From comments: "
neoliberalism to be a techno-economic order of control, requiring a state apparatus to enforce
wholly artificial directives. Also, the work of recent critics of data markets such as Shoshana
Zuboff has shown capitalism to be evolving into a totalitarian system of control through
cybernetic data aggregation."
"... By rolling back the state, neoliberalism was supposed to have allowed autonomy and
creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more
oppressive than the system it replaced. ..."
"... Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and
micromanaged. Organisations that depend on a cooperative ethic – such as schools and
hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The
introduction of private capital into public services – that would herald a glorious new age
of choice and openness – is brutally enforced. The doctrine promises diversity and freedom
but demands conformity and silence. ..."
"... Their problem is that neoliberal theology, as well as seeking to roll back the state,
insists that collective bargaining and other forms of worker power be eliminated (in the name of
freedom, of course). So the marketisation and semi-privatisation of public services became not so
much a means of pursuing efficiency as an instrument of control. ..."
"... Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The
bureaucratic quantification of public administration goes far beyond an attempt at discerning
efficacy. It has become an end in itself. ..."
Notable quotes:
"... By rolling back the state, neoliberalism was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a semi-privatised authoritarianism more oppressive than the system it replaced. ..."
"... Workers find themselves enmeshed in a Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend on a cooperative ethic – such as schools and hospitals – are stripped down, hectored and forced to conform to suffocating diktats. The introduction of private capital into public services – that would herald a glorious new age of choice and openness – is brutally enforced. The doctrine promises diversity and freedom but demands conformity and silence. ..."
"... Their problem is that neoliberal theology, as well as seeking to roll back the state, insists that collective bargaining and other forms of worker power be eliminated (in the name of freedom, of course). So the marketisation and semi-privatisation of public services became not so much a means of pursuing efficiency as an instrument of control. ..."
"... Public-service workers are now subjected to a panoptical regime of monitoring and assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The bureaucratic quantification of public administration goes far beyond an attempt at discerning efficacy. It has become an end in itself. ..."
"... The other point to be made is that the return of fundamentalist nationalism is arguably a radicalized form of neoliberalism. ..."
"... Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian orientations, previously effaced beneath discourses of egalitarian free-enterprise, become overt. ..."
"... The market is no longer an enabler of private enterprise, but something more like a medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs collectivise into a 'people' serving a market which has become synonymous with nationhood. ..."
Thousands of people march through London to protest against underfunding and privatisation
of the NHS. Photograph: Wiktor Szymanowicz/Barcroft Images M y life was saved last year by the
Churchill Hospital in Oxford, through a skilful procedure
to remove a cancer from my body . Now I will need another operation, to remove my jaw from
the floor. I've just learned what was happening at the hospital while I was being treated. On
the surface, it ran smoothly. Underneath, unknown to me, was fury and tumult. Many of the staff
had objected to a decision by the National Health Service
to privatise the hospital's cancer scanning . They complained that the scanners the private
company was offering were less sensitive than the hospital's own machines. Privatisation, they
said, would put patients at risk. In response,
as the Guardian revealed last week , NHS England threatened to sue the hospital for libel
if its staff continued to criticise the decision.
The dominant system of political thought in this country, which produced both the creeping
privatisation of public health services and this astonishing attempt to stifle free speech,
promised to save us from dehumanising bureaucracy. By rolling back the state, neoliberalism
was supposed to have allowed autonomy and creativity to flourish. Instead, it has delivered a
semi-privatised authoritarianism more oppressive than the system it replaced.
Workers find themselves enmeshed in a
Kafkaesque bureaucracy , centrally controlled and micromanaged. Organisations that depend
on a cooperative ethic – such as schools and hospitals – are stripped down,
hectored and forced to conform to suffocating diktats. The introduction of private capital into
public services – that would herald a glorious new age of choice and openness – is
brutally enforced. The doctrine promises diversity and freedom but demands conformity and
silence.
Much of the theory behind these transformations arises from the work of Ludwig von Mises. In
his book Bureaucracy , published in 1944, he
argued that there could be no accommodation between capitalism and socialism. The creation of
the National Health Service in the UK, the New Deal in the US and other experiments in social
democracy would lead inexorably to the bureaucratic totalitarianism of the Soviet Union and
Nazi Germany.
He recognised that some state bureaucracy was inevitable; there were certain functions that
could not be discharged without it. But unless the role of the state is minimised –
confined to defence, security, taxation, customs and not much else – workers would be
reduced to cogs "in a vast bureaucratic machine", deprived of initiative and free will.
By contrast, those who labour within an "unhampered capitalist system" are "free men", whose
liberty is guaranteed by "an economic democracy in which every penny gives a right to vote". He
forgot to add that some people, in his capitalist utopia, have more votes than others. And
those votes become a source of power.
His ideas, alongside the writings of
Friedrich Hayek , Milton Friedman and other neoliberal thinkers, have been applied in this
country by Margaret Thatcher, David Cameron, Theresa May and, to an alarming extent, Tony
Blair. All of those have attempted to privatise or marketise public services in the name of
freedom and efficiency, but they keep hitting the same snag: democracy. People want essential
services to remain public, and they are right to do so.
If you hand public services to private companies, either you create a private monopoly,
which can use its dominance to extract wealth and shape the system to serve its own needs
– or you introduce competition, creating an incoherent, fragmented service characterised
by the institutional failure you can see every day on our railways. We're not idiots, even if
we are treated as such. We know what the profit motive does to public services.
So successive governments decided that if they could not privatise our core services
outright, they would subject them to "market discipline". Von Mises repeatedly warned against
this approach. "No reform could transform a public office into a sort of private enterprise,"
he cautioned. The value of public administration "cannot be expressed in terms of money".
"Government efficiency and industrial efficiency are entirely different things."
"Intellectual work cannot be measured and valued by mechanical devices." "You cannot
'measure' a doctor according to the time he employs in examining one case." They ignored his
warnings.
Their problem is that neoliberal theology, as well as seeking to roll back the state,
insists that collective bargaining and other forms of worker power be eliminated (in the name
of freedom, of course). So the marketisation and semi-privatisation of public services became
not so much a means of pursuing efficiency as an instrument of control.
Public-service workers are now subjected to a panoptical regime of monitoring and
assessment, using the benchmarks von Mises rightly warned were inapplicable and absurd. The
bureaucratic quantification of public administration goes far beyond an attempt at discerning
efficacy. It has become an end in itself.
Its perversities afflict all public services. Schools teach to the test , depriving
children of a rounded and useful education. Hospitals manipulate waiting times, shuffling
patients from one list to another. Police forces ignore some crimes, reclassify others, and
persuade suspects to admit to extra offences to improve their statistics . Universities urge their
researchers to
write quick and superficial papers , instead of deep monographs, to maximise their scores
under the research excellence framework.
As a result, public services become highly inefficient for an obvious reason: the
destruction of staff morale. Skilled people, including surgeons whose training costs hundreds
of thousands of pounds, resign or retire early because of the stress and misery the system
causes. The leakage of talent is a far greater waste than any inefficiencies this quantomania
claims to address.
New extremes in the surveillance and control of workers are not, of course, confined to the
public sector. Amazon has patented
a wristband that can track workers' movements and detect the slightest deviation from
protocol. Technologies are used to monitor peoples' keystrokes, language, moods and tone of
voice. Some companies have begun to experiment with the
micro-chipping of their staff . As the philosopher Byung-Chul
Han points out , neoliberal work practices, epitomised by the gig economy, that
reclassifies workers as independent contractors, internalise exploitation. "Everyone is a
self-exploiting worker in their own enterprise."
The freedom we were promised turns out to be
freedom for capital , gained at the expense of human liberty. The system neoliberalism has
created is a bureaucracy that tends towards absolutism, produced in the public services by
managers mimicking corporate executives, imposing inappropriate and self-defeating efficiency
measures, and in the private sector by subjection to faceless technologies that can brook no
argument or complaint.
Attempts to resist are met by ever more extreme methods, such as the threatened lawsuit at
the Churchill Hospital. Such instruments of control crush autonomy and creativity. It is true
that the Soviet bureaucracy von Mises rightly denounced reduced its workers to subjugated
drones. But the system his disciples have created is heading the same way.
The other point to be made is that the return of fundamentalist nationalism is arguably a
radicalized form of neoliberalism. If 'free markets' of enterprising individuals have
been tested to destruction, then capitalism is unable to articulate an ideology with which to
legitimise itself.
Therefore, neoliberal hegemony can only be perpetuated with authoritarian, nationalist
ideologies and an order of market feudalism. In other words, neoliberalism's authoritarian
orientations, previously effaced beneath discourses of egalitarian free-enterprise, become
overt.
The market is no longer an enabler of private enterprise, but something more like a
medieval religion, conferring ultimate authority on a demagogue. Individual entrepreneurs
collectivise into a 'people' serving a market which has become synonymous with
nationhood.
A corporate state emerges, free of the regulatory fetters of democracy. The final
restriction on the market - democracy itself - is removed. There then is no separate market
and state, just a totalitarian market state.
This is the best piece of writing on neoliberalism I have ever seen. Look, 'what is in
general good and probably most importantly what is in the future good'. Why are we
collectively not viewing everything that way? Surely those thoughts should drive us all?
Pinkie123: So good to read your understandings of neoliberalism. The political project is the
imposition of the all seeing all knowing 'market' on all aspects of human life. This version
of the market is an 'information processor'. Speaking of the different idea of the
laissez-faire version of market/non market areas and the function of the night watchman state
are you aware there are different neoliberalisms? The EU for example runs on the version
called 'ordoliberalism'. I understand that this still sees some areas of society as separate
from 'the market'?
ADamnSmith: Philip Mirowski has discussed this 'under the radar' aspect of neoliberalism. How
to impose 'the market' on human affairs - best not to be to explicit about what you are
doing. Only recently has some knowledge about the actual neoliberal project been appearing.
Most people think of neoliberalism as 'making the rich richer' - just a ramped up version of
capitalism. That's how the left has thought of it and they have been ineffective in stopping
its implementation.
Finally. A writer who can talk about neoliberalism as NOT being a retro version of classical
laissez faire liberalism. It is about imposing "The Market" as the sole arbiter of Truth on
us all.
Only the 'Market' knows what is true in life - no need for 'democracy' or 'education'.
Neoliberals believe - unlike classical liberals with their view of people as rational
individuals acting in their own self-interest - people are inherently 'unreliable', stupid.
Only entrepreneurs - those close to the market - can know 'the truth' about anything. To
succeed we all need to take our cues in life from what the market tells us. Neoliberalism is
not about a 'small state'. The state is repurposed to impose the 'all knowing' market on
everyone and everything. That is neoliberalism's political project. It is ultimately not
about 'economics'.
The left have been entirely wrong to believe that neoliberalism is a mobilisation of
anarchic, 'free' markets. It never was so. Only a few more acute thinkers on the left
(Jacques Ranciere, Foucault, Deleuze and, more recently, Mark Fisher, Wendy Brown, Will
Davies and David Graeber) have understood neoliberalism to be a techno-economic order of
control, requiring a state apparatus to enforce wholly artificial directives. Also, the work
of recent critics of data markets such as Shoshana Zuboff has shown capitalism to be evolving
into a totalitarian system of control through cybernetic data aggregation.
Only in theory is neoliberalism a form of laissez-faire. Neoliberalism is not a case of the
state saying, as it were: 'OK everyone, we'll impose some very broad legal parameters, so
we'll make sure the police will turn up if someone breaks into your house; but otherwise
we'll hang back and let you do what you want'. Hayek is perfectly clear that a strong state
is required to force people to act according to market logic. If left to their own devices,
they might collectivise, think up dangerous utopian ideologies, and the next thing you know
there would be socialism. This the paradox of neoliberalism as an intellectual critique of
government: a socialist state can only be prohibited with an equally strong state. That is,
neoliberals are not opposed to a state as such, but to a specifically centrally-planned state
based on principles of social justice - a state which, to Hayek's mind, could only end in t
totalitarianism. Because concepts of social justice are expressed in language, neoliberals
are suspicious of linguistic concepts, regarding them as politically dangerous. Their
preference has always been for numbers. Hence, market bureaucracy aims for the quantification
of all values - translating the entirety of social reality into metrics, data, objectively
measurable price signals. Numbers are safe. The laws of numbers never change. Numbers do not
lead to revolutions. Hence, all the audit, performance review and tick-boxing that has been
enforced into public institutions serves to render them forever subservient to numerical
(market) logic. However, because social institutions are not measurable, attempts to make
them so become increasingly mystical and absurd. Administrators manage data that has no
relation to reality. Quantitatively unmeasurable things - like happiness or success - are
measured, with absurd results.
It should be understood (and I speak above all as a critic of neoliberalism) that
neoliberal ideology is not merely a system of class power, but an entire metaphysic, a way of
understanding the world that has an emotional hold over people. For any ideology to
universalize itself, it must be based on some very powerful ideas. Hayek and Von Mises were
Jewish fugitives of Nazism, living through the worst horrors of twentieth-century
totalitarianism. There are passages of Hayek's that describe a world operating according to
the rules of a benign abstract system that make it sound rather lovely. To understand
neoliberalism, we must see that it has an appeal.
However, there is no perfect order of price signals. People do not simply act according to
economic self-interest. Therefore, neoliberalism is a utopian political project like any
other, requiring the brute power of the state to enforce ideological tenets. With tragic
irony, the neoliberal order eventually becomes not dissimilar to the totalitarian regimes
that Hayek railed against.
Nationalised rail in the UK was under-funded and 'set up to fail' in its latter phase to make
privatisation seem like an attractive prospect. I have travelled by train under both
nationalisation and privatisation and the latter has been an unmitigated disaster in my
experience. Under privatisation, public services are run for the benefit of shareholders and
CEO's, rather than customers and citizens and under the opaque shroud of undemocratic
'commercial confidentiality'.
What has been very noticeable about the development of bureaucracy in the public and private
spheres over the last 40 years (since Thatcher govt of 79) has been the way systems are
designed now to place responsibility and culpability on the workers delivering the services -
Teachers, Nurses, social workers, etc. While those making the policies, passing the laws,
overseeing the regulations- viz. the people 'at the top', now no longer take the rap when
something goes wrong- they may be the Captain of their particular ship, but the
responsibility now rests with the man sweeping the decks. Instead they are covered by tying
up in knots those teachers etc. having to fill in endless check lists and reports, which have
as much use as clicking 'yes' one has understood those long legal terms provided by software
companies.... yet are legally binding. So how the hell do we get out of this mess? By us as
individuals uniting through unions or whatever and saying NO. No to your dumb educational
directives, No to your cruel welfare policies, No to your stupid NHS mismanagement.... there
would be a lot of No's but eventually we could say collectively 'Yes I did the right thing'.
'The left wing dialogue about neoliberalism used to be that it was the Wild West and that
anything goes. Now apparently it's a machine of mass control.'
It is the Wild West and anything goes for the corporate entities, and a machine of control
of the masses. Hence the wish of neoliberals to remove legislation that protects workers and
consumers.
The take away quote
"
and overnight none other than Deutsche Bank joined the "truther" chorus, when in a report by
the bank's chief economist Torsten Slok, he writes what we pointed out several weeks back,
namely that "since QE4 started in October, a 1% increase in the Fed balance sheet has been
associated with a 1% increase in the S&P500, see chart below." Not that DB has absolutely
no qualms about calling what the Fed is doing QE4 for the simple reason that... it is
QE4.
"
You have to go to the link to see the chart.....
by Ingrid Robeyns on December 29, 2019 Some aspects of
academia show great international variation. There is one on which I haven't found any good
data, and hence thought I'll ask the crowd here so that we can gather our own data, even if it
will be not very scientifically collected.
The question is this: if you are a university teacher/professor and your department awards
PhD-degrees, do you get any official time allocated (or time-compensation) for PhD supervision?
If it is part of a teaching load model, how many hours (or % teaching load) is it equivalent
to? Or is there an expectation that you take on PhD-students but that this does not lead to a
reduction in other tasks?
How do international practices of the conditions for PhD-supervisors compare?
In my faculty (Humanities at Utrecht University, the Netherlands), all supervisors together
(which generally are two, sometimes three) are collectively given a teaching load reduction of
132 hours in the year follow the graduation of the PhD-candidate. So your teaching reduction
upon successful graduation of a PhD-candidate tends to be 66 hours. For the supervisory work
you effectively do in the four years prior to graduation, there is no time allocated; so you
effectively do this in your research or your leisure time.
To put this into perspective: most (assistant/associate/full) professors teach 50-70% of
their time, and a fulltime workload is 1670 hours, or 1750 hours if you are saving for a
sabbatical. This can be reduced if you have major managerial tasks (e.g. Head of Department) or
if a large part of your wage is paid by a research grant. So without reductions, we teach about
835-1190 hours a year (this includes the time for preparation and examination, but frankly, one
always needs more than the teaching load models allocate for a given course. And in general
there are no TAs or other support staff to help with the practical sides of teaching).
For writing the grants that are almost always needed to create the jobs for PhD students
(with success rates now around 15%), and for supervising those who in the end do not get their
PhD degree, there is no time put aside for the supervisor/applicants. That time also goes,
effectively, from our research time, or, more realistically, from our leisure time.
Recently, I heard from a British colleague and a Swedish colleague their models for
PhD-supervision, which were way more generous (and rightly so in my view), so thought I'll
throw the question on the table here: what, if any, time-compensation/teachingreduction do you
get for supervising PhD students?
I am not trying to suggest here that without adequate time set aside for doing this work, it
would not be worthwhile supervising PhDs. There are in many cases other forms of rewards for
the work one does as a PhD supervisor. One might be the honor of supervising PhDs, and in most
cases the intrinsic rewards of the supervisory process – the satisfaction of seeing a
young person take their first steps as a scholar, and being able to play a crucial role in this
process. There is , after all, a reason why the Germans call their PhD-supervisor
mein Doktorvater or meine Doktormutter – since yes, there is this element
of helping someone to grow, in a cognitive and professional sense. Professionally, there are
few people who had so much influence on me as my PhD-supervisor, and I am hoping that some of
my (former) PhD-students will think the same at some point in their lives. So it would be wrong
to frame it merely as a burden, since there is the intrinsic value of the rather unique
professional relationship. But that cannot be a reason to not give PhDsupervisors the time they
need to properly supervise, given how severe time pressure in academia is. I see this as a real
tension.
In some academic fields, there may be professional research benefits for the supervisors,
such as becoming co-authors on the publications the PhD-students write under your supervision.
I recently examined a PhD-thesis in medical ethics, and all chapters (being articles published
or under review) had been co-written with several members of the supervisory team. Even raising
the funds to hire the PhD is sometimes seen as sufficient reason to be listed as a co-author.
In the humanities there is no such a thing: we don't put our names on articles of our
PhDstudents, even if we contributed significantly to the development of that piece (rightly so
in my view).
I'm posting this because I am interested in the international comparison in its own right,
but also because of its relevance in discussions on higher education policies which are
currently very intense in the Netherlands, on which I'll write another blogpost
later.
In my part of my university each PhD student earns her supervisors around 60 notional
hours/1600 total per annum, but that's usually divided 5/1 between two supervisors, so that
the person actually doing the work has about 50 hours, so slightly over an hour/week given
annual leave etc. My greatest beef with this is when we admit non-anglophone PhD students.
Since they officially have a level of competence in English as a condition of their
admission, they do not get any extra time for supervision. But in practice, their work takes
much longer to read and you have to put a lot of work into improving their English.
In my faculty (Arts and Social Sciences at Sydney) the primary supervisor gets 40 hours per
year and an auxiliary supervisor gets ten. (There is some flexibility for the 50 total hours
to be divided differently.)
In a recent survey of faculty staff with a response rate of around 30%, most reported
spending longer per primary supervision: the median was 50 hours.
There's actually a growing literature on academic time use. Kenny and Fluck have published
a series of papers based on a large survey of Australian academics. The median reported time
spent supervising a higher degree student per year was 60 hours over all discipline groups,
50 hours for Arts, Law and Humanities. (Kenny and Fluck 2018 'Research workloads in
Australian universities', _Australian Universities Review_ -- and the companion papers on
teaching and admin workloads are also worth googling for the full results over lots of
tasks.)
When we tried to establish a "norm" at the University of York, it turned out that practice
varied widely not only across faculties, but within the arts and humanities and social
sciences. Some departments simply included it in "research time" and gave zero extra time,
others gave a (more-or-less generous) "teaching" allocation. So, I am not sure you can get
any useful comparisons even at an institutional level let alone internationally.
Currently, in the Law School at York, a PhD student – during the period of registration
(i.e., only for the first 3 years) – earns her supervisors around 80 notional hours of
teaching per year. This is split across the supervisory team in proportion to their
involvement.
Many colleagues think this is insufficient, in particular with non-anglophone students and it
can be particularly galling if one is putting a lot of work into the final "writing up"
year.
For what it is worth, I found this very hard to manage when I was Head of Department (and so
responsible for workloads). The issue for me was that in many cases senior colleagues had
several PhD students and (some) junior colleagues none (or very little involvement. This was
back in the day of most students have one supervisor.). Modelling a system where PhD
supervision was "properly" rewarded (that is, where I tried to allocate hours in accordance
to the amount of time it actually took) resulted in a very hierarchical department where
(roughly) senior colleagues did PhD supervision and junior colleagues taught undergraduates.
So, I didn't do it.
For what it is worth (addressing the wider issues of workload), it seems to me that there is
an inevitable gap between a workload system conceived of as a mechanism of "counting" (how
many hours does this job actually take?) and conceived of as a mechanism of "distribution"
(how much work is there to be done and how many people to do it?). Of course, the
distributive principles cannot stray too far from the realities revealed in counting, but it
(seems to me at least) perfectly okay to think that the distributive principles include other
considerations like the "shape" of the department, individual "goals" (having PhD students is
good for promotion at York) and personal development, gender, and so on.
Finally, this problem does not seem to be unique to PhD supervision (the current "hot topic"
at York is how to count/distribute time for research grant writing, which at the moment is
simply included in individual research in most, but not all, departments). York tried to
introduce a workload model across the university and never managed it because departmental
variations were so huge (in everything from whether/how to include teaching preparation time
to how to rank administrative tasks). That said, this may be the result of our particular
institutional history (until recently, we had a very flat structure with only relatively
autonomous departments and no faculties).
In Japan as far as I know there is no allowance at all, and senior staff (the professor who
is the official supervisor) often dump all supervisory responsibility on the most junior
staff. There is also often no limit on how many PhD students the professor can take on (and
dump on their assistant prof). This is particularly bad with masters students, whose theses
are much more time limited and challenging to supervise.
I don't know if it's a general thing but my colleagues in China tell me they are only
allowed a PhD student if they publish above a certain level – PhD students are treated
as a valuable asset you need to struggle to get. (I think they are paid by the uni but don't
quote me). In the universities I know of in China the PhD student has to publish to graduate
(sometimes like 3 papers) so the benefits to the supervisor are obvious.
I'm in public health where publication is relatively easy and quick. I don't know how it
is in other disciplines (but the Japanese professor dumping his responsibilities on junior
staff is quite common across disciplines as far as I can tell).
It's not part of a workload model for us. We're expected to teach 2 classes a semester (8
contact hours a week total), then research, service, and graduate supervision on top, but the
only thing that is specified is the 2 classes. So no compensation for PhD students. In
practice the number of PhD supervisions varies greatly across faculty (as you'd expect), as
does the amount of service work we do (if you're good at it you get asked to do more, if
you're tenured and responsible you generally try to say yes), as does the amount of time we
actually spend on the courses we teach.
As do our salaries, to be fair, which reflect years of service, perceived quality of
research, how much the people elected to the department budget value the other things we do,
and, to some extent, market forces.
What I've described is my own department. There's huge variation across campus, including
variation in numbers of courses we're expected to teach.
Possibly worth mentioning that from what I have gathered expectations of how many courses
we teach have fallen dramatically (across campus) over the past 50 years, and the number of
course releases granted have increased dramatically: I estimate faculty in the humanities
teach 30% less than 50 years ago, and in the sciences 50% less. I imagine this is similar
across public research universities and SLACs.
So, purely anecdotal and from the perspective of a PhD and post-doc in Science at 2
different, fairly well thought of UK Universities (Russel group, etc. etc.).
PhD students are highly valuable. This is because a Masters or summer student are
necessarily short term, and it is difficult to fulfil much breakthrough research (sometimes
you need a few years of banging your head against a wall ). Post-docs are phenomenally
expensive as in the UK as the University charges a huge amount just to have them – e.g.
a rough breakdown (from some years ago, so a little out of date) is to just have a post-doc
(i.e. no equipment, materials, etc.) is in excess of £110K per year. Some 31000 is for
salary, the rest goes to the University to keep the lights on. Having more than a few
post-docs, for all but the most successful labs, became prohibitively expensive.
However, as a PhD most of my time was with my post-docs (in my first year I saw my
professor once, for 1hr, in later years maybe a few times more, so approximately 15 hr over
3.5 years). As a post-doc, the PhD students had regular meetings in a group format once per
month (so, more or less 2-3 hr per month). In both cases it, in principle, was possible to go
and meet the supervisor if you felt the need, but generally speaking your post-doc was the
point of contact on a day-by-day, week-by-week basis.
I've not been a lecturer, so this is very speculative, but my impression is that
supervising PhD students is generally considered a research activity, and thus you are not
budgeted time for it specifically.
Not sure if any of this is useful, but feel free to hit me up for more details if you
think it is useful/interesting.
I taught for 15 years at 3 Dutch universities, 3 years at a Russell Group university in
England, and am now at an Irish university. I did my PhD in the United States. Like the other
posters, I have experienced wide variation in 'compensation' for PhD supervision. One of the
reasons I left my position at a British university was the bizarre (and I thought, unfair)
model for workload allocation. PhD supervision was highly 'compensated', and actual classroom
teaching of undergrads was not. I had colleagues who met all or most of their teaching
obligations with PhD supervision and did not teach undergrads.
I don't know what the best way to compensate PhD supervision is, but there are a couple of
aspects I think need more attention. The first is wide variation in the number of PhD
students in any given department and the rules/norms governing who is (de facto) permitted to
supervise PhDs. Dutch departments have fewer PhD students than UK/Irish departments (for
complicated reasons), and only full (and now associate?) profs are permitted to supervise.
PhD supervision is important for promotion (as it is in the UK and IE), so everyone wants to
do it, but not everyone has access. I am not sure that an activity that is so important for
career progression should be generously compensated.
The second issue concerns co-authoring with a PhD student. I can see the advantages of this
(which Ingrid mentions), but the proliferation of the article-based PhD where the supervisors
co-author all articles is a cause for concern. Again, I am not convinced that a PhD
supervisor should be generously compensated for something (publications) that strongly
advances their own career. And it is not clear to me that the supervisor's contribution to
the publication (in many cases, at least) amounts to more than what would be considered
'normal' PhD supervision in the US, Canada, and many European universities. This makes it
very difficult to evaluate a newly minted PhD's CV, and it inflates the publication list of
more senior academics.
A couple of ideas: 1) cap the number of PhD students that staff can supervise, or at least
cap the number for which teaching points are earned. 2) ensure that all academic staff have
access to PhD supervision.
Private university in Turkey : the basic assumption here is that supervising PhD students and
MA theses takes zero time (although people typically budget an hour per week per student.
The workload allocation for Humanities at the University of Exeter is similar to Chris's
account of Bristol (where I worked previously), though it's more common for the hours to be
divided 70/30, 60/40 or even 50/50 between first and second supervisors, with the latter
playing a much more active role. The biggest difference, however, is that you continue to
receive an allowance when the student is writing up, and even if they're revising after a
first examination, whereas the Bristol practice was, at least, that you get a workload
allowance for the first three years and then nothing for the period which in my experience
often required the greatest amount of work
I haven't – yet – supervised a doctoral student, but I did examine a viva this
year & was surprised to find that this carried no workload allowance at all, which seems
odd given the amount of reading time involved. (Fortunately I wasn't mad busy.)
Former US academic; taught at a few R1 uni's from 80s to aughts.
To echo the doughty Puritan: " the basic assumption here is that supervising PhD students
and MA theses takes zero time."
We had a standard teaching load, and expectations for research and service. But there was
no calculation of supervisory load -- it simply was not tracked, budgeted, or accounted for.
As Harry says above, there were wide disparities from person to person, since some people
attract a lot of grad students and some do not (and some repel them, either for strategic
purposes, or because they are repellent no matter what they try).
No one cared whether you supervised 15 PhD students or zero. Not quite true -- there was
some unofficial awareness among colleagues who thought collegially about things. And you
might get some private thanks or informal kudos for doing more than your share. But there was
absolutely no official account of it. And this was true at all 3 R1s I taught at over several
decades.
That's partly because -- in a Humanities field -- the funding of grad students does not
follow the prof, but the program as a whole. So, Central Admin knows that your department is
training 25 PhDs, because Central Admin has to figure their tuition, stipends, etc. But the
money then flows to your department as a whole, with no closer investigation of who in your
department is doing the work.
The picture must be radically different in the Sciences, where there is literal accounting
of PhD students, since they are supported by the professor's grant-money.
Surely there are other ways to offload work to PhD students one would otherwise have to do
oneself besides getting research recognition for their thesis. How much of that is possible
should also vary across countries. So a comparsion of alocated supervision time only seems a
bit one sided.
As regards co-authorship, my PhD students and postdocs are often keen to include me on the
theory that a paper with a more senior author will have a better chance of acceptance. My
impression is that, in economics, the expectation is that the main job market paper will be
sole-authored or else co-authored with another junior researcher, but that others are likely
to be co-authored with the supervisor.
To complicate things further, economics (like philosophy, I believe) works on average
quality rather than total contribution. So, a publication with a student in a journal lower
ranked than my average paper is actually a negative for me.
I assume that "Harry" above is Harry B of the blog. If so, he's showing why comparisons w/
the US on this will be hard, if not impossible. In many countries, there is a weird fantasy
that academics can and should be treated like hourly employees, with "hours" assigned to
things. (This is certainly so in Australia.) Of course, it's a fantasy in that, if it in fact
takes a lot more "hours" to do the things you're assigned, you don't get over-time, comp
time, or paid more. The other down-side is that this system leads, in my experience, to more
micro-managing – being expected to "account" for your time to a much greater degree.
The US system treats academics more like salaried employees – you get paid a certain
amount, you have certain tasks to do, and you must do them (some of them at particular times,
like teaching classes) but otherwise you're not dealing with "hours" for things. The
down-side is that there can be lots of variation in how much work people actually do –
even teaching the same "number" of classes can vary a lot depending on the number of preps,
size, how often you've taught it, if you have TAs, etc., and having more advisees may not
lead to more recognition on its own. The plus side is that less time is spent on being
mico-managed and bureaucratic nonsense. The relevant point here, though, is that it's really
hard to make a comparison like the one asked for between systems where one treats academics
more like hourly employees and the other more like salaried employees.
My wife (a New Zealand academic with confirmation) is allocated a. 24 hours per year for
supervising PhD students. She trusts that the ludicrousness of this number is not lost on
those present.
I am a Professor in an Engineering discipline at a small, state engineering school in the US.
Our workload is departmentally determined. My department is fairly small, ~100 undergrads,
but does quite a bit of research. My nominal workload is 40% teaching, 40% research and 20%
service. This is based on 40 working hours per week. My effective workload is 46% teaching,
8% advising (both undergrad and grad), 23% overseeing my funded research projects and about
25% service. This is more than 100%, which is true for almost all faculty at my school.
Thus, I estimate how much time I spend doing various things and then convert that to
credit hours, as my contract is specified in terms of 18 credit hours of work per semester,
making a credit hour about 2 hours and 40 minutes
In Technological University Dublin (formerly Dublin Institute of Technology), supervision of
a full-time PhD student attracts a time allowance of 2 hours per week (48 hours per annum),
from a weekly teaching load of 16 contact hours for lecturers (18 hours for assistant
lecturers). So, for example, a lecturer with two full-time PhD students will allocate 25% (4
hours) of his / her weekly contact teaching duties to this role.
In my department (at Uppsala University, Sweden) the workload norm is 88 hours per year
supervisory time for the main supervisor and 20 for the assistant supervisor. This time
includes the face-to-face hours, as well as reading, commenting, etc. The split can be done
differently to reflect other kinds of co-supervisory arrangements. This seems very generous
compared to what others are reporting, which is sad, since an average of 1 hour meeting, 1
hour reading per week for 44 weeks in a year would work out as very minimal supervision --
and supervisors typically spend much more time on supervision related tasks than this.
A couple of years ago, I did a survey of the formal teaching duties at polisci departments at
Scandinavian universities for a report published by the Swedish Institute for Labour Market
Evaluation. The survey looked at the formal percentage of teaching duty for senior lecturers
and full professors, and the formal compensation in terms of hours allotted for various
teaching activities (e.g., lectures, supervision at different levels, examination and so on).
We found, first, that the formal teaching duty varied quite a lot across Scandinavian
universities, but that all Swedish universities had less generous conditions than Danish and
Norwegian universities, which came closer to the Humboldtian ideal of unity of teaching and
research.
Second, by multiplying teaching duty and compensation for a standard set of teaching
activities, we found that the consequences for the individual lecturer could be quite
drastic: over a hypothetical career from age 35 to retirement at 67, a lecturer at the least
generous university could have ten whole years more of teaching duty than their colleague at
the most generous university.
I'm an Associate Professor in Computer Science at a US R1 university.
As Matt says, the description in Ingrid's post is totally unlike how things are thought of
at all in US universities. My load is 40% research, 40% teaching, 20% service, which is
standard for tenure-track faculty in my department (and I think across departments here). The
standard teaching load is 3 courses per year (2 in one semester, 1 in the other). However,
there are several exceptions to this: before tenure, faculty are assigned only 2 courses per
year. Also, if you support (with external grant funding) 3 PhD students or post-docs in the
previous year then you only teach 2 courses the next year. Additionally, pre-tenure faculty
are asked to do considerably less service.
Furthermore, there are several additional differences that are relevant. First, and most
importantly, the distinction between "research" and "PhD supervision" does not exist in
science. Effectively all of my research is joint with PhD students, although sometimes they
are not "my" students, but those of my collaborators. Second, not all students are funded by
grants; PhD students can also be funded by teaching. So it's possible to have one or two
students without bringing in funding. Third, there's a strong expectation that training PhD
students is part of the job, you wouldn't get tenure/promotion/etc if you just didn't do
it.
In my institution, you don't get any teaching load reduction, whereas you do get a tiny but
non-zero reduction for supervising a master thesis, or even an undergraduate research
project. I believe that is the norm in France in science in general, and most likely overall.
The logic behind that choice is that supervising a PhD student is supposed to bring its own
benefits: the student will do a lot of lab work for the superviser, the superviser will
cosign the research papers etc.
In math (my own field), there is no lab work to be done and the French tradition is that
papers drawn from the PhD should be signed by the student alone, so the arrangement is quite
unfavorable to us.
On the other hand
So without reductions, we teach about 835-1190 hours a year
Did I read that right? Can you clarify how many hours are counted for one hour in front of
the students? That number looks like madness to me (and I have a heavy teaching load
myself).
"Highly research-active" profs teach one fewer course per year. There is some flexibility
as to how to maintain this designation, but typically you must have at least 2 active
graduate students at any given time (and meet various other requirements).
Going through our standard courseload: if you ignore the other work related to maintaining
status, your first two Ph.D. students are worth about 90 hours/year, and the remainder are
worth nothing.
As regards co-authorship, my Ph.D. students and postdocs are often keen to include me on
the theory that a paper with a more senior author will have a better chance of
acceptance.
This is an important point. I agree that it is somewhat dishonest to use your post-grad
students to increase you number of publications. But it should be weighted against the real
difficulties of young researchers to get their papers published. And the fact that sometimes
brilliant papers from them are rejected. Nobody can abolish clan behavior in the academy. And
the "academic kitchen" is pretty dirty, and takes years to understand ;-).
Sometimes publishing oversees helps here, and young researchers should keep this in mind.
For many foreign journals, just the fact that you are a foreigner from a prestigious
university is a plus that weights on the acceptance.
Wells Fargo, Citigroup, PNC Financial Service Group, and CIT Group accumulated hundreds of
thousands of commodity hauling railcars in North America over the last decade. These banks
believed railcars carrying coal, grain, and other commodities were going to be highly
profitable but have recently turned out to be a major
headache as many cars are now in storage because of new regulations and demand woes brought
on by fluctuating commodity markets.
David Nahass, president of Railroad Financial Corp., which provides advisory services to
railroad firms, told
The Wall Street Journa l that "the industry is suffering, there are no two ways about it.
Lease rates are down, and there's not a source of hope about when it will start to
improve."
The Journal, citing the Association of American Railroads (AAR), said about 400,000 railcars
currently sit in storage with no use at all, and many are bank-owned.
Imbecilization is a normal historical process where intellectual declines follows the
economic decline of a given empire. There's growing evidence the West is going through the
same process.
A with any composite, complex historical process, imbecilization doesn't happen in a
uniform and linear way. Economics was the first science that descended into pseudo-science in
the capitalist world (after Marx dismantled Classic Economics). Philosophy followed. Erudite
art degenerated after the fall of Modernism somewhere in the 1950s. Human sciences in general
became fragmented and little more than a constelation of esoterism and pseudo-sciences - a
condition they still enjoy today (e.g. the dismembering of History into Sociology, Behavioral
Economics and others).
Meanwhile, the so-called STEM or "Hard Sciences" continued to prosper for some decades,
until they also hit a ceiling in the 1990s. The fall of the profitability of the capitalist
world led it to resort to "financialization" to keep the system going, which resulted in the
most brilliant capitalist mathematicians to be hosed to Wall Street instead to the likes of
NASA. Those MIT mathematicians and rocket scientists created the algorithms Wall Street still
uses today, but they did not stop the 2008 meltdown.
Nowadays, those brilliant STEM minds are nothing more than fraudsters who keep their
careers going by creating meaningless experiments (because they need the funding) only to
publish articles and keep their production quotas or self-censuring bootlickers for Wall
Street and Big Pharma. When they get to work for a big corporation, they are mere architects
of planned obsolescence or patent renewing. There's a new book I strongly recommend all of
you to read:
The Decade in Retirement: Wealthy
Americans Moved Further Ahead https://nyti.ms/34pZAbD
NYT - Mark Miller - Dec. 14
... In 2010, the economy was just beginning to recover from the worst recession and
financial crisis in recent memory. The unemployment rate was high, the stock market was
coming back and millions of workers were worried that their retirement plans were ruined.
Since then, a robust economic rebound has put some Americans back on solid footing for
retirement, but progress has been uneven. Despite the gains made in employment, wage growth
has only recently begun to recover -- and remained flat for older workers. Retirement wealth
has accumulated almost exclusively among higher-income households, while middle- and
lower-income households have only held steady or lost ground, Federal Reserve data shows.
Trends in Social Security and Medicare also are troubling. The value of Social Security
benefits -- measured by the share of pre-retirement income they replace -- is falling, and
the cost of Medicare is rising.
For members of the baby boomer and Gen X generations, the odds of success are mixed. The
Employee Benefit Research Institute has developed a model that simulates the percentage of
households likely to have adequate resources to meet retirement expenses, considering
household savings, home equity and income from Social Security and pensions.
The model shows that the highest-income households have seen their odds of a successful
retirement improve sharply during this decade, and have very high odds of success.
Middle-income households, meanwhile, have seen some gains, but still have only 50-50 odds of
success. And the lowest-income households have seen their retirement prospects diminish
sharply -- among these boomers approaching retirement, their odds of success have fallen
during the decade from 26 percent to 11 percent.
"Retirement prospects improved significantly for higher-income workers who were fortunate
enough to work for employers that sponsor retirement plans," says Jack VanDerhei, the
organization's research director.
Let's consider how the retirement landscape has changed during the decade now ending.
Retirement savings: Up for the affluent
The stock market bottomed out in March 2009 -- and it has more than quadrupled since then.
Most retirement savers did not abandon equity markets during the crash, says Jean Young,
senior research associate with the Vanguard Center for Investor Research. "Some did, but the
vast majority stayed the course."
But the recovery has seen retirement wealth accumulate almost exclusively among affluent
households that had access to workplace retirement plans and the means to make contributions.
For example, Vanguard reports that the average balance for plan participants with incomes
over $150,000 in 2018 was $193,130, compared with just $22,679 for workers with income of
$30,000 to $50,000. ...
For the second year in a row, Art Cashin, the head of UBS's floor operations at the NYSE,
was spot-on with his market calls in 2019.
Last December, Cashin told CNBC that he expected the Federal Reserve wouldn't raise interest
rates during the coming year. In fact, Cashin said late last year that he felt there was now
"an outside chance" that the Fed would cut rates in 2019. At the time, many scoffed at that
call. But Cashin turned out to be correct.
He was also correct about whether the US and China would manage to strike a long-term trade
deal. "I don't believe so," Cashin said. "I think we will get something that approximates it,
and you'll get perhaps in midyear a relaxation rally, but - with - with the problems of -
political sequencing, whatever, I don't think it works out."
As for whether the US would succeed in striking a lasting trade deal with Beijing before the
end of the year, Cashin insisted that the answer was 'most likely no'.
"I don't believe so. I think we will get something that approximates it, and you'll get
perhaps in midyear a relaxation rally, but - with - with the problems of - political
sequencing, whatever, I don't think it works out."
So, Cashin sat down with CNBC's Bob Pisani at Bobby Van's Steakhouse, across from the NYSE,
to discuss what Cashin sees coming down the pipe for markets in 2020.
Cashin offered three predictions - that's fewer predictions than usual: His first prediction
was that there will be no Fed hikes over the coming year. His second is that the market's
winning streak will continue, and that the big US stock indexes will finish the year
higher.
Finally, although Cashin expects stocks to rise next year, their ascent will be punctuated
by several periods of extreme volatility, particularly during the months of January, March and
July.
Prediction one: Despite a still-strong U.S. economy, there will be no Fed rate hikes in the
next year.
"I think the Fed is somewhat intimidated by the market... And the market, if anything,
thinks the Fed is ahead of itself on higher rates."
Prediction two: The market winning streak will continue and the broader indexes will be up
in 2020.
"Eight out of nine times that we've had an up year like we had this year, it's followed by
another decent up year. Not quite as strong, but still strong, and so I'll go with
history."
Prediction three: Stocks may be up, but there will be several periods of volatility,
particularly in January, March and July.
"In late January, we'll get to see if there's going to be a Brexit now that [Prime
Minister Boris] Johnson got a sweeping move in Parliament . And will he, in fact, push
through a no-deal Brexit? That could make the markets very volatile and jumpy. The next thing
will be the U.S. election. Number one, in early March, we will get Super Tuesday, and
one-third of the U.S. populace will vote. And we'll get to find out where [Democat Mike]
Bloomberg's strategy is. Who looks to be the leader? Has anybody locked it up? If not, then
it could be a brokered convention, and that date would be in the middle of July, when the
convention will be."
The truth is that the one-percenters got a $1.5 trillion tax cut, another trillion in
military industrial complex spending, continued suppression of workers' wages, more imperialist
war (even as we now know that Iraq, Syria, and Afghanistan were all lies and fraud that cost
the American people trillions of dollar), more big pharma raping the **** out of us all,
totally ignoring of climate change that will destroy humanity, etc. The 99% got nothing. That's
why Trump can only talk about how great his trade deal is going to be for you one day. And how
great it will be when there one day are no more "illegals" (which nobody noticed at all being
removed from society when Obama set the "illegals" deportation record (which still stands
today).
No, we the 99% have gotten ****. Trump, the billionaire president (who's paid zero taxes
over the past decade) has done nothing but **** the **** out of the American people for the
benefit of himself and his one-percenter BFFs. No right-wing member of the base can point to
even one tiny thing that Trump has done that personally benefited them. That is not true for
the 1%. Remember, even the Democrat/liberal 1% have done fabulously well under Trump. But
regardless of how much the Trump base loves him, he's done absolutely nothing of any substance
for them. NOTHING! That's why Trump has to try to tell you what to say to your relatives.
"... My hunch is that a lot of Pentagon defence spending already props up communities throughout the US. Private defence companies set up factories in towns that would otherwise be ghost towns to manufacture armaments or parts for planes or ships in programs funded by the US Department of Defense, in states across the country ..."
"... Part of the reason is to lobby politicians representing the electorates where their factories are located for more Pentagon funding to finance more contracts. Politicians willingly support more defense funding because they know these companies provide jobs and keep unemployment down. ..."
My hunch is that a lot of Pentagon defence spending already props up communities
throughout the US. Private defence companies set up factories in towns that would otherwise
be ghost towns to manufacture armaments or parts for planes or ships in programs funded by
the US Department of Defense, in states across the country .
Part of the reason is to lobby politicians representing the electorates where their
factories are located for more Pentagon funding to finance more contracts. Politicians
willingly support more defense funding because they know these companies provide jobs and
keep unemployment down.
The issue then is how to keep those jobs and keep those factories but change what
engineers are designing and workers are making from machines of destruction into machines
that sustain life and communities.
Yes, the absolute truth. Defense spending is spread over as many states and regions as
possible to keep strong political support. It seems every month the state is sponsoring
seminars aimed at educating small/medium manufacturers on how to bid on defense contracts.
Even small mom-and-pop machine shops get their share of defense business. One small shop in
our region makes compressor blades for cruise missiles. Every time the US fires off a barrage
of missiles, they probably get an order; everybody is happy except those in the target area.
Many American communities also depend on the Military-Industrial Complex to educate their
children. I personally know several families who had children enlist in the military in order
to get a free college education; one that their families could otherwise not afford. The
parents put their kids in the army and navy, and then just cross their fingers and hope they
won't be deployed to a war zone.
The system is actually perfect. The odds of any one of these young people actually getting
killed in a war, is actually quite low. The vast majority get a good education with lots of
perks, all expenses paid including housing, they do their time, and never see a bullet. All
at the taxpayers expense.
There is nothing wrong with hierarchy in and of itself. After all, is seniority to mean
nothing? Is demonstrated competence meaningless? Should an individual's efforts to build
skill sets be treated as equivalent to the couch potato's efforts to build up an epic Body
Mass Index (BMI)? Should notions of winners and losers be banned from athletic competitions
and sporting events, along with any associated prizes? Everybody gets a trophy whether they
run the race or not?
As I understand it there were plenty of routes through life in the Soviet Union in which
people could distinguish themselves, perhaps more than in the West. There were plenty of ways
to rise in society's hierarchy. None of those routes resulted in fabulous and opulent wealth,
but if some did then the society would necessarily be able to afford fewer such routes.
The only problems with hierarchy in society is if the process of rising in it is corrupt
(being born into wealth, for instance) or if the span between the bottom and the top of that
hierarchy is larger than what the population considers fair.
"...The only problems with hierarchy in society is if the process of rising in it is
corrupt (being born into wealth, for instance) or if the span between the bottom and the top
of that hierarchy is larger than what the population considers fair."
That is true, the only problem being (for the lower classes) that by the time the gap
becomes evident to all, mechanisms of 'law' and power (plus bread and circuses) have been set
in place to prevent or repress the necessary changes from happening from below. This is
evident to the US populace as the few who saw it coming and protested could not rouse enough
support when it could have mattered. We looked and still look for helpers among the children
of the hierarchs because those are the only ones who can work within the current system. So
far, such are few, if they exist at all. But we saw with FDR it only takes one or two. (I
don't know if you saw my previous post that finance was not the governmental powerhouse it
has become in FDR's time. First they came for the legislators!!)
I still have hope that the system in the US will of its own weight become unweildly. There
are already signs of that happening in the increasing inability of US powermongers to have
their way on the world stage, and in their search for ephemeral 'boltholes'. And while they
are still able to inflict harm on others and do so with reckless abandon, I do not believe
they are ready to risk their own skins or those of their near and dear - or the fortunes they
have staked everything to gain. My hope is that even that damaging ability will peter out as
climate change necessities force a refocus on what actually threatens said skins and
fortunes.
Editor's Note: Last month, Foreign Policy ran an article, "Open Borders Are a
Trillion-Dollar Idea," which advocated for Open Borders. So for all those who say, "Oh, no
one supports Open Borders," here it is in writing! Every point made by author Bryan Caplan,
an economics professor, is refutable, and, while the piece is long, we believe it's important
"for the record" to counter all of his points.
As I first read Bryan Caplan's "Open Borders Are a Trillion-Dollar Idea" in Foreign
Policy, besides disbelief, my thoughts were that this person must not get out much or must
not read much. A quote from writer Upton Sinclair came to mind as well: "It is difficult to
get a man to understand something, when his salary depends on his not understanding it." https://progressivesforimmigrationreform.org/open-borders-trillion-dollar-mistake/
In China's history when the largest landowners, the wealthiest individuals connived or
bribed their way out of paying taxes and the burden shifted down the income scale, the result
sooner rather than later was an uprising that ended with a new dynasty.
Why is there always more money than is even asked for for the "defense budget", but social
security and medicare are budget problems?
This is a constant in Chinese history, even the French Revolution was set up by the
exclusive taxation of the poor and middle classes. Eviscerating one's sources of income while
weakening the overall economy including the general population does not make for a strong
state able to withstand an unanticipated emergency. Somehow people keep doing the same thing
over and over.
in the US pols are still making masssive tax cuts for billionairs and big
corporations – 60 of America's largest corporations in the US
paid no federal taxes last year.
At the same time, both parties say there isn't enough money to continue Social Security, as
we know it, because of deficits. They say Social Security is the budget problem. right .
France's govt is doing the economic same trick, imo.
Let that sink in for a moment. Over the same period, the CPI for new vehicles (green
line, right scale in the chart below) rose just 22%:
Note that from 1990 through 1998, the CPI for new vehicles closely tracked the price
increases of the F-150. But this surge in CPI was too disturbing, apparently, and so the CPI
methodology was enhanced with aggressive hedonic quality adjustments and other methods to
bring CPI down, and it actually fell from 1997 through 2009, even as new vehicle prices were
soaring.
Note the inherent class warfare aspect of the dynamic here: Technological advances are
inherently deflationary, in that they allow a manufacturing worker to produce ever-more
value-add per hour. In a fair world, said workers would share in that increased value-add via
salary gains, which would largely offset the price increases of the higher-value-add products
they and others produce.
"Note the inherent class warfare aspect of the dynamic here: Technological advances are
inherently deflationary, in that they allow a manufacturing worker to produce ever-more
value-add per hour. In a fair world, said workers would share in that increased value-add via
salary gains, which would largely offset the price increases of the higher-value-add products
they and others produce."
I entered the workforce in ~1984, and I have yet to see the workers get a share in
anything.
In Eric Weinstein's podcast with Tyler Cowen they have an argument about the CPI and the
hedonic adjustment. Cowen claims that the finance markets are totally cool with CPI as is and
if you think it is messed up then you have the basis for an investment play that will make
you a ton of profits if you are correct.
This is the kind of argument that has given rhetoric a bad name for 2500 years.
If you do not have the patience to listen all the way to the end (I am not proud to say
that I did) you will learn that Cowen and Weinstein are sure that they have impeccable taste
in music. They sound like one of those cartoon characters like Phineas Whoopie the man who
knows everything.
It was interesting watching the impeachment vote on the House floor. Several House Democrats
got up and spoke of how impeachment was like the civil rights movement. I guess they forgot
it was the Democratic Party who defended slavery, founded the clan, imposed segregation, and
fought against the civil rights acts of the 1950s and 1960s.
This was a reply to the jarhead Mattis who mentioned the possibly of a preemptive strike on
Russia because of allegations they are violating a missile treaty.
"We have no concept of a preemptive strike," Putin told a forum of international experts
in the southern city of Sochi in response to a question from the audience.
"In such a situation, we expect to be struck by nuclear weapons, but we will not use them"
first, he said.
"The aggressor will have to understand that retaliation is inevitable, that it will be
destroyed and that we, as victims of aggression, as martyrs, will go to heaven.
"They will simply die because they won't even have time to repent,"
Bobbie
last year Russia is a Christian nation since the Soviet Union fell. They believe in the
10 Commandments one of which is do not murder. E D
last year Yup a reply to the jarhead Mattis who mentioned the possibly of a preemptive
strike on Russia because of allegations they are violating a missile treaty.Yup should start
showing the movies 'Fail Safe' New Bedford Incident', 'The Day After', 'Dr Strange Love, '
Missiles of October' now on TV prime time spots. No JFK or RFK to hold the generals in check
this time.and God indeed will judge them for the billions that die.
Reply
last year If it had not been for one brave Soviet officer during the Cuban missle crisis
it is likely few of us would be reading how "unlikely" the communists are to launch a first
strike. I consider Vasili Arkhipov to be a hero but he was not necessarily viewed that way in
Russia. He probably prevented a nuclear world war III. Please read his story... https://www.warhistoryonline.com/cold-war/vasili-cuban-missile-crisis.html
Vasili Arkhipov was a Soviet naval officer who, upon making a split second decision, prevented
the Cuban Missile Crisis from escalating into a nuclear Vasili Arkhipov was a Soviet naval
officer who, upon making a split second decision, prevented the Cuban Missile Crisis from
escalating into a nuclear www.warhistoryonline.com wootendw
last year Just a warning to nutjobs in the US who believe Russia won't use nukes because
they know they'll be destroyed. Even if there isn't a heaven, what happened to Libya and
Qaddafi was WORSE than nuclear war. Having lost 20m in WWII, Russia will certainly use nukes in
defense EVEN IF THE WEST ONLY ATTACKS THEM WITH CONVENTIONAL WEAPONS Bond000000007
last year Russia is obviously not the evil society or culture that the evil west is
drumming propaganda against at every opportunity It is unfortunate the western world has
evolved very negative socially; surviving at the cost of lies, murder, cheating, beliefs in the
cultural superiority of the Anglo-Saxons, domination of the world and name it! If it is true
that Russia has achieved the military advances that Russia has publicly made known and if that
was the western world, then they would have most likely planned for a schedule of striking
Russia and China in order to bring the world to the level of subjugation that was existing in
the colonial era and even practically now where they are telling countries which community
should lead a country at the national level and which ones and which ones should work on
cohesion of the nation etc. Without any pretence, a one world government will bring the world
to subjugation which will be more less comparable to the era of slavery! Alex
last year
One correction: Putin didn't say "our enemies will just die", he said "our enemies will
croak" , he used an informal word 'сдохнут' -
zdokhnut.
Earlier this week, the Observer reported on a spat that had broken out between a
division of the giant Samsung empire and the American hedge fund Elliott Management. The
most newsworthy feature of the dispute involved a series of articles on Korean business
sites that pointedly criticized Elliott's CEO Paul Singer and directly attacked him for
being Jewish, noting that "Jewish money has long been known to be ruthless and merciless"
and claiming "It is a well-known fact that the US government is swayed by Jewish
capital."
"Do the Jews Really Control America?" asked one Chinese newsweekly headline in 2009. The
factoids doled out in such articles and in books about Jews in China -- for example: "The
world's wealth is in Americans' pockets; Americans are in Jews' pockets" -- would rightly
be seen to be alarming in other contexts. But in China, where Jews are widely perceived as
clever and accomplished, they are meant as compliments. Scan the shelves in any bookstore
in China and you are likely to find best-selling self-help books based on Jewish knowledge.
Most focus on how to make cash. Titles range from 101 Money Earning Secrets From Jews'
Notebooks to Learn To Make Money With the Jews.
Does productivity explain income? I asked this question in a
previous
post
. My answer was a bombastic
no
. In this post, I'll dig deeper into the reasons that
productivity doesn't explain income. I'll focus on wages.
The Evidence
Let's start with the evidence trumpeted as proof that productivity explains wages. Looking across firms, we
find that sales per worker correlates with average wages. Figure 1 shows this correlation for about 50,000 US
firms over the years 1950 to 2015.
Figure 1: The correlation between a firm's average wages and
its sales per worker.
Data comes from Compustat. To adjust for inflation, I've divided wages and sales
per worker by their respective averages (in the firm sample) in each year. I've shown stock tickers for select
firms.
Mainstream economists take this correlation as evidence that productivity explains wages. Sales, they say,
measure firms' output. So sales per worker indicates firms' labor productivity. Thus the evidence in Figure 1
indicates that productivity explains (much of) workers' income. Case closed.
The Problem
Yes, sales per worker correlates with average wages. No one disputes this fact. What I dispute is that this
correlation says anything about productivity. The problem is simple. Sales per worker
doesn't measure
productivity
.
To understand the problem, let's do some basic accounting. A firm's sales equal the unit price of the firm's
product times the quantity of this product:
Sales = Unit Price × Unit Quantity
Dividing both sides by the number of workers gives:
Sales per Worker = Unit Price × Unit Quantity per Worker
Let's unpack this equation. The 'unit quantity per worker' measures labor productivity. It tells us the
firm's output per worker. For instance, a farm might grow 10 tons of potatoes per worker. If another farm grows
15 tons of potatoes per worker, it unambiguously produces more potatoes per worker (assuming the potatoes are
the same).
The problem with using sales to measure productivity is that
prices
get in the way. Imagine that
two farms, Old McDonald's and Spuds-R-Us, both produce 10 tons of potatoes per worker. Next, imagine that Old
McDonald's sells their potatoes for $100 per ton. Spuds-R-Us, however, sells their potatoes for $200 per ton.
The result is that Spuds-R-Us has double the sales per worker as Old McDonald's. When we equate sales with
productivity, it appears that workers at Spuds-R-Us are twice as productive as workers at Old McDonald's. But
they're not. We've been fooled by prices.
The solution to this problem seems simple. Rather than use sales to measure output, we should measure a
firm's output
directly
. Count up what the firm produces, and that's its output. Problem solved.
So why don't economists measure output directly? Because the restrictions needed to do so are severe. In
fact, they're so severe that they're almost never met in the real world. Let's go through these restriction.
1: Firms must produce identical commodities
To objectively compare productivity, you have to find firms that produce the same commodity. You could, for
instance, compare the productivity of two farms that produce (the same) potatoes. But if the farms produce
different things, you're out of luck.
Here's why. When firms produce different commodities, we need a common dimension to compare their outputs.
The problem is that the choice of dimension affects our measure of output.
To see the problem, let's return to our two farms, Old McDonald's and Spuds-R-Us. Suppose that Spuds-R-Us
produces 10 tons of potatoes per worker. Tired of growing potatoes, Old McDonald's instead grows 5 tons of corn
per worker. Which workers are more productive?
The answer depends on our dimension of analysis.
Suppose we compare potatoes and corn using mass. We find that Spuds-R-Us workers (who produce 10 tons per
worker) are more productive than Old McDonald's workers (who produce 5 tons per worker).
Now suppose we compare potatoes and corn using energy. Furthermore, imagine that corn has twice the caloric
density of potatoes. Now we find that workers at Spuds-R-Us (who produce half the mass of food at twice the
caloric density) have the same labor productivity as Old McDonald's workers.
The lesson? Unless two firms produce the same commodity, productivity comparisons are subjective. They
depend on the choice of dimension.
Restriction 2: Firm output must be countable
When you read economic textbooks, it's clear that the discipline of economics is stuck in the 19th century.
Firms, the textbooks say, produce
stuff
.
But what about all those other firms that don't produce stuff? What is their output? What, for instance, is
the output of Goldman Sacks? What is the output of a high school? What is the output of a hospital? What is the
output of a legal firm?
Yes, these institutions do things. But it defies reason to give these activities a 'unit quantity'. In other
words, it defies reason to quantify the output of these institutions.
Restriction 3: Firms must produce a single commodity
Complicating things further, we can objectively measure output only when firms produce a single commodity.
If a firm produces two (or more) commodities, its output is affected by how we add the commodities together.
To see the problem, let's return to Old McDonald's and Spuds-R-Us. Suppose that both farms have diversified
their production. Spuds-R-Us produces 5 tons of potatoes and 1 ton of corn per worker. Old McDonald's produces
1 ton of potatoes and 5 tons of corn. Which workers are more productive?
The answer depends on our dimension of analysis. In terms of mass, both farms produce 6 tons of food per
worker. So labor productivity appears the same. But suppose we measure the output of energy. Again, we'll
assume that corn has double the caloric density of potatoes. Suppose corn contains 2 GJ (gigajoule) per ton,
while potatoes contain 1 GJ per ton. Now we find that Old McDonald's workers are about 60% more productive than
workers at Spuds-R-Us. Here's the calculation:
Spuds-R-Us:
5 tons potato × 1 GJ / ton + 1 ton corn × 2 GJ / ton = 7 GJ
Old McDonald's:
1 ton potato × 1 GJ / ton + 5 ton corn × 2 GJ / ton = 11 GJ
This 'aggregation problem' is why the neoclassical theory of income distribution assumes a single-commodity
world -- a world in which everyone produces and consumes the same thing. In this one-commodity world, we can
measure productivity unambiguously. In the real world (with many commodities) productivity depends on our
choice of dimension.
The Severity of the Problem
Let's take stock. If we want to measure productivity objectively, the restrictions are severe:
Firms must produce the same commodity
This commodity must be countable
Firms must produce only one commodity
These conditions are so stringent that they're rarely met in the real world. This is a bit of a problem for
neoclassical theory. It proposes that everyone's income is explained by their productivity. But only in the
rarest of circumstances can we measure productivity objectively.
It's hard not to laugh at this predicament. It's like Newton proclaiming that gravitational force is
proportional to mass. But in the next sentence he realizes that mass can be measured only in the rarest of
circumstances.
The Neoclassical Sleight of hand
Neoclassical economists don't think of themselves as Newtons who can't measure mass. Instead, economics
textbooks don't even mention the problems with measuring productivity. In these textbooks, all seems well in
neoclassical land.
But all is not well. Neoclassical economists perpetuate their fantasy by relying on a sleight of hand.
Here's what they do.
First, economists argue that the purpose of all economic activity is to give consumers
utility
. Buy
a potato and you get utility. Buy a cigarette and you get utility. Utility, economists say, is the universal
dimension of output. By measuring utility, we can compare the output of any and all firms (no matter what they
produce).
After proclaiming that utility is the universal dimension of output, economists pull their trick. Utility,
they say, is
revealed through prices
. So a painting worth $1000 gives the buyer 1000 times the utility
as a $1 potato.
With this thinking in hand, economists see that a firm's sales measure its output of utility:
Sales = Unit Price × Unit Quantity
Sales = Unit Utility × Unit Quantity = Gross Utility
So sales become a universal measure of utility, and utility is the universal measure of output. Now, when we
compare sales per worker to wages (as in Figure 1), economists proclaim that we're comparing productivity to
wages.
Except we're not.
The problem is that this whole operation is circular. The idea that prices reveal utility is a
hypothesis
.
And as every good scientist knows, you can't use your hypothesis to test your hypothesis. But that's what
neoclassical economists do. They assume that one aspect of their theory is true (the link between prices and
utility) to test another aspect of their theory (the link between productivity and income). This is a big no
no.
Why do economists use this circular reasoning? Probably because they don't know they're doing it. Economists
take as received wisdom the idea that prices reveal utility. But this is just a hypothesis. In fact, it's a bad
hypothesis. Why? Because we can never measure utility independently of prices.
Why are Sales Related to Wages
Whenever I go through the logic above, mainstream economists will retort: "But look at the correlation
between wages and sales! How can this not show that productivity explains wages?" Their reasoning seems to be
that, absent an alternative explanation, this correlation must support their hypothesis.
In
No,
Productivity Does Not Explain Income
, I gave an alternative explanation. The correlation between wages and
sales per worker, I argued, follows from accounting principles.
Sales isn't a measure of output. It's an
income
stream. Once earned, this income gets split by the
firm into different categories. Some of it goes to workers. Some of it goes to other firms (as non-labor
costs). And some of it goes to the firm's owners as profit.
Figure 2: Dividing a firm's income stream.
Accounting
principles dictate that a firm's sales get divided into profits and wages.
By
definition, the terms on the left must sum to the terms on the right. So it's not surprising that we find a
correlation between wages and sales. They're related by an accounting identity.
In comments on
No,
Productivity Does Not Explain Income
(and on other sites), some economists pounced on this argument, saying
it was fatally flawed. And in hindsight, I admit that I wasn't clear enough about my reasoning. I was thinking
about the real world. But the economists who critiqued my reasoning were thinking in terms of pure mathematics.
To frame the debate, let's think about something more concrete than income. Let's think about volume. In
rough terms, the volume of an object is the product of its length, width and height:
V = L × W × H
Now, let's pick a dimension -- say length. Will the length of an object correlate with its volume? In general
terms, no. I can make an object with any volume using any length. I just have to adjust the other dimensions
appropriately. By doing so, I can make a cube have the same volume as a box that is long and thin.
So in pure mathematical terms, the accounting definition of volume doesn't lead to a correlation between
length and volume.
But when we look at real-world objects -- like animals -- we
will
find a correlation. If we took all
the species on earth and plotted their length against their volume, we'd expect a tight correlation. A bacteria
has a small length and a small volume. A blue whale has a big length and a big volume. Fill in the gaps between
and we should get a nice tight line.
The reason for this correlation is that animals cannot take any shape. You'll never find an animal that is a
mile long and a few micrometers wide. Such a beast doesn't exist. Yes, the shapes of animals vary. But in the
grand scheme, this varation is small. As a first approximation, animals are roughly cubes. Or, if you're a
physicist,
they're
spheres
.
With this shape restriction, it follows from the definition of volume that animal length should correlate
with animal volume. We'd be astonished if it didn't.
So too with the correlation between sales per worker and wages. True, this correlation doesn't follow purely
from accounting principles. It follows jointly from accounting principles, and the fact that firms can't take
any form. We don't find firms that pay their workers nothing. That's slavery and its illegal. Similarly, we
don't find (many) firms that pay their workers the entirety of sales. That leaves no room for profit.
So in the real world, there are restrictions on how firms can divide their income stream. Here's what these
restrictions look like. In Figure 3, I've plotted the distribution of firms' payroll as a portion of sales.
This is the portion of sales that goes to workers. Across all firms, it's a pretty tight distribution,
clustered around 25%.
Figure 3: The distribution of firm payrolls as a fraction of
sales.
Data is for US firms in the Compustat database over the years 1950–2015.
Yes, it's theoretically possible for a firm to give any portion of its sales to workers. But this isn't what
happens in reality. In the real world, most firms give between 10% and 50% of their sales to workers. Just like
with the shape of animals, there are real-world restrictions on the 'shape' that firms can take.
Given these restrictions, it's not surprising that we find a correlation between sales per worker and wages.
When a firm's income stream grows, so does the amount going to workers.
None of this has anything to do with productivity. It's all about income. Sales are the firm's income. And
wages are the portion of this income given to workers.
Prices The Elephant in the Room
Let's conclude this foray into neoclassical thinking. The reason that sales don't measure firm output is
because they mix unit prices with unit quantities. Yes, sales per worker correlates with wages. But the
elephant in the room is prices. Greater sales may be due to greater output. But it can also be due to greater
unit prices.
In many cases, price differences are
everything
.
Imagine that a lawyer and a janitor both work 40 hours a week as self-employed contractors. The lawyer
charges $1000 per hour, while the janitor charges $20. At the end of the week, the lawyer has 50 times the
sales as the janitor. This difference comes down solely to price. The lawyer charges 50 times more for their
hourly services than the janitor.
The question is
why
?
Neoclassical economists proclaim they have the answer. The lawyer, they say, produces 50 times the utility
as the janitor. Ask economists how they know this, and they'll answer with a straight face: "Prices revealed
it."
It's time to recognize this sleight of hand for what it is: a farce. The reality is that we know virtually
nothing about what causes prices. And we will continue to know nothing as long as researchers believe the
neoclassical farce.
Further Reading
The Aggregation Problem: Implications for Ecological and Biophysical Economics.
BioPhysical Economics
and Resource Quality
. 4(1), 1-15.
SocArxiv
Preprint
.
Economists are always prepared for yesterday's problems.
Inflation was a big problem in the Keynesian era and every effort has been made to ensure that it doesn't
return.
Exceptionally intelligent Chinese economists have been looking at today's problems.
Davos 2018 – They know financial crises come from the private debt-to-GDP ratio and inflated asset prices
https://www.youtube.com/watch?v=1WOs6S0VrlA
The PBoC know how to spot a Minsky Moment coming, unlike the FED, BoE, ECB and BoJ.
The black swan flies in under our policymaker's radar.
Our policymakers are always looking in the wrong direction.
They fixate on public debt, and so don't see the problems emerging in private debt
The central banks look at consumer price inflation, while the problems are emerging in asset price inflation.
Your salesperson might negotiate higher prices on every deal, and that might correlate with their higher
productivity in a regulated and truly competitive market.
What does sales at higher prices in a (de facto) deregulated and increasingly monopolist market space
point to? Not to greater productivity, imo, but to deregulated monopoly. It too oftern points to unregulated
rentier-ism, or price gouging. Why has the cost of, say, insulin
tripled
over
the past decade? Not because of greater productivity. How can these price increases in this deregulated
market environment possibly point to real productivity? It points to price gouging. Since there is more
rentier-ism in the market, the old idea that prices/wages can be reliably equated with productivity becomes
meaningless, imo.
Do your other employees building widgets become "less productive" suddenly when your salesman catches a
cold? (You can come up with a bunch of these showing that productive can not be precisely equal to money
earned, because they exist on different time scales measuring different firm aggregates).
Is the salesman "more productive" if he kidnaps the children of a client and blackmails him into buying
more product? What would "productive" mean in any useful sense if there's no independent definition of
utility? Not every dollar earned is a measure of "productive" -- unless you redefine productive to mean
"every dollar earned by any measure".
When the US invaded Santo Domingo to extract debts, was that "productive" in any meaningful sense? That
would seem to be an abuse of language, rather than saying what you mean.
The problem here is that "productive" is a
moral
justification -- and so it must continue to mean
something more than simply money earned in order to morally justify the order. That's the goal of the use of
the word productive -- that thus the results are
just
.
"It's time to recognize this sleight of hand for what it is: a farce. The reality is that we know
virtually nothing about what causes prices. And we will continue to know nothing as long as researchers believe
the neoclassical farce."
This is what I don't understand, I think its obvious why there are prices. The whole idea of business, and
capitalism generally, is to charge as much as possible while spending as little as possible.
Beyond a certain point I do believe greed drives inflation -- companies will charge whatever they think they
can get away with long before there is wage pressure. Wage pressure in my experience is a reaction to
inflation, not a driver of it. For some reason many people of the conservative persuasion seem to get this
backwards.
Absolutely. The use of "we" here is problematic. What needs to be made clear is the fundamental
distinction between those who study capitalism, where the fundamental driver is the search for profit, and
those who study "the economy," for whom profit either doesn't exist or is the "marginal productivity of
capital," a concept which has been shown over and over to be nonsensical, and the fundamental drivers are
things we can't explain – individual wants and preferences and various completely unpredictable "shocks."
There is no collective "we." It's them against us.
It is obvious that prices are seriously out of kilter with actual value of products & services but is this a
result of all that extra money that was created to save the banks after 2008? And what about the vital function
of price discovery then. How does that work out? I do believe that there is something missing from this article
and that is a break-out of "wages". I suppose you could break it down to wages, salary & management which may
be more instructive. How does productivity relate to management then, both internally and externally? By
externally I mean when consultants are called into a company to do management's job. If you think that this
cannot be a serious concern, then reflect that the UK's NHS paid out between $350 million and $600 million
worth of taxpayer money on management consultancy in 2014 alone. What effect did that have on the NHS's
productivity then?
It sounds like the sure path to higher productivity is to encourage monopolies and oligopolies that can
raise prices pretty much at will while reducing the number of workers. The question becomes: why hasn't US
productivity surged as its markets became increasingly concentrated?
Blair Fix touches on an important issue behind the layers of terminology, concepts and policies that have so
impacted our everyday lives. So if labor productivity doesn't explain wages, income or prices, then what are
the true factors influencing prices and stagnant real wages?
Pricing power, labor cost, and profit margins of large transnational corporations have benefitted from their
increasingly monopolistic control of markets to suppress competition, use of global labor arbitrage, enjoyment
of very low and even negative real interest rates, tax policies and use of tax havens, hidden subsidies,
automation, neutering of organized labor, and purchased political influence. The productivity of labor in the
West has essentially been made irrelevant in many cases. Important stuff in so many ways.
Still appreciate the famous EPI chart that shows how the wealthy have captured the entire differential
between stagnant real wages and the rising productivity of labor since neoliberal capitalism made its
appearance on the world stage four decades ago. Trillions:
Hence 'private equity' is a euphemism for cannibalizing any source of equity for a quick profit. We have
an entire paradigm that is a farce. Based on value (equity) which in turn is based subjectively on whatever
you can snooker. It is one step forward and two steps backwards at this point. The Chinese have a beautiful
view of our debacle. No wonder they can tease out the contradictions. But it's not like we, places like NC,
haven't been screaming about all this loud and clear. (Steve Keen for starters.) The thing the aptly named
Mr. Fix is saying resides beneath the surface: If we are ever in so desperate a position to raise prices too
much nobody will buy and the system will collapse. And because of our horror-at-the-thought we have avoided
pricing oil where it belongs. Instead we have burned it with abandon, devastating the environment while we
were at it. A very expensive abandonment. It was an unrecognized consequence; an unavoidable one for the
sake of profit – whereas the other accounting anomalies are more "discretionary". When you are desperate
nothing is discretionary. If price ever comes to equal "utility" aka value, then there will be very little
commerce. It makes Richard Murphy's advocacy for Oil Bankruptcy a very rational suggestion. Mitigate the
devastation – that's about all we'll be able to do.
Even Adam Smith admitted that the economic value of something has no relation to its intrinsic utility, but
only to the relative balance of supply and demand for it.
If there are more workers than jobs, wages will be driven down and productivity gains will decouple from
wages – although with low wages, there will be little incentive to invest in making workers more productivity
so productivity may decline as a second-order effect.
If there are more jobs than workers, wages will be bid up, and productivity gains will be largely captured
by workers because it is the limiting factor in any economy that captures the profits. At the same time, high
wages will tend to spur higher productivity because there will be strong incentive to make efficient use of
relatively expensive labor.
At the base of Niagara Falls, water is cheap and it is not used efficiently. Using water efficiently in
Niagara Falls will not increase its price. In the Gobi desert, water is expensive and it is used efficiently.
Not using water efficiently in the Gobi desert will not make it cheaper.
The core of modern macroeconomics is to take what is fundamentally simple and confuse the heck out of it.
then what are the true factors influencing prices and stagnant real wages?
That would be the human factor. Greed, honesty, and desires and conscious acts. Economics cannot capture the
human factor.
Every human on Earth is capable of affecting markets dramatically by one act. Humans making multiple
decisions every day. All 7.5 billion. One person can change markets and history with one act. Gavrilo Princip,
for instance. Or by using an Internet post to affect markets.
To accurately model economics? All decisions made by each and every person on the planet would have to be an
input into any model. Each person's actions would have to have a solid, predictable outcome with no deviations.
A person becomes depressed, then A and B and C can ONLY happen.
Which would rule out occurrences such as Malaysia Flight 370 and quite a few other possibilities.
Economics and economists are in no way, shape, or form capable of accounting for the human factor. Which is
why there should be no laws of economics. More like, guesswork and observing trends in a general and gross
manner. Only to pray for accuracy.
LTCM was an example of economics and economists over-stepping their intellect. LTCM employed the
observations from John Nash (the subject of the move, A Beautiful Mind) and his Nobel prize winning work. Their
system worked until it didn't. Other humans made decisions that trashed.
People chose not to play the game. For LTCM? Such decisions by others outside of LTCM's control were fatal.
The issue with game theory, etc? For it to work, one has to have enforcers or project power to force people to
play by a set of rules. One could call this, the basis of American foreign policy – financial in nature.
The "Law of Supply and Demand"? Routinely violated. A person can decide arbitrarily to put items on sale.
The Human Factor.
Trends in economics are like trends on Twitter. You just never know. Economists are trend chasers. Having
more in common with Internet "influencers" trying to convince people that a $5 pair of shoes is actually worth
$400, than with actual science. THAT being an example of how prices are determined, in part.
Neoliberal economics is a case study of a select group (economists) influencing politicians and others, to
support their version of economics.
Economics and economists are in no way, shape, or form capable of accounting for the human factor.
Which is why there should be no laws of economics.
+1000
Great post DF! This whole discussion reminds me of the shortest job I ever had – selling crappy stereo
speakers out of the back of a white van for a day.
I'd answered an ad not knowing what I'd be getting into. The people who were "training" me would drive up
to an unsuspecting person in a mall parking lot and try to sell these speakers. They had a set dollar amount
per day there were supposed to sell to get a bonus, so if they could sell a speaker for $200 they would and
if at the end of the day they needed $25 to meet their sales quota, the last speaker would go for $25. The
whole thing depended on two very big human factors – greed and gullibility.
I'm sure an economist could come up with productivity figures for this operation, but what it really was
was a scam.
The job you describe reminds me of Eastern European bazaars back in the day where items being sold
"fell off" the back of a truck. Or Hoboken, NJ market on a certain block. :)
Thank you NC for yet another article exposing the sham of neoclassical economics. Here's a paragraph from a
book I happen to be reading yesterday
"..the neoclassical economic perspective is
the
ideology par excellence of capitalist political
economy. It is a theory that explains nothing more than how to assure that capitalism remains capitalism. That
is, neoclassical economics demonstrates how wealth and resources may continue to function to the advantage of
the minority that controls wealth and the immediate access to political power. It is an ideology because it
depicts as "rational" only economic behavior that seeks the "utility maximization" characteristic of market
exchange. That other motives and values might deserve priority in our action as economic agents is either
unthinkable (ruled out by definition) or, worse, held to be economically "irrational." Neoclassical economic
theory is itself a system of morality- and theology and ethics – masquerading as "science." Yet those who
dissent from this hidden morality have a difficult task before them. For this debate concerning the ethics of
economics is consistently suppressed in public discourse. Reigning economic theory makes calls for the
substantive realignment of existing economic power appear as madness. Dissenters are
by definition
"unrealistic," "utopian," or "irresponsible.""
And
this was written almost 30 years ago
in the book 'God and Capitalism – A Prophetic
Critique of Market Economy'. The excerpt is from chapter three – 'The "Fate" of the Middle Class in Late
Capitalism' by Beverly W. Harrison.
Can we please get an SEC or FASB ruling requiring the explicit breakout of salary payroll on the income
statement of EVERY public listed company?
Capitalism has ALL manner of enumeration of uses of capital, but nowhere is labor listed! I don't care for
labor hidden inside direct/indirect "costs of goods sold", "SG&A", "R&D" etc. Just put a payroll expense (minus
payroll taxes, minus the healthcare and whatnot, straight payroll) line item somewhere in the 10-k. Is it a
crime to ask?
Forgive me if this has been discussed previously. It's from a September Atlantic article on
economics I happened upon, a review of a book by Applebaum written by Sebastian Mallaby:
"...Applebaum opens his book with the observation that economics was not always the
imperial discipline. Roosevelt was delighted to consult lawyers such as Berle, but he
dismissed John Maynard Keynes as an impractical 'mathematician'. Regulatory agencies were
headed by lawyers, and courts dismissed economic evidence as irrelevant. In 1963, President
John F. Kennedy's Treasury secretary made a point of excluding academic economists from a
review of the international monetary order, deeming their advice useless. William McChesney
Martin, who presided over the Federal Reserve in the 1950s and '60s, confined economists to
the basement.
Starting in the l970s, however, economists began to wield extraordinary influence..."
I know all who are discussing financial matters here know this - it was just good for me
to see it spelled out. I see, however, the rest of the review is very economist oriented and
no mention of Michael Hudson whatsoever; it is, after all, the Atlantic. Yay for Roosevelt
and Kennedy though!
Isikoff is a part of conspiracy to depose Trump. and it shows.
OK. Let's assume that will drag the trial all the
January. Then what ?
If we believe polls it is amazing how brainwashed US public is: to assume that
marionette government has any say in what to do is the upper level of naivety: " Removing Trump from office (a step beyond impeachment) had the support of just under half
(49 percent) of registered voters
in the Yahoo News/YouGov poll . On the factual basis for the two articles of impeachment,
53 percent of registered voters said Trump abused his power in demanding help from Ukraine;
only 40 percent said he did not. Fifty-one percent said the president obstructed Congress;
again, only 40 percent said he did not."
Notable quotes:
"... Michael Isikoff was involved with Clinton and the Russian Dossier. ..."
A House Democrat who played a key role in the impeachment of President Trump says the House
should not "roll over" and quickly present the articles of impeachment to the Senate for a
trial that would amount to a "farce."
"We're not going to participate in a process that makes a mockery out of the Constitution,"
said Rep. Jamie Raskin, D-Md., a member of the House Judiciary Committee, who presented the
panel's case for impeachment to the House Rules Committee. Raskin has been widely mentioned as
a candidate to be one of the House managers to prosecute the case in an impeachment trial in
the Senate. "We are not gonna roll over and say, yeah, you can give us some drive-through
justice with one afternoon where everything is dealt with on a motion to dismiss and no
evidence is heard.
"My position is that, so long as they do not make the most minimal provisions for a fair
trial, then we should not participate in a farce."
Although Raskin emphasized he was speaking for himself, his comments on the Yahoo News
"Skullduggery" podcast illustrate the competing pressures House Speaker Nancy Pelosi is under
from her own caucus in the aftermath of the historic vote to impeach the president, which was
supported by virtually all House Democrats -- and not a single Republican. Public opinion among
registered voters shows a narrow (50-45)
plurality favoring impeachment , according to a new Yahoo News/YouGov poll.
After the passage of the two articles of impeachment on Wednesday evening -- one for abuse
of power, the other for obstruction of Congress -- Pelosi has held off presenting them to the
Senate, citing doubts that Senate Majority Leader Mitch McConnell will permit a "fair" trial.
McConnell has said he will coordinate his efforts with the White House and has made up his mind
not to vote for conviction. Removal of the president requires a two-thirds majority in the
Senate, which Republicans control by a 53-47 margin.
Pelosi's move -- as the House adjourned for a two-week holiday break on Thursday -- has
created a new layer of uncertainty over when, or even if, the Senate will actually try the
president. Republicans have already jumped over Pelosi's tactics, accusing her of political
gamesmanship that undermines the solemnity with which Democrats presented the case against the
president.
But Raskin, one of the House's more progressive members, says it is McConnell's own comments
-- vowing to work with White House lawyers to ensure the acquittal of the president -- that
have made a mockery of impeachment.
"To say that you're not going to look at the evidence or the facts would get you
disqualified from every jury pool in the United States of America," Raskin said. "If you were
in a voir dire and the judge said to you, 'Will you pay attention to the facts? Will you pay
attention to the evidence? Will you pay attention to the law?' and you say, 'No. I've already
made up my mind,' you would be dismissed immediately."
Bolton, Mulvaney and Pompeo were blocked from appearing before the House during its
impeachment hearings by a White House claim that any conversations they had with the president
were shielded by executive privilege. Trump's defenders say the House could have tried to
compel their testimony by subpoena. But the certainty that White House lawyers would have
fought those subpoenas all the way up to the Supreme Court would have put off action until well
into next year, Raskin said.
"It just takes a very long time."
Raskin acknowledged that impeachment by its nature is both a judicial and political process
-- and that Pelosi's maneuvering is intended at least in part to put public heat on McConnell
to accede to the demand for witnesses.
"We want the country to put serious pressure on the Senate to conduct the trial with
seriousness," Raskin said. "And the polls show, for example, on the question of witnesses, that
even though I think only 51 percent or 52 percent of the people are declaring themselves right
now in favor of impeachment and removal, like 70 percent of the people are saying, 'Yes, the
president should make all witnesses available.'"
Removing Trump from office (a step beyond impeachment) had the support of just under half
(49 percent) of registered voters
in the Yahoo News/YouGov poll . On the factual basis for the two articles of impeachment,
53 percent of registered voters said Trump abused his power in demanding help from Ukraine;
only 40 percent said he did not. Fifty-one percent said the president obstructed Congress;
again, only 40 percent said he did not.
How effective Pelosi's strategy will be is far from clear. While President Trump is seeking
a quick Senate trial in January so he can proclaim vindication as he runs for reelection,
McConnell has suggested he is happy to forget the whole thing. "Do you think this is leverage,
to not send us something we'd rather not do?" he said to reporters this week. And with those
words, noted New York Times reporter Carl Hulse, the Senate majority leader " cracked a
broad smile outside the Senate chamber in a departure from his usual dour expression."
yesterday
Michael Isikoff was involved with
Clinton and the Russian Dossier. ThisSkullduggeryGroup is
another TokyoRoseYellowJournalistic attempt at presenting
propagandist commentaries as news articles.
Isekoff has replaced Marrissa Mayer
at Yawho News that's all.
There are many fake posters on the
message boards. They are not really fellow U.S.Citizens
and can easily be recognized by their one line insults
that have nothing to do with debate and only to do with
creating a hostile environment between so called liberals
and so called conservatives who I prefer to call
U.S.Citizens. Our differences are not that far apart but
there are Globalist, Anarchist, and other forces in this
country and outside of this country that would love to
see our country collapse and that we also discard our
Constitution and our freedoms protected under that
document.
Cass Sunstein
ObolaCzar proposed government
'infiltrate' social network sitesCassSunstein wants
agents to 'undermine' talk in chat rooms, message boards.
Published: 01/12/2012 at 10:56 PM
Just prior to his appointment as
President Obama's so-called regulatory czar,CassSunstein
wrote a lengthy academic paper suggesting the government
should "infiltrate" social network websites, chat rooms
and message boards.Such "cognitive infiltration,"Sunstein
argued, should be used to enforce a U.S. government ban
on "conspiracy theorizing."
Major Obama donor and former Google
executive Marissa Mayer will take the helm at Yahoo! as the
company's new CEO Tuesday In May, Neilsen listed
theYahooABC NewsNetwork as the leading news site on the
Web in the U.S., makingMayer the head of the
largest news site on the Web.
She
is also a major donor to both PresidentBarackObama and
the DemocraticParty.According to the Center for
ResponsivePolitics; in April 2011Mayer donated two
separate amounts of $2,500 dollars to Obama, and one
large sum of $30,800 to the Democratic National
committee.
Data from political data firm Aristotle, as
reported by the HuffingtonPost, reveals that, in the
second quarter of 2011,Mayer also contributed $35,800 to
Obama Victory Fund 2012.
Asked whether Mayer's political
leanings would not affect the editorial direction ofYahoo!, Yahoo nor Mayer returned The DC's request for
comment by the time of publication. [Full
Disclosure:TheDCandYahoo! have an editorial partnership.]
Well, maybe if Nancy used her
position to actually help the American economy instead of
using her political position to line the pockets of
herself, her husband and their cronies, she might have
remained Speaker.
Why do I say that ? Since Nancy has been "serving" the
nation in D.C., she has increased her personal wealth by
$100 MILLION. Not a typo. How did she do that ? According
to various bios, "good investing". What that really means
is insider trading. You, I and Martha Stewart go to jail
if we get caught doing that, but it was perfectly okay
for members of congress until exposed and the passing of
S.T.O.C.K ( Stop Trading On Congressional Knowledge ) Act
in April 2012. The Act prohibited the use of non-public
information for private profit, including insider trading
by members of Congress and other government employees.
But, thanks to Nancy's piggish greed and abuse of her
position, she bought stocks in at least 8 Initial Public
Offerings (IPOs), with insider knowledge. If you have any
friends in the securities industry, ask them how
difficult it is to get in on even one IPO, let alone
eight. Pelosi’s husband’s purchase of shares in the 2008
initial public offering by Visa Inc as Congress was
considering new credit card regulations. Within two days
of the Visa offering, the 5,000 shares purchased by Paul
Pelosi had risen $20 each.
Nancy's greed led to the addition of the "Pelosi
Provision" to the S.T.O.C.K. Act.
The Pelosi provision prohibits members of Congress,
executive branch officials and their staffs from
receiving special access to initial public offerings
because of their position.
So, Nancy "led" a House that was in power during 10%
Unemployment. Lost control of the House while a Democrat
was in the White House and Democrat majority in the
Senate.
Meanwhile, Nancy was looking out for #1, big time.
"... Where is AOC in all this? She was th e prime mover on impeachment, specifically impeachment over a phone call rather than concentration camps and genocide. And now with impeachment she gave Pelosi cover to sell the country out again. I was wondering why many libreral centrists were expreasing admiration for her, a socialist. Maybe they recognized something? ..."
Interesting, to me at least, that the rocket docket timetable of the House impeachment
coincided with the deadline to pass a budget to avoid a(nother) govt shutdown. While all msm
eyes were transfixed by the hyperventilating spectacle, behind the scenes the budget passed
through the Dem House was filled with more tax breaks for the corporations and the .001%,
more money than the admin asked for the MIC, and killed a bill that would end medical
'surprise billing' (another gift to medical PE investors and giant hospital corporations),
basically a whole neolib wish list.
Interesting the two events coincided, and, that Nancy decided not to sent on the articles
to the Senate at this time. What gives? Is she hold on to them for a future time when she'll
need to use them as another distraction for the msm to report on? (no, that could not be the
reason. ;) )
Pointed this out a couple of days ago (Slate and Buzzfeed). Happy that it is not just the
online press pointing out it was Democrats killing this measure, Democrats in leadership
positions. I also like that few, if any, of our media is falling for the kabuki used by Neal
to stick the shiv in. Everyone gets that the 'competing plan' was there strictly to derail a
law that end the hugely profitable but fraudulent price gauging of healthcare by private
equity.
If he keeps this up, walking POS Schumer might make me miss Al D'Amato nah Al and Chuck
are just two different colors of tulle, adding illusion to the political process.
..and they could have just passed it for the good PR and then de-fanged it
administratively, but it looks like they wanted to press the point:
"No, Proles, we're not gonna let you breathe, not a bit."
Where is AOC in all this? She was th e prime mover on impeachment, specifically
impeachment over a phone call rather than concentration camps and genocide. And now with
impeachment she gave Pelosi cover to sell the country out again. I was wondering why many
libreral centrists were expreasing admiration for her, a socialist. Maybe they recognized
something?
(Bloomberg) -- Glancing at bags of cash stuffed to the brim earlier this month, Gary Fan
simply wanted someone to remove them from an office in Hong Kong used by his political
party.
The former pro-democracy lawmaker had collected HK$2.7 million ($345,000) during an
anti-government protest the day before, and was waiting for someone to pick it up from a
mysterious group known as Spark Alliance that helps bail protesters out of jail. The next day,
a person whom he knew and trusted came to collect the cash, even though Fan says he doesn't
know who exactly is behind the group or where the money ends up.
"We just work by an honor system now, trusting them with a good cause," Fan said in a Dec.
11 interview, adding that Spark Alliance has "earned credibility with real work" like getting
legal assistance for protesters. Still, he said, "I absolutely agree there should be more
disclosure, transparency and accountability when you take money from the public."
On Thursday evening, police announced the arrests of four people connected with Spark
Alliance for suspected money laundering, the first cases brought over financing the
demonstrations after six months of protests against China's tightening grip over Hong Kong.
Authorities froze HK$70 million of bank deposits and personal insurance products linked to the
fund, while also seizing HK$130,000 in cash.
"The police attempted, through false statements, to distort the work of Spark Alliance as
money laundering for malicious uses," the group said in a statement on Facebook. "Spark
Alliance condemns this kind of defamatory action."
The crackdown deals a major blow to demonstrators as they face ever-mounting legal
bills, with more than 6,000 people arrested since June. Spark Alliance, one of the largest
crowd-funding campaigns supporting the protests, plays a crucial behind-the-scenes role --
often sending anonymous representatives to bail protesters out of jail in the middle of the
night.
The latest arrests risk deterring Hong Kong's professional class from giving more cash,
potentially curbing a substantial source of funds that have helped sustain the protests longer
than anyone had expected. They also show the limits of the leaderless movement's ability to
manage tens of millions of dollars with little oversight outside of a formal financial
system.
Funds bankrolling the protests have collectively raised at least HK$254 million ($33
million) since June, with 70% coming from just two groups, Spark Alliance and the 612
Humanitarian Fund, according to a tally based on disclosures from the groups and an analysis of
publicly available documents. That figure doesn't reflect all the money raised related to the
protests, only the funds Bloomberg News could verify.
The $33 million alone amounts to a third of the money the city has spent in overtime pay to
11,000 police officers since June, and would be able to purchase some 300,000 gas masks. But
the largest costs faced by protesters are legal fees that may stretch out for years.
Nearly 1,000 people have been charged for offenses like rioting, which carries a jail
sentence of as much as a decade, according to police. The 612 Fund says it can cost up to
HK$1.8 million per person for a 60-day legal defense, and many trials last far longer. Some
proceedings related to Hong Kong's 2014 Occupy protests are still ongoing.
Among dozens of groups, Spark Alliance is one of the most secretive: Even some donors and
lawyers who assist the group say they don't know who runs it, while the bank account listed on
its website belongs to a firm that owns a pest control company. A person who picked up Spark
Alliance's hotline last week said the number was only for protester requests. The group didn't
respond to requests for comment via Facebook, Whatsapp or Telegram.
'We Need Protection'
"Spark is probably less transparent but people tend to believe them," said Jason, a
protester in his 30s who asked to be identified by his English name. He said he memorized the
group's phone number and called the group after he was arrested in August. Seven hours later,
two lawyers helped arrange HK$4,000 in bail money.
"Everyone knows the cost to fight for this movement and not everyone can afford lawyer
fees," he said. "We need protection."
HB. I have used leases developed in our field in the past ten years to demonstrate that shale
is high cost. Again, rule of thumb the cost of a conventional well in our field is
approximately 1/100 of a shale oil well ($70K range v $7 million range).
Here are some examples with production through 10/31/19:
8 producers 4 injection wells. Cumulative BO 83,466. YTD BO 2,085. First production
4/2003.
10 producers 4 injection wells. Cumulative BO 116,065. YTD BO 2089. First production
9/2005.
10 producers 4 injection wells. Cumulative Bo 55,595. YTD BO 3,023. First production
3/2006.
4 producers 1 injection well. Cumulative BO 37,418. YTD BO 1,289. First production
8/2008.
8 producers 3 injection wells. Cumulative BO 42,494. YTD BO 2,328. First production
10/2008.
4 producers 1 injection well. Cumulative BO 19,216. YTD BO 1,220. First production
12/2010.
8 producers 3 injection wells. Cumulative BO 46,463. YTD BO 1,877. First production
8/2011.
4 producers 2 injection wells. Cumulative BO 10,700. YTD BO 634. First production
10/2011.
8 producers 3 injection wells. Cumulative 59,592 BO. YTD 4,956 BO. First production
11/2011.
1 producer. Water disposed of in adjoining lease. Cumulative BO 7,872. YTD BO 444 BO.
First production 5/2012.
8 producers 3 injection wells. Cumulative 56,500 BO. YTD 3,858 BO. First production
6/2012.
4 producers 1 injection well. Cumulative BO 11,758. YTD BO 1,457. First production
6/2013.
2 producers. Water disposed of on adjoining lease. Cumulative 3,524 BO. YTD BO 393. First
production 11/2013.
6 producers Two injection wells. Cumulative 25,988 BO. YTD 3,233 BO. First production
9/2014.
Figure in anywhere from $60K-80K to drill, complete and equip each well including
electric, flow and/or injection lines. Figure another $20-30K for a tank battery.
Assume anywhere from 12.5 to 20 percent royalty.
Of course, some projects do better than others. But compare this to shaleprofile.com
wells.
There was very little drilling in our field from 1987 to 2003. There has been very little
since 2015. Century plus year old stripper field.
There have also been many reclamation projects in our field during 2005-2014 of abandoned
wells wherein the producers went bust in the 1990s, with 1998 being a knockout blow.
We took over 2 wells drilled in the 1950s they were abandoned in 1998. We just had to
equip them and build a new tank battery. We also took over three wells also drilled in the
1950s where we had to do the same, plus plug the injection well and convert one producer to
an injector. These work well at $55-65 WTI also.
I can also point to many projects developed in our field in the 1980s where cumulative per
well has topped 40K BO to date.
Conventional oil is a much better deal than shale usually when you can find it. And also
when you aren't trying to pay for 8 figure CEO pay, skyscrapers and jets out of it.
Shale just has the scale. Huge scale. Worldwide game changing size.
Shallow, I can't thank you enough. Alot to digest here. My first glance gave me the feeling
shale drilling dollars are about half as productive. Maybe you have a better number.
When a new field is drilled, is it always under pressure without the cost of lifting it
from the hole? Then once the pressure is exhausted it becomes a stripper?
A lot of the Huntington Beach field lays under the ocean. There is over a mile long row of
wells along the shoreline. I'm assuming they go horizontal under the ocean. Only a few wells
have lift Jacks. Can strippers wells go horizontal?
There isn't enough down hole pressure here for natural flow. Everything goes on pumping unit
immediately and injection wells are also drilled at the same time as production wells.
To put into perspective, the field was originally drilled over 100 years ago. Waterflood
was initiated on a large scale right after WW2. Many wells were plugged in the late
1960s-early 1970s when oil prices were low. The field was redrilled in the late 1970s –
early 1980s. Little activity after 1986, until prices took off during the Iraq War.
For example, we operate a lease that was originally drilled in the 1950s. It was plugged
out in 1972. In 1979-81, all of the plugged wells were drilled out (casing had not been
pulled). New injection wells were drilled.
Cumulative from 9 producing wells since 1979 is over 140K BO with production currently at
5.5 BOPD. It is difficult to tell what these wells produced from 1953-1972, because they were
part of a larger unitized waterflood project. Our guess is around 200-250K BO during that
time frame.
Only a small company would be interested in 9 wells making 5.5 BOPD, but they have been
economic even during the worst part of 2016 (barely during Q1 – 2016).
There haven't been HZ wells drilled in the shallow zones (1,500' and below). However,
there has been some success with 1,800'-5,000' TVD hz wells. Not sure of the economics.
There has been success with slick water fracks in deeper vertical wells also.
No way. It's already here, and there will be no rebound. BTW I did carefully read your
comments above Dennis and thank you for your time to respond. As always, your responses are
significantly better than what my caustic remarks deserve.
As has been said many times, money does not equal geology. Even if a new tranche of
'investment' could be begged, borrowed, or stolen (likely stolen) it would be spent to build
new drilling equipment, pay for new leases/roads/infrastructure, with all of it into new
wells that will produce less than any before them. If inflation is a factor (and it is), the
borrowed & eventually defaulted upon money will buy less than before.
Shale started bad, and it will stay bad. No shale well was a gusher instead, they all
needed huge horsepower, millions of gallons of water, hundreds of tons of sand, and lots of
investment dollars just to get started. None of these were ever a Texas gusher. To me, this
is no business model to follow, it is a debacle.
We have seen hundreds of shale companies go bankrupt over the last couple of years. Going
forward, there won't be hundreds of bankruptcies because there won't be hundreds of shalies
to go bankrupt. Like the motorcar companies of old, it'll go from dozens of market
participants to a handful through M&A and bankruptcies. There is still plenty of surface
carnage to come and it is far from over. Bear in mind, this is largely the same crowd that
kept exclaiming a dropping 'breakeven' price from 2010 forward, to the point where $20 was
wildly shouted from the rooftops (particularly from John Mauldin) as the point of
profitability. Of course, none of it was true. Now we see at long last that $60 (and probably
$75) was the true breakeven point. Lots of C-suite executives should be in jail for their
malfeasance, but of course none are and with the exception of Aubrey McClendon, all of them
are still 'at large'.
So with all this in mind and to round off a long screech, I summarize by saying that 2019
is peak shale.
The small companies, which have gotten only B class land will have to reduce, leading the
decline.
The bigger ones can continue to grow to a certain amount – but using up their A
class land. Especially all non-Permian will see this very soon and start declining. So
Permian growth soon will not be enough to keep up all shale decline – and this at the
cost of the Permian Tier A claims.
Oil production from shale will have a long future if prices settle at 100$ – but
with worse land it will just not be a bit boom.
A boom means high drilling everything costs, in a long calm era everything has more normal
prices (why should a truck driver carrying fertiliser to farm tows earn much less than a
truck driver delivering sand to a hole). And so finally some money can be earned in the oil
spot.
If the Democrats take over and get more green, taxes on oil production will be increased
anyway, and tax credits cut – so more calm drilling anyway. This is a big "if", I don't
know how the D – R battle stands now.
" The golden age of U.S. shale is far from over, with an expected slowdown in the Permian
Basin likely to be temporary, according to the new U.S. Energy Secretary.
The shale boom helped transform the U.S. into a net exporter of crude and petroleum
products in September from a major importer a decade ago. Even as growth is set to slow next
year in the Permian and elsewhere as drillers respond to investor demands for capital
restraint, Dan Brouillette said the shale boom has further to run."
Permian Drillers Are Struggling To Keep Output Flat
Newer wells in the Permian see their oil and gas production declining much faster than
older wells, and operators will need to drill a large number of wells just to keep current
production levels, an IHS Markit analysis showed on Thursday.
IHS Markit has analyzed what it calls the "base decline" rate, calculating the actual or
expected production of all the operating wells at the start of the year and tracking their
cumulative decline by the end of the year. Over the past decade, the base decline rate of
the more than 150,000 producing oil and gas wells in the Permian has "increased
dramatically," according to the analysis.
Your article goes into a lot of depth. I noticed these statements:
"The main driver of Legacy Loss is Total Production, which is logical.
In Permian, higher Initial Production (IPt) increased legacy loss, probably because new wells
deplete faster than old wells"
New wells depleting fasting than old wells partly explains why the monthly legacy loss
keeps increasing from month to month. It's now close to 600kbd/month, according to EIA
DPR.
The chart below from the article shows Jan 2015 as Peak Shale No 1 as legacy loss was
above new monthly shale production. The author says when "red line gets above new monthly
initial production then that's Peak Shale No 2", which might happen as soon as early 2020.
This is shown by the dashed line "IPt minus Legacy Loss" reaching zero, which means Peak
Shale No 2. The author says that this could happen if WTI stays at $55.
The basic premise is that productivity per completion has stalled, and there is no longer
a huge overhang of cheap frac spreads keeping the frac market oversupplied.
And what, Dennis? How, pray tell, will 17 million horsepower -and other infrastructure
including manpower – magically re-appear in 2020 and inflate another peak? With
existing shale finances in the tank, $300 billion of already accumulated and un-repayable
debt, and Wall Street financiers demanding repayment on their investments, your
prognostication for a rebound has a tinge of 'wildly unrealistic' about it.
ExxonMoble boe per day is 2.25 millon and has a market value of $300 billion. The tight oil
shale play over the last decade has increased production 7 million bpd. Is $300 billion of
debt really out of line? Do you have CFO experience with a multi-billion dollar company?
In the trucking industry the major freight companies running 24/7 turn their tractor fleet
over on a 5 year rotation receiving 20 cents on the dollar at retirement. Ready mix trucks
are turned over after 10 years rotation at 20 cents or less on the dollar running 12/5. When
the business environment is good. It's easy to delay retirement a little to meet demand. When
times are difficult, the old trucks sit in the yard and can be stripped for parts.
I have to question your hair on fire comment. Do you know the life expectancy of a
drilling rig for a large corporation ? The related article is talking about retiring 10
percent. That's a 10 year rotation. Maybe replacement is just cost efficient verses down
time. The big boys don't work on the same time frame as the little guy.
HB. $300 billion divided by 7 million comes to over $42,000 per barrel of debt. IMO that
is a high level of debt unless oil prices recover to 2011-14 levels.
Only the best oil production is selling for that in our part of the world and that is
production with a decline rate of 3% per year or less.
Regarding XOM, keep in mind that includes not just the upstream, but the midstream and
down stream, both of which are substantial.
XOM also has substantial international upstream assets which are generating substantial
cash flow at $60s Brent.
The only reason there is any production of shale oil at all is that there is a combination of
cheap money and a plethora of desperate investors starved for yield. Well guess what, the
investors want a return on their investment and the cheap money is drying up. So, artificial
life support is being withdrawn and the patient is now expected to get off the emergency room
gurney and start working for his keep. We shall see how that turns out.
This whole exercise in perfidy is much like Uber, that has never made a profit to date,
and yet was supported by billions of investor dollars. The whole ignominious affair put
hundreds of thousands of cabbies into destitution and bankruptcy, i.e those who didn't enjoy
the largess of investors willing to put up with loss-making operations for years on end.
Uber and Shale; the twin shitstorms of inequity, capital misalocation, and widespread
collateral damage to their respective proximal markets.
I agree with your concerns Mike. It seems to me that debt will be accumulated in the system
until it needs to be defaulted on. The governments of the world have become expert on kicking
the can down the road.
But that path will end one day, perhaps suddenly. Default will come via one of several
mechanisms- currency devaluation and debt write-off, for example. Whatever method, it will
severely hurt those who were expecting pensions or government payments (Medicare/SS), or to
live on savings or investment yield. These things will be massively de-valuated. Negative
interest rates you have been hearing about are just the early symptom of this process. A
president who cannot release his tax returns because he has a long pattern of committing
severe financial crimes, is another. The extreme accumulation of wealth among the super
wealthy is yet another.
I have given up expecting a 'fair' or rational game.
The EIA has December 2019 C+C production at 12.99 million bpd. They have December 2020 at
13.28 million bpd. That is an increase, December to December of .29 million bpd. Quite a
comedown from the over 2 million bpd increase in 2018.
HB. The problem with shale is that it is expensive oil, despite what companies such as XOM
and CVX put out publicly. However, it has a big advantage in that it is onshore, USA.
I think part of the reason that XOM, CVX, COP, MRO and other companies with worldwide
operations keep at it is because it is onshore lower 48.
I remember when everything that these companies were doing was international. It required
employees to live in some less than desirable places. Recall the stories I have related here
about employees of these companies having less than 24 hours to leave Libya, or being herded
out of the office in Venezuela at gunpoint.
Working offshore can't be a picnic. Also, the liability is great, see BP's disaster.
The management and employees want shale to work very badly. And it does at a high enough
oil price. Unfortunately, the price hasn't been there since 2014. But they keep making stuff
up because they don't want to be sent back to the Middle East and other tough places, or work
offshore deepwater.
But what has been bad for the companies has been great for consumers. I can't believe how
much Bernie and Elizabeth ignore the benefit shale has been to the US economy.
What would have happened without US going from less than 5 million BOPD to almost 13
million in eleven years? I suspect a lot of bad things. My primary beef is that the companies
lie about what price they need for shale to work and completed too many wells when prices
were low.
I think maybe shale is finally figuring out they need above my preferred $55-65 WTI
price band. We have been slightly below that and it appears things are really slowing
down.
Also lots of Goldman Sachs charts, with the one below showing a peak plateau from 2022 to
2025. The legend is missing 3 shale plays. The bottom dark blue is Delaware (Permian),
Midland (Permian) above and Bakken, the grey.
Good article, I believe it will not only be related to US shale oil quality but also a more
or less collapse in US shale , to use the shale pioneer Mark Papas words from 2019 " the best
in US shale is behind " but the investors choose to not believe him as it not fits with what
the shale producers had presented them. Perhaps this time wall street will learn a lesson
that might be quite exspensive. I am waiting for how much Exxon will write down of their
assets in Permian, that might be higher than Chevron have annonsed.
Tight oil output will not increase as much as forecast by IEA and OPEC so it is not likely a
refining wall at the World level will be be reached. As to demand outrunning supply, when
that occurs oil prices will rise to a level that demand is destroyed to the point that supply
will equal consumption as it must over the long term. Demand (consumption) cannot be higher
than supply (output) for very long as stocks cannot be less than zero plus pipeline fill and
minimum storage tank levels needed to keep the overall refinery and distribution system
functioning. Oil prices will rise from 2020 to 2030, of that we can be sure, unless a severe
World recession occurs (I expect this to begin in 2030+/-2 years and last for 2 to 4 years if
World economists remember their Keynesian economics, otherwise it could be 5 to 7 years, if
nonsense like fiscal austerity in the face of severe recessions is recommended and we are
foolish enough to forget the lessons of 1929-1933.)
Oil quality is not the way to address or label the issue. Quality is a word traditionally
used in oil to describe sulphur content, not a scarcity of middle distillates in the yield.
Needs a different word.
Further, from the article, diesel is not the consumption growth heavy constituent. It's
jet fuel. Up 3.7% last year. Gasoline was up almost 1%.
The
Economics Debate, again and again The debate on the economics profession – its
alleged ills and failings -- abates at times, but never ends. A recent
piece in The Guardian taking the profession to task for its lack of reform has prompted a
response from a group of economists. I thought it was time to re-up my own views on this
debate, in the form of two sets of ten commandments. The first set is directed at economists,
and the second to non-economists.
Ten commandments for economists
1. Economics is a collection of models; cherish their diversity.
2. It's a model, not the model.
3. Make your model simple enough to isolate specific causes and how they
work, but not so simple that it leaves out key interactions among causes.
4. Unrealistic assumptions are OK; unrealistic critical assumptions
are not OK.
5. The world is (almost) always second-best.
6. To map a model to the real world you need explicit empirical
diagnostics, which is more craft than science.
7. Do not confuse agreement among economists for certainty about how the
world works.
8. It's OK to say "I don't know" when asked about the economy or
policy.
9. Efficiency is not everything.
10. Substituting your values for the public's is an abuse of your
expertise.
Ten commandments for non-economists
1. Economics is a collection of models with no predetermined conclusions;
reject any arguments otherwise.
2. Do not criticize an economist's model because of its assumptions; ask
how the results would change if certain problematic assumptions were more realistic.
3. Analysis requires simplicity; beware of incoherence that passes itself
off as complexity.
4. Do not let math scare you; economists use math not because they are
smart, but because they are not smart enough.
5. When an economist makes a recommendation, ask what makes him/her sure
the underlying model applies to the case at hand.
6. When an economist uses the term "economic welfare," ask what s/he means
by it.
7. Beware that an economist may speak differently in public than in the
seminar room.
8. Economists don't (all) worship markets, but they know better how they
work than you do.
9. If you think all economists think alike, attend one of their
seminars.
10. If you think economists are especially rude to non-economists, attend
one of their seminars.
I have spent enough time around non-economists to know that their criticism often misses the
mark. In particular, many non-economists tend not to understand the value of parsimonious
modeling (especially of the mathematical kind). Their typical riposte is: "but it is more
complicated than that." It is of course. But without abstraction from detail, there cannot be
any useful analysis.
Economists, on the other hand, are very good at modeling but not so good at navigating among
their models. In particular, they often confuse a model, for the model. A big
part of the problem is that the implicit scientific method to which they subscribe is one in
which they are constantly striving to achieve the "best" model.
Macroeconomists are particularly bad at this, which accounts in part for their dismal
performance. In macroeconomics, there is too much of "is the right model the classical or the
Keynesian one" (and their variants), and too little of "how do we know whether it is the
Keynesian or the classical model that is the most relevant and applicable at this point in time
in this particular context."
Price of oil does have problem that will play out over next 6-8 months. Without a trade war
and Brexit hanging over markets. There isn't a whole lot of reason to be holding government
bonds which yield next to nothing or less than nothing in some cases. Fed is buying bills so
Repo market won't implode into another 2008. Only problem is they need to be buying coupons
or treasuries also. They are buying some treasuries but it's not near enough to hold interest
rates down. Yields on debt are going to rise without something like a trade war holding them
down. That is a problem if your long oil.
Keep an eye on 10 year US treasuries. If they become just a little less liquid and yields
rise as i believe they will. These OPEC cuts aren't going to mean as much as some might
think.
Information from local sources said that US army helicopters have already transported the gold bullions under cover of darkness
on Sunday [February 24th], before transporting them to the United States.
The sources said that tens of tons that Daesh had been keeping in their last hotbed in al-Baghouz area in Deir Ezzor countryside
have been handed to the Americans, adding up to other tons of gold that Americans have found in other hideouts for Daesh, making
the total amount of gold taken by the Americans to the US around 50 tons, leaving only scraps for the SDF [Kurdish] militias that
serve them [the US operation].
Recently, sources said that the area where Daesh leaders and members have barricaded themselves in, contains around 40 tons
of gold and tens of millions of dollars.
Allegedly, "US occupation forces in the Syrian al-Jazeera area made a deal with Daesh terrorists, by which Washington gets tens
of tons of gold that the terror organization had stolen, in exchange for providing safe passage for the terrorists and their leaders
from the areas in Deir Ezzor where they are located."
ISIS was financing its operations largely by the theft of oil from the oil wells in the Deir Ezzor area, Syria's oil-producing
region, and they transported and sold this stolen oil via their allied forces, through Turkey, which was one of those US allies trying
to overthrow Syria's secular Government
and install a Sunni fundamentalist regime that would be ruled from Riyadh (i.e., controlled by the Saud family) . This gold is
the property of the Syrian Government, which owns all that oil and the oil wells, which ISIS had captured (stolen), and then sold.
Thus, this gold is from sale of that stolen black-market oil, which was Syria's property.
The US Government evidently thinks that the public are fools, idiots. America's allies seem to be constantly amazed at how successful
that approach turns out to be.
Jihadists were recruited from throughout the world to fight against Syria's secular Government. Whereas ISIS was funded mainly
by black-market sales of oil from conquered areas, the Al-Qaeda-led groups were mainly funded by the Sauds and other Arab royal families
and their retinues, the rest of their aristocracy. On 13 December 2013, BBC headlined
"Guide to the Syrian rebels" and opened "There are
believed to be as many as 1,000 armed opposition groups in Syria, commanding an estimated 100,000 fighters." Except in the Kurdish
areas in Syria's northeast, almost all of those fighters were being led by Al Qaeda's Syrian Branch, al-Nusra. Britain's Center on
Religion & Politics headlined on 21 December 2015,
"Ideology
and Objectives of the Syrian Rebellion" and reported: "If ISIS is defeated, there are at least 65,000 fighters belonging to other
Salafi-jihadi groups ready to take its place." Almost all of those 65,000 were trained and are led by Syria's Al Qaeda (Nusra), which
was protected by
the US
In September 2016 a UK official
"FINAL REPORT OF THE TASK
FORCE ON COMBATING TERRORIST AND FOREIGN FIGHTER TRAVEL" asserted that, "Over 25,000 foreign fighters have traveled to the battlefield
to enlist with Islamist terrorist groups, including at least 4,500 Westerners. More than 250 individuals from the United States have
also joined." Even just 25,000 (that official lowest estimate) was a sizable US proxy-army of religious fanatics to overthrow Syria's
Government.
On 26 November 2015, the first of Russia's videos of Russia's bombing ISIS oil trucks headed into Turkey was bannered at a US
military website
"Russia Airstrike on ISIS Oil Tankers" , and exactly a month later, on 26 December 2015, Britain's Daily Express headlined
"WATCH: Russian fighter jets smash ISIS oil tankers after spotting 12,000 at Turkish border" . This article, reporting around
twelve thousand ISIS oil-tanker trucks heading into Turkey, opened: "The latest video, released by the Russian defence ministry,
shows the tankers bunched together as they make their way along the road. They are then blasted by the fighter jet." The US military
had nothing comparable to offer to its 'news'-media. Britain's Financial Times headlined on 14 October 2015,
"Isis Inc: how oil fuels the jihadi terrorists" . Only America's allies were
involved in this commerce with ISIS -- no nation that supported Syria's Government was participating in this black market of stolen
Syrian goods. So, it's now clear that a lot of that stolen oil was sold for gold as Syria's enemy-nations' means of buying that oil
from ISIS. They'd purchase it from ISIS, but not from Syria's Government, the actual owner.
An estimated 20,000-40,000 barrels of oil are produced daily in ISIS controlled territory generating $1-1.5 million daily profit
for the terrorist organization. The oil is extracted from Dir A-Zur in Syria and two fields in Iraq and transported to the Kurdish
city of Zakhu in a triangle of land near the borders of Syria, Iraq and Turkey. Israeli and Turkish mediators come to the city
and when prices are agreed, the oil is smuggled to the Turkish city of Silop marked as originating from Kurdish regions of Iraq
and sold for $15-18 per barrel (WTI and Brent Crude currently sell for $41 and $45 per barrel) to the Israeli mediator, a man
in his 50s with dual Greek-Israeli citizenship known as Dr. Farid. He transports the oil via several Turkish ports and then onto
other ports, with Israel among the main destinations.
The US had done the same thing when it took over Ukraine by
a brutal coup in February 2014
: It grabbed the gold. Iskra News in Russian
reported, on 7 March 2014 , that "At 2 a.m. this morning ... an unmarked transport plane was on the runway at Borosipol Airport"
near Kiev in the west, and that, "According to airport staff, before the plane came to the airport, four trucks and two Volkswagen
minibuses arrived, all the truck license plates missing." This was as translated by Michel Chossudovsky at Global Research headlining
on 14 March,
"Ukraine's Gold Reserves Secretly Flown Out and Confiscated by the New York Federal Reserve?" in which he noted that, when asked,
"A spokesman for the New York Fed said simply, 'Any inquiry regarding gold accounts should be directed to the account holder.'" The
load was said to be "more than 40 heavy boxes." Chossudovsky noted that, "The National Bank of Ukraine (Central Bank) estimated Ukraine's
gold reserves in February to be worth $1.8 billion dollars." It was allegedly 36 tons. The US, according to Victoria Nuland (
Obama's detail-person
overseeing the coup ) had invested around $5 billion in the coup. Was her installed Ukrainian Prime Minister Arseniy Yatsenyuk
cleaning out the nation's gold reserves in order to strip the nation so that the nation's steep indebtedness for Russian gas would
never be repaid to Russia's oligarchs? Or was he doing it as a payoff for Nuland's having installed him? Or both? In any case: Russia
was being squeezed by this fascist
Ukrainian-American ploy.
The Syria operation was about oil, gold, and guns. However, most of America's support was to Al-Qaeda-led jihadists, not to ISIS-jihadists.
As the great independent investigative journalist Dilyana
Gaytandzhieva reported on 2 July 2017 :
"In December of last year while reporting on the battle of Aleppo as a correspondent for Bulgarian media I found and filmed
9 underground warehouses full of heavy weapons with Bulgaria as their country of origin. They were used by Al Nusra Front (Al
Qaeda affiliate in Syria designated as a terrorist organization by the UN)."
Furthermore, On
8 March 2013, Richard Spenser of Britain's Telegraph reported that Croatia's Jutarnji List newspaper had reported that "3,000
tons of weapons dating back to the former Yugoslavia have been sent in 75 planeloads from Zagreb airport to the rebels, largely via
Jordan since November. The airlift of dated but effective Yugoslav-made weapons meets key concerns of the West, and especially Turkey
and the United States, who want the rebels to be better armed to drive out the Assad regime."
Also, a September 2014 study by Conflict Armaments Research (CAR), titled
"Islamic State Weapons
in Iraq and Syria" , reported that not only east-European, but even US-made, weapons were being "captured from Islamic State
forces" by Kurds who were working for the Americans, and that this was very puzzling and disturbing to those Kurds, who were risking
their lives to fight against those jihadists.
In December 2017, CAR headlined
"Weapons of the Islamic State"
and reported that "this materiel was rapidly captured by IS forces, only to be deployed by the group against international coalition
forces." The assumption made there was that the transfer of weapons to ISIS was all unintentional.
That report ignored contrary evidence, which I summed up on 2 September 2017 headlining
"Russian TV
Reports US Secretly Backing ISIS in Syria" , and reporting there also from the Turkish Government an admission that the US was
working with Turkey to funnel surviving members of Iraq's ISIS into the Deir Ezzor part of Syria to help defeat Syria's Government
in that crucial oil-producing region. Moreover, at least one member of the 'rebels' that the US was training at Al Tanf on Syria's
Jordanian border had quit because his American trainers were secretly diverting some of their weapons to ISIS. Furthermore: why hadn't
the US bombed Syrian ISIS before Russia entered the Syrian war on 30 September 2015? America talked lots about its supposed effort
against ISIS, but why did US wait till 16 November 2015 before taking action,
"'Get Out Of Your Trucks And Run Away': US Gives ISIS 45 Minute Warning On Oil Tanker Strikes" ?
So, regardless of whether the US Government uses jihadists as its proxy-forces, or uses fascists as its proxy-forces, it grabs
the gold -- and grabs the oil, and takes whatever else it can.
This is today's form of imperialism.
Grab what you can, and run. And call it 'fighting for freedom and democracy and human rights and against corruption'. And the
imperial regime's allies watch in amazement, as they take their respective cuts of the loot. That's the deal, and they call it 'fighting
for freedom and democracy and human rights and against corruption around the world'. That's the way it works. International gangland.
That's the reality, while most of the public think it's instead really "fighting for freedom and democracy and human rights and against
corruption around the world." For example, as
RT reported on Sunday , March 3rd,
about John Bolton's effort at regime-change in Venezuela, Bolton said: "I'd like to see as broad a coalition as we can put together
to replace Maduro, to replace the whole corrupt regime,' Bolton told CNN's Jake Tapper." Trump's regime wants to bring clean and
democratic government to the poor Venezuelans, just like Bush's did to the Iraqis, and Obama's did to the Libyans and to the Syrians
and to the Ukrainians. And Trump, who pretends to oppose Obama's regime-change policies, alternately expands them and shrinks them.
Though he's slightly different from Obama on domestic policies, he never, as the US President, condemns any of his predecessors'
many coups and invasions, all of which were disasters for everybody except America's and allies' billionaires. They're all in on
the take.
The American public were suckered into destroying Iraq in 2003, Libya in 2011, Syria in 2011-now, and so many other countries,
and still haven't learned anything, other than to keep trusting the allegations of this lying and psychopathically vicious and super-aggressive
Government and of its stenographic 'news'-media. When is enough finally enough ? Never? If not never, then when ? Or do most people
never learn? Or maybe they don't really care. Perhaps that's the problem.
Back on 21 December 2018, one of the US regime's top 'news'-media, the Washington Post, had headlined
"Retreating ISIS army smuggled a fortune in cash and gold out of Iraq and Syria" and reported that "the Islamic State is sitting
on a mountain of stolen cash and gold that its leaders stashed away to finance terrorist operations." So, it's not as if there hadn't
been prior reason to believe that some day some of the gold would be found after America's defeat in Syria. Maybe they just hadn't
expected this to happen quite so soon. But the regime will find ways to hoodwink its public, in the future, just as it has in the
past. Unless the public wises-up (if that's even possible).
Last Thursday/Friday the Fed published a $500 billion dollar REPO backstop plan to
cover private bank positioning through the end of the year
according to Dmitry Orlov it's the x10 rate spike on these REPOS that signifies that the
final act is underway. So, for folks paying attention to the prediction market, perhaps now
is the last moment to take heed.
Looking at the numbers for October and November, the Fed monetized over half (50.7%) of
new US government debt. A straight-line projection is that if it took the Fed to go from 0%
to 50% in four months, then it will go from 50% to 100% in another four -- by April Fool's
2020. But who's to say that the increase will be linear rather than exponential? Whichever it
is, the trend is unmistakable: the market in US government debt -- once the deepest and most
liquid market in the world -- is dead. The only thing propping up the value of USTs is the
Fed's printing press. And the only thing propping up the value of the output of the Fed's
printing press is what is it, exactly? Exactly
@Colin
Wright Intelligence and bias for co-operation may lead some groups to far greater
achievements, in scams as well as in everything else.
That aside, I think we daily meet plenty of individuals who'd sell their mothers, and
maybe kill lives, for pennies. They are like machines not even conscious of what they are
doing.
I meet them daily, in whatever activity, and none of them is Jewish. Also their shops,
businesses, and so on are always the ones that prosper more: people love being scammed, and
people love the show of power implicit in making you pay some extra for the service you
requested, and still keeping plenty of customers with you.
So, it's the usual with Joyce (and not only Joyce of course). You take something that is
human, talk of Jews, point to that something in Jews, and pretend, trusting that your readers
will pretend the same, that it's a Jewish-specific something.
Because if you were to say: everyone does this, everywhere, but when Jews do it it's just on
a larger scale, then you'd be shining light on the fact that what changes with Jews is just
skills, and that they are intelligent enough to co-operate more than the others.
Like when Mac Donald speaks of Jewish self-deception.
I feel I am swimming in self-deception everytime I talk with people (more so with women), and
they aren't Jewish. Do people do anything, but self-deceive?
So?
Elliott Management is perhaps most notorious for its 15-year battle with the government
of Argentina, whose bonds were owned by the hedge fund. When Argentine president Cristina
Kirchner attempted to restructure the debt, Elliott -- unlike most of the bonds' owners --
refused to accept a large loss on its investment. It successfully sued in US courts, and in
pursuit of Argentine assets, convinced a court in Ghana to detain an Argentine naval
training vessel, then docked outside Accra with a crew of 22o. After a change of its
government, Argentina eventually settled and Singer's fund received $2.4 billion, almost
four times its initial investment. Kirchner, meanwhile, has been indicted for
corruption.
This massive transfer of the American tech industry has largely been the work of one
leading Republican donor -- billionaire hedge fund manager Paul Singer, who also funds the
neoconservative think tank American Enterprise Institute (AEI), the Islamophobic and
hawkish think tank Foundation for Defense of Democracies (FDD), the Republican Jewish
Coalition (RJC), and also funded the now-defunct Foreign Policy Initiative (FPI).
Singer's project to bolster Israel's tech economy at the U.S.' expense is known as
Start-Up Nation Central, which he founded in response to the global Boycott, Divest and
Sanctions (BDS) movement that seeks to use nonviolent means to pressure Israel to comply
with international law in relation to its treatment of Palestinians.
@Lot
You give partial information which seem misleading and use arguments which are also weak and
not enlightening.
1- Even if its natural that unsafe bonds are sold, this doesn't justify the practices and
methods of those vulture fonds which buy those fonds which are socially damaging. I'm not
certain of the details because it's an old case and people should seek more information. Very
broadly, in the case of Argentina most funds accepted to make an agreement with the country
and reduce their demands. Investors have to accept risks and losses. Paul Singer bought some
financial papers for nothing at that time and forced Argentina to pay the whole price. For
years Argentina refused to pay, but with the help of New York courts and the new Argentinian
president they were forced to pay Singer. This was not conservative capitalism but
imperialism. You can only act like Singer if you have the backing of courts, of a government
which you control and of an army like the US army. A fast internet search for titles of
articles: "Hedge fund billionaire Paul Singer's ruthless strategies include bullying CEOs,
suing governments and seizing their navy's ships". "How one hedge fund made $2 billion from
Argentina's economic colapse".
Andrew Sayer, professor in an English university, says in his book "Why we can't afford
the rich" that finances as they are practiced now may cost more than bring any value to a
society. It's a problem if some sectors of finances make outsized profits and use methods
which are more than questionable.
2- You say that if borrowers become more protected "lenders become more conservative,
investment declines, and worthy businesses can't get investments." I doubt this is true. In
the first place, risk investments by vulture fonds probably don't create any social value.
The original lenders who sold their bonds to such vulture fonds have anyway big or near total
losses in some cases and in spite of that they keep doing business. Why should we support
vulture fonds, what for? What positive function they play in society? In Germany, capitalism
was much more social in old days before a neoliberal wave forced Germany to change Rhine
capitalism. Local banks lended money to local business which they knew and which they had an
interest that they prosper. Larger banks lended money to big firms. Speculation like in
neoliberal capitalism wasn't needed.
3- The point which you didn't grasp is that there is a component of those business which
isn't publicly clear, the fact that they funcion along ethnic lines.
4- It would be easy to fix excesses of capitalism. The problem is that the people who
profit the most from the system also have the power to prevent any change.
The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of
bondholders, probably the majority, cannot hold distressed or defaulted debt. Insurance
companies often can't by law. Bond mutual funds set out in their prospectuses they don't
invest in anything rated lower than A, AA, or whatever. Even those allowed to hold
distressed debt don't want the extra costs involved with doing so, such as carefully
following bankruptcy proceedings and dealing with delayed and irregular payments.
The author is not a finance expert but he correctly spotlights flaws of so-called
'predatory capitalism' which is disproportionately Jewish.
Private equity is rife with vices like asset-stripping and looting e.g Eddie Lampert
('Jewishness' member) plus El Trumpo appointee Steven Mnuchin at Sears.
Vulture funds often load all sorts of costs, even frivolous ones, and extra interest
charges on the original debt to maximize profit.
Some countries have the Duplum rule which limits the amount you are liable to a creditor
when you default on a debt.
I generally like Tucker but thought his piece on Singer was way off base and a silly hit job.
As others above have commented, if you think it's wrong to buy or try to collect on defaulted
debt, what is the alternative set of laws and behavior you are recommending? If debts can
simply be repudiated at will, capitalism cannot function. (Also, while it would take too much
time and space to debate the Puerto Rico situation here, it bears noting that the entire PR
public debt burden of ~$75 billion comes to around $25,000 per resident -- about a third of
the comparable burden of public sector debt per person in the United States, which itself
ignores tens of trillions of "off balance" sheet liabilities for underfunded social security,
Medicare, Medicaid and public sector pension obligations. The source of PR's problems lies
pretty clearly at the feet of PR's long corrupt politicians -- not the incidental holders of
its bonds who would simply like to be repaid or have the debt reasonably restructured.)
Other minor points worth noting:
Joyce names a few Jews associated with Baupost but misleadingly omits its president, the
guy who is running the show: Jim Mooney, a proud graduate of Holy Cross and big supporter of
Catholic and Jesuit causes. If memory serves, Jim was also the guy behind some of Baupost's
biggest and most successeful distressed debt (or "vulture" to use Joyce's pejorative term)
trades. The firm's Jewish founder (Seth Klarman) has also donated tons of money to secular
causes, including something like $60 million for a huge facility at Cornell.
Speaking of donations and Jews, I believe Bloomberg (not technically a "vulture"
capitalist but clearly just as bad -- I.e., Jewish -- on the Joyce scale) gave $1.5 billion
to his alma mater, Johns Hopkins. If memory serves, that may have been the largest donation
to any university ever. Maybe Carnegie's donations were greater in "real" dollars, but
Bloomberg's donation is still pretty significant -- with likely more to come.
@sally
Sally, please, knock it off. If you worked on Wall Street you'd know this article is just the
tip of the iceberg of Jewish financial criminality. Years ago Jim Cramer of CNBC fame, who
used to appear with Goldman Sachs' former and current PR man Larry Kudlow, also headed Wall
Street's top hedge fund at the time, Cramer Berkowitz. A former employee and Jewish at that
wrote an expose, Trading With the Enemy letting non-Jews in the reading public in on
what's really going on. Of course there's a Jewish pipeline giving them the news before it's
news, which is what it means to be a Wall Street insider. Or so says Jim Cramer, and the book
establishes this with solid evidence and not speculation.
For example, one of the Jewish anchors on CNBC would routinely call Cramer, which the
author overheard at the trading desk, and tip Cramer off about a market moving news story
about to be aired so Cramer could front run the market, fanatically divvying the orders out
to avoid scrutiny. His most important client was Norman Podoretz of socialist fame, who put
up the seed money for Cramer, who'd be on the phone to Cramer throughout the day checking on
his investments when not pushing socialism on the stupid goys. That's what socialism means in
America. The big names among Jewish stock and bond analysts at the big houses would also be
on the line with Cramer right before market making analysis was about to be released.
It's also the case that no economy and society can survive the sort of FIRE parasitism
this country's now burdened with, which as Spengler put it a century ago, amounts to tricking
a profit off every penny of goyisher labor. A dog can handle a number of ticks and fleas
sucking its blood, but will die soon enough when the ticks and fleas are consuming a quarter
or more of its blood. As Dr Joyce points out in yet another brilliant article, DJT is
demonstrably a puppet of the Jewish billionaires mentioned, who're in a rage to destroy the
families and everything the fools attending his rallies hold dear.
@J
Adelman Yes, the Jews have always stood up for the underdog (except when they were slave
traders) and promoted social harmony (except for cultural Marxism) and "Jewish influence" is
purely a figment of your imagination (except WWI and the Communist revolution .and and ). And
they definitely have nothing to do with the financial industry or banks (it is all a
conspiracy the protocols ya know).
Do you really believe your own poopaganda? A little introspection goes a long way. Why
have you been persecuted or kicked out of every country you have ever lived in? You never,
ever do anything wrong?
No one is demonizing you. You do it to yourself. People like Epstein and Weinstein are
your standard bearers. Events like 9/11 are your trophies. Your infiltration of the body
politic and malign influence in society is once again becoming visible to everyone and it is
making you afraid.
You have done it again. You never, ever learn. You play the perpetual victim .everyone
hates me without a reason. My sin is greater than I can bear (Cain) everyone who comes across
me will kill me. I spend my time wandering the earth (boo ho). And despite slaying your
brother you are accorded divine protection.
Jesus said (paraphrasing here) that if the unclean spirit is cast out of a man and is not
replaced with something wholesome he takes "seven other spirits" into himself and becomes
totally insane. You did this to yourself and you will realize that your problem is no longer
with man but with God himself. Jacob the deceiver has wrestled all his life against his
fellow man and triumphed but now he will confront God himself. Get ready to meet your Maker
and see how far your excuses will get you with the Almighty.
Jewish financists are no longer Jewish, much like a socialist who became minister is no
longer a socialist minister. Unregulated finance promotes a set of destructive behaviors which
has nothing to do with nationality or ethnicity.
Of course that Joyce is peddling his own obsessions, but I have to admit that Singer &
comp. are detestable. I know that what they’re doing is not illegal, but it should be (in
my opinion), and those who are involved in such affairs are somehow odious. The same goes for
Icahn, Soros etc. Still Ethnic angle is evident, too: how come Singer works exclusively with his
co-ethnics in this multi-ethnic USA? Non-Jewish & most Jewish entrepreneurs don’t
behave that way.
It was very gratifying to see Tucker Carlson's
recent attack on the activities of Paul Singer's vulture fund, Elliot Associates, a group I
first
profiled four years ago. In many respects, it is truly remarkable that vulture funds like
Singer's escaped major media attention prior to this, especially when one considers how
extraordinarily harmful and exploitative they are. Many countries are now in very significant
debt to groups like Elliot Associates and, as Tucker's segment very starkly illustrated, their
reach has now extended into the very heart of small-town America. Shining a spotlight on the
spread of this virus is definitely welcome. I strongly believe, however, that the problem
presented by these cabals of exploitative financiers will only be solved if their true nature
is fully discerned. Thus far, the descriptive terminology employed in discussing their
activities has revolved only around the scavenging and parasitic nature of their activities.
Elliot Associates have therefore been described as a quintessential example of a "vulture fund"
practicing "vulture capitalism." But these funds aren't run by carrion birds. They are operated
almost exclusively by Jews. In the following essay, I want us to examine the largest and most
influential "vulture funds," to assess their leadership, ethos, financial practices, and how
they disseminate their dubiously acquired wealth. I want us to set aside colorful metaphors. I
want us to strike through the mask.
It is commonly agreed that the most significant global vulture funds are Elliot Management,
Cerberus, FG Hemisphere, Autonomy Capital, Baupost Group, Canyon Capital Advisors, Monarch
Alternative Capital, GoldenTree Asset Management, Aurelius Capital Management, OakTree Capital,
Fundamental Advisors, and Tilden Park Investment Master Fund LP. The names of these groups are
very interesting, being either blankly nondescript or evoking vague inklings of Anglo-Saxon or
rural/pastoral origins (note the prevalence of oak, trees, parks, canyons, monarchs, or the use
of names like Aurelius and Elliot). This is the same tactic employed by the Jew Jordan Belfort,
the "Wolf of Wall Street," who operated multiple major frauds under the business name Stratton
Oakmont.
These names are masks. They are designed to cultivate trust and obscure the real background
of the various groupings of financiers. None of these groups have Anglo-Saxon or venerable
origins. None are based in rural idylls. All of the vulture funds named above were founded by,
and continue to be operated by, ethnocentric, globalist, urban-dwelling Jews. A quick review of
each of their websites reveals their founders and central figures to be:
Elliot Management
-- Paul Singer, Zion Shohet, Jesse Cohn, Stephen Taub, Elliot Greenberg and Richard Zabel
Cerberus -- Stephen Feinberg, Lee Millstein, Jeffrey Lomasky, Seth Plattus, Joshua Weintraub,
Daniel Wolf, David Teitelbaum FG Hemisphere -- Peter Grossman Autonomy Capital -- Derek Goodman
Baupost Group -- Seth Klarman, Jordan Baruch, Isaac Auerbach Canyon Capital Advisors -- Joshua
Friedman, Mitchell Julis Monarch Alternative Capital -- Andrew Herenstein, Michael Weinstock
GoldenTree Asset Management -- Steven Tananbaum, Steven Shapiro Aurelius Capital Management --
Mark Brodsky, Samuel Rubin, Eleazer Klein, Jason Kaplan OakTree Capital -- Howard Marks, Bruce
Karsh, Jay Wintrob, John Frank, Sheldon Stone Fundamental Advisors -- Laurence Gottlieb,
Jonathan Stern Tilden Park Investment Master Fund LP -- Josh Birnbaum, Sam Alcoff
The fact that all of these vulture funds, widely acknowledged as the most influential and
predatory, are owned and operated by Jews is remarkable in itself, especially in a contemporary
context in which we are constantly bombarded with the suggestion that Jews don't have a special
relationship with money or usury, and that any such idea is an example of ignorant prejudice.
Equally remarkable, however, is the fact that Jewish representation saturates the board level
of these companies also, suggesting that their beginnings and methods of internal promotion and
operation rely heavily on ethnic-communal origins, and religious and social cohesion more
generally. As such, these Jewish funds provide an excellent opportunity to examine their
financial and political activities as expressions of Jewishness, and can thus be placed in the
broader framework of the Jewish group evolutionary strategy and the long historical trajectory
of Jewish-European relations.
How They Feed
In May 2018, Puerto Rico declared a form of municipal bankruptcy after falling into more
than
$74.8 billion in debt, of which more than $34 billion is interest and fees. The debt was
owed to
all of the Jewish capitalists named above, with the exception of Stephen Feinberg's
Cerberus group. In order to commence payments, the government had instituted a policy of fiscal
austerity, closing schools and raising utility bills, but when Hurricane Maria hit the island
in September 2017, Puerto Rico was forced to stop transfers to their Jewish creditors. This
provoked an aggressive attempt by the Jewish funds to seize assets from an island suffering
from an 80% power outage, with the addition of further interest and fees. Protests broke out in
several US cities calling for the debt to be forgiven. After a quick stop in Puerto Rico in
late 2018, Donald Trump pandered to this sentiment when he told Fox News, "They owe a lot of
money to your friends on Wall Street, and we're going to have to wipe that out." But Trump's
statement, like all of Trump's statements, had no substance. The following day, the director of
the White House budget office, Mick Mulvaney, told reporters: "I think what you heard the
president say is that Puerto Rico is going to have to figure out a way to solve its debt
problem." In other words, Puerto Rico is going to have to figure out a way to pay its Jews.
Trump's reversal is hardly surprising, given that the President is considered extremely
friendly to Jewish financial power. When he referred to "your friends on Wall Street" he really
meant his friends on Wall Street. One of his closest allies is Stephen Feinberg, founder
and CEO of Cerberus, a war-profiteering vulture fund that has now accumulated
more than $1.5 billion in Irish debt , leaving the country prone to a "
wave of home repossessions " on a scale not seen since the Jewish mortgage traders behind
Quicken Loans (Daniel Gilbert) and Ameriquest (Roland Arnall)
made thousands of Americans homeless . Feinberg has also been associated with mass
evictions in Spain, causing a collective of Barcelona anarchists to
label him a "Jewish mega parasite" in charge of the "world's vilest vulture fund." In May
2018, Trump made Feinberg
chair of his Intelligence Advisory Board , and one of the reasons for Trump's sluggish
retreat from Afghanistan has been the fact Feinberg's DynCorp has enjoyed years of lucrative government
defense contracts training Afghan police and providing ancillary services to the military.
But Trump's association with Jewish vultures goes far beyond Feinberg. A recent piece
in the New York Post declared "Orthodox Jews are opening up their wallets for Trump in
2020." This is a predictable outcome of the period 2016 to 2020, an era that could be neatly
characterised as How Jews learned to stop worrying and love the Don. Jewish financiers
are opening their wallets for Trump because it is now clear he utterly failed to fulfil
promises on mass immigration to White America, while pledging his commitment to Zionism and to
socially destructive Jewish side projects like the promotion of homosexuality. These actions,
coupled with his commuting
of Hasidic meatpacking boss Sholom Rubashkin 's 27-year-sentence for bank fraud and money
laundering in 2017, have sent a message to Jewish finance that Trump is someone they can do
business with. Since these globalist exploiters are essentially politically amorphous, knowing
no loyalty but that to their own tribe and its interests, there is significant drift of Jewish
mega-money between the Democratic and Republican parties. The New York Post reports, for
example, that when Trump attended a $25,000-per-couple luncheon in November at a Midtown hotel,
where 400 moneyed Jews raised at least $4 million for the America First [!] SuperPAC, the
luncheon organiser Kelly Sadler, told reporters, "We screened all of the people in attendance,
and we were surprised to see how many have given before to Democrats, but never a Republican.
People were standing up on their chairs chanting eight more years." The reality, of course, is
that these people are not Democrats or Republicans, but Jews, willing to push their money in
whatever direction the wind of Jewish interests is blowing.
The collapse of Puerto Rico under Jewish debt and elite courting of Jewish financial
predators is certainly nothing new. Congo , Zambia , Liberia ,
Argentina , Peru ,
Panama , Ecuador ,
Vietnam , Poland , and
Ireland are just some of the countries that have slipped fatefully into the hands of the
Jews listed above, and these same people are now closely watching
Greece and
India . The methodology used to acquire such leverage is as simple as it is ruthless. On
its most basic level, "vulture capitalism" is really just a combination of the
continued intense relationship between Jews and usury and Jewish involvement in medieval
tax farming. On the older practice, Salo Baron writes in Economic History of the Jews
that Jewish speculators would pay a lump sum to the treasury before mercilessly turning on the
peasantry to obtain "considerable surpluses if need be, by ruthless methods." [1] S. Baron
(ed) Economic History of the Jews (New York, 1976), 46-7. The activities of the
Jewish vulture funds are essentially the same speculation in debt, except here the trade in
usury is carried out on a global scale with the feudal peasants of old now replaced with entire
nations. Wealthy Jews pool resources, purchase debts, add astronomical fees and interests, and
when the inevitable default occurs they engage in aggressive legal activity to seize assets,
bringing waves of jobs losses and home repossessions.
This type of predation is so pernicious and morally perverse that both the
Belgian and
UK governments have taken steps to ban these Jewish firms from using their court systems to
sue for distressed debt owed by poor nations. Tucker Carlson, commenting on Paul Singer's
predation and the ruin of the town of Sidney, Nebraska, has said:
It couldn't be uglier or more destructive. So why is it still allowed in the United
States? The short answer: Because people like Paul Singer have tremendous influence over our
political process. Singer himself was the second largest donor to the Republican Party in
2016. He's given millions to a super-PAC that supports Republican senators. You may never
have heard of Paul Singer -- which tells you a lot in itself -- but in Washington, he's
rock-star famous. And that is why he is almost certainly paying a lower effective tax rate
than your average fireman, just in case you were still wondering if our system is rigged. Oh
yeah, it is.
Aside from direct political donations, these Jewish financiers also escape scrutiny by
hiding behind a mask of simplistic anti-socialist rhetoric that is common in the American
Right, especially the older, Christian, and pro-Zionist demographic. Rod Dreher, in a
commentary on Carlson's
piece at the American Conservative , points out that Singer gave a speech in May
2019 attacking the "rising threat of socialism within the Democratic Party." Singer continued,
"They call it socialism, but it is more accurately described as left-wing statism lubricated by
showers of free stuff promised by politicians who believe that money comes from a printing
press rather than the productive efforts of businesspeople and workers." Dreher comments: "The
productive efforts of businesspeople and workers"? The gall of that man, after what he did to
the people of Sidney."
What Singer and the other Jewish vultures engage in is not productive, and isn't even any
recognisable form of work or business. It is greed-motivated parasitism carried out on a
perversely extravagant and highly nepotistic scale. In truth, it is Singer and his co-ethnics
who believe that money can be printed on the backs of productive workers, and who ultimately
believe they have a right to be "showered by free stuff promised by politicians." Singer places
himself in an infantile paradigm meant to entertain the goyim, that of Free Enterprise vs
Socialism, but, as Carlson points out, "this is not the free enterprise that we all learned
about." That's because it's Jewish enterprise -- exploitative, inorganic, and attached to
socio-political goals that have nothing to do with individual freedom and private property.
This might not be the free enterprise Carlson learned about, but it's clearly the free
enterprise Jews learn about -- as illustrated in their extraordinary
over-representation in all forms of financial exploitation and white collar crime. The
Talmud, whether actively studied or culturally absorbed, is their code of ethics and their
curriculum in regards to fraud, fraudulent bankruptcy, embezzlement, usury, and financial
exploitation. Vulture capitalism is Jewish capitalism.
Whom They Feed
Singer's duplicity is a perfect example of the way in which Jewish finance postures as
conservative while conserving nothing. Indeed, Jewish capitalism may be regarded as the root
cause of the rise of Conservative Inc., a form or shadow of right wing politics reduced solely
to fiscal concerns that are ultimately, in themselves, harmful to the interests of the majority
of those who stupidly support them. The spirit of Jewish capitalism, ultimately, can be
discerned not in insincere bleating about socialism and business, intended merely to entertain
semi-educated Zio-patriots, but in the manner in which the Jewish vulture funds disseminate the
proceeds of their parasitism. Real vultures are weak, so will gorge at a carcass and
regurgitate food to feed their young. So then, who sits in the nests of the vulture funds,
awaiting the regurgitated remains of troubled nations?
Boston-based Seth Klarman (net worth $1.5 billion), who like Paul Singer has
declared "free enterprise has been good for me," is a rapacious debt exploiter who was
integral to the financial collapse of Puerto Rico, where he hid much of activities behind a
series of shell companies. Investigative journalists eventually discovered that Klarman's
Baupost group was behind much of the aggressive legal action intended to squeeze the decimated
island for bond payments. It's clear that the Jews involved in these companies are very much
aware that what they are doing is wrong, and they are careful to avoid too much reputational
damage, whether to themselves individually or to their ethnic group. Puerto Rican journalists,
investigating the debt trail to Klarman, recall trying to follow one of the shell companies
(Decagon) to Baupost via a shell company lawyer (and yet another Jew) named Jeffrey Katz:
Returning to the Ropes & Gray thread, we identified several attorneys who had worked
with the Baupost Group, and one, Jeffrey Katz, who – in addition to having worked
directly
with Baupost – seemed to describe a particularly close and longstanding relationship
with a firm fitting Baupost's profile on his experience page. I called
Katz and he picked up, to my surprise. I identified myself, as well as my affiliation with
the Public Accountability Initiative, and asked if he was the right person to talk to about
Decagon Holdings and Baupost. He paused, started to respond, and then evidently thought
better of it and said that he was actually in a meeting, and that I would need to call back
(apparently, this high-powered lawyer picks up calls from strange numbers when he is in
important meetings). As he was telling me to call back, I asked him again if he was the right
person to talk to about Decagon, and that I wouldn't call back if he wasn't, and he seemed to
get even more flustered. At that point he started talking too much, about how he was a lawyer
and has clients, how I must think I'm onto some kind of big scoop, and how there was a person
standing right in front of him – literally, standing right in front of him –
while I rudely insisted on keeping him on the line.
One of the reasons for such secrecy is the intensive Jewish philanthropy engaged in by
Klarman under his Klarman Family
Foundation . While Puerto Rican schools are being closed, and pensions and health
provisions slashed, Klarman is regurgitating the proceeds of massive debt speculation to his "
areas of
focus " which prominently includes " Supporting the global Jewish community
and Israel ." While plundering the treasuries of the crippled nations of the goyim, Klarman
and his co-ethnic associates have committed themselves to "improving the quality of life and
access to opportunities for all Israeli citizens so that they may benefit from the country's
prosperity." Among those in Klarman's nest, their beaks agape for Puerto Rican debt interest,
are the American Jewish Committee, Boston's Combined Jewish Philanthropies, the Holocaust
Memorial Museum, the Honeymoon Israel Foundation, Israel-America Academic Exchange, and the
Israel Project. Klarman, like Singer, has also been an enthusiastic proponent of liberalising
attitudes to homosexuality, donating $1 million to a Republican super PAC aimed at supporting
pro-gay marriage GOP candidates in 2014 (Singer donated $1.75 million). Klarman, who also
contributes to candidates
who support immigration reform, including a path to citizenship for undocumented immigrants,
has said "The right to gay marriage is the largest remaining civil rights issue of our time. I
work one-on-one with individual Republicans to try to get them to realize they are being
Neanderthals on this issue."
Steven Tananbaum's GoldenTree Asset Management has also fed well on Puerto Rico, owning $2.5
billion of the island's debt. The Centre for Economic and Policy Research has
commented :
Steven Tananbaum, GoldenTree's chief investment officer, told a business conference in
September (after Hurricane Irma, but before Hurricane Maria) that he continued to view Puerto
Rican bonds as an attractive investment. GoldenTree is spearheading a group of COFINA
bondholders that collectively holds about $3.3 billion in bonds. But with Puerto Rico facing
an unprecedented humanitarian crisis, and lacking enough funds to even begin to pay back its
massive debt load, these vulture funds are relying on their ability to convince politicians
and the courts to make them whole. The COFINA bondholder group has spent
$610,000 to lobby Congress over the last two years, while GoldenTree itself
made $64,000 in political contributions to federal candidates in the 2016 cycle. For
vulture funds like GoldenTree, the destruction of Puerto Rico is yet another opportunity for
exorbitant profits.
Whom does Tananbaum feed with these profits? A brief glance at the spending of the
Lisa and Steven Tananbaum Charitable Trust reveals a relatively short list of beneficiaries
including United Jewish Appeal Foundation, American Friends of Israel Museum, Jewish Community
Center, to be among the most generously funded, with sizeable donations also going to museums
specialising in the display of degenerate and demoralising art.
Following the collapse in Irish asset values in 2008, Jewish vulture funds including OakTree
Capital swooped on mortgagee debt to seize tens of thousands of Irish homes, shopping malls,
and utilities (Steve Feinberg's Cerberus took control of public waste disposal). In 2011,
Ireland emerged as a hotspot for distressed property assets, after its bad banks began selling
loans that had once been held by struggling financial institutions. These loans were quickly
purchased at knockdown prices by Jewish fund managers, who then aggressively sought the
eviction of residents in order to sell them for a fast profit. Michael Byrne, a researcher at
the School of Social Policy at University College Dublin, Ireland's largest university,
comments : "The
aggressive strategies used by vulture funds lead to human tragedies." One homeowner, Anna Flynn
recalls how her mortgage fell into the hands of Mars Capital, an affiliate of Oaktree Capital,
owned and operated by the Los Angeles-based Jews Howard Marks and Bruce Karsh. They were "very,
very difficult to deal with," said Flynn, a mother of four. "All [Mars] wanted was for me to
leave the house; they didn't want a solution [to ensure I could retain my home]."
When Bruce Karsh isn't making Irish people homeless, whom does he feed with his profits? A
brief glance at the spending of the
Karsh Family Foundation reveals millions of dollars of donations to the Jewish Federation,
Jewish Community Center, and the United Jewish Fund.
Paul Singer, his son Gordin, and their Elliot Associates colleagues Zion Shohet, Jesse Cohn,
Stephen Taub, Elliot Greenberg and Richard Zabel, have a foothold in almost every country, and
have a stake in every company you're likely to be familiar with, from book stores to dollar
stores. With the profits of exploitation, they
fund campaigns for homosexuality and mass migration , boost Zionist politics,
invest millions in security for Jews , and promote wars for Israel. Singer is a Republican,
and is on the Board of the Republican Jewish Coalition. He is a former board member of the
Jewish Institute for National Security Affairs, has funded neoconservative research groups like
the Middle East Media Research Institute and the Center for Security Policy, and is among the
largest funders of the neoconservative Foundation for Defense of Democracies. He was also
connected to the pro-Iraq War advocacy group Freedom's Watch. Another key Singer project was
the Foreign Policy Initiative (FPI), a Washington D.C.-based advocacy group that was founded in
2009 by several high-profile Jewish neoconservative figures to promote militaristic U.S.
policies in the Middle East on behalf of Israel and which received its seed money from
Singer.
Although Singer was initially anti-Trump, and although Trump once
attacked Singer for his pro-immigration politics ("Paul Singer represents amnesty and he
represents illegal immigration pouring into the country"), Trump is now essentially funded by
three Jews -- Singer, Bernard Marcus, and Sheldon Adelson, together accounting for over $250
million in pro-Trump political money . In return, they want war with Iran. Employees of
Elliott Management were one of the main sources of funding for the 2014 candidacy of the
Senate's most outspoken Iran hawk, Sen. Tom Cotton (R-AR), who urged Trump to conduct a
"retaliatory strike" against Iran for purportedly attacking two commercial tankers. These
exploitative Jewish financiers have been clear that they expect a war with Iran, and they are
lobbying hard and preparing to call in their pound of flesh. As one political commentator put
it, "These donors have made their policy preferences on Iran plainly known. They surely expect
a return on their investment in Trump's GOP."
The same pattern is witnessed again and again, illustrating the stark reality that the
prosperity and influence of Zionist globalism rests to an overwhelming degree on the predations
of the most successful and ruthless Jewish financial parasites. This is not conjecture,
exaggeration, or hyperbole. This is simply a matter of striking through the mask, looking at
the heads of the world's most predatory financial funds, and following the direction of
regurgitated profits.
Make no mistake, these cabals are everywhere and growing. They could be ignored when they
preyed on distant small nations, but their intention was always to come for you too. They are
now on your doorstep. The working people of Sidney, Nebraska probably had no idea what a
vulture fund was until their factories closed and their homes were taken. These funds will move
onto the next town. And the next. And another after that. They won't be stopped through blunt
support of "free enterprise," and they won't be stopped by simply calling them "vulture
capitalists."
Strike through the mask!
Notes
[1] S.
Baron (ed) Economic History of the Jews (New York, 1976), 46-7.
To what extent is Jewish success a product of Jewish intellect and industry versus being a
result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit?
An application of "chutzpah" to business, if you will – the gall to break social
conventions to get what you want, while making other people feel uncomfortable; to wheedle
your way in at the joints of social norms and conventions – not illegal, but selfish
and rude.
Krav Maga applies the same concept to the martial arts: You're taught to go after the
things that every other martial art forbids you to target: the eyes, the testicles, etc. In
other sports this is considered "low" and "cheap." In Krav Maga, as perhaps a metaphor for
Jewish behavior in general, nothing is too low because it's all about winning .
There's a rather good article on the New Yorker discussing the Sacklers and the
Oxycontin epidemic. It focusses on the dichotomy between the family's ruthless promotion of
the drug and their lavish philanthropy. 'Leave the world a better place for your presence'
and similar pieties and Oxycontin.
The article lightly touches on the extent of their giving to Hebrew University of
Jerusalem -- but in general, treads lightly when it comes to their Judaism.
understandably. The New Yorker isn't exactly alt-right country, after all. But can
Joyce or anyone else provide a more exact breakdown on the Sacklers' giving? Are they genuine
philanthropists, or is it mostly for the Cause?
@anon'To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit? '
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
I won't defend high finance because I don't like it either. But this is a retarded and highly
uninformed attack on it.
1. The article bounces back and forth between two completely different fields: private
equity and distressed debt funds. The latter is completely defensible. A lot of bondholders,
probably the majority, cannot hold distressed or defaulted debt. Insurance companies often
can't by law. Bond mutual funds set out in their prospectuses they don't invest in anything
rated lower than A, AA, or whatever. Even those allowed to hold distressed debt don't want
the extra costs involved with doing so, such as carefully following bankruptcy proceedings
and dealing with delayed and irregular payments.
As a result, it is natural that normal investors sell off such debt at a discount to funds
that specialize in it.
2. Joyce defends large borrowers that default on their debt. Maybe the laws protecting
bankrupts and insolvents should be stronger. But you do that, and lenders become more
conservative, investment declines, and worthy businesses can't get investments. I think
myself the laws in the US are too favorable to lenders, but there's definitely a tradeoff,
and the question is where the happy middle ground is. In Florida a creditor can't force the
sale of a primary residence, even if it is worth $20 million. That's going too far in the
other direction.
3. " either blankly nondescript or evoking vague inklings of Anglo-Saxon or rural/pastoral
origins "
More retardation. Cerberus is a greek dog monster guarding the gates of hell. Aurelius is
from the Latin word for gold. "Hemisphere" isn't an Anglosaxon word nor does in invoke rural
origins.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a
company "Oaktree" should be limited to those of purely English blood! Jews must name their
companies "Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
4. The final and most general point: it's trivially easy to attack particular excesses of
capitalism. Fixing the excesses without creating bigger problem is the hard part. Two ideas I
favor are usury laws and Tobin taxes.
Jewishness aside, maximizing shareholder is the holy grail of all capitalist enterprises. The
capitalist rush to abandon the American working class when tariff barriers evaporated is just
another case of vulturism. Tax corporations based on the domestic content of their products
and ban usury and vulturism will evaporate.
Someone with the username kikz posted a link to this article in the occidental observer. I
read it and thought it was a great article. I'm glad it's featured here.
The article goes straight for the jugular and pulls no punches. It hits hard. I like
that:
1. It shines a light on the some of the scummiest of the scummiest Wall Street
players.
2. It names names. From the actual vulture funds to the rollcall of Jewish actors running
each. It's astounding how ethnically uniform it is.
3. It proves Trump's ties with the most successful Vulture kingpin, Singer.
4. It shows how money flows from the fund owners to Zionist and Jewish causes.
This thing reads like a court indictment. It puts real world examples to many of the
theories that are represents on this site. Excellent article.
Andrew Carnegie left behind institutions like Carnegie Hall, Carnegie-Mellon University,
and over 2500 Free Libraries from coast to coast, in a time when very little was done to
help what we now call the “underprivileged”.
And he funded the building of the Peace Palace (“Vredespaleis”) in The Hague,
presently the seat of the International Court of Justice, an institution not held in high
esteem in the home country of the generous donor.
Jimmy1969 says: December
19, 2019 at 2:12 pm GMT 200 Words Golden Tree Asset Management bought up Post Media in
Canada at a fire sale years ago from the bankrupt Asper family. Post Media is a conglomerate
that controls dozens and dozens of media outlets in all of Canada including 95% of all the
major Newspapers in every large city. Therefore Canadian news is de facto controlled by an
American New York Jewish hedge fund. That fact has been known for years and is joked about on
all of the bar stools in Canada where reporters hang out .but not in the Press. No one writes
about it none of the Nationalistic Professors, Journalists, Members of Parliament no one. One
fact is certain you will never ever see a single bad word in any of their papers critical of
Israel, or any actions of Israelis. Any comment critical of Israel or Zionist power, no matter
how objective or moderate is immediately deleted. And sadly this is no joke. The world should
take note of how Canada is strangled. Read More Replies: @bike-anarkist
Replies: @the
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@silviosilver
Paying what you owe is perfectly fine and moral. Paying double of what you owe on account of
inflated fees and interest is blood sucking. Doing this to developing nations is downright
cruel.
Let's say Congo owes $10 billion. A finance firm buys that debt for $8 billion, collects
the full $10 billion (which already includes interest) and make a $2 billion profit. That's
not too terrible.
But to buy the debt for $8 billion and then force Congo to pay $60 billion is Jewish.
Playing the victim while accusing Congo of financial mismanagement and forcing them to close
their schools and hospitals – very Jewish. Evading the ethical implications of one's
actions and seeking cover behind legalism like a coward –> Jew level –
Godlike
Jews see themselves as the ingroup, and the "goyim" as the outgroup. Since Whites are the
"outgroup" it's not just acceptable, but praiseworthy, to exploit them. To "beat" them at
war.
The problem is that Whites wrongly do not see Jews as an outgroup – something that
Jews themselves take great pains to discourage via their various front groups like the
ADL.
There is no "technical" fix, there is no objective "system" that can change this dynamic.
There is no "level playing field."
Whites need to ostracize Jews at all levels. Boycott, Divest and Sanction – not just
their apartheid regime of Jew bigotry in Zionist-occupied Palestine, but at every level of
society, business, civil institutions, etc.
Jews are destroying the world. Everywhere they go, they leave behind nations in ruins.
Look at Europe, Africa and the Americas, Jews have left their ugly footprints. Corruption,
prostitution, drugs and human trafficking are their trade.
Reading the (obvious) Jews commenting here on their various financial swindle-systems is a
lot like reading zionists defending Israel. The basic tactics are always the same:
1.) Focus on some small aspects or most recent events and make a comparison to Gentiles or
other events with similar micro-narratives. "See? Everyone else does it! Why single out us
poor, persecuted Jews?"
2.) Use these minute distractions to drown out the overall issues, underlying concepts,
long history or guiding ideology in noise and minutiae.
3.) Never start at the beginning of the story and follow the trajectory though; always
start in the middle and focus on some trivial detail, use it to defend the (never stated)
sicko ideology that started the problem in the first place. Completely ignore any timelines
or larger perspectives.
David Icke calls it (or used to call it -- - back when his backbone was healthy) the
Reptilian Brain. The ability to manipulate trivial minutiae while never addressing underlying
concepts or timelines.
It is hard to feel sorry for WASPs, they struck a deal with the Jews centuries ago
Catholic political powers have been "striking deals with Jews" for two thousand years.
There is a synagogue in Rome right next to the Vatican which has been legally privileged
since the days of Christ. As E. Michael Jones detailed in his book, Jewish Revolutionary
Spirit , the Catholic Church itself defended Jews from the angry mobs time and time again
throughout their history, to the point bishops and priests would harbor Jews in the
cathedrals and lock the doors before the peasants could arrest them.
Indeed, the infighting among Whites promoted by the likes of Jones is yet again another
assist from Catholic powers to their partners, the Jews.
The popular "neo-reactionary/NRx" movement, started by the Ashkenazi Curtis Yarvin, is yet
another "right-wing" fad that blames Calvinists for all the problems in the world.
Jews are blameless, yet again another White ethnicity/religion is at fault.
No wonder Jews get away with what they do. Whites are too busy infighting over false
history demonizing various rival cults.
So, the "vultures" flew out to the West after devouring the Russian empire and now with the
help of the likes of the homeboy or more like a two bit whore, Ben Sasse, they've descended
on America and have started gutting it out.
Where will they fly next? White Christians don't want them and black/brown Muslims can't
stand them but perhaps China is their next destination being that they have shipped most of
the jobs out there and the whole lot of them are marrying "Chinese-American" women in droves
for good measure.
In the coming battle of the titans, the one who's name can't be pronounced, viz. Yahweh,
hopefully has better guns than Jehovah and Allah, for it sure is gonna need it when the
latter two gang up on it maybe Buddha will give it a helping hand being that they're
practically in-laws now!
My question is how do entities like Puerto Rico get so far in debt in the first
place?
For the same reason individuals get into debt, financial incompetence and sometimes a bit
of bad luck.
I've personally never understood how people can take out loans from companies like Wonga
or QuickQuid (both Jewish owned incidentally) seeing as they quite clearly advertise their
exorbitant interest rates.
Look up income by ethnic group in the UK and US, you will find that Indians and Chinese
(South Asians) are the richest in both countries (except for Jews of course).
What I have found is that these two groups come from a debt-averse culture, their kids
actually live with their parents until they have saved enough money for a house and other
such things required to start a family.
Whites meanwhile are WAY to trusting of these faceless financial institutions, they get
into debt very easily and thus become slaves, if you have kids, the first thing you should
educate them about is finance and debt, don't throw them out to the dogs either, it's tragic
to see some getting into debt and then having other problems like drugs and alcohol
addictions.
I came out of that book with the utmost admiration for Bill Browder.
You don't seem to be serious, if I understood what you want to say. Even Der Spiegel has
published a critical article in English about Browder, Browder is the one who pushed for
sanctions against Russia because of the case Magnitsky:
Questions Cloud Story Behind U.S. Sanctions
The story of Sergei Magnitsky has come to symbolize the brutal persecution of
whistleblowers in Russia. Ten years after his death, inconsistencies in Magnitsky's story
suggest he may not have been the hero many people -- and Western governments -- believed him
to be.
@Anonymous
Sure, but you're talking utopia. The reality is that public entities issue bonds to finance
special projects or even their operations. Somebody then buys the bonds and expects to be
paid back.
@Realist
There is something especially deficient with Whites when it comes to money matter, how can
such a large number of Whites take short-term loans from companies like Wonga and QuickQuid,
when the nature of their business (usury) is very clearly advertised. I was around 10 years
old when I was astounded at the 5000% APR loans advertised on TV, and wondered if I
understood interest right.
Parents, especially White ones, really need to educate their children on personal finance
and debt, it seems a lot of Whites these days do not actually own anything and all their
flashy gadgets and whatnot are being loaned out (buying Iphone on contract for example),
these people are the hardest hit as they can't scrape together even a couple of hundred
pounds/dollars/euros when hard times come. Its farcical albeit tragic.
Wow what a confused mess. Here's a summary: Vulture capitalism is bad for no particular
reason but only an evil anti-Semite (like you) would dare criticize capitalism.
And they want the island of Puerto Rico for themselves, save a few thousand able bodies to
serve as maids and gardeners. But what about the triple-raced residents of the island itself?
Well, that's easy! Dump them in states like Florida and New York and let the suckers pay for
it. After all, it's not like they are going to vote for the other side we get to eat the cake
and keep it too!
An article that appeared in Goebbels newspaper, Der Angriff (The Attack) titled
"The Jew", a short excerpt that is relevant to your comment;
The Jew is immunized against all dangers: one may call him a scoundrel, parasite,
swindler, profiteer, it all runs off him like water off a raincoat. But call him a Jew and
you will be astonished at how he recoils, how injured he is, how he suddenly shrinks back:
"I've been found out."
I think the term "vulture capitalism" is calumnious to vultures, who, as carrion birds,
perform a useful and purifying function in nature.
The Jews as a collective, i.e., the Jews who identify as such, concur in the death
sentence of Christ handed down by their Sanhedrin and espouse the Talmudic mitzvah of killing
the best of the gentiles (which naturally implies elevating the worst of the gentiles to
power and prominence) are more to be likened to plague bearing rodents. Unlike vultures, rats
feast on corruption and putrescence, spread disease and also kill the living.
We embrace the finance capitalist worldview at our peril. In its essence, it is nothing
but the worship of money making and profiteering as the supreme aspiration of life,
irregardless of its horrible effects on our compatriots and fellow humans. In doing so, we
become Jews at heart.
There is nothing wrong with industry and the profit motive per se. Predatory finance
contributes nothing to the well being of a nation and the needs of the physical economy- it
is supremely toxic and corrosive of both. It must be expunged and its champions expropriated
and exiled. People like the odious Peter Singer have no place in a moral world; they ought to
be first expropriated, then exiled as far away from their host societies as possible.
I was personally wounded by the anti gay rhetoric peppered across this article. I can't help
making the association that Paul singer's son came out as gay and that this must be the
source of the author's animus against him and the others. Shakespeare, who was also
homosexual, described this state of mind as "a green eyed monster," i.e. jealousy. I'm
mortified that other members of the commentariat have not taken issue with this. Maybe we
would be more compassionate to the denizens of middle America if they allowed our most basic
civil rights.
@J
Adelman Oh those kind jews have always been for the working class? But there is a white
working class and jews want them extinct from the face of the earth. Read 'Abolishing
whiteness has never been more urgent.' By Mark Levine
@silviosilver
You make several good points but you don't address the issue of capitalists manipulating the
politicians with campaign contributions. If a fund gets paid off by public money due to
politicians putting the fund owners ahead of the taxpayers, that's corrupt. What happened to
the 'creative destruction' principle by which large IBs like Goldman would have been allowed
to collapse and their principals carried off in leg-irons in 2008? Oh -- they are "too big to
fail and too big to jail." So much for the free market myth.
Moreover, most Jews support endless free money for "victim groups" to be forcibly
extracted from the middle-class. Never mind if Mr. Jones has a lengthy criminal record, let's
pay for him to go to college, let's pay his rent, let's pay his medical bills, etc. Why then
take such a hard line on people who foolishly get into debt?
Moreover, the economic downturn that caused many mortgagors to default was CAUSED BY the
big Wall Street firms' irresponsible behavior.
Also, most people do tend to temper economic contracts with a degree of compassion.
Gentile capitalism does not exist in a vacuum.
I recall reading about a young female environmentalist who was refusing to leave a
venerable redwood tree that was scheduled to be cut down. The WASP businessman who owned the
tree was extremely patient with the girl, tried to win her over, threw her food and drinks,
and so on. The land with the tree was then sold to some Jewish firm. At that point the
article left off. The tree was cut down with no further negotiation.
The greatest jewish vulture fund is the zionist privately owned feral reserve aka the FED ,
is creates money out of thin air and feeds this money to the otherwise bankrupt zionist banks
and not just here in the ZUS but in Europe, and the BIS is the vulture fund of vulture funds
owned by the zionists, the biggest scam in the history of the world.
By the way, Tucker Carlson said that 911 truthers were nuts, that says it all about
him.
Mass immigration for cheap labor, the weaponization of the grievance industry against
white majority/European nations and the use for the production of anti-white race baiting
media.
Much great work!! Very impressed. Would recommend to Moses himself.
@Colin
Wright I remember seeing a clip where Jared Taylor was on some talk show. He was calmly
citing statistics on how blacks are over represented among violent criminals. A sassy black
women broken in with "Jeffrey Dahmer Ted Bundy they were all white!" Not her exact words but
something to that effect. Naxalt, in other words.
I don't think Joyce is suggesting that all unscrupulous capitalists are Jews, or vice
versa. It is true that gentiles can be scumbags (the Enron boys.)
Now most Muslims are not terrorists, and many terrorists are not Muslims.
And yet it seems like there are many people who will notice patterns among other groups,
rightfully roll their eyes when they hear PC arguments in favor of those groups, and then
pull out the naxalt and what-about-isms when you notice patterns in Jewish behavior.
@Dutch
Boy Your statement: "maximizing shareholder is the holy grail of all capitalist
enterprises" statement is spot on.
I've been saying that for decades.
Labor is never given value, but is a commodity-a "necessary evil" according to the Wall
Street types and is to be minimized and marginalized at all costs.
Adolph Hitler's Germany monetized labor and gave it value. THAT is the reason that the
jews went after Germany. Post WW1 Germany was successful in its economy due to throwing off
the shackles (and shekels) of the internationalist banksters.
Henry Ford CREATED a market which had not existed when he paid his employees $5.00 per day
when the average wage of the day was around $1.25 per day. His premise was not entirely
altruistic as assembly line work was monotonous; a way had to be found to retain employees as
well.
Of course, the wall street types and the banksters howled that Ford's wage rates would
destroy capitalism (as they knew it-those at the top reap all of the benefits while the
proles are forced to live on a bare subsistence wage, due to the machinations of those at the
top).
Guess what??
The OPPOSITE happened. Henry Ford knew one of the basic tenets of a truly free,
capitalistic society, that a well-paid work force would be able to participate and contribute
to a strong economy, unlike what is taught in business schools today-that wages must be kept
to a bare minimum and that the stockholder is king.
Our "free trade" politicians have assisted the greedy wall street types and banksters in
depressing wages on the promise of cheap foreign labor and products.
A good example of this is the negative criticism that Costco receives for paying its
employees well above market wages. These same wall street types praise Wal-Mart for paying
its employees barely subsistence wages while assisting them in filling out their public
assistance (welfare) forms.
Any sane person KNOWS that in order for capitalism to work, employees need to make an
adequate wage. Unfortunately, this premise does not exist in today's business climate.
Henry Ford openly criticized those of the "tribe" for manipulating wall street and
banksters to their own advantage, and was roundly (and unjustly) criticized for pointing out
the TRUTH.
Catholic priest, Father Coughlin did the same thing and was punished by the Catholic
church, despite his popularity and exposing the TRUTH of the American economy and the
outsider internationalists that ran it . . . and STILL run it.
Our race to the bottom will not be without consequences. A great realignment is necessary
(and is coming) . .
@lavoisier
I'm not sure I'd put Buffett in that category. For example, in one of the companies he
bought, he kept a factory with declining profits open as long as he could to avoid throwing a
large chunk of people out of work overnight. He has mostly made his money by avoiding dopey
fads and a disciplined buy-and-hold approach to stocks.
@J
Adelman' Jewish people have always stood against tyranny against the working class,
the poor and other people of color." '
Right. I'd say Jews actually collaborated extensively in the imposition of tyranny
on the working class in Eastern Europe from 1917 to 1991. That'd be one counter-example.
Should we explore others? The role of Jews in the medieval slave trade? After all,
somebody had to castrate all those Christian boys who were to serve as harem
guards.
No reason to dredge up ancient history -- except here you are, making a blatantly false
claim about it. 'Always stood against ', my ass.
They are gunning for India now who do you think that brought in the Turks who ruled as the
Moguls to exploit the Hindu wealth and later on who did in the Muslims?
Disraeli and his ilk always knew that India was poor but their temples were rich with gold
and it's that they are after one can't build one's own "Third Temple" without it.
Why are the black cohens being promoted (South Brahmins the most pliable ones) at Google,
Microsoft and Pepsi etc.? Because the waterboys, and girls, will help rope in what's left of
the Indian carcass for thirty pieces of silver!
@secondElijah
You are probably the most antisemitic troll I have ever met online.
So, when did Epstein and Weinstein become the standard bearers of the Jewish community?
It is your jealousy of the Jewish people that makes you spew such vile hatred here.
Smug, obnoxious white people like you who have always considered this country their private
preserve are an endangered species. The demographic trends cannot be denied.
In less than 25 years white folks will become a minority in this country. So enjoy it while
you can, Bubba, your days of driving the bus are numbered.
You and other whites here are like the bad guys in every horror movie ever made, who gets
shot five times, or stabbed ten, or blown up twice, and who will eventually pass -- even if
it takes four sequels to make it happen -- but who in the meantime keeps coming back around,
grabbing at our ankles as we walk by, we having been mistakenly convinced that you were
finally dead this time. Fair enough, and have at it. But remember how this movie ends. Our
ankles survive.
YOU DO NOT.
@Saguaro
The soup has boiled over, the horse has bolted and the barn has burnt down and yet you
Yankees haven't woken up.Your politicians are whores who cannot function without funding from
the jews. And Jeffery got them all for Mossad. Enjoy
@Vaterland
The "standing up for People of Color" schtick is particularly disingenous, as all the Jews
have really done isuse their disproportionate control of the media to peddle false narratives
and distort history. One good example of this is the case of then president of the Atlanda
chapter of B'nai B'rith, Leo Frank. Frank had raped and murdered 13 year-old Mary Phagan and
when he was found out, he used his connection with New York Jews to get lots of money and
hire the best defence lawyers, his lawyer then launched vicious racial attacks on a Black
semi-literate janitor who worked in the factory that Frank was in charge of (and where Phagan
worked) to try and convict him of the horrible crime.
Jews will be friends of POC when it suits them. The funny thing about the Frank case is
that the Jewish media has made it out that Frank was innocent and wrongly lynched (only after
his death sentence had been commuted by a judge who was suspected to have been bribed by
powerful New York Jews), and that the Black janitor was the guilty one. This is absurd seeing
as the racist Southern jury would never favour a "White" man over a Black man (anti-semtism
wasn't that big in the South, and especially so considering this was before the Bolsheviks
took control of Russia), and that if Frank had truly been White, this case would be a
landmark case in which the evil rich White man was tried and the Black man was given
justice.
"Gentlemen! I too have been a close observer of the doings of the Bank of the United States.
I have had men watching you for a long time, and am convinced that you have used the funds of
the bank to speculate in the breadstuffs of the country. When you won, you divided the
profits amongst you, and when you lost, you charged it to the bank. You tell me that if I
take the deposits from the bank and annul its charter I shall ruin ten thousand families.
That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin
fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I
have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I
will rout you out!"
Islam stands in their way of usury-ripping of mankind of their
resources and defrauding mankind via bank thefts.
Bring on the Shariah Law. I would much rather live under Shariah, God's Constitution than
under Euoropean/Western diabolic, satanic, fraudulent monies, homosexual, thievery, false
flag hoaxes, WMD's, bogus wars, Unprovoked oppression, tel-LIE-vision, Santa Claus lies,
Disney hocus pocus , hollywood, illuminati, free mason, monarchy, oligarchy, millitary
industrial complex, life time congressman/senators, upto the eye balls taxation, IRS
thievery, Fraudulent federal reserve, Rothchild/Rockerfeller/Queens and Kings city of London
satanic cabal, opec petro$$$ thievery, ISISraHELL's, al-CIA-da hoaxes, Communist, Atheist,
Idol worshippers, Fear Monger's, Drugged and Drunken's oxy crystal coccaine meth psychopath,
child pedeophilia, gambler's, Pathological and diabolical liars, Hypocrites, sodomites ..I
can't think of any right now, because my mind is exploding with rage because of these
troubling central banker's satanic hegemony!
Quran Chapter 30
39. The usury you practice, seeking thereby to multiply people's wealth, will not multiply
with God. But what you give in charity, desiring God's approval -- these are the
multipliers.
40. God is He who created you, then provides for you, then makes you die, then brings you
back to life. Can any of your idols do any of that? Glorified is He, and Exalted above what
they associate.
41. Corruption has appeared on land and sea, because of what people's hands have earned, in
order to make them taste some of what they have done, so that they might return.
@Really
No Shit Jews are doing to White countries what Whites and Jews did to India, no honour
amongst thieves, the ones with the higher verbal IQ wins.
Also it is important to note that the reason India came under the sway of Anglo-Zionist
banking cartels so easily was because how divided it was, I reckon that is why they are
promoting mass immigration. Import lots of different groups, then run lots of race-baiting
stories to distract the plebs from their financial machinations.
This is why Jews are well represented in non-antisemitic White Nationalist organisations
like Jared Taylor's AmRen, they are great at playing both sides.
And he funded the building of the Peace Palace ("Vredespaleis") in The Hague, presently
the seat of the International Court of Justice, an institution not held in high esteem in
the home country of the generous donor.
@Wally
You can act confused all you want, you know exactly what I am talking about, the fact of the
matter is Whites like you and Joyce would be laughing it up at countries/territories like
Puerto Rico, Congo, Vietnam etc etc being carved up and financially enslaved if Whites were
also allowed a piece of the pie along with Jews (as was the case in the days of the British
Empire when WASP's and Jews worked together), but now that the low-IQ countries have been
looted, the Jews have turned on the Whites and the latter are now crying that their criminal
comrades have now betrayed them.
You quite clearly have a clue, you are just terrified and trying to divert because I am
right, the Jews will do to the White nations what the White nations and Jews did to the
non-White nations. All I can say is that you WASPs should have kept to youselves like Eastern
Europeans and Eastern Asians, they didn't really engage in lofty ambitons to dominate the
world and as such are intact at the moment and seem like they will remain that way for a long
time, they are the true conservatives, WASPs have always had a Jewish streak within their
corrupt souls and are now paying the price for engaging with a criminal race.
Why do you think Epstein has all these Gentiles in his pocket? You think do-gooding
gentiles just randomly decided to get into bed with Epstein and Co.? How many East Asians and
Eastern Euros do you see terrified of being outed as paedophiles.
Don't deceive yourselves, all debts are paid in the end, especially when the creditors are
Jews.
@Adrian
They are a function of Empire in Hague, who protect empire criminals, and assume a non
existent legitimacy and jurisdiction as a private entity to take down empire opponents.
It is the very same kangaroo court as the IMT or Tokio show trials.
In the book "Heaven is for real" a 4 year old boy who supposedly is dead for a short period,
but actually visits heaven; when he returns, is asked : what is the meaning, the purpose of
life on earth?
His response is so simple, that it could only be true. And it could only come from
knowing
Don't deceive yourselves, all debts are paid in the end, especially when the creditors
are Jews.
It is a mathematical impossibility due to interest. The FED probably goes negative
interest like ECB mafia.
Chances are higher they do a reset and start anew with an electronic ponzi scheme.
No one seriously plans to pay these "debts", they can't be paid, and are actually a nothing
burger, pure fiction.
" it is truly remarkable that vulture funds like Singer's escaped major media attention prior
to this ."
Not really. The Jew's grip is starting to slip now, though. More and more people are
becoming aware that they are virulent parasites and always have been.
@Mulegino1
Real capitalism is the competition of ideas, innovation, efficient manufacturing and quality
products made and produced by honest companies. That competition can, in theory at least,
make people (and companies) "try harder". But only when a company's success is determined by
the strength of its products, not by the "deals" it cuts with Jewish financial, advertising,
"marketing" and swindling rackets, designed to line the pockets of the Jew while destroying
honest competition by Gentiles who struggle to play fair and innovate.
Jewish vulture "capitalism" contributes NOTHING of value to any company or any culture. It
never has and never will.
You and other whites here are like the bad guys in every horror movie ever made, who
gets shot five times, or stabbed ten, or blown up twice, and who will eventually pass --
even if it takes four sequels to make it happen -- but who in the meantime keeps coming
back around, grabbing at our ankles as we walk by, we having been mistakenly convinced that
you were finally dead this time. Fair enough, and have at it. But remember how this movie
ends. Our ankles survive.
YOU DO NOT.
Talk about deflection. Any nation, empire, culture or civilization wherein the Jewish
collective gains critical mass and ultimately absolute power turns into a real horror,
not a movie. The Jews may be said to be the true prototype of the "bad guys in every horror
movie", since they can only be gotten rid of by very rigorous means taken in the healthiest
and most vigorous cultures and societies. Indeed, antisemitism itself is the healthy
immunological reaction of a flourishing culture, and its lack thereof the pathology of a
moribund one.
Woke Christians of European provenance have nothing to envy the Jew (the archetypal Jew)
over. We realize that the true measure of success is not primarily monetary or the
fulfillment of cheap ambitions, but a spiritual and cultural one. On the contrary, the Jewish
hatred against Christian Europe and the civilization that it constructed is engendered out of
sheer envy and malice, because Jewry understands that is would never be capable of
constructing anything similar, and never has. In all of the arts, Jewry has produced nothing
of note.
This is not to say that individual Jews have not made contributions to the arts and sciences,
but they have done so only by participation in gentile culture, not qua Jews. Jewry only
tears down and deconstructs; it is not creative in the sense of high art, and can thrive only
in the swamp of gentile decadence and moral putrefaction. Whatever Jewry touches, it turns to
merde.
European Jewish IQ has only gone 1/2 a standard deviation above the white norm in the last
100 years. Interesting to know why, but the belief Jews have always been more intelligent is
just lack of data.
bias for co-operation
Nazis did this too – they worked reaaally well with each other. The issue was how
they thought of and treated others.
That aside, I think we daily meet plenty of individuals who'd sell their mothers, and
maybe kill lives, for pennies. They are like machines not even conscious of what they are
doing.
Your 1 data point aside, are you saying all humans act in identical ways, regardless of
how the ideologies they embrace ask them to act?
Take the ideology of Islam – it does not allow for aggressive war, surprise attacks,
the killing of women or children (unless they take up arms)..
Judaism allows for aggressive war, surprise attack, and demands the killing of all
when a state of war is declared.
Do you believe these declarations lead to identical actions by their practitioners? (in
other words – people act how they would wish to act, and don't really engage in any
belief systems beyond what pulls their own selves?)
So, it's the usual with Joyce (and not only Joyce of course). You take something that is
human, talk of Jews, point to that something in Jews, and pretend, trusting that your
readers will pretend the same, that it's a Jewish-specific something.
Yes, correct – no ideology is perfect at taming human action, and corruption is a
human action, not a Jewish action. But we could still engage in comparative ideology, and
this is what Joyce (and not only Joyce, of course) engage in.
Saying 'well, all peoples engage in force and deceit, so is there any actual difference
between them and their beliefs?' is absurdism. In such a world, I will build a nation of
priests, fashioned along the lines of the Aztek priesthood. Give me your children so I can
rip out their hearts and make it rain – after all 'we are all the same'!!
The argument is that, for the proportion of the population, the fraction of monopoly power
in Western economies that is taken up by Jewish power is much disproportional to other
nations/belief systems.
It is fair to ask whether people who engage in other belief systems have the same level of
desire for monopoly, just less skill to get it due to their belief systems.. I would say yes,
they have the same level of desire (we are all human after all (not that if you read chapter
1 of the Tanya, you will be offered that point of view)) – but that their belief
systems specifically push them away from materialism and desire for money and power, even at
the expense of others. That is the exact point of religion (self-improvement) btw, so
the next question is – is the Jewish religion effective?
At which point, the Jewish ideology becomes the wolf in the hen house – because it
fails to tame the human away from such materialistic desire (as it btw claims it does
best).
Should the hens be allowed to point out what they see as a wolf? Yes.
That the supposed wolf then obfuscates and justifies their actions by pointing to others,
mostly, betrays that it is, in fact, a wolf.
I have become totally disenchanted with the SEC. Stupid, Evil, Crazy! It would not surprise
me if they are the ones that have been terrorizing me, with stupid, evil, crazy chants
through appliances after illegallly implaced RFIDs, microchips, or sensors illegally
implanted in my ears and nose that started after my first phone was hacked in 2017! Can't
expect stupid people not to be stupid, evil people not to be evil, and crazy people not to be
crazy! They were just born that way!
@J
Adleman brookings.edu : "The US will become minority white in 2045 Census projects "
:
"During that year [2045] whites will comprise 49.7 per cent of the population in contrast to
24.6 per cent for Hispanics , 13.1 per cent for Blacks , 7.9 per cent for Asians and 3.8 per
cent for multi-racial populations " Are these projections good or bad for the "Jewish people
" ?
Nov 22, 2013 Thomas DiLorenzo – The Revolution Of 1913
From the Tom Woods show Loyola economics professor Thomas DiLorenzo discusses three events
from 1913 that greatly escalated the transmogrification of America from the founder's vision
(limited government) to its current state (unlimited government).
@silviosilver
Yes, and just because you can doesn't mean you should. And if there's a predilection among
jewish men to engage in predatory lending and collecting tactics that is disproportionate to
their of the population, there's something about their genes or their culture that shapes
them to be this way.
Also, notice how you left out the part where they jack up the interest rates and debtor's
fees to grossly inflate their income. Is there a reason to do this other than as a quick way
to make money off already impoverished people? It's kind of like opening up a rent to own
place in a low income place. The people who do that shit know exactly why they should set up
among poor people; low wealth and bad decision making abound.
And yes, it does seem to be particularly jewish given how many jews are involved in its
practice and given that it used to be frowned upon in Christian Europe. Hell, God himself (as
Jesus) went and beat the shit out of a bunch of jews for their money lending in the temple.
That's the best part of the Bible, frankly. God gets so sick of the his own chosen people
that he sends himself to chastise and whip them for their greed and hubris. No lesson was
learned.
And then they killed him. And they lost their homeland for 2000 years. And then were
kicked out of a hundred plus kingdoms, cities and countries. And then a miserable liberal
shows how vile and stupid their children are:
You know, maybe instead of making excuses, you can just acknowledge the wrongdoing and
acknowledge that some jews are particularly malicious. Cuz eventually, people are
gonna get sick of the shit jews pull and see jewish (or gentile zionist) people defending
their obvious misdeeds and get pissed at them as well. Remember, the well is open to
everyone.
Besides being retardedly wrong, the broader point is likewise retarded: when
English-speaking Jews name their businesses they shouldn't use English words. Naming a
company "Oaktree" should be limited to those of purely English blood! Jews must name their
companies "Cosmopolitan Capital" or RosenMoses Chutzpah Advisors."
Telling that you go with hyperbole here: the only two options must be Albion
Whyteman Capital or Foreskin-Chewing Pornographers Incorporated!
There are two interesting things about the onomastics of the prepuce-free business world.
One is that far fewer sons of Abraham name their businesses after themselves (I'm sure this
will insincerely be attributed to some fear of native kulaks' repressed urge-to-pogrom, even
in Finland or Japan.) The other is an observation made by an associate of a famous Austrian
landscapist: even merely remarking on their origins causes these guys mental distress.
Here in the melting pot, the difference couldn't be any starker. You can make small talk
with any flavor of goy based on it: that's a Polish name, isn't it? Yeah, how did you
know! Try this one with Levy or Nussbaum down at The Smith Group or The Jones Foundation
and watch them plotz.
Jews have always weaponized usury. Long before Christianity, Jews operated the East/West
mechanism on donkey caravan trade routes. Silver would drain from the West, and Gold would
drain from the east, while Jewish caravaneers would take usury on exchange rate differences.
This operated for thousands of years.
Haibaru donkey bones have been discovered outside of Sumer. The Aiparu/Haibaru (Hebrew)
tribes were formed as merchants operating between city states. In those days, psychopaths and
criminals would be excommunicated from civilized city states, and would take up with the
wandering merchant tribe.
Why do you think the Jew is always interested in owing the money power? Why do you think
the Jew perpetually stands outside the walls of the city state, plotting its destruction?
History tells us things, and we had better listen. That is – real history, not what
you learned in (((public skool))). There are two ways to deal with the Jew: 1) Remove him
from your country. 2) Limit him.
Limiting was done by Byzantium under Justinian. The Jew was limited FROM money
counting/banking; limited from participation in government; limited from access to pervert
young minds – especially as school teachers and professors.
It takes a King or Tsar who cares about his population, and is willing to eject or filter
out toxins from the body politic. (((Democracy))) is a failed form of government, whereby
monied Oligarchs control the polity by compromat and pulling strings.
You are not going to be able to vote your way out of the Jew problem.
@Colin
Wright Echoing words once supposedly used by Hermann Goering: whenever I here the word
'philanthropist' these days, I instinctively reach for my revolver!
Take the ideology of Islam – it does not allow for aggressive war, surprise
attacks, the killing of women or children (unless they take up arms)..
Ilya,
There is deception in Islam. Sorry. You cannot make claims about Islam not allowing for
aggressive war and surprise attacks.
These concepts even have names and doctrine that support them. Wahabbi/Salafist Islam is
exactly in alignment with Islamic teachings, especially when using abrogation techniques.
Taqiyya is lying with intent to deceive. The analog in Judaism is the Kol-Niedre, which
allows one pre-forgiveness for lying, cheating, even murder of Goyim.
Hudnas is are used to lay in wait, build up strength, to then attack the enemy.
Islam has derogatory terms to demean e.g. Kaffirs, which is similar to Goyim.
There is also deception in Christianity, but this deception is OUT OF ALIGNMENT WITH
DOCTRINE. The doctrine of super-session means the old testament is superseded, completed, a
historical record.
In Islam the doctrine of Abrogation means that the more pacific Meccan verses are
abrogated (made less relevant) that post Medina. Ergo, Wahabbi Islam and the Takfiri's are
doctrinaly correct, while Judaizer Christians (those that worship the old testament) are out
of alignment and heretics.
Judaism is actually a new religion that came into being after 73 AD, when the verbal
tradition (Caballa) became written down into Talmud.
Our Jewish friends have always been practicing usury, going back to since forever.
Our Jewish friends, I count as worse that Islamics. However two wrongs don't make a right.
Islam badly needs reform or to be expunged. Talmudic Judaism is by far the worst religion on
the planet, and its adherents must malfunction by definition.
o ..kill all the Jewish, er, "vulture capitalists" , right? Or should we go "easy" on
them all and merely ship them all off to special "re-education" camps? Or am I missing
something here ?
You are missing something because you are unwilling to adapt and learn with new
information. This makes you an ideologue.
Lolbertarianism IS A JEWISH CONSTRUCT.
There are no such things as free markets. Money's true nature is law, not gold. Money
didn't come into being with barter and other nonsense lolbertarians believe.
Most of the luminaries that came up with "libertarian" economics are Jews, and it is a
doctrine of deception. The idea is to confuse the goyim with thoughts and ideas that make
them easy pickings.
A determined in-group of predators operating in unison, will take down an "individual"
every-time.
Don't expect anything to improve with Jay Clayton as SEC Chair, and his wife and her father
Gretchen Butler Clayton who was CEO of CSC and mysterious WMB Holdings which share the same
address in addition to many Goldman Sachs divisions. Gretchen was employed by Goldman Sachs
as an attorney from 1999-2017. Many companies affiliated with the Panama Papers share the
same address as well.
Jewish people have treated me better than my own White Euro family.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them
out . and so their charity is within the tribe, but there is no charity within the tribe
among Whites.
Jews, along with Asians and at least some Africans, believe in not just climbing the
ladder, but in actually helping others – at least family – up it also. Whites
believe in climbing the ladder and then pulling it up after them.
I was explaining to a friend recently: My (relative) has proven that if I showed up at
their door, starving, they'd not give me a cheese sandwich, while in my experience, strangers
have been overall a fairly kind lot and a stranger, 50/50, might. Therefore, while I find the
idea of robbing or burning down the house of a stranger abhorrent, I don't mind the idea so
much when it involves a person who's proven to be cold and evil.
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New
York where they were being befriended by a Jewish family. There was a ray of hope. The Irish
kids, at least, would have been fed, steered into decent schooling, etc. But foolishly they
went back to Ireland, to be treated like utter dogshit by their fellow White family and
"people".
Most of the predation going on in the US and worldwide is being done by WASPS who are
using Jews as a convenient scapegoat.
@tono
bungay Feel free to offer us some counter-examples, tono. How many such funds to you know
of that aren't disproportionately Jewish? We're all ears!
@Robjil
This is an example of what I was saying. Less Euro whites in the world is not going to be a
good world for Big Js. Non-Euros believe in freedom of speech.
Jewish Bigwigs can't get control of businesses in East Asia. They have been trying. Paul
Singer tried and failed. In Argentina he got lots of "success". Why? Lots of descendants of
Europeans there went along with "decisions" laid out by New York Jews.
Little Paulie tried to get control of Samsung. No such luck for him in Korea. In Korea
there are many family monopolies, chaebols. A Korean chaebol stopped him. Jewish Daniel Loeb
tried to get a board seat on Sony. He was rebuffed.
I was moved to reflect on the universality of this theme recently when surveying media
coverage on Korean and Argentinian responses to the activities of Paul Singer and his
co-ethnic shareholders at Elliott Associates, an arm of Singer's Elliott Management hedge
fund. The Korean story has its origins in the efforts of Samsung's holding company, Cheil
Industries, to buy Samsung C&T, the engineering and construction arm of the wider
Samsung family of businesses. The move can be seen as part of an effort to reinforce
control of the conglomerate by the founding Lee family and its heir apparent, Lee Jae-yong.
Trouble emerged when Singer's company, which holds a 7.12% stake in Samsung C&T and is
itself attempting to expand its influence and control over Far East tech companies,
objected to the move. The story is fairly typical of Jewish difficulties in penetrating
business cultures in the Far East, where impenetrable family monopolies, known in Korea as
chaebols, are common. This new story reminded me very strongly of last year's efforts by
Jewish financier Daniel Loeb to obtain a board seat at Sony. Loeb was repeatedly rebuffed
by COO Kazuo Hirai, eventually selling his stake in Sony Corp. in frustration.
Here is how the Koreans fought off Paul Singer.
The predominantly Jewish-owned and operated Elliott Associates has a wealth of
self-interest in preventing the Lee family from consolidating its control over the Samsung
conglomerate. As racial outsiders, however, Singer's firm were forced into several tactical
measures in their 52-day attempt to thwart the merger. First came lawsuits. When those
failed, Singer and his associates then postured themselves as defending Korean interests,
starting a Korean-language website and arguing that their position was really just in aid
of helping domestic Korean shareholders. This variation on the familiar theme of Jewish
crypsis was quite unsuccessful. The Lee family went on the offensive immediately and,
unlike many Westerners, were not shy in drawing attention to the Jewish nature of Singer's
interference and the sordid and intensely parasitic nature of his fund's other
ventures.
Cartoons were drawn of Singer being a vulture.
Other cartoons appearing at the same time represented Elliott, literally, as humanoid
vultures, with captions referring to the well-known history of the fund. In the above
cartoon, the vulture offers assistance to a needy and destitute figure, but conceals an axe
with which to later bludgeon the unsuspecting pauper.
ADL got all worked about this. The Koreans did not care. It is reality. Freedom of speech
works on these vultures. The west should try some real freedom of speech.
After the cartoons appeared, Singer and other influential Jews, including Abraham
Foxman, cried anti-Semitism. This was despite the fact the cartoons contain no reference
whatsoever to Judaism – unless of course one defines savage economic predation as a
Jewish trait. Samsung denied the cartoons were anti-Semitic and took them off the website,
but the uproar over the cartoons only seemed to spur on even more discussion about Jewish
influence in South Korea than was previously the case. In a piece published a fortnight
ago, Media Pen columnist Kim Ji-ho claimed "Jewish money has long been known to be ruthless
and merciless." Last week, the former South Korean ambassador to Morocco, Park Jae-seon,
expressed his concern about the influence of Jews in finance when he said, "The scary thing
about Jews is they are grabbing the currency markets and financial investment companies.
Their network is tight-knit beyond one's imagination." The next day, cable news channel YTN
aired similar comments by local journalist Park Seong-ho, who stated on air that "it is a
fact that Jews use financial networks and have influence wherever they are born." It goes
without saying that comments like these are unambiguously similar to complaints about
Jewish economic practices in Europe over the course of centuries. The only common
denominator between the context of fourteenth-century France and the context of
twenty-first-century South Korea is, you guessed it, Jewish economic practices.
The Koreans won. Paulie lost. Good win for humanity. The Argentines were not so lucky.
They don't have freedom speech like the Koreans and East Asians have.
In the end, the Lee strategy, based on drawing attention to the alien and exploitative
nature of Elliott Associates, was overwhelmingly effective. Before a crucial shareholder
vote on the Lee's planned merger, Samsung Securities CEO Yoon Yong-am said: "We should
score a victory by a big margin in the first battle, in order to take the upper hand in a
looming war against Elliott, and keep other speculative hedge funds from taking short-term
gains in the domestic market." When the vote finally took place a few days ago, a
conclusive 69.5% of Samsung shareholders voted in favor of the Lee proposal, leaving
Elliott licking its wounds and complaining about the "patriotic marketing" of those behind
the merger.
@jack
daniels Now that I think about it, it was unfair to make an anecdotal judgment that
Jewish lenders are less forgiving. There are plenty of examples, I'm sure, of compassionate
Jews and flinty gentiles.
Finally! An intelligent criticism of Trump for a change. So tired of the brainless
Democrat/MSM impeachment circus. They make me feel like a reflexive MAGAtard just for
defending the constitution, logic, etc., from their never-ending stream of inanities.
Meanwhile, the real problem with Trump is not that he's Hitler; it's that he's not Hitler
enough!
I am also so tired of Zionist-loving cucks bleeting on about the evils of the CRA without
ever considering the role played by the (((profiteers))) who lobbied such policies into law
in the first place. Realize that what Paul Singer does for a living used to be illegal in
this country up until recently. That's right: US bankruptcy law used to forbid investors from
buying up debt second-hand at a discount and then trying to reclaim the entire face
value from the debtor. But I see all kinds of people even on this thread blaming the victim
instead -- 'Damn goyishe deadbeats!' Whatever
What Singer and the other Jewish vultures engage in is not productive, and isn't even
any recognisable form of work or business. It is greed-motivated parasitism carried out on
a perversely extravagant and highly nepotistic scale. In truth, it is Singer and his
co-ethnics who believe that money can be printed on the backs of productive workers, and
who ultimately believe they have a right to be "showered by free stuff promised by
politicians."
To what extent is Jewish success a product of Jewish intellect and industry versus being
a result of a willingness to use low, dirty, honorless and anti-social tactics which, while
maybe not in violation of the word of the law, certainly violate its spirit?
The last Gentleman on WS was not a Jew. Bring back the WASP. You can maintain your honor,
and manners and still succeed. Jews take the easy low road of deception and cheating. WASP
take the higher road of harder work and ethical business practice.
[MORE]
The courtly Mr. Jenrette, who has been dubbed "the last gentleman on Wall Street" earned this
sobriquet largely for his reputation of being particularly sensitive to the human dimension
in an industry where such matters often get sidestepped. Nonetheless, despite Mr. Jenrette's
modest demeanor, he's risen to the top in an often cutthroat business. He remained with
Donaldson Lufkin through good times and bad, guiding it after its two other founding partners
departed for other ventures and, next month, he will step down as the chairman of the
Securities Industry Association, the brokerage trade group.
"Dick has been the one who carried the firm from its original promise through to closure,"
said Samuel Hayes 3d, an investment banking professor at the Harvard Business School.
"Dick's more in tune with human values and that's not frequently found on Wall Street."
Richard Jenrette, 89, Wall Street power, Raleigh native, dies https://www.wral.com ›
richard-jenrette-89-wall-street-power-and-preserva
Apr 23, 2018 – A courtly, soft-spoken North Carolina native whom The New York Times
once called the "last gentleman on Wall Street," Jenrette (pronounced
Wall Street's 'last gentleman' left behind these 24 lessons about life and success: At the
time of his death late last month due to complications from lymphoma, these couple dozen
rules to live by were left on his desk.
Stay in the game. That's often all you need to do -- don't quit. Stick around! Don't be a
quitter!
•Don't burn bridges (behind you)
•Remember -- Life has no blessing like a good friend!
•You can't get enough of them
•Don't leave old friends behind -- you may need them
•Try to be nice and say "thank you" a lot!
•Stay informed/KEEP LEARNING!
•Study -- Stay Educated. Do Your Home Work!! Keep learning!
•Cultivate friends of all ages -- especially younger
•Run Scared -- over-prepare
•Be proud -- no Uriah Heep for you! But not conceited. Know your own worth.
•Plan ahead but be prepared to allow when opportunity presents itself.
•Turn Problems into Opportunities. Very often it can be done. Problems create
opportunities for change -- people willing to consider change when there are problems.
•Present yourself well. Clean, clean-shaven, dress "classically" to age. Beware style,
trends. Look for charm. Good grammar. Don't swear so much -- it's not cute.
•But be open to change -- don't be stuck in mud. Be willing to consider what's new but
don't blindly follow it. USE YOUR HEAD -- COMMON SENSE.
•Have some fun -- but not all the time!
•Be on the side of the Angels. Wear the White Hat.
•Have a fall-back position. Heir and the spare. Don't leave all your money in one
place.
•Learn a foreign language.
•Travel a lot -- around the world, if possible.
•Don't criticize someone in front of others.
•Don't forget to praise a job well done (but don't praise a poor job)
•I don't like to lose -- but don't be a poor loser if you do.
•It helps to have someone to love who loves you (not just sex).
•Keep your standards high in all you do.
•Look for the big picture but don't forget the small details.
"Permit me to issue and control the money of a nation and I" care not who makes its laws"
That is what Mayer Amschel Rothchild said in the 1750s. Now, is it a stretch of my
imagination to believe the Central Banks of the West, all Jewish controlled, would unfairly
favor their 'own' when issueing or disbursing the money they are permitted to create.
We are not allowed to audit the Federal Reserve, so we know not what they do with it beyond
what they tell us. In 2016 it was discovered that between the year 1999 and 2016 well over
$23 trillions had been stolen from just 2 departments of our government, the DoD and HUD.
(Someone should look at NASA). Is it possible the seed money, for not only Venture
capitalists schemes but also buying governments and law makers, has been diverted, shoveled
out of the back door of these corrupt central banks and into the hands of their fellow
jews?
Anyway, the more exposure articles like this get the closer we get to ending their reign.
As I noted in my previous examination of contemporary Jewish usury, Jews have been at
the forefront of innovation in debt for many centuries, and remain its most adroit auteurs.
Although obviously rooted in centuries of Jewish financial practice, Singer and his
co-ethnics (all four equity partners of Elliott are Jewish, and its COO is the
charmingly-named Zion Shohet) pioneered the finer points of the vulture-fund concept. The
firm was born in 1977 when Singer pooled $1.3 million from family and friends,
His firm's first big "win" was the pillage of Panama in 1995.
but it only really took off in October 1995, when Elliott Associates L.P. purchased
$28.7 million of Panamanian sovereign debt for the discounted price of $17.5 million. The
banks holding those bonds, a group that included heavy hitters like Citi and Credit Suisse,
had given up on repayment from Panama. To cut their losses, they sold their holdings to
Elliott which, like a medieval tax farmer, went in with a heavy hand. When Panama's
government asked for a restructuring of its foreign debt in 1995, the vast majority of its
bondholders agreed – apart from Elliott. In July 1996, Elliott Associates,
represented by one of the world's most high-profile securities law firms, filed a lawsuit
against Panama in a New York district court, seeking full repayment of the original $28.7
million – plus interest and fees. The case made its way from a district court in
Manhattan to the New York State Supreme Court, which sided with Elliott. In the end,
Panama's government had to pay the Jewish group over $57 million, with an additional $14
million going to other creditors. Overnight, Singer's group made $40 million, and the
people of Panama found their original sovereign debt had more than doubled.
@Mefobills
If you could point to a verse in the Quran that allows for aggressive war, it would help me
learn – when I read it I saw an explosive self defence at any infringment on the Ummah,
but not much beyond that.
Of course the origination story of the faith is one of fighting, and without any wise men
to guide the laypeople, the faith has an issue in that it is easy for people to not follow
what it teaches.
Islam has been assaulted for a millennium, and so the self defence aspect of its faith has
become more active than the rest.. it needs reform I agree (and not in the direction the
Salafists have taken it), but more so there is a need for the Ummah to have a few generations
of non-aggression from the outside world.. without it the pressure will only be towards
violence – for any nation or faith!
Judaism has monopolized for millennia though, and still acts as a victim. Different kettle
of fish.
Also, you can debate the positives and negatives of Islam with a Muslim (not as a rabid
ignoramus of course – you must be polite, and have learnt something, as well as be open
to learning more). Almost every debate with a Jew about Judaism has started with, continued
with, and ended with name calling for me however.
Judaism fails as a religion because it does not encourage the practitioner to look at
themselves when confronted with error, Islam still does imo.
Does anyone here remember how John Leibowitz aka John Stewart spent months ripping Mitt
Romney to shreds? Remember? Evil white man vulture capitalism at Bain? Remember? Romney was
Adolf Hitler, and look he put his golden retriever on the roof once?
Say. How come that Mr Leibowitz never talked about the Jews who basically destroyed yes
the entire Rust belt by acquisition and outsource?
That Mr Johnny Leibovitz sure did hate the goy a lot and all. He never talked about his
own people. What a fair fellow Mr Johnny Leibovitz was. He even changed his name. Why change
the name?
Remember. Bain Capital and that kind of merger pump and dumps is all done by Mormons
goyim.
@Colin
Wright Your statement: "Jews actually collaborated extensively in the imposition of
tyranny on the working class in Eastern Europe from 1917 to 1991" not only applies to Europe,
but the united States of America as well.
It's the JEWS it's always the JEWS
[MORE]
Our present situation and the devolving into the morass of "multiculturalism" and "diversity"
is no accident. The jewish talmud and that jewish invention-communism has "rules" for the
debasement of (white) civil society.
The following statements are a result of personal experiences–your mileage may
vary
I came of age during the first so-called "civil-rights" movement and saw for myself the
underhanded dealings, the demonization of decent, law-abiding whites, and in general, the
deterioration of civil society.
Almost all of the "civil-rights" workers and demonstration "handlers" were of one
persuasion–New York based leftist communist jews. They cared not one wit about true
"civil rights", but were there to create hate and discontent among their black charges (who
were too stupid or naive to see that they were being used to suborn and destroy legitimate
government and society–a favorite communist tactic).
These New York-based "carpetbaggers" fomented their hate and discontent, only to become
future "civil-rights" attorneys, race-hustlers, and America-hating leftist communists and the
ADL and $PLC being invented.
Those of us whites who were in the middle of this "civil-rights" revolution had a saying:
" Behind every negro, there is a jew ". No truer words were spoken.
Let's not forget their infestation of the nation's education and entertainment systems,
(which continues to the present day), in which they can spread their jewish supremacist
poison.
The so-called "non-violent civil-rights demonstrations" were anything but "non-violent".
Robberies, rapes, and other criminal acts were common, but never reported, as even the
"mainstream media" was "in on the game" and conveniently turned off their cameras during the
acts of violence. You see, even then,"creating crises" was a part of the agenda.
The "beginning of the end" of America was the use of federal troops against white
Americans, which, in itself was a violation of "posse comitatus"–the prohibition on the
use of federal troops for domestic "law enforcement" purposes. As most whites were (and still
are) law-abiding, they (we) were "steamrollered" by the use of federal troops to crush honest
dissent. We never recovered from those unconstitutional actions. It was all downhill from
there
The next step may be "civil-war" in which us whites will have to take back our birthright
by force.
"Foreign Policy described the court's decision as "a groundbreaking moment in the modern
history of finance." By taking the case to a New York district court, Elliott broke with
long-standing international law and custom, according to which sovereign governments are not
sued in regular courts meant to deal with questions internal to a nation state. Further, the
presiding judge accepted the case – another break with custom. It set the stage for two
decades of similar parasitism on struggling countries by Elliott Associates, a practice that
has reaped billions for Jewish financiers. "
A year later after the ground breaking decision. Paulie tries this scam on another nation,
Peru.
Just one year after the Panama decision, Singer spent about $11 million on
government-backed Peruvian bank debt in 1996. After Singer took Peru to court in the U.S.,
U.K., Luxembourg, Belgium, Germany, and Canada, the struggling nation finally agreed in
2000 to pay him $58 million. That meant he got better than a 400 percent return.
In 2001, the victim was Argentina.
In 2001, Elliott Associates purchased an Argentinian default for $48 million; the face
value of that debt today is $630 million. The fund wants repayment for the full value of
the debt to all of Argentina's creditors, as it did in 1995 with Panama. This amounts to
$1.5 billion, which could rise to $3 billion including, again, that all-important interest
and fees.
Another victim was the Congo in 2002-03.
..specific activities of Elliott Associates in Congo, where it originally bought $32.6
million in sovereign debt incurred by that country for the knockdown price of under $20
million. In 2002 and 2003, a British court (tactically chosen) forced the Congolese
government to settle for an estimated $90 million, which included that all-important
interest and fees. Elliott Associates rapidly became known as the quintessential "vulture
fund."
1. Re Sidney, Nebraska: Maybe I'm missing something but wasn't it Cabela's owners, for
example co-founder and chairman Jim Cabela, who sold Cabela, not Elliot Management (Singer et
al)? I gather Elliot Management owned only 11% of the company. Was that enough to force them
to sell?
2. The article confuses honest straightforward loans with tax farming and government
corruption. Loans can be very useful, e.g. for a car to get to a job, or for a house so you
build up equity instead of paying rent.
@Hapalong
Cassidy Bain's not much of an exception to Joyce's pattern: although Mitt, like the other
three founders, was a goy, there were plenty of Chosen Ones associated with the company right
from the start:
In addition to the three founding partners, the early team included Fraser Bullock,
Robert F. White, Joshua Bekenstein, Adam Kirsch, and Geoffrey S. Rehnert Early investors
included Boston real estate mogul Mortimer Zuckerman and Robert Kraft, the owner of the New
England Patriots football team.
@BannedHipster
According to the Talmud, we goyim are not the descendants of Adam and Eve, like the
Jews. No, we are the bastard progeny of Adam's first wife, Lilleth, who eloped with the demon
Samael. So we goyim are really all half-demons and therefore we are an abomination in the
sight of Jew-hova, and we get what we deserve at the hands of his 'chosen people'.
improving the quality of life and access to opportunities for all Israeli citizens so that
they may benefit from the country's prosperity
Read 'all Jewish Israeli citizens'. I doubt they're going to do any life-enhancing
or make opportunities available to any of the grunting subhuman goyim .
It's important not to get carried away with this. Figures such as Andrew Carnegie, while
impeccably gentile, were hardly paragons of scrupulous ethics and disinterested virtue.
Andrew Carnegie built something that made life better for people. Making steel is a
beneficial thing.
These evil vulture Jews build nothing – they make people poorer. They suck the
wealth out of people who have little. They know 100% what they are doing.
Jesus expressed anger against the money changers on the temple steps.
It is OK for you to have natural human feelings and be angry at these Jew bastards.
@Anon
Romney is a Mormon, one of the church officials. The Mormons are closer to the Jews pattern
of worshiping money and using charity donation for business investments.
Mormons arent considered Protestants .
"Although the church has not released church-wide financial statements since 1959, in
1997, Time magazine called it one of the world's wealthiest churches per capita.[147] In a
June 2011 cover story, Newsweek stated that the LDS Church "resembles a sanctified
multinational corporation -- the General Electric of American religion, with global ambitions
and an estimated net worth of $30 billion." A whistle blower within the church reported them
to the IRS for using their status as a non taxable religious groups to invest in business
ventures instead of charities.
@anon
Maybe I can answer your question.
I studied and befriended many jews as a student (Imperial College, London etc) – none
were above average intelligent, and although they were very geeky, they only got average
grades.
When I moved to LA – most of my friends were jews and again, none were very bright
(even though a few were famous). Most of these LA jewish friends were probably psychopaths
– thinking back – very manipulative, exploitative and they lied a lot.
I think it's mostly through their cultural nepotism – they work on their own unity
(they help promote each other) while at the same time they work on destroying unity in their
host and everyone else.
Many have changed their Eastern European names.
And they go out of the way to help other jews (only) – a Serbian friend in Toronto
looks very jewish (but is not religious) told me several times here in Toronto, other Jews
(his boss etc) just offered to help him for no reason ("Is there anything I can do for you?"
etc). He did not understand why they did that – then I realized he actually looks like
a Jewish stereotype (as does his twin brother). So he thought he was helping his own
tribe.
When I went to Cuba with a Jewish 'friend' from LA – he was actively looking for
anything jewish (and nothign else – he did not want to see anything famous like a
beautiful cemetery in Havana etc) – only synagogs etc – where he gave some money
to jews he never even met. I was there with him and saw it. He was even angry if I suggested
we see something nice , historical and not-jewish. We met a NY jew there and we gave his a
ride in the car we rented – they immediately teamed up against me – for no reason
– I regretted going with him on this trip. It was an awful experience –
consistent with all the books I read on psychopaths and also that book Jewish History, Jewish
Religion, the weight of 3000 years
Another very wealthy American mother of a friend asked her South African friends (also jews)
to help her book trips in South Africa (and they of course recommended only their Jewish
friends) – it's their son who told me this.
So a lot of backstabbing, cultural nepotism and actively (but in a hidden way as most
psychopaths like to do) they do at wakening and isolating their host. That's their only
advantage – not intelligence (at least in my experience )
I recently learned that from about 1790 to 1967 the USState department refused to issue US
passports to people who held foreign passports. State also didn't hire any dual citizens for
any job from cafeteria dishwasher to ambassador.
Then in the mid sixties, an Israeli immigrant who became a US citizen applied for a US
passport. State refused to issue the US passport. So the Israeli immigrant practiced lawfare.
In 1967 the Supreme Court issued one of its usual detrimental and dangerous rulings. State
was ordered to start issuing US passports to dual citizens.
Soon there were numerous applications to State depot jobs from Israeli citizens residing
in the US. Knowing lawsuits loomed, State caved.
And that children is how and why State, commerce, DOJ CIA treasury, top security civilian
departments in the Pentagon and other federal agencies became flooded with dual American
Israeli citizens who divert money to Israel. Plus they work for Israel instead of the US.
Mysterious how the only Whites who manage to make it past affirmative action barriers are
jews.
Maybe there's a special affirmative action quota for Israelis residing in America.
@J
Adelman Adelman, be careful what you wish for, as in a debate you will be drowned.
Being labeled an ANTISEMITE is the new badge of honor and courage.
Central banks and their fiat fractional reserve banking system is slowly collapsing, as more
and more nations avoid using the BIS. Joyce's article fully explains why Russia is being
promoted as some type of arch-enemy.
@DaveE
I don't even know what capitalism means anymore. It doesn't seem like it's an actual free
market system. Seems like it is slavery for the little guy, and parasitism for the rich.
Maybe we should ditch the word capitalism for usuryism.
"'It was very gratifying to see Tucker Carlson's recent attack on the activities of Paul
Singer's vulture fund, Elliot Associates '"
I am going to avoid the Jew is bad mantra here. I read that article. But it was not an
expose' of hedgefunds, at least not at the level i was expecting. They merged two companies
and sold off or closed that which was least profitable.
In that article there was no clear discussion – about what could have prevented the
closure. So it was hard to respond positively in favor of not closing. I am advocate of
keeping work in the US, but I don't think it is unreasonable that companies be sustainable. I
would have liked that exposure, that the hedge had no intention of exploring possible profit
making alternatives.
And that is where Mr. Carlson lost me. He did not link the companies as you have. Nor
provide the examples you bring to the fore.
What distresses me about Islam is that the pacific practitioners, e.g. Suffi's, many Shias
and Sunnis are out of alignment, and hence are subject to violence from their coreligionists.
I happen to believe there are many wonderful people within the religion what I am saying is
that there is an elephant in the room, and it has a name: abrogation.
I'm going to use a smoke there is fire analogy using data.
If a religion launches repeated attacks against civilizations, then there is something
"in" the religion that is used for justification of said aggression. I'm of the opinion that
data matters, and you have to adjust your position to come into accord with real world
data.
Between 632 and 1922, Islam launched 548 offensive battles against classical
civilization
These attacks were often brutal, especially with rapes being used to "convert women"
rapidly.
In Islam (as in other religions as well) the Imam can turn knobs and get an output. This
means that abrogation is used to pick and choose verses depending on situation, to maneuver
the sheeple in the direction Imam's or political authority want them to go – including
offensive war. I used the term political authority on purpose, because Islam is more than
just a religion, it is a political-theocratic construct that is all-encompassing.
There may not be a specific verse allowing aggressive violence, but there is something
going on based on the data. (I admit to being a lay-man and not an expert on minutia of
Islam. I don't want to go there based on what I already know to be true.)
In Christianity, if there are calls for aggressive violence it is OUT OF ALIGNMENT because
of super-session. Christian adherents who do this are Judaizers, and have to use the old
testament for justification.
@Digital
Samizdat Who the heck is Lillith? Where did she come from? Adam's apple? At least Samael
is a step up from a talking snake. Talk about rewrite. Almost on par to the silly ones on the
daytime soaps. Oh wait . probably same writers.
@Rebel0007
"This won't end well."
-- They cannot help themselves. Two components make it impossible for the tribe to behave in
a preservation mode:
1. the victimhood complex, despite all the recently displayed data about Jewish murderous
ways in the host countries
2. the disproportionate number of psychopaths who are approved by tribal epos and mentality
Perhaps the only solution is to make the aggressive Jews become confined to their Jewish
country. Like an infectious disease that needs to be quarantined. Otherwise, the Jewish
psychopaths will continue leaching and destroying.
Not only the vulture bankers but a complete set of ziocons-infested stink-tanks should be
relocated (with their immediate families) to the Jewish State and prohibited from crossing
the Jewish State borders. Plus the limitations on their involvement in international commerce
and banking. Let the Jews be finally in Jerusalem today, not "next year." Let them enjoy the
company of other Jews.
Jew billionaire globalizer money-grubber Paul Singer has bought and paid for politician
puppet whore Marco Rubio.
JEWS ORGANIZED GLOBALLY(JOG) -- of which Paul Singer is a shady participant -- have plans
for after Trump and they involve the US Senators Marco Rubio and Josh Hawley and Tom Cotton
and others.
Paul Singer pushes mass legal immigration and mass illegal immigration. Paul Singer wants
to continue to use mass legal immigration and mass illegal immigration as demographic weapons
to attack and destroy the historic American nation.
Paul Singer wants to continue to use the US military as muscle to fight endless wars on
behalf of Israel.
I wrote this in February of 2019:
I just got reminded that Marco Rubio won a lot of the GOP billionaire Jew donor money away
from Jebby Bush in the 2016 GOP presidential primary because the Jew billionaires -- Paul
Singer in particular -- were not too thrilled with Jebby Bush's connection to James Baker.
James Baker was a factor in the Jew billionaire decision to back Marco Rubio.
George W Bush had dragged the American Empire into a war in Iraq on behalf of Israel and
the GOP Jew billionaire donors were still not convinced of Jebby Bush's slavish devotion to
Israel.
Marco Rubio signalled his willing whoredom to the ISRAEL FIRST foreign policy of endless
war on behalf of Israel in a way that left nothing to chance for the GOP Jew billionaire
donors.
Marco Rubio is nothing more than a filthy politician whore for the GOP Jew billionaire
donors who want to continue to use the US military as muscle to fight wars on behalf of
Israel.
New York Times article:
Mr. Rubio has aggressively embraced the cause of wealthy pro-Israel donors like Mr.
[Sheldon] Adelson, whom the senator is said to call frequently, and Mr. Singer, who both
serve on the board of the Republican Jewish Coalition, an umbrella group for Republican
Jewish donors and officials. Mr. Bush has been less attentive, in the view of some of these
donors: Last spring, he refused to freeze out his longtime family friend James A. Baker
III, the former secretary of state, after Mr. Baker spoke at the conference of a liberal
Jewish group.
The lobbying of Mr. Singer intensified in recent weeks as Mr. Bush's debate stumbles and
declining poll numbers drove many donors to consider Mr. Rubio anew. Last week, Mr. Bush's
campaign manager, Danny Diaz, and senior adviser, Sally Bradshaw, flew to New York to make
personal appeals on Mr. Bush's behalf, in the hopes of heading off an endorsement of Mr.
Rubio, according to two people close to the former governor's campaign.
This is a timely article for me as I have been pondering the relationship between Jews and
neoliberalism for some time now.
At university I studied under a brilliant Neo-Marxist professor who showed me some theory
and arguments that went a long way towards explaining how to make sense of the global power
structure. (Just a quick not for those who recoil at the mere mention of Neo-Marxist: the
academics that use a marxist lens as a tool to criticize the powerful are not all the cuckold
communist SJW types – some of these individuals are extremely intelligent and they make
very powerful arguments backed by loads of data.) One of the theories I was introduced to was
the notion of the Transnational Capitalist Class in this article called Towards A Global
Ruling Class? Globalization and the Transnational Capitalist Class:
http://media.library.ku.edu.tr/reserve/respring18/Intl313_ZOnis/3_Historical_Structuralism.pdf
The authors write the following:
Sklair's work goes the furthest in conceiving of the capitalist class as no longer
tied to territoriality
Inherent in the international concept is a system of nation-states that mediates relations
between classes and groups, including the notion of national capitals and national
bourgeoisi. Transnational, by contrast, denotes economic and related social, political, and
cultural processes – including class formation that supersede nation-states
What distinguishes the TCC from national or local capitalists is that it is involved
in globalized production and manages globalized circuits of accumulation that give it an
objective class existence and identity spatially and politically in the global system above
any local territories and polities.
Since reading your (Dr Joyce) work on the JQ I began to see the connection between age old
complaints of Jews, and what Ford referred to as "The International Jew". In fact, replace
the term "transnational capitalist class" from my passages quoted above (and many others) and
what you have is perfect mirror image of the argument.
This question has come up often lately, synchronistically (or maybe not). I'm somewhat new
to the JQ, having consumed many hours of work (including much of your own) after being sent
down the rabbit hole by the ongoing Epstein case. I was pondering that perhaps, Jews take the
blame for what the predatory capitalists are doing. Not even a week later you addressed this
precise question in your piece about Slavoj Ziszek and now with "vulture capitalism" it is
coming up yet again in Carlson's segment followed by the article right here. It also came up
on the "other side" in the blog I follow of a professor of globalization in this article:
https://zeroanthropology.net/2019/11/27/global-giants-american-empire-and-transnational-capital/
The link above is a review of the book Giants: The Global Power Elite . The review
provides a summary of the book which once again could be a text about Jews if one were to
replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is
the following: "Chapter 2, "The Global Financial Giants: The Central Core of Global
Capitalism," identifies the 17 global financial giants -- money management firms that control
more than one trillion dollars in capital. As these firms invest in each other, and many
smaller firms, the interlocked capital that they manage surpasses $41 trillion (which amounts
to about 16% of the world's total wealth). The 17 global financial giants are led by 199
directors. This chapter details how these financial giants have pushed for global
privatization of virtually everything, in order to stimulate growth to absorb excess capital.
The financial giants are supported by a wide array of institutions: "governments,
intelligence services, policymakers, universities, police forces, militaries, and corporate
media all work in support of their vital interests" (p. 60).
Chapter 3, "Managers: The Global Power Elite of the Financial Giants," largely consists of
the detailed profiles of the 199 financial managers just mentioned.
This caught my eye because I immediately wondered how many of those 199 directors are
Jewish. It also pertains directly to this exact article because I am confident that the
vulture capitalists you targeted here are profiled in the book, probably with many
others.
Now, I am not in the business of writing about the JQ, so I wanted to suggest to anyone
out there that is that if they were to obtain a copy of this book and determine how many of
the 199 directors are jews. What this could accomplish is a marriage of the major two
theories of the "anti-semites" (for lack of a better word) and the "Neo-Marxists". I would
argue that perhaps both sides would learn they are coming at the same thing from two
different angles. Most would ignore it, but maybe a few leftist thinkers would receive a much
needed electric shock if they were to see the JQ framed in marxist terms. Perhaps some
alliances could be forged across the cultural divide in this struggle. Personally I believe
that both angles are perfectly valid, and that understanding one without the other will
leaves far too much to be desired when studying the powerful.
@the
grand wazoo Reagan relaxed the laws on takeovers and as a result what Galbraith called the technostructure (modern
corporation in which the business was run by not with an eye on shareholder value but in the
interests of everyone involved) was ripped apart.
However the technostructure had come about in the 30s when the Depression led to mass lay
offs, which had began to cause social unrest. The Chinese are have already cutting a swath
through Western productive capacity, and now they are coming for the rest to the extent that
the European Union is tightening the limits of foreign direct investment and takeovers. Trump
is calling for negative interest rates, which were not adopted even during the 1930s when
one-quarter of the labor force was idle.
Prospects for severe economic pain being imposed on ordinary working people and the
consequent (eventual) establishment of a new technostructure are excellent. I hate to sound
like an accelerationist, but Jews like Singer are bringing that day closer.
@Ghali
'Everywhere they go, they leave behind nations in ruins. "
-- They always find the willing local collaborators ready to make a big profit. Who can
forget Dick Cheney, the Enemy of Humanity? The same kind of unrestricted criminality and
amorality lives on in Tony Blair the Pious. The fact that this Catholic weasel and major
criminal Tony Blair is still not excommunicated tells all we need to know about the
Vatican.
Assange is rotting in a prison, while Tony Blair and Ghislaine Maxwell are roaming free. The
Jewish connections pay off.
I know some Torah Jews who are angry that Mischlings have no right of return to Israel,
and apparently now aren't part of the ruling American Jewish nation, or American, or have
anywhere to go now. They're also angry at what they see as a repeat of the cycle of
international Jewish action and inevitable reaction they will have to bear the brunt of.
They referred me to this website: The Institute for Historical Review where they
apparently contribute.
" Although Jews make up no more than three or four percent of Russia's population, they
wield enormous economic and political power in that vast and troubled country. "At least half
of the powerful 'oligarchs' who control a significant percentage of the economy are Jewish,"
the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New
Russia," May-June 1997 Journal, pp. 21-27. )"
So that was the context of who owned capital in Russia, what was the effect?
" According to Harvard University scholar Graham Allison, who is also a former US
assistant Secretary of Defense, ordinary Russians have experienced, on average, a 75 percent
plunge in living standards since 1991 -- almost twice the decline in Americans' income during
the Great Depression of the 1930s. But in the midst of this widespread economic misery, a
small minority has grown fabulously wealthy since the end of the Soviet era ."
But how is that possible? Swashbuckling international capitalists like Bill Browder were
bringing their Ivy League MBA's to more efficiently manage all those assets. And he said how
much he wanted to save the Polish Train-yards.
What happened? A Putin arose. He took the capital from the Jews, and the Jews were
dispatched to the United States. Putin also aligned himself with a different Jewish faction
less virulently dismissive of the needs of the people they ruled.
What do they do in the United States? Something similar as the economy careens towards
another financial crisis and living standards, mortality rates, and the middle class
plummet.
"Jewish power in Russia, Galushin continues, has resulted in millions of homeless
children, widespread tuberculosis and cholera, a shortage of medicines, cheating retirees of
their pensions, suicide in the armed forces, and the death of science. What do the Gusinskys,
the Berezovskys, the Chubais, the Nemtsovs, the Kiriyenkos, the Smolenskys, the Livshits, and
the Gaidars say about this? Millions of Russians have perished under their rule. Are the
Russian people ready to judge these scoundrels for their crimes, Galushin ask",
Robert Maxwell was a Chezch Jew – he also robbed hundreds of millions worth of
pensions. How is it possible that all these Jewish capitalists can be linked to readily to
Jeffrey Epstein?
How did Robert Maxwell get his seed money?
Here is a letter sent to Boris Berezovsky nee Abramovich.
"In sharp contrast to the intense feelings expressed by such Russian writers over the
catastrophic situation in their country today is the seeming indifference of American and
German taxpayers who have unwittingly channeled billions of dollars and marks to the
oligarchs -- who in turn have transferred this largesse to secret Swiss accounts. Who
monitors the distribution of these billions through the World Bank, the IMF, the financial
houses, and various banks? Who is responsible for this terrible injustice?"
That's really strange, because isn't that what the Russians accused Browder of doing? They
say that he channelled billions of dollars out of Russia into the United States. Then we had
the great Russian menace that is still ongoing in the media, and failing.
But Browder said that the Russian collusion story that was created by Fusion GPS, and then
the FISA court warrants issued on the basis of the fabricated Steele 'pissgate' dossier and
media stories was 100% true.
And Steele worked for the Russia desk of British Intelligence, and was being paid by the
Democrats.
Even the proto-Shabbos goys at the National Review had to distance themselves from it.
They showed that the date the FBI and Justice said it was verified it couldn't possibly have
been verified.
So why did so many Jewish capitalists like Browder support it?
And why aren't the Russians being permitted to trace Russian monies into Cyprus if Bill
Browder and now Jewish captialist ever has every done a thing that is wrong?
Because literally to the letter what is said about Donald Trump, the Democrats were
actually doing.
"" It got almost no attention, but in May [2018], CNN reported that Sens. Robert
Menendez (D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to
Ukraine's prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four
investigations they said were critical to the Mueller probe. In the letter, they implied that
their support for U.S. assistance to Ukraine was at stake. Describing themselves as "strong
advocates for a robust and close relationship with Ukraine," the Democratic senators
declared, "We have supported [the] capacity-building process and are disappointed that some
in Kyiv appear to have cast aside these [democratic] principles to avoid the ire of President
Trump," before demanding Lutsenko "reverse course and halt any efforts to impede cooperation
with this important investigation ."
And yet Trump pulls the Jews ever closer. A ruling race of ubermenschen now.
'No reason'.
Can you imagine what American Blacks and savage Hispanics let alone whites are going to do
if the US economy craters like the Russian economy, and everything is transferred to the
banks?
@Old
and grumpy Yeah . fine idea. I've always maintained there are two uses of the word
"capitalism" industrial capitalism or competition of ideas vs. financial capitalism, the
Darwinian struggle for the most ruthless bankster to rig the "markets" most efficiently.
Whether we give it new terminology I don't care much . but I sure wish people would
understand the difference, one way of another !
Trump and the Republican Party puppets are nothing more than nasty politician whores for
billionaire Jews such as Seth Klarman and Paul Singer and Shelly Adelson and Les Wexner and
Bernie Marcus and many other money-grubber Jew donors.
The Republican Party Jew donors want to continue to flood the USA with mass legal
immigration and mass illegal immigration and the Jew donors want to continue to use the US
military as muscle to fight unnecessary wars and endless wars on behalf of Israel.
The Republican Party Jew donors also want to have all their shady money-grubber scams
protected by the Republican Party politician whores.
I wrote this in October of 2017 about Seth Klarman and Puerto Rican government debt:
Puerto Rico must be allowed to go belly up. The bond owners who own Puerto Rican debt must
go tits up. The US government must not bail out the investors who purchased Puerto Rican
government debt, or any debt whatsoever connected to Puerto Rico. Seth Klarman has been
revealed as a person who has bought Puerto Rican bonds in hopes of cashing out big.
SETH KLARMAN must be given a salt shaker to sprinkle salt on his worthless Puerto Rican
bonds before he eats them. Klarman must lose 100 cents on the dollar for his greedy purchase
of Puerto Rican debt. Klarman has loads of loot, and the Puerto Rican government debt was
purchased for one of his funds. I am sure his investors won't mind getting soaked by Seth for
a bit of money -- it is not even a whole billion dollars, only close to it.
David Dayen says:
Klarman, who has been described as the Oracle of Boston, has a history of buying
unpopular or distressed assets on the cheap in hopes of a payday. Baupost manages over $30
billion in assets. He is known as the top campaign contributor in New England and has been
a major donor in Republican politics in Massachusetts, including largely secret support for
2016's Question 2, an ultimately unsuccessful effort to lift a state cap on charter
schools. Klarman supported Hillary Clinton in 2016, calling Donald Trump "completely
unqualified for the highest office in the land."
Klarman's involvement in Puerto Rican debt will surely come as a surprise to activists
in Massachusetts and Puerto Rico, who have never mentioned him among the "vultures" who are
causing undue pain for the island's U.S. citizens.
Jewish people have treated me better than my own White Euro family.
White Euro people are/were evolved for small tribes. They were hunter gatherers, and
evolved concurrently with dogs. In my opinion the pathological altrusim of whites has to do
with the close relations to dogs, pets and later livestock. The whole "good shepherd" is more
of a Western Construct of Cro-Magnon white people, than the insular goat-herding types of the
middle east.
For example, in Scandinavia and most white countries, a 'baby sitter' can be a neighbor,
while in middle eastern cultures, a baby sitter can only be from a family member.
In other words, white people extend trust to one another, while middle-eastern ethos is
more familal then tribal. Ice age evolution, especially the fourth ice ages, selected for
pathological altruism is whites; which is why whites extend their grace to foreigners, brown
people, and are easily duped by Jews.
All you can do is try to rise above your own families failings. White people have to think
it through intellectually, as it does not come naturally.
Jews are tribal, gee what a surprise after 1000's of years of people trying to wipe them
out . and so their charity is within the tribe, but there is no charity within the tribe
among Whites.
Yes, but what is being debated here is how Jews use their ethnocentrism and in-group
methods to practice usury against out-groups. Euro-whites are a perfect host for the
parasite. The parasitical methods EVOLVED over millenia to operate the usury mechanism, to
take rents and unearned income. This is why they have been kicked out of 109 countries,
because what they do is seen as immoral and against the common good. (Euro whites eventually
smarten up and it always takes a King to eject the Jews.)
For more on this, see the book Angela's Ashes. The Irish family could have stayed in New
York where they were being befriended by a Jewish family.
Let's not get cause and effect reversed. The potato famine in Ireland was devastating
because high-value crops were being exported to England to pay for wait for it . usury on
debts the Irish owed the English. The English in turn were operating the state sponsored
usury system of the Bank of England, which came into being in 1694. The BOE in turn was
JEWISH in construct, being maneuvered into place by Sephardic Jews from Amsterdam.
The Irish, being trusting souls, fell into the usury trap and could not keep up with the
exponential debts.
A general statement: White people can build high trust civilizations that benefit all of
their people, but are easily subverted when the wrong type of predators infiltrate. If your
family was extended, and had aunts and uncles and cousins, who lived in the general area for
centuries, then there would be a network to fall back on.
See slaughter of the cities by Jones:
And yes, the FIRE sector and impetus behind the destruction of your extended family was
JEWISH. The breakdown of neighborhoods and ethnics was on purpose.
The Jew is anti-logos, and whatever he touches he destroys. (There are exceptions of
course – but these people no longer possess a negative Jewish spirit.)
Sorry your family was destroyed. When whites become un-moored they don't know how to
act.
@J
Adleman Quite bizarre post. First,he makes a half ass defense of Jew
character.(Weinstein,Epstein don't represent jews! Well,they kind of do. Any jew who is
called to accounts for his crimes automatically does not represent jews!
You are a used condom. Do you represent the jews? Id day yes.)
Your diatribe sounds like an alt righter's view of jews. Are you real?
if you think it's wrong to buy or try to collect on defaulted debt, what is the
alternative set of laws and behavior you are recommending? If debts can simply be
repudiated at will, capitalism cannot function.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad
investors should be punished and good investors rewarded. Resources should be well allocated.
Otherwise it's not capitalism.
These insane Boomers seem to think that there is a Jewish coup underway to remove Trump
because of all the things that Jews are saying in Jewish publications and every single person
involved being Jewish and stuff.
@Germanicus
About the Carnegie donated "Peace Palace" in The Hague, presently the seat of the In
ternational Court of Justice:
Germanicus claims:
They are a function of Empire in Hague, who protect empire criminals, and assume a non
existent legitimacy and jurisdiction as a private entity to take down empire opponents.
Such as this ruling for instance:
Guardian 3 Oct.2018:
International court of justice orders US to lift new Iran sanctions
Mike Pompeo indicates US will ignore ruling, after judges in The Hague find unanimously in
favour of Iran
@silviosilver
"What Joyce regards as a defect of "vulture" funds, others might regard as an benefit. "
-- Of course. I hope you did not miss the fact that the Jewish vulture funds -- ruthless,
unethical, and leaching on goyim -- contribute to the Jewish Holocaust Museum.
Is not it touching that the same bloody destroyers of nations demand from the same nations a
very special reverence -- out of ethical considerations, of course -- towards the Jewish
victims of WWII? But only Jewish victims. All others were not victims but casualties. See
Iraq, Syria, Libya, and Ukraine. See the unlimited hatred of ziocons towards Russia.
@Anonymous" but maybe a few leftist thinkers would receive a much needed electric shock if they were
to see the JQ framed in marxist terms " – I would not count on the effect of the
electric shock on the leftist thinkers. The role of Jewish Bolsheviks in the Cheka, NKVD,
GULAGs, genocides by famine has been known from the very beginning and yet it left no impact
on the leftist thinkers.
"According to Harvard University scholar Graham Allison, who is also a former US
assistant Secretary of Defense, ordinary Russians have experienced, on average, a 75 percent
plunge in living standards since 1991 -- almost twice the decline in Americans' income during
the Great Depression of the 1930s. But in the midst of this widespread economic misery, a
small minority has grown fabulously wealthy since the end of the Soviet era."
"Although Jews make up no more than three or four percent of Russia's population, they
wield enormous economic and political power in that vast and troubled country. "At least half
of the powerful 'oligarchs' who control a significant percentage of the economy are Jewish,"
the Los Angeles Times has cautiously noted. (See also: D. Michaels, "Capitalism in the New
Russia," May-June 1997 Journal, pp. 21-27.)"
It's interesting how the appeal of Eduard Topol to Jews in Russia is now starting to echo
Jewish calls in the United States for Jews to stop the path they are currently on.
Here is the complete text of Topol's extraordinary "Open Letter to Berezovksy,
Gusinsky, Smolensky, Khodorkovsky and other Oligarchs," translated for the Journal by Daniel
Michaels from the text published in the respected Moscow paper Argumenty i Fakty ("Arguments
and Facts"), No. 38, September 1998:
Magnitsky and Bill Browder is also really interesting.
It turns out that a large measure of the Russiagate story arose because Russian lawyer
Natalia Veselnitskaya, who traveled to America to challenge Browder's account, arranged a
meeting with Donald Trump Jr. and other Trump campaign advisers in June 2016 to present this
other side of the story.
Then we had Democrats actually literally word for word doing what they accuse Trump of
doing in Ukraine.
"It got almost no attention, but in May [2018], CNN reported that Sens. Robert Menendez
(D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to Ukraine's
prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four investigations
they said were critical to the Mueller probe. In the letter, they implied that their support
for U.S. assistance to Ukraine was at stake. Describing themselves as "strong advocates for a
robust and close relationship with Ukraine," the Democratic senators declared, "We have
supported [the] capacity-building process and are disappointed that some in Kyiv appear to
have cast aside these [democratic] principles to avoid the ire of President Trump," before
demanding Lutsenko "reverse course and halt any efforts to impede cooperation with this
important investigation."
What's the first rule of Communist and Satanist Saul Alinsky? Always accuse your opponents
of what you are doing.
Imagine having a Grandfather as the literal Chairman of the American Communist Party, and
all the amazing lessons you would learn about political maneuvering and ideology.
And it's amazing.
Browder's story is that Russian officials stole his companies seals and then fraudulently
formulated a tax avoidance scheme with a complete paper trail that they fabricated against
him in totem. Precisely matching the amount of money he was trying to remove from their
country, like those other Jewish Oligarchs who imposed conditions that were multiples worse
then even the American depression.
When under oath it turns out that Magnitsky wasn't even a lawyer at all, and didn't go to
law school. Why did the media owned by Mormons of course keep saying that Magnitsky was
Browder's lawyer?
Why did the Russians fraudulently fabricate a paper-trail for another Jewish Oligarch to
steal money out of Russia? Just like they colluded with Trump when a Russian lawyer sought to
explain what happened. Because that totally happened.
Maybe the problem isn't Capitalism. Maybe, when even the ur-Shabbos goys at National
Review are shaking their head and washing their hands like Pilate, maybe it's a different
problem.
Yet Trump holds these people ever close to his beating heart.
And then there are all these connections to Jeffrey Epstein that are like an explosion
linking all these people.
Poor old Russia. Even Putin isn't worse then what came before.
The link above is a review of the book Giants: The Global Power Elite. The review
provides a summary of the book which once again could be a text about Jews if one were to
replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is
the following: "Chapter 2, "The Global Financial Giants: The Central Core of Global
Capitalism," identifies the 17 global financial giants -- money management firms that
control more than one trillion dollars in capital.
From the review .
"Robinson's claim that nation-states have become, "little more than population containment
zones," while "the real power lies with the decision makers who control global capital" (p.
26). Both propositions are unconvincing: first, populations are clearly not being
contained; second, if states matter so little, and the real decision-makers are global
capitalists, then why do the latter need states
That is such stupid reasoning it blows the mind. He is trying to shift the global problem
to institutions .. instead of the people who head those institutions
Institutions, agencies , financial firms, etc .are ALL run by PEOPLE .who make the
policies,laws, take the actions.
Why does the 'transnational capitalist class' need states? well duh because
people/labor/consumers are indeed "contained' in states subject to the states laws and
system. The transnational capitalist class created the institutions he speaks of 'from
within' those states thru their control of its system and their same goal partners who do the
same from within their respective states.
That the capitalist class is not tied to any territory has been observable since 1960.
I don't have time now to look up how many of 199 directors are Jews . but I know enough of
the economic history of various countries to know that Jews were the first business and
finance globe trotters,,,,.from Spain to Amsterdam, France to Africa , etc.etc. Jew were
first hired as reps and facilitators by the gentile business owners especially because of
their breather tribal contacts in many countries ..that was their stepping stone to becoming
transnational capitalist themselves.
Understanding our global capitalist ruling elite and who they are is not rocket
science
Buy your loans from another lender,
change the terms (add fees, penalties, underhanded stuff),
reposses your collatteral.
Outta be illegal.
White Gentiles, you must infiltrate and take over big business and big finance to help
protect your people from predation .and to give all peoples principled, fair financial
services. To help our society, and even others. Paul Singer doesnt seem to care about most of
his fellow men. We could do better, and help the world be a better place.
Yet more evidence is piling up that Donald J Trump is the Great Betrayer.
A man who had the biggest mandate in post war history to clean up the Swamp that is D.C.,
reform Immigration to save America and reform the economy for American workers.
He has squandered all of it while pandering to Jews.
When the Donald is revealed as the Great Betrayer where will Jews run? Yes, they have
several back up plans. Patagonia, Ukraine and Israel.
Imagine that. They have their own country and 2 back up plans. It is really tough being a
hated, oppressed minority.
@Anonymous
Thanks for your comment. You've come to the right place. Unz is an ideal hangout for
left/right fusionists who don't fit in perfectly with either side, but are interested in
hearing from both. In addition, if you're looking for other good right-wing sites that aren't
libertarian, Zionist or overly Christian, I can also heartily recommend Dr. Kevin MacDonald's
Occidental Observer ,
where Dr. Joyce himself usually posts.
What this could accomplish is a marriage of the major two theories of the "anti-semites"
(for lack of a better word) and the "Neo-Marxists". I would argue that perhaps both sides
would learn they are coming at the same thing from two different angles. Most would ignore
it, but maybe a few leftist thinkers would receive a much needed electric shock if they
were to see the JQ framed in marxist terms.
Or, more correctly, it would be a re -marriage of anti-Semitism and Marxism. If you
have a background in Marxism yourself, maybe you recall reading or hearing about Karl Marx's
pre-Kapital classic, On the Jewish Question , where he basically identifies
finance-capitalism as a Jewish phenomenon in essence and origin. Money quote
:
"Let us consider the actual, worldly Jew – not the Sabbath Jew but the everyday
Jew. Let us not look for the secret of the Jew in his religion, but let us look for the
secret of his religion in the real Jew. What is the secular basis of Judaism? Practical
need, self-interest. What is the worldly religion of the Jew? Huckstering. What is his
worldly God? Money. Money is the jealous god of Israel, in face of which no other god may
exist. Money degrades all the gods of man – and turns them into commodities . The
bill of exchange is the real god of the Jew. His god is only an illusory bill of exchange .
The chimerical nationality of the Jew is the nationality of the merchant, of the man of
money in general.[ ] The Jew has emancipated himself in a Jewish manner, not only because
he has acquired financial power, but also because, through him and also apart from him,
money has become a world power and the practical Jewish spirit has become the practical
spirit of the Christian nations. The Jews have emancipated themselves insofar as the
Christians have become Jews. [ ] In the final analysis, the emancipation of the Jews is the
emancipation of mankind from Judaism."
Marx himself, of course, came from a family of rich conversos, so he knew whereof he
spoke.
Perhaps some alliances could be forged across the cultural divide in this struggle.
Personally I believe that both angles are perfectly valid, and that understanding one
without the other will leaves far too much to be desired when studying the powerful.
As a third-way national socialist, I hope so, too. Libertarianism/capitalism and mainline
socialism are dead-ends, having both been thoroughly co-opted (founded?) by the Jews. Both
fail to address the pink elephant in the corner; both put some hopelessly abstract ideology
before the welfare of my people–while benefiting another. And so, as the original NS
used to say: 'Neither godless Bolshevism nor soulless capitalism!'
Reality: Contrary to popular mythology, not all serial killers are white. Serial killers
span all racial and ethnic groups in the U.S. The racial diversity of serial killers
generally mirrors that of the overall U.S. population. There are well documented cases of
African-American, Latino and Asian-American serial killers. African-Americans comprise the
largest racial minority group among serial killers, representing approximately 20 percent of
the total. Significantly, however, only white, and normally male, serial killers such as
Ted Bundy become popular culture icons.
@Lot
Your defense of bond holders do not hold water. They agreed to take the risk at the given
price. If the debtor can't pay back, they have the eat the losses, period. Usury law needs to
be put in place to outlaw these vulture funds. Then the bond funds will adjust by demanding
better terms that truly reflects the risk from the get go, and the debtors will adjust by
being much more cautious in their borrowing since the borrowing cost is so high.
Instead, this current arrangement basically uses bond funds to put up a false front,
telling a debtor they can borrow at 2% when the real rate should be at 20% given the known
risks, then the debtor goes crazy borrowing because it's so cheap to borrow, and when they
can't pay back, the bond gets sold to the vultures who come collecting at 20% or they seize
assets. This is no different than the subprime mortgage crap, except now that is regulated so
they go after sovereign debt and corporate debt instead. These vultures need to go die
period.
Trump is now essentially funded by three Jews -- Singer, Bernard Marcus, and Sheldon
Adelson, together accounting for over $250 million in pro-Trump political money. In return,
they want war with Iran.
Hmm -- The day after Trump in inaugurated for his second term -- will Iran be in his
crosshairs?
@Jimmy1969
This is a great, concise overview of Canadian media influence by the "silent" Jewish
overlords via Golden Tree.
I tried copy/paste of your comment on CBC, but it did NOT last 2minutes before being
suspended!!
I am sorry to have used your comment without your permission, but I am going to "misspell"
some words to defeat the algorithm to get your message across.
@Lot
For points 1 and 2, I think that you would learn a lot from reading his previous article (
https://www.theoccidentalobserver.net/2015/08/01/paul-singer-and-universality-of-anti-semitism/
) on vulture capitalism. It is not just that they are recovering assets from defaults. These
vulture groups will use the courts to increase the size of the debts and sue for extra "fees"
on top, even when all other lenders are against it. They typically manage to get US courts in
NYC to try these cases, which also is apparently abnormal (apparently it would be more normal
to use international courts). This is what Joyce refers to here:
"This type of predation is so pernicious and morally perverse that both the Belgian and UK
governments have taken steps to ban these Jewish firms from using their court systems to sue
for distressed debt owed by poor nations. "
These funds do not do something that normal investors do, especially not to the bonds of
governments of struggling third-world countries.
As for 3, you are misunderstanding. Joyce never demanded that they name their charities
anything in particular, but it is obviously the case that your typical normie thinks that
"white males," presumably golf-playing Episcopalians or something, are the ones running
finance, and these golfy-sounding names (Elliot, Monarch, GoldTree, OakTree, Canyon, Tilden
Park) fit the perception. We whites receive the society's hate for the wealth disparities
created by high finance.
4. No, it is not difficult to do finance differently. Every other investor has higher
patience for poor countries in Central America and Africa, and they all look at Elliot with
confused scorn.
And, things would probably run fine without hyper-aggressive multi-billionaires in pushing
the courts to f- over those who default on debts they owe to the maximum degree. Japan and
Norway do quite fine with businesses that are run by gentle and humble goys who feel ashamed
at the thought of getting "too rich."
@J
Adleman You will be thrown out.
You will have to choose between Israel, Ukraine and Patagonia. No one else will take you.
You have destroyed our politics, media and economy.
You are not respected.
You buy compliance with money.
You have bankrupted the U.S. dollar with debt pursuing Israel's enemies.
Do any of you goys remember when the Jewish funded Democrats through the US State
department gave Russia one third of the US strategic uranium reserve and also funnelled
military tech to Russia's Skolkovo Valley? At a time when they were working on the Hypersonic
ballistic missile engine?
It's almost like there was this plan for people to move back into Russia, just like China,
but for some reason the Russians and Chinese didn't cooperate.
Remember when David Spengler wrote about this a few years back hence?
Do you think disloyal Jews had anything to do with 18 American CIA assets getting captured
and murdered by the Chinese Intelligence services through 2010 to 2012?
Could it be that there were loyal Americans who were interfering with Chinese pay for play
with the Jewish nation in the United States? Or might have come upon it?
Imagine being an American military service member knowing that your Jewish commanders and
Jewish senior officers have got your back.
It's amazing isn't it.
Clinton was receiving tens of millions of dollars from Skolkovo Valley Syndicate owners in
Russia, and in exchange all she gave them were military secrets that may have given Russia
for example it's lead in hypersonic military technology.
And then we're told China had a duplicate version of her emails in China, in exchange for
what?
US Taxpayer money funded the Russian weapons program.
How much China tech was also funded by US taxpayers?
And then these people accused Trump of collusion with Russia, because the Russians were
telling the Trump family that the Magnitsky Act was unjust because the Russians were trying
to secure their assets against the kind of predatory practices that lowered Russian mortality
to where it's headed in the Midwest. Right now. For the same reasons.
Yeah – this trend is absolutely going to be permitted to continue.
The American nation forewarned and forearmed is simply going to allow itself to go the way
of the Russian Slav under a century of Jewish and proto-Jewish (the man who was made to call
himself Stalin) leadership.
Maybe, just maybe, an American President might consider a Magnitsky Act the subjects of
which were different. Maybe Trump is the last civic-nationalist President, maybe.
Look at how loyal the ruling nation in the United States is to their fellow Americans.
There aren't enough hours in the day to trace the labyrinthine set of Jewish betrayals and
asset transferrals – remember the Panama Papers? Remember the Samson Option?
Why won't Browder let the Russians investigate Cyprus?
Maybe good old fashioned local corruption with noblesse oblige is preferable to this
international corruption.
The Jews got out-leveraged by the Russians, and now, finally, the Empire might be able to
take back Korriban from the Jewdi.
Of course that's impossible. You have to trade one for the other. Just one set for the
other set.
If you want to find a list of these capitalists – you just look at who attends the
World Jewish Congress Galas.
" Ira Rennert (net worth $3 billion, previously, $6 billion, investor, known as a "junk
bond billionaire," found guilty of corruption in 2015, placed a mill in Baltimore's outer
harbor into bankruptcy, causing more than 2,000 workers to lose their jobs, owes Baltimore $8
million in unpaid city water bills, allegedly used money he looted from his business to build
a 29-room mansion & compound – a garage holds 100 cars)
Dick Parsons (former Time Warner CEO, CBS chair, & Citibank chair; in 2012 shareholders
filed a lawsuit against Parsons and some other executives for "stuffing their pockets while
running the bank into the ground")
Ben Ashkenazy (net worth $4 billion, Israeli American real estate tycoon, a benefactor of the
2015 AIPAC Real Estate Luncheon at New York's Grand Hyatt Hotel)
Jack Chehebar (real estate mogul, sued for alleged breach of contract, accused of beating his
son)
Ray Kelly (longest serving commissioner in the history of the New York City Police
Department, for a period was an Interpol vice president, charged by Muslim groups of
discrimination: "The commissioner oversaw a spying program that targeted Muslims based solely
on their religion, showed poor judgment by participating in a virulently anti-Islamic film,
and approved a report on terrorism that equated innocuous behavior such as quitting smoking
with signs of radicalization."
What did God say once?
In Genesis 18:32 He said he would spare Sodom and Gamorrah if Abraham could find just 10
honourable men. He couldn't find them. Only the family of Lot.
There isn't much time left. It might simply be the case that the rot goes too deep and too
dark.
Valhalla is a worthy place. I think there might be some Russians there, along with the
souls of those 18 Americans who were tortured and murdered in China for reasons unknown.
Capitalism includes money. You can't separate the risks in lending from other risks. Bad
investors should be punished and good investors rewarded. Resources should be well
allocated. Otherwise it's not capitalism.
There are different kinds of capitalism. It is part of today's hypnotism that people don't
know the different types.
For example, there is finance capitalism, industrial capitalism, and what Andrew Joyce
calls vulture capitalism.
Vulture capitalism is a subset of finance capitalism.
Industrial capitalism was invented in the American colonies, especially Massachusetts bay.
The American system of economy (industrial capitalism with mixed economy and sovereign money)
has since been lost to America, as it imported Jewish/British finance capitalism as the
operating construct after 1913.
You can separate risks in lending. That is more hypnosis that you have been imbibing on.
The entire corpus of Classical economics goes about trying to separate unearned from earned
income, how to tax properly, what is site value, and it also is able to separate risk
types.
The fact that you do not know these things is not surprising, as most of western man is
living inside of a Jewish inverted reality bubble. The agents of mammon won, and classical
economics is not even taught in university.
Homosexuality is present in our society, but doesn't register much in demographics and as
such, I am happy to call gays as homosexuals. Tackling animus towards homosexuals requires
NOT trying to enforce new nomenclature of gender etc., otherwise an unexpected nasty backlash
can occur. Within your "ingroup", you can say what you like, but do not try and force ingroup
dynamics on the majority that are not interested.
Otherwise, you are behaving by identity politics, just like the Jews force their identity
upon the majority.
@sally
" Time after time I have asked my Jewish friends are you are Zionist, and most say they do
not really know what Zionism is? "
Zionism is a name which is more well known as an identifier by the critical (among the
Goy), carrying by now negative connotations. Broadly it is not an ism which is well known to
the man in the street. It could well be that among Jews, the name Zionism is only handled by
certain groups.
The question should have been rephrased asking what position these Jewish friends take with
regard to Israel. It comes down roughly to the same thing.
To not know of Zionism might be strategically a good thing, it refers to convergent
interests, actually a power block, you don't want to throw around such things, it could make
people aware Keep it diluted, diversity, obfuscation.
Ben Franklin and the American revolution was almost put in a similar pinch by the Amsterdam
banker Jean DeNeufville. In a letter to John Adams, 14 December 1781*, Franklin explained
that DeNeufville wanted as security for a loan "all the lands, cities, territories, and
possessions of the said Thirteen States, which they may have or possess at present, and which
they may have or possess in the future, with all their income, revenue, and produce, until
the entire payment of this loan and the interests due thereon."
Franklin considered that "extravagant" but Newhouse rejoined, "this was usual in all loans
and that the money could not otherwise be obtained". Franklin retold in this lengthy letter,
"Besides this, I was led to understand that it would be very agreeable to these gentlemen if,
in acknowledgment of their zeal for our cause and great services in procuring this loan, they
would be made by some law of Congress the general consignee of America, to receive and sell
upon commission, by themselves and correspondents in the different ports and nations, all the
produce of America that should be sent by our merchants to Europe."
Talk about shooting the moon
While Wikipedia says DeNeufville was Mennonite, Franklin concluded with this colorful --
and bitter -- remark , "By this time, I fancy, your Excellency is satisfied that I was wrong
in supposing John de Neufville as much a Jew as any in Jerusalem, since Jacob was not content
with any per cents, but took the whole of his brother Esau's birthright, and his posterity
did the same by the Canaanites, and cut their throats into the bargain; which, in my
conscience, I do not think Mr. John de Neufville has the least inclination to do by us while
he can get any thing by our being alive. I am, with the greatest esteem, etc., ✪ B.
Franklin."
Perhaps it was just an expression based on an earlier stereotype?
*Bigelow, 1904. The Works of Benjamin Franklin, Vol. 9 Letters and Misc. Writings
What our Jewish friends have done to Argentina, through maneuvering the elections, killing
dissidents, and marking territory, is a cautionary tale to anybody woke enough to see with
their own eyes.
Zion had the opportunity to go to Uganda and Ugandans were willing, but NO Zion had to
have Palestine, and they got it through war, deception, and murder. It was funded by usury,
as stolen purchasing power from the Goyim.
The fake country of Israel, is not the biblical Israel, and it came into being by
maneuverings of satanic men determined to get their way no matter what, and is supported by
continuous deception. Even today's Hebrew is resurrected from a dead language, and is fake.
Many fake Jews (who have no blood lineage to Abraham), a fake country, and fake language.
These fakers, usurers, and thieves do indeed have their eyes set on Patagonia, what they call
the practical country.
Unz is an ideal hangout for left/right fusionists who don't fit in perfectly with either
side, but are interested in hearing from both
You just described me to a tee. I defy categorization, especially ideological ones
(although I half jokingly refer to myself as a free-thinkist), and I feel this makes me
weird.
I've been to TOO. However I can't bring myself to start commenting on a white nationalist
website. I will admit I am unable to articulate this discomfort presently.
As to your point about Marx – I actually forgot about his work on the JQ. The Saker,
who is a columnist on this site, referenced Marx's essay on the JQ some time ago. I must have
not read the whole thing or I'd have remembered it. I didn't know that Marxism originated
with anti-Semitism, but that is fascinating. I have encountered some Marxists in my time and
they focus exclusively (predictably) on the cis-white-male patriarchy, or whatever occupies
their brainwashed minds after an Introduction to Gender Studies class.
@Anon
"If debts can simply be repudiated at will, capitalism cannot function."
Is this children's capitalist theory class time? throwing around some simple slogans for a
susceptible congregation of future believers?
Should be quite obvious that people, groups of people, if not whole nations , can be
forced and or seduced into depths by means of certain practices. There are a thousand ways of
such trickery and thievery, these are not in the theory books though. In these books things
all match and work out wonderfully rationally
Then capitalism cannot function? Unfortunately it has become already dysfunctional, if not
a big rotten cancer.
Isaiah 1:4 4 Alas, sinful nation, A people laden with iniquity, A brood of evildoers,
Children who are corrupters! They have forsaken the LORD, They have provoked to anger The
Holy One of Israel, They have turned away backward.
Ezekiel 21:25 25 'Now to you, O profane, wicked prince of Israel, whose day has come, whose
iniquity shall end
Jeremiah 5:9 Shall I not punish them for these things?" says the LORD. "And shall I not
avenge Myself on such a nation as this?
As Jesus said which of the prophets have you not killed or persecuted? The truth hurts. As
for me I do not hate Jews ..I feel terribly sad for a people that are capable of greatness
and squandered the gifts given to them by God. Are you a holy nation? Don't make me laugh.
Repent. Your time is coming. No more running and hiding. Deception will no longer save you
only acceptance of the Messiah.
Hey! Don't mention anything a Jew ever did, especially usury, or else the entire cult will go
up in a holocaustal mushroom cloud of emo nasal whining. In Judaism you've got a fanatical
sect that systematically selects and brainwashes its members to inculcate extreme values of
two Big Five personality axes: high neuroticism and low intellect (where intellect means
open-mindedness.) Note the existential crisis triggered by a straightforward lecture from The
Society for the Study of Unbelievably Obvious Shit.
Of course Israel is holocausting the Palestinians. This is what happens when the founding
myth of a nation is, We wiped em all out and then they wiped us almost all out so now we
gotta wipe em all out etc., etc., etc.
Well, the only difference between a narcissist and a psychopath is that the former need
people to like them whereas psychopaths genuinely could not care less (although they learn
early that acting as if they do can be very helpful , as can always trying to elicit sympathy
etc).
As I noticed while reading a few books on psychopathy (I was inspired to after reading Steve
Job's biography) – their whole 'culture' is structured as a (collective )
PSYCHOPATH.
It seems that (collectively) they cannot care about others even if they wanted to. Due to
their sickness
I am not saying they are all that way – but overall their 'culture' seems to be that
way
@Digital
Samizdat Indeed I cannot agree more. I quote from a 1923 interview of Hitler:
"Why," I asked Hitler, "do you call yourself a National Socialist, since your party
programme is the very antithesis of that commonly accredited to socialism?"
"Socialism," he retorted, putting down his cup of tea, pugnaciously, "is the science of
dealing with the common weal. Communism is not Socialism. Marxism is not Socialism. The
Marxians have stolen the term and confused its meaning. I shall take Socialism away from
the Socialists.
"Socialism is an ancient Aryan, Germanic institution. Our German ancestors held certain
lands in common. They cultivated the idea of the common weal. Marxism has no right to
disguise itself as socialism. Socialism, unlike Marxism, does not repudiate private
property. Unlike Marxism, it involves no negation of personality, and unlike Marxism, it is
patriotic.
@Colin
Wright The Sacklers occupy a hoity-toity rung in the philanthropy universe, as they have
given enough $$$ to Harvard for H to paste their name on its museum housing I believe its
whole Asian art collection. Students have now protested Harvard's high-profile gift of
probity and cultural status to the Sacklers via, literally, an "Aushangerschild" on a major
university museum. Harvard protests back: Jeez, if we don't take the Sacklers' dough we might
be obliged to stop taking the dough from Exxon, etc.
@Anon
you are right about repaying the loan
but Banksters have managed over decades I think starting with Clinton to remove protection
laws (which were stating how much interest was the maximum a bankster could charge his pray
etc). They also removed the rules of how much was the maximum they could lend (according to
how much their victim makes a year etc).
So even though you are right that loans should be repaid – it is immoral to allow a
well connected mafia to change all the laws and remove protections while pushing up prices of
everything because it suits the lender (who has a licence to print).
They basically lend money that does not exist and get interest for that. So the more sheeple
are tricked into borrowing the better for them, but the worse for everyone else
They should not be allowed to bribe politicians to remove all the protection that was there
since 1920s I think.
It's a marriage from hell: easy to bribe Anglosheep meets the masters of predatory bribing
who own the printing press
That stupid cuck Trump just got impeached by the House. Thats a good lesson to everybody
how much good Jew-ass kissing does for you .you get stabbed in the back anyway lol
Couldn't have happened to a more deserving and treacherous scumbag!
But he should have been impeached for his treachery to the constitution and to the
American people for his slavish devotion to all things Jewish!
@Digital
Samizdat True, but irrelevant. The Jews that matter don't read the Talmud or believe in
"Adam and Eve."
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
Frankly, it's these traditional religious notions of "anti-semitism" that get in the way
of understanding what is, at the core, an ethnic issue. It's Sheldon Adelson, the Zionist
entity in Palestine, and the ADL that are the problem, not some looney-tunes rabbi living in
Brooklyn.
The other side of the expalnation is the laking of reaction of the victim,the american
people.
The least that the people that loot the world trough and with the USA power should do, is ,at
least ,let us,the american people, a free ride.
Not illegal in the Talmud either but most certainly illegal in all of the countries that
DynCorp was caught profiting from this type of business. For some reason they never seem to
suffer for their exposure suggesting that they may be wielding the same influence that
Epstein had over our elected officials.
We dont have to get back to the Singer of this world but to our own politicians ,that allowed
them to do this to us,and to the world.In this kind of abusive realtionship the 2 sides are
to blame.
@Just
passing through "Look up income by ethnic group in the UK and US, you will find that
Indians and Chinese (South Asians) are the richest in both countries (except for Jews of
course)."
And why is that? Think about it. These are members of the Indian and Chinese elite who the
multinational corporations are doing business with.
In order to do business in China, the Chinese stipulated that the western corporations had
to give one of the members of the Chinese elite half ownership in the company. They were also
required to turn over the western technology to the China-based company. Western technology,
western money, cheap Chinese slave labor, ability to pollute to your heart's content. For
both sides, it was a win-win. The Chinese elite got filthy rich and then moved over to the
West with their newfound gains, buying up properties, forcing prices up for the natives. The
western corporations not only wanted cheap products to export back to the U.S., but they were
also developing a whole new market – Chinese consumers who would buy their products as
well. Double plus good!
And once in the West, the Chinese and the Indians stick to their groups. They hire their
own, promote their own, do business together. A lot of corruption, money laundering,
cheating, taking advantage of and bending laws. Rule of law? Code of ethics? Morals? Do unto
others? They never learned it. Opportunistic dual citizens.
I would not count on the effect of the electric shock on the leftist thinkers. The role
of Jewish Bolsheviks in the Cheka, NKVD, GULAGs, genocides by famine has been known from
the very beginning and yet it left no impact on the leftist thinkers.
It unfortunately has not had much of an effect on a lot of people in the West, who remain
ignorant or in denial of the role played by Jewish Bolsheviks in historic mass murders and
totalitarian repression.
Waiting for the Hollywood movie to tell the story.
This is an expensive, weighty, and important book, which will take some time to
digest.
Classical economists re-learn the science of money, starting with Prodhoun and even Marx
in Das Kapital volume 3. (Leftists are often correct about money, but wrong on social
issues.)
The jew Marx does do some deception in volume 3 with a sneaky equation that does not
compound interest, but otherwise he is pretty accurate. Marx was probably beholden to his
finance masters.
This is why you need to start with Zarlinga, as there is no BS to lead you astray. Hudson
tends to drill the bulls-eye too. There is so much deception in the field of money and
economy, that it is easy to get caught up in false narratives, like one-born free
libertarianism. Usury flows fund the deception, even to the point of leaving out critical
passages in translations, such as in Aristotle's works. Or, important works are bought up and
burned.
Michael Hudson is the leading economist resurrecting Classical Economics. Reading all of
Hudson and Zarlinga will take some time and effort, but it is good to take a first step.
@Anon
I respectfully disagree that "Kenya was given up [by Great Britain] before there was even an
anti-colonial movement in Kenya ."
According to Wikipedia : " The armed rebellion of the Mau Mau was the culminating response to
Colonial rule . Although there had been previous instances of violent resistance to
colonialism , the Mau Mau revolt was the most prolonged and violent anti-colonial warfare in
the British Colonial colony. From the start the land was the primary British interest in
Kenya ."
Just as the Kenyans suffered the consequences of British colonialism , the "Palestinians will
suffer
the consequences of Zionist colonialism until Israel's original sin is boldly confronted and
justly remedied " foreignpolicyjournal.com
@anon
A particular distinction of Jewish investors versus gentile investors – on average, of
course – is their use of bribery to get the force of government behind them. Rather
than taking a bet about some group being able to pay back some bonds and letting the chips
fall where they may, Jews start bribing or influencing politicians to force that group to pay
back the bonds.
Buy some bonds, charge outrageous fees, bribe officials in some form or other, get govt to
force the payment of bonds and outrageous fees. Rinse and repeat. Jews have been doing this
in some form aor another for 1500 years. It's why the peasants get a tad angry at both the
Jews and their bribed politicians/nobility.
@lavoisier
"But he should have been impeached for his treachery to the constitution and to the American
people for his slavish devotion to all things Jewish!"
A purely political impeachment, right down party lines. I hear Schiff has got his hands
full of Ukrainian-Jewish oligarchic money. Dear me, wait until that comes out.
Trump is in league with the Jews? Yeah, who isn't? Obama's lips are still sore from
kissing Jewish Wall Street bankers' asses (notice that none of them went to jail). Same with
the Clinton's.
You can get politicians to pass all sorts of laws in your favor if you've got enough dirt
on them. After all, your side owns the media, Hollywood, academia, the courts, the banks.
If dirt doesn't work, you can always threaten to impeach them in order to get what you
want.
But Trump is also revealing every last dirty one of them (accidentally or on purpose).
People see them now.
@J
Adelman J Adelman comes out swinging. He's such a tough guy. But does he make sense? Does
he care if he makes sense? The writer is talking about those Jews who are vulture
capitalists. He's not talking about every Jew. Isn't it a little odd that nearly all of these
funds are run by Jews? Can your corrupt mind accept that fact and address the question? Or
are you going to bore us with your religion and by that I mean your obsession with
anti-semitism, which is your religion.
@PCA
Stop splitting hairs. Is this the best you can do? Are you one of Lot's cronies? I don't
normally address petty matters of this kind but Joyce is describing a multitude of sins and
misconduct orchestrated by various Jewish financiers around the globe. It is not merely one
phenomenon; thus, 'phenomena' fits. Go troll someone else.
Lobelog ran some articles in Singer, Argentina, Iran Israel and the attorney from Argentina
who died mysteriously . Singer is a loan shark. Argentinian paid dearly .
Google search –
NYT's Argentina Op-Ed Fails to Disclose Authors – LobeLog
https://lobelog.com/tag/paul-singer/
Paul Singer NYT's Argentina Op-Ed Fails to Disclose Authors' Financial Conflict of Interest
by Eli Clifton On Tuesday, Mark Dubowitz and Toby Dershowitz, two executives at the hawkish
Foundation for Defense of Democracies (FDD), took
The Right-Wing Americans Who Made a Doc About Argentina
https://lobelog.com/the-right-wing-americans-who-made-a-doc-about-argentina/
Oct 7, 2015 One might wonder why a movie about Argentina, in Spanish and . of Nisman's and
thought highly of the prosecutor's work, told LobeLog, FDD, for its part, has been an
outspoken critic of Kirchner but has From 2008 to 2011, Paul Singer was the group's
second-largest donor, contributing $3.6 million.
NYT Failed to Note Op-Ed Authors' Funder Has $2 Billion
@mark
green Mark green the queen of self rightousness.
There are many non jews runny vulture funds worldwide with at least 100 in china
alone.
The list joyce provided is selective and politically motivated.There are many more non
jews who are guilty of financial crimes.The jails are full of them.
The vulture funds are a product of a system that punishes failure.Do not blame the
funds,blame the system.
This story and like many that appear here is designed to pressure israel to change
politically.Israels future lies in the hands of God not some mutt with a serious case of
mutters.
@Lot
venture capital funds are only made necessary because we have a federal reserve.. which is a
private bank and private banks want to earn interest.
consider the difference between when a private lender makes loans to the USA
(treasury)
on the books of the feds is the following
due from the USA $11,000
new cash printed and given to dumb clucks at the USA $10,000
profit on the loan $ 1,000
what happened here is the fed printed $10,000 in new bills.
Assume the loan made at 10% interest and it is due in 1 year.
Ok so what is the loan on the USA books
cash $10,000
amount payable to the Federal Reserve $11,000
loss on the deal $ 1,000
this loan becomes the loan on the local bank books
the government gives the bank its loan and its obligation to repay the principal plus
interest
If there were no interest (that is the government printed its own money and made
venture loans to entrepreneurs at 0% interest the entries would look like this )
Amount due in one year from venture borrower $10,000
new cash printed and loaned to venture $10,000
so if the venture guy spent the $10,000 and then went broke the treasury would still gets
its money back in taxes from those who earned profit the money the venture paid.. no one has
to beat somebody to pay the interest (the economy does not have the extra $1000 dollars in
interest so somebody has to lose)
When interest must be paid its like musical chairs.. each time the music stops there are
not enough chairs to go around, someone is left standing ( its like that in money lending,
the debtors dance until the music stops, but because the private bank only put the principal
amount $10,000 in circulation the guy needs $11,000 to pay the loan back where does he get
the extra $1,000? <=If ten $10,000 loans are made, and 1 guy goes broke, there will be
enough cash in the system for the 9 others to pay the interest they each owe and enough for
the local private bank and lawyers to get paid for handling the bankruptcy. . <= we
started with 10 loans, one loan went broke the 9 remaining borrowers each pay $11,000 to
retire the debt , there are 9 loans "$99,000 to repay them and $1000 to pay debt service
costs and legal fees.
if there were no interest on the loans, the bankruptcy would not matter.
What makes the venture capitalist have a business at all is the Federal reserve is a
private profit making bank. Lending printed money from the Federal reserve requires interest
to be paid, and that requirement of interest makes the economy horde its capital and the
economic players playing king of the mountain to get the extra money they need to pay the
interest . ..
Zionism brought private banking to the USA and the USA wrote a tax law to collect the
money from the Americans it governs to pay the interest on the debt.
this is a really simplistic description of what is happening to our economy so don't rely
on it but instead use its simplistic idea to model the impact of having interest on the
national debt is having each year. If our government reversed what it privatized to the
Federal Reserve, we could make the economy run more or less as we please. \we could eliminate
the national debt and with it income tax es.
Typical Jew baiting article. Mitt Romney isn't a "Jew" Ashish Masih isn't. Many more examples
of gentiles taking advantage of their brothers. May as well consider the Walton family of
Wal-Mart to be vultures as well since they benefit the most from this system, they're so
called Christians, not Jews. The problem is capitalism. Author seems to suggest that a moral
economic system has been corrupted. The system was designed in an era of widespread slavery
folks. Its an immoral system that requires theft, slavery, war, immigration, all the things
you hate, to survive. The system is working exactly as it is designed to work. Exploit
workers, the environment and resources, shift all the profits from workers to the owners of
capital, period. Welcome to the late stage, it eats and destroys itself
From the days of the colonists slaughtering the Injuns and stealing their land. The days
of importing African slaves, and indentured servants. The days of child labor and factory
owners hiring Pinkertons to gun down workers who protested shitty wages and working
conditions. The good ol days of the gilded age. Now the age of offshoring to China or some
other lower wage nation. Overthrowing leaders not willing to let their resources and people
be plundered and enslaved, driving refugees to our borders fleeing violence and poverty.
Importing H1B workers to drive down wages. It was always a corrupt system of
exploitation/theft/slavery. This is nothing new and doesn't require "Jews" to be immoral.
And all these so called "Christians" like Pastor Pence approve. Usury and capitalism run
amok. I'm sure Jesus is smiling down on all these Bible toting demons who allow their fellow
man to be exploited by the parasites. Sad!
Good for Tucker. He has his moments I'd watch his show if he wasn't a partisan hack. But
that will never happen working for Fox or any other corporate media.
@Colin
Wright I doubt Trump promised to go to war with Iran before he was elected. In his
Inauguration Speech, Trump said he wanted to bring the troops home and stop the wars. He
didn't have to say these things, he had already won the election, but he said them anyway.
One of the few times the media has laid off Trump was when he sent some missiles into
Syria (after he gave them hours of warning ahead of time that the missiles were coming). If
Hillary had been elected, Syria would have been leveled by now and flying an Israeli
flag.
Obama brought us the destruction of Libya and the murder of Gaddafi, the coup in Ukraine,
and through ISIS, which the U.S. armed, trained and paid for, tried to destroy Syria.
I don't really blame Obama or Bush Jr. or Clinton. They were all puppets who did as they
were told. If they hadn't, in the words of Chuckie Schemer, there would have been "six ways
from Sunday of getting back at them".
If you don't do what they want, you're impeached, some of your dirty laundry is aired, or
they purposely crash the stock market on you. If you still don't get the message, maybe
you're just assassinated.
Trump loves his daughter and she is married to a Jew. If they're not getting their way, I
could see them telling Trump: "Sad what happened at the Pittsburgh synagogue, isn't it? Sure
hope nothing like that happens to your daughter."
I don't envy Trump. He not only is up against the Democrats, but he is also fighting the
globalist neocons in his own party. Both parties want open borders and more war, something
Trump does not believe in. As far as I can see, he's throwing them bones in order to shut
them up. If he gets elected again, which I think he will, we might see a different Trump. Who
knows.
@Jimmy1969
I think this deal has already taken place. Israel has given away to China for 99 years the
hall commercial incomming This deal has taken place 2 or 3 years ago
Don't blame it on the Talmud. These Jews act in accordance to their Torah: "If Yahweh your
God blesses you as he has promised, you will be creditors to many nations but debtors to
none; you will rule over many nations, and be ruled by none" (Deuteronomy 15:6). "feeding on
the wealth of the nations" (Isaiah 61:5) is Israel's destiny according to Yahweh.
@mcohen
I took a squint at both your own and Mark Green's comment history. Your comment history
cannot even begin to compare in value, but I should have already guessed that from the
name-calling in the first line of your comment. Just weak, extremely weak.
Rather amusing to read our resident Jewish apologists carrying on about the absolute sanctity
of the necessity of collecting debts to the functioning of the capitalistic system. These
nations and corporate entities that are now in thrall of the Wall Street Jews , were herded
into debt by that other faction of the capitalist system, the dealers in easy money.
Snookering the rubes into lifelong debt, telling them that money is on the tap, promoting
unsustainable spending habits and then let the guillotine come down, for the vultures to feed
on. They are two sides of the same coin.
Its damned funny that the rich Jews nowadays are absolutely addicted to usury, rentier
activities, and debt collection, when the Bible itself condemns such activities. But they are
our elder brothers in faith according to some.
@Colin
Wright Carnegie was a Protestant. The Protestant cancer serves it's Jewish masters. Read
'The Jewish Revolutionary Spirit' by E. Michael Jones. There is definitely a revolutionary
nature to the international Jew just as there is to their Protestant dupes. Jewish nature is
to subvert the natural order and the west was built by the guidance of LOGOS. The Catholic
Faith created by God guided the creation of the west. These Jewish exploits are a result of
the Wests rejection of its nature and its enslavement
1. rich or poor, creditor or debtor, in the final analysis, ultimately, all will become equal
in the grave. the filthy rich might decide to lay their corpses in coffins made of gold, but
it will be in vain. the sorrows and the joys of this fleeting world shall quickly pass like
the shadow.
2. talmudics feel the need to accumulate money in order to have sense of security since they
were stateless for two millennia. paradoxically, amount of wealth is indirectly proportional
to a sense of security, provoking backlash from aggrieved host people.
3. establishment of State of Israel did not reduce the need for the accumulation but has only
heightened it since now talmudics feel the need to support it so that she could maintain
military superiority over neighbouring threats.
4. as long as Palestinians are not free and Israel does not make peace, talmudics will
continue to meddle in American politics. if you don't want to save the Palestinians for the
sake of humanity and truth or justice, at least you should do it for your own sake.
5. loan sharking, vulture whatever, etc., is the ugliness of big capitalism with capital C,
what is beyond sickening is the promotion of sodomy. if one becomes poor or homeless, it's a
pity. to go against nature is an abomination.
6. by using such words as "homosexual" you have accepted the paradigm of the social engineers
and corruptors, and are therefore collaborating with them. words have consequences since that
is how we convey ideas unless you own Hollywood and can produce your own moving pictures
too.
7. talmudics is a better word than as a great American scholar says, since people who promote
sodomy are absolutely opposed to the Torah (O.T.). those who still struggle to follow it
couldn't care less what happens to benighted goyim, only becoming reinforced in pride of
their own purity as opposed to disgraced nations. thus, practically, they too are talmudics,
alien to the spirit of the ancient holy fathers and prophets of Israel. the word "Orthodox"
has been stolen and now has lost all meaning or it means the exact opposite of what it
originally meant.
8. Blessed are the meek, for they shall inherit the earth. Matthew 5:5
@Colin
Wright Well there's nothing wrong in principle about specialists in valuing distressed
debt and managing it nuying such debt and using the previously established mechanisms for
getting value out of their investment. So the problem is how they go about enforcing their
rights and the lack of regulation to mitigate hardship in hard cases.
Still it is notable that it should, overwhelmingly be a Jewish business and such a
powerful medium for enriching Jewish causes and communities at the expense of poor
Americans.
While Whites theoretically still have the numbers to affect/determine the outcome of
elections, a majority of Whites usually stay home because they are tired of the 'evil of two
lessers' choice they are offered -- even voting for Trump got them little/nothing.
@Colin
Wright George Bush needed Tony Blair's support to attack Iraq , Donald Trump now has the
support of Boris Johnson to attack Iran : "Boris Johnson refuses to rule out military
intervention on Iran ." metro.co.uk
It is said that the "deep state " removed Theresa May from office as she was "too soft" on
Iran . As you suggest the attack will not happen until Trump's second term unless, in the
meantime , there is a false flag attack like 9/11 which can be blamed on the Iranians .
East Asians have freedom of speech. That is all that is needed to end Jewish Mafia vulture
capitalism. If it was Italian Mafia vulture capitalism, the west would end it a few seconds.
When one is in a "no see, no say, no hear" tribal group one can get away with everything.
East Asians don't believe in hiding reality.
Here is more on how Samsung fought back against little Paulie.
Samsung published controversial sketches in response to row over merger
Jewish U.S. hedge fund boss Paul Singer was trying to stop a Samsung business deal
In response the firm released cartoons on its website depicting Singer as a vulture
A row has broken out in South Korea with media there describing Jews as 'ruthless' with
money
Merger between Samsung C&T and Cheil Industries was approved today
This is how Paulie's row with Samsung started.
These are the extraordinary cartoons Samsung posted on its website which reportedly
depict a Jewish hedge fund boss as a money-grabbing vulture.
The row between Samsung and one of its major shareholders, Paul Singer, has sparked an
anti-Semitism row in South Korea.
Harvard-educated Mr Singer, 70, whose hedge fund Elliott Management owns a seven per
cent stake in Samsung C&T fell out with the company after he objected to a merger
deal.
Cartoons shown what Paul's company did to the Congo, just one of many nations he
pillaged.
In response Samsung posted a number of inflammatory cartoons on its website showing Mr
Singer as a long-beaked vulture, which have since been taken down.
In one of the sketches a poor-looking man goes, cap in hand, to the vulture who has an
axe hidden behind his back.
The caption reads: 'Elliott Management's representative method of earning money is,
first of all, to buy the national debt of a struggling country cheaply, then insist on
taking control as an investor and start a legal suit'
In another people appear to be dying in the desert from dehydration. Underneath is the
caption: 'Because of it, Congo suffered even more hardship'.
This is believed to refer to Elliott Management's business dealings in the Congo.
Samsung wanted to keep their company in the Lee family. They did not want a Jewish Mafia
tribal group take over.
The bitter fall out came because Samsung Group's founding family wanted to complete a
merger with its holding company Cheil Industries and Samsung C&T to shore up its
control of the firm as its chairman, Lee Kun-hee's health is in decline.
In the End, Samsung won. Paul lost.
The Lee family, who control Samsung, owns 43 per cent of Cheil Industries. The
controversial merger was finally approved today.
South Koreans are not shy to express reality as it is. The west has to learn the value of
freedom of speech before it too late for the west.
But the row has sparked an outpouring of anti-Semitism in South Korea.
One columnist described Jewish money as 'ruthless and merciless'.
And on Tuesday the former South Korean ambassador to Morocco Park Jae-seon expressed his
concern about the influence of Jews in finance.
In an extraordianry outburst he said: 'The scary thing about Jews is they are grabbing
the currency markets and financial investment companies.
'Their network is tight-knit beyond one's imagination,' Park added.
The next day, cable news channel YTN aired similar comments by local journalist Park
Seong-ho.
'It is a fact that Jews use financial networks and have influence wherever they are
born,' he said.
Neither Park Jae-seon and Park Seong-ho were available for comment.
In a piece published a fortnight ago, Media Pen columnist Kim Ji-ho claimed 'Jewish
money has long been known to be ruthless and merciless'.
While Whites theoretically still have the numbers to affect/determine the outcome of
elections, a majority of Whites usually stay home because they are tired of the 'evil of
two lessers' choice they are offered -- even voting for Trump got them little/nothing.
I said nothing of an electoral solution to America's problems the problems will not be
solved that way.
@Art
That scary thought has crossed my mind, too, Art. I've even started wondering if this whole
impeachment circus is really part of an elaborate plot to guarantee Trump's re-election. I
mean, would Pelosi's insane actions make the slightest sense otherwise? And everyone has
noted how this is such a 'Jew coup,' haven't they? It all looks so suspicious
What our Jewish friends have done to Argentina, through maneuvering the elections,
killing dissidents, and marking territory, is a cautionary tale to anybody woke enough to
see with their own eyes.
True, but irrelevant. The Jews that matter don't read the Talmud or believe in "Adam and
Eve."
Whether they believe it or not, they act as though they do. That shows it is an ancient
and essential part of their ethnic subculture. Who knows? Maybe Kevin MacDonald is right and
it's actually genetic .
It's 2020. The Jewish religion is "The Holocaust" and we're all "Nazis."
The holo-hoax is just their modern version of 'chosenness'. Pretending to be the
biggest victims evah! is just another way of making themselves appear collectively as
morally superior to the rest of mankind–even the darkies:
But whether it's being wielded by the Zionists or the lefty Social Jewish Warriors, it's
really just a power play down deep. It's really just another way of reminding us
goyim–white and colored–that we are all just half-demons (so to speak) compared
to The Chosen.
@Wally
It is rather entertaining watching you kvetch, Jewish colonialism over WASP nations will be
glorious.
Vietnam & Congo can choose as they wish, it is they who vote for their leaders.
In fact, Congo was better off with colonialism.
America voted for Zion Don, he is now receving hundreds of millions of dollars from Jews
to do their bidding. It is hilarious that you can't see the irony of your comments.
In fact, it is even more funny what the Jews will do to WASP nations, enjoy your future of
transexualism and fast food, WASPs totally deserve everything that is coming at them.
Then you change the subject to Epstein. Pathetic.
If you had an IQ above room temperature, you would realise my segue into the Epstein
affair was a response to your question of "What deal was supposedly struck".
You killed Lumumba," she roared at the Belgian officials on the platform, before being
escorted away by the police. The music and speeches resumed.
She was right: they did. Belgium was heavily implicated in the 1961 killing of the
radical, first prime minister of an independent Congo, now the war-torn Democratic Republic
of Congo. In 1975 a US inquiry also pointed conclusively to CIA involvement in the
execution carried out by a Katangan police unit under a Belgian officer.
Paul Singer, a Jewish Mafia vulture capitalist did some "work" on the Congo too.
He also bought some of Congo's debt for $10m and sued for $127m. The Congolese
government was found to be corrupt and under US racketeering law, Singer may be able to
claim triple damages, reaping as much as $400m.
On March 9, 2016, Department of Justice (DOJ) oversight personnel learned that the FBI
had been employing outside contractors who had access to raw Section 702 Foreign Intelligence
Surveillance Act (FISA) data, and retained that access after their work for the FBI was
completed.
This information was disclosed in a 99-page FISA court ruling on April 26, 2017, that was
declassified by Director of National Intelligence Dan Coats.
That wasn't an isolated incident and the improper access granted to outside contractors
"seems to have been the result of deliberate decisionmaking" (footnote – page 87).
The FISA court noted the "FBI's apparent disregard of minimization rules" and questioned
"whether the FBI may be engaging in similar disclosures of raw Section 702 information that
have not been reported."
"This is bigger than Watergate + 9/11 + the Bay of Pigs + almost every other conspiracy
theory you can name combined. It is also why you're seeing definite signs of panic and
desperation everywhere from the House of Representatives to the mainstream media to the
boardrooms of the Fortune 500. This reaches from the heart of the Swamp in Washington DC to
Silicon Valley and Seattle, Washington. In East Germany, it came out after the Wall fell that
one-fifth of the population was involved in the surveillance of the other four-fifths of the
population; now keep in mind that due to the mathematical reach of the FISA warrants, the 825
million surveillance orders issued actually exceeds the 320 million population of the
USA.
Now we know how and why Google and Amazon and Facebook got so big, so fast. They were the
corporate arm of the surveillance state."
You disloyal Jews used government resources and private contractors to surveil the entire
country.
I wonder what's going to happen next?
Also why haven't you responded to any of the comments about what the Jews did in
Russia?
@RealistI said nothing of an electoral solution to America's problems
And I said nothing about an "electoral solution", or any other kind of "solution", to
"America's problems" -- I said/implied that blaming Whites, or the way they vote, more or
less exclusively, as you did, for the way things are, was not exactly a genius take -- there
is literally no one for a race conscious white person, eg a WN, to vote (affirmatively)
for at the moment -- and it is hard to imagine anyone emerging in the near future.
For the record: I (also) do not think just voting, especially in the current
one two party system with the usual 'evil of two lessers' choices offered,
will do anything for Whites.
What We abrogate (of) a sign or [We] cause it to be forgotten, We bring better than it
or similar (to) it. Do not you know that Allah over every thing (is) All-Powerful?
2:106
The verses on abrogation read as to only allow Allah to abrogate, so any human action on
this is stepping over the line imo.. maybe other than when 100% of the Ummah agree on
something, I read that could remove a surah of the Quran, like a voice of God. That rhymes
nicely imo.
Of course how to judge which ruling to use? I agree, it brings in a casuistry into the
faith that generally helps to confuse.. I don't know much about it though yet.
I think Islam preaches a decent message, but the average practitioner is open to
misinterpret it quite a bit. This is a failing of the teaching.. but I think Mohammed's
message was corrupted like Christ's message pretty much straight after his death. Gospel of
Thomas and Tolstoy's rewrites all the way for something closer imo.
venture capital funds are only made necessary because we have a federal reserve.. which
is a private bank and private banks want to earn interest.
Sentiments are correct and you are hovering over the target, but some details are
needed.
The federal reserve is the tail on the dog, not the dog. The Fed was created as a part of
the corporate banking money trust. Before Fed the reserve loops of banks were not tied
together, and they had to use treasuries (T bills or Lincoln Green-backs) to balance their
ledgers.
Banksters wanted to extend their money power beyond their region. In the days before
federal reserve bank money power would fall off the further you got away from the bank. Banks
hypothecate new bank credit, and the credit has to swim home to the debt instrument. This
"swimming home" is done easily when the ledgers are all connected through reserve loops (also
called the overnight market).
After Federal Reserve (1913) and before Wright Pattman, the Federal Reserve was recycling
its profits made on public debt back to its stock owners and member banks. The member banks
especially, were guaranteed profits no matter how the economy did. After Wright Pattman (mid
60's) Fed has to rebate to treasury they couldn't face up to the allegations they were
stealing from the commons, which they were.
Today, the FED rebates interest on TBills and public debt back to Treasury. The private
banks within the system continue to hypothecate new money at interest, as that is their
business model. This business model does not include morality, nor does it work in the public
interest. It works to enrich finance at the expense of the working/laboring economy.
So, central banks are not profit centers, but instead they ensure profit lower down
– within the private banking system. Central banks are backstops to prevent instability
within the already unstable debt money system.
Recent Example: The Repo Crises, whereby FED is monetizing repurchase agreements. Non bank
actors such as hedge funds, REIT's and others have been given access to the overnight market
(where reserves are supposed to be traded). The FED now swaps new keyboard dollars for
various finance paper to keep the non bank actors in the repo market liquid.
This action is artificial and props up the finance sector at the expense of the normal
working economy, and hence it is usurious.
Usury is a word that has been normed out of our language. Why? Because our (((friends)))
are agents of mammon, and they cannot help themselves. It may be genetic.
Usury is a power relation, where you steal from others because you can. Laws are changed
to enable the thefts.
In the case of the FED it was taking 6 percent from the people on public debts. Public
debts were funded by taxpayers. This money was then funneling backwards from FED into their
crony banks and paid off sycophants.
We don't know what the FED is doing today because the bad guys won't allow an audit. The
general statement is that private corporate banking is usurious, and was born in iniquity,
and that is where your eye should gaze, not necessarily at the FED or any central bank.
The debt money system and finance capitalism is state sponsored usury, and is a Jewish
construct.
Vulture capitalism is simply vultures buying up or creating distressed assets and then
changing the law, or using force to then collect face value of the debt instrument or other
so called asset. Vultures will use hook or crook to force down what they are buying, and hook
or crook to force up what they are selling. God's special people can do this because when
they look in the mirror, they are god, and are sanctioned to do so.
Maybe the vulture should replace the bald eagle as America's favorite bird since our dear
shabbos goy President Trump and cohorts are undermining the First Amendment and trying to
make it a crime to criticize Jews and/or Israel. Oh and don't think I am promoting the other
Zionist and their shabbos goy on the demshevik side. The Jew CONTROLS both sides and "our"
two party system has become Jew vs. Jew, not republican vs. democrat. Lenin said that the
best way to control the opposition was to lead it and (((they))) are at it AGAIN.
I think Islam preaches a decent message, but the average practitioner is open to
misinterpret it quite a bit. This is a failing of the teaching.. but I think Mohammed's
message was corrupted like Christ's message pretty much straight after his death. Gospel of
Thomas and Tolstoy's rewrites all the way for something closer imo.
The line of good and evil runs down the middle of each person's heart, and they have to
decide.
My line of attack on Judaism, Islam, Christianity, or whatever, has to answer the
question: "Is it good narrative for high civilization." Does the narrative make people
malfunction?
There are branches of Islam that are good narrative – where people choose the better
side of Islam.
The point is that these good branches, say the Suffi's, have to keep the crazy aunt in the
basement.
Abrogation allows what comes later, to gain power over what comes earlier. And what comes
earlier is the best part of Islam.
Christianity has the same problem, it does not do a good job of policing its crazies, who
twist scripture. Judaism, especially Talmudic Judaism is Kabala and utterances of the sages,
and it morphs and changes over time. For example, after Sabatai Sevi, the Kol-Neidre was
weaponized, and this construct is used by today's Zionists to wreak havoc. Before Sabatai,
there was Hillel, who weaponized usury.
Yes, I agree about Christianity changing quite a bit. In the first 300 years it was much
different than today, especially after the Arien controversy was settled by Constantine's
maneuvering of Bishops at council of Nicea. For example, before; reincarnation was part of
Christian doctrine, and after; reincarnation was excluded.
Trump should be impeached and convicted. But not for the reasons in the two Articles passes
by the House.
He should be for
Violating the Symington and Glenn amended 1961 Foreign Assistance Act to ban any aid to
clandestine nuclear powers that were not NPT signatories. Trump increased aid to Israel.
Moving the US Embassy to Jerusalem in violation of numerous UN Security Council and
General Assembly resolutions.
The abuse of Office via Nepotism in having totally unqualified Jared and Ivanka Kushner
serve as US Government respresentatives.
Executive Order classifying Jews as a Nationality protected from Free Speech criticism of
them, in violation of the First Amendment.
Of course those in Congress, that facilitated and cheered on the Israeli centric Trump
acts, should all be voted out forever.
I have long maintained that libertarianism/capitalism is really like a kind of Calvinism
for atheists. Calvinists used to assume that, since whatever happened was God's will and
God's will was invariable good, then whatever happened was good. Likewise, many modern cucks
seem to have just substituted The Market for God. Morally speaking, it all lets man off the
hook for anything that results–especially when those men happen to be Jewish
financiers!
No, boys and girls, The Market is not inherently good. It requires that a moral system be
superimposed on top of it in order to make it moral.
@Anon
After reading the book of this MI6 asset (and potential killer) who tried to fleece Russia,
you probably can benefit from watching a movie by Nekrasov about him. See references in:
It looks like it was Browder who killed Magnitsky, so that he can't spill the beans. And
then in an act of ultimate chutzpah played the victim and promoted Magnitsky act.
Level of talent is another important factor. Especially difficult people are able to succeed in fields which are
absolutely closed for others. Think about the level of competition in middle ages when a single academic position needed to be
waited until previous holder retires. Still it did not prevented rising people like Euler to the top.
You should take the results from Clever.com published below with a grain of slat.
The unjustifiably high cost of college tuition in the US has dragged a whole generation into
debt slavery. The average cost of a 4-year degree in the US is 3x higher than it was in 1990.
Even tuition at in-state schools is climbing more quickly than incomes.
As more people are forced to go into deep levels of debt to afford an education, more
would-be students are being forced to take a hard look and reevaluate the ROI on a college
degree.
And as college tuition continues to outpace wage growth, for a growing number of people, the
answer to 'is college worth it?' is going to be no.
A reporter at
Clever.com did some digging, and tabulated the ROI on different types of degrees: the
bachelor's, master's and doctorate.
Generally speaking, people with at least a bachelor's degree typically earn more money over
their lifetime than those who never attended college, and it's also easier to get a job with a
degree.
But while Americans with a bachelor's degree might be on to something, those who earn a
Master's and PHD-level degrees can't say the same.
While nearly half the population has a bachelor's degree, only 13% of Americans have a
master's or Phd-level degree.
And according to Clever's analysis, many higher-level degrees may not be worth the time and
money that students spend.
In fact, the longer someone spends in school, the more the value of their degrees
diminishes.
Of course, ROI changes depending on the subject that an individual studies. Clever found
that the best bachelor's degrees, unsurprisingly, tend to be in the STEM area: operations
research, petroleum engineering, biological and physical sciences, biopsychology and
gerontology.
Here, the data are showing us something that we find to be very interesting. Namely, that
those who spend more money on a low-ROI bachelor's degree often find their careers to be more
'meaningful' than your average engineer. Does this mean there's an inverse relationship between
spiritual fulfillment and monetary compensation when it comes to ones' career path? Possibly.
But would like to suggest another possible explanation.
The children of America's wealthy often choose low-yield fields like journalism and English,
since they don't face as much pressure to maximize earnings (their parents very often cover the
cost of their education and living expenses) they can enjoy finding 'meaning' in low-paying
careers like being a social media manager or writing for Gawker Media - careers that also don't
require the hard work and dedication required of, say, a mechanical engineer at Boeing.
If true this china capitulation. Or some shrewd tactical maneuver, as the next year it is
China who hold trump cards -- it can derail Trump re-election with ease.
I have my doubts about Trump being the Grand Dealmaker he calls himself. Looking at seven
bankruptcies as a proof of that ... mythical skill I don't find much. I recall Trump suing the
Deutsche Bank after the bank wanted a credit back. His lawyers in court referred to the bank
crisis, called the Deutsche Bank as a bank responsible for that and said that thus they don't
deserve repayment. that was Chutzpah in the First Degree, For very obvious reasons Trump lost
that case and did pay back.
When Trunmp recently went on searching lawyers to work and sue for him he didn't find any. A
big corp lawyer anonymously briefly explained why: "Doesn't pay. Doesn't listen.'
A US-China trade deal was announced to chaotic fanfare late Friday Asian time – and we
are sceptical. First, we still don't have details other than that December tariffs were
postponed by both sides, the 15% US tariffs imposed on 1 September are to be reduced to 7.5% as
a sign of goodwill, and the 25% tariffs on USD250bn stay in place . Second, we aren't going to
get a signing ceremony between the US and Chinese leaders, which does not send an encouraging
signal. And third, what we see is close to the terms we previously criticized for being
unrealistic in reports such as 'A Great Deal of Nonsense" and "LOL-A-PLAZA".
The US Trade Representative (USTR) says the final text of the phase one
agreement is still being finalised, and he will sign it early next year for a likely incept
date of end-January 2020. The areas covered include: Intellectual Property (IP); Technology
Transfer; Agriculture; Financial Services; Currency; Expanding Trade; and Dispute Resolution.
Each of these promises much and yet potentially delivers little.
China has pledged to address issues of geographical indications, trademarks, and enforcement
against pirated and counterfeit goods. That's just after a Chinese court ruled that Japanese
retailer Muji doesn't own its own name in China and a local rival started years afterwards
does. Enforcement matters, not promises: more on that in a moment.
China has agreed to end forcing or pressuring foreign companies to transfer their tech as a
condition for obtaining market access or administrative approvals. Again, enforcement is all
that matters here. China also " commits to refrain from directing or supporting outbound
investments aimed at acquiring foreign technology pursuant to industrial plans that create
distortion. " That is China's reason for outbound investment! For example, Sweden's Defence
Research Agency just released a detailed survey of Chinese corporate acquisitions in their
country showing at least half are correlated with the "Made in China 20205" plan.
China will " support a dramatic expansion of US food, agriculture and seafood product
exports " , with the USTR stating the target is to jump to USD40bn in 2020, a USD16bn increase
over the pre-trade war level of USD24bn, and to aim for USD50bn. Part of that reflects China's
decimated pork herd, so is hardly a concession. Yet it is hard to conceive of how the total
figure can be achieved without China using the US to displace agri imports from other nations,
e.g., Argentinean and Brazilian soy, and perhaps Aussie and Kiwi farm goods. That also
increases China's economic exposure to the US at a time of rising geopolitical tensions between
the two (see news of the US' secret expulsion of two Chinese diplomats), and US' farmers
exposure to China in kind. For its part, the Chinese press are not mentioning these US hard
targets, and are talking about WTO trading terms, which bodes poorly.
The financial services chapter pledges China to an opening up already underway as it
searches for new sources of USD inflows, so again is not a concession. Interestingly, it also
says US ratings agencies will get access – which will be fun given the evident credit
stresses emerging in China just as US banks will be trying to sell China as an investment
destination. .
On currency the US is requiring "high-standard commitments" to refrain from competitive
devaluations and targeting of exchange rates. Everyone knows the CNY is not freely-traded
– but also that China is doing its best to prop it up, not to try to push it lower. The
key message is CNY is not going to be allowed to do what it ought to be doing, i.e., weakening,
as China is pledging new fiscal stimulus in 2020 that will decrease its external surplus. That
runs counter to market forces, and smacks of a kind of Plaza Accord. Of course, as long as this
US-China agreement holds that might be sustainable due to the promised higher capital
inflows...
Eexcept the expanding trade chapter implies the opposite. The USTR says China is pledging to
boost its 2020 imports of US goods and services by USD100bn over the level in 2017, and by
USD100bn again in 2021, for a total increase of USD200bn . Given 2017 was pre-trade war and US
exports to China dropped off a cliff in 2019, this means around a 110% y/y increase in
purchases in 2020 – and agri is only a portion of that. The problems should be obvious.
How can a slowing Chinese economy (imports are down y/y from most sources), see this kind of
increase without substituting US for world exports or local goods? How can a China with a USD
liquidity shortage serious enough to be driving said lowered import bill, and
'1USD-in/1USD-out' de facto capital controls, cope with the net reduction on the trade side? As
of November, the 12-month rolling Chinese global trade surplus with the US it was USD330bn and
globally was USD440bn. We are talking about reducing that US figure by 2/3 and the global total
by 1/2!
Which brings us to the last chapter: Dispute Resolution. Getting China to comply is far
harder than getting it to sign. The USTR notes the agreement " establishes strong procedures
for addressing disputes related to the agreement and allows each party to take proportionate
responsive actions that it deems appropriate ." In other words, each side can unilaterally do
what they want when they want! So much for the unilateral US control of the process.
So how to see this in summary? The reduction in tariffs from 15% to 7.5% is a positive,
albeit far less than the Wall Street Journal had promised. (NB, the USTR took the
extraordinary step of publicly chastising the WSJ journalists who wrote that story –
regular readers may recall I have also called them out more than once in the past.) Indeed, if
China really has agreed to all that is stated here then further incremental tariff rollbacks
can be seen – though the USTR has said the 25% tariffs will stay as collateral for a
phase two deal that nobody really expects to happen. Yet the terms of this phase one still seem
to be A Great Deal of Nonsense. How can China stop buying foreign tech? How can it buy as much
US stuff as pledged? How can it do so and not undermine the WTO? How can it do so and not
weaken CNY? And how can it do so with a strong CNY without increasing its USD debts, its
strategic reliance on the USD, and to US goods? In short, if China does as the USTR claims, the
US is a huge winner here (and there are lots of losers); if China does not comply with what
look an impossible import targets, then the US can frame China as the bad guy and the tariffs
can go back up again. Arguably, the question is not if that will happen, but when.
The author singles out low interest rates and the possible trade deal with China as the main
factors for this alleged recession-avoidance.
Well, she's wrong, 100% wrong. Her argument sounds even more absurd when you realize the
trade deal has only now being seriously negotiated and is not in fact done yet(and not "since
August") and that the USA's interest rates have been essentially zero or even in negative
territory in real terms since 2009.
The reason the USA still registers relatively high GDP growths (in relation to its First
World vassals) is that it is the financial superpower. The "real economy" in the USA has been
in full stagnation or recession for years now, but Wall Street keeps beating records after
records. That means the USA is suffering a problem of valorisation, i.e. a crisis of
capitalism.
The USA will suffer a major recession soon. Prediction from the real experts forsee it most
probable in 2020-2022. The American elite clearly knows that, and is doing everything in their
reach to avoid that, so this monumental effort can delay it by some years - but it will
come.
There's nothing like wild volatility to destroy the integrity of those high-end bankers and
analysts who are brave enough to make oil price predictions year in and year out.
But the forecasting nightmare doesn't stop them, even at the worst of times.
In the final month of last year, banks and analysts were brave enough to divulge their
predictions for 2019.
At that time, the second year of the OPEC
agreement was coming to a close; the U.S. had
re-imposed sanctions on Iran four months earlier with waiver extensions; and the average
price of a Brent barrel for December was changing hands at $56.50, compared to the month
earlier average of $65.20. WTI averaged $49 in December 2018. OPEC had
agreed to cut production again for 2019.
So who should we look for when it's time to forecast what oil prices will do in 2020? That
depends on their track record the last time around.
Here are some of the best and worst oil price predictions of 2019:
The World Bank
For 2019,
the World Bank was one of the first on the scene to provide its outlook in late 2018.
The Bank said the most important factor for 2019 would be OPEC, specifically the lack of
spare production capacity among OPEC members. This lack of oil production capacity would
provide "limited buffers" should there be a sudden shortfall in the supply of oil "raising the
likelihood of oil price spikes in 2019."
While WB acknowledged that the world was currently in a state of oversupply, it could swing
the other way quickly. In the first month of 2019, the World Bank conservatively predicted that
Brent would average $67 per barrel for the year -- a $2 per barrel decrease from its June 2018
predictions for 2019. The WB was quick to add that the "uncertainty around this forecast is
high."
How did they do? Aside from needlessly worrying the market with OPEC's lack of capacity, it
turns out their prediction was a bit high. The average
price of the Brent barrel in Q1 2019 was $63.30; for Q2 it was $68.30, and Q3 at $61.90.
November's average was $62.70.
Citi
Citi's
forecast for 2019 , also made in December 2018, was more sober-minded, with the bank
predicting that Brent would average $60 for the year. It, too, predicted a volatile market for
the next year, largely because the U.S., Russia, and Saudi Arabia -- the top three oil
producers in the world--all had different views as to what that perfect oil price should be.
The bank also predicted that oil production in the United States would continue to offset much
of what OPEC would cut -- a prediction that turned out to be close to reality: US production
has increased 1.2 million bpd this year -- precisely what OPEC agreed to cut.
How did they do? Not terrible. Its primary range was for Brent to trade between $55 and $65
per barrel--a generous $10 price range. Even with that big range, oil sat above $65 for the
better part of February through May.
Bank of America Merrill Lynch (BAML)
Also in mid-December 2018, BAML took a stab at making Brent price
predictions , forecasting that oil would resume its path back up to $70 average in 2019,
with a potential for higher prices in Q2. Similar to Citi and World Bank, BAML said that oil
prices would be volatile.
How did they do? It's hard to argue with the fact that oil indeed appears to be trending
upward, which could be interpreted as "resuming its path back up to $70". And Q2 was in fact
higher, with oil prices actually surpassing $70 for a time in April and May.
However, BAML lost a bit of credibility in our book when it hedged its forecast by saying
that "the only certainty is uncertainty." BAML hedged further in April when it said oil prices
had a higher chance of hitting $100 than what the
market consensus was, due to OPEC supply cuts, a slowdown in US shale, and IMO 2020
regulations.
BAML further watered down its predictions in August when it said oil could
fall to $30 or $40 should China decide to import substantial amounts of oil from Iran,
despite the US sanctions.
The EIA
A month after Citi, WB, and BAML ponied up their predictions, the EIA came out with its own.
Its prediction
for 2019 , provided in its January 2019 Short Term Energy Outlook, was that Brent would
average $61 per barrel. Around this time, specifically at the start of the year, Brent was
trading at $53.80 and WTI was trading at $45.41 .
How did they do? Not half bad. Brent traded at an average of $61.90 for the 3rd quarter
2019, and November's average was $62.70 -- less than $2 off per barrel for a prediction made 11
months ago in a volatile market.
That's it for the predictions made at the start of the year. But other predictions along the
way, armed with a half a year or more of actual data, are noteworthy as well.
FX Empire: Using adaptive dynamic learning (ADL),
FX Empire predicted in July of this year that oil prices would rotate between $47 and $64
between July and October, before falling in November and December to a range between $45 and
$50. FX Empire said it could actually dip below $40 by the end of 2019, or in early 2020.
How did they do? FX Empire's ADL appears to be pretty far off the mark. This CL=F is today
trading at $59.42, nearly $20 higher than it's sub-$40 prediction for the end of the year.
Goldman Sachs' Jeff Currie : In October, Currie, head of Goldman's commodity research,
warned that oil prices could fall as low as $20
per barrel for WTI if oversupply were to result in full storage facilities. With nowhere to
put it, explains Currie, the price of oil would fall dramatically as production would have to
crash. However, crude oil inventories in the United States are not dramatically up, and are
almost even-steven with this time last year, down a total of
1.41 million barrels over the last 50 weeks. Global oil inventories are a different story,
though. In Currie's defense, he did say that there was a less than 50% chance of oil falling
below $20 barrel.
How did they do? By our math, that 50% hedge would have made Goldman correct either way.
IEA : Piggybacking off Goldman's October forecast for the oil-inventory-pocalypse, the IEA's
Fatih Birol said that these low prices would force the US to cut production, resulting in a
price hike once again. In July, the IEA predicted that slowing oil demand would cap oil prices,
and keep them from moving
too much higher. At the time, Brent was trading at $63.01, with WTI trading at
$56.18.
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How did they do? With Brent trading on December 12 at $64.47, the $1.50 increase comfortably
falls within the not-too-much-higher range, so we'd say the IEA's prediction was spot on.
Analyst Poll : In August,
Reuters polled 51 economists and analysts, who thought Brent would average $65.02 in 2019.
At the time, Brent had averaged $65.08, so the $65.02 wasn't stepping out on a long limb.
How did they do? Wisely, the analysts cited the US-China trade dispute and risk of an
economic slowdown as the reason for its new forecast, which was down from $67.47 for the month
before. Still, the price prediction was a bit high.
RBC Capital Markets : RBC's Helima Croft in May suggested that Brent could top
$80 over the summer due to Iranian tensions.
How did they do? RBC got it partially right. Iran tensions did indeed escalate. Iran
repeatedly made threats to close Hormuz, drone strikes attacked Saudi Aramco's oil
infrastructure, and Iran seized a British oil tanker and held onto it for months. Still, prices
didn't get anywhere near $80. But this isn't your daddy's oil market. A year or two ago,
tensions in the Middle East -- especially ones that are more than just threats, would have sent
oil prices soaring. But the market is today permanently spooked with the trade war negotiations
with China and slow oil demand growth, meaning these geopolitical risks no longer pack the same
punch.
Iran : In June, a top military aide to Iran's Supreme Leader
issued a prediction which was really more of a warning: that the first bullet fired in the
Persian Gulf would push oil prices above $100 per barrel. At the time, oil was trading at
$61.67.
How did they do? Not well. Things did heat up in the Gulf, and bullets -- many of them --
have been fired over the last month after major fuel protests in Iran. There were also drone strikes over
Saudi Arabia that did significant damage to oil infrastructure, which took offline over 5
million bpd. Still, oil got nowhere near $100.
Eurasia Group : Henry Rome, a senior analyst at political risk consultancy Eurasia Group,
agreed that these same Iranian tensions could push prices above $100, and a major confrontation
with Iran "would likely" send prices above $150.
How did they do? Even worse than Khamenei's military aide.
WSJ Poll: At the end of April, a week or so after the US announced that it would not extend
the waivers to buyers of sanctioned Iranian oil, WSJ-polled analysts expected Brent to
average $70 per barrel in 2019 -- an increase of $2 per barrel from its previous poll a
month earlier.
How did they do? Oil was already trading at $70 at the time of their prediction, so it
wasn't really a huge leap of faith at the time. Still, prices failed to get any higher than
that for the remainder of the year, rendering their prediction in the far-too-high
category.
This year's winner is Branko Milanovic's
Capitalism, Alone: The Future of the System That Rules the World . (This is the second
Globie for Milanovic, who won it in 2016 for Global Inequality .) The book is based on
the premise that capitalism has become the universal form of economic organization. This type
of system is characterized by "production organized for profit using legally free wage labor
and mostly privately owned capital, with decentralized coordination." However, there exist two
different types of capitalism: the liberal meritocratic form that developed in the West, and
state-led political capitalism, which exists primarily in Asia but also parts of Europe and
Africa.
The two models are competitors, in part because of their adoption in different parts of the
world and also because they arose in different circumstances. The liberal meritocratic system
arose from the class capitalism of the late 19th century, which in turn evolved out of
feudalism. Communism, Milanovic writes, took the place of bourgeoise development. Communist
parties in countries such as China and Vietnam overthrew the domestic landlord class as well as
foreign domination. These countries now seek to re-establish their place in the global
distribution of economic power.
Milanovic highlights one characteristic that the two forms of capitalism share: inequality.
Inequality in today's liberal meritocratic capitalism differs from that of classical capitalism
in several features. Capital-rich individuals are also labor-rich, which reinforces the
inequality. Assortative mating leads to more marriages within income classes. The upper classes
use their money to control the political process to maintain their position of privilege.
Because of limited data on income distribution in many of the countries with political
capitalism, Milanovic focuses on inequality in China. He attributes its rise to the gap between
growth in the urban areas versus the rural, as well the difference in growth between the
maritime provinces and those in the western portion of the country. There is also a rising
share of income from capital , as well as a high concentration of capital income. In addition,
corruption has become systemic, as it was before the communist revolution.
The mobility of labor and capital allows capitalism to operate on a global basis.
Migrants from developing economies benefit when they move to advanced economies. But residents
in those countries often fear migration because of its potentially disruptive effect on
cultural norms, despite the positive spillover effects on the domestic economy. Milanovic
proposes granting migrants limited rights, such as a finite term of stay, in order to
facilitate their acceptance. He points out, however, the potential downside of the creation of
an underclass.
Multinational firms have organized global supply chains that give the parent units in their
home countries the ability to coordinate production in different subsidiary units and their
suppliers in their host nations. Consequently, the governments of home countries seek to limit
the transfer of technology to the periphery nations to avoid losing innovation rents. The host
countries, on the other hand, hope to use technology to jump ahead in the development
process.
The Trump administration clearly shares these concerns about the impact of globalization.
President Trump has urged multinational firms to relocate production facilities within the U.S.
Government officials are planning to limit the
export of certain technologies while carefully scrutinizing foreign acquisitions of
domestic firms in tech-related areas. New
restrictions on legal immigration have been enacted that would give priority to a
merit-based system. Moreover, the
concerns over migration are not unique to the U.S.
Milanovic ends with some provocative thoughts about the future of capitalism. One path would
be to a "people's capitalism," in which everyone has an approximately equal share of both
capital and labor income. This would require tax advantages for the middle class combined with
increased taxes on the rich, improvements in the quality of public education, and public
funding of political campaigns. But it is also feasible that there will be a move of liberal
capitalism toward a form of political capitalism based on the rise of the new elite, who wish
to retain their position within society.
Milanovic's book offers a wide-ranging review of many of the features of contemporary
capitalism. He is particularly insightful about the role of corruption in both liberal and
political capitalism. Whether or not it is feasible to reform capitalism in order to serve a
wider range of interests is one of the most important issues of our time.
==quote==
The Trump administration clearly shares these concerns about the impact of globalization.
President Trump has urged multinational firms to relocate production facilities within
the U.S. Government officials are planning to limit the export of certain technologies
while carefully scrutinizing foreign acquisitions of domestic firms in tech-related
areas. New restrictions on legal immigration have been enacted that would give priority
to a merit-based system. Moreover, the concerns over migration are not unique to the
U.S.
== end ==
In plain language that means the collapse of neoliberal globalization.
By Anat R. Admati, the George G.C. Parker Professor of Finance and Economics at Stanford University Graduate School of Business
(GSB), a Director of the GSB Corporations and Society Initiative, and a senior fellow at Stanford Institute for Economic Policy Research.
Originally published at
ProMarket
Author's note: This essay is based on a speech I gave at the
Stigler Center 2019 Conference on Political Economy of Finance. Whereas the content refers to my experiences as an academic with
expertise in finance and economics, the key ideas apply to other areas in business schools and beyond. I hope colleagues will reflect
on the harm from silos and on our opportunities as academics to benefit society.
In the real world, it turned out, important economic outcomes are often the consequences of political forces. During 2010, people
within regulatory bodies told me privately that false and misleading claims were affecting key policy decisions. They urged me to
help clarify the issues and I felt compelled to become involved. Despite years of
research and advocacy , however, flawed
claims persist and still have an impact. (A recently
updated document lists and debunks 34 such claims.)
Many of my experiences in the last decade, which involved extensive interactions outside as well as within academia, were sobering.
I saw confusion, willful blindness , political
forces, various and sometimes subtle forms of corruption, and
moral disengagement
, first hand. The harm from economists ignoring political economy became increasingly evident. There was no way for me to return
to ignoring the issues.
It was also impossible to explain my experiences using economics alone. In writing an essay in 2016 for a book on Finance in
a Just Society edited by a philosopher, I went beyond economics and finance and drew from scholarship in political science, law,
sociology, and social psychology. My essay was entitled " It
Takes a Village to Maintain a Dangerous Financial System ."
Sadly, among the enablers of our inefficient and distorted financial system are economists and academics. Perhaps most shocking,
a fallacious claim about the impact and "cost" of more equity funding, which contradicts basic teachings in corporate finance, has
been included in many versions and editions of banking textbooks authored by prominent academic and former Federal Reserve governor
Frederic Mishkin. (See Section 3.3
here or Chapter 8 of The Bankers' New Clothes .)A risk manager
in one of the largest banks, whom I met in 2016 at a conference attended almost exclusively by practitioners and regulators and who
had dropped out of a top doctoral program in finance, quipped in an email after quoting from an academic paper: "with such friends
[as academics], who needs lobbyists?"
Lobbyists, who engage in "marketing" ideas to policymakers and to the public, are actually influential. They know how to work
the system and can dismiss, take out of context, misquote, misuse, or promote research as needed. If policymakers or the public are
unable or unwilling to evaluate the claims people make, lobbyists and others can create confusion and promote misleading narratives
if it benefits them. In the real political economy, good ideas and worthy research can fail to gain traction while bad ideas and
flawed research can succeed and have an impact.
Luigi Zingales highlighted political economy issues within our profession in a 2013 essay entitled "
Preventing
Economists' Capture " and in his 2015
AFA presidential address entitled "
Does Finance Benefit Society
?" Zingales notes and laments a pro-business and pro-finance bias within economics and finance and the pervasive blindness to
issues such as corporate fraud and political forces. "Awareness of the risk of [economists'] capture is the first line of defense,"
he writes in his 2013 essay. I agree that the issues are real yet often denied or ignored, and that recognizing problems is essential
for addressing them.
Governance and political economy challenges are pervasive beyond banking, where I encountered them so clearly. For example, corporate
governance research, including my own coauthored papers (in
1994 and
2009 ) on shareholder activism, has focused almost exclusively on conflicts between shareholders and managers, effectively assuming
that competitive markets, contracts, and laws protect everyone except for the narrowly-defined "shareholder" -- who is implicitly
assumed to own only one corporation's shares and to care only about the price of those shares.
Having observed governance and policy failures in banking, I realized that the focus on shareholder-manager conflicts is far too
narrow and often misses the most important problems. We must also worry about the governance of the institutions that create and
enforce the rules for all. How power structures and information asymmetries play out within and between institutions in the private
and public sectors is critical.
A 2017 Journal of Economic Perspectives Symposium on the modern corporation includes
an essay I wrote on the distortions that arise
as a result of the focus in corporate governance on financialized targets that purport to capture "shareholder value" when combined
with political economy forces that can lead to governments failing to set and enforce proper rules. The symposium also includes
an essay by Luigi Zingales on how political
and market power feed off each other. We both noted that more public awareness and understanding of these problems is essential for
addressing them.
Economists and academics have numerous opportunities to be helpful by looking more frequently out of their windows, expanding
their domain beyond "solved political problems," collaborating across disciplines, and bringing back a more holistic approach to
their work. Small changes in this direction are starting to happen, as the Stigler Center's conferences on the political economy
of finance show, but we can and should do much more.
Numerous research topics are ripe for more study by theorists and empiricists. Within the following long list of topics (still
a partial one) there are low-hanging fruits and more challenging problems that may require interdisciplinary reach and which tenured
academics are in a particularly privileged position to take on: whistleblower policies, the impact of consumers, employees, and politicians
on corporate actions, accounting rules for derivatives, the effectiveness of boards, audits and auditors regulation, the design of
bankruptcy laws, money laundering, corporate fraud, the organization and pricing of deposit insurance, debt subsidies, the role of
financial literacy and ideology in policy discussions, the structure and governance of regulatory agencies and central banks, lobbying
of multinational corporations, the governance of international bodies such as Financial Stability Board, Basel Committee, and IMF,
and the political economy of corporate enforcement.
Anat Admati. Photo by Nancy Rothstein
Engaging with policy issues in our research and teaching, and even engaging in
advocacy when appropriate and effectively lobbying on behalf
of the public (for example by writing
comment letters or
opinion pieces ) can be valuable and important. Policy
involvement, however, requires not only disclosing
potential conflicts of interest but, most importantly, scrutinizing research carefully to ensure it is adequate for guiding policy.
A problem I have become acutely aware of is that economists and others can be cavalier in claiming that research is relevant for
real-world application without such scrutiny.
As a theorist, I know models have unrealistic and sometimes stylized assumptions, yet models can bring important insights, and
theoretical and empirical papers that capture key features of the real world can be useful for policy. It takes a big leap of faith,
however, and can actually do more harm than good, to claim that models whose assumptions greatly distort the real world are adequate
for real-world applications. Specific examples are discussed in the
first paper I wrote with Peter DeMarzo,
Martin Hellwig, and Paul Pfleiderer (Sections 5-7), the
omitted chapter from the book I wrote with Martin Hellwig, Paul Pfleiderer's
paper on the misuse of models in finance
and economics (which starts with the old joke about the economist assuming a can opener on a deserted island and, among other things,
compares economics and physics) and a recent
presentation by Paul Pfleiderer that discusses the role of assumptions in theoretical and empirical research and which includes
great visuals.
The key takeaways if research is claimed to be relevant for the real world are:
Just because a model claims to "explain" something in the real world does not give it logical or actual validity . Even if
we may never have the data to be able to reject a model, there are ways to apply casual empiricism ("if this model was true, we would
observe x and we don't"), and we must be especially careful if a model contradicts other plausible explanations for what we see.
(Consider: "cigarette smoking improves people's health" as an "explanation" of why people smoke.) Just because a model can be
"calibrated" does not give it logical or actual validity .
Applying inadequate economic models to policy in the real world is akin to building bridges using flawed engineering models. Serious
harm may follow.
We can also enrich our teaching and connect more dots for our students by
developing interdisciplinary courses and by bringing out
the bigger picture, at least occasionally, in teaching standard courses. For example, basic corporate finance courses show how to
calculate the debt tax shield, and we should point out that there is no good reason for the tax code to subsidize debt relative to
equity and that this tax code can create distortions. We can also ask whether shareholders as individuals actually want a company
in which they hold shares to pursue "
positive Net Present Value
" projects that involve pollution or deceptive marketing of harmful products.
Many students are anxious to have such discussions. There is a broad sense today that standard business practices and dysfunctional
governments have exacerbated economic, social, and political problems. We must find ways to broaden the discussion beyond our narrow
lanes. Academic silos are part of the problem, and we should break them to be part of the solution.
Finally, we can and should engage in trying to ensure that governments and other institutions serve society. If only conflicted
experts engage in the process of creating rules, especially on important issues that appear technical and confusing such as accounting
standards or financial regulation, we get what Karthik Ramanna calls "
thin political markets " and
our assumptions about markets are more likely to be false. Academics may be in the best position to inform policy, expose flawed
or poorly enforced rules, and help hold power to account. We cannot assume others will be able or willing to do it without our help.
Governance and politics are key to outcomes everywhere. Related issues about power and control and about the respective roles
of governments and private sector institutions are playing out prominently today in the technology sector. A course I
taught recently about
the internet allowed me to compare and contrast the finance and internet sectors. The Stigler Center has laudably been informing
policy related to digital platforms .
In a recent Harvard
Business Review piece, I argue that business schools should practice and promote "civic-minded leadership" much more than
they currently do. (The text is also available
here .) I hope more academics and academic institutions recognize and embrace the great opportunities we have to try to make
the world a better place.
Does anyone know of a good book (or series of books) that discusses the history and evolution of economics. Ideally, I'm looking
for something that discusses particular political philosophers (e.g Adam Smith, Marx, Keynes, Mises, etc.) in sequence. What I'm
interested in is not only their ideas, but also their histories–what were the circumstances of their lives that lead to their
ideas and how did the political environment they found themselves in contribute. Also, how were the philosophies adopted or corrupted
by followers (e.g. Marx and Russian communism, Adam Smith and neoliberalism). I have yet to find a truly comprehensive book that
has this info. I would expect a title something like "History of Political Economy." Any suggestions from the NC commentariate?
So far I haven't found one book that covers it all. And most books I do find try to describe all economic thought in terms
of the author's particular belief system, which to me isn't all that helpful. So I read a lot of books on history, economics,
and archeology to try and piece together an accurate story. And I still have not read nearly enough to have a complete picture.
If I was much smarter I'd try to do it on my own. Sadly, I'm only mildly intelligent and a crappy writer. Somebody get Michael
Hudson on this so I can read it. I'll start the Kickstarter campaign.
It's much like religion in that introspection and study is generally confined to the walled-garden-containing-all-that-is-true-in-this-world
of choice.
This question intrigued me enough to explore what the Library of Congress catalog has to offer in response to it. The short
answer, based on a good deal of rather fancy searching, is not much -- in English. The subject heading, "Economics–History," is
the one that LC applies to the history of economics as a discipline. However, it retrieves so many citations as to be all but
useless, even when those results are sorted chronologically, because it has been applied to so many works that treat narrow rather
than broad sub-topics. LC has numerous books sharing the straightforward title, History of Economic Thought; they range in date
from 1911 on. The oldest is by Lewis F. Haney. The latest of them seems to be the 2nd "updated" edition of History of Economic
Thought, by E. K. Hunt (2002).
The Library of Congress has also established the subject heading "Political economy–history." However,
it is attached to only one title that covers the topic broadly: Histoire de la pensée économique : abrégé des analyses et
des théories économiques des origines au XXe siècle / Alain Redslob (2011). Despite characterizing itself as a 'summary' the
book comes in at a hefty 355 pages. LC classifies this work at HB75. A title search on "Political Economy" yields, to my eye,
only one somewhat recent work that seems to offer a general treatment: Political economy / Dan Usher (2003). Coming in at 427
pages, it is classified as "Economics" and classed at HB171.5. LC applies the heading 'Economics–Historiography" to eleven works
of which the most relevant here may be: History and historians of political economy / Werner Stark ; edited by Charles M.A. Clark
(1994). As a check of those results a bit of googling turned up a set of essays edited by Maxine Berg under the title, Political
Economy in the Twentieth Century (1990), which set out to represent thinking outside the 'mainstream' of neoclassical or Keynesian
traditions. LC classes it at HB87.
For books titled "History of Political Economy" it looks like one would have to go back into
the 19th century, to discover works bearing just such a title by John K. Ingram (1888; reprinted 2013 by Cambridge UP) and Gustav
Cohn (1894), thus apparently from the point where the Berg essays begin. I have read nothing by any of the authors I've mentioned
here; am just posting the outcome of my searching fwiw.
I have, but haven't yet finished, "An Economist's Guide to Economic History" by Blum and Colvin. If the text itself is insufficient,
the bibliography ought to be pretty comprehensive.
Yes Galbraith Sr was the last classical that pointed out the failings of the payed for PR merchants that some have called economists
and to rub salt in that wound claim dominate economics has no value based biases.
Richard Wolff (of Democracy at Work) has one but I'm not able to search for the title. Just google/qwant his name and a title
that you will recognize as what you are looking for will appear.
I've skimmed that book and it seemed accessible and neatly putting together timelines and major inflection points in the development
or economics.
"In the real world, it turned out, important economic outcomes are often the consequences of political forces."
Sorry to sound mean, but, duh.
"The key takeaways if research is claimed to be relevant for the real world are:
Just because a model claims to "explain" something in the real world does not give it logical or actual validity. Even if we
may never have the data to be able to reject a model, there are ways to apply casual empiricism ("if this model was true, we would
observe x and we don't"), and we must be especially careful if a model contradicts other plausible explanations for what we see.
(Consider: "cigarette smoking improves people's health" as an "explanation" of why people smoke.)"
Did the individuals she is addressing ever take a required undergraduate course in research methods?
Not understanding that is like believing that money does actually grow on trees. I don't understand how this could be
a revelation to supposedly intelligent people with advanced degrees.
You've got Evonomic's newsletter sign-up text box, copy-pasted in here, along with the article text. Guessing that wasn't intentional.
Mentioning it just in case.
This has "Academics may be in the best position to inform policy, expose flawed or poorly enforced rules, and help hold power
to account. We cannot assume others will be able or willing to do it without our help."
Given the funding method for much of academics (wealthy patrons, wealthy think tanks, wealthy companies and wealthy parents)
is it reasonable to expect that academics will truly speak truth to power?
In my view, the article implies a more vigilant economic profession COULD be important in influencing policy.
But I have doubts this could occur.
Economics and economists may be used in the same way that an insurance company executive told me that outside consultants were
sometimes chosen at his firm.
He suggested that consultants were sometimes selected because they were expected to agree with what management wanted to do.
One could suggest that similar dynamics exist for newspaper editorial writers.
If editorial writers were to go counter to their expected editorial content (right or left), they could well be expecting their
future paychecks would be at risk.
Western economics has evolved to serve TPTB, not the common good.
One can see that outside voices, such as Steve Keen and Michael Hudson, are relegated to outside the mainstream.
And on top of that, as Nassim Nicholas Taleb and others have regularly pointed out, achieving a high degree of efficiency
typically comes at the expense of safety.
An old Star Trek episode titled The Trouble With Tribbles is about Star Fleet and Klingons disputing ownership of a planet
which can grow vast amounts of food grains. In one short scene the Klingons claim ownership based on their more efficient exploitation
of resources (more efficient than the Federation) which, they claim, gives them 'rights' to own the planet. To which either McCoy
or Kirk say to themselves, "Oh yes, they're efficient all right. Ruthless, but efficient."
And on top of that, as Nassim Nicholas Taleb and others have regularly pointed out, achieving a high degree of efficiency
typically comes at the expense of safety.
No system ever operates at a greater efficiency than at the moment before its collapse.
Just something to think about, Capitalism rewarding efficiency rather than sustainability or robustness. Both of these require
the expenditure of resources, costs, which subtract from potential profits.
Yes, exactly. I liked this piece, long overdue for me. But what exactly is "efficiency"? I agree that there is no good reason
for the tax code to subsidize debt if, if, adequate financing is otherwise available. Hence the question: Why is there no alternative?
I dunno about small changes but I'm pretty sure we need to be able to downshift, as opposed to spinning out disastrously. There's
this too: finance itself (because financial time is much faster than ordinary time) is more desperate, even frantic, to maintain
its survival in a competitive "economy" so that as finance turns into financialization it achieves critical mass. And in order
just to hang on and not explode requires massive infusions of new money just so finance can stay on top of their own monster.
Some rodeo. The first good regulation for economic security might be to extend financial time – reducing the necessity for huge
turnover profits. But doing so in a way that preserves finance in a tame and domestic manner. Like preventing all the animals
in the barn from eating exponential volumes of alfalfa and producing mud slides of manure in order that the noble farmer doesn't
lose his tennies whilst mucking . Thereby reducing the risks inherent in equity finding – which for a sole proprietor (should
any still exist) is also known as crushing debt.
> The first good regulation for economic security might be to extend financial time – reducing the necessity for huge turnover
profits.
In ecology there is a tau function, the delay time. Predator population lags prey variation and can stabilize systems. And
Theo Compernelle gives details about delaying response time, as the productivity of a work session drops with the number of interruptions.
The Oct 28 Links included the article "Asynchronous Communication: The Real Reason Remote Workers Are More Productive", along
similar lines.
This seems to go against instant messaging, hi frequency trading, and OODA loops. But those seem to operate best in disregulated
situations. To extend financial time – what would that do to speculation?
Edit: Also, Taleb had something on taking data points too often leading to noisy results.
tau function seems to apply here. so as not to eat the seed corn. by extending financial time I meant slow it way down, in
my mind that means extending obligations over a much longer period. That might also mean many fewer financings, less opportunity
to speculate. tau is interesting; nice to know nature has this one figured out.
speculation is the "money" in financial markets. lenghten time=0 opportunity=0liquidity
on the other hand maybe another LTCM can be avoided.
pet theory, financial markets and all their attendend complexity exist to abosrb blasting high energy, innovation to assure survival,nutjob
i know
I'm thinking that one possibility would be money that expires after a set amount of time. Say one year. Money could not then
be used as an asset. It would have to be continuously and reliably spent. All assets would be physical. For one thing, we would
know what society really possessed, as opposed to the imaginary stuff/asset money is.
When I was a little boy, obsessing over Christmas presents, it seemed to me that politics was economics and that economics
was about the extraction of resources from the earth, and from human beings, with all kinds of shenanigans about timing.
No matter how much I learn, it seems that not much has changed.
Thank you for this post! Political economics is a much better name for this pseudo science. If aerospace engineers were wrong
as often as theses clowns airplanes would routinely fall out of the air.
And as Boeing so aptly demonstrates, putting the MBA PMC types in charge of the engineers, also results in airplanes falling
out of the air.
But huge props to Steve Keen for calling this out!
Paul Samuelson and Milton Friedman took the "animal spirits" out of economics and turned it into a mathematical model. However,
the behavioral economics and psychological research has shown that people are hard-wired in ways that make the mathematical models
flawed and erroneous.
As a design engineer, we use lots of complex modeling but ultimately our design blueprints and specifications are not rigidly
based on these models because people and/or robots have to build and operate the things. So there is a fair amount of simplification
and clarification that has to happen to have something built without major errors and then operated without major errors, as well
as maintained with varying levels of attention and funding. These require a fair amount of understanding about how humans process
and execute things and/or the limitations on what can be programmed into robots and computers.
I point out to junior engineers that the people who will build and operate the systems did not necessarily graduate in the
top 25% of their high school class unlike the designers. However, many of them have different skill sets that the designers don't
have, such as how to operate heavy equipment and do physical trade activities. So we need to design systems to a common denominator
that work from design and operations viewpoints.
In economics, we are seeing the systems being biased by focusing on theoretical models that don't actually work in practice
because they don't account for what people actually do compared to what a "rational" model says they should do. Hence the crap
about "trickle-down" that never actually works in practice in tax cut plans for the wealthy. Similarly, complex private healthcare
systems in the US don't remotely follow a "perfect information" model that would allow the "invisible hand" to produce efficiency.
so we get massive bloat and rentiere models that prey on consumers. However, that has become a feature, not a bug, on K-street.
Thank you X 10. Samuelson and Friedman claimed they could take the "animal spirits", aka human nature however defined, out
of economics. The claim amounts to saying they could measure, quantify, model, and manipulate human responses to changing situations,
which amounts to a claim of god-like understanding of human mental capacities. How do they measure a human? Reason and logic and
measurable outputs are only a part – and how large a part is as yet undetermined – in human awareness and decision making. Logic
is a good servant but a bad master, as the saying goes. Samuelson and Friedman construct a 'rational man' without ever questioning
the epistemology of their construct. (Mary Shelly might recognize the conceit.)
Michael Hudson is perhaps the best place to start. (Bill Black is a close second. Author of "The Best Way to Rob a Bank is
to Own One.")
Really, if one's education includes a healthy dose of history, anthropology, sociology, politics, and social theory, it's tempting
to suggest that economics is a self-important and smug discipline. Wow, politics affects markets, property relations, and conflict
over economic surplus! Wow. Good to know. And someone just told me that human beings aren't as rational as economists assume.
Wow again. Thanks.
started by an unemployed Englishman named Eliot Higgins
Good on him – being able to create a thing that rises to such prominence in such a
short space of time speaks volumes about this Higgins guy's entrepreneurial ability. And if he
wasn't mobbed-up to begin with, he sure as fuck is now – which is a double-
mitzvah (for him).
If he did so starting from being unemployed, then anybody who turned down a job application
from the guy must be kicking themselves. (' Unemployed ' is obviously used pejoratively
in the blockquote; 'Englishman' is purely-descriptive).
.
Also, the entire article accepts Bernays' conclusion, but disagrees as to which objectives
should be pursued.
Bernays' conclusions are hardly controversial: most people are gullible imbeciles .
It's not clear to me how much more empirical evidence we need before that becomes just a thing
that everyone with an IQ above 115 accepts.
So the question then becomes " OK, now what? ".
As usual, the right answer is " Depends " – and not just for those with bladder
control problems.
If you want to do things that are just , exploiting gullible imbeciles would appear
to violate the playing conditions. It would be hors jeu ; not done; just not
cricket .
As the Laconian famously said . " IF ."
For those for whom the 'if' condition returns 'false', it does very little to bleat about
how awful they are. You're not going to cause a little switch in their brain to flick on (or
off?), whereupon they realise the error of their ways and make a conscious decision to leave
the gullible imbeciles unexploited.
It's even unlikely to affect their victims (remember, they're imbeciles) – because
otherwise some infra-marginal imbeciles would have to process their way through quite a bit of
cognitive dissonance, and they're not wired for introspection (or processing).
So the sole real purpose (apart from κάθαρσις
catharsis ) is prophylaxis (προ +
φύλαξις – guarding ). Both good enough aims
obviously the writer is the one who gets the cathartic benefit, but who is going to be on
heightened alert as a result of this Cassandra -ish jeremiad -ing?
Non-imbeciles don't need it; imbeciles won't benefit.
Here's the thing: the gullible imbeciles are going to be exploited by someone
.
.
This is something that people of my persuasion struggle with. It boils down to the
following:
Let's assume that a reprehensible thing exists already, and is unlikely to be overthrown
by my opposition to it. Should I just participate and line my pockets?
The resources used are going to be used whether I participate or not, so it may as well be
me who gets them. After all, I will put them to moral uses – and while inside, I can do
things that are contrary to the interests of the reprehensible thing.
There is no satisfactory counter-argument to that line of reasoning, and yet I reject
it.
Then again: I was dropped on my head as an infant, so YMMV.
(Bloomberg Opinion) -- In testimony before Congress this week, Lieutenant Colonel Alexander
Vindman, an Army officer with more than 20 years of service, told lawmakers that he had heard
the president try to pressure Ukraine's president to unearth dirt on a political rival. In
response, the president's allies have decided to make an issue of Vindman's birthplace. They
say his infanthood in Kiev -- he left at age 3 -- reveals something about his character and his
allegiances. They are right, but in exactly the wrong way.
Here, you should pardon the expression, are some facts and a little bit of history. When
Vindman was born on June 6, 1975, Ukraine was enveloped in the Soviet Union. At birth, Vindman
would have been added temporarily to his parents' internal passports, a document that all
Soviet citizens were required to carry starting at 16, mostly to make sure they were not
residing somewhere without official permission.
That passport contained the infamous "fifth line" or "pyati punkt," in Russian, which had
been created under Josef Stalin and listed the holder's "nationality." Vindman was born in
Ukraine, but that line would not have said "Ukrainian" unless his parents had chosen to defy
the law. It would have said "Jew."
In the Soviet Union, Jews were considered separate and apart from other nationalities,
especially in two of the republics, Russia and Ukraine, where the local party enforcers were
particularly happy to do the Kremlin's dirty work. You could be born in Minsk or Pinsk, or Omsk
or Tomsk, or even Alexandrovsk or Petropavlovsk, and if you were born to Jewish parents, your
passport was likely stamped "Jew."
When I first learned this, upon arriving in Moscow in May 1983 as a reporter for the
Associated Press, I was outraged. I saw it like the Nazi's yellow star. I couldn't imagine how
Jewish people could stand it.
Until one day, I put that question to Naum Meiman, a Jewish mathematician who was part of
Andrei Sakharov's circle of dissidents. The answer was simple and humbling.
He didn't want "Russian," or any other so-called Soviet nationality, in his passport.
Russians didn't consider him Russian, officially or otherwise, and he didn't want the label.
"I'm a Jew who is forced to live in Russia, not a Russian," he said more than once.
I am certainly not speaking for Vindman, whom I do not know, but I have never met a Jew who
fled the Soviet Union and felt any kind of loyalty to the country -- one where Jews were
spurned from birth and then imprisoned within the state's borders until it decided to allow
them to leave. In those days, the Soviet Union revoked émigré's citizenships, in
what was supposed to be a final act of deep humiliation, but was invariably a badge of
pride.
"Here we have a U.S. national security official who is advising Ukraine while working inside
the White House, apparently against the president's interest," Fox News host Laura Ingraham
told viewers Monday.
The circumstances of Vindman's birth argue for a different interpretation. They show him to
be part of a tradition of 20th century Eastern European Jews who suffered under tyrannies of
the left and the right. These people fled the first chance they had to a country that would
accept them as fellow citizens, one where they would not be constantly questioned about their
loyalties. For many decades, that country was the United States.
To contact the author of this story: Andrew Rosenthal at [email protected]
Retired Brigadier General Peter Zwack spoke to "Nightline" ahead of Vindman's testifying
before the House Intelligence Committee during a public impeachment hearing of President
Trump.
Former democrat
21 days ago Mr Vindman looks more like a doorman, than a Army Officer in that uniform !
Larry
21 days ago
What's that "thing" on his ring finger (appears wooden)? Is that from his partner "Husband"?
In my US Army years, soldiers were dishonorable discharged from this "Criminal Offense" !
Germany's manufacturing sector is suffering its steepest downturn for a decade after
industrial production fell 1.7 per cent in October, underlining how the powerhouse of the
eurozone's biggest economy is spluttering.
The figures, published on Friday by the Federal Statistics Office, mean that Germany's
manufacturing output has fallen 5.7 per cent in the year to October and indicate that the
sector is likely to keep weighing on overall eurozone growth in the fourth quarter.
"Far from bottoming out, Germany's industrial recession may be getting worse," said
Andrew Kenningham at Capital Economics. "The latest data support our view that a recession
is still more likely than not in the coming quarters."
And it was investment that was hit. The drop in German manufacturing in October was
concentrated in production of capital goods, including tools, buildings, vehicles,
machinery and equipment, which fell 4.4 per cent in the month. Production of intermediate
goods and consumer goods both increased.
After the fall of the DDR, the Western Germans thought they had everything sorted out:
capitalism had proved its supremacy over socialism, and History had ended. Their reward was
the Hartz Reforms of the early 2000s, which marked the end of German welfare state -- a token
to the German working class to remember what was its place for the forseeable future.
Germany is now entirely on the USA's hands. If the USA doesn't collapse, the liberal
financial architecture won't collapse, and the EU will be able to continue to exist in a
stagnated, 0-1% annual growth indefinitely and the European illusion will live on; if not,
Europe will go back to be a periphery of the world system, as it has been since the fall of
the Roman Empire in the West until the Second Industrial Revolution.
"... "There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it -- there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies." ..."
"... Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and -- perhaps most of all -- its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development. ..."
"... Emphasizing to policymakers not only the importance of investment, but also the direction of that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato has influenced the way American politicians speak about the state's potential as an economic engine. In her vision, governments would do what so many traditional economists have long told them to avoid: create and shape new markets, embrace uncertainty and take big risks. ..."
Meet the Leftish Economist With a New Story About Capitalism
Mariana Mazzucato wants liberals to talk less about the redistribution of wealth and more
about its creation. Politicians around the world are listening.
By Katy Lederer
Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan,
but inside -- in a Columbia University conference space full of scientists, academics and
businesspeople advising the United Nations on sustainability -- the air conditioning was on
full blast.
For a room full of experts discussing the world's most urgent social and environmental
problems, this was not just uncomfortable but off-message. Whatever their dress -- suit,
sari, head scarf -- people looked huddled and hunkered down. At a break, Dr. Mazzucato
dispatched an assistant to get the A.C. turned off. How will we change anything, she wondered
aloud, "if we don't rebel in the everyday?"
Dr. Mazzucato, an economist based at University College London, is trying to change
something fundamental: the way society thinks about economic value. While many of her
colleagues have been scolding capitalism lately, she has been reimagining its basic premises.
Where does growth come from? What is the source of innovation? How can the state and private
sector work together to create the dynamic economies we want? She asks questions about
capitalism we long ago stopped asking. Her answers might rise to the most difficult
challenges of our time.
In two books of modern political economic theory -- "The Entrepreneurial State" (2013) and
"The Value of Everything" (2018) -- Dr. Mazzucato argues against the long-accepted binary of
an agile private sector and a lumbering, inefficient state. Citing markets and technologies
like the internet, the iPhone and clean energy -- all of which were funded at crucial stages
by public dollars -- she says the state has been an underappreciated driver of growth and
innovation. "Personally, I think the left is losing around the world," she said in an
interview, "because they focus too much on redistribution and not enough on the creation of
wealth."
Her message has appealed to an array of American politicians. Senator Elizabeth Warren,
Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's
thinking into several policy rollouts, including one that would use "federal R & D to
create domestic jobs and sustainable investments in the future" and another that would
authorize the government to receive a return on its investments in the pharmaceutical
industry. Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez,
Democrat of New York, and her team on the ways a more active industrial policy might catalyze
a Green New Deal.
Even Republicans have found something to like. In May, Senator Marco Rubio of Florida
credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his
proposal to jump-start economic growth. "We need to build an economy that can see past the
pressure to understand value-creation in narrow and short-run financial terms," he wrote in
the introduction, "and instead envision a future worth investing in for the long-term."
Formally, the United Nations event in September was a meeting of the leadership council of
the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts
who advise on topics like gender equality, poverty and global warming. Most of the attendees
had specific technical expertise -- Dr. Mazzucato greeted a contact at one point with,
"You're the ocean guy!" -- but she offers something both broad and scarce: a compelling new
story about how to create a desirable future.
'Investor of first resort'
Originally from Italy -- her family left when she was 5 -- Dr. Mazzucato is the daughter
of a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when
she moved to the United States. She got her Ph.D. in 1999 from the New School for Social
Research and began working on "The Entrepreneurial State" after the 2008 financial crisis.
Governments across Europe began to institute austerity policies in the name of fostering
innovation -- a rationale she found not only dubious but economically destructive.
"There's a whole neoliberal agenda," she said, referencing the received free-market
wisdom that cutting public budgets spurs economic growth. "And then the way that traditional
theory has fomented it or not contested it -- there's been kind of a strange symbiosis
between mainstream economic thinking and stupid policies."
Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory
taught in most academic departments: its assumption that the forces of supply and demand lead
to market equilibrium, its equation of price with value and -- perhaps most of all -- its
relegation of the state to the investor of last resort, tasked with fixing market failure.
She has originated and popularized the description of the state as an "investor of first
resort," envisioning new markets and providing long-term, or "patient," capital at early
stages of development.
In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician
as much as an economist. She has written of waging what the historian Tony Judt called a
"discursive battle," and scrutinizes descriptive terms -- words like "fix" or "spend" as
opposed to "create" and "invest" -- that have been used to undermine the state's appeal as a
dynamic economic actor. "If we continue to depict the state as only a facilitator and
administrator, and tell it to stop dreaming," she writes, "in the end that is what we
get."
As a charismatic figure in a contentious field that does not generate many stars -- she
was recently profiled in Wired magazine's United Kingdom edition -- Dr. Mazzucato has her
critics. She is a regular guest on nightly news shows in Britain, where she is pitted against
proponents of Brexit or skeptics of a market-savvy state.
Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director
general of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr.
Mazzucato for, in his view, cherry-picking her case studies, underestimating economic
trade-offs and defining industrial policy too broadly. In January, in an academic piece
written with one of his Cato colleagues, Terence Kealey, he called her "the world's greatest
exponent today of public prodigality."
Her ideas, though, are finding a receptive audience around the world. In the United
Kingdom, Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and
Theresa May, a former Prime Minister, and she has counseled the Scottish leader Nicola
Sturgeon on designing and putting in place a national investment bank. She also advises
government entities in Germany, South Africa and elsewhere. "In getting my hands dirty," she
said, "I learn and I bring it back to the theory."
The 'Mission Muse'
During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning
to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore
a brightly colored glass necklace that has become something of a trademark on the economics
circuit. Having traveled to five countries in eight days, she was fighting off a cough.
"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature
reference is to the original mission to the moon -- a state-spurred technological revolution
consisting of hundreds of individual feeder projects, many of them collaborations between the
public and private sectors. Some were successes, some failures, but the sum of them
contributed to economic growth and explosive innovation.
Dr. Mazzucato's platform is more complex -- and for some, controversial -- than simply
encouraging government investment, however. She has written that governments and state-backed
investment entities should "socialize both the risks and rewards." She has suggested the
state obtain a return on public investments through royalties or equity stakes, or by
including conditions on reinvestment -- for example, a mandate to limit share buybacks.
Emphasizing to policymakers not only the importance of investment, but also the
direction of that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato
has influenced the way American politicians speak about the state's potential as an economic
engine. In her vision, governments would do what so many traditional economists have long
told them to avoid: create and shape new markets, embrace uncertainty and take big
risks.
... ... ...
Earlier in the day, she pointed at an announcement on her laptop. She had been nominated
for the first Not the Nobel Prize, a commendation intended to promote "fresh economic
thinking." "Governments have woken up to the fact the mainstream way of thinking isn't
helping them," she said, explaining her appeal to politicians and policymakers. A few days
later, she won.
Then she would advocate free banking, like Selgin. Better more efficient banking is a huge
and profitable investment for government.
So before the leftwards jump on her idea of investment, start here and explain why
suddenly, making finance more efficient for everyone is a bad idea.
Or ask our knee jerkers, before they jump on her ideas with all their delusions, why not
invest in dumping the primary dealer system? That is obviously inefficient and generates the
ATM costs we pay. Why not remove that with a sound investment f some sort?
Everything is through the eye of the beholder, for lelftwards it is the wonder of central
planning, for the libertariaturds it is about efficiency via decentralization.
Then comes meetup, and waddya know, each side brings a 200 page insurance contract they
want guaranteed before any efficiency changes are made. The meeting selects business as
normal. We will select business as normal, our economists will approve.
I am thrilled / s at the feeling of fulfillment I, well, feel, that an academic deems the
obvious. It definitely, indicates that we are approaching, wokeness !
Economists are beginning to evolve, again, almost, but not quite capturing the curl of the
real time world.
" There's a whole neoliberal agenda," she said, referencing the received free-market wisdom
that cutting public budgets spurs economic growth. "And then the way that traditional theory
has fomented it or not contested it -- there's been kind of a strange symbiosis between
mainstream economic thinking and stupid policies."
That is a deep vision that needs to be unpacked. My impression of traditional theory is
that it discourages the neoliberal, market deism.
"... "There's a whole neoliberal agenda," she said, referencing the received free-market wisdom that cutting public budgets spurs economic growth. "And then the way that traditional theory has fomented it or not contested it -- there's been kind of a strange symbiosis between mainstream economic thinking and stupid policies." ..."
"... Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory taught in most academic departments: its assumption that the forces of supply and demand lead to market equilibrium, its equation of price with value and -- perhaps most of all -- its relegation of the state to the investor of last resort, tasked with fixing market failure. She has originated and popularized the description of the state as an "investor of first resort," envisioning new markets and providing long-term, or "patient," capital at early stages of development. ..."
Meet the Leftish Economist With a New Story About Capitalism
Mariana Mazzucato wants liberals to talk less about the redistribution of wealth and more about
its creation. Politicians around the world are listening.
By Katy Lederer
Mariana Mazzucato was freezing. Outside, it was a humid late-September day in Manhattan, but
inside -- in a Columbia University conference space full of scientists, academics and
businesspeople advising the United Nations on sustainability -- the air conditioning was on
full blast.
For a room full of experts discussing the world's most urgent social and environmental
problems, this was not just uncomfortable but off-message. Whatever their dress -- suit, sari,
head scarf -- people looked huddled and hunkered down. At a break, Dr. Mazzucato dispatched an
assistant to get the A.C. turned off. How will we change anything, she wondered aloud, "if we
don't rebel in the everyday?"
Dr. Mazzucato, an economist based at University College London, is trying to change
something fundamental: the way society thinks about economic value. While many of her
colleagues have been scolding capitalism lately, she has been reimagining its basic premises.
Where does growth come from? What is the source of innovation? How can the state and private
sector work together to create the dynamic economies we want? She asks questions about
capitalism we long ago stopped asking. Her answers might rise to the most difficult challenges
of our time.
In two books of modern political economic theory -- "The Entrepreneurial State" (2013) and
"The Value of Everything" (2018) -- Dr. Mazzucato argues against the long-accepted binary of an
agile private sector and a lumbering, inefficient state. Citing markets and technologies like
the internet, the iPhone and clean energy -- all of which were funded at crucial stages by
public dollars -- she says the state has been an underappreciated driver of growth and
innovation. "Personally, I think the left is losing around the world," she said in an
interview, "because they focus too much on redistribution and not enough on the creation of
wealth."
Her message has appealed to an array of American politicians. Senator Elizabeth Warren,
Democrat of Massachusetts and a presidential contender, has incorporated Dr. Mazzucato's
thinking into several policy rollouts, including one that would use "federal R & D to
create domestic jobs and sustainable investments in the future" and another that would
authorize the government to receive a return on its investments in the pharmaceutical industry.
Dr. Mazzucato has also consulted with Representative Alexandria Ocasio-Cortez, Democrat of New
York, and her team on the ways a more active industrial policy might catalyze a Green New
Deal.
Even Republicans have found something to like. In May, Senator Marco Rubio of Florida
credited Dr. Mazzucato's work several times in "American Investment in the 21st Century," his
proposal to jump-start economic growth. "We need to build an economy that can see past the
pressure to understand value-creation in narrow and short-run financial terms," he wrote in the
introduction, "and instead envision a future worth investing in for the long-term."
Formally, the United Nations event in September was a meeting of the leadership council of
the Sustainable Development Solutions Network, or S.D.S.N. It's a body of about 90 experts who
advise on topics like gender equality, poverty and global warming. Most of the attendees had
specific technical expertise -- Dr. Mazzucato greeted a contact at one point with, "You're the
ocean guy!" -- but she offers something both broad and scarce: a compelling new story about how
to create a desirable future.
'Investor of first resort'
Originally from Italy -- her family left when she was 5 -- Dr. Mazzucato is the daughter of
a Princeton nuclear physicist and a stay-at-home mother who couldn't speak English when she
moved to the United States. She got her Ph.D. in 1999 from the New School for Social Research
and began working on "The Entrepreneurial State" after the 2008 financial crisis. Governments
across Europe began to institute austerity policies in the name of fostering innovation -- a
rationale she found not only dubious but economically destructive.
"There's a whole neoliberal agenda," she said, referencing the received free-market
wisdom that cutting public budgets spurs economic growth. "And then the way that traditional
theory has fomented it or not contested it -- there's been kind of a strange symbiosis between
mainstream economic thinking and stupid policies."
Dr. Mazzucato takes issue with many of the tenets of the neoclassical economic theory
taught in most academic departments: its assumption that the forces of supply and demand lead
to market equilibrium, its equation of price with value and -- perhaps most of all -- its
relegation of the state to the investor of last resort, tasked with fixing market failure. She
has originated and popularized the description of the state as an "investor of first resort,"
envisioning new markets and providing long-term, or "patient," capital at early stages of
development.
In important ways, Dr. Mazzucato's work resembles that of a literary critic or rhetorician
as much as an economist. She has written of waging what the historian Tony Judt called a
"discursive battle," and scrutinizes descriptive terms -- words like "fix" or "spend" as
opposed to "create" and "invest" -- that have been used to undermine the state's appeal as a
dynamic economic actor. "If we continue to depict the state as only a facilitator and
administrator, and tell it to stop dreaming," she writes, "in the end that is what we get."
As a charismatic figure in a contentious field that does not generate many stars -- she was
recently profiled in Wired magazine's United Kingdom edition -- Dr. Mazzucato has her critics.
She is a regular guest on nightly news shows in Britain, where she is pitted against proponents
of Brexit or skeptics of a market-savvy state.
Alberto Mingardi, an adjunct scholar at the libertarian Cato Institute and director general
of Istituto Bruno Leoni, a free-market think tank, has repeatedly criticized Dr. Mazzucato for,
in his view, cherry-picking her case studies, underestimating economic trade-offs and defining
industrial policy too broadly. In January, in an academic piece written with one of his Cato
colleagues, Terence Kealey, he called her "the world's greatest exponent today of public
prodigality."
Her ideas, though, are finding a receptive audience around the world. In the United Kingdom,
Dr. Mazzucato's work has influenced Jeremy Corbyn, leader of the Labour Party, and Theresa May,
a former Prime Minister, and she has counseled the Scottish leader Nicola Sturgeon on designing
and putting in place a national investment bank. She also advises government entities in
Germany, South Africa and elsewhere. "In getting my hands dirty," she said, "I learn and I
bring it back to the theory."
The 'Mission Muse'
During a break at the United Nations gathering, Dr. Mazzucato escaped the air conditioning
to confer with two colleagues in Italian on a patio. Tall, with a muscular physique, she wore a
brightly colored glass necklace that has become something of a trademark on the economics
circuit. Having traveled to five countries in eight days, she was fighting off a cough.
"In theory, I'm the 'Mission Muse,'" she joked, lapsing into English. Her signature
reference is to the original mission to the moon -- a state-spurred technological revolution
consisting of hundreds of individual feeder projects, many of them collaborations between the
public and private sectors. Some were successes, some failures, but the sum of them contributed
to economic growth and explosive innovation.
Dr. Mazzucato's platform is more complex -- and for some, controversial -- than simply
encouraging government investment, however. She has written that governments and state-backed
investment entities should "socialize both the risks and rewards." She has suggested the state
obtain a return on public investments through royalties or equity stakes, or by including
conditions on reinvestment -- for example, a mandate to limit share buybacks.
Emphasizing to policymakers not only the importance of investment, but also the direction of
that investment -- "What are we investing in?" she often asks -- Dr. Mazzucato has influenced
the way American politicians speak about the state's potential as an economic engine. In her
vision, governments would do what so many traditional economists have long told them to avoid:
create and shape new markets, embrace uncertainty and take big risks.
Inside the conference, the news was uniformly bleak. Pavel Kabat, the chief scientist of the
World Meteorological Organization, lamented the breaking of global temperature records and said
that countries would have to triple their current Paris-accord commitments by 2030 to have any
hope of staying below a critical warming threshold. A panel on land use and food waste noted
that nine species account for two-thirds of the world's crop production, a dangerous lack of
agricultural diversity. All the experts appeared dismayed by what Jeffrey Sachs, the S.D.S.N.'s
director, described as the "crude nationalism" and "aggressive anti-globalization" ascendant
around the world.
"We absolutely need to change both the narrative, but also the theory and the practice on
the ground," Dr. Mazzucato told the crowd when she spoke on the final expert panel of the day.
"What does it mean, actually, to create markets where you create the demand, and really start
directing the investment and the innovation in ways that can help us achieve these goals?"
Earlier in the day, she pointed at an announcement on her laptop. She had been nominated for
the first Not the Nobel Prize, a commendation intended to promote "fresh economic thinking."
"Governments have woken up to the fact the mainstream way of thinking isn't helping them," she
said, explaining her appeal to politicians and policymakers. A few days later, she won.
Reply Thursday, November 28, 2019 at 12:05 PM
Economy Adds 266,000 Jobs in November, Unemployment Edges Down to 3.5 Percent
By Dean Baker
The share of women in payroll employment is likely to exceed 50 percent in December.
The Bureau of Labor Statistics reported that the economy added 266,000 jobs in November.
While this figure is inflated by the return of roughly 50,000 striking GM autoworkers, upward
revisions to the prior two months' data brought the three-month average to a solid 205,000.
The unemployment rate edged down to 3.5 percent, returning to a 50-year low.
The job growth was widely spread across industries. Manufacturing added 54,000 jobs,
somewhat more than the number of returning strikers. It appears that the sector may again be
on a modest growth path, with the number of jobs up 13,000 from its level three months ago
and 76,000 from its year-ago level. Food manufacturing is providing the bulk of these gains,
adding 19,300 jobs in the last three months and 25,900 over the last year.
Health care added 45,200 jobs in November after adding just 11,900 in October. Job growth
for the two months together falls slightly below the 34,500 average for the last year.
Restaurants added 25,300 jobs, roughly its average for the last year. The high-paying
professional and technical services sector added 30,600 jobs, after three months of weak
growth.
Construction employment remains weak, with the sector adding just 1,000 jobs in November.
Job growth has averaged just 5,600 a month since June. Support activities for mining, which
has been losing jobs since February, lost another 5,700 jobs in November. Employment in that
sector is now down 23,700 (6.6 percent) over the last year. Retail added 2,000 jobs for the
month, but employment is still down 31,400 (0.2 percent) over the last year.
In spite of the strong job growth and low unemployment rate, there continues to be no
evidence of accelerating wage growth. The average hourly wage increased 3.1 percent over the
last year. The annual rate of growth over the last three months (September, October, and
November), compared to the prior three months (June, July, August), was just 3 percent.
Women's share of payroll employment edged closer to 50 percent in November, with the
figure now standing at 49.992 percent, up from 49.977 percent in October. This should mean
that the share will cross 50 percent in December.
The data in the household survey was generally positive. The overall
employment-to-population ratio (EPOP) remained at a recovery high of 61.0 percent for the
third straight month. The EPOP for prime-age workers (ages 25 to 54) also remained at its
recovery high of 80.3 percent. The EPOP for prime-age men edged up 0.2 percent to 86.7
percent, a high reached in March, while the EPOP for women slipped 0.1 percentage point to
74.1 percent, which is still a full percentage point above its year-ago level.
The average duration of unemployment spells fell in November, as did the share of the
long-term unemployed. There was a modest increase of 0.1 weeks in the median duration.
Perhaps the most disturbing item in this report was the dip in the share of unemployment
due to voluntary quits from 14.5 percent to 13.3 percent. This is extraordinarily low, given
the 3.5 percent unemployment rate. On the other hand, it is consistent with what we're seeing
with wage growth, which remains modest, and with no evidence of acceleration.
Another discouraging item in the household data is the decline in the share of the
workforce that chooses to work part-time. This fell by 15,000 in November. For the year
average to date, this figure is up by less than 0.5 percent, meaning that it is dropping as a
share of total employment. The share of voluntary part-time employment had increased sharply
after the Affordable Care Act took effect, the recent decline is likely an indication of the
increasing difficulty of getting health care coverage outside of employment.
[Graph]
This should be seen as a mostly positive report. The pace of job growth clearly has slowed
some from its 2018 rate, but with the economy presumably approaching full employment, this
was inevitable. The major downside is that workers seem to remain insecure about their
employment prospects, as evidenced by the low quit rates and the relatively modest pace of
wage growth.
The truth is that good, middle class jobs are very difficult to get. Almost impossible.
You are very lucky being a retiree with Vanguard funds chest ;-)
Recent graduates are in a very bad position, with only graduates from Ivy league colleges
resume not being instantly tossed into waist basket.
McJobs, Amazon warehouse jobs, Home Depot jobs, low level construction jobs (in $15-$20
per hour range), etc are available for graduates. But that's it. Looks like the USA is
looking now like a big amazon warehouse.
People over 50 are actually doomed, if they lost the job, to much lower standard of
living. Even if they are professionals.
Donald Trump Boasts About Taxing Middle Class for "Billions and Billions"
By Dean Baker
This was in the context of the tariffs he has imposed on imports from China. According to
the Washington Post, * Trump boasted:
"I like what's happening right now. We're taking in billions and billions of dollars."
Tariffs of course are taxes on imports. The evidence is overwhelming that the vast majority
of these taxes are being borne either by consumers or retailers in the United States. According
to the Bureau of Labor Statistics ** the price of imports from China has fallen just 1.6
percent over the last year. This means that people in the United States are paying the
overwhelming majority of the tariffs that run as high as 25 percent and apparently Donald Trump
is very happy about that.
Could Tax Increases Speed Up the Economy?
Democrats Say Yes https://nyti.ms/2RlDbJx
NYT - Jim Tankersley - December 5
WASHINGTON -- Elizabeth Warren is leading a liberal rebellion against a long-held economic
view that large tax increases slow economic growth, trying to upend Democratic policymaking
in the way supply-side conservatives changed Republican orthodoxy four decades ago.
(Warren Would Take Billionaires Down
a Few Billion Pegs https://nyti.ms/2CtMPRN
NYT - November 10)
Generations of economists, across much of the ideological spectrum, have long held that
higher taxes reduce investment, slowing economic growth. That drag, the consensus held, would
offset the benefits to growth from increased government spending in areas like education.
Ms. Warren and other leading Democrats say the opposite. The senator from Massachusetts,
who is a leading candidate for the Democratic presidential nomination, contends that her
plans to tax the rich and spend the revenue to lift the poor and the middle class would
accelerate economic growth, not impede it. Other Democratic candidates are making similar
claims about their tax-and-spend proposals. Some liberal economists go further and say that
simply taxing the rich would help growth no matter what the government did with the
money.
Democrats in the past, including the party's 2016 nominee, Hillary Clinton, have argued
that a more modest combination of tax increases and spending programs would expand the
economy. But no Democratic nominee before Ms. Warren had ever proposed so many new taxes and
spending programs, and leaned so heavily into the argument that they would be, in economist
parlance, pro-growth.
That argument tries to reframe a classic debate about the economic "pie" in the United
States by suggesting there is no trade-off between increasing the size of the pie and
dividing the slices more equitably among all Americans.
Ms. Warren has proposed nearly $3 trillion a year in new taxes on businesses and
high-earners, largely focused on billionaires but sometimes hitting Americans who earn
$250,000 and above per year. The taxes would fund wide-reaching new government spending on
health care, education, and family benefits like universal child care and paid parental
leave.
Last month, Ms. Warren wrote on Twitter that education, child care and student loan relief
programs funded by her tax on wealthy Americans would "grow the economy." In a separate post,
she said student debt relief would "supercharge" growth.
The last batch of economists to disrupt a political party's consensus position were
conservative -- the so-called supply-siders who built influence in the late 1970s and gained
power in the Reagan administration. Previous Republican presidents had focused on keeping the
budget deficit low, which constrained their ability to cut taxes if they did not also cut
government spending. Supply-siders contended that well-targeted tax cuts could generate big
economic growth even without spending cuts. ...
Ms. Warren is making the case that the economy could benefit if money is redistributed from
the rich and corporations to uses that she and other liberals say would be more productive.
Their argument combines hard data showing that high levels of inequality and wealth
concentration weigh down economic growth with a belief that well-targeted government spending
can encourage more Americans to work, invest and build skills that would make them more
productive.
They also cite evidence that transferring money to poor and middle-class individuals would
increase consumer spending because they spend a larger share of their incomes than wealthy
Americans, who tend to save and invest.
"The economy has changed, our understanding of it has changed, and we understand the
constricting effects of inequality" on growth, said Heather Boushey, the president of the
Washington Center for Equitable Growth, a think tank focused on inequality.
Inequality has widened significantly in America over the last several decades. The
Congressional Budget Office estimates that the incomes of the top 1 percent of Americans more
than tripled from 1979 to 2016, before taxes and government transfer payments are taken into
account. For the middle class, incomes grew 33 percent. More than a decade after the
recession, wage growth for the middle class continues to run well behind previous times of
economic expansion, like the late 1990s.
Research by the economist Emmanuel Saez and colleagues shows that the last time such a
small sliver of Americans controlled such a large share of the nation's income and wealth was
in the late 1920s, just before a stock market crash set off the Great Depression. World Bank
researchers have warned that high levels of inequality are stifling growth in South Africa,
which has the globe's worst measured inequality.
"We have an economy that isn't delivering like it used to," said Ms. Boushey, who advised
Hillary Clinton's 2016 Democratic presidential campaign. "That's leading people to say let's
re-examine the evidence."
The contention that tax and spending increases can lift economic growth is not the only
challenge to traditional orthodoxy brewing in liberal economic circles. Some Democrats have
also embraced modern monetary theory, which reframes classic thinking that discourages large
budget deficits as a drag on growth. Its supporters, including Representative Alexandria
Ocasio-Cortez of New York and the economist Stephanie Kelton, an adviser to Senator Bernie
Sanders of Vermont, argue that the United States government should be spending much more on
programs to fight inequality, like a federal job guarantee, without imposing new taxes.
Some of the inequality-focused economists say they are hoping to build new economic models
to predict the effects of their policies, though they acknowledge few of those models exist
yet. Instead, they rely on evidence about the likely effects of individual programs, added
together.
Many economists who study tax policy contend that Ms. Warren's plans -- and other large
tax-and-spend proposals from Democratic candidates this year -- would hurt the economy, just
as classic economic models suggest.
"Some elements of the large increase in government spending on health and education
proposed by Senator Warren would promote economic growth" through channels like improved
education, said Alan Auerbach, an economics professor at the University of California,
Berkeley, who has written some of the most influential research in the profession on the
relationship between tax rates and growth.
But, he said, "I am very skeptical that these growth effects would offset the negative
effects on growth of the higher taxes, particularly given that the spending increases are not
specifically targeted toward enhancing growth."
Ms. Warren disagrees. In the latest Democratic debate, she said the spending programs
funded by her wealth tax would be "transformative" for workers. Those plans would raise
wages, make college tuition-free and relieve graduates of student debt, she said, adding, "We
can invest in an entire generation's future."
An emerging group of liberal economists say taxes on high-earners could spur growth even
if the government did nothing with the revenue because the concentration of income and wealth
is dampening consumer spending.
"We are experiencing a revolution right now in macroeconomics, particularly in the policy
space," said Mark Paul, an economist who is a fellow at the liberal Roosevelt Institute in
Washington. "We can think of a wealth tax as welfare-enhancing, in and of itself, simply by
constraining the power of the very wealthy" to influence public policy and distort markets to
their advantage.
Taken together, Ms. Warren's proposals would transform the role of federal taxation. If
every tax increase she has proposed in the campaign passed and raised as much revenue as her
advisers predict -- a contingency hotly debated among even liberal economists -- total
federal tax revenue would grow more than 50 percent.
The United States would leap from one of the lowest-taxed rich nations to one of the
highest. It would collect more taxes as a share of the economy than Norway, and only slightly
less than Italy.
Mr. Sanders's plan envisions a similarly large increase in tax levels. Former Vice
President Joseph R. Biden Jr.'s proposals are much smaller in scale: He would raise taxes on
the wealthy and corporations by $3.4 trillion over a decade, in order to fund increased
spending on health care, higher education, infrastructure and carbon emissions reduction.
If Ms. Warren's tax program is enacted, said Gabriel Zucman, an economist at Berkeley who
is an architect of her wealth tax proposal, "in my view, the most likely effect is a small
positive effect on growth, depending on how the revenues are used."
Another economist who has worked with the Warren campaign to analyze its proposals, Mark
Zandi of Moody's, said he would expect her plans to be "largely a wash on long-term economic
growth."
Researchers at the Levy Economics Institute of Bard College projected this summer that Ms.
Warren's wealth tax and spending policies would generate a 1.7 percent increase in the size
of the economy. A preliminary study of a wealth tax like Ms. Warren's proposal, by the Penn
Wharton Budget Model, found that it would reduce the size of the economy by a similar 1.7
percent. The model uses the sort of classic methodology that liberals are now rebelling
against and did not evaluate Ms. Warren's spending proposals.
Historical experience offers few parallels for assessing the economic effects of a
taxation-and-spending program on the scale of Ms. Warren's ambitions. A 2002 study of wealth
taxes in rich countries found that those taxes, most of which have since been abandoned,
reduced economic growth slightly on an annual basis.
Conservative economists roundly disagree that large tax increases can spur faster growth,
even those who say government spending on paid leave and child care may get more Americans
into the labor force. They say a wealth tax on the scale of Ms. Warren's proposal would
greatly reduce savings and investment by the rich.
"What a wealth tax does is, it directly taxes savings," said Aparna Mathur, an economist
at the conservative American Enterprise Institute who favors a narrow paid leave program and
whose research finds benefits from reducing tax rates on business and investment. "If you're
taxing savings, you're implicitly taxing investment. So how can that possibly be
pro-growth?"
The supply-side economists' plans were similarly denounced -- George Bush called them
"voodoo economic policies" while running for president in 1980 -- but in time dominated
Republican proposals.
Some members of the new liberal revolt against tax orthodoxy welcome the comparison to the
supply-side uprising.
"While I think that the supply-siders were wrong, and were always wrong, they were
reacting to very real economic problems in the 1970s," said Michael Linden, the executive
director of the Groundwork Collaborative, a liberal policy and advocacy group. "There was
something really wrong with the economy at the time. I think there is now."
"... The existence of the bubble and the fact that it was driving the economy could both be easily determined from regularly published government data, yet the vast majority of economists were surprised when the bubble burst and it gave us the Great Recession. This history should lead us to ask what other simple things economists are missing. ..."
Simple Economics that Most Economists Don't Know
By Dean Baker
Economists are continually developing new statistical techniques, at least some of which
are useful for analyzing data in ways that allow us to learn new things about the world.
While developing these new techniques can often be complicated, there are many simple things
about the world that economists tend to overlook.
The most important example here is the housing bubble in the last decade. It didn't
require any complicated statistical techniques to recognize that house prices had sharply
diverged from their long-term pattern, with no plausible explanation in the fundamentals of
the housing market.
It also didn't require sophisticated statistical analysis to see the housing market was
driving the economy. At its peak in 2005 residential construction accounted for 6.8 percent
of GDP. This compares to a long-run average that is close to 4.0 percent. Consumption was
also booming, as people spent based on the bubble generated equity in their homes, pushing
the savings rate to a record low.
The existence of the bubble and the fact that it was driving the economy could both be
easily determined from regularly published government data, yet the vast majority of
economists were surprised when the bubble burst and it gave us the Great Recession. This
history should lead us to ask what other simple things economists are missing.
For this holiday season, I will give three big items that are apparently too simple for
economists to understand.
1) Profit shares have not increased much -- While there has been some redistribution in
before-tax income shares from labor to capital, it at most explains a small portion of the
upward redistribution of the last four decades. Furthermore, shares have been shifting back
towards labor in the last four years.
2) Returns to shareholders have been low by historical standards -- It is often asserted
that is an era of shareholder capitalism in which companies are being run to maximize returns
to shareholders. In fact, returns to shareholders have been considerably lower on average
than they were in the long Golden Age from 1947 to 1973.
3) Patent and copyright rents are equivalent to government debt as a future burden –
The burden that we are placing on our children through the debt of the government is a
frequent theme in economic reporting. However, we impose a far larger burden with
government-granted patent and copyright monopolies, although this literally never gets any
attention in the media.
To be clear, none of these points are contestable. All three can all be shown with widely
available data and/or basic economic logic. The fact that they are not widely recognized by
people in policy debates reflects the laziness of economists and people who write about
economic policy.
Profit Shares
It is common to see discussions where it is assumed that there has been a large shift from
wages to profits, and then a lot of head-scratching about why this occurred. In fact, the
shift from wages to profits has been relatively modest and all of it occurred after 2000,
after the bulk of the upward redistribution of income had already taken place.
If we just compare end points, the labor share of net domestic product was 64.0 percent in
2019, a reduction of 1.6 percentage points from its 65.6 percent share in 1979, before the
upward redistribution began. If, as a counter-factual, we assume that the labor share was
still at its 1979 level it would mean that wages would be 2.5 percent higher than they are
now. That is not a trivial effect, but it only explains a relatively small portion of the
upward redistribution over the last four decades.
It is also worth noting the timing of this shift in shares. There was no change in shares
from 1979 to 2000, the point at which most of the upward redistribution to the richest one
percent had already taken place. The shift begins in the recovery from the 2001
recession.
This was the period of the housing bubble. The reason why this matters is that banks and
other financial institutions were recording large profits on the issuance of mortgages that
subsequently went bad, leading to large losses in the years 2008-09. This means that a
substantial portion of the profits that were being booked in the years prior to the Great
Recession were not real profits.
It would be as though companies reported profits based on huge sales to a country that
didn't exist. Such reporting would make profits look good when the sales were being booked,
but then would produce large losses when the payments for the sales did not materialize,
since the buyer did not exist. It's not clear that when the financial industry books phony
profits it means there was a redistribution from labor to capital.[1]
There clearly was a redistribution from labor to capital in the weak labor market
following the Great Recession. Workers did not have enough bargaining power to capture any of
the gains from productivity growth in those years. That has been partially reversed in the
last four years as the labor share of net domestic income has risen by 2.4 percentage
points.[2] This still leaves some room for further increases to make up for the drop in labor
share from the Great Recession, but it does look as though the labor market is operating as
we would expect.
Returns to Shareholders Lag in the Period of Shareholder Capitalism
It is common for people writing on economics, including economists, to say that companies
have been focused on returns to shareholders in the last four decades in a way that was not
previously true. The biggest problem with this story is that returns to shareholders have
actually been relatively low in the last two decades.
If we take the average real rate of return over the last two decades, it has been 3.9
percent. That compares to rates of more than 8.0 percent in the fifties and sixties. Even
this 3.9 percent return required a big helping hand from the government in the form a
reduction in the corporate income tax rate from 35 percent to 21 percent.
The figure for the last two decades is somewhat distorted by the fact that we were
reaching the peak of the stock bubble in the late 1990s, but the story is little changed if
we adjust for this fact. If we take the average real return from July of 1997, when the price
to earnings ratio was roughly the same as it is now, it is still just 5.7 percent, well below
the Golden Age average when companies were supposedly not being run to maximize shareholder
value.
It is striking that this drop in stock returns is so little noticed and basically does not
feature at all in discussions of the economy. Back in the late 1990s, it was nearly
universally accepted in public debates that stocks would provide a 7.0 percent real return on
average in public debates.
This was most evident in debates on Social Security, where both conservatives and liberals
assumed that the stock market would provide 7.0 percent real returns. Conservatives, like
Martin Feldstein, made this assumption as part of their privatization plans. Liberal
economists made the same assumption in plans put forward by the Clinton administration and
others to shore up the Social Security trust fund by putting a portion of it in the stock
market. The Congressional Budget Office even adopted the 7.0 percent real stock returns
assumption in its analysis of various Social Security reform proposals that called for
putting funds in the stock market.
Given the past history on stock returns and the widely held view that returns would
continue to average close to 7.0 percent over the long-term, the actual performance of stock
returns over the last two decades looks pretty disappointing from shareholders' perspective.
It certainly does not look like corporations are being run for their benefit, or if so, top
executives are doing a poor job.
One of the obvious factors depressing returns has been the extraordinary run up in price
to earnings ratios. A high price to earnings ratio (PE) effectively means that shareholders
have to pay a lot of money for a dollar in corporate profits. When PEs were lower, in the
1950s and 1960s, dividends yields were in the range of 3.0 -5.0 percent. In the recent years
they have been hovering near 2.0 percent. When the PE is over 30, as is now the case, paying
out a dividend of even 3.0 percent would essentially mean paying out all the company's
profits as dividends. Clearly that cannot happen, or at least not on a sustained basis.
While shareholders have not done well by historical standards in recent decades, CEO pay
has soared, with the ratio of the pay of CEOs to ordinary workers going from 20 or 30 to 1 in
the 1960s and 1970s, to 200 or 300 to 1 at present. There is a story that could reconcile
soaring CEO pay with historically low stock returns.
Corporations have increasingly turned to share buybacks as an alternative to dividends for
paying out money to shareholders. The process of buying back shares would drive up share
prices. Part of this is almost definitional, with fewer shares outstanding, the price per
share should go up. If buybacks push up share prices enough to raise the price to earnings
ratio, then in principle other investors should sell stock to bring the PE back to its prior
level. But if this doesn't happen, then buybacks could increase PEs.
That would of course imply huge irrationality in the stock market, but anyone who lived
through the 1990s stock bubble and the housing bubble in the last decade knows that large
investors can be exceedingly irrational for long periods of time. Anyhow, if share buybacks
do raise PEs there would be a clear story whereby CEOs could drive up their own pay, which
typically is largely in stock options, to the detriment of future shareholders, which would
explain both soaring CEO pay and declining returns to shareholders.
Whether this story of share buybacks raising PE is accurate would require some serious
research (I'd welcome references, if anyone has them), but what is beyond dispute is that the
last two decades have provided shareholders with relatively low returns. That seems hard to
reconcile with the often repeated story about this being a period of shareholder
capitalism.
Patents and Copyright Monopolies Are Implicit Government Debt
There is a whole industry dedicated to highlighting the size and growth of the government
debt, largely funded by the late private equity billionaire Peter Peterson. The leading news
outlets feel a need to regularly turn to the Peterson funded outfits to give us updates on
the size of the debt.
When presenting the horror story of a $20 trillion debt and the burden it will impose on
our children, there is never any mention of the burden created by patent and copyright
monopolies. This is an inexcusable inconsistency.
Patent and copyright monopolies are mechanisms that the government uses to pay for
services that are alternatives to direct spending. For example, instead of granting drug
companies patent monopolies and software developers copyright monopolies, the government
could just pay directly for the research and creative work that was the basis for these
monopolies. There are arguments as to why these monopolies might be better mechanisms than
direct funding, but these arguments don't change the fact they are mechanisms the government
uses for paying for services.
While we keep careful accounting of the direct spending, we pretend the implicit spending
by granting patent and copyright monopolies does not exist. This makes zero sense, especially
given the size of the rents being created by these monopolies.
In the case of prescription drugs alone, we will spend close to $400 billion (1.8 percent
of GDP) this year above the free market price, due to patent protections and other monopolies
granted by the federal government. This is considerably more than the $330 billion in
interest that the Congressional Budget Office projected we would spend on the $16.6 trillion
in publicly held debt in 2019.[3]
And this figure is just a fraction of the total rents from patent and copyright
monopolies, which would include most of the payments for medical equipment, computer software
and hardware, and recorded music and video material. Since these payments dwarf the size of
interest payments on the debt, it is difficult to understand how anyone concerned about the
burdens the government was creating could ignore patents and copyrights, while harping on
interest on the debt.
As I have often argued there are good reasons, especially in the case of prescription
drugs, for thinking that direct funding would be a more efficient mechanism than patent
monopolies. In the case of prescription drugs, direct funding would mean that all findings
would be immediately available to all researchers worldwide. If drugs were sold at free
market prices, it would no longer be a struggle to find ways to pay for them. And, we would
take away the incentive to push drugs in contexts where they are not appropriate, as happened
with the opioid crisis. (See "Rigged: How Globalization and the Rules of the Modern Economy
Were Structured to Make the Rich Richer," for a fuller discussion - it's free. * )
While the relative merits of patent/copyright monopolies and direct funding can be
debated, the logical point, that these monopolies are an implicit form of government debt,
cannot be. It shows the incredibly low quality of economic debate that this fact is not
widely recognized.
The Prospect for Simple Facts and Logic Entering Economic Debate in the Next Decade
The three issues noted here are already pretty huge in terms of our understanding of the
economy. The people who write in a wide range of areas should be aware of them, but with few
exceptions, they are not.
Unfortunately, that situation is not likely to change any time soon for a simple economic
reason, there is no incentive for people who write on economic issues to give these points
serious attention. They can continue to draw paychecks and get grants for doing what they are
doing. Why should they spend time addressing facts and logic that require they think
differently about the world?
As has been noted many times, there is no real consequence to economists and people
writing about the economy for being wrong. A custodian who doesn't clean the toilet gets
fired, but an economist who missed the housing bubble whose collapse led to the Great
Recession gets the "who could have known?" amnesty.
Given this structure of incentives, we should assume that economists and others who write
on economics will continue to ignore some of the most basic facts about the economy. That is
what economics tells us.
[1] Since income is supposed to be matched by output in the GDP accounts, the
corresponding phony entry on the output side would be the loans that subsequently went bad.
These loans were counted as a service when they were issued. Arguably, this was not accurate
accounting.
[2] This rise in labor share appears in the net domestic income calculation, but not in
the net domestic product figure. The reason is that there has been a sharp drop in the size
of the statistical discrepancy over the last four years, as output side GDP now exceeds the
income side measure. It is common to assume that the true figure lies somewhere in the
middle, which would mean the increase in labor share is likely less the 2.4 percentage points
calculated on the income side.
[3] This subtracts out the $50 billion in interest payments remitted from the Federal
Reserve Board.
This simple conception generalized deans
Bean hunt for rents
How might one do this
Well first make up a rate of interest
And take a system wide wage snap shot
From mines oceans forests and fields
Thru factories warehouses ultilities
boats and trains
To barber shops malt shops and convenience stores
Mark up the wage cells of your matrix
By your invented rate of interest
Now compare this vector to the 've tor of actual prices
You get a vector of rents aka profits of enterprise and residuals
An unprecedented frenzy of debt sales around the world is threatening to cool this year's
hot returns on corporate bonds.
Companies have sold a record $2.43 trillion so far this year across currencies, surpassing
previous full-year records. Investors rushed to snap up all this debt because they were
desperate for yield as central banks cut rates. That has pushed up valuations.
Now, some troubling signs for the direction of those valuations are converging. Recent
data suggest that the worst may be over for the global economy, which means many central
banks could have less reason next year to guide down borrowing costs. That will all make it
harder to top the double-digit returns that some investors scored on corporate bonds this
year.
---
Wealthy made some real money betting on our government bailouts, in Europe an the US. Now the
yields are gone, where to? China, the only rational central banker left means, park your
money in China.
What this means now is that things will only get more complicated for Beijing from here on
out. Chinese President Xi Jinping bet on letting the people of Hong Kong decide, and they
did. Only it was against him.
We'll return to the political situation in Hong Kong momentarily, but before we do,
another major development, this time on the business front.
On Tuesday, Alibaba executed a slam-dunk secondary offering in Hong Kong, raising $12.9
billion. That easily surpassed Uber's $8.1 billion IPO in May, making it the biggest public
offering of 2019. For those who were predicting the death of Hong Kong -- and they've been
doing that for decades, (and Kyle Bass and others are still at it) -- that again appears to
be premature.
---
Clueless reporting. Xi came out of this looking great. He has one country three systems, he
now has a sound central banking, investment is flowing in, not out. They are immune from
sanctions, and even the trade tariffs are expanding Chinese influence in Asia, Iran, Russia
and China can look forward to a new global banking system, absent the dollar. Belt and
suspenders is moving forward.
I like it, I have no priors, I can point this fact without contradiction. Go Xi.
The Programme for International Student Assessment (PISA) is a triennial survey of
15-year-old students that assesses the extent to which they have acquired the key knowledge
and skills essential for full participation in society. The assessment focuses on proficiency
in reading, mathematics, science and an innovative domain (in 2018, the innovative domain was
global competence), and on students' well-being.
Beijing, Shanghai, Jiangsu and Zhejiang (China)
What 15-year-old students in B-S-J-Z (China) know and can do
Figure 1. Snapshot of performance in reading, mathematics and science
[Graph]
• Students in B-S-J-Z (China) scored higher than the Organisation for Economic
Co-operation and Development average in reading, mathematics and science.
• Compared to the OECD average, a larger proportion of students in B-S-J-Z (China)
performed at the highest levels of proficiency (Level 5 or 6) in at least one subject; at the
same time a larger proportion of students achieved a minimum level of proficiency (Level 2 or
higher) in at least one subject.
What students know and can do in reading
• In B-S-J-Z (China), 95% of students attained at least Level 2 proficiency in
reading, significantly more than on average across OECD countries (OECD average: 77%). At a
minimum, these students can identify the main idea in a text of moderate length, find
information based on explicit, though sometimes complex criteria, and can reflect on the
purpose and form of texts when explicitly directed to do so. Over 85% of students in Beijing,
Shanghai, Jiangsu and Zhejiang (China), Canada, Estonia, Finland, Hong Kong (China), Ireland,
Macao (China), Poland and Singapore performed at this level or above.
• Some 22% of students in B-S-J-Z (China) were top performers in reading, meaning
that they attained Level 5 or 6 in the PISA reading test (OECD average: 9%). At these levels,
students can comprehend lengthy texts, deal with concepts that are abstract or
counterintuitive, and establish distinctions between fact and opinion, based on implicit cues
pertaining to the content or source of the information. In 20 education systems, including
those of 15 OECD countries, more than 10% of 15-year-old students were top performers.
What students know and can do in mathematics
• Some 98% of students in B-S-J-Z (China) attained Level 2 or higher in mathematics
(OECD average: 76%). At a minimum, these students can interpret and recognise, without direct
instructions, how a (simple) situation can be represented mathematically (e.g. comparing the
total distance across two alternative routes, or converting prices into a different
currency). The share of 15-year-old students who attained minimum levels of proficiency in
mathematics (Level 2 or higher) varied widely – from 98% in Beijing, Shanghai, Jiangsu
and Zhejiang (China) to 2% in Zambia, which participated in the PISA for Development
assessment in 2017. On average across OECD countries, 76% of students attained at least Level
2 proficiency in mathematics.
• In B-S-J-Z (China), 44% of students scored at Level 5 or higher in mathematics
(OECD average: 11%). Six Asian countries and economies had the largest shares of students who
did so: Beijing, Shanghai, Jiangsu and Zhejiang (China) (44%), Singapore (37%), Hong Kong
(China) (29%), Macao (China) (28%), Chinese Taipei (23%) and Korea (21%). These students can
model complex situations mathematically, and can select, compare and evaluate appropriate
problem-solving strategies for dealing with them.
What students know and can do in science
• Some 98% of students in B-S-J-Z (China) attained Level 2 or higher in science
significantly more than on average across OECD countries (OECD average: 78%). At a minimum,
these students can recognise the correct explanation for familiar scientific phenomena and
can use such knowledge to identify, in simple cases, whether a conclusion is valid based on
the data provided.
• In B-S-J-Z (China), 32% of students were top performers in science, meaning that
they were proficient at Level 5 or 6 (OECD average: 7%). These students can creatively and
autonomously apply their knowledge of and about science to a wide variety of situations,
including unfamiliar ones.
"... There is no longer any doubt. The people who are not elected and don't represent the American people are lunatics. Look at the hubris on display here with Stanford law professor Pamela Karlan. ..."
"... With these low grade sub-standard people like Karlan it really is time to drain the swamp but make certain the drain isn't plugged. Keep in mind too that this impeachment movement against President Trump is being led by Jewish participants including Kaplan who is Jewish. ..."
"... This would make sense considering American Jewish oligarchs are working with Ukrainian Jewish oligarchs. It is pathological as to just how much Jews hate Russia. ..."
There is no longer any doubt. The people who are not elected and don't
represent the American people are lunatics. Look at the hubris on display here with Stanford
law professor Pamela Karlan.
Is it any wonder that today in America
universitystudents are confused and compromised . It is probably true to a certain extent that
what Kaplan is saying in public is probably to degrade President Trump on Ukraine, however, the
Russians are paying very close attention.
These are the kind of "low-intellect dinosaurs" behind U.S. foreign policy calling
themselves "professors" who are responsible for "educating" American youth.
With these low grade sub-standard people like Karlan it really is time to drain the swamp
but make certain the drain isn't plugged. Keep in mind too that this impeachment movement
against President Trump is being led
by Jewish participants including Kaplan who is Jewish.
This would make sense considering American Jewish oligarchs are working with Ukrainian
Jewish oligarchs. It is pathological as to just how much Jews hate Russia.
As the Chicago revolution took hold, Bork's views crept into the judiciary. Eventually in a
fit of activism, the courts did away with the prohibition on predatory pricing. In its 1993
decision in Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation , the United
States Supreme Court completely re-imagined the Robinson-Patman Act.
The case originally involved the tobacco oligopoly controlled by six firms. Liggett had
introduced a cheap generic cigarette and gained market share. When Brown & Williamson saw
that generics were undercutting their shares, it undercut Liggett and sold cigarettes at a
loss. Liggett sued, alleging that the predatory behavior was designed to pressure it to raise
prices on its generics, thus enabling Brown & Williamson to maintain high profits on
branded cigarettes.
In its decision, the Court held that in order for there to be a violation of the Clayton Act
and the Robinson-Patman Act, a plaintiff must show not only that the alleged predator priced
the product below the cost of its production but also that the predator would be likely to
recoup the losses in the future. The recoupment test dealt a death blow to predatory pricing
lawsuits because it is, of course, impossible to prove a future event.
The Supreme Court parroted Bork, noting that "predatory pricing
schemes are rarely tried, and even more rarely successful ." The Court also argued that it was
best not to pursue predatory pricing cases because doing so would "chill the very conduct the
antitrust laws are designed to protect."
The result has been severe. After 1993, no plaintiff alleging predatory pricing has
prevailed at the federal level, and most cases are thrown out in summary judgement. The DOJ and
FTC have completely ignored the law and ceased enforcing it.
Through judicial activism and executive neglect, the laws regarding antitrust and predatory
pricing have become odd relics, like those on greased pigs and cannibalism.
Predatory pricing is symptomatic of the broader problems when it comes to antitrust. Today,
except in extreme circumstances such as outright monopoly, courts are unlikely to block mergers
over an increase in market concentration. The Supreme Court has now tilted so far the other way
that it prefers to allow too much concentration rather than too little. It made this clear in
its Verizon Communications Inc. v. Law Offices of Curtis V. Trinko LLP decision, where
it stated its preference for minimizing incorrect merger challenges rather than preventing
excessive concentration.
In the Trinko case, for example, Justice Scalia suggested that those who enforce
antitrust laws ought to be deferential to firms with monopoly power, which are "an important
element of a free market system."
Scalia continued: "Against the slight benefits of antitrust intervention here, we must weigh
a realistic assessment of its costs ." The opportunity to acquire monopoly power and charge
monopoly prices is "what attracts 'business acumen' in the first place," he said, and "induces
risk taking that produces innovation and economic growth." He wrote that the "mere possession
of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful;
it is an important element of the free-market system."
The result of all this has been an increase of monopolies. Professor John Kwoka reviewed
decades of merger cases and concluded that "recent merger control has not been sufficiently
aggressive in challenging mergers." The overall effect has been "approval of significantly more
mergers that prove to be anticompetitive."
The Sherman Act and the Robinson-Patman Act may be deeply misguided; perhaps they should
even be repealed. But they haven't been. Passing new legislation is the proper way to change
laws one disagrees with. Getting rid of them in practice via judicial activism or an an
unwilling executive is not democratic.
The death of antitrust and predatory pricing reflects not only a failure of jurisprudence
but of economics. For all the claims of up-to-the-minute economic sophistication that activist
judges have used in the field of antitrust, the scholarship on predatory pricing is wildly out
of date. Brooke made Robinson-Patman irrelevant by citing "modern" economic
scholarship, yet the research the Supreme Court relied on goes back to studies by John McGee
and Roland Koller, published in 1958 and 1969 respectively.
Predatory pricing has only become more rational in a world where winner-take-all platforms
are happy to sustain short-term losses for the sake of long-term market share gains. What they
lose on one side with free shipping or below cost products, they make up for in other parts of
their business.
The rationality of predatory pricing is not some new economic finding. Almost 20 years ago,
Patrick
Bolton , a professor at Columbia Business School, wrote that "several sophisticated
empirical case studies have confirmed the use of predatory pricing strategies. But the courts
have failed to incorporate the modern writing into judicial decisions, relying instead on
earlier theory no longer generally accepted."
According to Bork, predatory pricing didn't work in theory, but does it work in practice?
Antitrust experts remember the Brooke case, but none seem to recall what actually
happened to the companies involved in the lawsuit.
After the Supreme Court decision left it without any legal remedy, Liggett succumbed to
pressure from Brown & Williamson and raised its prices. The entire industry raised prices
too. In the end, Liggett was not able to attract enough market share and ended up selling most
of its brands to Phillip Morris a few years later. Ever since, the tobacco oligopoly has raised
prices in lockstep twice a year with no competition. No company is foolish enough to lower
prices for fear of predatory pricing.
The losers from the judicial activism of Brooke are consumers and the rule of law.
The winners are the oligopolies and monopolies who protect their markets.
When it comes to enforcing antitrust, it's worth remembering the words of Robert Bork. As he
wrote in 1971 in his seminal piece " Neutral
Principles and Some First Amendment Problems ," "If the judiciary really is supreme, able
to rule when and as it sees fit, the society is not democratic."
The Supremes have been the Federal legislature since 1803. Recommending restraint is the
same thing as ordering one party in a legislature to surrender to the opposite party
regardless of majorities.
Monopolization is the core of Free Market economics. Free, literally, means free to become
a monopoly, free to practice vulture capitalism, free to use superior capitalization to
destroy competition, free to move your factory to China.
Free Market is a buzz phrase among bankers and other well-to-do to increase their income
at your expense instead of through superior production, design, and advertising methods. If
you want to know why we live in such a dysfunctional economy, its because we've abandoned
competitive capitalism for a free market economy.
Adam Smith (yes, that Adam Smith) noted in Wealth of Nations that if you put
two competing businessmen in a room together, not only do they get along just fine, their
conversation quickly turns to the subject of how they can work work together to rig markets
and screw the consumer for moar profitt.
Adam Smith was a much more interesting and sophisticated thinker than the B-school
Cliffs Notes version.
I think we could us more purist views of capitalism in conversations about capitalism. The
kinds of behaviors engaged designed to put others out of business described in the article
is not exemplary of capitalism.
The purpose of capitalism is not explicated with models of destroying competition. And
it certainly does not have mechanisms in which the government acts as an arm of business.
The notion that the business of "America" (the US) is business is misleading. Because when
it comes the government of the US her role is to ensure fair play. And power dynamics used
to destroy the ability of another to tap into the available market share is not a
capitalist principle. When one reads about the level and kinds of antics that corporate
boards and CEO's play to damage competition, to include the use of campaign funds to "buy"
or influence unique favors at cost to consumers - then we are talking about kind of faux
"law of the jungle". Bailing out business but not the defrauded customers of those same
businesses -- mercantilism not capitalism.
And it is these types of behaviors guised as capitalism, that fuels liberal demands for
a system of governance that is more akin to communism and socialism. They note the abuses,
but apply the wrong remedy.
I would agree that predatory pricing actually undercuts better pricing, improved
products or innovation (product creativity).
Conservatives are outraged, still, that Democrats refused to confirm Bork to the Supreme
Court.
Never mind the fact the Democrats were fully within their rights not to confirm, advise
and consent does not mean rubber stamp, Bork was the guy who actually carried out Nixon's
Saturday Night Massacre. Why would conservatives want a corrupt and unethical person like
this in the Supreme Court in the first place?
Conservatives' outraged is very ironic considering Reagan still got to nominate another
candidate, which the Dems confirmed. Meanwhile in a completely unprecedented and vindictive
move, Republicans denied a Democratic president outright his right to a Supreme Court
appointment. There is no comparison between these two episodes.
I have long thought that paul singer is representative of the worst people in the world
(argentina wtf)
and I'm glad carlson put his face up there so many times for his victims to see, in case he
ever ventures out of mordor undisguised. For all the money he has, a truly worthless pos, as
the closing comment made so clear. Good for Carlson, though, almost seems like actual
journalism. Kudos.
Glad to see someone in the MSM point out the obvious .Carlson called out Singer, but in
doing so he also called out the Republican Party, specifically Sen. Ben Sasse from Nebraska.
It will be interesting to see if Sasse is reelected.
Nebraskans – R and D both – should toss Sasse to the curb. He's angered
regular bat-poo crazy Republicans by his "never Trump" blather, then angered Nebraska
Democrats (both of us) by voting Trump/GOP well over 90 percent of the time.
Add to this his folksy BS appearances in the media and his execrable books, and he's a
classic empty suit. Closer to a straight Republican Mayor Pete than any thing else –
over-credentialed, over-ambitious and under performing.
Our Nebraska Democratic Party problem is two-fold: incredibly thin bench for decent
candidates and preponderance of Clinton/Obama/HRC leftovers running the state party. Will be
knocking on doors for Bernie come 2020 but state races are iffy at best.
Tucker has good sense. Perhaps Paul Singer is probably retiring from vultury. He's old and
it's a nasty fight. Singer is at the end of a 30 year stint of dispossessing other people.
Being vicious really isn't enough to keep the federal government at bay. Nor are his bribes.
There has been an unspoken policy of dispossessing poor and middle class people. Why? Is the
United States actually looking at a specific future? That wouldn't align with the free market
– tsk tsk. Or would it? Live free, die free. Somebody needs to define the word "free".
Did TPTB decide to deindustrialize this country that long ago? That's when they attacked the
unions. And the consensus might have been, "Go for it; get it while you can." So Paul Singer
did just that, along with other creepy people like Mitt Romney. Because once the country has
been hosed out by these guys we won't be pushing the old capitalist economy at all. We will
be pushing a globally connected, sustainable economy. Paul Singer is just a dung beetle. And
our government didn't want to discuss it because they would have had to create a safety net.
If we despise Singer, we must also despise Congress.
If we despise Singer, we must also despise Congress. -Susan the Other
Agreed. I think you can argue Congress (and the Executive Branch) have done more to help
the Chinese middle class than the American middle class over the last 30 years. Co-locating
our industrial base with the CCP on communist soil should be looked upon as the most radical
policy in our history but is not. Imagine if at the height of the Cold War we had told
Kruschev hey..how about you make all the stuff we need and we'll pay you $20 or $30T in trade
surplus over a number of years in hard currency which you can then parlay into geopolitical
power in Africa, South America, the ME and else where. What would the America of the fifties
think of this policy?
>Because once the country has been hosed out by these guys we won't be pushing the old
capitalist economy at all. We will be pushing a globally connected, sustainable economy.
Tucker Carlson Tears into Vulture Capitalist Paul Singer for Strip Mining American Towns
Posted on
December 5, 2019
by
Yves Smith
In a bit of synchronicity, Lambert gave a mini-speech tonight that dovetails with an important Tucker
Carlson segment about how hedge funds are destroying flyover. As UserFriendly lamented, "It is beyond sad
that Tucker Carlson is doing better journalism than just about anywhere else." That goes double given that
Carlson has only short segments and TV isn't well suited to complicated arguments.
Lambert fondly recalled the America he grew up in in Indiana, before his parents moved to Maine, where
most people were comfortable or at least not in perilous shape, where blue collar labor, like working in a
factory or repairing cars, was viewed with respect, and where cities and towns were economic and social
communities, with their own businesses and local notables, and national chain operations were few. Yes,
there was an underbelly to this era of broadly shared economic prosperity, such as gays needing to be
closeted and women having to get married if they wanted a decent lifestyle.
I'm not doing his remarks justice, but among other things, the greater sense of stability contributed to
more people being able to be legitimately optimistic. If you found a decent job, you weren't exposed to
MBA-induced downsizings or merger-induced closures. Even in the transitional 1970s, Lambert got his first
job in a mill! He liked his work and was able to support himself, rent an apartment, and enjoy some modest
luxuries. Contrast that with the economic status of a Walmart clerk or an Amazon warehouse worker. And even
now, the small towns that remain cling to activities that bring people together, as Lambert highlighted in
Water Cooler earlier this week:
Please watch this clip in full. Carlson begins with an unvarnished description of the wreckage that
America's heartlands have become as financial predators have sucked local businesses dry, leaving shrunken
communities, poverty and drug addiction in their wake.
Readers may wonder why Carlson singles out hedge funds rather than private equity, but he has
courageously singled out one of the biggest political forces in DC, the notorious vulture capitalist Paul
Singer, best known for his pitched battles with Peru and Argentina after he bought their debt at
knocked-down prices. Carlson describes some US examples from his
rapacious
playbook, zeroing on Delphi, where Singer got crisis bailout money and then shuttered most US
operation, and Cabela's, where a Singer-pressured takeover wrecked one of the few remaining prosperous
American small towns, Sidney, Nebraska. Not only are former employees still afraid of Singer, but even
Carlson was warned against taking on the famously vindictive Singer.
Kev said; "It will also slit your throat tomorrow."
This, aggressive mergers and acquisitions, has been going on for a very long time and everybody
always says that but I have yet to see any wealthy person suffer more than a small loss of a point or
2.
The fact is thats where we are at with capitalism. Money MUST become more money. There are no
outside considerations not even human life.
We all talk about robots going rogue and killing off humanity. Well money is already doing that.
Sound of the Suburbs, your comment suggests that this is the way things are and that there is nothing
to do about it, but that is wrong. It's not inherent to markets or to nature. In fact, "it's not even
hard" because we have agreed to it as part of the social contract, and created policies that enable it.
We can reverse the calculation by changing the tax rules, accounting rules, and legal liability rules and
this calculation reverses. TLDR; vote Bernie.
Which "we" are you talking about? You assume an entity with agency, when there is no such thing.
How do YOU suggest "WE" rewrite the non-existent "social contract?" Or change the tax rules, the
accounting rules, the Delaware corporations law, the Federal Codes of Civil and Criminal Procedure,
the current contents of the Code of Federal Regulations, the United States Code and all the other
trappings of legitimacy that give "us" the looting we suffer and remove any access to 'agency" to
re-fix things? I hope Bernie wins/is allowed to win, but he would need the skills of a Machiavelli and
Richelieu and Bismarck to "drain the swamp" of all the horrible creatures and muck that swirls there.
Not to say it's not worth trying "our" mope-level damndest to make it happen.
That said – it doesn't seem to me that Cabelas was 'forced' to sell. Singer owned less than 12% of the
stock. Is he to blame for either managerial greed, or lack of cojones? I'm not praising Singer, just saying
ISTM that he had couldn't have succeeded there without the greed or cowardice of management. I could be
wrong.
Carlson said this behavior is banned in the UK, how does that work?
Tthis is standard operating procedure for takeovers and greenmail in the US. First, 11% is going to be
way way above average trading volumes. Second, unless management owns a lot of shares or has large blocks
in the hands of loyal friends, many investors will follow the money and align with a greenmailer.
When a hostile player is forced to announce that he has a stake >5% by the SEC's 13-D filing
requirement, managements start sweating bullets. "Activist" hedge funds regularly make tons of trouble
with 10% to 15% stakes. CalPERS was a very effective activist investor in its glory years (not even
hostile but pushing hard for governance changes) with much smaller stakes.
The New York Post, which is very strong on covering hedge funds, confirms Carlson's take. From a 2016
article:
Hedgie Paul Singer hit another bull's-eye with his Cabela's investment.
Singer's Elliott Management bought an 11 percent stake in the hunting supply chain last October and
pressed the Springfield, Mo., chain to pursue strategic alternatives -- including a sale.
On Monday, his suggestion was heeded as the 55-year-old company said it agreed to a $5.5 billion,
$65.50-per-share takeover offer from rival Bass Pro Shops.
For Singer, who purchased much of his Cabela's stake at between $36 and $40 a share, Monday's news
means that the fund gained roughly 72 percent on its investment.
The same story depicts Singer as able to exert pressure with even smaller interests:
The hedge fund had an 8.8 percent stake in the company and was expected to net $58 million in
profits, The Post reported.
Elliott, which in June announced a 4.7 stake in PulteGroup, named three board members to the
Atlanta-based homebuilding company.
Last Thursday, it readied a new target, taking an 8.1 percent stake in Mentor Graphics, a
Wilsonville, Ore.-based developer of electronic design automation software.
Since then, shares of the company have risen 6 percent, to $26.24.
Mentor represents a "classic" Elliott investment, a source close to the matter told The Post,
adding that it is a "perfect time" for the company to sell itself.
You have a gift for explaining these things to people with a lot of education but not in finance. I
was confused by this, too, until I read your comment.
"CalPERS was a very effective activist investor in its glory years (not even hostile but pushing
hard for governance changes) with much smaller stakes."
Does that mean they pulled the same parasitical stripping of companies to raise money to help pay
pensions?
But, since it represents public employees and their paymasters, the taxpayers, couldn't CALPERS be
forced to only effect deals that create the most employment, ideally in California, rather than
destroy it? i.e. a ban on job destroying deals.
That would be a long term investment in California, rather than a short term means to raise cash,
no?
Tucker Carlson has taken remarkably courageous positions on a number of issues, including Syria,
Ukraine, Russia, etc.
Matt Stoller tweets praise of Carlson's report on Singer:
"There is a real debate on the right.
@TuckerCarlson just guts billionaire Paul Singer over the destruction of a Nebraska town through
financial predation. And Carlson is merciless towards Senator @BenSasse for taking $$$ and remaining
silent."
I have noticed a considerable uptick in comments across a whole range of sites about things "going to
get biblical".
When the next downturn happens there seems to be every indication that it's going to be on an
unprecedented scale.
Traditionally that's always seem to be time to have a good war, you can get the country to focus on an
external common enemy, you can ramp up industrial production providing full employment and you can use
national security to clamp down on dissent. Nuclear weapons seems to have put paid to that idea unless
our leaders convince themselves that they can survive and flourish in their bunkers (while simultaneously
relieving themselves of a large surplus of global population)
The populations willing embrace of the security state through all our electronic devices will be a large
hurdle for revolutionary elements as well as the crushing of dissent via institutions like the FBI and
the mainstream media.
The French and the Russians succeeded in the past. I doubt if I will either live long enough to see it
(being old) or even less likely to live through it.
Biblical in the OT sense. In the NT going biblical was a sacrifice.
I'm not fond of the phrase as it is a euphemism for violence or war. Under that definition, the US,
through declared and undeclared wars, has been going biblical for most of my life.
In the Jimmy Dore show this is almost a running joke now: He shows a clip with Tucker Carlson, where
Tucker is doing what you would expect the "liberal" media to do, like going against the deep state,
criticizing regime change wars (a few times with Tusi as his guest), or something like this great piece
against Singer and the hedge funds. Jimmy Dore then, each time, shakes his head in disbelief and asks, "Why
the hell is Tucker Carlson the only one who is allowed to say things like this? Its a mystery! I dont get
it!"
-- indeed: Why, and why on Fox News?
Because it sells. Can't let RT steal all the money with anti-war voices, Watching the Hawks, Jesse
Ventura, On Contact with Chris Hedges, these shows have viewership, and the Fox news owners know it.
Perhaps they'll have to make Tucker Carlson FOX, the TCFOX news channel. An anti-establishment,
pro-capitalism libertarianesque program experience, where they can decry all the pro-war democrats, and
RINO's, while making a case that capitalism isn't working cause of "big government".
Of course "private property" requiires state enforcement, which, when you remind libertarians that
they are "statists", they don't like that too much
It sells, but also doesn't pose a real threat to the powers that be. He creates very accurate,
specific, personally moving, well-produced, diagnoses of problems (he even names names!)
Then he and his ilk imply that the only solution is to magically create a government free white
Christian ethnostate where the good non-corrupt capitalists (like, as he states in this video, the
rockefellers and carnegies apparently were) will bring us back to the good ol days.
I strongly recommend sitting down for a good long policy discussion with a Tucker Carlson fan. In
my experience they will, without exception, go to great lengths to convince you that a vote for Bernie
will, undoubtedly, make all the problems Tucker describes worse, cuz gubmint bad and racist dog
whistles.
I suspect absent Carlson and his ilk, Bernie would actually have an easier time making inroads into
the republican base.
I heard no Carlson mention of "magically create a government free white Christian ethnostate
where the good non-corrupt capitalists (like, as he states in this video, the rockefellers and
carnegies apparently were) will bring us back to the good ol days."
Carlson seemed to suggest that prior US capitalists "felt some obligation" while, to me,
implying that current US capitalist versions do not feel this obligation.
Bernie could show he will listen to good ideas from all sides, even when the ideas surface on
Fox.
Carlson did mention some "countries have banned this kind of behavior, including the United
Kingdom" which suggests legislative changes are possible.
If Bernie were to pitch a legislative fix, he might pick up some Tucker Carlson fans.
Maybe Bernie might get mentioned favorably by Carlson.
Carnegie built hundreds of public libraries, Rockefeller donated thousands of acres of land,
Sears founder
Julius Rosenwald funded the beginnings of the NAACP.
Well, we can agree to disagree on whether or not Carlson's regularly invoked vision of
deserving Americans is racist or ethnocentric, and I'll admit his view of the role of
government can seem a bit schizophrenic at times – as far as I can tell he has strongly
libertarian sensibilities but in recent years figured out that "free" markets do, in fact,
require government regulations.
But I do strongly recommend reading a few social/economic histories of the US from the
industrial revolution through the beginning of the great depression.
I promise those fellows you mention were not quite so swell as Tucker makes out, and that
the relationship between philanthropy and capital hasn't changed as much as you seem to
think.
I'll just say this, if I were playing for the other team so to speak, and I were a GOP strategist
trying to secure a future for the party, the easy move would be to adopt a degree of populist rhetoric
and at least make some gestures towards easing the pain of towns which have been rendered post-industrial
wastelands by people like Singer and acknowledge what's been done. It would be almost comically easy to
paint the Democrats as the political party of globalized capitalism (because they are), even more so
because most of the places that are key liberal constituencies are also centers of the financial industry
(Manhattan and San Fransisco, for example). It wouldn't take much to graft the loathing of "urban elites"
in these communities onto PE and hedge funds. This, combined with toning down the nationalist rhetoric,
cutting back on the racism and homophobia (hell, even just keeping your mouth shut about it) would pretty
much build an unstoppable electoral majority.
Back in the days when I was more optimistic about the Democrats, I always tried to warn people that if
the Democrats (and other center left parties) waited too long and let the GOP be the first ones to the
lifeboats when neoliberalism started to sink, they'd get stuck holding the bag even if the GOP had more
to do with those policies historically. But pursuing this strategy would imply that the GOP is somehow
less beholden to its donors than the Democrats, which it isn't, but maybe Tucker Carlson is the canary in
the coal mine. Even people on the right realize the jig is up, and that they better start trying to cut
some kind of deal with the rising populist currents in US politics if they want to stay in power.
Tucker Carlson on Fox is making sense, while MSNBC and CNN peddle nonsense. What better reason to cancel
your cable and say adios to the fakery and programming.
In other unrelated news, Paul Singer has announced that he is providing funding to the Manhattan
Institute for Policy Research to try and understand why so many "flyover" Americans give their votes to
Trump. "It's a mystery. I have no idea why they would not vote for a good Republican candidate instead –
like my boy Mitt Romney" he stated. "Why would they do that? Maybe I should run for President like my buddy
Mike. Then they could all vote for me. Or else!"
Reading his Wikipedia page, I notice that he only donates money to things that effect him personally. He
went to Harvard so he gives to Harvard. He lives in New York so he gives money to the Food bank and the
Police – which both serve to keep the place calm. He is Jewish so he gives a ton to money to pro-Israel
causes. He votes Republican so he helps fund Republicans that will defend wealthy people like him. One son
comes out as gay so he gives to same-sex marriage & LGBTQ causes. He provides money to organizations that
fight taxes being imposed on wealthy people like himself. It is a very narrow circle of concerns that he
has. And the vast bulk of Americans are outside this circle I note.
But of all people to call him on his part in destroying the real economy of the United States. That which
actually makes stuff and does stuff instead of financial bs. Of all the people to do so it is
Tucker-goddamnn-Carlson. And on Fox News to boot. The same person that "liberal" protesters were
demonstrating outside his home with his family inside because they did not like his beliefs. It is kinda
funny when you think about it. A right wing commentator is attacking the Left. But from their left.
It is kinda funny when you think about it. A right wing commentator is attacking the Left. But from
their left.
What better proof that there is no Left left in the Left any more? Today's Left is to the right of
what used to be the Centre, Liberals are what used to be Conservative and Conservatives have moved into
"here there be dragons" territory. .
This is nonsense, the DSA for example is to the right of what used to be the Center? They aren't
left enough for some, including some of their members I suspect but .. But the left period has little
actual power is the thing. And it's all about taking power.
Like I've mentioned previously – politically .. our society has gone through a phase-shift. Mr.
Carlson is but just one example. So are those of us who held our noses, after seeing how transparently
conniving the DNC et al were, and voted for the Julius de Orange !
"the crushing of dissent via institutions like the FBI and the mainstream media"
This will be unnecessary. Recent research indicates that when people feel like they are being
watched, they self-censor.
The growing number of activist special interest groups with a myriad of hot topics and disparate
worldviews and interests just about guarantees that anything you say other than parroting the current
majority opinion will offend someone.
Couple that with murky legal powers, the unpredictability of the Twitter/Instagram mob, doxing, and
the expansion, both in extent and number of players, of ubiquitous surveillance, and significant
dissent becomes more and more a thing of the past.
I wonder if this has anything to do with the growing unreliability of political polls?
There is a populist Left. Its figurehead is Bernie but there are growing local/state organizations
like the DSA that may become relevant nationally in the not-too-distant future. AOC is a
current/future leader for this faction.
There is a populist Right. Its figurehead is Trump. From what I can tell, they're primarily online
but are also gaining strength in traditional conservative institutions like churches, community orgs,
etc.. Tucker appeals to this group. Josh Hawley is a Senator from MO with presidential ambitions who I
expect will lead this faction after Trump is gone. He is the slick-but-folksy and deadly serious
neo-Fascist type many on this board worry/warn about taking power if a real Left does not arise to
counter it/him.
Then there is the establishment elites (or ruling class, or deep state, whatever), which are
primarily Neoliberal (domestic policy) and Neoconservative (foreign policy). There have long been
these types in both parties, differing only by degree, but Trump has forced most of the "liberal"
Republicans into the D party. This group controls the money and most of the key institutions,
particularly the major media, tech, energy, and financial corporations, but their grip is slipping and
the mask is falling off. Some will side with the populist Left, but most will welcome the new Fascism,
i.e. the DNC apparatchiks who would rather lose to Trump than win with Bernie.
Mitt Romney, Bain Capital, another species of parasite, sucking some of the last marrow out of the
bones of America. Beware of billionaires who demonstrate that they are aliens to our society.
I read Tucker Carlsons book "ship of fools". It is all in there: criticism of the war fare state, Wall
Street, TBTF bail outs a.s.o. He spares neither Republicans nor Democrats. Kinda crazy but he voices more or
less exactly what Sanders is saying as well. Except he doesn´t get "Medicare for all" and he is social
conservative. Still you might think that there is enough common ground to work together. Instead we get
crazy idendity politics. I more and more believe that it is indeed so that the people on top have realised
that "identity politics" is the best thing that ever happened to them: divice et impera. Divide and rule as
already the Romans knew
And the biggest threat from Tucker Carlson is that the lower orders will believe that
Carlson-cum-Trump are as much their friend as Sanders. One of the longest-standing Idpol divisions in
US history has been unions vs. scabs. Over the past half-century, the Democratic Party has realigned
its public image in favor of the scabs. The union leadership stayed with the Dems, but the
rank-and-file long ago moved over to the Repubs. Old wine, new bottle.
Unions were weakened and made easier to destroy using IdPol. First by encouraging banning,
sometimes expelling, blacks from the various unions and secondly getting rid of first the
communists, then the socialists, and finally those deemed too liberal (not conservative enough).
Although the efforts by business interests, often helped by government at all levels, to
segregate unions was mainly in the 19th century and the "Better Dead Than Red" campaign was in the
20th especially after 1947, the use of racism and anti-leftism was done in both centuries.
You can see similar successful splintering of the Civil Rights Movements. First separating the
Suffragettes from from the anti-racism efforts. Then later the efforts to unite the Women's Rights
Movement with the successful efforts against racism was the 1960s were thwarted.
Let us just say that reform movement of the past two centuries has been splintered. The earlier
women's rights and the abolitionists, blacks and whites throughout the unions, suffragettes and the
anti lynching efforts, communists from everyone else, anti poverty from equal rights ( MLK did get
lead poisoning when he tried) and so.
So when I see the latest efforts to use IdPol to split poor people from everyone else or blacks
from whites, and see people falling for the same tactics I just lose my mind. Obviously.
You might think but you'd be wrong. St Clair in Counterpunch calls hims Tuckkker Carlson–apparently
because Carlson agrees with Trump on things like immigration. I read Carlson's book too and would say
only about half of it was material I would agree with. But the notion that anyone who doesn't stand up to
IDPol standards is a villain is crushing the left. They obsess over Trump while the wealthy of both
parties wreck the country.
I'd go along sooner with Tucker Carlson than Mr. St Clair, whose CP smeared both Caitlin Johnstone
and CJ Hopkins. St Clair and CP are controlled "oppo", IMO.
The commenter you were replying to had it right: divide et impera is the order of the day;
sometimes from unexpected sources, like the one mentioned above.
Great post! TC has strode out of the Fox News subset of the Overton window a number of times in recent
years.
PS: Yves, some introductory text to the part about Lambert's speech apparently didn't make it into the
post. It would fit between the 1st and 2nd paragraphs.
In my opinion, Tucker Carlson represents a very real and very active right-libertarian view that has been
consistently present within the Republican Party for decades. Anti-war, anti-imperialist, anti-big
business/pro-small business, and of course, anti-big union. Robert Taft comes to mind. I don't share their
"ideologies" but as a self-described socialist, I am deeply attracted to their criticisms. And criticisms
ARE important and necessary, even if the solutions are left wanting. I dearly hope that his popularity is a
sign of the realignment of politics, where issues of class and war become commonplace and issues of "to
impeach or not to impeach" fall by the wayside. I recognize that my hopes may not turn to realities.
But for an employee it makes no difference if they work for a big or small business (only big business
on average is LESS exploitative if anything – if for no other reason but they can afford to be – some of
the worst exploitation out there is employees working for small business owners).
Exactly,
right
libertarian. Within the libertarian spectrum there are real and then
royal libertarians, Tucker is of the latter.
http://geolib.com/essays/sullivan.dan/royallib.html
What are his immigration views? Are people motivated to come here because this global vulture octopus
thing has ruined their home market?
I have long thought that paul singer is representative of the worst people in the world (argentina wtf)
and I'm glad carlson put his face up there so many times for his victims to see, in case he ever ventures
out of mordor undisguised. For all the money he has, a truly worthless pos, as the closing comment made so
clear. Good for Carlson, though, almost seems like actual journalism. Kudos.
If we assume that good mergers achieve cost savings which ultimately benefit the consumer (they very
often do, assuming a good merger), is it better that a relatively large number of people save money on
goods, or that a relatively smaller number of people keep duplicate, unnecessary jobs?
Can you name such a good merger? Mergers by definition must reduce competition, and by classical
Liberal theory competition is what reduces prices for consumers.
In Neoliberal theory monopoly is the just reward for beating the competition. Sorry consumers! Bad
luck workers!
By what criteria do you deem a job unnecessary? Neoliberal criteria.
Here are some ways a merger can be bad for the US consumer.
If a merger results in employee pensions being transferred to the Pension Benefit Guarantee
Corporation (US government funded) then employee pension costs are being transferred to the US
taxpayer/consumer.
Or consider that a merger might create a monopoly that can raise consumer prices.
How does one determine that a proposed merger will be a good one that will "ultimately benefit the
consumer."?
Good morning Yves.
Tucker Carlson invoke Paul Singer noted ultra vulture as vehicle to transport Yves, others to Fox News
Commentary!
Seems the Good Night and Good Luck segue from Edward R Murro via Keith Olbermann to Tucker Carlson is
complete.
Thank you for this. It is a story that has been repeated countless times across the country, including
the midwestern town where I was born and raised.
As for Carlson being the only source of occasional light in the MSM -- the clarification continues. It has
truly become Bizarro World.
I wonder if the powers at be at Fox News allow Tucker to go on these rants because they know two things:
1.) 99% of bought and paid for Republican politicians will never do anything about this except perhaps some
lip service here and there.
2.) The fact that it's on Fox News will cause the Vichy left to not believe it's real or perhaps a Russian
phy op against American capitalism. Thus outside of the Sanders camp there will be no push/support for any
change.
Glad to see someone in the MSM point out the obvious .Carlson called out Singer, but in doing so he also
called out the Republican Party, specifically Sen. Ben Sasse from Nebraska. It will be interesting to see if
Sasse is reelected.
Nebraskans – R and D both – should toss Sasse to the curb. He's angered regular bat-poo crazy
Republicans by his "never Trump" blather, then angered Nebraska Democrats (both of us) by voting
Trump/GOP well over 90 percent of the time.
Add to this his folksy BS appearances in the media and his execrable books, and he's a classic empty
suit. Closer to a straight Republican Mayor Pete than any thing else – over-credentialed, over-ambitious
and under performing.
Our Nebraska Democratic Party problem is two-fold: incredibly thin bench for decent candidates and
preponderance of Clinton/Obama/HRC leftovers running the state party. Will be knocking on doors for
Bernie come 2020 but state races are iffy at best.
In a wacky pre apocalyptic world, truth and justice is pined for by many. Conservation is a critical
requirement. I now look at what is true and what is not, I know, very subjective. Those folks that tell us
to do things that harm us are transparent. We follow them at our peril.
I consider Sanders the most conservative option we have for the nation. He intends to 'conserve' our nation
and the people first. Something we have not had for decades, or ever, perhaps. Giving the people with the
most to lose a voice in how things move forward is a critical point of distinction from the rest of the
field.
so vote conservative. Protect that which makes us whole. Stop the looting and take back what has been stolen
to benefit all instead of a small clique of criminals.
But I'm an optimist.
Tucker has good sense. Perhaps Paul Singer is probably retiring from vultury. He's old and it's a nasty
fight. Singer is at the end of a 30 year stint of dispossessing other people. Being vicious really isn't
enough to keep the federal government at bay. Nor are his bribes. There has been an unspoken policy of
dispossessing poor and middle class people. Why? Is the United States actually looking at a specific future?
That wouldn't align with the free market – tsk tsk. Or would it? Live free, die free. Somebody needs to
define the word "free". Did TPTB decide to deindustrialize this country that long ago? That's when they
attacked the unions. And the consensus might have been, "Go for it; get it while you can." So Paul Singer
did just that, along with other creepy people like Mitt Romney. Because once the country has been hosed out
by these guys we won't be pushing the old capitalist economy at all. We will be pushing a globally
connected, sustainable economy. Paul Singer is just a dung beetle. And our government didn't want to discuss
it because they would have had to create a safety net. If we despise Singer, we must also despise Congress.
If we despise Singer, we must also despise Congress.
-Susan the Other
Agreed. I think you can argue Congress (and the Executive Branch) have done more to help the Chinese
middle class than the American middle class over the last 30 years. Co-locating our industrial base with
the CCP on communist soil should be looked upon as the most radical policy in our history but is not.
Imagine if at the height of the Cold War we had told Kruschev hey..how about you make all the stuff we
need and we'll pay you $20 or $30T in trade surplus over a number of years in hard currency which you can
then parlay into geopolitical power in Africa, South America, the ME and else where. What would the
America of the fifties think of this policy?
>Because once the country has been hosed out by these guys we won't be pushing the old capitalist
economy at all. We will be pushing a globally connected, sustainable economy.
Tucker Carlson has been making comments like this for a long time. And he's not a libertarian. He
believes in regulated capitalism.
What we might be seeing is a the beginning of the two parties flipping from left to right on economic
issues. The social issues just obscure it, as they were designed to do.
the only question then is to what extent social issues DERAIL the economic issues then. If social
issues mean paid family leave must be opposed for example because women oughta be barefoot and pregnant,
then that's derailing of real concrete material benefits period. Of course progressive socially is where
demographics trend.
But of course using the example of paid family leave, we're starting from a country with almost no
safety net to begin with, and there are bigger problems with the labor market as well (people having gig
jobs with NO benefits, they aren't going to be helped by policy changes to job provided benefits period).
Medicare for All is the issue that most incisively cuts through this ruling-class kayfabe. Both the
top-dog Dems and the top-dog Repubs get their jollies having their boots licked by workers in abject fear
for the health and life of their families. It is a neon testosterone line that neither Carlson nor Trump
will cross.
I find a good explanation for many behaviors is the human practice of favoring people in their circle of
acquaintances, friends and families, and showing some degree of contempt to others.
Some phrases
He (She) is not one of us! (Typically in an upper class UK accent)
The Others (Typically in a string ulster accent)
Not on our team (US)
He's a Catholic
He's a peasant
The attitude of "them and us" coupled with Greed, appears to drive many bad Human behaviors.
Indeed! My libertarian friend* is all about helping friends and family, I have seen him do it many
times. I totally agree with him, but I have concluded that his definition of "friends and family" is just
somewhat more restrictive than mine.
* True convo: "What about if listeria in the bologna at the nursing home kills your granny?" "Ah, a
whacking great lawsuit!"
Paul Singer is leading the hedge fund group that is trying to take over PG&E from the existing
stockholders/hedge funds through the bankruptcy process. He even offered more money to PG&E fire victims
($2.5B), that PG&E almost met (they want to pay part of the funds in stock).
Does anyone have an idea how he plans to make money by taking over PG&E? While the stock is very low, its
chance of going back to where it was is very low. Besides, PG&E is under pressure to actually maintain and
fire proof the distribution/transmission system and that won't be cheap.
Here's Jon Stewart roasting Tucker Carlson back in 2006 when he was just a clown with a bow-tie. A rare
and well deserved confrontation.
https://www.youtube.com/watch?v=aFQFB5YpDZE
Since then Tucker has ditched his bow-tie and developed a conscience.
We used to call this "being Dutch uncle."
Tucker has CHANGED his views on lots of things. Like I have. To be able to admit you were wrong is a big
deal. He supported the Iraq War. I didn't. In retrospect, he realized he did this because of group think
cool kids thing. Then he realized that he had been conned, He doesn't like being conned. I thought Obama's
speech was the opposite of John Edwards "2 Americas". Obama was delivering a "con" I.e. "We are all One
America". So now Tucker and I, from different sides, are more skeptical. I started questioning my groupthink
Democratic viewpoint in 2004. Slowly I realized that I too had been conned. So some of those on the "right"
and Some of those on the "left" have sought other ports to dock in as we figure this all out. Naked
Capitalism is one of those docks. So soon we should introduce Tucker to Yves.
As I have frequently pointed out to my once-upon-a-time "liberal" friends, Tucker Carlson is often these
days a worthwhile antidote to the collective yelpings & bleatings of the brain-snatched amen corner on MSNBC
& CNN. In this instance (and others) his observations are rational and clearly articulated. He makes sense!
And he is on the correct (not far right) side of the topic. The continuing Iraq/Syria catastrophe, PutinGate
and the hedge fund hooligan Paul Singer are just three recent examples. His arguments (and his snark) are
well played. Alas, following these sensible segments, he is still a Fox guy and is obliged to revert to Fox
boilerplate for most of the rest of the night. But in our present crackbrained media environment, be
thankful for small mercies such as Tucker's moments.
Thanks for the post. I probably would have missed this without you.
There are a couple things that are interesting to me. First, why does Tucker Carlson call out Ben Sasse
for accepting a maxed out campaign contribution from Paul Singer? The Governor of Nebraska then and now is
Pete Ricketts. His father (Joe – TD Ameritrade, Chicago Cubs) is a "very good friend" of Paul Singer.
Everyone believes Pete Ricketts wants to run for US Senate and the nearest opportunity is Ben Sasse's seat.
More than meets the eye?
Two, a longtime director of Cabela's is Mike McCarthy of McCarthy Capital. [Former Secretary of Defense
Chuck Hagel worked for McCarthy.] ES&S (electronic voting machines) is owned by McCarthy Group, LLC.
01 December 2019Academic Conformism is the road to "1984."
The world is filled with conformism and groupthink. Most people do not wish to think for
themselves. Thinking for oneself is dangerous, requires effort and often leads to rejection by
the herd of one's peers.
The profession of arms, the intelligence business, the civil service bureaucracy, the
wondrous world of groups like the League of Women Voters, Rotary Club as well as the empire of
the thinktanks are all rotten with this sickness, an illness which leads inevitably to
stereotyped and unrealistic thinking, thinking that does not reflect reality.
The worst locus of this mentally crippling phenomenon is the world of the academics. I have
served on a number of boards that awarded Ph.D and post doctoral grants. I was on the Fulbright
Fellowship federal board. I was on the HF Guggenheim program and executive boards for a long
time. Those are two examples of my exposure to the individual and collective academic
minds.
As a class of people I find them unimpressive. The credentialing exercise in acquiring a
doctorate is basically a nepotistic process of sucking up to elders and a crutch for ego
support as well as an entrance ticket for various hierarchies, among them the world of the
academy. The process of degree acquisition itself requires sponsorship by esteemed academics
who recommend candidates who do not stray very far from the corpus of known work in whichever
narrow field is involved. The endorsements from RESPECTED academics are often decisive in the
award of grants.
This process is continued throughout a career in academic research. PEER REVIEW is the
sine qua non for acceptance of a "paper," invitation to career making conferences, or to
the Holy of Holies, TENURE.
This life experience forms and creates CONFORMISTS, people who instinctively boot-lick their
fellows in a search for the "Good Doggy" moments that make up their lives. These people are for
sale. Their price may not be money, but they are still for sale. They want to be accepted as
members of their group. Dissent leads to expulsion or effective rejection from the group.
This mentality renders doubtful any assertion that a large group of academics supports any
stated conclusion. As a species academics will say or do anything to be included in their
caste.
This makes them inherently dangerous. They will support any party or parties, of any
political inclination if that group has the money, and the potential or actual power to
maintain the academics as a tribe. pl
That is the nature of tribes and humans are very tribal. At least most of them.
Fortunately, there are outliers. I was recently reading "Political Tribes" which was written
by a couple who are both law professors that examines this.
Take global warming (aka the rebranded climate change). Good luck getting grants to do any
skeptical research. This highly complex subject which posits human impact is a perfect
example of tribal bias.
My success in the private sector comes from consistent questioning what I wanted to be
true to prevent suboptimal design decisions.
I also instinctively dislike groups that have some idealized view of "What is to be
done?"
As Groucho said: "I refuse to join any club that would have me as a member"
The 'isms' had it, be it Nazism, Fascism, Communism, Totalitarianism, Elitism all demand
conformity and adherence to group think. If one does not co-tow to whichever 'ism' is at
play, those outside their group think are persecuted, ostracized, jailed, and executed all
because they defy their conformity demands, and defy allegiance to them.
One world, one religion, one government, one Borg. all lead down the same road to --
Orwell's 1984.
David Halberstam: The Best and the Brightest. (Reminder how the heck we got into Vietnam,
when the best and the brightest were serving as presidential advisors.)
Also good Halberstam re-read: The Powers that Be - when the conservative media controlled
the levers of power; not the uber-liberal one we experience today.
I'm not sure I agree with you about the Medieval Christians having no imagination. Chaucer's
pilgrims were all interesting characters. Perhaps they weren't all brilliant or virtuous, but
they were, as Chaucer created them, all INDIVIDUALS.
I try not to make judgments about medieval Muslims. I simply have had not chance to learn
much about them; so I try not to lump them all together in my mind.
After 1200, Muslims ran out of steam, encouraged & advised by their so-called Thinkers to
conform the Law and thus guarantee their After Life. What is more important: Knowledge or
Faith? Athens or zJerusalem? If your innovation causes you to go astray, discard it.
Due to the negative opinion that some Fathers of the Church expressed in relation to
ancient culture, all-medieval Christianity did not consider the teaching of liberal arts a
priority. Initially, in the monastic and episcopal schools the essential rudiments were
taught to understand the Bible and the chant, leaving aside the "subtleties" of grammar and
oratory. It will not be until the educational design of Alcuino when the liberal arts
became the central part of the curriculum.
I guess I was thinking of the common people, who did count themselves as Christian, and not
the people in the "schools," though some of Chaucer's characters were in the church--e.g., a
prioress, a friar, and so on. But these characters certainly knew how they were "supposed" to
live their lives but clearly weren't living their lives as the church would have them live.
In that regard, perhaps there was a group of Christians who were IN the church. What I am
saying is that almost all people in England at that time were--or at least considered
themselves as Christians. However, they were indeed not living their lives as a member of the
"Borg."
Perhaps, since I am a Protestant Christian, I am also not part of the group of people who
are Christian and who are "accepted" in this Borg-like group.
I often feel dismissed and diminished when my Christian beliefs, which I have held since
childhood, seem not to be worthy of consideration in the discussion.
How long ago was your last academic experience? My understanding is that in the liberal arts
it has basically become a long struggle session. Basically if you are a straight white male
you keep your head down and think in secret, like Winston Smith.
The answer to a lot of this is simple: end all federal funding to any public institution
any part of which has speech codes more restrictive than settled law with regard to the First
Amendment.
Trump could have done this his first day in office, and he actually tweeted about it once.
But no.
Requirements, IMO are 1) a certain amount of intelligence but not all that much 2) some luck
(your supervisor shouldn't die, someone else shouldn't beat you to it, your examiners
shouldn't take a scunner to you or your supervisor) 3, and probably most important,
sitzfleisch: the ability to nail your bum to the chair and plow through it. And, also
important, to know when to stop.
(an absurdly long process in N American it seems, years and years and years. I got mine in
the UK -- write the thesis and that's it)
Liberal Arts education has been made available to the masses: they do not understand it,
appreciate, need it, or can even use it. A very small percentage of mankind is suited for
that kind of education. It is almost criminal negligence to have expanded it so much.
Remember, Weinstein was fine with the anti-white, anti-western, anti-Christian agenda at
Evergreen until it inconvenienced him. Then he learned to his shock that pulling his J-card
would not give him a pass. At which point the pathetic attempt at gatekeeping called the
"intellectual dark web" was declared.
Taleb and Weinstein have had an interesting back-and-forth on twitter lately over the
latter's statement:
"We are going to have to figure out how to govern the Earth. That requires us to agree on
values, ground rules and assumptions. I don't care about private faith. I care that all
populations maintain compatibility with a common belief system that prioritizes no one's
sacred book."
The test for whether Weinstein is lying or not is simple: will he support a global ban on
infant genital mutilation?
Nassim Taleb, of Black Swan fame, talks about this phenomenon in Skin in the Game. He also
writes convincingly, if briefly, about the radical Sunni threat and Americans confusing the
Shia as the global threat. Worthwhile.
The best description of a PhD that I can think of came from a tailor. He had learned his
trade in Germany and, when he was ready to become a master, the local guild gave him a task
-- to make a morning suit from start to finish, every bit done by him. Then they tore it
apart checking everything and decided that he had the ability to be ranked as a master
tailor. That's all a PhD thesis is: proof that you can do the whole research and writing
thing.
However, I believe that of late it has more and more become an exercise in showing that you
are a loyal acolyte of whatever school your supervisor belongs to. I conclude this from
younger PhDs I met at work.
Mine dates, BTW, from 1976 and I am amused to see (everything's on the Net these days) that
there has been a (modest) uptick in demand. But an exercise that, when I started work for the
govt, probably got me more starting money and gave a useful title in a military-dominated
world where everyone had a title. "Doctor" being impressive enough but usefully vague.
All irrelevant these days and no relation, BTW, to Russia (Just as well since most
Russia/Soviet teachers in the English-speaking world seem to hate Russia and all that it has
ever done.)
Dreher's article on the 1619 project of the NY TIMES where there is an effort to re frame
the history of the US in the context of slavery. He quotes World Socialist Web Site's view on
the 'movement'. From the WSWS editorial
"Despite the pretense of establishing the United States' "true" foundation, the 1619
Project is a politically motivated falsification of history. Its aim is to create a
historical narrative that legitimizes the effort of the Democratic Party to construct an
electoral coalition based on the prioritizing of personal "identities" -- i.e., gender,
sexual preference, ethnicity, and, above all, race."
Dreher picks out a part of an interview that relates to the new academic conformity
"The reflection of identity politics in the curriculum is the primacy of cultural history.
There was a time, a long, long time ago, when a "diverse history faculty" meant that you had
an economic historian, a political historian, a social historian, a historian of the American
Revolution, of the Civil War, and so on. And now a diverse history faculty means a women's
historian, a gay historian, a Chinese-American historian, a Latino historian. So it's a
completely different kind of diversity.
On a global scale the benefit of this has been tremendous. We have more -- and we should
have more -- African history, Latin American history, Asian history, than we ever have.
Within US history it has produced narrow faculties in which everybody is basically writing
the same thing. And so you don't bump into the economic historian at the mailbox and say "Is
it true that all the wealth came from slavery," and have them say, "that's ridiculous," and
explain why it can't be true."
I am sad to agree with the points made in this post.
I find it a little frightening to think about what might happen to our country if academia
continues on this course.
However, as a person who dropped out of a doctoral program because it just wasn't in me to
interpret all assigned readings as a Marxist or a totally wacky feminist who feels men and
women might not be of the same species, I just decided not to get a doctorate and dropped out
of the program. I've been happier for it.
Later, I watched as friends, family members, and their various friends and family members
who realized the absolute worthlessness of public education nowadays in NEA controlled
schools turned to home schooling, charter schools, and various other alternate ways of
providing an actual education for their children.
I've met many of the children of these parents and am often quite pleased with the fact
that for the most part they are individuals who can speak and think freely and are happy to
be finding their way in the world doing what they want to do.
I hope more and more parents like these young people's parents break away from the public
NEA option. There are many very good choices for educating our children to become real
individual people who contribute in their individual ways to a vial economy and society.
I am counting on God, Who is Good and Loving to make this current state of affairs
temporary in the long lifetime of this world. I give it to God, as they say, and I do not
mourn my not ever getting that doctorate--a dream I had as a young girl. Not having it
doesn't mean I can't still read and study and think on my own.
Much of what I write could well be considered 'non-conformist', but I've never encountered
any problems in academia because of it. In fact, being a professor gives one the security
which makes one confident enough to be non-conformist. Sweeping generalizations are
unhelpful.
During my years as a student and my years as an adjunct instructor in several undergrad and
community college programs, I also had no problems. I was teaching required undergrad classes
such as research writing and essay writing.
It was easy in those classes to set my own standards. No full professors want to teach
those classes because it requires much time and effort to plan lessons and to grade papers.
For argumentation essays and argumentation research papers it was my right to insist that the
student research all views of the research question they chose, though many students tried
hard not to have to report the opinions they did not like and to have to explain exactly why
they felt that side was invalid.
I was lucky in the fact that when I taught those classes, "political correctness" had not
yet developed a firm foothold in the universities.
I left teaching those classes at about the time "political correctness" was beginning.
The only time I was reported to the Dean was by a student who wanted to research the
question of whether Elvis was dead or not. I told her that if her source list included the
National Enquirer or and other grocery store "news" magazine, I would not accept her paper.
My department chairman didn't laugh at her complaint, but he did back me up and smiled when
he told me he had said she had to follow my rule.
And sadly, the journalism majors were also hard to deal with. They didn't want to research
at all. They felt all they had to do was call people they felt were important sources to
provide quotes for their essays or papers. They didn't feel it was necessary to do any
in-depth research on the issue they had chosen, usually an issue that was important at the
time in the state or local community. It made them angry that I felt they should do some
background research in order to balance quoted opinions.
No. Sweeping generalizations are quite helpful because they express opinions about
behavior in general. As for you, you may have tenure but if you start saying things like,
"Bigfoot is real," you will find yourself largely ostracized. Actually academics prefer
extremely narrow foci for studies because the possibility of conflict among them is thereby
reduced,
As for you, you may have tenure but if you start saying things like, "Bigfoot is real,"
you will find yourself largely ostracized.
You feel the Bigfoot and related para-normal phenomena should matter in Public and
International Affair studies? Since comparable phenomena are reported all over the world? In
the context of what larger topic/theme/course could/should it be considered?
Or are you suggesting a Prof in international relations couldn't even mention privately he
feels Bigfoot is an interesting phenomenon? Suggesting it would get him into troubles no
matter how solid his research in his own field?
I was careful to include a wide diversity of groups in my critique of humanity.
Yes, you were. But you also spent a considerable amount of digital ink on academics more
generally and academia.
All I can say is that I have never in 20 years in academia felt the slightest pressure from
other academics to bend my research or writing to fit their will. Pressure to conform has,
however, come from outside the university - my one experience writing a report for a think
tank did not end well. On the whole, in my own field of study, I find academics much more
reasonable, nuanced, and willing to discuss and consider alternatives, than politicians,
journalists, and think tank types. Of course, that is just one person's experience, and I
wouldn't generalize from it, any more than you should from yours. But there it is.
Once Elora thought of studying Social Sciences in University at Distance...but, after seeing
the cadre of professors, being one a member of CFR who, moreover, got lately involveded in
the Integrity Initiative scandal as a one of the cluster in charge of spreading maledicence
through their columns in MSM on certain respectable colonel they deemed too much pro-Russian
to be head of national intelligence...she certainly desisted...and decided that she would
better learn on her own...
After all, it was "highly likely" he was going to catearme de plano, sin ni siquiera
leer lo que escribo ....only because Elora is so....
It looks like Soylent Green is a not too far off possibility. Washington State has thrown out
the dignity of the human death and subsequent corpse with their Washington State's bath
water. They'll be composting dead human beings like they would compost rotting food or
rotting garbage. With burial or cremation, there is some dignity given to the life of the
individual who life has passed, whereas with composting, they'll be throwing the human corpse
with its decaying fluids and all into basically a sewage pit to rot. With them composting
human dead like a rotting cabbage, basic human dignity will have been cast into the trash
heap. The Elites are now coming out in the open and calling for human cannibalism, and there
could be legislation enacted like what Washington State did with human composting,
legislation to make human cannibalism a reality. And a step further is turning the human
corpse into a palatable food item, which is what Soylent Green was in the movie. The humanity
of that movie thought they were eating vegetable crackers, unbeknownst to them they were
eating their next of kin, or their neighbor down the street. In the movie, garbage trucks
gathered up the dead corpses like they were cord-wood, and took them to a processing station,
much like what the human composting will have -- processing stations.
Remember that Orwell's 1984 was poo poo'd as never happening just a few short years ago.
And the 1973 movie Soylent Green was poo poo'd as science fiction when it was released.
World's First Human Composting Facility is Coming to Seattle in 2021
Academics make easy targets for this crew, but, as noted above, they they are far from unique
in their tribal instincts. The thing that appalled me most after my Vietnam experience (apart
from the fact that William Calley's entire chain of command did not go to prison) was the
discovery of how many people had figured out that our cause was all but unwinnable and how
little influence that discovery had. When the preparatory simulation exercises showed us
consistently losing, the pentagon stopped the war gaming. Etc. all the way through the war.
In fact even the catastrophe they suffered in Tet '68 did not shift the balance in our favor.
John Maynard Keynes made the academics' ultimate response to the notion that people in
more "practical" pursuits are more realistic: "Practical men, who believe themselves to be
quite exempt from any intellectual influences, are usually slaves of some defunct
economist."
And no, Keynes was not that much an advocate for academics either: " Education: the
inculcation of the incomprehensible into the indifferent by the incompetent."
Because they thought the accords meant that we agreed to let them win the war. That
interpretation doesn't mesh with Nixon's ferocious rhetoric about the Christmas bombing, but
that was the truth. And they were pretty shrewd about that sort of thing.
I can't prove it and they would never say it, but I thought at the time that the Christmas
bombing sent a message that we needed an end to it more than they did. So they reached out
and sure enough we were willing to settle on terms similar to what they had offered in
1968.
That is not to say that they were anything other than horrible brutal people. But they
were not stupid horrible brutal people, and they had the commitment to see it through. And we
did not. It was their country.
I doubt it. The ones I have spoken with about it saw it pretty much the same way at the
time. They spent a couple years hoping against hope that they were wrong - that the US did
have the commitment to see it through. Their hopes were disappointed.
Would that be the ones who fled communism after the NV army invaded the the Republic of
Vietnam or the fine people of the Socialist Republic who brought freedom from the barrels of
all those guns?
"Because they thought the accords meant that we agreed to let them win the war."
No fredw. That's a naive (or simplistic, should I say) thinking. They had no illlusion
like that, they just practiced age old Sun Tzu's teaching. In other words, if you know you
can win with diplomacy why spend the blood and treasure to achieve the same thing?
Demonstrate to your enemy that you are really willing to fight to the end no matter it takes,
and then negotiate the peace to your favor.
This conformism is not only limited to the humanities, it has crept insidiously into the
physical and natural sciences. Pharmaceutical companies can now depend on an endless supply
of conformist Scientists who will advocate for the drugging up of children in order to treat
imaginary first world diseases.
Yesterday, we had a guest Minister at my Unitarian church (I can feel the eye rolls from the
commentariat already....). She has an economics degree from Princeton, a business degree from
MIT, and an M.Div from Meadville Lombard Theological School. She comes to ministry after a
career in high tech and slow food. She is of European and Native American ancestry, and
practices the Hawaiian culture with her Big Island ohana. (Isn't that cultural appropriation?
/snark)
She opened with two sweeping proclamations:
"I am here today to help you all break the habit of referring to Native People in the past
tense..."
"We are standing on stolen land..."
She then followed those with an incoherent sermon, which I hesitate to even try to
summarize.
One of her points was that Governor Bradford, who wrote the famous sermon speaking the
shining city on the hill, believed in the righteousness of his cause, including treating the
Natives as lesser beings. She did note that the Unitarian Church is a descendant of those
original Congregational churches, but she missed the part where we still believe in the
righteousness of our cause, and the right to treat the lesser orders as we wish.
Back to her two opening remarks:
I fully know that there are still descendants of the original settlers of our area still
here.
The particular land where the First Unitarian Church of Providence stands is part of the land
conveyed by deed from the Narragansett tribe to Roger Williams, and the deed is in the
Providence City Hall Archives, signed by the Sachems Cononicus and Miantonomi.
I can hardly think of a better example of the product of group think, where the particulars
of your audience don't matter.
Pat is probably going to toss me out of here for this comment. Conformity and "Group Think"
is a human characteristic that is probably hard wired into our brains. It is not just
academics who are subject to this trait but every group, poliitcal, religious or otherwise.
That is how we got into Iraq. I got a kick out of an article in the Hill this morning about
Trump's trillion dollar annual defcits. The comment section was almost universal in " it was
Obama's fault". There was "group think' at work since anyone who disagreed was roundly booed
and the fact that not a single Republican congresscritter has raised their voice on our
annual deficits when if it was a Democrat President the hue and cry would drown out normal
reporting. Don't get me wrong, the Democrats are not any better but group think is very
widespread.
Contemptibly disrespectful to the brave men who carried out Linebacker II. It would seem
that you were a communist sympathizer. No sympathy for all the Vietnamese who did not want to
be ruled by the communists?
The men who carried out Linebacker II were American soldiers (and sailors and airmen) who as
usual gave it their all. I don't disrespect even Richard Nixon or the military brass who
ordered it. They faced seriously tough problems with no good solutions. I am just reporting
the signalling I perceived with whatever insight I had picked up from a year of interacting
with Vietnamese.
And whatever my words might "seem" to imply, I have no sympathy at all for Communism or
the Dang Lao Dong Viet Nam. But facing them day after day takes you beyond the abstraction of
"enemy". You get some insight into how they interpret the world. I don't claim any real
expertise. I didn't do that long enough to get a really deep understanding. And the people I
dealt with were low level. I am just reporting how I thought they might have reacted to
events as they unfolded. The Vietnamese I knew(both sides) were very logical calculating
people. They wouldn't underestimate the effects of what we did, but they would always be
looking for the motivation behind it.
I was heartbroken for the Vietnamese who put their lives on the line in the expectation
that we would somehow pull it out. We owed them. We copped out on that debt. I don't believe
we could have saved their war, but we should have done a lot better for them when it was
lost.
A couple of years after the accords. US commitment didn't last much longer than that. That
was the point. The accords signaled to many Vietnamese that we were played out. Yes, we had
been there for a long time, but we had come to the point of accepting that we could not have
the outcome we had fought for.
you seem to have missed the fact that between the armistice agreement and the onslaught in
1975 there were two + years. In that period of time they watched and waited until the US
Congress cut off all aid to SVN and then they overran the country.
No sir. I did not missed that fact. I merely disagreed with fredw's opinion about the
reason why the North Vietnamese came to the negotiating table. Vietnamese people are
pragmatic. Being a small country, they always do that regardless of of the situation.
The American people betrayed the Vietnamese, not the military. And truth be told most of
the SVN people were lukewarm participants in their own defense.
I don't see that you are disagreeing with my account of commitment levels. That said, there
were both deeply committed south Vietnamese and many more who put their lives on the line
betting that we could keep them from the bloody hell promised by a Communist victory. We took
that bargain on that basis. Morally, I find it similar to the situation that you have
described for the Kurds in Syria. It could only end ugly.
Perhaps the most shocking revelation that interrogators received was the realization that it
wasn't primarily us the enemy were worried about. Most of their anxieties were directed
toward the lukewarm ARVNs who despite their many many many failings were perceived as the
more dangerous enemy. We were a known (if lethal) factor. We did not represent an alternative
to them. We rarely had the knowledge or understanding of local conditions to be really
effective. The ARVNs did, and suffered four times our casualty rates trying to make their
alternative happen.
This is not a judgement of military or social effectiveness, just an observation of what
their levels of concern seemed to be.
You are mighty certain for someone who was not there. Yes, there were Vietnamese who
fought well and hard but not enough of them. You don't seem to understand that we were there
to help them. We did not run their government, leftist beliefs about that not withstanding.
We did not command their army.
"Not there"? Where was I in 1970? Sure looked like Viet Nam. Sure was hot.
There sure were a lot people speaking tieng Viet Nam. Mine had to improve really fast. I
think you may have lost the thread.
I am sure they were afraid of being turned over to the ARVN who were likely to torture and
kill them if they were in the mood. The NVA and VC main force troops wre just as liely to do
the same. You sound like John Vann who once rebuked me for not loving the Vietnamese. He was
right.
All right granted. The contents of my prior posts are much more present in my mind than in
yours. In any case, I don't see that we actually disagree that much. I think that we just
have different reactions to similar sets of acts. Not my purpose to annoy you for no reason.
Good luck with your roofing. I would probably fall the roof, even when I was young.
We have Fred, Freds, fredw. How many more Fred? " The contents of my prior posts are much
more present in my mind than in yours" Duh! Vann asked why I did not love the Vietnamese. My
answer wa something like "Why should I? I am here to fight a war on their behalf. That does
not require me to love them."
Professors are generally people who prefer the catfights in the academy to actual work in
industry, finance, engineering, etc. does that mean that I generally think they are drones?
Yes, I do.
I received this comment from DMR, presumab;y a member of the professoriat.
"Mr Robinson's remarks are spot on. In my experience most academics worth their salt are
absorbed in their research area however microscopic the focus, and delight above all in
lively exchange of ideas with colleagues and students when afforded the opportunity to do so
in the classroom, at conferences, in published research. Conformism, some of it timid, and
competition, often cut-throat, there certainly are. Who would deny this? But as in any
profession or walk of life they are par for the course. Forty years as a university teacher
encourage me to say that these deformations professionelles are far from definitive, still
less all-encompassing. Most unusually for you, Col. Lang, and pace your vaunted experience on
boards of award-granting bodies/degree committees, your judgements in this instance smack of
personal animus and bespeak an unwarrantedly generalized contempt. I say this with respect
and no wish to annoy." It is a characteristic of the academy that its members wish to be
thought independent thinkers. They are united in that thought. Professor, i will seek to
conform to your "professional" mores. My most personal animus is reserved for social
"scientists.
"... "Employment in the United States has increased steadily over the last seven years, one of the longest periods of economic growth in American history. There are about 10 million more working Americans today than when President Obama took office. ..."
"... "David Autor, an economist at M.I.T., estimated in a famous paper that increased trade with China did eliminate roughly one million factory jobs in the United States between 2000 and 2007. However, an important implication of his findings is that such job losses largely ended almost a decade ago. ..."
"... It is also worth noting that even though our trade deficit has declined from its 2006 peak (the non-oil deficit has recently been rising again), workers are constantly being displaced by imports. The Bureau of Labor Statistic reports there have been an average of 110,000 layoffs or discharges a month in manufacturing thus far this year. If just a quarter of these are trade-related, it would imply that more than 300,000 workers a year are losing their jobs due to trade. ..."
"... The second point is the wage effect, which can go beyond the direct impact of job loss. The oil market can give us a useful way of thinking about this issue. Suppose that Saudi Arabia or some other major producer ramps up its oil production by 1 million barrels of oil a day. This will put downward pressure on world prices, which will have the effect of lowering prices in the United States as well. This could mean, for example, that instead of getting $50 for a barrel of oil, producers in North Dakota will only get $40 a barrel. This will mean less money for workers and companies in the oil industry. In the case of workers, it will mean fewer jobs and lower pay. ..."
"... This can happen even if there is very little direct impact of trade. The increased supply of Saudi oil may result in some modest reduction in U.S. exports of oil, but the impact on price will be much larger. The analogous story with trade in manufactured goods is that the potential to import low cost goods from Mexico, China, or other countries can have the effect of lowering wages in the United States, even if the goods are not actually imported. ..."
"... Finally, the balance of trade will have an impact on the overall level of employment in the economy when the economy is below its full employment level of output. Until the Great Recession, most economists did not think that trade could affect the overall level of employment, but only the composition. This meant that trade could cause us to lose manufacturing jobs in the Midwest, but these job losses would be offset by gains in Silicon Valley and other tech centers. This could still mean bad news for the manufacturing workers who lost their jobs, but the net effect for the country as a whole would still be positive. ..."
"... The Great Recession changed this view, as many economists came to believe that the United States is facing a period of secular stagnation: a sustained period in which lack of demand in the economy constrains growth and employment. In this context, the trade deficit is a major cause of the lack of demand since it is spending that is creating demand in other countries rather than the United States. If we could reduce the annual trade deficit by $100 billion then as a first approximation it will have the same impact on the economy as a stimulus of $100 billion. ..."
"... There is no generally accepted explanation as to why so many prime age workers would suddenly decide they didn't feel like working, but one often invoked candidate is the loss of manufacturing jobs. The argument in this story is that the manufacturing sector provided relatively good paying jobs for people without college degrees. With so many of these jobs now gone, these workers can't find jobs. If this argument is true, then it means that trade has cost the country a large number of jobs even if the economy is back at full employment. ..."
Given his history of promoting racism, xenophobia, sexism and his recently exposed boasts about sexual assaults, not many people
want to be associated with Donald Trump. However that doesn't mean everything that comes out of his mouth is wrong.
In the debate on Sunday Donald Trump made a comment to the effect that because of the North American Free Trade Agreement and
other trade deals, "we lost our jobs." The New York Times was quick to say * this was wrong.
"We didn't.
"Employment in the United States has increased steadily over the last seven years, one of the longest periods of economic
growth in American history. There are about 10 million more working Americans today than when President Obama took office.
"David Autor, an economist at M.I.T., estimated in a famous paper that increased trade with China did eliminate roughly
one million factory jobs in the United States between 2000 and 2007. However, an important implication of his findings is that
such job losses largely ended almost a decade ago.
"And there's no evidence the North American Free Trade Agreement caused similar job losses.
"The Congressional Research Service concluded in 2015 that the 'net overall effect of Nafta on the U.S. economy appears to
have been relatively modest.' "
There are a few things to sort out here. First, the basic point in the first paragraph is absolutely true, although it's not
clear that it's relevant to the trade debate. The United States economy typically grows and adds jobs, around 1.6 million a year
for the last quarter century. So any claim that trade has kept the U.S. from creating jobs is absurd on its face. The actual issue
is the rate of job creation and the quality of the jobs.
Here there are three issues to consider.
1) The direct job loss – the jobs that were displaced due to imports substituting for domestically produced goods and services;
2) The wage effects – the downward pressure on the wages of workers that retain their jobs that can result from job loss and
also the threat of job loss;
3) The impact of a trade deficit on the level of demand in the economy.
Taking these in turn we now have some pretty solid evidence on some of the job loss attributable to trade. David Autor's work
** found that imports from China cost the economy more than 2 million jobs in the years from 2000-2007.
"Estimates of the net impact of aggregate demand and reallocation effects imply that import growth from China between 1999
and 2011 led to an employment reduction of 2.4 million workers" (page 29).
These are workers who are directly displaced by import competition. In addition, as the article goes on to note, there were
more workers who likely lost their jobs to the multiplier effect in the local economies most directly affected by imports.
The impact of trade with China was more dramatic than trade with Mexico and other countries because of the huge growth in imports
over a short period of time. However, even if the impact from trade with other countries was smaller, it still would have a substantial
effect on the communities affected.
It is also worth noting that even though our trade deficit has declined from its 2006 peak (the non-oil deficit has recently
been rising again), workers are constantly being displaced by imports. The Bureau of Labor Statistic reports there have been an
average of 110,000 layoffs or discharges a month in manufacturing thus far this year. If just a quarter of these are trade-related,
it would imply that more than 300,000 workers a year are losing their jobs due to trade.
Of course people lose jobs for other reasons also, like increased productivity. So the fact there is job loss associated with
trade doesn't make it bad, but it is not wrong to see this as a serious problem.
The second point is the wage effect, which can go beyond the direct impact of job loss. The oil market can give us a useful
way of thinking about this issue. Suppose that Saudi Arabia or some other major producer ramps up its oil production by 1 million
barrels of oil a day. This will put downward pressure on world prices, which will have the effect of lowering prices in the United
States as well. This could mean, for example, that instead of getting $50 for a barrel of oil, producers in North Dakota will
only get $40 a barrel. This will mean less money for workers and companies in the oil industry. In the case of workers, it will
mean fewer jobs and lower pay.
This can happen even if there is very little direct impact of trade. The increased supply of Saudi oil may result in some modest
reduction in U.S. exports of oil, but the impact on price will be much larger. The analogous story with trade in manufactured
goods is that the potential to import low cost goods from Mexico, China, or other countries can have the effect of lowering wages
in the United States, even if the goods are not actually imported.
Kate Bronfenbrenner, a professor of industrial relations at Cornell, documented one way in which the potential to import can
have the effect of lowering wages. She found *** that employers regularly used the threat of moving operations to Mexico as a
way to thwart unionization drives. While most workers are not typically involved in unionization drives, it is easy to imagine
this dynamic playing out in other contexts where employers use the real or imagined threat from import competition as a reason
for holding down wages. The implication is the impact of trade on wages is likely to be even larger than the direct effect of
the goods actually brought into the country.
Finally, the balance of trade will have an impact on the overall level of employment in the economy when the economy is below
its full employment level of output. Until the Great Recession, most economists did not think that trade could affect the overall
level of employment, but only the composition. This meant that trade could cause us to lose manufacturing jobs in the Midwest,
but these job losses would be offset by gains in Silicon Valley and other tech centers. This could still mean bad news for the
manufacturing workers who lost their jobs, but the net effect for the country as a whole would still be positive.
The Great Recession changed this view, as many economists came to believe that the United States is facing a period of secular
stagnation: a sustained period in which lack of demand in the economy constrains growth and employment. In this context, the trade
deficit is a major cause of the lack of demand since it is spending that is creating demand in other countries rather than the
United States. If we could reduce the annual trade deficit by $100 billion then as a first approximation it will have the same
impact on the economy as a stimulus of $100 billion.
From this perspective, the trade deficit is a major source of job loss. Our current trade deficit of $500 billion a year (@2.8
percent of GDP) is a major drag on demand and employment. For this reason, a politician would be absolutely right to cite trade
as a big factor in the weakness of the labor market.
It is worth noting that many economists (including many at the Federal Reserve Board) now believe that the economy is close
to its full employment level of output, in which case trade is not now a net cause of job loss even if it had been earlier in
the recovery. There are two points to be made on this view.
First, there are many prominent economists, such as Paul Krugman and Larry Summers, who argue that the economy is still well
below its full employment level of output. So this is at least a debatable position.
Second, if we accept that the economy is near full employment it implies that close to 2 million prime age workers (ages 25-54)
have permanently left the labor market compared to 2007 levels of labor force participation. (The gap is close to 4 million if
we use 2000 as our comparison year.)
There is no generally accepted explanation as to why so many prime age workers would suddenly decide they didn't feel like
working, but one often invoked candidate is the loss of manufacturing jobs. The argument in this story is that the manufacturing
sector provided relatively good paying jobs for people without college degrees. With so many of these jobs now gone, these workers
can't find jobs. If this argument is true, then it means that trade has cost the country a large number of jobs even if the economy
is back at full employment.
In short, there are good reasons for a politician to complain about trade as a major source of our economic problems. There
is much research and economic theory that supports this position.
In a bid to end the massive welfare state, the Trump administration is expected to announce
new measures Wednesday that would end food stamp benefits for nearly 750,000 low-income folks.
The new rules will make it difficult for "states to gain waivers from a requirement that
beneficiaries work or participate in a vocational training program," according to
Bloomberg sources.
Republicans have long attempted to abolish the welfare state, claiming that the
redistribution of wealth for poor people keeps them in a state of perpetual poverty. They also
claim the welfare state is a system of command and control and has been used by Democrats for
decades as a political weapon against conservatives, hence why most inner cities vote
Democrat.
House Republicans tried to cut parts of the federal food assistance program last year, but
it was quickly rejected in the Senate.
The new requirements by the Trump administration would only target "able-bodied" recipients
who aren't caring for children under six.
Sources said the measure would be one of three enacted by the Trump administration to wind
down the massive federal food assistance program.
The measures are expected to boot nearly 3.7 million recipients from the Supplemental
Nutrition Assistance Program (SNAP). Though it comes at a time when employment is in a
downturn, manufacturing has stumbled into a recession
, and the US economy could be entering a mild recession in the year ahead. As to why President
Trump wants hundreds of thousands of low-income folks off SNAP ahead of an election year while
the economy is rapidly decelerating could be an administrative error that may lead to social
instabilities in specific regions that will be affected the hardest. Then again, no turmoil
could come out of it, and it's hailed as a success during the election year.
The Department of Agriculture estimates that the new measures could save the agency $1.1
billion in year one, and $7.9 billion by year five.
Nearly 36.4 million Americans in the "greatest economy ever" are on food stamps. At least
half of all Americans have low-wage jobs, barely enough to cover living expenses, nevertheless,
service their
credit cards with record-high interest rates . The economy as a whole is undergoing
profound structural changes with automation and artificial intelligence. Tens of millions of
jobs will be lost by 2030. It's likely the collision of these forces means the welfare state is
going nowhere and will only grow in size when the next recession strikes.
Cutting food stamps for low-income folks is the right move into creating a more leaner
government, but there are severe social implications that could be triggered if the new
measures are passed.
And while President Trump wants to slash the welfare state for poor people, his supply-side
policies and bailouts of corporate America have been record-setting in some respects.
Actions by the administration clearly show that corporate welfare for Wall Street elites is
more important than welfare for low-income folks. Perfect Storm: Trump Admin To Cut 750,000
From Food Stamps Ahead Of Recession
this is one of the most shameful acts for any president, especially a billionaire. If he
wants to save a billion/year, cut it from military. Or increase staff at SNAP to check for
fraud, but this is really shameful. I think it would've been better to raise tariff on China
and use that money to increase SNAP not decrease it
What's the need in cutting foodstamps? You can take every able-bodied recipient and have
them work a reasonable number of hours per week in a fair exchange. Plenty of work to be had
and you could do it WPA style where those of certain skills could apply them.
And if you want to cut welfare, START WITH CORPORATE WELFARE
This is a positive development in terms of the nuclear family. Women can't just abscond
with the kids and her husband's alimony if she knows she will have to actually get a job to
pay for her own food. I'm sick of paying taxes to support whore women and their bastard
children.
"The Department of Agriculture estimates that the new measures could save the agency $1.1
billion in year one, and $7.9 billion by year five."
Today's Repo operation by the Fed is $70.1 Billion. The $1.1 Billion in annual savings due
to this cut is about 1.5% of what the Fed pumped into the Repo market just today. I'm all for
cutting out the fraud. If you can work, then you should work. Don't work? Don't eat! But our
economy is a Service Sector for the most part now, and the wages suck for a big part in the
Service Sector. Wages overall have been nearly flat for about 30 years. How about we cut the
welfare **** to the banks, Wall Street? That would save trillions not just billions. Typical
DC. Fix problems while ******* over the little people, and continuing corporate welfare all
the while. This **** so needs to burn up!
great... outsource manufacturing, sign new trade deals to off shore more jobs, ramp up the
stock market for the rich, waste trillions on destabilizing other nations, give israel all
they want, print money to infinity, ask for zero interest rate.. and a billion per year to
feed poor people is too much.. Trump is in touch with the little guy
Trump will lose 2020... give the 750,000 guns and ammo and some food and water... and a
map to DC... Soros can provide the buses...
In a bid to end the massive welfare state, the Trump administration is expected to
announce new measures Wednesday that would end food stamp benefits for nearly 750,000
low-income folks
and yet Trump is crying for negative interest rates so the 0.1% can continue getting the
welfare they deserve ?
The new rules will make it difficult for "states to gain waivers from a requirement that
beneficiaries work or participate in a vocational training program," according to
Bloomberg sources.
And... those are actually the OLD rules, which are still on the books, but which Obama
waived by EO. I'm glad 750,00 are being cut from the roles.
Trump Admin To Cut 750,000 From Food Stamps Ahead Of Recession
OK, so I have to ask: What recession? Well, the coming one, obviously! So let's logic this
out. You wouldn't cut food stamps IN a recession (political suicide), so what's your
alternative? You're either in a recession or you're on your way to the next one which will
happen eventually, right? So, when would you be able to cut food stamps? I guess never by
that logic.
A video from Tucker Carlson. Every once in a while he's allowed to say things the
mainstream media isn't allowed to say.
The video is about Paul Singer (Elliott Management) and his hedge fund buying into
Cabela's which was headquartered in Sydney, Nebraska. Cabela's was merged with Bass Pro Shops
and the town lost 2000 jobs and was hard hit by Singer and his fund but Elliott Management
and Singer made a nice profit.
It shows the people and town left behind after the jobs leave. Watching this was
depressing.
While Obama organized 2014 coup data that smashed contitutional oder in Ukraine and installed far-right nationalists in power (Nulandgate) Obamam did not suppled arms toUkrains; Trump did
In his foreign policy Trump looks
like a Republican Obama, save Nobel Peace Price. If Obama was/is a CIA-democrat, this guy is a Deep State controlled republican. Why
is the Deep State is attacking him is completely unclear. May be they just do not like unpredictable, impulsive politicians
Despite his surrender "Neocon crazies from the basement" still attack his exactly the same way as they attacked him for
pretty mundane meeting with Putin and other fake "misdeeds" like Ukrainegate
And that means that he lost a considerable part of his electorate: the anti-war republicans
and former Sanders supporters, who voted for him in 2016 to block Hillary election.
And in no way he is an economic nationalist. He is
"national neoliberal" which rejects parts of neoliberal globalization based on treaties and
prefer to bully nations to compliance that favor the US interests instead of treaties. And his "fight" with the Deep state resemble so closely to complete and unconditional
surrender, that you might have difficulties to distinguish between the two. Most of his appointees are rabid neocons. Just look at Pompeo, Bolton, Fiona Hill. That that extends far beyond
those obvious crazies.
Washington
Post stating that he "has gone to extraordinary lengths to conceal details" of his
discussions with Russian President Vladimir Putin - telling Fox News host Jeanine Pirro in a
phone interview that he would be willing to release the details of a private conversation in
Helsinki last summer.
"I would. I don't care," Trump told Pirro, adding: "I'm not keeping anything under wraps. I
couldn't care less."
"I mean, it's so ridiculous, these people making up," Trump said of the WaPo report.
The president referred to his roughly two-hour dialogue with Putin in Helsinki -- at which
only the leaders and their translators were present -- as "a great conversation" that
included discussions about "securing Israel and lots of other things."
"I had a conversation like every president does," Trump said Saturday. "You sit with the
president of various countries. I do it with all countries." -
Politico
In July an attempt by House Democrats to subpoena Trump's Helsinki interpreter was quashed
by Republicans. "The Washington Post is almost as bad, or probably as bad, as the New York Times," Trump
said. When Pirro asked Trump about a Friday night New York Times report that the FBI had opened an
inquiry into whether he was working for Putin, Pirro asked Trump "Are you now or have you ever
worked for Russia, Mr. President?" "I think it's the most insulting thing I've ever been asked," Trump responded. "I think it's
the most insulting article I've ever had written."
Trump went on an
epic tweetstorm Saturday following the Times article, defending his 2017 firing of former
FBI Director James Comey, and tweeting that he has been "FAR tougher on Russia than Obama, Bush
or Clinton. Maybe tougher than any other President. At the same time, & as I have often
said, getting along with Russia is a good thing, not a bad thing. I fully expect that someday
we will have good relations with Russia again!"
"... As part of the scam, parents would "donate" money to a fake charity run by Singer. The funds would then be laundered to either pay off an SAT or ACT administrator to take the exams or bribe an employee in college athletics to name the rich, non-athlete children as recruits. Virtually every scenario relied on multiple layers of corruption, all of which eventually allowed wealthy students to masquerade as "deserving" of the merit-based college slots they paid up to half a million dollars to "qualify" for. ..."
"... When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor policy change, they generally do not get it. ..."
"... The conclusion of the study? We live in an oligarchy: ..."
The college bribery scandal reveals an ugly truth: our society is unjust, dominated by a small elite. Actress Lori
Loughlin, who has been implicated in the Operation Varsity Blues scandal. Credit:
Featureflash Photo Agency/Shutterstock The most destructive
and pervasive myth in America today is that we live in a meritocracy. Our elites, so the myth goes, earned their places at Yale and
Harvard, on Wall Street and in Washington -- not because of the accident of their birth, but because they are better, stronger, and
smarter than the rest of us. Therefore, they think, they've "earned" their places in the halls of power and "deserve" to lead.
The fervor with which so many believe this enables elites to lord over those worse off than they are. On we slumber, believing
that we live in a country that values justice, instead of working towards a more equitable and authentically meritocratic society.
Take the Operation Varsity Blues scandal. On Tuesday, the FBI and federal prosecutors announced that 50 people had been charged in,
as Sports Illustrated put it , "a nationwide college admissions scheme that used bribes to help potential students cheat
on college entrance exams or to pose as potential athletic recruits to get admitted to high-profile universities." Thirty-three parents,
nine collegiate coaches, two SAT/ACT exam administrators, an exam proctor,
and a college athletics administrator were among those charged. The man who allegedly ran the scheme, William Rick Singer, pled
guilty to four charges of racketeering conspiracy, money laundering conspiracy, conspiracy to defraud the U.S., and obstruction of
justice.
As part of the scam, parents would "donate" money to a fake charity run by Singer. The funds would then be laundered to either
pay off an SAT or ACT administrator to take the exams or bribe an employee in college athletics to name the rich, non-athlete children
as recruits. Virtually every scenario relied on multiple layers of corruption, all of which eventually allowed wealthy students to
masquerade as "deserving" of the merit-based college slots they paid up to half a million dollars to "qualify" for.
Cheating. Bribery. Lying. The wealthy and privileged buying what was reserved for the deserving. It's all there on vivid display.
Modern American society has
become increasingly and
banally corrupt , both in the ways in which "justice" is meted out and in who is allowed to access elite education and the power
that comes with it.
The average American citizen has very little power, as a 2014
study by Princeton University found. The research reviewed 1,779 public policy questions asked between 1981 and 2002 and the
responses by different income levels and interest groups; then calculated the likelihood that certain policies would be adopted.
A proposed policy change with low support among economically elite Americans (one-out-of-five in favor) is adopted only about
18 percent of the time, while a proposed change with high support (four-out-of-five in favor) is adopted about 45% of the time.
That's in stark contrast with policies favored by average Americans:
When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover,
because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favor
policy change, they generally do not get it.
The conclusion of the study? We live in an oligarchy:
our analyses suggest that majorities of the American public actually have little influence over the policies our government
adopts. [T]he preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact
upon public policy.
The belief in the myth of merit hurts the smart kid with great grades who aced his SATs but was still rejected from Yale and Harvard.
It hurts talented athletes who have worked their tails off for so many years. It hurts parents who have committed hundreds of school
nights and weekends to their children. It hurts HR departments that believe degrees from Ivy League schools mean that graduates are
qualified. It hurts all of us who buy into the great myth that America is a democratic meritocracy and that we can achieve whatever
we want if only we're willing to expend blood, toil, sweat, and tears.
At least in an outright class system like the British Houses of Lords and Commons, there is not this farcical playacting of equal
opportunity. The elites, with their privilege and titles, know the reason they are there and feel some sense of obligation to those
less well off than they are. At the very least, they do not engage in the ritual pretense of "deserving" what they "earned" -- quite
unlike those who descend on Washington, D.C. believing that they really are better than their compatriots in flyover country.
All societies engage in myth-making about themselves. But the myth of meritocracy may be our most pervasive and destructive belief
-- and it mirrors the myth that anything like "justice" is served up in our courts.
Despite all this evidence, most Americans embrace a version of the Calvinist beliefs promulgated by their forebears, believing
that the elect deserve their status. We remain confident that when our children apply to college or are
questioned by police , they will receive just and fair outcomes. If our neighbors' and friends' kids do not, then we assure ourselves
that it is they who are at fault, not the system.
The result has been a gaping chasm through our society. Lives are destroyed because, rather than working for real merit-based
systems and justice, we worship at the altar of false promises offered by our institutions. Instead we should be rolling up our sleeves
and seeing Operation Varsity Blues for what it is: a call to action.
Barbara Boland is the former weekend editor of the Washington Examiner . Her work has been featured on Fox News, the
Drudge Report, HotAir.com, RealClearDefense, RealClearPolitics, and elsewhere. She's the author of Patton Uncovered , a book
about General Patton in World War II. Follow her on Twitter@BBatDC.
If conservatives are going to dance the graves of Aunt Beckie, the backlash is going to be big. Sure this is a 'scandal' but it
seems these parents weren't rich enough to bribe their kids in college the right way, like Trumps and Kushner, and probably slightly
duped into going along with this scheme. (It appears the government got the ring leader to call all defendants to get evidence
they participated in a crime.)
Just wait until the mug shot of Aunt Beckie is on the internet and Olivia Jade does 60 minutes doing teary eyed interview of
how much she loves her mother. And how many parents are stress that their kids will struggle in the global competitive economy.
I fully recall the days of getting government computing contracts. Once a certain threshold was reached, you discovered you had to
hire a "lobbyist," and give him a significant amount of money to dole out to various gatekeepers in the bureaucracy for your contracts
to be approved. That was the end of our government contracts, and the end was hastened by the reaction to trying to complain about
it.
Thank you, Barbara Boland, for "The Myth of American Meritocracy" and for linking ("Related Articles" box) to the 2012 "The Myth
of American Meritocracy" by Ron Unz, then publisher of the American Conservative.
The 26,000-word Ron Unz research masterpiece was the opening salvo in the nation-wide discussion that ultimately led to the federal
court case nearing resolution in Boston.
"The Myth of American Meritocracy -- How corrupt are Ivy League admissions?" by Ron Unz, The American Conservative, Nov 28, 2012:
Barbara Boland "While black people make up only 13 percent of the population, they make up 42 percent of death row and 35 percent
of those who are executed."
Ms. Boland: According to the US Department of Justice, African Americans [13 per cent of the population] accounted for 52.5% of
all homicide offenders from 1980 to 2008.
I agree with prodigalson. This is the type of article that TAC should uphold as a 'gold standard'. One reason I read, and comment
on, TAC is that it offers thought provoking, and sometimes contrarian, articles (although the constant harping on transgender BS
gets annoying).
America has always been somewhat corrupt. But, to borrow a phrase, wealth corrupts, and uber wealth corrupts absolutely.
As Warren Buffet says "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning".
I have said it before, and I will say it again. During the next severe financial recession, if the rich are protected and coddled
and everybody else is left to fend for themselves the ARs will come out of the closets when the sheriff comes to take the house or
the pickup truck. My sense is that average Americans have had enough.
Imagine if the digital transfer of money was abolished. Imagine if everybody had to have their money in a local bank instead of
on an account in one of the major banks. Imagine if Americans saw, day after day, armored vehicles showing up at local banks to offload
sacks of currency that went to only a few individual accounts.
Instead, the elites get their financial statements showing an ever increasing pile of cash at their disposal. They see it, but
nobody else does. But, if everybody physically saw the river of wealth flowing to the elites, I believe things would change. Fast.
Right now this transfer of wealth is all digital, hidden from the view of 99.99% of Americans. And the elites, the banking industry,
and the wealth management cabal prefer it that way.
I am amazed by the media coverage of this scandal. Was anyone actually under the impression that college admissions were on the
level before these Hollywood bozos were caught red handed?
No, the meritocracy is not dead; it's not even dying. It is, in fact, alive and well and the absolute best alternative to any
other method used to separate wheat from chaff, cream from milk, diamonds from rust.
What else is there that is even half as good?
Are merit-based systems perfect? Heck, no. They've never been perfect; they will never be perfect. They are administered by people
and people are flawed. Not just flawed in the way Singer, and Huffman are flawed (and those individuals are not simply flawed, they're
corrupt) but flawed in the everyday kind of sense. Yes, we all have tendencies, biases, preferences that will -- inevitably -- leak
into our selection process, no matter how objectively strict the process may be structured, no matter how rigorously fair we try
to be.
So the fact that -- as with most things -- we can find a trace of corruption here that fact is meaningless. We can find evidence
of human corruption, venality, greed, sloth, lust, envy (all of the 7 Deadly Sins) pretty much everywhere. But if we look at the
20M students enrolled in college, the vast majority are successfully & fairly admitted through merit-based filtering systems (which
are more or less rigorous) which have been in place forever.
Ms. Boland tells us (with a straight face, no less) that "The U.S. is now a country where corruption is rampant and money buys
both access and outcomes." But what does that even mean?
Certainly money can buy access and certainly money can buy outcomes. But that's what money does. She might as well assert that
money can buy goods and services, and lions and tigers and bears -- oh my! Of course it can. Equally networks can 'buy' access and
outcomes (if my best friend is working as the manager for Adele, I'm betting he could probably arrange my meeting Adele). Equally
success & fame can buy access and outcomes. I'm betting Adele can probably arrange a meeting with Gwen Stefani .and both can arrange
a meeting with Tom Brady. So what? Does the fact that money can be used to purchase goods & services mean money or the use of money
is corrupt or morally degenerate? No, of course not. In truth, we all leverage what we have (whatever that may be) to get what we
want. That's how life works. But the fact that we all do that does not mean we are all corrupt.
But yes, corruption does exist and can usually be found, in trace amounts -- as I said -- pretty much everywhere.
So is it rampant? Can I buy my way into the NBA or the NFL? If I go to Clark Hunt and give him $20M and tell him I want to play
QB for the Chiefs, will he let me? Can I buy my way into the CEO's position at General Electric, Apple, Microsoft, Google, Sprint,
Verizon, General Motors, Toyota or any of the Fortune 500? Heck, can I even buy my way into the Governor's mansion? To become the
Mayor of Chicago? Or the Police Commissioner? No -- these things are not possible. But what I can buy is my presence on the media
stage.
What happens after cannot be purchased.
So no, by any measure, corruption is not rampant. And though many things are, in fact, for sale -- not everything is. And no matter
how much money I give anyone, I'm never gonna QB the Chiefs or play for the Lakers.
She tells us, "we are dominated by a rich and powerful elite." No, we're not. Most of us live our lives making the choices we
want to make, given the means that each of us has, without any interference from any so-called "elite". The "elite" didn't tell me
where to go to school, or where to get a job, or how to do my job, or when to have kids, or what loaf of bread to buy, or what brand
of beer tastes best, or where to go on the family vacation. No one did. The elite obviously did not tell us who to vote for in the
last presidential election.
Of course one of the problems with the "it's the fault of the elite" is the weight given institutions by people like Ms.Boland.
"Oh, lordy, the Elite used their dominating power to get a brainless twit of a daughter into USC". Now if my kid were cheated out
of a position at USC because the Twit got in, I'd be upset but beyond that who really cares if a Twit gets an undergraduate degree
from USC or Yale .or Harvard .or wherever. Some of the brightest people I've known earned their degrees at Easter PolyTechnic U (some
don't even have college degrees -- oh, the horror!); some of the stupidest have Ivy League credentials. So what?
Only if you care about the exclusivity of such a relatively meaningless thing as a degree from USC, does gaming the exclusivity
matter.
She ends with the exhortation: "The result has been a gaping chasm through our society. Lives are destroyed because, rather than
working for real merit-based systems and justice, we worship at the altar of false promises offered by our institutions. Instead
we should be rolling up our sleeves and seeing Operation Varsity Blues for what it is: a call to action."
To do what, exactly?
Toss the baby and the bathwater? Substitute lottery selection for merit? Flip a coin? What?
Again the very best method is and always will be merit-based. That is the incentive which drives all of us: the hope that if we work
hard enough and do well enough, that we will succeed. Anything else is just a lie.
Yes, we can root out this piece of corruption. Yes, we can build better and more rigorously fair systems. But in the end, merit
is the only game in town. Far better to roll-up our sleeves and simply buckle down, Winsocki. There isn't anything better.
"While black people make up only 13 percent of the population, they make up 42 percent of death row and 35 percent of those who are
executed. There are big racial disparities in charging, sentencing, plea bargaining, and executions, Department of Justice reviews
have concluded, and black and brown people are disproportionately found to be innocent after landing on death row. The poor and disadvantaged
thereby become grist for a system that cares nothing for them."
So to what degree are these "disparities" "disproportionate" in light of actual criminal behavior? To be "proportionate," would
we expect criminal behavior to correlate exactly to racial, ethnic, sex, and age demographics of society as a whole?
Put another way, if you are a victim of a violent crime in America, what are the odds your assailant is, say, an elderly, Asian
female? Approximately zero.
Conversely, what are the odds your assailant is a young, black male? Rather high, and if you yourself are a young, black male,
approaching 100 percent.
Mostly thumbs up to this article. But why you gotta pick on Calvinism at the end? Anyway, your understanding of Calvinism is entirely
upside down. Calvinists believe they are elect by divine grace, and salvation is something given by God through Jesus, which means
you can't earn it and you most assuredly don't deserve it. Calvinism also teaches that all people are made in the image of God and
worthy of respect, regardless of class or status. There's no "version" of Calvinism that teaches what you claim.
"... And while I am not as focused on the poverty ve wealth dynamic. this century has revealed something very disappointing that you address. That the elites have done a very poor job of leading the ship of state, while still remaining in leadership belies such a bold hypocrisy in accountability, it's jarring. The article could actually be titled: "The Myth of the Best and the Brightest." ..."
"... They are teaching the elite how to drain all value from American companies, as the rich plan their move to China, the new land of opportunity. When 1% of the population controls such a huge portion of the wealth, patriotism becomes a loadstone to them. The elite are global. Places like Harvard cater to them, help train them to rule the world .but first they must remake it. ..."
"... In my high school, there were roughly 15 of us who had been advanced two years ahead in math. Of those, 10 were Jewish; only two of them had a 'Jewish' last name. In my graduate school class, half (7) are Jewish. None has a 'Jewish' last name. So I'm pretty dubious of the counting method that you use. ..."
"... Regarding the declining Jewish achievement, it looks like it can be primarily explained through demographics: "Intermarriage rates have risen from roughly 6% in 1950 to approximately 40–50% in the year 2000.[56][57] This, in combination with the comparatively low birthrate in the Jewish community, has led to a 5% decline in the Jewish population of the United States in the 1990s." ..."
"... Jewish surnames don't mean what they used to. And intermarriage rates are lowest among the low-performing and highly prolific Orthodox. ..."
"... A potentially bigger issue completely ignored by your article is how do colleges differentiate between 'foreign' students (overwhelmingly Asian) and American students. Many students being counted as "Asian American" are in reality wealthy and elite foreign "parachute kids" (an Asian term), dropped onto the generous American education system or into boarding schools to study for US entrance exams, qualify for resident tuition rates and scholarships, and to compete for "American" admissions slots, not for the usually limited 'foreign' admission slots. ..."
"... As some who is Jewish from the former Soviet Union, and who was denied even to take an entrance exam to a Moscow college, I am saddened to see that American educational admission process looks more and more "Soviet" nowadays. Kids are denied opportunities because of their ethnic or social background, in a supposedly free and fair country! ..."
"... Actually, Richard Feynman famously rejected genetic explanations of Jewish achievement (whether he was right or wrong to do so is another story), and aggressively resisted any attempts to list him as a "Jewish scientist" or "Jewish Nobel Prize winner." I am sure he would not cared in the slightest bit how many Jews were participating in the Physics Olympiad, as long as the quality of the students' work continued to be excellent. Here is a letter he wrote to a woman seeking to include him in a book about Jewish achievement in the sciences. ..."
"... It would be interesting to know how well "true WASPS" do in admissions. This could perhaps be estimated by counting Slavic and Italian names, or Puritan New England last names. I would expect this group to do almost as well as Jews (not quite as well, because their ability would be in the lower end of the Legacy group). ..."
"... The missing variable in this analysis is income/class. While Unz states that many elite colleges have the resources to fund every student's education, and in fact practice need-blind admissions, the student bodies are skewed towards the very highest percentile of the income and wealth distribution. SAT scores may also scale with parents' income as well. ..."
"... Having worked with folks from all manner of "elite" and not so elite schools in a technical field, the main conclusion I was able to draw was folks who went to "elite" colleges had a greater degree of entitlement. And that's it. ..."
"... My own position has always been strongly in the former camp, supporting meritocracy over diversity in elite admissions. ..."
"... The Reality of American Mediocrity ..."
"... The central test of fairness in any admissions system is to ask this simple question. Was there anyone admitted under that system admitted over someone else who was denied admission and with better grades and SAT scores and poorer ? If the answer is in the affirmative, then that system is unfair , if it is in the negative then the system is fair. ..."
"... Harvard ranks only 8th after Penn State in the production of undergrads who eventually get Doctorates in Science and Engineering. Of course Berkeley has the bragging rights for that kind of attribute. ..."
"... There is an excellent analysis of this article at The Occidental Observer by Kevin MacDonald, "Ron Unz on the Illusory American Meritocracy". The MSM is ignoring Unz's article for obvious reasons. ..."
"... Could it be that the goal of financial, rather than academic, achievement, makes many young people uninterested in competing in the science and math competitions sought out by the Asian students? I ..."
"... America never promised success through merit or equality. That is the American "dream." ..."
"... Anyone famliar with sociology and the research on social stratification knows that meritocracy is a myth; for example, if one's parents are in the bottom decile of the the income scale, the child has only a 3% chance to reach the top decile in his or her lifetime. In fact, in contrast to the Horatio Alger ideology, the U.S. has lower rates of upward mobility than almost any other developed country. Social classses exist and they tend to reproduce themselves. ..."
"... The rigid class structure of the the U.S. is one of the reasons I support progressive taxation; wealth may not always be inherited, but life outcomes are largely determined by the class position of one's parents. In this manner, it is also a myth to believe that wealth is an individual creation;most financially successful individuals have enjoyed the benefits of class privilege: good and safe schools, two-parent families, tutors, and perhaps most important of all, high expecatations and positive peer socialization (Unz never mentions the importants of peeer groups, which data show exert a strong causal unfluence on academic performance). ..."
"... And I would challenge Unz's assertion that many high-performing Asians come from impovershed backgrounds: many of them may undereport their income as small business owners. I believe that Asian success derives not only from their class background but their culture in which the parents have authority and the success of the child is crucual to the honor of the family. As they assimilate to the more individualist American ethos, I predict that their academic success will level off just as it has with Jews. ..."
"... All I can say is see a book: "Ivy League Fools and Felons"' by Mack Roth. Lots of them are kids of corrupt people in all fields. ..."
Just before the Labor Day weekend, a front page New York Times story broke the news of the largest cheating scandal in Harvard University
history, in which nearly half the students taking a Government course on the role of Congress had plagiarized or otherwise illegally
collaborated on their final exam.
[1] Each year, Harvard admits just 1600 freshmen while almost 125 Harvard students now face possible suspension over this single
incident. A Harvard dean described the situation as "unprecedented."
But should we really be so surprised at this behavior among the students at America's most prestigious academic institution? In
the last generation or two, the funnel of opportunity in American society has drastically narrowed, with a greater and greater proportion
of our financial, media, business, and political elites being drawn from a relatively small number of our leading universities, together
with their professional schools. The rise of a Henry Ford, from farm boy mechanic to world business tycoon, seems virtually impossible
today, as even America's most successful college dropouts such as Bill Gates and Mark Zuckerberg often turn out to be extremely well-connected
former Harvard students. Indeed, the early success of Facebook was largely due to the powerful imprimatur it enjoyed from its exclusive
availability first only at Harvard and later restricted to just the Ivy League.
During
this period, we have witnessed a huge national decline in well-paid middle class jobs in the manufacturing sector and other sources
of employment for those lacking college degrees, with median American wages having been stagnant or declining for the last forty
years. Meanwhile, there has been an astonishing concentration of wealth at the top, with America's richest 1 percent now possessing
nearly as much net wealth as the bottom 95 percent.
[2]
This situation, sometimes described as a "winner take all society," leaves families desperate to maximize the chances that their
children will reach the winners' circle, rather than risk failure and poverty or even merely a spot in the rapidly deteriorating
middle class. And the best single means of becoming such an economic winner is to gain admission to a top university, which provides
an easy ticket to the wealth of Wall Street or similar venues, whose leading firms increasingly restrict their hiring to graduates
of the Ivy League or a tiny handful of other top colleges.
[3] On the other side, finance remains the favored employment choice for Harvard, Yale or Princeton students after the diplomas
are handed out. [4]
As a direct consequence, the war over college admissions has become astonishingly fierce, with many middle- or upper-middle class
families investing quantities of time and money that would have seemed unimaginable a generation or more ago, leading to an all-against-all
arms race that immiserates the student and exhausts the parents. The absurd parental efforts of an Amy Chua, as recounted in her
2010 bestseller Battle Hymn of the Tiger Mother , were simply a much more extreme version of widespread behavior among her
peer-group, which is why her story resonated so deeply among our educated elites. Over the last thirty years, America's test-prep
companies have grown from almost nothing into a $5 billion annual industry, allowing the affluent to provide an admissions edge to
their less able children. Similarly, the enormous annual tuition of $35,000 charged by elite private schools such as Dalton or Exeter
is less for a superior high school education than for the hope of a greatly increased chance to enter the Ivy League.
[5]
Many New York City parents even go to enormous efforts to enroll their children in the best possible pre-Kindergarten program,
seeking early placement on the educational conveyer belt which eventually leads to Harvard.
[6] Others cut corners in a more
direct fashion, as revealed in the huge SAT cheating rings recently uncovered in affluent New York suburbs, in which students were
paid thousands of dollars to take SAT exams for their wealthier but dimmer classmates.
[7]
But given such massive social and economic value now concentrated in a Harvard or Yale degree, the tiny handful of elite admissions
gatekeepers enjoy enormous, almost unprecedented power to shape the leadership of our society by allocating their supply of thick
envelopes. Even billionaires, media barons, and U.S. Senators may weigh their words and actions more carefully as their children
approach college age. And if such power is used to select our future elites in a corrupt manner, perhaps the inevitable result is
the selection of corrupt elites, with terrible consequences for America. Thus, the huge Harvard cheating scandal, and perhaps also
the endless series of financial, business, and political scandals which have rocked our country over the last decade or more, even
while our national economy has stagnated.
Just a few years ago Pulitzer Prize-winning former Wall Street Journal reporter Daniel Golden published The Price
of Admission , a devastating account of the corrupt admissions practices at so many of our leading universities, in which every
sort of non-academic or financial factor plays a role in privileging the privileged and thereby squeezing out those high-ability,
hard-working students who lack any special hook.
In one particularly egregious case, a wealthy New Jersey real estate developer, later sent to Federal prison on political corruption
charges, paid Harvard $2.5 million to help ensure admission of his completely under-qualified son.
[8] When we consider that Harvard's
existing endowment was then at $15 billion and earning almost $7 million each day in investment earnings, we see that a culture of
financial corruption has developed an absurd illogic of its own, in which senior Harvard administrators sell their university's honor
for just a few hours worth of its regular annual income, the equivalent of a Harvard instructor raising a grade for a hundred dollars
in cash.
An admissions system based on non-academic factors often amounting to institutionalized venality would seem strange or even unthinkable
among the top universities of most other advanced nations in Europe or Asia, though such practices are widespread in much of the
corrupt Third World. The notion of a wealthy family buying their son his entrance into the Grandes Ecoles of France or the top Japanese
universities would be an absurdity, and the academic rectitude of Europe's Nordic or Germanic nations is even more severe, with those
far more egalitarian societies anyway tending to deemphasize university rankings.
Well, legacy programs are alive and well. According to the read, here's the problem:
"The research certainly supports the widespread perception that non-academic factors play a major role in the process,
including athletic ability and "legacy" status. But as we saw earlier, even more significant are racial factors, with black
ancestry being worth the equivalent of 310 points, Hispanics gaining 130 points, and Asian students being penalized by 140
points, all relative to white applicants on the 1600 point Math and Reading SAT scale."
These arbitrary point systems while well intended are not a reflection of AA design. School lawyers in a race not be penalized
for past practices, implemented their own versions of AA programs. The numbers are easy to challenge because they aren't based
on tangible or narrow principles. It's weakneses are almost laughable. Because there redal goal was to thwart any real challenge
that institutions were idle in addressing past acts of discrimination. To boost their diversity issues, asians were heavily recruited.
Since AA has been in place a lot of faulty measures were egaged in: Quotas for quotas sake. Good for PR, lousy for AA and issues
it was designed to address.
I think the statistical data hides a very important factor and practice. Most jews in this country are white as such , and
as such only needed to change their names and hide behaviors as a strategy of surviving the entrance gauntlet. That segregation
created a black collegiate system with it's own set of elite qualifiers demonstrates that this model isn't limited to the Ivy
league.
That an elite system is devised and practiced in members of a certain club networks so as to maintain their elite status, networks
and control, this is a human practice. And it once served as something to achieve. It was thought that the avenues of becoming
an elite were there if one wanted to strive for it. Hard work, honesty, persistence, results . . . should yield X.
And while I am not as focused on the poverty ve wealth dynamic. this century has revealed something very disappointing
that you address. That the elites have done a very poor job of leading the ship of state, while still remaining in leadership
belies such a bold hypocrisy in accountability, it's jarring. The article could actually be titled: "The Myth of the Best and
the Brightest."
I don't think it's just some vindictive intent. and while Americans have always known and to an extent accepted that for upper
income citizens, normal was not the same as normal on the street. Fairness, was not the same jn practice nor sentiment. What may
becoming increasing intolerant has been the obvious lack of accountability among elites. TARP looked like the elites looking out
for each other as opposed the ship of state. I have read three books on the financials and they do not paint a pretty portrait
of Ivy League leadership as to ethics, cheating, lying, covering up, and shamelessly passing the buck. I will be reading this
again I am sure.
It's sad to think that we may be seeing te passing of an era. in which one aspired to be an elite not soley for their wealth,
but the model they provided od leadership real or imagined. Perhaps, it passed long ago, and we are all not just noticing.
I appreciated you conclusions, not sure that I am comfortable with some of the solutions.
Since I still hanker to be an elite in some manner, It is interesting to note my rather subdued response to the cheating. Sadly,
this too may be an open secret of standard fair - and that is very very sad. And disappointing. Angering even.
The shifting social demography of deans, house masters and admissions committees may be a more important metric than the composition
of the student body, as it determines the shape of the curriculum, and the underlying culture of the university as a legacy in
itself.
If Ron harrows the literary journals of the Jackson era with equal diligence. he may well turn up an essay or two expressing
deep shock at Unitarians admitting too many of the Lord's preterite sheep to Harvard, or lamenting the rise of Methodism at Yale
and the College of New Jersey.
Harvard is a university, much like Princeton and Yale, that continues based on its reputation, something that was earned in
the past. When the present catches up to them people will regard them as nepotistic cauldrons of corruption.
Look at the financial disaster that befell the USA and much of the globe back in 2008. Its genesis can be found in the clever
minds of those coming out of their business schools (and, oddly enough, their Physics programs as well).
They are teaching the elite how to drain all value from American companies, as the rich plan their move to China, the new
land of opportunity. When 1% of the population controls such a huge portion of the wealth, patriotism becomes a loadstone to them.
The elite are global. Places like Harvard cater to them, help train them to rule the world .but first they must remake it.
• Replies: @Part White, Part
Native I agree, common people would never think of derivatives , nor make loans based on speculation
First, I appreciated the length and depth of your article.
Having said that, to boil it down to its essence:
Subconcious bias/groupthink + affirmative action/diversity focus + corruption + innumeracy = student bodies at elite institutions
that are wildly skewed vis-a-vis both: 1) the ethnic makeup of the general population; and 2) the makeup of our top-performing
students.
Since these institutions are pipelines to power, this matters.
I rather doubt that wage stagnation (which appears to have begun in ~1970) can be pinned on this – that part stuck out, because
there are far more plausible causes. To the extent you're merely arguing that our elite failed to counter the trend, ok, but I'm
not sure a "better" elite would have either. The trend, after all, favored the elite.
Anyway, I find your case is plausible.
Your inner/outer circle hybrid option is interesting. One (perhaps minor) thing jumps out at me: kids talk. The innies are
going to figure out who they are and who the outies are. The outies might have their arrogance tempered, but the innies? I suspect
they'd be even *more* arrogant than such folks are now (all the more so because they'd have better justification for their arrogance),
but I could be wrong.
Perhaps more significantly, this:
But if it were explicitly known that the vast majority of Harvard students had merely been winners in the application
lottery, top businesses would begin to cast a much wider net in their employment outreach, and while the average Harvard student
would probably be academically stronger than the average graduate of a state college, the gap would no longer be seen as so
enormous, with individuals being judged more on their own merits and actual achievements
Is a very good reason for Harvard, et al. to resist the idea. I think you're right that this would be a good thing for the
country, but it would be bad for Harvard. I think the odds of convincing Harvard to do it out of the goodness of their administrators
hearts is unlikely. You are basically asking them to purposefully damage their brand.
All in all, I think you're on to something here. I have my quibbles (the wage stagnation thing, and the graph with Chinese
vs USA per capita growth come on, apples and oranges there!), but overall I think I agree that your proposal is likely superior
to the status quo.
Don't forget the mess one finds after they ARE admitted to these schools. I dropped out of Columbia University in 2010.
You can "make it" on an Ivy-league campus if you are a conservative-Republican-type with all the rich country-club connections
that liberals use to stereotype.
Or you can succeed if you are a poor or working-class type who is willing to toe the Affirmative Action party line and be a
good "progressive" Democrat (Obama stickers, "Gay Pride" celebrations, etc.)
If you come from a poor or working-class background and are religious, or culturally conservative or libertarian in any way,
you might as well save your time and money. You're not welcome, period. And if you're a military veteran you WILL be actively
persecuted, no matter what the news reports claim.
It sucks. Getting accepted to Columbia was a dream come true for me. The reality broke my heart.
Regarding the overrepresentation of Jewish students compared to their actual academic merit, I think the author overstates
the role bias (subjective, or otherwise) plays in this:
1) , a likely explanation is that Jewish applicants are a step ahead in knowing how to "play the admissions game." They therefore
constitute a good percentage of applicants that admission committees view as "the total package." (at least a higher percentage
than scores alone would yield). Obviously money and connections plays a role in them knowing to say precisely what adcoms want
to hear, but in any case, at the end of the day, if adcoms are looking for applicants with >1400 SATs, "meaningful" life experiences/accomplishments,
and a personal statement that can weave it all together into a compelling narrative, the middle-upper-class east coast Jewish
applicant probably constitutes a good percentage of such "total package" applicants. I will concede however that this explanation
only works in explaining the prevalence of jews vs. whites in general. With respect to Asians, however, since they are likely
being actively and purposefully discriminated against by adcoms, having the "complete package" would be less helpful to them.
2) Another factor is that, regardless of ethnicity, alumni children get a boost and since in the previous generation Jewish
applicants were the highest achieving academic group, many of these lesser qualified jews admitted are children of alumni.
3) That ivy colleges care more about strong verbal scores than mathematics (i.e., they prefer 800V 700M over 700V 800M), and
Jewish applicants make up a higher proportion of the high verbal score breakdowns.
4) Last, and perhaps more importantly we do not really know the extent of Jewish representation compared to their academic
merit. Unlike admitted Asian applicants, who we know, on average, score higher than white applicants, we have no similar numbers
of Jewish applicants. The PSAT numbers are helpful, but hardly dispositive considering those aren't the scores colleges use in
making their decision information.
@Bryan– Getting accepted to Columbia was a dream come true for me. The reality broke my heart.
I'm touched by this. I've spent tons of time at Columbia, a generation ago -- and my background fit fine -- the kind of WASP
background Jews found exotic and interesting. But I can see your point, sad to say. There are other great schools -- Fordham,
where my wife went to law school at night, has incredible esprit de corps - and probably, person for person, has as many lawyers
doing good and interesting work as Columbia.
"There are other great schools–Fordham, where my wife went to law school at night, has incredible esprit de corps - and
probably, person for person, has as many lawyers doing good and interesting work as Columbia."
"Tiffany was also rejected by all her other prestigious college choices, including Yale, Penn, Duke, and Wellsley, an outcome
which greatly surprised and disappointed her immigrant father.88″
In the fall of 1990, my parents had me apply to 10 colleges. I had the profile of many Indian kids at the time – ranked in
the top 10 of the class, editor of school paper, Boy Scouts. SAT scores could have been better, but still strong. Over 700 in
all achievement tests save Bio, which was 670.
Rejected by 5 schools, waitlisted by 3, accepted into 2 – one of them the state univ.
One of my classmates, whose family was from Thailand, wound up in the same predicament as me. His response, "Basketball was
designed to keep the Asian man down."
The one black kid in our group – got into MIT, dropped out after one year because he could not hack it. The kid from our school
who should have gone, from an Italian-American family, and among the few who did not embrace the guido culture, went to Rennsealer
instead, and had professional success after.
As a University of Chicago alum, I infer that by avoiding the label "elite" on such a nifty chart we can be accurately categorized
as "meritocratic" by The American Conservative.
Then again, this article doesn't even purport to ask why elite universities might be in the business of EDUCATING a wider population
of students, or how that education takes place.
Perhaps, by ensuring that "the best" students are not concentrated in only 8 universities is why the depth and quality of America's
education system remains the envy of the world.
In my high school, there were roughly 15 of us who had been advanced two years ahead in math. Of those, 10 were Jewish;
only two of them had a 'Jewish' last name. In my graduate school class, half (7) are Jewish. None has a 'Jewish' last name.
So I'm pretty dubious of the counting method that you use.
Also, it's clear that there are Asian quotas at these schools, but it's not clear that Intel Science Fairs, etc, are the best
way to estimate what level of talent Asians have relative to other groups.
I was curious so I google High School Poetry Competition, High School Constitution Competition, High School Debating Competition.
None of the winners here seem to have an especially high Asian quotient. So maybe a non-technical (liberal arts) university would
settle on ~25-30% instead of ~40% asian? And perhaps a (small) part of the problem is a preponderance of Asian applicants excelling
in technical fields, leading to competition against each other rather than the general population? Just wonderin'
Regarding the declining Jewish achievement, it looks like it can be primarily explained through demographics: "Intermarriage
rates have risen from roughly 6% in 1950 to approximately 40–50% in the year 2000.[56][57] This, in combination with the comparatively
low birthrate in the Jewish community, has led to a 5% decline in the Jewish population of the United States in the 1990s."
Jewish surnames don't mean what they used to. And intermarriage rates are lowest among the low-performing and highly prolific
Orthodox.
Jewish birth rates have been falling faster than the white population, especially for the non-Orthodox:
"In contrast to the ongoing trends of assimilation, some communities within American Jewry, such as Orthodox Jews, have significantly
higher birth rates and lower intermarriage rates, and are growing rapidly. The proportion of Jewish synagogue members who were
Orthodox rose from 11% in 1971 to 21% in 2000, while the overall Jewish community declined in number. [60] In 2000, there were
360,000 so-called "ultra-orthodox" (Haredi) Jews in USA (7.2%).[61] The figure for 2006 is estimated at 468,000 (9.4%).[61]"
"As against the overall average of 1.86 children per Jewish woman, an informed estimate gives figures ranging upward from 3.3
children in "modern Orthodox" families to 6.6 in Haredi or "ultra-Orthodox" families to a whopping 7.9 in families of Hasidim."
These statistics would suggest that half or more of Jewish children are being born into these lower-performing groups. Given
their very low intermarriage rates, a huge portion of the secular, Reform, and Conservative Jews must be intermarrying (more than
half if the aggregate 43% intermarriage figure is right). And the high-performing groups may now be around 1 child per woman or
lower, and worse for the youngest generation.
So a collapse in Jewish representation in youth science prizes can be mostly explained by the collapse of the distinct non-Orthodox
Jewish youth.
Incidentally, intermarriage also produces people with Jewish ancestry who get classified as gentiles using last names or self-identification,
reducing Jewish-gentile gaps by bringing up nominal gentile scores at the same time as nominal-Jewish scores are lowered.
The center of power in this country being located in the Northeast is nothing new. Whether it be in it's Ivy League schools
or the ownership of natural resources located in other regions, particularly the South, the Northeast has always had a disproportionate
share of influence in the power structures, particularly political and financial, of this nation. This is one of the reasons the
definition of "white" when reviewing ethnicity is so laughably inaccurate. There is a huge difference in opportunity between WASP
or Jewish in the Northeast, for instance, and those of Scots Irish ancestory in the mountain south. Hopefully statistical analysis
such as this can break open that stranglehold, especially as it is directly impacting a minority group in a negative fashion.
Doing this exercise using say, white Baptists compared to other white subgroups, while maybe equally valid in the results, would
be seen as racist by the very Ivy League system that is essentially practicing a form of racism.
Yeah, my ultimate goal was to attend law school, and a big part of the heartbreak for me–or heartburn, the more cynical would
call it–was seeing how skewed and absurd the admissions process to law school is.
I have no doubt that I could have eventually entered into a "top tier" law school, and that was a dream of mine also. I met
with admissions officers from Duke, Harvard, Stanford, Fordham, etc. I was encouraged. I had the grades and background for it.
But–and I'm really not trying to sound corny 0r self-important here–what does it profit a man to gain the world and lose his
soul? I really don't feel that I'm exaggerating when I say that that's exactly how it felt to me.
The best experience I had while In New York was working as an after-school programs administrator for P.S. 136, but that was
only because of the kids. They'll be old and bitter and cynical soon enough.
At one point it occurred to me that I should have just started claiming "Black" as my ethnicity when I first started attending
college as an adult. I never attended high-school so it couldn't have been disproved. I'm part Sicilian so I could pass for 1/4
African-American. Then I would have received the preference toward admission that, say, Michael Jordan's kids or Barack Obama's
kids will receive when they claim their Ivy-league diplomas. I should have hid the "white privilege" I've enjoyed as the son of
a fisherman and a waitress from one of the most economically-depressed states in America.
The bottom line is that those colleges are political brainwashing centers for a country I no longer believe in. I arrived on
campus in 2009 and I'm not joking at all when I say I was actively persecuted for being a veteran and a conservative who was not
drinking the Obama Kool-aid. Some big fat African-American lady, a back-room "administrator" for Columbia, straight-up threw my
VA benefits certification in the garbage, so my money got delayed by almost two months. I had no idea what was going on. I had
a wife and children to support.
The fact that technology has enabled us to sit here in real-time and correspond back-and-forth about the state of things doesn't
really change the state of things. They are irredeemable. This country is broke and broken.
If Abraham Lincoln were born today in America he would wind up like "Uncle Teardrop" from Winter's Bone. Back then, in order
to be an attorney, you simply studied law and starting trying cases. If you were good at it then you were accepted and became
a lawyer. Today, something has been lost. There is no fixing it. I don't want to waste my time trying to help by being "productive"
to the new tower of Babel or pretending to contribute.
Perhaps only one thing you left out, which is especially important with regard to Jewish enrollment and applications at Ivy
leagues, and other schools as well.
Jewish high school graduates actively look out for campuses with large Jewish populations, where they feel more comfortable.
I don't know the figures, but I believe Dartmouth, for example, has a much smaller Jewish population than Columbia, and it will
stay that way because of a positive feedback loop. (i.e. Jews would rather be at Columbia than Dartmouth, or sometimes even rather
be at NYU than Dartmouth). This explains some of the difference among different schools (and not solely better admission standards).
This is also especially relevant to your random lottery idea, which will inevitably lead to certain schools being overwhelmingly
Asian, others being overwhelmingly Jewish, etc., because the percentage of applicants from every ethnicity is different in every
school. This will necessarily eliminate any diversity which may or may not have existed until now.
I like the lottery admissions idea a lot but the real remedy for the US education system would be to abandon the absurd elite
cult altogether. There is not a shred of evidence that graduates of so-called elite institutions make good leaders. Many of them
are responsible for the economic crash and some of them have brought us the disaster of the Bush presidency.
Many better functioning countries – Germany, the Scandinavians – do not have elite higher education systems. When I enrolled
to University in Germany, I showed up at the enrollment office the summer before the academic year started, filled out a form
(1), and provided a certified copy of my Abitur certificate proving that I was academically competent to attend University. I
never wasted a minute on any of the admissions games that American middle class teenagers and their parents are subjected to.
It would surely have hurt my sense of dignity to be forced to jump through all these absurd and arbitrary hoops.
Americans, due to their ignorance of everything happening outside their borders, have no clue that a system in which a person
is judged by what "school" they attended is everything but normal. It is part of the reason for American dysfunction.
Since they are the pool from which tomorrow's governing elites will be chosen, I'd much rather see Ivy League student bodies
which reflected the full ethnic and geographic diversity of the US. Right now rural and small town Americans and those of Catholic
and Protestant descent who live in the South and Mid-West - roughly half the population - are woefully under-represented, which
explains why their economic interests have been neglected over the last forty years. We live in a multi-cultural, multi-ethnic
representative democracy and our policy-making elites must reflect that diversity. Else the country will come apart.
Thus I recommend 'affirmative action for all' in our elite liberal arts colleges and universities (though not our technical
schools). Student bodies should be represent 'the best and the brightest' of every ethnic group and geographical area of the country.
Then the old school ties will truly knit our society together in a way that is simply not happening today.
A side benefit - and I mean this seriously - is that our second and third tier colleges and universities would be improved
by an influx of Asian and Ashkenazi students (even though the very best would still go to Harvard).
I believe that this article raises – and then inappropriately immediately dismisses – the simplest and most likely reason for
the over-representation of Jewish students at Ivy League Schools in the face of their declining bulk academic performance:
They apply to those schools in vastly disproportionate numbers.
Without actual data on the ethnicity of the applicants to these and other schools, we simply cannot rule out this simple and
likely explanation.
It is quite clear that a large current of Jewish American culture places a great emphasis on elite college attendance, and
among elite colleges, specifically values the Ivy League and its particular cache as opposed to other elite institutions such
as MIT. Also, elite Jewish American culture, moreso than elite Asian American culture, encourages children to go far away from
home for college, considering such a thing almost a right of passage, while other ethnic groups tend to encourage children to
remain closer. A high performing Asian student from, say, California, is much more likely to face familial pressure to stay close
to home for undergrad (Berkeley, UCLA, etc) than a high performing Jewish student from the same high school, who will likely be
encouraged by his or her family to apply to many universities "back east".
Without being able to systematically compare – with real data – the ethnicities of the applicants to those offered admission,
these conclusions simply cannot be accepted.
Different expectations for different races should worry traditional Americans.
If we become comfortable with different academic standards for Asians will we soon be expected to apply different laws to them
also? Will we apply different laws or at least different interpretations of the same laws to blacks?
The association of East Asians with CalTech is now as strong as the association of blacks with violent crime. Can not race
conscious jurisprudence be far behind?
Around a millenium ago in England it mattered to the court if you were a commoner or a noble. Nobles could exercise 'high justice'
with impunity. They were held to different standards. Their testimony counted for more in court. The law was class concious.
Then we had centuries of reform. We had 'Common Law'. By the time of our revolution the idea that all were equal before the
law was a very American kind of idea. We were proud that unlike England we did not have a class system.
Today we seem to be on the threshold of a similar sytem of privileges and rights based on race. Let me give an example. If
there were a domestic riot of somekind and a breakdown of public order, the authorities might very well impose a cufew. That makes
good sense for black male teens but makes little or no sense for elderly Chinese women. I can envision a time when we have race
specific policies for curfews and similar measures.
It seems to be starting in schools. It could be that the idea of equality before the law was an idea that only flourished between
the fifteenth century and the twenty first.
"But filling out a few very simple forms and having their test scores and grades scores automatically forwarded to a list of
possible universities would give them at least the same chance in the lottery as any other applicant whose academic skills were
adequate."
They get a lot of applications. I am guessing they chuck about 1/2 or more due to the application being incomplete, the applicant
did not follow instructions, the application was sloppy, or just obviously poor grades/test scores. The interview and perhaps
the essay and recommendations are necessary to chuck weirdos and psychopaths you do not want sitting next to King Fahd Jr. So
the "byzantine" application process is actually necessary to reduce the number of applicants to be evaluated.
I have a friend who went to Stanford with me in the early 80s. She has two sons who recently applied to Stanford. The older
son had slightly better grades and test scores. The younger son is gay. Guess which one got in?
If you were in Columbia's GS school, (or even if you were CC/SEAS/Barnard) you ought to reach out to some of on-campus and
alumni veteran's groups. They can help you maneuver through the school. (I know there's one that meets at a cafe on 122 and Broadway)
CU can be a lonely and forbidding place for anyone and that goes double for GSers and quadruple for veterans.
You ought to give it another go. Especially if you aren't going somewhere else that's better. Reach out to your deans and make
a fuss. No one in the bureaucracy wants to help but you can force them to their job.
Mr. Unz, the issues of jewish/gentile intermarriage and the significance of jewish-looking names do indeed merit more consideration
than they were given in this otherwise very enlightening article.
What would the percentage of jews in Ivy-League universities look like if the methodology used to determine the percentage
of jewish NMS semifinalists were applied to the list of Ivy League students (or some available approximation of it)?
For background: I'm an Asian-American who worked briefly in legacy admissions at an Ivy and another non-Ivy top-tier, both
while in school (work-study) and as an alum on related committees.
Mendy Finkel's observations are spot on. Re: her 1st point, personal "presentation" or "branding" is often overlooked by Asian
applicants. An admission officer at another Ivy joked they drew straws to assign "Night of a 1000 Lee's", so accomplished-but-indistinguishable
was that group.
A few points on the Asian analysis:
1. I think this analysis would benefit from expanding beyond HYP/Ivies when considering the broader meritocracy issue. Many
Asians esteem technical-leaning schools over academically-comparable liberal arts ones, even if the student isn't a science major.
When I was in college in the 90′s, most Asian parents would favor a Carnegie Mellon or Hopkins over Brown, Columbia or Dartmouth
(though HYP, of course, had its magnetic appeal). The enrollment percentages reflect this, and while some of this is changing,
this is a fairly persistent pattern.
2. Fundraising is crucial. The Harvard Class of '77 example isn't the most telling kind of number. In my experience, Jewish
alumni provide a critical mass in both the day-to-day fundraising and the resultant dollars. And they play a key role, both as
givers and getters, in the signature capital campaign commitments (univ hospitals, research centers, etc.). This isn't unique
to Jewish Ivy alumni; Catholic alumni of ND or Georgetown provide similar support. But it isn't clear what the future overall
Asian commitment to the Ivy "culture of fundraising" will be, which will continue to be a net negative in admissions.
Sidenote: While Asians greatly value the particular civic good, they are uneasy with it being so hinged to an opaque private
sector, in this case, philanthropy. That distinction, blown out a bit, speaks to some of the Republican "Asian gap".
3. I would not place too much weight on NMS comparisons between Asians and Jews. In my experience, most Asians treat the PSAT
seriously, but many established Jews do not – the potential scholarship money isn't a factor, "NMS semifinalist" isn't an admissions
distinction, and as Mendy highlighted, colleges don't see the scores.
On a different note, while the "weight" of an Ivy degree is significant, it's prestige is largely concentrated in the Northeast
and among some overseas. In terms of facilitating access and mobility, a USC degree might serve you better in SoCal, as would
an SMU one in TX.
And like J Harlan, I also hope the recent monopoly of Harvard and Yale grads in the presidency will end. No doubt, places like
Whittier College, Southwest Texas State Teachers' College, and Eureka College gave earlier presidents valuable perspectives and
experience that informed their governing.
But thank you, Ron, for a great provocative piece. Very well worth the read.
Hey Ron, your next article should be on the military academies, and all those legacies that go back to the Revolutionary War.
How do you get into the French military academy, and do the cadets trace their family history back to the soldiers of Napoleon
or Charles Martel or whatever?
"Thus, there appears to be no evidence for racial bias against Asians, even excluding the race-neutral impact of athletic recruitment,
legacy admissions, and geographical diversity."
Yes, at UCLA, at least up to 2004, Asian and white admits had nearly identical SATs and GPAs.
Further, it just isn't the case that Asians are so spectacular as people seem to think. Their average on the SAT Verbal is
slightly less than whites, their average on SAT Writing is slightly more. Only in math do they have a significant advantage, 59
points or .59 standard deviation. Total advantage is about .2 over the three tests. Assuming that Harvard or Yale admit students
at +3 standard deviations overall, and plugging the relative group quantiles +(3, 2.8) into a normal distribution, we get that
.14% of white kids would get admitted, versus .26% of Asian kids. Or, 1.85 Asian kids for every one white kid.
But, last year 4.25 times as many whites as Asians took the SAT, so there still should be about 2.28 times as many white kids
being admitted as Asians (4.25/1.85).
On GPA, whites and Asians are also pretty similar on average, 3.52 for Asians who took the SAT, 3.45 for whites who took the
SAT. So that shouldn't be much of a factor.
I am a Cadet at the US Military Academy at West Point and generally pretty familiar with trans-national Academy admissions
processes. There's an excellent comparative study of worldwide military academy admissions that was done in the late '90′s you
might find interesting (IIRC it was done by a group in the NATO Defence College) and I think you will find that although soldiers
are often proud of their family histories to a fault, it is not what controls entrance to the officer corps in most countries.
"Legacy" is definitely meaningless in US Military Academy admissions, although can be very helpful in the separate process
of securing a political appointment to attend the Academy once accepted for admission and in an Army career. West Point is not
comparable to the Ivy League schools in the country, because (ironically) the admissions department that makes those comparisons
lets in an inordinate number of unqualified candidates and ensures our student body includes a wide range of candidates, from
people who are unquestionably "Ivy League material" to those who don't have the intellect to hack it at any "elite" institution.
Prior the changes in admissions policies and JFK ordering an doubling of the size of the Corps of Cadets in the '60′s, we didn't
have this problem. But, I digress. My point is, the Academy admissions system is very meritocratic.
I am a Jewish alum of UPenn, and graduated in the late 90s. That puts me almost a generation ago, which may be before the supposed
Jewish decline you write about. I was in an 80%+ Jewish fraternity, and at least 2/3 of my overall network of friends at Penn
was also Jewish. As was mentioned earlier, I have serious qualms with your methods for counting Jews based upon last name.
Based upon my admittedly non-scientific sample, the percentage of us who had traditionally Jewish last names was well under
half and closer to 25%. My own last name is German, and you would never know I am Jewish based solely upon my name (nor would
you based upon the surname of 3/4 of my grandparents, despite my family being 100% Jewish with no intermarriages until my sister).
By contrast, Asians are much easier to identify based upon name. You may overcount certain names like Lee that are also Caucasian,
but it is highly unlikely that you will miss any Asian students when your criterion is last name.
Admittedly I skimmed parts of the article, but were other criterion used to more accurately identify the groups?
The Jewish presence is definitely understated by just looking at surnames. As is the American Indian.
My maternal grandfather was Ashkenazi and his wife was 1/2 Ashkenazi and 1/4 Apache. He changed his name to a Scots surname
that matched his red hair so as to get ahead as a business man in 20s due to KKK and anti-German feelings at the time. Their kids
had two PHDs and a Masters between them despite their parents running a very blue collar firm.
My surname comes from my dad and its a Scottish surname although he was 1/4 Cherokee. On that side we are members of the FF
of Virignia. Altogether I am more Jewish and American Indian than anything else yet would be classified as white. I could easily
claim to be
Jewish or Indian on admissions forms. I always selected white. I was NMSF.
Both my sister and I have kids. Her husband is a full blood Indian with a common English surname. One of my nieces made NMSF
and another might. My sisters kids do not think of themselves as any race and check other.
My wife is 1/4 Indian and 3/4 English. My kids are young yet one has tested to an IQ in the 150s.
Once you get West of the Appalachians, there are a lot of mutts in the non-gentile whites. A lot of Jews and American Indians
Anglicized themselves a generation or two ago and they are lumped into that group – as well as occupy the top percentile academically.
Interesting article with parts I would agree with but also tinged with bias and conclusions that I would argue are not fully
supported by the data.
I think more analysis is needed to confirm your conclusions. As others have mentioned there may be problems with your analysis
of NMS scores. I think graduate admissions and achievements especially in the math and sciences would be a better measure of intellectual
performance.
Now, I didn't attend an Ivy League school, instead a public university, mainly because I couldn't afford it or so I thought.
I was also a NMS finalist.
But I always was of the opinion that except for the most exceptional students admission to the Ivies was based on the wealth
of your family and as you mentioned there are quite a few affluent Jews so I imagine they do have a leg up. Harvard's endowment
isn't as large as it is by accident.
It is interesting that you didn't discuss the stats for Stanford.
Lastly, I think your solution is wrong. The pure meritocracy is the only fair solution. Admissions should be based upon the
entrance exams like in Asia and Europe.
There are plenty of options for those who don't want to compete and if the Asians dominate admissions at the top schools so
be it.
Hopefully, all of this will be mute point n a few years as online education options become more popular with Universities specializing
in graduate education and research.
Ron Unz on Asians (ie Asian Americans): "many of them impoverished immigrant families"
Why do you twice repeat this assertion. Asians are the wealthiest race and most of the wealthiest ethnic groups tracked by
the Census Bureau, which includes immigrants.
A potentially bigger issue completely ignored by your article is how do colleges differentiate between 'foreign' students
(overwhelmingly Asian) and American students. Many students being counted as "Asian American" are in reality wealthy and elite
foreign "parachute kids" (an Asian term), dropped onto the generous American education system or into boarding schools to study
for US entrance exams, qualify for resident tuition rates and scholarships, and to compete for "American" admissions slots, not
for the usually limited 'foreign' admission slots.
Probably people from non-Asian countries are pulling the same stunt, but it seems likely dominated by Asians. And expect many
more with the passage of the various "Dream Acts"
So American kids must compete with the offspring of all the worlds corrupt elite for what should be opportunities for US Americans.
Am I the only one that finds the comparison of Asians (a race) to Jews (a religion) as basis for a case of discrimination completely
flawed? I got in at Harvard and don't remember them even asking me what my religion was.
The value of diversity is absolutely key. I have a bunch of very good Asian friends and I love them dearly, but I don't believe
a place like CalTech with its 40% demographics cannot truly claim to be a diverse place any more.
Regarding the SAT, we do know more than just differences of averages between whites and Asians. We have some years of
score distributions . As recently
as 1992, 1.2% of whites and 5.1% of Asians scored between 750 and 800 on the math subtest. As recently as 1985, 0.20% of whites
and 0.26% of Asians scored in that range on the verbal/critical reading subtest.
On a different form of the writing subtest than is currently used, 5.0% of whites and 3.0% of Asians scored greater than 60
in 1985. We also know that, as the white-Asian average verbal/critical reading gap shrank to almost nothing and the average math
gap grew in Asians' favor, the standard deviations on both for Asians have been much higher than every other group but have stayed
relatively unchanged and have become, in fact, slightly lower than in 1985.
Therefore, Asians probably greatly increased their share of top performers.
@Milton F.: "Perhaps, by ensuring that "the best" students are not concentrated in only 8 universities is why the depth and
quality of America's education system remains the envy of the world."
Hardly. America's education system is "the envy" because of the ability for minorities to get placement into better schools,
not solely for the education they receive. Only a very select few institutions are envied for their education primarily, 90% of
the colleges and universities across the country are sub-standard education providers, same with high schools.
I would imagine you're an educator at some level, more than likely, at one of the sub-standard colleges or even perhaps a high
school teacher. You're attempting to be defensive of the American education system, when in reality, you're looking at the world
through rose colored glasses. Working from within the system, rather than from the private sector looking back, gives you extreme
tunnel vision. That, coupled with the average "closed mindedness" of educators in America is a dangerous approach to advancing
the structure of the American education system. You and those like you ARE the problem and should be taken out of the equation
as quickly as possible. Please retire ASAP or find another career.
Aside from the complete lack of actual ivy league admission data on jewish applicants, a big problem with unz's "jewish affirmative
action" claim is how difficult such a policy would be to carry out in complete secrecy.
Now, it would be one thing if Unz was claiming that jews are being admitted with similar numbers to non-jewish whites, but
in close cases, admissions staff tend to favor jewish applicants. But he goes much further than that. Unz is claiming that jews,
as a group, are being admitted with lower SAT scores than non-jewish whites. Not only that, but this policy is being carried out
by virtually every single ivy league college and it has been going on for years. Moreover, this preference is so pervasive, that
it allows jews to gain admissions at many times the rate that merit alone would yield, ultimately resulting in entering classes
that are over 20% Jewish.
If a preference this deep, consistent and widespread indeed exists, there is no way it could be the result of subjective bias
or intentional tribal favoritism on the part of individual decision makers. It would have to be an official, yet unstated, admissions
policy in every ivy league school. Over the years, dozens (if not hundreds) of admission staff across the various ivy league colleges
would be engaging in this policy, without a single peep ever leaking through about Jewish applicants getting in with subpar SAT
scores. We hear insider reports all the time about one group is favored or discriminated against (we even have such an insider
account in this comment thread), but we hear nothing about the largest admission preference of them all.
Remember, admissions staffs usually include other ethnic minorities. I couldn't imagine them not wondering why jews need to
be given such a big boost so that they make up almost a quarter of the entering class. Even if every member of every admissions
committee were Jewish liberals, it would still be almost impossible to keep this under wraps.
Obviously, I have never seen actual admission numbers for Jewish applicants, so I could be wrong, and there could in fact be
an unbreakable wall of secrecy regarding the largest and most pervasive affirmative action practice in the country. Or, perhaps,
the ivy league application pool contains a disproportionate amount of high scoring jewish applicants.
As some who is Jewish from the former Soviet Union, and who was denied even to take an entrance exam to a Moscow college,
I am saddened to see that American educational admission process looks more and more "Soviet" nowadays. Kids are denied opportunities
because of their ethnic or social background, in a supposedly free and fair country!
But this is just a tip of the iceberg. The American groupthink of political correctness, lowest common denominator, and political
posturing toward various political/ethnic/religious/sexual orientation groups is rotting this country inside out.
"Similarly, Jews were over one-quarter of the top students in the Physics Olympiad from 1986 to 1997, but have fallen to just
5 percent over the last decade, a result which must surely send Richard Feynman spinning in his grave."
Actually, Richard Feynman famously rejected genetic explanations of Jewish achievement (whether he was right or wrong to
do so is another story), and aggressively resisted any attempts to list him as a "Jewish scientist" or "Jewish Nobel Prize winner."
I am sure he would not cared in the slightest bit how many Jews were participating in the Physics Olympiad, as long as the quality
of the students' work continued to be excellent. Here is a letter he wrote to a woman seeking to include him in a book about Jewish
achievement in the sciences.
Dear Miss Levitan:
In your letter you express the theory that people of Jewish origin have inherited their valuable hereditary elements from their
people. It is quite certain that many things are inherited but it is evil and dangerous to maintain, in these days of little knowledge
of these matters, that there is a true Jewish race or specific Jewish hereditary character. Many races as well as cultural influences
of men of all kinds have mixed into any man. To select, for approbation the peculiar elements that come from some supposedly Jewish
heredity is to open the door to all kinds of nonsense on racial theory.
Such theoretical views were used by Hitler. Surely you cannot maintain on the one hand that certain valuable elements can be
inherited from the "Jewish people," and deny that other elements which other people may find annoying or worse are not inherited
by these same "people." Nor could you then deny that elements that others would consider valuable could be the main virtue of
an "Aryan" inheritance.
It is the lesson of the last war not to think of people as having special inherited attributes simply because they are born
from particular parents, but to try to teach these "valuable" elements to all men because all men can learn, no matter what their
race.
It is the combination of characteristics of the culture of any father and his father plus the learning and ideas and influences
of people of all races and backgrounds which make me what I am, good or bad. I appreciate the valuable (and the negative) elements
of my background but I feel it to be bad taste and an insult to other peoples to call attention in any direct way to that one
element in my composition.
At almost thirteen I dropped out of Sunday school just before confirmation because of differences in religious views but mainly
because I suddenly saw that the picture of Jewish history that we were learning, of a marvelous and talented people surrounded
by dull and evil strangers was far from the truth. The error of anti-Semitism is not that the Jews are not really bad after all,
but that evil, stupidity and grossness is not a monopoly of the Jewish people but a universal characteristic of mankind in general.
Most non-Jewish people in America today have understood that. The error of pro-Semitism is not that the Jewish people or Jewish
heritage is not really good, but rather the error is that intelligence, good will, and kindness is not, thank God, a monopoly
of the Jewish people but a universal characteristic of mankind in general.
Therefore you see at thirteen I was not only converted to other religious views but I also stopped believing that the Jewish
people are in any way "the chosen people." This is my other reason for requesting not to be included in your work.
@Rob Schacter – your last point is basically spot-on. The Ivies are fairly unique in the high proportion of Jewish applicants.
History, geographical bias, and self-selection all play a role. I think the overall preference distortion is probably not as wide
as Unz claims, but you will see similar tilts at Stanford, Northwestern, etc. that reflect different preference distortions.
@Leon, two quick points.
1st – the census tracks by household, which generally overestimates Asian wealth. Many families have three generations and
extended members living in one household (this reflects that many of them work together in a small family business).
2nd – most of the time, it's clear in the application (the HS, personal info, other residency info, etc.) which Asian applicants
are Asian-American and which are "Parachute Kids". But the numbers are much smaller than one might think, and the implication
depends on the school.
At Ivies, parachute kids (both Asian and not) tend to compete with each other in the application pool, and aren't substantially
informing the broader admissions thesis in this article. I'm not saying that's right, just saying it's less material than we might
think.
They more likely skew the admissions equation in great-but-not-rich liberal arts colleges (like Grinnell) and top public universities
(like UCLA), which are both having budget crises and need full fare students, parachute or not. And for the publics, this includes
adding more higher-tuition, out-of-state students, which further complicates assertions of just whose opportunities are being
lost.
I will bring this back to fundraising and finances again, because the broader point is about who is stewarding and creating
access: so long as top universities are essentially run as self-invested feedback loops, and position and resource themselves
accordingly (and other universities have to compete with them), we will continue to see large, persistent discrepancies in who
can participate.
When I applied to Harvard College back in 1976, I was proud of my application essay. In it, I proposed that the US used the
Israeli army as a proxy, just as the Russians were using the Cuban army at the time.
Alas, I wasn't admitted (I did get into Yale, which didn't require free-form essay like that).
This, of course, illustrates the point that coming from an Application Hell instead of from central Illinois helps a student
know how to write applications. It also illustrates what might help explain the mystery of high Jewish admissions: political bias.
Jews are savvier about knowing what admissions officers like to hear (including the black and Latino ones, who as a previous commentor
said aren't likely to be pro-semite). They are also politically more liberal, and so don't have to fake it. And their families
are more likely to read the New York Times and thus have the right "social graces" as we might call them, of this age.
It would be interesting to know how well "true WASPS" do in admissions. This could perhaps be estimated by counting Slavic
and Italian names, or Puritan New England last names. I would expect this group to do almost as well as Jews (not quite as well,
because their ability would be in the lower end of the Legacy group).
The missing variable in this analysis is income/class. While Unz states that many elite colleges have the resources to
fund every student's education, and in fact practice need-blind admissions, the student bodies are skewed towards the very highest
percentile of the income and wealth distribution. SAT scores may also scale with parents' income as well.
Tuition and fees at these schools have nearly doubled relative to inflation in the last 25-30 years, and with home prices in
desirable neighborhoods showing their own hyper-inflationary behavior over the past couple of decades (~15 yrs, especially), the
income necessary to pay for these schools without burdening either the student or parents with a lot of debt has been pushed towards
the top decile of earners. A big chunk of the upper middle class has been priced out. This could hit Asian professionals who may
be self made harder than other groups like Jews who may be the second or third generation of relative affluence, and would thus
have advantages in having less debt when starting their families and careers and be less burdened in financing their homes. Would
be curious to see the same analysis if $$ could be controlled.
I would also like to add that I am a late '80′s graduate of Wesleyan who ceased his modest but annual financial contribution to
the school after reading The Gatekeepers.
If I had a penny for every Jewish American I met (including myself) whose first and last name gave no indication of his religion
or ethnicity, I'd be rich. Oh–and my brother and I have four Ivy League degrees between us.
I almost clicked on a different link the instance I came across the word "elite" , but curiosity forced my hand.
Just yesterday my mom was remarking how my cousin had gotten into MIT with an SAT score far below what I scored, and she finished
by adding that I should have applied to an ivy-league college after high school. I as always, reminded her, I'm too "black for
ivy games".
I always worked hard in school, participated in olympiads and symposiums, and was a star athlete. When it came to applying
for college I found myself startled when forced to "quantify" my achievements in an "application package". I did not do or engage
in these activities solely to boost my chances of gaining admission into some elite college over similarly-hardworking Henry Wang
or Jess Steinberg. I did these things because I loved doing them.
Sports after class was almost a relaxation activity for me. Participating in math olympiads was a way for me to get a scoop
on advanced mathematics. Participating in science symposiums was a chance for me to start applying my theoretical education to
solve practical problems.
The moment I realized I would have to kneel down before some admissions officer and "present my case", outlining my "blackness",
athleticism, hard work, curiosity, and academic ability, in that specific order I should point, in order to have a fighting chance
at getting admitted; is the moment all my "black rage" came out in an internal explosion of rebellion and disapproval of "elite
colleges".
I instead applied to a college that was blind to all of the above factors. I am a firm believer that hard work and demonstrated
ability always win out in the end. I've come across, come up against is a better way to put it, Ivy-league competition in college
competitions and applications for co-ops and internships, and despite my lack of "eliteness" I am confident that my sheer ability
and track record will put me in the "interview candidate" pool.
Finally, my opinion is: let elite schools keep doing what they are doing. It isn't a problem at all, the "elite" tag has long
lost its meaning.
The difficulty with using Jewish sounding last names to identify Jewish students works poorly in two ways today. Not only,
as others have pointed out, do many Jews not have Jewish sounding last names, but there are those, my grandson for example, who
have identifiably Jewish last names and not much in the way of Jewish background.
Interesting reading. The article opens a deceptively simple statistical window into a poorly understood process - a window
which I would guess even the key participants have never looked through. I especially appreciated the insights provided by the
author's examination of Asian surname-frequencies and their over-representation in NMS databases.
Though this is a long and meticulously argued piece, it would have benefited from a more thorough discussion of the statistical
share of legacies and athletic scholarships in elite admissions.
Perhaps, though, it would be better to focus on increasing meritocracy in the broader society, which would inevitably lead
to some discounting of the value of educational credentials issued by these less than meritocratic private institutions.
It is precisely because the broader society is also in many key respects non-meritocratic that the non-meritocratic admissions
practices of elite institutions are sustainable.
Despite the very long and detailed argument, the writer's interpretation of a pro-Jewish admissions bias at Ivy-league schools
is worryingly flawed.
First, he uses two very different methods of counting Jews: name recognition for counting various "objective" measures such
as NMS semifinalists and Hillel stats for those admitted to Harvard. The first is most likely an underestimate while the latter
very possibly inflated (in both cases especially due to the very large numbers of partially-Jewish students, in the many interpretations
that has). I wonder how much of his argument would just go away if he simply counted the number of Jews in Harvard using the same
method he used to count their numbers in the other cases. Would that really be hard to do?
Second, he overlooks the obvious two sources that can lead to such Asian/Jewish relative gaps in admissions. The first is the
different groups' different focus on Science/Math vs. on Writing/Culture. It is very possible that in recent years most Asians
emphasize the former while Jews the latter, which would be the natural explanation to the Caltech vs Harvard racial composition
(as well as to the other stats). The second is related but different and it is the different group's bias in applications: the
same cultural anecdotes would explain why Asians would favor applying to Caltech and Jews to Harvard. A natural interpretation
of the data would be that Jews have learned to optimize for whatever criteria the Ivy leagues are using and the Asians are doing
so for the Caltech criteria.
Most strange is the author's interpretation of how a pro-Jewish bias in admissions is actually put into effect: the application
packets do not have the data of whether the applicant is Jewish or not, and I doubt that most admission officers figure it out
in most cases. While it could be possible for admissions officers to have a bias for or against various types of characteristics
that they see in the data in front of them (say Asian/Black/White or political activity), a systematic bias on unobserved data
is a much more difficult proposition to make. Indeed the author becomes rather confused here combining the low education level
of admissions officers, that they are "liberal arts or ethnic-studies majors" (really?), that they are "progressive", and that
there sometimes is corruption, all together presumably leading to a bias in favor of Jews?
Finally, the author's suggestion for changing admittance criteria is down-right bizarre for a conservative: The proposal is
a centralized solution that he aims to force upon the various private universities, each who can only loose from implementing
it.
Despite the long detailed (but extremely flawed) article, I am afraid that it is more a reflection of the author's biases than
of admissions biases.
Both the article and the comments are illuminating. My takeaways:
1) Affirmative action in favor of blacks and Hispanics is acknowledged.
2) Admissions officers in the Ivy League appear to limit Asian admissions somewhat relative to the numbers of qualified applicants.
3) They may also admit somewhat more Jewish applicants than would be warranted relative to their comparative academic qualifications.
The degree to which this is true is muddled by the difficulty of identifying Jews by surnames, by extensive intermarriage, by
changing demographics within the Jewish population, by geographic factors, and by the propensity to apply in the first place.
4) (My major takeaway.) White Protestants and Catholics are almost certainly the sole groups that are greatly under-represented
relative to their qualifications as well as to raw population percentages.
5) This is due partly to subtle or open discrimination.
6) I would hypothesize that a great many of the white Protestants and Catholics who are admitted are legacies, star athletes,
and the progeny of celebrities in entertainment, media, politics, and high finance. White Protestant or Catholic applicants, especially
from the hinterlands, who don't fit one of these special categories–though they must be a very large component of Mr Unz's pool
of top talent–are out of luck.
7) And everyone seems to think this is just fine.
The inner and outer ring idea seems to me an excellent one, though the likelihood of it happening is next to nil, both because
some groups would lose disproportionate access and because the schools' imprimatur would be diminished in
value.
The larger point, made by several respondents, is that far too many institutions place far too much weight on the credentials
conferred by a small group of screening institutions. The great advantage of the American system is not that it is meritocratic,
either objectively or subjectively. It is that it is–or was–Protean in its flexibility. One could rise through luck or effort
or brains, with credentials or without them, early in life or after false starts and setbacks. And there were regional elites
or local elites rather than, as we increasingly see, a single, homogenized national elite. Success or its equivalent wasn't something
institutionally conferred.
The result of the meritocratic process is that we are making a race of arrogant, entitled overlords, extremely skilled at the
aggressive and assertive arts required to gain admission to, and to succeed in, a few similar and ideologically skewed universities
and colleges; and who spend the remainder of their lives congratulating each other, bestowing themselves on the populace, and
destroying the country.
This article is the product of careful and thoughtful research, and it identifies a problem hiding in plain sight. As a society,
we have invested great trust in higher education as a transformative institution. It is clear that we have been too trusting.
That the admissions policies of elite universities are meritocratic is hardly the only wrong idea that Americans have about
higher education. Blind faith in higher education has left too many people with largely worthless degrees and crushing student-loan
debt.
Of course, the problems don't end with undergraduate education. The "100 reasons NOT to go to grad school" blog offers some
depressing reading:
The higher education establishment has failed to address so many longstanding internal structural problems that it's hard to
imagine that much will change anytime soon.
"I believe that this article raises – and then inappropriately immediately dismisses – the simplest and most likely reason
for the over-representation of Jewish students at Ivy League Schools in the face of their declining bulk academic performance:
They apply to those schools in vastly disproportionate numbers."
Here's the problem with that point. What Ron Unz demonstrates, quite effectively, is that today's Jews simply don't measure
up to either their Asian or their White Gentile counterparts in terms of actual performance when they get into, say, Harvard.
The quite massive difference in the proportions of those groups who get into Phi Beta Kappa renders this quite undeniable. What
is almost certain is that policies that favored Asians and White Gentiles over the current crop of Jewish students would create
a class of higher caliber in terms of academic performance.
If indeed it's true that Jews apply to Harvard in greater numbers, then, if the desire is to produce a class with the greatest
academic potential, some appropriate way of correcting for the consequent distortion should be introduced. Certainly when it comes
to Asians, college admissions committees have found their ways of reducing the numbers of Asians admitted, despite their intense
interest in the Ivies.
One way of understanding Unz's results here might be not so much that today's Jewish student is far less inclined to hard academic
work than those of yesteryear, but rather that others - White Gentiles and Asians - have simply caught up in terms of motivation
to get into elite schools and perform to the best of their abilities.
Certainly among members of the upper middle class, there has been great, and likely increasing, emphasis in recent years on
the importance of an elite education and strong academic performance for ultimate success. This might well produce a much stronger
class of students at the upper end applying to the Ivies.
It may be that not only the Asians, but upper middle class White Gentiles, are "The New Jews".
I don't always agree with, Mr. Unz, but his expositions are always provocative and informative. As far as the criticisms of
his data set go, he openly admits that they are less than ideal. However, the variances are so large that the margin of error
can be excused. Jews are 40 TIMES more likely to be admitted to Harvard than Gentile whites. Asians are 10 times more likely.
Of course, it could be possible that Jews, because of higher average IQs, actually produce 40 times as many members in the upper
reaches of the cognitive elite.
Given Richard Lynn's various IQ studies of Jews and the relative preponderance of non-Jewish and Jewish whites in the population,
however, whites ought to have a 7 to 1 representation vis-a-vis Jews in Ivy League institutions, assuming the IQ cutoff is 130.
Their numbers are roughly equivalent instead.
Because Ivy League admissions have been a hotbed of ethnic nepotism in the past, it seems that special care should be taken
to avoid these improprieties (or the appearance thereof) in the future. But no such safeguards have been put in place. David Brooks
has also struck the alarm about the tendency of elites to shut down meritocratic institutions once they have gained a foothold:
http://www.nytimes.com/2012/07/13/opinion/brooks-why-our-elites-stink.html?_r=1&ref=global-home
Clannish as the WASPs may have been, they were dedicated enough to ideals of fairness and equality that they opened the doors
for their own dispossession. I predict that a new Asian elite will eventually eclipse our Jewish elite. Discrimination and repression
can restrain a vigorously ascendant people but for so long. When they do, it will be interesting to see if this Asian cohort clings
to its longstanding Confucian meritocratic traditions, embodied in the Chinese gaokao or if it too will succumb to the temptation,
ever present in a multiethnic polity, of preferring ethnic kinsmen over others.
Does anyone know how a minority such as the Uighurs fares in terms of elite Chinese university admissions?
This may sound like special-pleading, but it's not clear that full-scale IQ measures are meaningful when assessing and predicting
Jewish performance. Jewish deficits on g-loaded spatial reasoning task may reflect specific visuo-spatial deficits and not deficits
in g. As far as I know, no one doubts that the average Jewish VIQ is at least 112 (and possibly over 120). This score may explain
jewish representation which seems to exceed what would be projected by their full-scale iq scores. Despite PIQ's correllation
to mathematical ability in most populations, we ought also remember that, at least on the WAIS, it is the VIQ scale that includes
the only directly mathematical subtest. We should also note that Jewish mathematicians seem to use little visualization in their
reasoning (cf. Seligman
That said, I basically agree that Jews are, by and large, coasting. American Jews want their children to play hockey and join
'greek life' and stuff, not sit in libraries . It's sad for those of us who value the ivory tower, but understandable given their
stigmatiziation as a nerdish people.
I wonder if it would be at all possible to assess the political biases of admissions counselors at these schools by assessing
the rates at which applicants from red states are admitted to the elite universities. I suppose you would have to know how many
applied, and those data aren't likely to exist in the public domain.
One major flaw with this article's method of determining Jewish representation: distinctive Jewish surnames in no way make
up all Jewish surnames. Distinctive Jewish surnames happen to be held by only 10-12% of all American Jews. In fact, the third
most common American Jewish surname after Cohen and Levy is Miller. Mr. Unz' methodology does not speak well for itself, given
that he's comparing a limited set of last names against a far more carefully scrutinized estimate.
I'm not suggesting his estimate of national merit scholars and the like is off by a full 90%, but he's still ending up with
a significant undercount, possibly close to half. That would still mean Jews may be "wrongfully" over-represented are many top
colleges and universities, but the disproportion is nowhere near as nefarious as he would suggest.
@Nick – the "red state" application and admission rates isn't useful data.
Short answer: There are many reasons for this, but basically, historical momentum and comfort play a much bigger role in where
kids apply than we think. I assure you, far more top Nebraska HS seniors want to be a Cornhusker than a Crimson, even though many
would find a very receptive consideration and financial aid package.
Long answer: 1st, although this article and discussion have been framed in broad racial/cultural terms, the mechanics of college
admissions are mostly local and a bit like athletic recruiting – coverage (and cultivation) of specific regions and districts,
"X" high school historically deliver "X" kinds of candidates, etc. So to the degree we may see broader trends noted in the article
and discussion, some of that is rooted at the HS level and lower.
2nd, in "red states", most Ivy applicants come from the few blue or neutral districts. E.g.: the only 2 Utah HS's that consistently
have applicants to my Ivy alma mater are in areas that largely mirror other high-income, Dem-leaning areas nationwide rather than
the rest of Utah.
3rd, but, with some variation among the schools, the Ivy student body is more politically balanced than usually assumed. Remember,
most students are upper-income, Northeastern suburban and those counties' Dem/Rep ratio is often closer to 55/45 than 80/20.
But to wrap up, ideology plays a negligible role in admissions generally (there's always an exception); they have other fish
to fry (see below).
"Quota against Asians" is not entirely wrong, but it's too strong because it implies the forward intent is about limiting their
numbers.
Put another way, Unz believes the Ivies are failing their meritocractic mission by over-admitting a group that is neither disadvantaged
nor has highest technical credentials; and this comes at the expense of a group that is more often disadvantaged and with higher
technical credentials. The Ivies would likely reply, "well, we define 'meritocractic mission' differently".
That may be a legitimate counter, but it's also what needs more expansion and sunlight.
But Unz' analysis has a broader causation vs correlation gap. Just because admissions is essentially zero-sum doesn't mean
every large discrepancy in it is, even after allowing for soft biases. I've mentioned these earlier in passing, but here are just
a couple other factors of note:
Admissions is accountable for selection AND marketing and matriculation – these are not always complementary forces. Essentially,
you want to maximize both the number and distribution (racial, geographic, types of accomplishment, etc.) of qualified applicants,
but also the number you can safely turn down but without discouraging future applications, upsetting certain stakeholders (specific
schools, admissions counselors/consultants, etc.) or "harming" any data in the US News rankings. And you have a very finite time
to do this, and – not just your competition, but the entire sector – is essentially doing this at the same time. You can see how
an admissions process would develop certain biases over time to limit risks in an unpredictable, high volume market, even if rarely
intended to target a specific group. Ivy fixation (but especially around HYP) is particularly concentrated in the Northeast –
a sample from several top HS' across America (public and private) would show much larger application and matriculation variations
among their top students than would be assumed from Unz's thesis. Different Ivies have different competitors/peers, which influences
their diversity breakdowns – to some degree, they all co-compete, but just as often don't. E.g.: Princeton often overlaps with
Georgetown and Duke, Columbia with NYU and Cooper Union, Cornell with SUNY honors programs because it has some "in state" public
colleges, etc.
There's much more, of course, but returning to Unz's ethnographic thesis, I have this anecdote: we have two friends in finance,
whose families think much of their success. The 1st is Asian, went to Carnegie Mellon, and is a big bank's trading CTO; the 2nd
is Jewish, went to Wharton, and is in private equity.
Put another way, while both families shared a pretty specific vision of success, they differed a lot in the execution. The
upper echelon of universities, and the kinds of elite-level mobility they offer, are much more varied than even 25 years ago.
While the relative role of HYP in our country, and their soft biases in admission, are "true enough" to merit discussion, it's
probably not the discussion that was in this article.
While you may have a point as to the difficulty in some cases of identifying a Jewish surname, the most important thing methodologically
is that the criteria be performed uniformly if one is comparing Jewish representation today vs. that of other periods. I can't
think, for example, of any reason that Cohens or Levys or Golds should be any less well represented today as opposed to many years
ago if indeed there has not been an underlying shift in numbers of Jews in the relevant categories. (Nor, for that matter, should
issues like intermarriage affect the numbers much here - for every mother whose maiden name is Cohen who marries a non-Jew with
a non-Jewish surname, and whose half Jewish child will be counted as non-Jewish, there is, on average, going to be a man named
Cohen who will marry a non-Jew, and whose half Jewish child will be counted as Jewish.)
One might suppose that all this "inequity" and "discrimination" matters if we're keeping score. However, seems to me that too
much emphasis is typically placed on equality whereas real criteria in productive and satisfying lives are neglected. Kind'a like
some people wanting bragging rights as much, if not more, than wanting positive reality.
I guess I just went about my way and lived a pretty god life (so far). Who knows?; maybe those "bragging rights" are meaningful.
Ditto to many comments about the "last name problem", even if its correction weakens but doesn't invalidate the argument. (One
imagines, chillingly, a new sub-field: "Jewish last name theory", seeking to determine proportionalities of classic names validated
against member/donor lists of synagogues and other Jewish organizations.)
Regarding the 20% inner ring suggestion, it suffers from its harsh transition. Consider a randomized derating scheme: a random
number between some lower bound (say 0.90) and 1.00 is applied to each score on the ranked applicant list.
The added noise provides warmth to a cold test scores list. Such an approach nicely captures the directive: "study hard, but
it's not all about the grades".
By adjusting the lower bound, you can get whatever degree of representativeness relative to the application base you want.
That it's a "just a number" (rather than a complex subjectivity-laden labyrinth incessantly hacked at by consultants) could
allow interesting conversations about how it could relate to the "top 1% / bottom 50%" wealth ratio. The feedback loop wants closure.
You missed my point, candid. A relatively small proportion of Jews, intermarried or otherwise, have distinctive Jewish names.
I didn't make that 10-12% figure up. It's been cited in numerous local Jewish population studies and is used in part (but certainly
far from whole) to help estimate those populations. It's also been significantly dragged down over the years as the Jewish population
(and hence the surname pool) has diversified, not just from intermarriage, but in-migration from groups who often lack "distinctive
Jewish surnames" such as Jews from the former Soviet Union. Consider also that for obvious reasons, Hillel, which maintains Jewish
centers on most campus, has an incentive to over-report by a bit. Jewish populations on college campuses in the distant past were
easier to gather, given that it was far less un-PC to simply point blank inquire what religious background applicants came from.
Again, I'm not saying there isn't a downward trend in Jewish representation among high achievers (which, even if one were to
accept Unz's figures, Jews would still be triple relative to were they "should" be). But Unz has made a pretty significant oversight
in doing his calculations. That may happen to further suit his personal agenda, but it's not reality.
This is interesting, but I suspect mostly bogus, based on your not having a decent algorithm for discovering if someone's Jewish.
I'm not sure what exact mechanism you're using to decide if a name is Jewish, but I'm certain it wouldn't have caught anyone,
including myself, in my father's side of the family (Sephardic Jews from Turkey with Turkish surnames), nor my wife's family,
an Ellis Island Anglo name. Or probably most of the people in her family. And certainly watching for "Levi, Cohen and Gold*" isn't
going to do anything.
Isn't the point about Jewish over representation in the Ivy League about absolute numbers?
Yes the Jewish demographic has a higher IQ at 115 to the Goyishe Kop 100 but Jewish people are only 2% of the population so
you have 6 million Jewish people vying with 200 million white Goys for admission to the Ivy League and future control of the levers
of power. That is a 33 times larger Bell curve so the right tail of the Goys' Bell curve is still much larger than the Jewish
Bell curve at IQ levels of 130 and 145, supposedly there are seven times more Goys with IQs of 130 and over 4 times more Goys
with IQs of 145. So why the equality of representation, one to one, Jewish to white Goy in the Ivy Leagues?
Russell K. Nieli on study by Thomas Espenshade and Alexandria Radford (mentioned by Unz):
"When lower-class whites are matched with lower-class blacks and other non-whites the degree of the non-white advantage becomes
astronomical: lower-class Asian applicants are seven times as likely to be accepted to the competitive private institutions as
similarly qualified whites, lower-class Hispanic applicants eight times as likely, and lower-class blacks ten times as likely.
These are enormous differences and reflect the fact that lower-class whites were rarely accepted to the private institutions Espenshade
and Radford surveyed. Their diversity-enhancement value was obviously rated very low."
Having worked with folks from all manner of "elite" and not so elite schools in a technical field, the main conclusion I was
able to draw was folks who went to "elite" colleges had a greater degree of entitlement. And that's it.
If all of the author's suspicions are correct, the most noteworthy takeaway would be that Jewish applicants have absolutely
no idea that they are being given preferential treatment when applying to Ivys.
Not that they think they are being discriminated against or anything, but no Jewish high school student or their parents think
they have any kind of advantage, let alone such a huge one. Someone should tell all these Jews that they don't need to be so anxious!
Also, I know this is purely anecdotal but having gone to an ivy and knowing the numbers of dozens of other Jews who have also
gone, I don't think I have ever witnessed a "surprise" acceptance, where someone got in with a score under the median.
I don't doubt for a minute that it's increasingly difficult for Asian students to get into so-called "elite" universities.
Having grown up in that community, I know a lot of people who were pressured into applying at Harvard and Yale but ended up *gasp*
going to a very good local school. My sarcasm aside, we can't really deny that having Harvard on your CV can virtually guarantee
a ticket to success, regardless of whether or not you were just a C student. It happens.
But what worries me about that is the fact that I know very well how hard Asian families tend to push their children. They
do, after all, have one of the highest suicide rates and that's here in the US. If by some means the Asian population at elite
universities is being controlled, as I suspect it is, that's only going to make tiger mothers push their children even harder.
That's not necessarily a good thing for the child's psyche, so instead of writing a novel here, I'll simply give you this link.
Since the author brought up the subject of Amy Chua and her book, I think it's a pretty fitting explanation of the fears I have
for my friends and their children if this trend is allowed to continue.
As a former admissions staff person at Princeton, I always sigh when I read articles on elite college admissions processes
which build cases on data analysis but which fail to consult with admissions experts on the interpretation of that data.
I am neither an expert in sociology, nor am I a statistician, but I have sat in that chair, reading thousands of essays, and
I have a few observations:
The most selective part of any college's admissions process is the part where students themselves decides whether or not to apply.
Without data on the actual applicant sets, it is, at the least, misleading to attribute incongruities between the overall population's
racial/ethnic/income/what-have-you characteristics and the student bodies' make-ups entirely to the admission decisions. The reality
is that there is always a struggle in the admission offices to compensate for the inequities that the applicant pool itself delivers
to their doorsteps. An experienced admission officer can tell you that applicants from cultures where academics and education
are highly valued, and where the emphasis on a single test is quite high, will generally present with very high SAT scores. Race
does not seem to be correlated, but immigrant status from such a culture is highly correlated. (This may partially explain Unz's
observation of a "decline" in Jewish scores, although I also do not believe that the surname tool for determining which scores
are "Jewish" holds much water.) One of the reasons that such students often fare less well in holistic application processes is
that the same culture that produces the work ethic and study skills which benefit SAT performance and GPA can also suppress activities
and achievement outside of the academic arena. Therefore, to say that these students are being discriminated against because of
race is a huge assumption. The true questions is whether the students with higher test scores are presenting activity, leadership
and community contributions comparable to other parts of the applicant pool which are "overrepresented". All of these articles
seem to miss the point that a freshman class is a fixed size pie chart. Any piece that shrinks or grows will impact the other
slices. My first thought upon reading Unz' argument that the Asian slice shrank was, "What other pieces were forced to grow?"
Forced growth in another slice of the class is the more likely culprit for this effect, much more likely than the idea that all
of the Ivies are systematically discriminating against the latest victim. I could go on and on, but will spare you! My last note
is to educate Mr. Unz on what an "Assistant Director" is in college admissions. Generally that position is equivalent to a Senior
Admission Officer (one step up from entry level Admission Officer), while the head of the office might be the Dean and the next
step down from that would be Associate Deans (not Assistant Directors). So while Michelle Hernandez was an Assistant Director,
she was not the second in charge of Admissions, as your article implies. A minor distinction, but one which is important to point
out so that her expertise and experience, as well as my own, as AN Assistant Director of Admission at Princeton, are not overstated.
A last personal note: During Princeton's four month reading season, I worked 7 days a week, usually for about 14 hours a day,
in order to give the fullest, most human and considerate reading of each and every applicant that I could give. I am sure that
the admission profession has its share of incompetents, corruptible people and just plain jerks, and apparently some of us are
not intelligent enough to judge the superior applicants . . . . But most of us did it for love of the kids at that age (they are
all superstars!), for love of our alma maters and what they did for us, and because we believed in the fairness of our process
and the dignity with which we tried to do it.
The sheer numbers of applicants and the fatigue of the long winters lend themselves to making poor jokes such as the "Night
of 1000 Lee's", but a good dean of admission will police such disrespect, and encourage the staff, as mine did, to read the last
applicant of the day with the same effort, energy and attention paid to the first. We admission folk have our honor, despite being
underpaid and playing in a no-win game with regard to media coverage of our activities. I am happy to be able to speak up for
the integrity of my former colleagues and the rest of the profession.
My own position has always been strongly in the former camp, supporting meritocracy over diversity in elite admissions.
When these Ivy League institutions were first begun in the colonial period, they were not strictly speaking meritocratic. The
prevailing idea was that Christocentric education is the right way to go, both from an eschatological and a temporal perspective,
and the central focus was on building and strengthening family ties. The Catholic institutions of higher learning took on the
vital role of preserving Church tradition from apostolic times and were thus more egalitarian and universalist. The results went
far beyond all expectations.
Nothing lasts forever. Your premise misses the essential point that the economy is for man and not vice-versa.
Many of the statements in this article relating to Jews are rather misleading: for while the Hillel data regarding percentage
of students who self-identify as Jews may be fairly accurate, the numbers the author cites based upon "likely Jewish names" are
a gross under-count of the real numbers, leading to the appearance of a large disparity between the two which, in reality, does
not exist. The reason for the under-count is that a large percentage of American Jews have either Anglicized their family name
or intermarried, resulting in their being mistaken for non-Hispanic whites. Thus, one ends up with incorrect statements such as
"since 2000, the percentage (of Jewish Putnam Fellows) has dropped to under 10 percent, without a single likely Jewish name in
the last seven years". The reality is that Jews, by Hillel's definition of self-identified students, have continued to be prominent
among the Putnam Fellows, US IMO team members, and high scorers in the USA Mathematical Olympiad. I have published a careful analysis
of the true ethnic/racial composition of the very top-performing students in these math competitions from recent years (see, Andreescu
et al. Notices of the AMS 2008; http://www.ams.org/notices/200810/fea-gallian.pdf
). For example, Daniel Kane, a Putnam Fellow in 2002-2006, is 100% of Jewish ancestry; his family name had been Cohen before
it was changed. Brian Lawrence was a Putnam Fellow in 2007, 2008, 2010, and 2011; his mother is Jewish. Furthermore, many of the
non-Jewish Putnam Fellows in recent years are Eastern European or East-Asian foreigners who matriculated to college in the US;
they were not US citizen non-Jewish whites or Asian-Americans, respectively. Rather, my data indicate that in recent years both
Jews and Asians have been 10- to 20-over-represented in proportion to their percentage of the US population among the students
who excel at the highest level in these math competitions. The authors conclusions based upon data from other types of competitions
is likely similarly flawed.
The title of this piece captured me to read what it was all about. What was discussed was admissions into elite colleges as
the only focus on "meritocracy" in America. That leaves the tail of the distribution of high IQ people in America, minus those
that make it into elite colleges, to be ignored, especially those that managed to be admitted to Cal Tech, or MIT, or a number
of other universities where significant intellectual power is admitted and fostered. this seems to further the meme that only
the elite graduates run the nation. They may have an early advantage through connections, but I believe that the Fortune 400 CEO's
are fairly evenly spread across the university world.
(1) Jews are better at verbal IQ, Asians at math. Your measures are all math. That woudl be OK if all else were equal across
time, but especially because Jews care a lot about admissions to Ivies, what we'd expect is that with growing Asian competition
in math/science, Jews would give up and focus their energy on drama/writing/service. I wonder if Jewish kids are doing worse in
music competitions too? Or rather- not even entering any more.
(2) For college numbers, adjustment for US/foreign is essential. How many Asians at Yale are foreign? It could well be that
Asian-Americans are far more under-represented than it seems, because they face quota competition from a billion Chinese and a
billion Indians. Cal Tech might show the same result as the Ivies.
(3) A separate but interesting study would be of humanities and science PhD programs. Different things are going on there,
and the contrast with undergrads and with each other might be interseting.
I also learned that Jews are no longer as prominent in math and science achievement, and that's not surprising to me at
all, because everyone in the elite knows that STEM is for Asians and middle-class kids. Jewish parents have learned that colleges
value sports and "leadership" activities more than raw academic achievement and nerdy activities like math olympiads, and that
the most prestigious careers are value transference activities which don't require science or high-level math.
The higher representation of Jews in the Ivies compared to Asians who have better average academic records compared to Jews
(applicants that is ) in the Ivies is due to the greater eligibility of Jews for preferences of every kind in the Ivies. In a
typical Ivy school like Harvard, at least 60% of the freshman class will disappear because of the vast system of preferences that
exists. There is no doubt that there is racial animus involved despite the denials of the Ivies and other private universities
despite the constant denials involved like that of Rosovsky who happens to be a historian by training. Jews are classified as
white in this country, hence there would presumably greater affinity for them among the white Board of Trustees and the adcom
staff. This is in contrast to Asians who do not share the same culture or body physiogonomy as whites do.
I had read the Unz article and the Andrew Goldman response to it. I just do not agree with Unz with his solutions to this problem.
First of all private schools are not going to give legacy preferences and other kinds of preferences for the simple reason that
it provides a revenue stream. Harvard is nothing but a business just like your Starbucks or Mcdonald's on the corner.
Around the world private universities regarded as nothing but the dumping ground of the children of the wealthy, the famous
and those with connections who cannot compete with others with regards to their talent and ability regardless of what anyone will
say from abroad about the private universities in their own country. Bottomline is in other countries , the privates simply do
not get the top students in the country, the top public school does. People in other countries will simply look askance at the
nonsensical admissions process of the Ivies and other private schools, the system that the Ivies use for admission does not produce
more creative people contrary to its claims.
The Goldman response has more to do with the humanities versus math . My simple response to Andrew Goldman would be this :
a grade of A in Korean history is different from a grade of A in Jewish history, it is like comparing kiwis and bananas. The fast
and decisive way of dealing with this problem is simply to deprive private schools of every single cent of tax money that practices
legacy preferences and other kinds repugnant preferences be it for student aid or for research and I had been saying that for
a long time. I would like to comment on the many points that had been raised here but I have no time.
The solution to a lot of problems would be transparency. I'd love to see the admissions and grade data of even one major university.
Public universities should be required to post publicly the names, SAT scores, and transcripts of every student. Allowing such
posting should be a requirement for admission.
The public could then investigate further if, for example, it turned out that children of state senators had lower SAT scores.
Scholars could then analyze the effect of diversity on student performance.
Of course, already many public universities (including my own, Indiana), post the salaries of their professors on the web,
and I haven't seen much analysis or muckraking come out of that.
One factor hinted at in the article, but really needing to be addressed is the "school" that is being attended.
By this, I mean, you need philosophy students to keep the philosophy department going. When I was in college 20 years ago,
I was a humanities major. I took 1 class in 4 years with an Asian American student. 1 class. When I walked through the business
building, it was about 50% Asian.
Could Asian-American students only wanting to go to Harvard to go into business, science, or math be skewing those numbers?
I don't know, but it's just a thought to put out there.
You are preaching to the choir! I blog on this extensively on my Asian Blog: JadeLuckClub. This has been going on for the last
30 years or more! All my posts are here under Don't ID as Asian When Applying to College:
All private schools basically practice legacy prefrences and other kinds of preferences and this practice has been going on
in the Ivies since time immemorial. The income revenue from these gallery of preferences will certainly not encourage the Ivies
to give them up.
In many countries around the world, private universiites are basically the dumping ground for the children of the wealthy ,
the famous and the well connected who could not get into the top public university of their choice in their own country. This
no different from the Ivies in this country where these Ivies and other private universities are just a corral or holding pen
for the children of the wealthy, the famous and the well connected and the famous who could not compete with others based on their
won talent or ability.
Abroad you have basically 3 choices if you could not get into the top public university of that country , they are:
Go to a less competetive public university
Go to a private university
or go abroad to schools like the Ivies or in other countries where the entrance requirements to a public or private university
are less competetive compared to the top public universities in your own home country.
You can easily tell a top student from another country, he is the guy who is studying in this country under a government scholarship
( unless of course it was wrangled through corruption ). the one who is studying here through his own funds or through private
means is likely to be the one who is a reject from the top public university in his own country. That is how life works.
I am generally satisfied with the data that Ron provided about Jews compared to Asians where Jews are lagging behind Asians
at least in grades and SAT scores in the high school level, from the data I had seen posted by specialized schools in NY like
Stuy , Bronx Sci, Brook Tech, Lowell (Frisco ) etc.
Ron is correct in asserting that the Ivies little represents the top students in this country. Compare UCLA and for example.
For the fall 2011 entering freshman class at UCLA , there were 2391 domestic students at UCLA compared to 1148 at Harvard who
scored above 700 in the Math portion of the SAT and there were 439 domestic students who scored a perfect 800 in the Math portion
of the SAT at UCLA, more than Harvard or MIT certainly. For the fall 2012 freshman classs at UCLA the figure was 2409 and 447
respectively.
We can devise a freshman class that will use only income, SATS,grades as a basis of admissions that will have many top students
like UCLA has using only algorithms.
The central test of fairness in any admissions system is to ask this simple question. Was there anyone admitted under that
system admitted over someone else who was denied admission and with better grades and SAT scores and poorer ? If the answer is
in the affirmative, then that system is unfair , if it is in the negative then the system is fair.
I like the comments from Chales Hale. (Nov. 30, 2012) He says: "Welcome to China". It said all in three words. All of these
have been experienced in China. They said there is no new things under the sun. History are nothing but repeated, China with its
5000 years experienced them all.
I meant that there were 439 domestic students in the fall 2011 freshman class at UCLA and 447 domestic students in the fall
2012 freshman class at UCLA who scored a perfect score of 800 in the Math portion of the SAT. In either case it is bigger than
what Harvard or MIT has got.
In fact for the fall 2011 of the entire UC system there were more students in the the freshman class of the entire UC system
who scored above 700 in the Math portion of the SAT than the entire fall 2011 freshman of the Ivy League (Cornell not included
since it is both a public and a private school )'
As I mentioned earlier there were 2409 domestic students in the fall 2012 UCLA freshman class who scored above 700 in the Math
portion of the SAT. We know that Harvard had only 1148 domestic students in its fall 2011 freshman class who scored above 700
in the Math portion of the SAT, why would Harvard ever want to have that many top students like Berkeley or UCLA have ? The answer
to that is simple , it has to do with money. For every additional student that Harvard will enroll it would mean money being taken
out of the endowment .
Since the endowment needs constant replenishment. Where would these replenishment funds come from ? From legacies,from the
children of the wealthy and the famous etc. of course . It would mean more legacy admits, more children of the wealthy admitted
etc.
That would mean that the admission rate at Harvard will rise, the mean SAT score of the entering class will be no different from
the mean SAT scores of the entering freshman classes of Boston University and Boston College
down the road. With rising admission rates and lower mean SAT scores for the entering freshman class that prospect will not prove
appetizing or appealing to the applicant pool.
Harvard ranks only 8th after Penn State in the production of undergrads who eventually get Doctorates in Science and Engineering.
Of course Berkeley has the bragging rights for that kind of attribute.
In the scenario I had outlined above, it would mean that the mean SAT score of the Harvard freshman class will actually go
down if it tried to increase the size of its freshman class and that kind of prospect ia unpalatable to Harvard and that is the
reason as to why it wants to maintain its current " air of exclusivity ".
There is another way of looking at the quality of the Harvard student body. The ACM ICPC computer programming competition is
regarded as the best known college competition among students around the world , it is a grueling programming marathon for 2 or
3 days presumably. Teams from universities around the world vie to win the contest that is dubbed the "Battle of the Brains "
What is arguably sad is that Ivy schools, Stanford and other private schools teams fielded in the finals of the competition are
basically composed of foreign students or foreign born students and foreign born coaches.
The University of Southern California team in this competition in its finals section was made up of nothing but foreign Chinese
students and a Chinese coach. The USC team won the Southern California competition to win a slot in the finals. Apparently they
could not find a domestic student who could fill the bill. However the USC team was roundly beaten by teams from China and Asia,Russia
and Eastern Europe. The last time a US team won this competition was in 1999 by Harvey Mudd, ever since the US had gone downhill
in the competition with the competition being dominated by China and Asia and by countries from Eastern Europe and Russia. Well
I guess USC's strategy was trying to fight fire with fire (Chinese students studying in the US versus Chinese students from the
Mainland ), and it failed.
Thank you Mr. Unz for scratching the surface of the various forms of corruption surrounding elite college admissions. I hope
that your next article further discusses the Harvard Price (and Yale Price and Brown Price etc). The recent press surrounding
the Hong Kong couple suing the person they had retained to pave their children's way into Harvard indicates the extent of the
problem. This Hong Kong couple just were not savvy enough to lay their money down where it would produce results.
Additionally, a discussion of how at least some North Eastern private schools facilitate the corrupt process would be illuminating.
Finally, a more thorough discussion of whether the Asian students being admitted are US residents or nationals or whether they
are foreign citizens would also be worth while and reveal. I suspect, an even lower admit percentage for US resident citizens
of Asian ethnicity.
For these schools to state that their acceptances are need blind is patently untrue and further complicates the admissions process
for students who are naive enough to believe that. These schools should come clean and just say that after the development admits
and the wealthy legacy admits spots are purchased, the remaining few admits are handed out in a need blind fashion remembering
that many of admit pools will already be filled by the development and wealthy legacy admits resulting in extraordinarily low
rates for certain non-URM type candidates (I estimate in the 1% range).
"By contrast, a similarly overwhelming domination by a tiny segment of America's current population, one which is completely
misaligned in all these respects, seems far less inherently stable, especially when the institutional roots of such domination
have continually increased despite the collapse of the supposedly meritocratic justification. This does not seem like a recipe
for a healthy and successful society, nor one which will even long survive in anything like its current form."
I completely agree that it is not healthy for one tiny segment of our population to basically hold all the key positions in
every major industry in this country. If Asians or Blacks (who look foreign) all of a sudden ran education, media, government,
and finance in this country, there would be uproar and resistance. But because Jewish people look like the majority (whites),
they've risen to the top without the masses noticing.
But Jewish people consider themselves a minority just like blacks and Asians. They have a tribal mentality that causes stronger
ethnic nepotism than most other minority groups. And they can get away with it because no one can say anything to them lest they
be branded "jew-hunters" or "anti-semists."
The question is, "where do we go from here?" True race-blind meritocracy will never be instituted on a grand scale in this
country both in education and in the work force. One group currently controls most industries and the only way this country will
see more balance is if other groups take more control. But if one group already controls them all and controls succession plans,
how will there ever be more balance?
If Jews become presidents or regents of universities, that's a credit to their ability. Nothing sinister there.
But when Jews (or anyone) buy into an institution to create the 'Goldman School of Business', or when they give large donations,
that is not a credit to anyone's ability and there may well be something sinister there.
It is no secret that corporations and individuals look for influence, if not control, in return for cash. The same thinking
can easily affect admissions policy.
It's always the same. In spite of all the jingoism about "democracy" and "freedoms" and the "free market capitalist system",
the trail of money obfuscates and corrupts. It is still very true that whoever pays the piper, calls the tune. And naive to believe
otherwise.
How recent was it that Princeton cancelled its anti-Semitism classes for lack of participation, and at least one Jewish organisation
was screaming that Princeton would never get another penny from any Jew, ever.
That is close to absolute control of a curriculum. I give you money, and you teach what I want you to teach.
How far is that from I give you money and you admit whom I want you to admit? Or from I give you money and you hire whom I
want?
A university that is properly funded by the government – "the people" – doesn't have these issues because there is nothing
you can buy.
Operating educational institutions as a business, just like charities and health care, will always produce this kind of corruption.
Two other points:
1. It occurred to me that the lowly-paid underachiever admissions officers might well have been mostly Jewish, and hired for
that reason, and that in itself could skew the results in a desired manner.
2. I think this is a serious criticism of the othewise excellent article:
At the end, Ron Unz wants us to believe that a $30-billion institution, the finest of its kind in the world, the envy of the
known universe and beyond, the prime educator of the world's most prime elites, completely abandons its entire admissions procedures,
without oversight or supervision, to a bunch of dim-witted losers of "poor human quality" who will now choose the entire next
generation of the nation's elites. And may even take cash payments to do so.
Come on. Who are you kidding? Even McDonald's is smarter than this.
Some of the comments suggest major problems with estimating who is Jewish. But the authors information is underpinned by data
collected by Jewish pressure groups for the purpose of ensuring the gravy train keeps flowing. It's either their numbers, or the
numbers are consistent with their numbers.
This article, to me, is shocking and groundbreaking. I don't think anyone has gone this in-depth into this biased and un-meritocratic
system. This is real analysis based on real numbers.
Why is this not getting more coverage in the media? Why are people so afraid to talk about this?
There is an excellent analysis of this article at The Occidental Observer by Kevin MacDonald, "Ron Unz on the Illusory
American Meritocracy". The MSM is ignoring Unz's article for obvious reasons.
I don't know if there's any truth behind the idea that Japanese Americans have become lazy relative to their Korean and Chinese
counterparts. I've grew up in Southern California, a part of the country with a relatively high percentage of Japanese Americans,
yet I've know very few other Japanese Americans in my life. I can recall one Japanese American classmate in jr. high, and one
Japanese classmate in my high school (who returned to Japan upon graduating). Even at the UC school I attended for undergrad,
I was always the only Japanese person in the every class, and the Japanese Student Association, already meager in numbers, was
almost entirely made up of Japanese International students who were only here for school.
If, in fact, 1% of California is made up of Japanese Americans, I suspect they are an aging population. I also think many 2nd
and 3rd generation Japanese Americans are only partially Japanese, since, out of necessity, Japanese Americans have a very high
rate of out marriage.
The carefully researched article makes a strong case that there is some discrimination against Asian-Americans at the Ivy League
schools.
On the other hand, I don't see how a percentage of 40-60% Asian-Americans at the selective UC schools, even given the higher
percentage of Asian-Americans in California, does not perhaps reflect reverse discrimation, or at least affirmative action on
their behalf. To be sure one way or the other, we would have to see their test scores AND GPA, apparently the criteria that the
UC schools use for admission, considered as well in the normalization of this statistical data.
The replies to date make some good points but also reflect precisely the biases pointed out in the article as likely causing
the discussed distortions.
1) use of name data in achievement vs use of Hillel data for Ivy admits: definitely an issue but is this only one of the measures
used in this study. Focusing only on this obscures the fact that Jewish enrollment as measured over time by Hillel numbers (apples
to apples) increased significantly over the past decade while the percent of Jewish high school age students relative to other
groups declined. One explanation for this surge could be that Jewish students became even more academically successful than they
have been in the past. The achievement data using Jewish surnames is used to assess this thesis in the absence of other better
data. Rejecting the surname achievement data still leaves a huge enrollment surge over time in Jewish attendance at the Ivies
relative to their percentage of the population.
2) many comments accept that the numbers show disproportionate acceptance and enrollment growth but simply then go on to assert
that Jewish students really are smarter (absolutely or in gaming the system) relying on anecdotal evidence that is not at all
compelling. All definitions of "smarter" contain value judgments". Back in the '20s the argument was that the Ivies should rely
more on objective testing to remove bias against the then high testing Jewish students; now the writers argue conveniently wthat
the new subjective tests that are applied to disproportionately admit Jewish students over higher scoring Asians and non-Jewish
Caucasians are better measures. In both cases, there is still an issue of using a set of factors that disproportionately favors
one group. In all such cases of significant disproportionate admits, the choice of the factors used to definemmerit and their
application should be carefully evaluated for bias. The burden of proof should shift to those defending the status quo in this
situation. In any event, it is clear that given the large applicant pool, there is no shortage of non-Jewish caucasians and Asians
who are fully qualified, so if the desire was there for a balanced entering class, the students are available to make it happen
3) the numbers don't break down admissions between men and women. When my child was an athletic recruit to Harvard, we received
an ethnic breakdown of the prior year's entering class. I was surprised to discover that the Caucasian population skewed heavily
male and the non-white/Asian population skewed heavily female. It seemed that Harvard achieved most of its ethnic diversity that
year by admitting female URMs, which made being a Caucasian female the single most underrepresented group relative to its percentage
in the school age population. I'm curious if this was an anomaly or another element of bias in the admissions process.
I will note that there is one flaw in this whole argument, and that flaw is thus:
Harvard and Yale aren't the best universities in the country. As someone who went to Vanderbilt, I knew people who had been
to those universities, and their evaluation was that they were no better – and perhaps actually worse – than Vanderbilt, which
is "merely" a top 25 university.
While there is a great deal of, shall we say, "insider trading" amongst graduates of those universities, in actuality they
aren't actually the best universities in the country today. That honor probably goes to MIT and Caltech, which you note are far
more meritocratic. But most of the other best universities are probably very close in overall level, and some of them might have
a lot of advantages over those top flight universities.
Or to put it simply, the Ivy League ain't what it used to be. Yeah, it includes some of the best universities in the country,
but there are numerous non-Ivy League universities that are probably on par with them. This may indeed be in part a consequence
of some of what you have described in the article, as well as a sense of complacency.
I suspect that in twenty or thirty years a lot of Ivy League graduates are going to feel a lot less entitled simply because
there has been an expansion of the top while they weren't paying attention.
I'm against the Ivies going up to 30-50% Asian but I'm also against the over-representation of a tiny minority group. This
country is going to go downhill if we continue to let one group skirt a fair application process just because they possess money
and influence. Who will stand up for fairness and equality?
Many of those commenting above don't seem to be picking up on Unz's evidence of bias against white Gentiles, which by meritocratic
measures is far worse than the bias against Asian Americans.
A drop of 70 PERCENT??? What's going on? Why is so much of the discussion that this article has spawned focused only on Asian
Americans and (secondarily) Jews?
National Merit Scholarship semifinalists are chosen based on per-state percentiles.
What this means is that NMS semifinalist numbers would be skewed _against_ a high-performing demographic group to the extent
that group's demographics concentrate geographically. Mr. Unz acknowledges that geographical skewing of Jewish populations is
huge. However, he ignores its effect on the NMS semifinalist numbers he uses as a proxy for academic performance on a _national_
level to predict equitable distributions at _national_ universities.
Please somebody explain to me how this oversight isn't fatal to his arguments
Surely the author must be aware that approximately half the children with "Jewish" names are not fully Jewish. Over half of
the marriages west of the Mississippi are reportedly mixed. Many non-Jews have last names that start with "Gold". Just these two
facts make the entire analysis ridiculous. Hillel does not keep statistics on how Jewish a student is, while many of Levys and
Cohens are not actually Jewish. What would we call Amy Chua's daughters? Jewish or Asian? It is therefore impossible to tease
out in a multi-racial society who is who.
I am an elementary school teacher at a Title One school in northern California. I supported your "English for the Children"
initiative when it was introduced.
However, the law of unintended consequences has kicked in, and what exists now is not at all what you (or anyone else, for that
matter) had intended.
The school day was not lengthened to create a time slot for English language instruction. Instead, history and science classes
were elbowed aside to make way for mediocre English language instruction. These usually worthless classes have crowded out valuable
core academic instruction for English language learners.
To make matters worse, while English language learners are in ESL classes, no academic instruction in science or history can
be given to "regular" students because that would lead to issues of "academic inequity." In other words, if the Hispanic kids
are missing out on history, the black kids have to miss out on it, too.
As a teacher, I hope you will once again consider bringing your considerable talents to focus on the education of low-income
minority children in California.
Could it be that the goal of financial, rather than academic, achievement, makes many young people uninterested in
competing in the science and math competitions sought out by the Asian students? I wonder about the different percentages
of applicants to medical school versus law or business.
I must also add that I am surprised that the author used the word "data" as singular, rather than plural. Shouldn't he be stating
that the data ARE, not IS; or SHOW, not SHOWS.
The author perhaps pays an incredible amount of attention to those with strengths in STEM fields (Science, technology, engineering,
and math), even though the proportion of all native-born white students majoring in these fields has plummetted in recent decades.
That means that he overlooks a shift in what kinds of training is considered "prestigious," and that this might be reflected in
the pursuits of students in high school. Perhaps there is a movement away from Jewish students' focus on Math Olympiad because
they are in no way interested in majoring in math or engineering fields, instead preferring economics or business. Is that the
fault of the students, or of the rewards system that corporate America has set up?
Jobs in STEM fields pay considerably less than do jobs in numerous professions - investment banking and law. So that is why
~ 40% of the Harvard graduating class - including many of its Jewish students - pursue that route. But to rely on various assessments
of math/science/computing as the measure of intelligence fails to incorporate how the rewards structure in our society has changed
over time.
I teach at an Ivy League university, and believe that many of the authors' arguments have merit, but there are also many weaknesses
in his argument. He sneers at Steinberg and the other sociologists he cites for not quite getting how society has changed - but
he clearly doesn' tunderstand how other aspects of our society have changed. Many of our most talented undergrads have no desire
to pursue careers in STEM fields. Entrance into STEM jobs even among those who majored in those fields is low, and there is very
high attrition from those fields, among both men and women. Young adults and young professionals are voting with their feet. While
our society might be better off with more Caltech grads and students interested in creating our way to a better future rather
than pursuing riches on wall street, one cannot fault students for seeking to maximize their returns on their expensive education.
That's the system we have presented them with, at considerable cost to the students and their families.
Personally, what I found profoundly disturbing is not the overrepresentation of Jewish students or the large presence of Asians
who feel they are discriminated against, but the fact that Ivy League schools have not managed to increase their representation
of Blacks for the last 3 decades. We all compete for the same talent pool. And until the K-12 system is improved, Black representation
won't increase without others screaming favoritism. The other groups - high performing Asians, middle class Jews - will do fine,
even if they don't get into Ivy League schools but have to "settle" for elite private schools. But if the Ivy Leagues are the
pathway to prestige and power, than we're not broadening our power base enough to adequately reprewsent the demographic shifts
reshaping our nation. more focus on that, please.
I've been an SAT tutor for a long time in West Los Angeles (a heavily Asian city), and I feel that at least some of Asians'
over-representation in SAT scores and NMS finalists is due to Asian parents putting massive time and money into driving their
children's success in those very statistics.
In my experience, Asian parents are more likely than other parents to attempt to ramrod their kids through test prep in order
to increase their scores. For example, the few students I've ever had preparing for the PSAT - most students prepare only for
the SAT - were all Asian.
Naturally, because it's so strange to be preparing for what is supposed to be a practice test, I asked these parents why their
9th or 10th grade child was in this class, and the answer was that they wanted to do well on the PSAT because of its use in the
NMS! Similarly, many Asian immigrants send their children to "cram school" every day after regular school lets out (and I myself
have taught SAT at one of these institutions), essentially having their students tutored in every academic subject year-round
from early in elementary school.
Because whites are unlikely to do this, it would seem to me that the resulting Asian academic achievement is analogous to baseball
players who use steroids having better stats than baseball players who do not.
It seems reasonable that the "merit" in "meritocracy" need not be based solely on test scores and grades, and that therefore
a race-based quota system is not the only conclusion that one can draw from a decrease in the attendance rate of hard-driving
test-preppers. Maybe the university didn't want to fill its dorms with grade-grubbers who are never seen because they're holed
up in the library 20 hours a day, and grade-grubbers just happen to be over-represented in the Asian population?
Unz's piece analyzes only the data that lead up to college - when the Asian parents' academic influence over their children
is absolute - whereas the Ivy League schools he criticizes are most concerned with what their students do during and after college.
Is the kid who went to cram school his entire life as likely to join student organizations? To continue practicing his four instruments
once his mom isn't forcing him to take lessons 4 days a week? To start companies and give money to his university? Or did he just
peak early because his parents were working him so hard in order to get him into that college?
However, the remedies considered are not. It is silly to believe that all abilities can be distilled into a small set of numbers,
and anyway, no one knows what abilities will succeed in marketplaces. The source of the problem is the lack of competition in
education, including higher education, a situation written in stone by current accreditation procedures. The solution to the problem
is entry. Remember Brandeis U? With sufficient competition, colleges could take whomever they pleased, on whatever grounds, and
everyone would get a chance.
Concerning the drop in non-Jewish white enrollment:
I am a recent graduate of a top public high school, where I was a NMS, individual state champion in Academic Decathlon, perfect
ACT score, National AP Scholar, etc. etc. Many of my friends – almost exclusively white and Asian – had similar backgrounds and
were eminently qualified for Ivy. None of us even applied Ivy, let alone considered going there. Why? At $60,000/yr, the cost
is simply not worth it, since none of us would have been offered anything close to substantial financial aid and our parents were
unable/unwilling to fully fund our educations. Meanwhile, my Asian friends applied to as many Ivies as they could because it was
understood that (a) their parents would foot the bill if they got in or (b) they would take on a large debt load in order to do
it.
This article discounts financial self-selection, which (at least based on my own, anecdotal evidence) is more prevalent than
we tend to think.
The author ignores the role that class plays in setting kids up for success. At one point he notes, "Given that Asians
accounted for just 1.5 percent of the population in 1980 and often lived in relatively impoverished immigrant families. . ."
When I was at Harvard in the mid-1980s, there were two distinct groups of Asian students: children of doctors, academics, scientists
and businesspeople who came from educated families in China, Korea and Vietnam, and therefore grew up with both strong educational
values and parental resources to push them; and a much smaller group of kids from Chinatown and Southeast Asian communities,
whose parents were usually working class and uneducated. The second group were at a severe disadvantage to the first, who were
able to claim "diversity" without really having to suffer for it.
I would expect you'd see the same difference among higher-caste educated South Asian Brahmins and Indians from middle and
lower castes or from places like Guyana. It is ridiculous to put South Asians and East Asians in the same category as "Asian."
They have different cultural traditions and immigration histories. Ask any Indian parent what race they are and they'll answer
"Caucasian." Grouping them without any kind of assessment of how they might be different undermines the credibility of the
author.
The takeaway is not that affirmative action is damaging opportunities for whites, but that whites are losing against Asians.
The percentage of Hispanic and Black students at leading schools is still tiny. Hence, if invisible quotas for Asians are lifted,
there will be far fewer white students at these schools. This isn't because of any conspiracy, but because white students are
scoring lower than the competition on the relevant entry requirements. I would love to see an article in this publication titled,
"Why White Students Are Deficient." How about some more writing about "The White Student Achievement Gap?"
As parents of 2 HYP grads, We can tell you from experience that Asian students are not under-represented in the Ivies today.
(In fact, I think they are slightly over represented, for the same reasons and stats the author cited).
True, if one looks at stats, such as SAT, scientific competition awards etc, it seems to imply that a +35% enrollment of Asian
students is warranted. However, these indicators are just a small part of a "holistc" approach in predicting the success of a
candidate not only in the next 4 years, but the individual's success in life and be able to impact and contribute to society later.
I have seen candidates of Asian background, who score almost full mark in SAT but was less than satisfactory in all other aspects
of being a potential achiever in life.
Granted, if one wants to be an achiever in science and technology, by all means go with Caltech and MIT. But if one wants an
real "education" and be a leader later on in life, one has to have other qualities as well (skin color is NOT one of them). Of
course, history, and current cultural and political climate may influence the assessment of such qualities because it is highly
subjective. (Is is unfair to pick a pleasant looking candidate over a lesser one, if the rest are the same?)
That is why an interview with the candidates is a good way to assess a potential applicant. I always encourage my children
to conduct interviews locally for their alma mater.
I just hope that the Ivies do not use this holistic approach to practice quota policies.
Here's a quote from a friend just today about this related topic: "Just like the Catholic church in the middle ages recruited
the smartest peasants in order to forestall revolutionary potential, and to learn mind bending religious dogma to befuddle the
remaining peasants, current practice is much the same. To twist Billy Clinton's mantra, "its the economy stupid", No ,"its the
co opted brains"! "
We can substitute economics dogma to the befuddlement mix. The bottom line is every ruling elite has co-opted the top 1%-5%
of high wage earners, to make the pyramid work. Sociology writing is all over this. Veblen, Weber, etc. We can see this little
group created everywhere minerals or natural resources are coveted by private empires.
The universities are doing exactly what they are supposed to do to protect the interests of the Trustees and Donors who run
them for a reason. They are a tool of, not a cause of, the inequality and over-concentration. It is interesting how the story
goes into hairsplitting and comparing Asians to others, etc. But, the real story is a well understood sociology story. This article
explains why Napoleon established free public education after the French Revolution.
This is a fascinating article. So much data. So many inferences. It's hardly surprising to any parent of high school students
that college admissions are only marginally meritocratic. Whether that's a good a thing or a bad thing is an open question. I
think meritocracy has a place in college admissions. But not the only place. Consider athletics, which are themselves almost exclusively
meritocratic. Only the best among the best are offered Division I scholarships. The same, I think, applies to engineering schools,
the physical sciences, and (to a lesser degree), elite law schools. It also applies to auto-mechanics, plumbers, and electricians.
Regarding the humanities (a field in which I hold a PhD), not so much. I think Unz's beef is less with admissions policies per
se (which I agree are mind-bogglingly opaque) than with the status of elite institutions. I also think, and I may be wrong, that
Unz appears heading down the Bobby Fisher highway, intimating that those pesky Jews are
America never promised success through merit or equality. That is the American "dream." America promises freedom of
religious belief and the right to carry a gun.
This is a fascinating and extremely important article which I am very eager to discuss privately with the author, having spent
my whole life in higher education, albeit with a unique perspective. I was flabbergasted the findings about Jewish and non-Jewish
white representation, and intrigued, all the more so since my own ancestry is evenly divided between those two groups. I do want
to make one criticism, however of something the author said about the 1950s which I do not think is correct.
At one point in the article the author makes the claim that the breakdown of Ivy League Jewish quotas in the 1950s reflected
the power of Jews in the media and Hollywood. The statistics he gives about their representation there may be correct, but the
inference, I believe, is unsustainable. The Proquest historical database includes the Washington Post, New York Times, and many
other major newspapers. I did a search for "Harvard AND Jewish AND quota" for the whole period 1945-65 and it turned up only 20
articles, not one of which specifically addressed the issue of Jewish quotas at Harvard and other Ivy League schools. The powerful
Jews of that era had reached their positions by downplaying their origins–often including changes in their last names–and they
were not about to use their positions overtly on behalf of their ethnic group. (This could be, incidentally, another parallel
with today's Asians.) Those quotas were broken down, in my opinion, because of a general emphasis on real equality among Americans
in those decades, which also produced the civil rights movement. The Second World War had been fought on those principles.
I could not agree more that the admissions policies of the last 30 years have produced a pathetic and self-centered elite that
has done little if any good for the country as a whole.
It is really refreshing to see in print what we all know by experience, but I have to wonder out loud, what is our higher purpose?
Surely, you have a largely goal than merely exposing corruption in the academy. Lastly, I have to wonder out loud, how would the
predicament of the working class fit into your analysis? I thank you for this scathing indictment of higher ed that has the potential
to offer us a chillingly sobering assessment.
This is why we need to reinstate a robust estate tax or "death tax" as conservatives derisively call it. To break the aristocracy
described in this article. No less than Alexis de Tocqueville said that the estate tax is what made America great and created
a meritocracy (which now is weaker and riddled with loopholes, thus the decline of America). Aristocracies dominated Europe for
centuries because they did not tax the inheritance.
The day when I learned so many Chinese ruling class' offspring are either alumni or current students of Harvard (the latest
example being Bo GuaGua), it was clear to me Harvard's admission process is corrupt. How would any ivy college determine "leadership"
quality? Does growing up in a leader's family give you more innate leadership skills? Harvard obviously thinks so.
Therefore, it's not surprising that Ron said the following on this subject. " so many sons and daughters of top Chinese leaders
attend college in the West ..while our own corrupt admissions practices get them an easy spot at Harvard or Stanford, sitting
side by side with the children of Bill Clinton, Al Gore, and George W. Bush." I hope world peace will be obtained within reach
in this approach.
The chilling factor is a hardworking Chinese immigrant's child in the U.S. would have less chance of getting into ivies than
these children of privileged.
It was also very disappointing to see another Asian parent whose children are HYP alumni saying too many Asians in ivies, despite
the overwhelming evidence showing otherwise.
Perhaps it's to be expected given the length of the article (over 22,000 words), but so many of the objections and "oversights"
raised in the comments are in fact dealt with – in detail and with a great deal of respect – by Unz in the article itself.
For example, this:
National Merit Scholarship semifinalists are chosen based on per-state percentiles.
What this means is that NMS semifinalist numbers would be skewed _against_ a high-performing demographic group to the extent
that group's demographics concentrate geographically. Mr. Unz acknowledges that geographical skewing of Jewish populations
is huge. However, he ignores its effect on the NMS semifinalist numbers he uses as a proxy for academic performance on a _national_
level to predict equitable distributions at _national_ universities.
Please somebody explain to me how this oversight isn't fatal to his argument
because geographical skewing of Asian populations is also huge, yet we don't witness the same patterning in admissions data
pertaining to Asian students. As the article states: "Geographical diversity would certainly hurt Asian chances since nearly half
their population lives in just the three states of California, New York, and Texas."
Unz goes on to note: "Both groups [Jews and Asians] are highly urbanized, generally affluent, and geographically concentrated
within a few states, so the 'diversity' factors considered above would hardly seem to apply; yet Jews seem to fare much better
at the admissions office."
So there's your answer.
And aside from the fact that your "basic question" has a very simple answer, it's just ludicrous in any case to suggest that
the validity of the entire article rests on a single data point.
There is no doubt this is more of a political issue than the academic one. If only merit is considered then asian american
would constitute as much as 50% of the student population in elite universities. Politically and socially this is not a desired
outcome. Rationale for affirmative action for the african americans and hispanics is same – leaving a large population is in elite
institution is not desired, it smacks of segregation.
But the core issue remains unsolved. Affirmative action resulted in higher representation but not the competitiveness of the
blacks. I am afraid whites are going the similar path.
Anyone famliar with sociology and the research on social stratification knows that meritocracy is a myth; for example,
if one's parents are in the bottom decile of the the income scale, the child has only a 3% chance to reach the top decile in his
or her lifetime. In fact, in contrast to the Horatio Alger ideology, the U.S. has lower rates of upward mobility than almost any
other developed country. Social classses exist and they tend to reproduce themselves.
The rigid class structure of the the U.S. is one of the reasons I support progressive taxation; wealth may not always be
inherited, but life outcomes are largely determined by the class position of one's parents. In this manner, it is also a myth
to believe that wealth is an individual creation;most financially successful individuals have enjoyed the benefits of class privilege:
good and safe schools, two-parent families, tutors, and perhaps most important of all, high expecatations and positive peer socialization
(Unz never mentions the importants of peeer groups, which data show exert a strong causal unfluence on academic performance).
And I would challenge Unz's assertion that many high-performing Asians come from impovershed backgrounds: many of them
may undereport their income as small business owners. I believe that Asian success derives not only from their class background
but their culture in which the parents have authority and the success of the child is crucual to the honor of the family. As they
assimilate to the more individualist American ethos, I predict that their academic success will level off just as it has with
Jews.
1. HYP are private universities: the success of their alumni verifies the astuteness of their admissions policies.
2. Mr. Unz equates "merit" with "academic". I wonder how many CalTech undergrads would be, or were, admitted, to HYP (and vice-versa).
3. I would like ethnic or racial stats on, for several examples, class officers, first chair musicians*, job holders, actors^,
team captains, and other equally valuable (in the sense of contributing to an entering freshman class) high-school pursuits.*By
17, I had been a union trombonist for three years; at Princeton, I played in the concert band, the marching band, the concert
orchestra, several jazz ensembles, and the Triangle Club orchestra.^A high school classmate was John Lithgow, the superb Hollywood
character actor. Harvard gave him a full scholarship – and they should have.
What if we were one homogeneous ethnic group? What dynamic would we set up then?
I suggest taking the top 20% on straight merit, based on SAT scores, whether they crammed for them or not, and take the next
50% from the economically poorest of the qualified applicants (1500 – 1600 on the SAT?) by straight ethnicity percentages to directly
reflect population diversity, and 30% at random to promote some humility, and try that for 20 years and see what effects are produced
in the quality of our economic and political leadership. And of course, keep them all in the dark as to how they actually got
admitted.
Maybe one effect is that more non-ivy league schools will be tapped by the top recruiters.
"Surely the author must be aware that approximately half the children with "Jewish" names are not fully Jewish. Over
half of the marriages west of the Mississippi are reportedly mixed. Many non-Jews have last names that start with "Gold". Just
these two facts make the entire analysis ridiculous. Hillel does not keep statistics on how Jewish a student is, while many
of Levys and Cohens are not actually Jewish. What would we call Amy Chua's daughters? Jewish or Asian? It is therefore impossible
to tease out in a multi-racial society who is who."
Well, there are several arguments to be made. First, unless you are advocating that there has been a mass adoption of words
like "Gold" in non-Jewish last names these past 10, 15 years, that argument sinks like a stone. Second, by selecting for specifically
Jewish last names, intermarriage can be minimized but not eliminated. How many kids with the lastname "Goldstein" was a non-Jew
in the last NMS? Not likely a lot of them.
Intermarriage can account for some fog, but not all, not by a longshot. Your entire argument reeks of bitter defensiveness.
You have to come to grips that Jews have become like the old WASPs, rich, not too clever anymore, and blocking the path forward
for brighter, underrepresented groups.
With all due respect, I was worried that I would get an answer that lazily points to the part of the essay that glosses over
this point (which mind you I had combed through carefully before posting my question). However, I was hoping that in response
someone might respond who had thought a little more carefully about the statistical fallacy in Unz's essay: that far-reaching
statements about nation-wide academic performance can be drawn directly from per-state-percentiles.
Yes, Asian Americans, like Jews, have concentrations. But their geographical distributions differ. Yes, it might be possible
that upon careful analysis of relative distributions of populations and NMS semifinalists in each state Unz might be able to draw
a robust comparison: he might even come up with the same answer. The point that I made is that he doesn't even try.
Given the lengths Unz goes to calculate and re-calculate figures _based_on_ the assumption of _equal_ geographic distributions
among Asians and Jews, it is - and I stand by this - a disservice to the reader that no effort (beyond hand-waving) is made to
quantitatively show the assumption is at all justified.
The statistical analysis used in this article is flawed. The author uses last names to identify the religion (or birth heritage)
of NMS semifinalists? Are you serious? My son was a (recent) National Merit Finalist and graduated from an ivy league university.
His mother is Jewish; his father is not, thus he has a decidedly WASP surname and according to the author's methods he would have
been classified as WASP. With the growing numbers of interfaith and mixed-race children how can anyone draw conclusions about
race and religion in the meritocracy or even "IQ" argument? Anecdotally, my son reported that nearly half his classmates at his
ivy league were at least one-quarter Jewish (one or more parents or one grandparent). To use last names (in lieu of actual demographic
data) to make the conclusion that Jews are being admitted to ivies at higher rates than similarly qualified Asians is irresponsible.
Essentially, the leftist forces in this country are trying to put the squeeze on white gentiles from both directions.
Affirmative action for underachieving minorities to take the place of white applicants.
Meritocracy for highly achieving Asians to push down white applicants, while never mentioning that full meritocracy would push
out other minorities as well (that's not politically correct).
The whole thing has become more about political narrative than actual concern for justice. I want you to know that as an Asian
man who graduated from Brown, I sympathize with you.
Very interesting article. The case that East Asian students are significantly underrepresented and Jewish students overrepresented
at Ivy League schools is persuasive, although not dispositive. The most glaring flaw in the analysis is the heavy reliance on
performance on the PSAT (the discussion of the winners of the various Olympiad and Putnam contests has little informational value
relevant to admissions, since those winners are the outliers on the tail of the distribution), which is a test that can be prepped
for quite easily. Another flaw is the reliance on last names to determine ethnicity, which I doubt works well for Jews, although
it probably works reasonably well for East Asians.
Unfortunately, the article is also peppered with (very) thinly supported (and implausible) claims like Asians are better at
visuospatial skills, worse at verbal skills, and that the situation is reversed for Jews. This kind of claim strikes me as racial
gobbledygook, and at least anecdotally belied if one considers the overrepresentation of Jews among elite chess players, both
in the US and worldwide.
In any event, the fundamental point is that the PSAT (as is the case with all standardized tests) is a fixed target that can
be studied for. Whether one chooses to put in 100s of hours studying for the PSAT is not, and should not be, the only criterion
used for admissions.
I find the relative percentage of East Asians and Jews at schools like MIT (and also Caltech and Berkeley, although obviously
those are in part distorted by the heavy concentration of East Asians in California) as compared to HYP as strong evidence that
the admissions process at HYP advantages Jews and disadvantages East Asians.
I suspect, though, that the advantages Jews enjoy in the admissions process are unconscious and unintentional, whereas the
disadvantages suffered by East Asians are quite conscious and intentional.
The graph entitled "Asians Age 18-21 and Elite College Enrollment Trends, 1990-2011″ is misleading. It contrasts percentage
of enrolled Asian students vs. the total number of the eligible Asian applicants. Therefore, it led to a flawed argument
when comfusing number vs. percentage . For proof, if a similar graph of Hispanic student percentage vs. eligible applicants
were drawn, it would appear that they were discriminated against as well. So would be the Black!
well, even a fair and objective admission criteria can have devastating consequences. here at IIT, we admit about 1 in 100.
this has the same effect on student ethics, career options and so on. in fact, even worse, since IIT is an engineering college,
the very definition of engineering in India has now distorted as serving international finance or distant masters in a globalized
world. our own development problems remain unattended.
also, the above is a part of the current trend of knowledge concentration, i.e., a belief that only a few universities can
impart us "true" knowledge or conduct "true" research.
see http://www.cse.iitb.ac.in/~sohoni/kpidc.pdf
This is a very valuable article. It deals with a subject that has received too little attention. I believe that cultural bias
in many cases outweighs the racial bias in the selection program. Time and again, I have seen young people with great potential
being selected against because they are culturally different from what the selectors are looking for (often people who are like
them culturally). The article's mentioning that students who participated in R.O.T.C., F.F.A. and/or 4H are often passed over
is a good illustration.
It was interesting to note that the girl who wrote an essay on how she dealt with being caught in a drug violation found acceptance.
I suspect that a student with similar academic qualifications who wrote an essay on the negative aspects of drug use would not
be so lucky.
comes news that Yale President Levin's successor will be Peter Salovey, tending to confirm Unz's observations regarding the
grossly disproportionate number of Jewish presidents at Ivy League schools.
All very interesting but I am among the National Merit Scholars from California who has a not obviously Jewish name despite
having two Jewish parents. It was changed in the 1950s due to anti-Semitism and an urge to assimilate. A lot of other names can
be German or Jewish for example. I suspect in light of that and intermarriage cases where the mom is Jewish and the dad is not,
not to mention a lot of Russian names, you may be undercounting Jews among other things. Although to be fair, you are probably
also undercounting some half-Asians given most of those marriages have a white husband and Asian wife.
I'm an Asian HYP grad. I applaud this article for being so extremely well researched and insightful. It's an excellent indictment
of the arbitrariness and cultural favoritism concentrated in the hands of a very small group of unqualified and ideologically
driven admissions officers. And I hasten to add that I am a liberal Democratic, an avid Obama supporter, and a strong proponent
of correcting income inequality and combating discrimination in the workplace.
To me, the most compelling exhibit was the one towards the end which showed the % relative representation of enrolled students
to highly-qualified students (I wish the article labeled the exhibits). This chart shows that in the Ivies, which administer highly
subjective admission criteria, Jews are overrepresented by 3-4x, but in the California schools and MIT, which administer more
objective criteria, Jews are overrepresented by only 0-50%, a range that can easily be explained by methodology or randomness.
This single exhibit is unequivocal evidence to me of systematic bias in the Ivy League selection process, with Jews as the
primary beneficiary. I tend to agree with the author this this bias is unlikely to be explicit, but likely the result of cultural
favoritism, with a decision-making body that is heavily Jewish tending to favor the activities, accomplishments, personalities,
etc. of Jewish applicants.
The author has effectively endorsed one of the core tenets of modern liberalism – that human beings tend to favor people who
look and act like themselves. It's why institutions dominated by white males tend to have pro-white male biases. The only twist
here is that the decision-making body in this instance (Ivy League admissions committees) is white-Jewish, not white-Gentile.
So if you're a liberal like me, let's acknowledge that everyone is racist and sexist toward their own group, and what we have
here is Jews favoring Jews. We can say that without being anti-semitic, just like we can say that men favor men without being
anti-male, or whites favor whites without being anti-white.
Just some puzzling statistics: In p. 32, second paragraph, it is mentioned "The Asian ratio is 63% slightly above the white
ratio of 61 percent", then in the third paragraph "However, if we separate out the Jewish students, their
ratio turns out to be 435 percent, while the residual ratio for non-Jewish whites drops to just 28 percent, less than half of
even the Asian figure", leading to the conclusion that "As a consequence, Asians appear under-represented relative to Jews by
a factor of seven, while non-Jewish whites are by far the most under-represented group of all". Not very clear on the analysis!
Let me try to make a guess on the calculation of this statistics ratio: Assume that all groups in NMS will apply, with mA=Asians,
mJ=Jews, mW=Whites be the respective numbers in NMS. Suppose that nA, nJ, and nW are those Asians, Jews, and Whites finally admitted.
Then if the statistics ratio for G means ((nG)/(mG))/(mG/mNMS), where mNMS is the total number in the NMS, then the ratio will
amplify the admission rate (nG/mG) by (mNMS/mG) times and becomes very large or very small for small group size. For example,
for a single person group, being admitted will give a ratio as large as mNMS, and a zero for not being admitted. Why can this
ratio be used for comparing under-representation between different groups?
Very well. Loved the fact that the author put a lot into reseaching this piece. But i would like to know how many asians who
manage to attend this ivy schools end up as nobel leaurets and professors?? This demonstrates the driving force behind the testscore
prowess of the asians-financial motivation. The author talks about asians being under-represented in the ivies but even though
they manage to attend then what?? do they eventually become eintiens and great nobel leurets or great cheese players. Also what
is the stats like for asian poets, novelist, actors.etc Pls focus should be given on improving other non-ivy schools since we
have a lots of high SAT test scores than high running universities.
Look at Nobel prizes, field medals and all kind of prizes and awards that recognize lifetime original academic contributions.
Not many asians there yet. Perfect grades or SAT scores does not guarantee creativity, original thinking, intelectual curiosity
or leadership. The problem is that those things are hard to measure and very easy to fake in an application.
Loved all the research in the article and I am on board with the idea that moving in the tiger mother direction will kill creativity
in young people. And I agree with the observation that our country's top leadership since 1970 or so has been underwhelming and
dishonest especially in the financial services industry which draws almost entirely from the Ivies.
However, I am not so convinced that the over representation of Jewish students in the Ivy league is created by intentional
bias on the part of Jewish professors or administrators at these institutions. Is it possible that admissions officers select
Jewish applicants at such a high rate because they are more likely to actually attend? Once a family of four's income exceeds
$160k the net price calculation for a year at Harvard jumps up pretty quickly. By the time you hit annual income of $200k you
are looking at $43k/yr or $172k for 4 years. And at the lower income levels, even if a family has to pay just $15k a year, how
will they do that if they are struggling to make it as it is? Do they want/does their student want to graduate with $60k worth
of debt? Why not choose a great scholarship offer from a state university to pay nothing at all or go to community college for
2 years and then on to the state public institution?
There are many options for top students who can compete at the Ivy level. If I am an admissions officer looking to fill slots
left over after minority admissions (ones poor enough to get the education for free and thus to say yes), legacies, athletic recruits,
and the few super special candidates, wouldn't I choose those most likely to take me up on the admissions offer and protect my
yield number? Might an easy way to get this done be to consult a demographic tool showing net worth by zip code? And to stack
the yield odds a little more in my favor might I also choose families with Jewish appearing last names knowing they would be extremely
likely to accept my offer since I obviously have recent history to show me that these families say yes to our prices? I think
this is a much more plausible explanation then assuming some secret quota in force at these schools.
I am a conservative but I cannot believe Jewish liberals would go that far just to ensure more Jewish liberals attend their
institutions or to keep conservative white non Jewish middle income students out. Dollars and cents and the perception a yield
number conveys about the desirability of a school are what is at work here in my humble opinion.
There is a very simple solution. There is no legal definition of race. Simply check the "Negro" (or "African-American" or whatever
it is called today) box on the application form. You don't look it? Neither do many others, because your ancestry is really mixed.
This may get you in. It won't hurt your chances, which are essentially zero before you check that box. At the very least, it will
make it harder for the bigots in the admissions office to exercise their bigotry.
"Look at Nobel prizes, field medals and all kind of prizes and awards that recognize lifetime original academic contributions.
Not many asians there yet. Perfect grades or SAT scores does not guarantee creativity, original thinking, intelectual curiosity
or leadership. The problem is that those things are hard to measure and very easy to fake in an application."
Last year, 75% of Ph.D candidates where foreign born, most of which were either Indian or Chinese. You should rely on statistics
that are more current and relevant.
Wow, another article on how corrupt higher eduation is.
Folks, open your eyes a bit. Online education is growing massively; sharing this growth are websites that write academic papers
(even Ph.D. theses) on demands .these websites in toto have nearly as many customers as there are online students.
Harvard is unusual in that they actually banned students for cheating. Every investigation of cheating on campus shows it exists
on a massive scale, and reports of half or more of a class cheating are quite common in the news.
The reason for this is simple: administrators care about retention, nothing else. Faculty have long since gotten the message.
I've taught in higher education for nearly 25 years now, and I've seen many faculty punished for catching cheaters; not once has
there been any reward.
Over 90% of remedial students fail to get a 2-year degree in three years, yet administration sees no issue with talking them
into loans that will keep them in debt forever. Admin sees no issue with exploiting the vulnerable for personal gain, of course.
Here's what higher education is today: desperate people take out loans to go to college. They use the money to pay the tuition,
and they use the money to buy academic papers because they really aren't there for college, they're there for the checks. Their
courses are graded by poorly paid faculty (mostly adjuncts), again paid by those checks. The facutly are watched over by administrators
to make sure there is no integrity to the system and again, admin is paid by those checks (in fact, most of the tuition money
goes to administrators).
Hmm, what part of this could be changed that would put integrity back into the system?
I think your sources who claim to be familiar with China are very wrong concerning entrance into Chinese universities, especially
those so-called upper tier unis. It is well known amongst most Chinese students who take the gaokao, the all-or-nothing university
entrance examination, bribes, guanxi (connections) and just being local, are often better indicators of who will be accepted.
• Replies: @KA Same and
some more in India.
In India it is politics of the gutter. Someone can get to medical school and engineering school even if he or she did not qualify,if
scored say 3 points out of 1000 points as long as he or she belonged to lower caste of Hindu. The minimum requirements they have
to fulfill is to pass the school leaving examinations with science subjects .A passing level is all that matters . The process
then continues (in further education -master , training, post doctoral, and in job and in promotion)
While upper caste Hindu or Christian or Muslim may not be allowed despite scoring 999 out of 1000. It is possible and has happened.
Unfortunately the lower caste has not progressed much. Upper caste Hindus have misused this on many occasions and continue to
do do by selling themselves as lower caste with legal loopholes .Muslim or Christians can't do that for they can't claim to be
Hindu
Ron Unz is a brilliant man. He created software that made him rich, and has written articles on all kinds of subjects. But
apparently, Ron shares a problem with a very tiny number of humanity. Ron is one of those oddball characters, that, no matter
where the truth leads him, he simply has to express it, regardless of political correctness. He did this in California with the
debate on English,etc.
Compared to the administrators of these Ivy League Institutions, Ron is a mental giant, not even near being in the same class
as these supposedly important but in reality, worthless beurocrats.
If ten million Gentile whites and Asians changed their surname to Kaplan, Levy, Golden, Goldstein, Goldman, it obviously would
throw a monkey wrench into the process of ethnic favoritism.
To paraphrase Unz - the "shared group biases" of Ivy League college admission officers that have "extreme flexibility and subjectivity",
does harm white Gentiles and Asians, but only because the process lacks objective, meritocratic decision making, and in its place
is a vile form of corrupt cronyism and favoritism.
An Asian speaking here, I agree that America isn't a meritocracy, but has it ever been? It seems like this article's falling
for the oldest trick in the book - looking back at the "good old days". I'd argue that now more than ever, the barrier to entry
is lower than ever, and that every individual can rise to the occasion and innovate for the better. Places like Exeter (my alma
mater) aren't just playgrounds for the rich - I'm not extremely wealthy, and neither were my classmates. Most of us were even
on financial aid. Don't just point fingers at institutions to account for shortcomings - if you had the stroke of fortune to be
born in a nation with such opportunity, with hard work and CREATIVITY and INNOVATION, anything is possible.
Has anyone thought about why the test-prep business has expanded so much? It's to feed into the very same system that you're
complaining about. Be the change you wish to see in the world, not a victim of it. To many of the Asians out there, I'd say get
over your 4.0 GPA and 2400 SAT score and be unique for once.
To put Unz's findings in social and historical perspective, it is important to understand where Jewish academics come from.
The Eastern European Jews who immigrated to Northeast US in the Twentieth Century ran into an immigrant world dominated by Catholics
and particularly Irish Catholics. The Irish, who were as "hungry" as the Jews got control over government and its ancillary economic
benefits. I wasn't there at the time, but I imagine we Irish did not do much to help Jewish immigrants compared with Catholic
immigrants.
One area abandoned by the Catholic Church was public and secular education. The Church formed its own educational Catholic
ghetto. Jewish immigrants adopted the public-secular educational world as their own and became strong adherents of education as
the key to Americanization. Education became their small piece of turf. The only memorable political conflict between Jews and
AfricanAmericans in New York City was over control of the public schools.
Just as the Irish react against affirmative action for non-Irish in government jobs, the descendants of these Jewish immigrants
react to the plagiarism of their assimilation plan by the Chinese/Koreans. When you have de facto Irish affirmative action you
don't want de jure African American affirmative action. When you have Jewish "meritocracy" you don't want Asian meritocracy.
The result is what you see today. The Irish still have a stranglehold on government related jobs in the Northeast with a smattering
of minorities ("New Irish") and the Jews try to protect their secular education turf from the "New Jews". It's just business.
Don't take it personally.
All I can say is see a book: "Ivy League Fools and Felons"' by Mack Roth. Lots of them are kids of corrupt people in all
fields.
But I disagree that opportunity is being closed off to most Americans. Here in North Dakota I work for a high school graduate,
self made trucking millionaire. Five years ago she was a secretary in Iowa. But she got off her butt and went to where the money
is circulating. Just my 2 cents
Sorry, but quick correction regarding rankings (and I only have to say this because I go to MIT). Technically, MIT and Caltech
are *both* ranked the same. The only reason why Caltech appears on the list before MIT is because it come before it alphabetically
to suggest otherwise would be untrue. When you look at individual departments, you'll find that MIT consistently ranks higher
than that of Caltech in all engineering disciplines and most scientific disciplines. Also, personally speaking, MIT has a far
better humanities program that Caltech (especially in the fields of economics, political science, philosophy, and linguisitics).
We do have a number of Pulitizer Prize winners who teach here.
Also generally, in academic circle, MIT is usually viewed with higher regard than Caltech, although that isn't to say Caltech
isn't a fantastic school (it really and truly is–I loved it there and I wish more people knew more about it)
One observation about methodology that struck me while reading this:
The Jewish population of universities is being evaluated based on Hillel statistics, with the "Non-Jewish white" population
being based on the white population minus the Jewish population.
This can be problematic when you consider that these population are merging at a pretty high rate. (I don't have much information
here, but this is from the header of the wikipedia article: "The 1990 National Jewish Population Survey reported an intermarriage
rate of 52 percent among American Jews.")
What percentage of partially Jewish students identify as "Jewish" or does Hillel identify as Jewish? If you're taking a population
that would have once identified as "white" and now identifying them as Jewish, obviously you'll see some Jewish inflation, and
white deflation. And when a large percentage of this population bears the names "Smith", "Jones", "Roberts" etc., you're obviously
not going to see a corresponding increase in NMS scores evaluated on the basis of last names.
Of course, I have no idea what methodology Hillel is using, but I wouldn't be surprised to learn that it's an inflated one.
Thank you Mr. Unz for this provocative article. It isn't the author's first one on Jewish & Asian enrollment at Ivy League
colleges. I remember another one, in the 1990s I believe.
According to what I read, less and less American Jews apply for medical school nationwide, and Jewish women are very educated,
but it comes also with a low birthrate and high median age. It makes the recent spike in Jewish admissions at Harvard College
all the more curious, intriguing.
This month, the NY Times published a list of the highest earners in the hedge fund industry in 2012, and 8 out of 10 were Jewish.
Are certain universities aggressively seeking donations from this super rich demographic since the 2000s?
The young American Jew is not like his grandparents. They are just as fun loving and lazy as any other. This is the result
of a lack of perceived persecution that use to keep the group together. In the major cities, half of the young people leave the
tribe through intermarriage. This is human nature. The Rabbis changed the rules some time ago to define a Jew as coming from the
mother, so the Jewish man would marry a Jewish woman, instead of a woman outside of the tribe. Read the Bible. In David's time,
the men had an eye for good looking women outside of the tribe(like all men). Now days, the young people just laugh at the Rabbi's
words.
Instead of the old folks liberal ideas of race and ethnic divisions, let us change it to go by economic class. According to
liberal thought, intelligence is equally distributed throughout all economic classes, so higher education admissions should be
by economic class, and not the old divisive ideas of race and ethnic background. After all, affirmative action programs are institutionalized
racism and racial profiling.
• Replies: @KA Yes . You
have points . This is one of the fears that drove the Zionist to plan of Israel in 1880 . It was the fear of secular life free
from religious persecution and freedom to enjoy life to its fullest in the post industrial non religious Europe guided by enlightenment
that drove them embrace the religious ethnic mix concept of statehood.
These and many other ills would be alleviated if government would stop: (a) banning aptitude tests or even outright discrimination
as determinants of employment; (b) subsidizing private institutions such as Harvard; and (c) close down all government schools,
starting with state institutions of "higher learning."
I know, pie in the sky. But the author's suggestions by comparison are mere Band-Aids.
Great analysis, but pie-in-the-sky prescription, which was presumably just intended to be thought provoking. If you want to
know why Harvard would never adopt the author's recommendation, just read what he wrote:
"But if it were explicitly known that the vast majority of Harvard students had merely been winners in the application lottery,
top businesses would begin to cast a much wider net in their employment outreach, and while the average Harvard student would
probably be academically stronger than the average graduate of a state college, the gap would no longer be seen as so enormous,
with individuals being judged more on their own merits and actual achievements. A Harvard student who graduated magna cum laude
would surely have many doors open before him, but not one who graduated in the bottom half of his class."
I wonder why Harvard officials would desire this outcome?
So a lot of ivy league presidents with Jewish-sounding names somehow influence admissions staff who may not have Jewish-sounding
names to favor undeserving applicants because they also have Jewish-sounding names? And this is because of some secret ethnic
pride thing going on? And nobody's leaked this conspiracy to the outside world until our whistle blowing author? The guy's a nut
job.
All of your statistics are highly suspect due to the enormous, and rapid annual increase in Jewish intermarriage. I do not
have the statistics, but over many years, it certainly appears that Jewish men are far more likely to intermarry than Jewish women
(the lure of the antithesis to their Jewish mother??) and to complicate matters further, Jewish men seem to have a predilection
for Asian women, at least in the greater NY Metro Area. But that still does not represent the majority of Jewish men marrying
Christians. QED. More Jewish last names, for children who are DNA wise only half Jewish than non Jewish names for the intermarried.
And if one wanted to get really specific, the rapidly rising intermarriage is diluting the "Jewish" genetic pool's previously
demonstrable intelligence superiority., strengthened by the fact that most couples use the Jewish fathers last name.
These observations are in no way associated with how the various Jewish denominations define 'Jewish"
In short: Unz substantially overestimated the percentage of Jews at Harvard while grossly underestimating the percentage of
Jews among high academic achievers, when, in fact, there is no discrepancy.
In addition, Unz's arguments have proven to be untenable in light of a recent survey of incoming Harvard freshmen conducted
by The Harvard Crimson, which found that students who identified as Jewish reported a mean SAT score of 2289, 56 points higher
than the average SAT score of white respondents.
First. I was thrilled to see your advocacy of admissions by lottery. I have advocated such a plan on various websites that
I participate in, but you have written the first major article advocating it that I have seen. Congratulations.
Just a small quibble with your plan, I would not allow the schools any running room for any alternatives to the lottery. They
have not demonstrated any willingness to administer such a system fairly. After a few years of pure lottery it would be time to
evaluate it and see if they should be allowed any leeway, but I wouldn't allow any variation before that.
I would hypothesize that one effect of a lottery admissions plan would be a return to more stringent grading in the class rooms.
It would be useful to the faculty to weed out the poor performers more quickly, and the students might have less of an attitude
of entitlement.
Second, I am glad that you raised the issue of corruption of the admissions staffs. It would be a new chapter in human history
if there was no straight out bribe taking of by functionaries in their positions. My guess is that the bag men are the "high priced
consultants". Pay them a years worth of tuition money and a sufficient amount will flow to the right places to get your kid in
to wherever you want him to go.
Third, three observations about Jewish Students.
First, Jews are subject to mean reversion just like everybody else.
Second, the kids in the millennial generation were, for the most part, born into comfortable middle class and upper class homes.
The simply do not have the drive that their immigrant grandparents and great-grandparents had. I see this in my own family. My
wife and I had immigrant parents, and we were pretty driven academically (6 degrees between us). Our kids, who are just as bright
as we were, did not show that same edge, and it was quite frustrating to us. None of them have gone to a graduate or professional
school. They are all working and are happy, but driven they aren't.
Third, Hillel's numbers of Jewish students on their website should be taken cum grano salis. All three of our kids went to
Northwestern U. (Evanston, IL) which Hillel claimed was 20% Jewish. Based on our personal observations of kids in their dorms
and among their friends, I think the number is probably 10% or less.
Finally, the side bar on Paying Tuition to a Hedge Fund. I too am frustrated with the current situation among the wealthy institutions.
I think that it deserves a lot more attention from policy makers than it has received. The Universities have received massive
benefits from the government (Federal and state) - not just tax exemptions, but grants for research and to students, subsidized
loans, tax deductions for contributions, and on, and on. They have responded to this largess by raising salaries, hiring more
administrators, spending billions on construction, and continually raising tuitions far faster than the rate of inflation. I really
do not think the tax payers should be carrying this much of a burden at a time when deficits are mounting without limit.
Henry VIII solved a similar problem by confiscating assets. We have constitutional limits on that sort of activity, but I think
there a lot of constitutional steps that should be considered. Here a few:
1. There is ample reason to tax the the investment gains of the endowments as "unrelated business taxable income" (UBTI, see
IRS Pub 598 and IRC §§ 511-515) defined as income from a business conducted by an exempt organization that is not substantially
related to the performance of its exempt purpose. If they do not want to pay tax on their investments, they should purchase treasuries
and municipals, and hold them to maturity.
2. The definition of an exempt organization could be narrowed to exclude schools that charge tuition. Charging $50,000/yr and
sitting on 30G$ of assets looks a lot more like a business than a charity.
3. Donations to overly rich institutions should be non deductible to the donors. Overly rich should be defined in terms of
working capital needs and reserves for depreciation of physical assets.
Is the proposed mechanism that Jewish university presidents create a bias in the admissions department?
That could be tested by comparing Jewish student percentages between schools with Christian and Jewish presidents. If Christian
presidents produce student bodies with a high proportion of Jews, then Jewish ethnocentrism is not the cause. (We'd have to find
a way to control for presidents' politics.)
If admissions departments are discriminating in favor of liberals, that will boost the proportion of all liberals, including
many Jews, but it will be political discrimination, not ethnic discrimination. (Both are bad, but we should be accurate.)
Liberals see a discrepancy in ethnic outcomes and consider it proof of ethnic discrimination. Are we doing the same thing?
After Russian emancipation, the Jews from Pale settlement spread out and took up jobs in government services, secured admissions
in technical and medical schools, and established positions in trade in just two decades. Then they started interconnecting and
networking more aggressively to eliminate competition and deny the non-Jews the opportunities that the non Jews rightfully claimed.
This pattern was also evident in Germany after 1880 and in Poland between interwars .
The anti-Jewish sentiment seen in pre revolutionary Russia was the product of this ethnic exclusivisity and of the tremendous
in-group behaviors .
@Ira The young American
Jew is not like his grandparents. They are just as fun loving and lazy as any other. This is the result of a lack of perceived
persecution that use to keep the group together. In the major cities, half of the young people leave the tribe through intermarriage.
This is human nature. The Rabbis changed the rules some time ago to define a Jew as coming from the mother, so the Jewish man
would marry a Jewish woman, instead of a woman outside of the tribe. Read the Bible. In David's time, the men had an eye for good
looking women outside of the tribe(like all men). Now days, the young people just laugh at the Rabbi's words.
Instead of the old folks liberal ideas of race and ethnic divisions, let us change it to go by economic class. According to
liberal thought, intelligence is equally distributed throughout all economic classes, so higher education admissions should be
by economic class, and not the old divisive ideas of race and ethnic background. After all, affirmative action programs are institutionalized
racism and racial profiling.
Yes . You have points . This is one of the fears that drove the Zionist to plan of Israel in 1880 . It was the fear of secular
life free from religious persecution and freedom to enjoy life to its fullest in the post industrial non religious Europe guided
by enlightenment that drove them embrace the religious ethnic mix concept of statehood.
@Anonymous I think your
sources who claim to be familiar with China are very wrong concerning entrance into Chinese universities, especially those so-called
upper tier unis. It is well known amongst most Chinese students who take the gaokao, the all-or-nothing university entrance examination,
bribes, guanxi (connections) and just being local, are often better indicators of who will be accepted.
Same and some more in India. In India it is politics of the gutter. Someone can get to medical school and engineering school
even if he or she did not qualify, if scored say 3 points out of 1000 points as long as he or she belonged to lower caste of Hindu.
The minimum requirements they have to fulfill is to pass the school leaving examinations with science subjects .A passing level
is all that matters . The process then continues (in further education -master , training, post doctoral, and in job and in promotion)
While upper caste Hindu or Christian or Muslim may not be allowed despite scoring 999 out of 1000. It is possible and has happened.
Unfortunately the lower caste has not progressed much. Upper caste Hindus have misused this on many occasions and continue to
do do by selling themselves as lower caste with legal loopholes .Muslim or Christians can't do that for they can't claim to be
Hindu
Takeaways:
Jews are really good at networking and in-group activity. They have centuries of practice, and lived a meritocratic existence
of self-sorting in the Pale and elsewhere.
That is evident to all who look.
Other groups have different approaches, and different organizational or affiliation bonds, based on their history, culture
and other factors.
NE Asians share some traits, and both value education as a way to improve themselves and to some extent their groups.
S Asians will demonstrate their own approach, focusing heavily on STEM.
Expect demographics to win out, given 2.5B Asians versus a smaller NAM or NE European-base populace.
Thanks for the informative article. Your proposal sounds reasonable. Another option would be to attempt to vastly decrease
the significance of these elite private schools. Why should we allow undemocratic little fiefdoms to largely control entry into
our country's ruling class? It would probably be considerably more fair, more transparent and more efficient to pour a lot of
resources into our public universities. If Berkeley, Michigan, UVA, UMass, etc. were completely free, for instance–or if they
provided students with living expenses as well as free tuition, the quality of their students would conceivably surpass that of
the Ivy League's, and over time the importance and prestige of Harvard, Stanford, etc. would diminish. Instead, we are subsidizing
students at elite private colleges more than those at public colleges–an absurd state of affairs (see this article, whose author
is a bit of an ideologue but who is right on this issue:
http://www.csmonitor.com/Business/Robert-Reich/2014/1014/How-the-government-spends-more-per-student-at-elite-private-universities-than-public
).
Mr. Unz; thank you for the long, informational and scholarly article. I read the whole thing, and from Sailer I am familiar
with your reputation as a certified genius. I must admit however, after the 5-10,000 words you had written, I was a bit shocked
that your answer to how to improve elite University enrollment, was to FLIP A FIGURATIVE COIN.
I expected some chart with differential equations that I would have to consult my much more intelligent brother, the electrical
engineer to explain to me. Not that it does not make a lot of sense.
The issue with your solution is that you go from a three class university:
1) Legacy Admits
2) Non athletic, black admits
3) everyone else
to a much-more rigid, two class university:
1) academic admits
2) coin-flip admits
One tier being one of the smartest 15-18 year olds in the world, the other being "somewhat better than good student at Kansas
State."
My brother works at a little ivy league school. Well endowed because the parents Dun and Bradstreet reports are at the top
of the selection sheets with parents jobs also. Extra points for finance and government jobs at executive levels.
This article was excellent and reinforced everything he has told me over the years. One thing he did mention i would like to
add. Asians, which for years were their choice for filling minority quotas, are horrible when it comes to supporting the alma
mater financially during the fund drives. This information was confirmed by several other schools in the area when they tried
a multi-school drive in the far east and south east asia to canvas funds and returned with a pitiful sum.
Diversity is a scheme that is the opposite of a meritocracy. Diversity is a national victim cult that generally demonizes gentiles,
and more specifically demonizes people that conform to a jewish concocted profile of a nazi.
Why would anyone use the word diversity in the same sentence as the word meritocracy?
"Are elite university admissions based on meritocracy and diversity as claimed?" Why would anybody claiming to be intelligent
include meritocracy and diversity in the same sentence?
@Sean Gillhoolley Harvard
is a university, much like Princeton and Yale, that continues based on its reputation, something that was earned in the past.
When the present catches up to them people will regard them as nepotistic cauldrons of corruption.
Look at the financial disaster that befell the USA and much of the globe back in 2008. Its genesis can be found in the clever
minds of those coming out of their business schools (and, oddly enough, their Physics programs as well). They are teaching the
elite how to drain all value from American companies, as the rich plan their move to China, the new land of opportunity. When
1% of the population controls such a huge portion of the wealth, patriotism becomes a loadstone to them. The elite are global.
Places like Harvard cater to them, help train them to rule the world....but first they must remake it.
I agree, common people would never think of derivatives , nor make loans based on speculation .
"Tiffany Wang['s] SAT scores were over 100 points above the Wesleyan average, and she ranked as a National Merit Scholarship
semifinalist "
"Julianna Bentes her SAT scores were somewhat higher than Tiffany's "
Did Ms. Wang underperform on her SATs? NMS semifinalist status depends purely on the score on a very SAT-like test being at
a 99.5 percentile level, as I understand it (and I was one, albeit a very long time ago) and I gather from the above that her
SAT scores did not correspond to the PSAT one. That is, merely " 100 points above the Wesleyan average" doesn't seem all that
exceptional. Or am I wrong?
Mr. Unz several times conflates NMS semifinalist status with being a top student. Which I most definitely was not. It's rather
an IQ test. As was the SAT.
The world is filled with conformism and groupthink. Most people do not wish to think for
themselves. Thinking for oneself is dangerous, requires effort and often leads to rejection by
the herd of one's peers.
The profession of arms, the intelligence business, the civil service bureaucracy, the
wondrous world of groups like the League of Women Voters, Rotary Club as well as the empire of
the thinktanks are all rotten with this sickness, an illness which leads inevitably to
stereotyped and unrealistic thinking, thinking that does not reflect reality.
The worst locus of this mentally crippling phenomenon is the world of the academics. I have
served on a number of boards that awarded Ph.D and post doctoral grants. I was on the Fulbright
Fellowship federal board. I was on the HF Guggenheim program and executive boards for a long
time. Those are two examples of my exposure to the individual and collective academic
minds.
As a class of people I find them unimpressive. The credentialing exercise in acquiring a
doctorate is basically a nepotistic process of sucking up to elders and a crutch for ego
support as well as an entrance ticket for various hierarchies, among them the world of the
academy. The process of degree acquisition itself requires sponsorship by esteemed academics
who recommend candidates who do not stray very far from the corpus of known work in whichever
narrow field is involved. The endorsements from RESPECTED academics are often decisive in the
award of grants.
This process is continued throughout a career in academic research. PEER REVIEW is the
sine qua non for acceptance of a "paper," invitation to career making conferences, or
to the Holy of Holies, TENURE.
This life experience forms and creates CONFORMISTS, people who instinctively boot-lick their
fellows in a search for the "Good Doggy" moments that make up their lives. These people are for
sale. Their price may not be money, but they are still for sale. They want to be accepted as
members of their group. Dissent leads to expulsion or effective rejection from the group.
This mentality renders doubtful any assertion that a large group of academics supports any
stated conclusion. As a species academics will say or do anything to be included in their
caste.
This makes them inherently dangerous. They will support any party or parties, of any
political inclination if that group has the money, and the potential or actual power to
maintain the academics as a tribe. pl
That is the nature of tribes and humans are very tribal. At least most of them.
Fortunately, there are outliers. I was recently reading "Political Tribes" which was written
by a couple who are both law professors that examines this.
Take global warming (aka the rebranded climate change). Good luck getting grants to do any
skeptical research. This highly complex subject which posits human impact is a perfect
example of tribal bias.
My success in the private sector comes from consistent questioning what I wanted to be
true to prevent suboptimal design decisions.
I also instinctively dislike groups that have some idealized view of "What is to be
done?"
As Groucho said: "I refuse to join any club that would have me as a member"
The 'isms' had it, be it Nazism, Fascism, Communism, Totalitarianism, Elitism all demand
conformity and adherence to group think. If one does not co-tow to whichever 'ism' is at
play, those outside their group think are persecuted, ostracized, jailed, and executed all
because they defy their conformity demands, and defy allegiance to them.
One world, one religion, one government, one Borg. all lead down the same road to --
Orwell's 1984.
David Halberstam: The Best and the Brightest. (Reminder how the heck we got into Vietnam,
when the best and the brightest were serving as presidential advisors.)
Also good Halberstam re-read: The Powers that Be - when the conservative media controlled
the levers of power; not the uber-liberal one we experience today.
"... As the Gramscian theorists Chantal Mouffe and Ernesto Laclau observed, our political identities are not a 'given' – something that emerges directly from the objective facts of our situation. We all occupy a series of overlapping identities in our day-to-day lives – as workers or bosses, renters or home-owners, debtors or creditors. Which of these define our politics depends on political struggles for meaning and power. ..."
"... The architects of neoliberalism understood this process of identity creation. By treating people as selfish, rational utility maximisers, they actively encouraged them to become selfish, rational utility maximisers. As the opening article points out, this is not a side effect of neoliberal policy, but a central part of its intention. As Michael Sandel pointed out in his 2012 book 'What Money Can't Buy: The Moral Limits of Markets' , it squeezes out competing values that previously governed non-market spheres of life, such as ethics of public service in the public sector, or mutual care within local communities. But these values remain latent: neoliberalism does not have the power to erase them completely. This is where the hope for the left lies, the crack of light through the doorway that needs to be prised open. ..."
"... More generally, there is some evidence that neoliberalism didn't really succeed in making us see ourselves as selfish rational maximisers – just in making us believe that everybody else was . For example, a 2016 survey found that UK citizens are on average more oriented towards compassionate values than selfish values, but that they perceive others to be significantly more selfish (both than themselves and the actual UK average). Strikingly, those with a high 'self-society gap' were found to be less likely to vote and engage in civic activity, and highly likely to experience feelings of cultural estrangement. ..."
"... Perhaps a rational system is one that accepts selfishness but keeps it within limits. Movements like the Chicago school that pretend to reinvent the wheel with new thinking are by this view a scam. As J.K. Galbraith said: "the problem with their ideas is that they have been tried." ..."
"... They tried running an economy on debt in the 1920s. The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn't look at private debt, neoclassical economics. ..."
"... Keynes looked at the problems of the debt based economy and came up with redistribution through taxation to keep the system running in a sustainable way and he dealt with the inherent inequality capitalism produced. ..."
"... Neoliberalism, which has influenced so much of the conventional thinking about money, is adamant that the public sector must not create ('print') money, and so public expenditure must be limited to what the market can 'afford.' Money, in this view, is a limited resource that the market ensures will be used efficiently. Is public money, then, a pipe dream? No, for the financial crisis and the response to it undermined this neoliberal dogma. ..."
"... The financial sector mismanaged its role as a source of money so badly that the state had to step in and provide unlimited monetary backing to rescue it. The creation of money out of thin air by public authorities revealed the inherently political nature of money. But why, then, was the power to create money ceded to the private sector in the first place -- and with so little public accountability? ..."
Lambert here: Not sure the soul is an identity, but authors don't write the headlines. Read
on!
By Christine Berry, a freelance researcher and writer and was previously Director of
Policy and Government for the New Economics Foundation. She has also worked at ShareAction and
in the House of Commons.
Originally published at Open Democracy .
"Economics is the method: the object is to change the soul." Understanding why Thatcher said
this is central to understanding the neoliberal project, and how we might move beyond it.
Carys Hughes and Jim Cranshaw's opening article poses a crucial challenge to the left in
this respect. It is too easy to tell ourselves a story about the long reign of neoliberalism
that is peopled solely with all-powerful elites imposing their will on the oppressed masses. It
is much harder to confront seriously the ways in which neoliberalism has manufactured popular
consent for its policies.
The left needs to acknowledge that aspects of the neoliberal agenda have been overwhelmingly
popular: it has successfully tapped into people's instincts about the kind of life they want to
lead, and wrapped these instincts up in a compelling narrative about how we should see
ourselves and other people. We need a coherent strategy for replacing this narrative with one
that actively reconstructs our collective self-image – turning us into empowered citizens
participating in communities of mutual care, rather than selfish property-owning individuals
competing in markets.
As the Gramscian theorists Chantal Mouffe and Ernesto Laclau observed, our political
identities are not a 'given' – something that emerges directly from the objective facts
of our situation. We all occupy a series of overlapping identities in our day-to-day lives
– as workers or bosses, renters or home-owners, debtors or creditors. Which of these
define our politics depends on political struggles for meaning and power.
Part of the job of politics – whether within political parties or social movements
– is to show how our individual problems are rooted in systemic issues that can be
confronted collectively if we organise around these identities. Thus, debt becomes not a source
of shame but an injustice that debtors can organise against. Struggles with childcare are not a
source of individual parental guilt but a shared societal problem that we have a shared
responsibility to tackle. Podemos were deeply influenced by this thinking when they sought to
redefine Spanish politics as 'La Casta' ('the elite') versus the people, cutting across many of
the traditional boundaries between right and left.
The architects of neoliberalism understood this process of identity creation. By treating
people as selfish, rational utility maximisers, they actively encouraged them to become
selfish, rational utility maximisers. As the opening article points out, this is not a side
effect of neoliberal policy, but a central part of its intention. As Michael Sandel pointed out
in his 2012 book 'What Money Can't Buy: The Moral Limits of Markets' , it squeezes out
competing values that previously governed non-market spheres of life, such as ethics of public
service in the public sector, or mutual care within local communities. But these values remain
latent: neoliberalism does not have the power to erase them completely. This is where the hope
for the left lies, the crack of light through the doorway that needs to be prised open.
The Limits of Neoliberal Consciousness
In thinking about how we do this, it's instructive to look at the ways in which neoliberal
attempts to reshape our identities have succeeded – and the ways they have failed. While
Right to Buy might have been successful in identifying people as home-owners and stigmatising
social housing, this has not bled through into wider support for private ownership. Although
public ownership did become taboo among the political classes for a generation – far
outside the political 'common sense' – polls consistently showed that this was not
matched by a fall in public support for the idea. On some level – perhaps because of the
poor performance of privatised entities – people continued to identify as citizens with a
right to public services, rather than as consumers of privatised services. The continued
overwhelming attachment to a public NHS is the epitome of this tendency. This is partly what
made it possible for Corbyn's Labour to rehabilitate the concept of public ownership, as the
2017 Labour manifesto's proposals for public ownership of railways and water – dismissed
as ludicrous by the political establishment – proved overwhelmingly popular.
More generally, there is some evidence that neoliberalism didn't really succeed in making us
see ourselves as selfish rational maximisers – just in making us believe that
everybody else was . For example, a 2016 survey found that UK citizens
are on average more oriented towards compassionate values than selfish values, but that they
perceive others to be significantly more selfish (both than themselves and the actual UK
average). Strikingly, those with a high 'self-society gap' were found to be less likely to vote
and engage in civic activity, and highly likely to experience feelings of cultural
estrangement.
This finding points towards both the great conjuring trick of neoliberal subjectivity and
its Achilles heel: it has successfully popularised an idea of what human beings are like that
most of us don't actually identify with ourselves. This research suggests that our political
crisis is caused not only by people's material conditions of disempowerment, but by four
decades of being told that we can't trust our fellow citizens. But it also suggests that deep
down, we know this pessimistic account of human nature just isn't who we really are – or
who we aspire to be.
An example of how this plays out can be seen in academic studies showing that, in game
scenarios presenting the opportunity to free-ride on the efforts of others, only economics
students behaved as economic models predicted: all other groups were much more likely to pool
their resources. Having been trained to believe that others are likely to be selfish,
economists believe that their best course of action is to be selfish as well. The rest of us
still have the instinct to cooperate. Perhaps this shouldn't be surprising: after all, as
George Monbiot argues in 'Out of the Wreckage' , cooperation is our species' main
survival strategy.
What's Our 'Right to Buy?'
The challenge for the left is to find policies and stories that tap into this latent sense
of what makes us human – what Gramsci called 'good sense' – and use it to overturn
the neoliberal 'common sense'. In doing so, we must be aware that we are competing not only
with a neoliberal identity but also with a new far-right that seeks to promote a white British
ethno-nationalist group identity, conflating 'elites' with outsiders. How we compete with this
is the million dollar question, and it's one we have not yet answered.
Thatcher's use of flagship policies like the Right to Buy was a masterclass in this respect.
Deceptively simple, tangible and easy to grasp, the Right to Buy also communicated a much
deeper story about the kind of nation we wanted to be – one of private, property-owning
individuals – cementing home-ownership as a cultural symbol of aspiration (the right to
paint your own front door) whilst giving millions an immediate financial stake in her new
order. So what might be the equivalent flagship policies for the left today?
Perhaps one of the strongest efforts to date has been the proposal for ' Inclusive Ownership
Funds ', first developed by Mathew Lawrence in a report for the New Economics Foundation,
and announced as
Labour policy by John McDonnell in 2018. This would require companies to transfer shares
into a fund giving their workers a collective stake that rises over time and pays out employee
dividends. Like the Right to Buy, as well as shifting the material distribution of wealth and
power, this aims to build our identity as part of a community of workers taking more collective
control over our working lives.
But this idea only takes us so far. While it may tap into people's desire for more security
and empowerment at work, more of a stake in what they do, it offers a fairly abstract benefit
that only cashes out over time, as workers acquire enough of a stake to have a meaningful say
over company strategy. It may not mean much to those at the sharpest end of our oppressive and
precarious labour market, at least not unless we also tackle the more pressing concerns they
face – such as the exploitative practices of behemoths like Amazon or the stress caused
by zero-hours contracts. We have not yet hit on an idea that can compete with the
transformative change to people's lives offered by the Right to Buy.
So what else is on the table? Perhaps, when it comes to the cutting edge of new left
thinking on these issues, the workplace isn't really where the action is – at least not
directly. Perhaps we need to be tapping into people's desire to escape the 'rat race'
altogether and have more freedom to pursue the things that really make us happy – time
with our families, access to nature, the space to look after ourselves, connection with our
communities. The four day working week (crucially with no loss of pay) has real potential as a
flagship policy in this respect. The Conservatives and the right-wing press may be laughing it
down with jokes about Labour being lazy and feckless, but perhaps this is because they are
rattled. Ultimately, they can't escape the fact that most people would like to spend less time
at work.
Skilfully communicated, this has the potential to be a profoundly anti-neoliberal policy
that conveys a new story about what we aspire to, individually and as a society. Where
neoliberalism tapped into people's desire for more personal freedom and hooked this to the
acquisition of wealth, property and consumer choice, we can refocus on the freedom to live the
lives we truly want. Instead of offering freedom through the market, we can offer
freedom from the market.
Proponents of Universal Basic Income often argue that it fulfils a similar function of
liberating people from work and detaching our ability to provide for ourselves from the
marketplace for labour. But in material terms, it's unlikely that a UBI could be set at a level
that would genuinely offer people this freedom, at least in the short term. And in narrative
terms, UBI is actually a highly malleable policy that is equally susceptible to being co-opted
by a libertarian agenda. Even at its best, it is really a policy about redistribution of
already existing wealth (albeit on a bigger scale than the welfare state as it stands). To
truly overturn neoliberalism, we need to go beyond this and talk about collective
ownership and creation of wealth.
Policies that focus on collective control of assets may do a better job of replacing
a narrative about individual property ownership with one that highlights the actual
concentration of property wealth in the hands of elites – and the need to reclaim these
assets for the common good. As well as Inclusive Ownership Funds, another way of doing this is
through Citizens' Wealth Funds, which socialise profitable assets (be it natural resources or
intangible ones such as data) and use the proceeds to pay dividends to individuals or
communities. Universal Basic Services – for instance, policies such as free publicly
owned buses – may be another.
Finally, I'd like to make a plea for care work as a critical area that merits further
attention to develop convincing flagship policies – be it on universal childcare, elderly
care or support for unpaid carers. The instinctive attachment that many of us feel to a public
NHS needs to be widened to promote a broader right to care and be cared for, whilst firmly
resisting the marketisation of care. Although care is often marginalised in political debate,
as a new mum, I'm acutely aware that it is fundamental to millions of people's ability to live
the lives they want. In an ageing population, most people now have lived experience of the
pressures of caring for someone – whether a parent or a child. By talking about these
issues, we move the terrain of political contestation away from the work valued by the market
and onto the work we all know really matters; away from the competition for scarce resources
and onto our ability to look after each other. And surely, that's exactly where the left wants
it to be.
The problem is that people are selfish–me included–and so what is needed is
not better ideas about ourselves but better laws. And for that we will need a higher level of
political engagement and a refusal to accept candidates who sell themselves as a "lesser
evil." It's the decline of democracy that brought on the rise of Reagan and Thatcher and
Neoliberalism and not some change in public consciousness (except insofar as the general
public became wealthier and more complacent). In America incumbents are almost universally
likely to be re-elected to Congress and so they have no reason to reject Neoliberal
ideas.
So here's suggesting that a functioning political process is the key to reform and not
some change in the PR.
Carolinian, like you, I try to include myself in statements about "the problem with
people." I believe one of the things preventing progress is our tendency to believe it's only
those people that are the problem.
Human nature people are selfish. It's like the Christian marriage vow – which I understand is a Medieval invention
and not something from 2,000 years ago – for better or worse, meaning, we share (and
are not to be selfish) the good and the bad.
"Not neoliberals, but all of us." "Not the right, but the left as well." "Not just Russia, but America," or "Not just America, but Russia too."
Perhaps a rational system is one that accepts selfishness but keeps it within limits.
Movements like the Chicago school that pretend to reinvent the wheel with new thinking are by
this view a scam. As J.K. Galbraith said: "the problem with their ideas is that they have
been tried."
My small brain got stuck on your reference to a 'Christian marriage vow'. I was just
sitting back and conceiving what a Neoliberal marriage vow would sound like. Probably a cross
between a no-liabilities contract and an open-marriage agreement.
"people are selfish"?; or "people can sometimes act selfishly"? I think the latter is the
more accurate statement. Appeal to the better side, and more of it will be forthcoming.
Neolib propaganda appeals to trivial, bleak individualism..
I'm not sure historic left attempts to appeal to "the better angels of our nature" have
really moved the ball much. It took the Great Depression to give us a New Deal and WW2 to
give Britain the NHS and the India its freedom. I'd say events are in the saddle far more
than ideas.
I rather look at it as a "both and" rather than an "either or." If the political
groundwork is not done beforehand and during, the opportunity events afford will more likely
be squandered.
And borrowing from evolutionary science, this also holds with the "punctuated equilibrium"
theory of social/political change. The strain of a changed environment (caused by both events
and intentionally created political activity) for a long time creates no visible change to
the system, and so appears to fail. But then some combination of events and conscious
political work suddenly "punctuates the equilibrium" with the resulting significant if not
radical changes.
Chile today can be seen as a great example of this: "Its not 30 Pesos, its 30 Years."
Carolinian, you provide a good illustration of the power of the dominant paradigm to make
people believe exactly what the article said–something I've observed more than enough
to confirm is true. People act in a wide variety of ways; but many people deny that altruism
and compassion are equally "human nature". Both parts of the belief pointed out
here–believing other people are selfish and that we're not–are explained by
projection acting in concert with the other parts of this phenomenon. Even though it's flawed
because it's only a political and not a psychological explanation, It's a good start toward
understanding.
"You and I are so deeply acculturated to the idea of "self" and organization and species
that it is hard to believe that man [sic] might view his [sic] relations with the environment
in any other way than the way which I have rather unfairly blamed upon the nineteenth-century
evolutionists."
Gregory Bateson, Steps to an Ecology of Mind, p 483-4
This is part of a longer quote that's been important to me my whole life. Worth looking up.
Bateson called this a mistake in epistemology–also, informally, his definition of
evil. http://anomalogue.com/blog/category/systems-thinking/
"When plunder becomes a way of life for a group of men in a society, over the course of
time they create for themselves a legal system that authorizes it and a moral code that
glorifies it."
― Frédéric Bastiat
Doesn't mean it's genetic. In fact, I'm pretty sure it means it's not.
The Iron Lady once proclaimed, slightly sinisterly: "Economics is the method. The object
is to change the soul." She meant that British people had to rediscover the virtue of
traditional values such as hard work and thrift. The "something for nothing" society was
over.
But the idea that the Thatcher era re-established the link between virtuous effort and
just reward has been effectively destroyed by the spectacle of bankers driving their
institutions into bankruptcy while being rewarded with million-pound bonuses and munificent
pensions.
The dual-truth approach of the Neoliberal Thought Collective (thanks, Mirowski) has been
more adept at manipulating narratives so the masses are still outraged by individuals getting
undeserved social benefits rather than elites vacuuming up common resources. Thanks to the
Thatcher-Reagan revolution, we have ended up with socialism for the rich, and everyone else
at the mercy of 'markets'.
Pretending that there are not problems with free riders is naive and it goes against
people's concern with justice. Acknowledging free riders on all levels with institutions that
can constantly pursue equity is the solution.
At some points in life, everyone is a free rider. As for the hard workers, many of them
are doing destructive things which the less hard-working people will have to suffer under and
compensate for. (Neo)liberalism and capitalism are a coherent system of illusions of virtue
which rest on domination, exploitation, extraction, and propaganda. Stoking of resentment (as
of free riders, the poor, the losers, foreigners, and so on) is one of the ways those who
enjoy it keep it going.
The Iron Lady once proclaimed, slightly sinisterly: "Economics is the method. The object
is to change the soul." She meant that British people had to rediscover the virtue of
traditional values such as hard work and thrift. The "something for nothing" society was
over.
But the idea that the Thatcher era re-established the link between virtuous effort and
just reward has been effectively destroyed by the spectacle of bankers driving their
institutions into bankruptcy while being rewarded with million-pound bonuses and munificent
pensions.
The dual-truth approach of the Neoliberal Thought Collective (thanks, Mirowski) has been
more adept at manipulating narratives so the masses are still outraged by individuals getting
undeserved social benefits rather than elites vacuuming up common resources. Thanks to the
Thatcher-Reagan revolution, we have ended up with socialism for the rich, and everyone else
at the mercy of 'markets'.
Pretending that there are not problems with free riders is naive and it goes against
people's concern with justice. Acknowledging free riders on all levels with institutions that
can constantly pursue equity is the solution.
The Iron Lady had a agenda to break the labor movement in the UK.
What she did not understand is Management gets the Union (Behavior) it deserves. If there
is strife in the workplace, as there was in abundance in the UK at that time, the problem is
the Management, (and the UK class structure) not the workers.
As I found out when I left University.
Thatcher set out to break the solidarity of the Labor movement, and used the neo-liberal
tool of selfishness to achieve success, unfortunately,
The UK's poor management practices, (The Working Class can kiss my arse) and complete
inability to form teams of "Management and Workers" was, IMHO, is the foundation of today's
Brexit nightmare, a foundation based on the British Class Structure.
And exploited, as it ever was, to achieve ends which do not benefit workers in any
manner.
The left needs to acknowledge that aspects of the neoliberal agenda have been
overwhelmingly popular: it has successfully tapped into people's instincts about the kind
of life they want to lead, and wrapped these instincts up in a compelling narrative about
how we should see ourselves and other people.
Sigh, no this is not true. This author is making the mistake that everyone is like the top
5% and that just is not so. Perhaps she should get out of her personal echo chamber and talk
to common people.
In my travels I have been to every state and every major city, and I have worked with just
about every class of people, except of course the ultra wealthy and ultra powerful –
they have people to protect them from the great unwashed like me – and it didn't take
me long to notice that the elite are different from the rest of us but I could never explain
exactly why. After I retired, I started studying and I've examined everything from Adam
Smith, to Hobbes, to Kant, to Durkheim, to Marx, to Ayn Rand, to tons of histories and
anthropologies of various peoples, to you name it and I've come to the conclusion that most
of us are not neoliberal and do not want what the top 5% want.
Most people are not overly competitive and most do not seek self-interest only. That is
what allows us to live in cities, to drive on our roadways, to form groups that seek to
improve conditions for the least of us. It is what allows soldiers to protect each other on
the battlefield when it would be in their self interest to protect themselves. It is what
allowed people in Europe to risk their own lives to save Jews. And it is also what allows
people to live under the worst dictators without rebelling. Of course we all want more but we
have limits on what we will do to get that more – the wealthy and powerful seem to have
no limits. For instance, most of us won't screw over our co-workers to make ourselves look
better, although some will. Most of us won't turn on our best friends even when it would be
to our advantage to do so, although some will. Most of us won't abandon those we care about,
even when it means severe financial damage to us, although some will.
For lack of a better description, I call what the 5% have the greed gene – a gene
that allows them to give up empathy and compassion and basic morality – what some of us
call fairness – in the search for personal gain. I don't think it is necessarily
genetic but there is something in their makeup that cause them to have more than the average
self interest. And because most humans are more cooperative than they are competitive, most
humans just allow these people to go after what they want and don't stand in their way, even
though by stopping them, they could make their own lives better.
Most history and economics are theories and stories told by the rich and powerful to
justify their behavior. I think it is a big mistake to attribute that behavior to the mass of
humanity. Archeology is beginning to look more at how average people lived instead of seeking
out only the riches deposited by the elite, and historians are starting to look at the other
side of history – average people – to see what life was really like for them, and
I think we are seeing that what the rulers wanted was never what their people wanted. It is
beginning to appear obvious that 95% of the people just wanted to live in their communities
safely, to have about what everyone else around them had, and to enjoy the simple pleasures
of shelter, enough food, and warm companionship.
I'm also wondering why the 5% think that all of us want exactly what they want. Do they
really think that they are somehow being smarter or more competent got them there while 95%
of the population – the rest of us – failed?
At this point, I know my theory is half-baked – I definitely need to do more
research, but nothing I have found yet convinces me that there isn't some real basic
difference between those who aspire to power and wealth and the rest of us.
" ..and I've come to the conclusion that most of us are not neoliberal and do not want
what the top 5% want. Most people are not overly competitive and most do not seek
self-interest only. That is what allows us to live in cities, to drive on our roadways, to
form groups that seek to improve conditions for the least of us. It is what allows soldiers
to protect each other on the battlefield when it would be in their self interest to protect
themselves. "
I really liked your comment Historian. Thanks for posting. That's what I've felt in my gut
for a while, that the top 5% and the establishment are operating under a different mindset,
that the majority of people don't want a competitive, dog eat dog, self interest world.
I agree with Foy Johnson. I've been reading up on Ancient Greece and realizing all the
time that 'teh Greeks' are maybe only about thirty percent of the people in Greece. Most of
that history is how Greeks were taking advantage of each other with little mention of the
majority of the population. Pelasgians? Yeah, they came from serpents teeth, the end.
I think this is a problem from the Bronze Age that we have not properly addressed.
Mystery Cycles are a nice reminder that people were having fun on their own.
I have more or less the same view. I think the author's statement about neoliberalism
tapping into what type of life people want to lead is untenable. Besides instinct (are we all
4-year olds?), what people want is also very much socially constructed. And what people do is
also very much socially coerced.
One anecdote: years ago, during a volunteer drive at work, I worked side by side with the
company's CEO (company was ~1200 headcount, ~.5bn revenue) sorting canned goods. The guy was
doing it like he was in a competition. So much so that he often blocked me when I had to
place something on the shelves, and took a lot of space in the lineup around himself while
swinging his large-ish body and arms, and wouldn't stop talking. To me, this was very rude
and inconsiderate, and showed a repulsive level of disregard to others. This kind of behavior
at such an event, besides being unpleasant to be around, was likely also making work for the
others in the lineup less efficient. Had I or anyone else behaved like him, we would have had
a good amount of awkwardness or even a conflict.
What I don't get is, how does he and others get away with it? My guess is, people don't
want a conflict. I didn't want a conflict and said nothing to that CEO. Not because I am not
competitive, but because I didn't want an ugly social situation (we said 'excuse me' and
'sorry' enough, I just didn't think it would go over well to ask him to stop being obnoxious
and dominant for no reason). He obviously didn't care or was unaware – or actually, I
think he was behaving that way as a tactical habit. And I didn't feel I had the authority to
impose a different order.
So, in the end, it's about power – power relations and knowing what to do about
it.
Yep, I think you've nailed it there deplorado, types like your CEO don't care at all
and/or are socially unaware, and is a tactical habit that they have found has worked for them
in the past and is now ingrained. It is a power relation and our current world unfortunately
is now designed and made to suit people like that. And each day the world incrementally moves
a little bit more in their direction with inertia like a glacier. Its going to take something
big to turn it around
I too believe "most of us are not neoliberal". But if so, how did we end up with the kind
of Corporate Cartels, Government Agencies and Organizations that currently prey upon
Humankind? This post greatly oversimplifies the mechanisms and dynamics of Neoliberalism, and
other varieties of exploitation of the many by the few. This post risks a mocking tie to
Identity Politics. What traits of Humankind give truth to Goebbels' claims?
There definitely is "some real basic difference between those who aspire to power and
wealth and the rest of us" -- but the question you should ask next is why the rest of us
Hobbits blindly follow and help the Saurons among us. Why do so many of us do exactly what
we're told? How is it that constant repetition of the Neoliberal identity concepts over our
media can so effectively ensnare the thinking of so many?
Maybe it's something similar to Milgram's Experiment (the movie the Experimenter about
Milgram was on last night – worth watching and good acting by Peter Sarsgaard, my kind
of indie film), the outcome is just not what would normally be expected, people bow to
authority, against their own beliefs and interests, and others interests, even though they
have choice. The Hobbits followed blindly in that experiment, the exact opposite outcome as
to what was predicted by the all the psychology experts beforehand.
people bow to authority , against their own beliefs and interests, and others
interests, even though they have choice
'Don't Make Waves' is a fundamentally useful value that lets us all swim along. This can
be manipulated. If everyone is worried about Reds Under the Beds or recycling, you go along
to get along.
Some people somersault to Authority is how I'd put it.
Yep, don't mind how you put that Mo, good word somersault.
One of the amusing tests Milgram did was to have people go into the lift but all face the
back of the lift instead of the doors and see what happens when the next person got in. Sure
enough, with the next person would get in, face the front, look around with some confusion at
everyone else and then slowly turn and face the back. Don't Make Waves its instinctive to let
us all swim along as you said.
And 'some people' is correct. It was actually the majority, 65%, who followed directions
against their own will and preferred choice in his original experiment.
That's a pretty damn good comment that, Historian. Lots to unpick. It reminded me too of
something that John Wyndham once said. He wrote how about 95% of us wanted to live in peace
and comfort but that the other 5% were always considering their chances if they started
something. He went on to say that it was the introduction of nuclear weapons that made
nobody's chances of looking good which explains why the lack of a new major war since
WW2.
Good comment. My view is that it all boils down to the sociopathic personality disorder.
Sociopathy runs on a continuum, and we all exhibit some of its tendencies. At the highest end
you get serial killers and titans of industry, like the guy sorting cans in another comment.
I believe all religions and theories of ethical behavior began as attempts to reign in the
sociopaths by those of us much lower on the continuum. Neoliberalism starts by saying the
sociopaths are the norm, turning the usual moral and ethical universe upside down.
Your theory is not half-baked; it's spot-on. If you're not the whatever it takes, end
justifies the means type, you are not likely to rise to the top in the corporate world. The
cream rises to the top happens only in the dairy.
Your 5% would correspond to Altemeyer's "social dominators". Unfortunately only
75% want a simple, peaceful life. 20% are looking for a social dominator to follow. It's
psychological.
Excellent comment. Take into consideration the probability that the majority of the top 5%
have come from a privileged background, ensconced in a culture of entitlement. This "greed"
gene is as natural to them as breathing. Consider also that many wealthy families have
maintained their status through centuries of calculated loveless marriages, empathy and other
human traits gene-pooled out of existence. The cruel paradox is that for the sake of riches,
they have lost their richness in character.
This really chimes with me. Thanks so much for putting it down in words.
I often encounter people insisting humans are selfish. It is quite frustrating that this
more predominant side of our human nature seems to become invisible against the
propaganda.
I'm barely into Jeremy Lent's The Patterning Instinct: A Cultural History of Humanity's
Search for Meaning , but he's already laid down his central thesis in fairly complete
form. Humans are both competitive and cooperative, he says, which should surprise no one.
What I found interesting is that the competitive side comes from primates who are more
intensely competitive than humans. The cooperation developed after the human/primate split
and was enabled by "mimetic culture," communication skills that importantly presuppose that
the object(s) of communication are intentional creatures like oneself but with a somewhat
different perspective. Example: Human #1 gestures to Human #2 to come take a closer look at
whatever Human #1 is examining. This ability to cooperate even came with strategies to
prevent a would-be dominant male from taking over a hunter-gatherer band:
[I]n virtually all hunter-gatherer societies, people join together to prevent powerful
males from taking too much control, using collective behaviors such as ridicule, group
disobedience, and, ultimately, extreme sanctions such as assassination [This kind of
society is called] a "reverse dominant hierarchy because rather than being dominated, the
rank and file manages to dominate.
yes, this chimes in with what I`ve been thinking for years after puzzling about why
society everywhere ends up as it does – ie the fact that in small groups as we evolved
to live in, we would keep a check on extreme selfish behaviour of dominant individuals. In
complex societies (modern) most of us become "the masses" visible in some way to the system
but the top echelons are not visible to us and are able to amass power and wealth out of all
control by the rest of us. And yes, you do have to have a very strange drive (relatively
rare, ?pathological) to want power and wealth at everyone else`s expense – to live in a
cruel world many of whose problems could be solved (or not arise in the first place) by
redistributing some of your wealth to little palpable cost to you
Africa over a few million years of Ice Ages seems to have presented our ancestors with the
possibility of reproducing only if you can get along in close proximity to other Hominids
without killing each other. I find that a compelling explanation for our stupidly big brains;
it's one thing to be a smart monkey, it's a whole different solution needed to model what is
going on in the brain of another smart monkey.
And communications: How could spoken language have developed without levels of trust and
interdependence that maybe we can not appreciate today? We have a word for 'Blue' nowadays,
we take it for granted.
There is a theory that language originated between mothers and their immediate progeny,
between whom either trust and benevolence exist, or the weaker dies. The mother's chances for
survival and reproduction are enhanced if she can get her progeny to, so to speak, help out
around the house; how to do that is extended by symbolism and syntax as well as example.
I recall the first day of Econ 102 when the Prof. (damned few adjuncts in those days)
said, "Everything we discuss hereafter will be built on the concept of scarcity." Being a
contrary buggah' I thought, "The air I'm breathing isn't scarce." I soon got with the program
supply and demand upward sloping, downward sloping, horizontal, vertical and who could forget
kinked. My personal favorite was the Giffen Good a high priced inferior product. Kind of like
Micro Economics.
Maybe we could begin our new Neo-Economics 102 with the proviso, "Everything we discuss
hereafter will be based on abundance." I'm gonna' like this class!
Neo-lib Econ does a great job at framing issues so that people don't notice what is
excluded. Think of them as proto-Dark Patternists.
If you are bored and slightly mischievous, ask an economist how theory addresses
cooperation, then assume a can opener and crack open a twist-top beer.
Isn't one of the problems that it's NOT really built on the concept of scarcity? Most
natural resources run into scarcity eventually. I don't know about the air one breaths,
certainly fish species are finding reduced oxygen in the oceans due to climate change.
If you would like that class on abundance you would love the Church of Abundant Life which
pushes Jesus as the way to Abundant Life and they mean that literally. Abundant as in Jesus
wants you to have lots of stuff -- so believe.
I believe Neoliberalism is a much more complex animal than an economic theory. Mirowski
builds a plausible argument that Neoliberalism is a theory of epistemology. The Market
discovers Truth.
Had a lovely Physics class where the first homework problem boiled down to "How often do
you inhale a atom (O or N) from Julius Caesar's last breath". Great little introduction to
the power and pratfalls of 'estimations by Physicists' that xkcd likes to poke at. Back then
we used the CRC Handbook to figure it out.
Anyway, every second breath you can be sure you have shared an atom with Caesar.
I don't think Maggie T. or uncle Milty were thinking about the future at all. Neither one
would have openly promoted turfing quadriplegic 70-year-olds out of the rest home. That's how
short sighted they both were. And stupid. We really need to call a spade a spade here. Milty
doesn't even qualify as an economist – unless economics is the study of the destruction
of society. But neoliberalism had been in the wings already, by the 80s, for 40 years. Nobody
took into account that utility-maximizing capitalism always kills the goose (except Lenin
maybe) – because it's too expensive to feed her. The neoliberals were just plain dumb.
The question really is why should we stand for another day of neoliberal nonsense? Albeit
Macht Frei Light? No thanks. I think they've got the question backwards – it shouldn't
be how should "we" reconstruct our image now – but what is the obligation of all the
failed neoliberal extractors to right society now? I'd just as soon stand back and watch the
dam burst as help the neolibs out with a little here and a little there. They'll just keep
taking as long as we give. This isn't as annoying as Macron's "cake" comment, but it's close.
I did like the last 2 paragraphs however.
Here's a sidebar. A universal one. There is an anomaly in the universe – there is
not enough accumulated entropy. It screws up theoretical physics because the missing entropy
needs to be accounted for for their theories to work to their satisfaction. It seems to be a
phenomenon of evolution. Thus it was recently discovered by a physics grad student that
entropy by heat dissipation is the "creator" of life. Life almost spontaneously erupts where
it can take advantage of an energy source. And, we are assuming, life thereby slows entropy
down. There has to be another similar process among the stars and the planets as well, an
evolutionary conservation of energy. So evolution takes on more serious meaning. From the
quantum to the infinite. And society – it's right in the middle. So it isn't too
unreasonable to think that society is extremely adaptable, taking advantage of any energy
input, and it seems true to think that. Which means that society can go long for its goal
before it breaks down. But in the end it will be enervated by lack of "resources" unless it
can self perpetuate in an evolving manner. That's one good reason to say goodbye to looney
ideologies.
For a view of humanity that is not as selfish, recommend "The Gift" by Marcel Mauss.
Basically an anthropological study of reciprocal gift giving in the oceanic potlatch
societies. My take is that the idea was to re-visit relationships, as giving a gift basically
forces a response in the receiver, "Am I going to respond in kind, perhaps even upping what
is required? Or am I going to find that this relationship simply isn't worth it and walk
away?"
Kind of like being in a marriage. The idea isn't to walk away, the idea is you constantly
need to re-enforce it. Except with the potlatch it was like extending that concept to the
clan at large, so that all the relationships within the clan were being re-enforced.
"Kind of like being in a marriage. The idea isn't to walk away, the idea is you constantly
need to re-enforce it. "
amen.
we, the people, abdicated.
as for humans being selfish by default i used to believe this, due to my own experiences
as an outlaw and pariah.
until wife's cancer and the overwhelming response of this little town,in the "reddest"
congressional district in texas.
locally, the most selfish people i know are the one's who own everything buying up their
neighbor's businesses when things get tough.
they are also the most smug and pretentious(local dems, in their hillforts come a close
second in this regard) and most likely to be gop true believers.
small town and all everybody literally knows everybody, and their extended family and those
connections are intertwined beyond belief.
wife's related, in some way, to maybe half the town.
that matters and explains my experience as an outcast: i never belonged to anything like that
and such fellowfeeling and support is hard for people to extend to a stranger.
That's what's gonna be the hard sell, here, in undoing the hyperindividualist, "there is no
such thing as society" nonsense.
I grew up until Junior High in a fishing village on the Maine coast that had been around
for well over a hundred years and had a population of under 1000. By the time I was 8 I
realized there was no point in being extreme with anyone, because they were likely to be
around for the rest of your life.
I fell in love with sun and warmth when we moved away and unfortunately it's all
gentrified now, by the 90s even a tar paper shack could be sold for a few acres up in
Lamoine.
Yep, small towns are about as close as we get to clans nowadays. And just like clans, you
don't want to be on the outside. Still when you marry in, it would be nice if the town would
make you feel more a member like a clan should / would. ;-)
But outside of the small town and extended families I think that's it. We've been atomized
into our nuclear families. Except for the ruling class – I think they have this quid
pro quo gift giving relationship building figured out quite nicely. Basically they've formed
their own small town – at the top.
By the way, I understand Mauss was an influence on Baudrillard. I could almost imagine
Baudrillard thinking how the reality of the potlatch societies was so different than the
reality of western societies.
That's the big problem I see in this discussion. We know, or at least think we know,
what's wrong, and what would be better; but we can't get other people to want to do something
about it, even those who nominally agree with us. And I sure don't have the answer.
Neoliberalism, in its early guise at least, was popular because politicians like Thatcher
effectively promised something for nothing. Low taxes but still decent public services. The
right to buy your council house without putting your parents' council house house in
jeopardy. Enjoying private medical care as a perk of your job whilst still finding the NHS
there when you were old and sick. And so on. By the time the penny dropped it was too
late.
If the Left is serious about challenging neoliberalism, it has to return to championing the
virtues of community, which it abandoned decades ago in favour of extreme liberal
individualism Unfortunately, community is an idea which has either been appropriated by
various identity warriors (thus fracturing society further) or dismissed (as this author
does) because it's been taken up by the Right. A Left which explained that when everybody
cooperates everybody benefits, but that when everybody fights everybody loses, would sweep
the board.
If the Left is serious about challenging neoliberalism, it has to return to championing
the virtues of community
I agree. The tenuous suggestions offered by the article are top down. But top-down
universal solutions can remove the impetus for local organization. Which enervates the power
of communities. And then you can't do anything about austerity, because your Rep loves the
PowerPoints and has so much money from the Real Estate community.
Before one experiences the virtue, or power, of a community, one has to go through the
pain in the ass of contributing to a community. It has to be rewarding process or it won't
happen.
"An example of how this plays out can be seen in academic studies showing that, in game
scenarios presenting the opportunity to free-ride on the efforts of others, only economics
students behaved as economic models predicted: all other groups were much more likely to pool
their resources. Having been trained to believe that others are likely to be selfish,
economists believe that their best course of action is to be selfish as well. The rest of us
still have the instinct to cooperate. Perhaps this shouldn't be surprising: after all, as
George Monbiot argues in 'Out of the Wreckage', cooperation is our species' main survival
strategy."
Since so many people believe their job is their identity, would be interssting to know
what the job training or jobs were of the "others."
>so many people believe their job is their identity
Only because the social sphere, which in the medium and long term we *all depend
on* to survive, has been debased by 24/7/365 neolib talking points, and their purposeful
economic constrictions..
How many people have spent their lives working for the "greater good"? How many work
building some transcendental edifice from which the only satisfaction they could take away
was knowing they performed a part of its construction? The idea that Humankind is selfish and
greedy is a projection promoted by the small part of Humankind that really is selfish and
greedy.
Where does wealth creation actually occur in the capitalist system?
Nations can do well with the trade, as we have seen with China and Germany, but this comes
at other nation's expense.
In a successful global economy, trade should be balanced over the long term.
Keynes was aware of this in the past, and realised surplus nations were just as much of a
problem as deficit nations in a successful global economy with a long term future.
Zimababwe has lots of money and it's not doing them any favours. Too much money causes
hyper-inflation.
You can just print money, the real wealth in the economy lies somewhere else.
Alan Greenspan tells Paul Ryan the Government can create all the money it wants and there is
no need to save for pensions. https://www.youtube.com/watch?v=DNCZHAQnfGU
What matters is whether the goods and services are there for them to buy with that money.
That's where the real wealth in the economy lies.
Money has no intrinsic value; its value comes from what it can buy.
Zimbabwe has too much money in the economy relative to the goods and services available in
that economy. You need wheelbarrows full of money to buy anything.
It's that GDP thing that measures real wealth creation.
GDP does not include the transfer of existing assets like stocks and real estate.
Inflated asset prices are just inflated asset prices and this can disappear all too easily as
we keep seeing in real estate.
1990s – UK, US (S&L), Canada (Toronto), Scandinavia, Japan
2000s – Iceland, Dubai, US (2008)
2010s – Ireland, Spain, Greece
Get ready to put Australia, Canada, Norway, Sweden and Hong Kong on the list.
They invented the GDP measure in the 1930s, to track real wealth creation in the economy
after they had seen all that apparent wealth in the US stock market disappear in 1929.
There was nothing really there.
How can banks create wealth with bank credit?
The UK used to know before 1980.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
Before 1980 – banks lending into the right places that result in GDP growth (business
and industry, creating new products and services in the economy)
After 1980 – banks lending into the wrong places that don't result in GDP growth (real
estate and financial speculation)
What happened in 1979?
The UK eliminated corset controls on banking in 1979 and the banks invaded the mortgage
market and this is where the problem starts.
Real estate does make the economy boom, but there is no real wealth creation in inflating
asset prices.
What is really happening?
When you use bank credit to inflate asset prices, the debt rises much faster than GDP.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
The bank credit of mortgages is bringing future spending power into today.
Bank loans create money and the repayment of debt to banks destroys money.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
In the real estate boom, new money pours into the economy from mortgage lending, fuelling a
boom in the real economy, which feeds back into the real estate boom.
The Japanese real estate boom of the 1980s was so excessive the people even commented on the
"excess money", and everyone enjoyed spending that excess money in the economy.
In the real estate bust, debt repayments to banks destroy money and push the economy towards
debt deflation (a shrinking money supply).
Japan has been like this for thirty years as they pay back the debts from their 1980s
excesses, it's called a balance sheet recession. https://www.youtube.com/watch?v=8YTyJzmiHGk
Bank loans effectively take future spending and bring it in today.
Jam today, penury tomorrow.
Using future spending power to inflate asset prices today is a mistake that comes from
thinking inflating asset prices creates real wealth.
GDP measures real wealth creation.
Did you know capitalism works best with low housing costs and a low cost of living?
Probably not, you are in the parallel universe of neoliberalism.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
Some very important things got lost 100 years ago.
The Mont Pelerin society developed the parallel universe of neoliberalism from
neoclassical economics.
The CBI (Confederation of British Industry) saw the light once they discovered my equation
(Michael Hudson condensed)
Disposable income = wages – (taxes + the cost of living)
"Wait a minute, employees get their money from wages and businesses have to cover high
housing costs in wages reducing profit" the CBI
It's all about the economy, and UK businesses will benefit from low housing costs. High housing costs push up wages and reduce profits. Off-shore to make more profit, you can pay lower wages where the cost of living is lower,
e.g. China; the US and UK are rubbish.
What was Keynes really doing?
Creating a low cost, internationally competitive economy. Keynes's ideas were a solution to the problems of the Great Depression, but we forgot why
he did, what he did.
They tried running an economy on debt in the 1920s. The 1920s roared with debt based consumption and speculation until it all tipped over into
the debt deflation of the Great Depression. No one realised the problems that were building
up in the economy as they used an economics that doesn't look at private debt, neoclassical
economics.
Keynes looked at the problems of the debt based economy and came up with redistribution
through taxation to keep the system running in a sustainable way and he dealt with the
inherent inequality capitalism produced.
The cost of living = housing costs + healthcare costs + student loan costs + food + other
costs of living
Disposable income = wages - (taxes + the cost of living)
High progressive taxation funded a low cost economy with subsidised housing, healthcare,
education and other services to give more disposable income on lower wages.
Employers and employees both win with a low cost of living.
Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of
neoclassical economics that he originally solved.
Classical economics – observations and deductions from the world of small state,
unregulated capitalism around them
Neoclassical economics – Where did that come from?
Keynesian economics – observations, deductions and fixes for the problems of
neoclassical economics
Neoclassical economics – Why is that back?
We thought small state, unregulated capitalism was something that it wasn't as our ideas
came from neoclassical economics, which has little connection with classical economics.
On bringing it back again, we had lost everything that had been learned in the 1930s, by
which time it had already demonstrated its flaws.
Ultimately, neoliberalism is about privatization and ownership of everything. This is why
it's so important to preserve the Common Good, the vital resources and services that support
earthly existence. The past 40 years has shown what happens when this falls out of balance.
Our value system turns upside down – the sick become more valuable than the healthy, a
violent society provides for the prisons-for-profit system and so on. The biggest upset has
been the privatization of money creation.
This latest secret bank bailout (not really secret as Dodd-Frank has allowed banks to
siphon newly created money from the Fed without Congressional approval. No more public
embarrassment that Hank Paulson had to endure.) They are now up to $690 billion PER WEEK
while the media snoozes. PPPs enjoy the benefits of public money to seed projects for private
gain. The rest of us have to rely on predatory lenders, sinking us to the point of Peak Debt,
where private debt can never be paid off and must be cancelled, as it should be because it
never should've happened in the first place.
"Neoliberalism, which has influenced so much of the conventional thinking about money,
is adamant that the public sector must not create ('print') money, and so public
expenditure must be limited to what the market can 'afford.' Money, in this view, is a
limited resource that the market ensures will be used efficiently. Is public money, then, a
pipe dream? No, for the financial crisis and the response to it undermined this neoliberal
dogma.
The financial sector mismanaged its role as a source of money so badly that the
state had to step in and provide unlimited monetary backing to rescue it. The creation of
money out of thin air by public authorities revealed the inherently political nature of
money. But why, then, was the power to create money ceded to the private sector in the
first place -- and with so little public accountability?And
if money can be created to serve the banks, why not to benefit people and the
environment? "
The Commons should have a shot at revival as the upcoming generation's desires are
outstripped by their incomes and savings. The conflict between desires and reality may give a
boost to alternate notions of what's desirable. Add to this the submersion of cities under
the waves of our expanding oceans, and one gets yet another concrete reason to think that
individual ownership isn't up to the job of inspiring young people.
A Commons of some sort
will be needed to undo the cost of generations of unpaid negative externalities. Fossil
fuels, constant warfare, income inequality, stupendous idiocy of kleptocratic government
these baked in qualities of neo-liberalism are creating a very large, dissatisfied, and
educated population just about anywhere one looks. Suburbia will be on fire, as well as
underwater. Farmlands will be parched, drenched, and exhausted. Where will Larry Summers dump
the garbage?
Antifragile states
Explains how globalisation has allowed small states to become major players and big cities to
outgrow their nation-states.
By Branko Milanovic
In a series of books, and especially in Antifragile, Nassim Taleb has introduced an
important concept -- that of being antifragile, referring to 'things that gain from
disorder'. 'Fragile' is, of course, the opposite: it connotes something that thrives under
stable conditions but, being brittle, loses, and at times loses big, amid volatility. In the
middle, 'robust' indicates resilience against uncertainty and turmoil, without the capacity
to profit from it.
The contrast between antifragile and the two other categories relates to that between
centralised, top-down formations (such as unitary states) and decentralised, bottom-up and
more flexible, federal structures. As an example of the latter Taleb takes Switzerland, with
its decentralised cantonal system and grassroots democracy.
But Switzerland is also antifragile in another sense. It has historically been a country
that benefited from turmoil and disorder outside its borders -- from wars, nationalisations,
uncertain property rights and outright plunder. In all these cases, whether Jews were trying
to save their property from 'Aryanisation', Chinese millionaires feared a revolution or
African potentates needed a haven in which to park their loot, Switzerland offered the
comfort of safety. It was (and is) the ultimate antifragile state: it thrives on
disorder.
Dubious legality
While Switzerland became emblematic of such a safe haven, it is hardly unique nowadays in
benefiting from it. Globalisation and worldwide turmoil, combined with openness of capital
accounts, have allowed many small economies to specialise in functions which run from asset
safety and money-laundering to tax avoidance and evasion. In most cases, the legality of such
transactions is dubious; many belong to the grey zone where neither full legality nor full
illegality can be attributed.
In western Europe, Liechtenstein, Luxembourg and Ireland have engaged in stimulating tax
evasion, including from neighbouring countries. In his Hidden Wealth of Nations: The Scourge
of Tax Havens, Gabriel Zucman documents the large outflows from Switzerland and inflows into
Luxembourg's banking system which followed the (forced) decision by the Swiss authorities to
impose withholding tax on accounts held by foreigners.
Ireland's provision of safe haven from taxes to various large multinational corporations
received quite a lot of attention when the European Commission obliged the county to assess
these rates, particularly for Apple, at other than zero. In what may well be a singular
historical case, the Irish government complained about having to receive billions more
taxes!
Elsewhere, as in the Caribbean, small nation-states have specialised in providing the
legal framework for shell companies. In Capital Without Borders: Wealth Managers and the One
Percent, Brooke Harrington describes a single building in the Cayman Islands which houses
headquarters for several hundred companies. Shell companies have played an enormous role in
the money-laundering which followed privatisations in many east-European countries after
1989, as well as in providing cover for many illegal activities -- from drug and arms sales
to people-trafficking.
Cyprus benefited enormously from the Lebanese and Yugoslav civil wars, as well as from the
confusion over property rights in Russia and Ukraine. Montenegro, the smallest of the
ex-Yugoslav republics, had economically the most successful transition, not least thanks to
massive cigarette-smuggling.
Globalisation effect
All such states are antifragile in the sense that Taleb gives to the term. But their
success provides us also with a lesson in the effects of globalisation. It shows that the old
notion of state 'viability' -- based on a supposed threshold of size -- is now plain
wrong.
Under globalisation, the specialisation of small states into niche activities enables them
to prosper: they do not need to produce cars or mobile phones to become rich. They do not
need even to have a domestic market. It suffices to find an activity which relatively few
other countries offer and for which there is an increasing global demand, as the world
becomes more volatile, or lawless or corrupt. They become antifragile.
The success of such states is replicated at subnational level. Big cities such as London,
New York, Miami and Barcelona offer many of the services and amenities we find in small
nation-states (asset protection, expert money-laundering) but in addition provide
agglomeration externalities (increasing returns to scale thanks to the physical presence in
the same place of many companies) and thriving housing markets. They too are antifragile.
This has implications for the political life of the nation-states where such cities are
located. Global cities are increasingly linked to other global cities and other countries,
less and less to their own hinterland. They are what Fernand Braudel called villes-monde.
They remind us of medieval cities, which were often more powerful than much larger states.
The power of cities such as Venice and Genoa ended with the advent of the nation-states which
became political, economic and military behemoths, absorbing city-states or relegating them
to oblivion.
Voting differently
Globalisation is bringing them back, however. While nation-states politically and
economically fragment, and in some cases (as with climate change) show themselves to be not
the right loci to address a problem, the villes-monde thrive. Many already vote very
differently from the surrounding areas: London had a solid anti-Brexit majority (60 per
cent), Budapest, Istanbul and Moscow voted against their countries' authoritarian leaders and
New York is leading the 'rebellion' against its own citizen who is currently the president of
the United States.
The important political question in the 21st century will be how a modus vivendi between
the globalised large cities, and the elites living there, and the rest of their nations can
be achieved. Will there be a redistribution of political power within countries, endless
friction between the 'globalists' and 'nativists' or, in extremis, secession by the
antifragile villes-monde?
Branko Milanovic is visiting presidential professor at the Graduate Center of City University
of New York (CUNY).
America's tariffs against China are already showing signs of undermining the global economy
and will create a funding crisis for the Federal Government when it leads to foreigners no
longer buying US Treasury debt and selling down their existing dollar holdings. A subversive
attempt by America to divert global portfolio investment from China by destabilising Hong Kong
will force China into a Plan B to fund its infrastructure plans, which could involve actively
selling down her dollar reserves and hastening the introduction of a new crypto-based trade
settlement currency.
The US budget deficit will then be financed entirely by monetary inflation. Furthermore, the
turn of the credit cycle, made more destructive by trade tariffs, is driving the global and US
economy into a slump , further accelerating all indebted governments' dependency on
inflationary financing. The end result is America's trade policies have been instrumental in
hastening the end of the dollar as the world's reserve currency, ultimately leading to its
destruction.
Introduction
For almost two years President Trump has imposed various tariffs on imported Chinese goods.
He advertised his tactics as hardball from a tough president who knows the art of the deal,
taking his business acumen and applying it to foreign affairs. He even proudly described
himself as a tariff man.
His opening gambit was to impose tariffs on some goods to get leverage over the Chinese,
with the threat that if they didn't cooperate, then further tariffs would be introduced. The
Chinese declined to be cowed by threats, introducing tariffs themselves on US imports,
particularly agricultural products, to bring pressure to bear in turn on President Trump.
Egged on by his trade adviser Peter Navarro and Commerce Secretary Wilbur Ross, Trump has
continued to intensify his tariff policies, oblivious to the damage being done to the global
economy. Putting aside Panglossian statistics, both America and China are now heading for a
recession that is increasingly likely to deepen significantly. America's consumer-driven
economy is yet to reflect much of a slow-down, though producer countries dependent on either or
both economies, such as Germany, are already descending into a manufacturing slump. China's GDP
is registering a growth rate of about 6%, low by Chinese standards, but being no more than a
money total this is just a reflection of the quantity of money still being pumped into the
Chinese economy by the authorities.
As the world descends into an economic contraction, it will not be reflected in government
statistics, because all economies are having increasing quantities of fiat money pumped into
them. Financial market participants naively believe that changes in GDP indicate an economy's
condition. If that was the case, the German economy in 1918-23 was an economic miracle and not
the disaster history has led us to believe. The impoverishment of the masses, just like today's
reported impoverishment of Venezuelans and Zimbabweans must have been misreported, because
nominal GDP was increasing ten or a hundredfold. Then there is the deflator. Ah, the deflator:
a concoction by statisticians who appear to be under a government cosh to keep it as low as
possible. That's easy to deal with: introduce price controls across the board and use those
official prices as a basis for the CPI. Infinite GDP growth is then assured.
That is the ultimate logic of perennial bulls and the errors should be obvious. At some
stage, market participants beholden to the system will awaken to the lie that GDP, nominal or
adjusted, has any statistical value, even in respectable jurisdictions. Banks will be rescued,
and unemployment will rise, but GDP will continue to inflate - sorry, grow. The effect on
prices so far has been subdued. At least, if you believe the official CPI version. Tariffs will
end up blowing a hole in inflation targets while the global economy slumps and borrowing costs
will then rise inexorably.
It's time to discover why the America-China financial war and trade war will end up
undermining the dollar.
US's deep state strategy is stuck in the cold war era
Besides President Trump's policy on tariffs, the permanent staff in the intelligence and
military complexes are the driving force behind Cold War 2 against China and Russia. Russia has
been in their sights since Yalta. Control of the Middle East along with Libya and Afghanistan
have been key objectives. The Western alliance, comprising the US and its European handmaidens,
has been focusing on oil, but at its root is the justification of US military spending. US
taxpayers have been told that the Middle East, North Africa and more recently the Ukraine are
important to stop Russia either dominating global energy supplies or pursuing territorial
ambitions.
Russia's military power is not as strong as projected by US military propagandists. It has
excellent nuclear capability but an underequipped out-of-date military. Who can forget the
sight of Russia's one aircraft carrier, the Admiral Kuznetsov, chugging from the Baltic to the
Mediterranean to come to Syria's aid, breaking down and emitting clouds of black smoke, needing
tugs to nurse it along? It is the naval equivalent of the ghastly Trabant motor car of the
1980s. The most egregious example of Russia's non-nuclear might perhaps, but indicative,
nonetheless.
The same is broadly true of Russia's army. Its capability is limited, and American battle
failures in the field are their own. Russia does not even try to punch above its weight,
choosing to dance round the ring and tire out its opponent that way. Despite its superior
equipment and battlefield technology, America usually then succumbs to its own errors.
As an adversary, China is in a different league to Russia altogether. At least America's
military complex knows not to take China on. Instead, more subversive tactics are deployed, and
this is why Hong Kong has become the pressure point against China, destroying the investment
link for international funds investing in Chinese infrastructure projects.
Logically, America should have accommodated China long ago, recognizing the dollar's role as
the supreme fiat currency would not then be challenged. But that would have led to the entire
military complex being downsized over time: peace is not good for the war business. Without
doubt it would have been economically beneficial for everyone other than the military. American
corporations were happily running manufacturing operations in China and South East Asia as
high-quality processors in their supply chains. Trump's simple world, where China steals
American jobs was never the case.
US Government's developing funding crisis
The statistics in Table 1 summarise America's financial problem.
These figures tell us that since the turn of the millennium 94% of America's accumulated
budget deficit is covered by the accumulated balance of payments deficit. In other words,
almost all the budget deficit is financed directly or indirectly by inward capital flows, and
very little can be attributed to genuine demand for US Treasuries by America's savers.
This result is to be expected, since it reflects an accounting identity at the national
level. The accounting identity tells us that unless there is an increase in national savings, a
budget deficit will be financed by capital arising from the trade deficit. We can also say the
money to cover the budget deficit in the absence of capital inflows and an increase in savings
can only be through monetary inflation. In other words, through the debasement of the currency
substituting for genuine savings.
In practice, foreign-owned dollars do not all go into US Treasuries, and investment outflows
must be taken into account as well. Since 2000, according to Treasury TIC figures these are
approximately $9 trillion, while total investment inflows at about $16 trillion leaves us with
net inflows of $7 trillion, implying that foreign-owned cash and deposits in the US banks will
have expanded to fill the gap between investment flows and the total balance of payments
deficit. And indeed, we find that these balances amount to $4.3 trillion, accounting almost
entirely for the gap between net inflows and the accumulated budget deficit in Table 1.
Obviously, there are other flows involved, but they are not material to the point. In the
absence of an increase in savings, a budget deficit will always lead to a balance of payments
deficit. How it is covered, by a combination of net inward capital flows and monetary inflation
is a separate, but important consideration to which we will return later.
Now that the US faces a recession, the budget deficit will rise due to lower than forecast
tax receipts and higher than expected welfare costs. The deeper the recession, the greater the
deficit, which before the recessionary effect is factored in was forecast by the Congressional
Budget Office to be just over one trillion dollars for the current fiscal year, which is two
months in. It will obviously be somewhat higher, requiring funding by a combination of inward
capital flows and monetary expansion.
If the foreigners don't play ball, funding the budget deficit will be entirely down to
monetary inflation. Worse, if they reduce their dollar holdings, not only will monetary
expansion have to make up the funding difference for the government, but it will also have to
address net foreign sales of existing treasuries and other US dollar assets as well. At
end-June 2018 the total value of those assets including those held before 2000 were recorded at
$19.4 trillion, plus bank deposits and short-term assets of $4.3bn, taking the total to $23.7
trillion.[i] This is the same approximate size as the US Government's total debt and slightly
more than US GDP.
Will foreigners sell US assets?
Naturally, dollar-based capital markets believe in the dollar and its hegemonic status. This
extends to a belief that foreigners in financial trouble will always demand dollars and the
more their trouble the greater their demand for dollars is likely to be. It is a mantra that
ignores the fact that foreigners are up to their eyes in dollars already.
Look at it from China's point of view. The bulk of her foreign reserves of $3.1 trillion are
in dollars, with about one third of it in US Government debt. She is helping America to finance
its military, which aims to contain and crush China. It's rather like giving the school bully
your baseball bat and inviting him to hit you with it. Furthermore, China's military
strategists have their own view of how America uses her currency's hegemonic status, and it is
not a casual one. They know, or think they know why America has stirred up Hong Kong, and that
is to prevent global portfolio flows being invested in China, because America is desperate to
have them instead.
It leaves China with a serious problem. She had expected inward global portfolio flows to
help finance her infrastructure projects, and the Americans have effectively succeeded in
closing down the Hong Kong Shanghai-connect link, through which foreign investment was to be
directed. She is now in a position whereby she may have no alternative but to put her plans on
hold or use her own dollar reserves to that end. Besides her US Treasury holdings, she is
likely to have a further trillion or so in short-term instruments and bank deposits to draw
on.
A decision to actively reduce her holdings of US Treasuries would not be taken lightly by
China. The response from America would likely be an intensification of the financial war,
perhaps including an emergency power to stop China selling her Treasury stock. If that
happened, China would have no option but to respond, and a dollar crisis would almost certainly
ensue. While outcomes with a rational opponent are theoretically predictable, President Trump's
actions and how they mesh with the deep state are less so, making the consequences of any
action taken by China deeply unpredictable.
We shall have to wait to see how this next stage plays out. Meanwhile, the inflationary
outlook in America is already deteriorating.
FMQ confirms a reacceleration of monetary
inflation
After pausing in its headlong growth since the Lehman crisis, the fiat money quantity surged
into record territory at $15,812bn at the beginning of October (Figure 1).
FMQ is the sum of Austrian true money supply and bank reserves held at the Fed. The reason
for its renewed growth is the Fed's easing by injecting money into the system through its
repurchase agreements. FMQ for the beginning of November is likely to be higher still.
Something is amiss systemically, which appears to require continual monetary injections to
prevent a financial crisis. The US economy having been already flooded with money following
Lehman, this development is deeply worrying and possibly marks a countdown to the next credit
crisis.
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and try again.Price inflation will get out of control
To independent analysts, it should be clear by now that the world is probably teetering on
the edge of a cyclical credit crisis, which this time is coupled with the destructive synergy
of trade tariffs. Equally, it is obvious that while central bankers and politicians suspect
something is wrong, they are clueless about the forces involved, otherwise they would not have
implemented monetary policies that led to the situation today.
In the short-term, as we saw with the Lehman crisis when a credit crisis hits, there will
probably be a panic into safety. But for the eventual outcome we must look beyond any initial
effect. America and its dollar are central to how events will evolve. As already shown in this
article the dollar is over-owned by foreigners, relative to ownership of foreign currencies by
Americans. The basis of both categories of ownership is commercial assumptions about current
and future prospects for international trade. For this reason a slump will cause demand for all
currencies to contract, which in the dollar's case will need to net selling greater than any
repatriation of capital from abroad. Even though most dollars are actually held by foreign
governments and their agencies, their strategic reserve decisions are ultimately driven by
economic factors.
Assuming the global economic slump deepens over the next few years, at a time when the
American budget deficit will be increasing rapidly foreigners will be sellers of dollars and
underlying US assets, including US Treasuries. Unless private sector actors in America increase
their propensity to save, the budget deficit will have to be financed instead entirely by
inflationary means.
Broadly, other than intertemporal factors there are two ways in which monetary inflation can
translate into higher prices: a relative desire to reduce possession of the currency relative
to goods either by domestic users or by foreigners. The two preceding paragraphs describe why
foreigners are likely to turn sellers for reasons of trade, to which we can add the further
consideration that over the last year a combination of a rising dollar and falling US Treasury
yields have been immensely profitable for them, an experience which might not be repeated next
year. So, while domestic users may be slow to see the dollar's purchasing power accelerate in
its decline, the push to a weakening dollar is likely to come from abroad, at least
initially.
All holders of dollars will find that their ownership of dollars relative to goods will be
increasing rapidly, due to inflationary financing to cover a rising budget deficit. Instead of
consumers and other economic actors associated with Main Street, the banks owe the bulk of
their balances and deposits to other financial entities and foreigners. Therefore, the domestic
monetary system is potentially more footloose than in the past. The risk to the Fed is that
this deposit cohort is more likely to take its cue from factors such as the foreign exchanges,
the price of gold and even cryptocurrencies, speeding up the fall in the dollar's purchasing
power once it begins to slide.
It is a long time since we have seen it, but when the smart money begins to view things
negatively, everything the Fed does with monetary policy, or the executive does fiscally, leads
to failure. A falling dollar leads to rising interest rates in the markets, and the
government's funding crisis will be laid bare for all to see. And with the Fed and the US
Treasury staffed with neo-Keynesians, a policy reversal to stabilise the currency by making it
sound will be the last thing that happens.
A world driven to trade isolationism
American trade policy under President Trump is isolationist and at odds with the role of a
reserve currency. His mantra of "Make America Great Again" and his determination to build a
wall on the Mexican border are testament to his thinking. If anything, America's introspection
towards Russia and China has strengthened their partnership as joint Asian hegemons. Their
decision to progress their economies without America and its dollars was taken by America for
them. Russia has already turned most of her dollars into gold and continues to do so. China's
plans to evolve her economy into a more consumer oriented one are underway, but she is still
too dependent on export-oriented trade to disregard ties with her Western trading partners.
Consequently, China can be expected to accelerate plans for her vision of a consumer-driven
middle class. In order to do so she will dispose of the dollar for trade purposes as much as
possible. At the meeting of the BRICS nations in Brazil earlier this month, a common
cryptocurrency was discussed, ostensibly to reduce currency volatility, but in reality, to
eliminate the dollar as a common settlement medium between BRICS members.
So far, China has seen the redundancy of the dollar as a gradual evolutionary process. But
America's policy of diverting global portfolio flows from China is likely to lead to China
drawing down on her foreign reserves, particularly her holdings of US dollars, to replace
expected capital inflows. She will still be dependent on imports of raw materials, for which
some dollars will be needed; but so long as she has a trade surplus, and she insists on her
preferences for trade settlement by other means, China's dollar requirements will be
minimised.
China can probably weather the political consequences of a collapse in international trade,
because for the population American aggression is clearly to blame. While China has had to
amend its plans and is resisting precipitative action, there can be no doubt her determination
to do away with the dollar is more urgent. Together with Russia, the other BRICS members and
the Shanghai Cooperation Organisation as well as her trade counterparties in sub-Saharan
Africa, China's policies for trade settlement without the dollar will affect more than half the
world's population.
And when you get establishment figures in the Western banking system, such as Mark Carney,
openly speculating at Jackson Hole last August about a replacement for the dollar in
international trade, you know the dollar's jig is finally up.
"... We should also note in passing that the Nobel Prize in Economics is not actually a Nobel Prize. ..."
"... You are right that the Nobel Prize in Economics is not a Nobel Prize and it is awarded by a bank. Plus, Milton Friedman won in 1976: that tells you a lot about why neoclassical economists are mainly chosen. ..."
"... many of the neoclassical models are pseudoscience, unreflective of the real world. ..."
"... Both awards pander to the rentier class. ..."
"... What? Not even a breath about the insane system called globalization, where raw material from all over the world is shipped to China to be processed into finished goods in the most polluting way possible, to have those goods then shipped and trucked to the Amazon horrorhouses and Walmart stores to be bought and then thrown in the trash a few months later. ..."
There is a quote from The Wolf (Harvey Keitel, Pulp Fiction) not apt for a family blog,
but very apt to describe what a Nobel Prize is, and most prizes indeed are. It is about
sucking
Nordhaus reinforces the conservatism of Sveriges Riksbank so he deserves the prize. I
wouldn't ever expect the prize being given to cutting edge studies that question the validity
of day-by-day assumptions embedded in institutions like S.R.
You are right that the Nobel Prize in Economics is not a Nobel Prize and it is awarded
by a bank. Plus, Milton Friedman won in 1976: that tells you a lot about why neoclassical
economists are mainly chosen.
In February 1995, following acrimony within the selection committee pertaining to the
awarding of the 1994 Prize in Economics to John Forbes Nash, the Prize in Economics was
redefined as a prize in social sciences. This made it available to researchers in such
topics as political science, psychology, and sociology.[29][30] Moreover, the composition
of the Economics Prize Committee changed to include two non-economists. This has not been
confirmed by the Economics Prize Committee. The members of the 2007 Economics Prize
Committee are still dominated by economists, as the secretary and four of the five members
are professors of economics.[31] In 1978, Herbert A. Simon, whose PhD was in political
science, became the first non-economist to win the prize,[citation needed] while Daniel
Kahneman, a professor of psychology and international relations at Princeton University is
the first non-economist by profession to win the prize.
It seems strange to me that non-economists would be awarded a prize for the economy. The
bank certainly knows who to select though!
Milton Friedman was monetarist who taught at the premier neoclassical school, the
University of Chicago. Karl Marx was the premier classical (political) economist. The
neoclassical school gradually came to deny land as a distinct factor of production, John
Bates Clark (whom there is an award named after) solidified the conflation of land and
capital.
This is why many of the neoclassical models are pseudoscience, unreflective of the
real world.
What? Not even a breath about the insane system called globalization, where raw
material from all over the world is shipped to China to be processed into finished goods in
the most polluting way possible, to have those goods then shipped and trucked to the Amazon
horrorhouses and Walmart stores to be bought and then thrown in the trash a few months
later.
Cognative dissonanace much? Lots of economic activity there, with nothing to show for it
except a growing heap of trash and Bezos and the Waltons getting richer by hundreds of
millions per day. What a phucking world.
Her premise, that neoliberal economics is past its sell-by date, is almost too little too
late. It was past its sell-by date by 1950 when it was just getting its second foul wind. We
are in this fix because it was so easy to get here. By using oil for energy. Nobody has used
the butterfly metaphor for oil fed climate change, but it describes the mess. Every
individual use of oil/natgas for our modern lifestyle puts a whole series of requirements for
the very maintenance of that lifestyle – which (like her comment that more work hours
propagate not just more emissions but more manufacturing and more consumption is a vicious
circle) expand exponentially. And what she says point blank, "the thing about a sufficiently
high carbon tax is that it is so disruptive of the market that it has to be accompanied by a
robust and comprehensive role for the state" is just pure poetic justice.
We believe this is due to two factors -- the very high carbon footprints of people at
the top and a political economy effect, in which the wealthy have outsized political impact
and are able to forestall effective climate responses.
I have my suspicions about general carbon footprints based on income levels. I suspect
that many less affluent people end up commuting more because of housing usually being more
costly in cities and immediately nearby cities. Think about it for a moment, are all the
affluent neighborhoods close or far from local centers of employment? In my view the
implication is that carbon footprint from driving around is a necessity for large part of
lower income population while car use comes out more as a luxury, a free choice, for more
affluent people – they have the financial means to find housing relatively close to the
work, while lower income people don't have this choice.
Extrapolating more, I would suspect that most of carbon footprint is at least partially a
necessity for lower income people, while the for higher income people the larger carbon
footprint represents free choice and conspicuous consumption – they do it because they
can .
There are really easy ways to decrease carbon footprint: Dense and functional cities to
enable anyone make the climate friendly choices of not driving car around. But there is
extreme opposition to these kind of dense affordable cities, even in my seemingly progressive
nordic home country. Most of all, housing is seen as a open market business instead of
personal right. This is important, as this prevents the EU countries of more forcible
interventions in to the housing markets but this whole situation is just insane right now as
most EU countries get loans at negative rates, they could easily build and rent out housing
at 'market' prices with really low margins and still at profit for the state. In my view
states should intervene forcibly to urban housing markets to push out new quality housing to
disrupt and drop the general market prices at the moment. Many people, and especially working
people, are staying out of larger cities because the general prices are too high for them.
State intervention would enable anyone to make the 'right' choices and then heavier carbon
taxes could be enacted and people would still have free choice to live where they want and
drive car if they want. But this isn't possible because the free market principles are
applied to housing markets by EU antitrust officials and this prevents state
interventions.
The most ridiculous part of this whole thing that ideology of free market capitalism and
how it's applied prevents this, it's more important to preserve the wealth and rights of
owners in the cities instead of doing the right things. Meanwhile neoliberals and european
ordoliberals are shouting with their heads red that debt is bad and demanding that all the
member countries must work hard to reduce their debt levels no matter what happens. These
people say they agree that climate change is real, but his acknowledgement is just cynical
gaslighting from them, as the only actions they will approve are debt reduction, tax
reduction and privatization of public goods. For them, the state is the problem, not the
solution.
Rich and affluent people have hijacked the whole economic discussion and most important is
ideology of protecting property rights and 'individual' freedoms, to the detriment of our
planet and all of us living on it.
Ultimately it's all about population growth, and in particular, government policies aimed
at maximizing population growth, and top-down pressure from the rich to censure any
discussion of this topic.
That's why they recently gave a Nobel Prize to some economists pushing 'solutions' to
poverty in places like India that have been demonstrated over and over not to work: because
the policy that does work is to limit fertility rates (example: China post-Mao), and the the
rich don't want that, because they love cheap labor.
Hal,
Could you please comment on Dylan Ratigan's comment about $128
Billion being automatically pumped into the banker's hands without
public comment by Dodd Frank?
Is it the same thing as a repo? I'm a non-economist, just a
simple fellow, that's getting the hang of this con game.
I watched the Ratigan video on your recommendation and agree
it is a fundamental retelling that pulls the elements together
better than anything I'd previously seen. And I completely
agree with his assessment that this was the biggest theft in
mankind's history.
The Fed's highest stated purpose is "the integrity and
stability of the banking system". Problem is, that mission
justifies anything and everything beneath it. They are not in
the business of ensuring a bank obeys the law, and if they
break the law, even the "business law" of making terrible
business decisions, all the Fed thinks they are required to do
is make them whole.
So you have a radically anti-capitalist structure at the
tippy top of a supposedly "capitalist" system. And that's even
before you even get to any discussion of secrecy, subterfuge or
malfeasance.
Why are we not allowed to know who the recipients were of
the *$21 trillion* (GAO number) of free Fed money after 2009?
All we can do is follow the bread crumbs: we do know, for
example, that 2/3rds of those dollars went to European
institutions, including non-bank corporations. Huh? Q: That
benefits the Main St U.S. economy how, again? A: It doesn't.
This means you can pay no attention whatsoever to the ancillary
Fed "missions" around U.S. employment and economic growth.
The $128B Ratigan mentions re Dodd-Frank is just a trickle
in the tsunami of funds reaching bank coffers. Free money of
course is funding massive share buybacks, the *only* cause of
stock "rises" since 2009, but what completely infuriates me is
what banks are doing around buybacks. It's one thing if
buybacks benefit *all* shareholders, but the latest trick (esp
by Jamie Dimon) is to take free money, buy back JPM shares,
*but those shares are only given to Jamie himself and his top
managers*.
(Of course until 1982 companies borrowing money to buy back
their own shares was completely illegal since it's effect is
stock price manipulation).
Repo is just a shorter term version of all of these other
diverted flows. Completely under all radars, with no
Congressional hearings or public scrutiny or oversight.
I always love to be wrong because it means I get to
be right again. I'm not a funding market expert either,
but I hope you're just correctlng Ratigan's views on
the $128B, not the entirety of my ramble? Thx Yves
I don't write about the repo mess because the commentary on it
is generally terrible. This is not "monetizing debt". This is
"providing liquidity to the money markets" which is what the Fed is
supposed to do!!!
The Fed got itself into a corner with super low rates and QE. It
also stupidly decided to manage short term rates via interest on
reserves. Prior to 2008, the Fed intervened in the repo markets
every bloody day to hit the target rate and no one cared.
The Fed drained liquidity too fast. It's been caught out and has
had to go into reverse big time. Its refusal to admit that is why
everyone is overreacting to the liquidity injections.
Yes, MMT proponents oppose a UBI (or BGI). They want a Job
Guarantee. They argue that setting a floor on the price of labor is a
much more important way to regulate the economy than diddling with
interest rates, plus it increases the productive capacity of an
economy, which increases prosperity.
The will accept a UBI that is lower than a JG as a sort of
disability income.
Thank you for that link. It certainly sounds like real life, and they say their
models predict inequality in various countries to within 1%. Any single agent in this economy could have become the oligarch -- in fact, all
had equal odds if they began with equal wealth. In that sense, there was equality
of opportunity. But only one of them did become the oligarch, and all the others
saw their average wealth decrease toward zero as they conducted more and more
transactions. To add insult to injury, the lower someone's wealth ranking, the
faster the decrease. once we have some variance in wealth, however minute, succeeding transactions
will systematically move a "trickle" of wealth upward from poorer agents to richer
ones, amplifying inequality until the system reaches a state of oligarchy. If the
economy is unequal to begin with, the poorest agent's wealth will probably decrease
the fastest. Where does it go? It must go to wealthier agents because there are no
poorer agents. Things are not much better for the second-poorest agent. In the long
run, all participants in this economy except for the very richest one will see
their wealth decay exponentially.
the presence of symmetry breaking puts paid to arguments for the justness of wealth
inequality that appeal to "voluntariness" -- the notion that individuals bear all
responsibility for their economic outcomes simply because they enter into
transactions voluntarily -- or to the idea that wealth accumulation must be the
result of cleverness and industriousness. It is true that an individual's location
on the wealth spectrum correlates to some extent with such attributes, but the
overall shape of that spectrum can be explained to better than 0.33 percent by a
statistical model that completely ignores them.
It would be amusing if it wasn't so pathetic. But Schiff has close ties to a notorious Ukrainian arms dealer. Schiff was also
a frequent recipient of campaign cash from meth dealer and Hillary Clinton donor Ed Buck. Buck is the LA Democrat with a penchant
for shooting up homeless black men with meth and having sex with them. He allegedly killed at least two of them and is currently
being charged with two counts of murder. Schiff has yet to disavow him and return his repeated donations.
Paul Pelosi has his own Ukrainian Gas Company
Pelosi's own son Paul Pelosi Jr had his own connection as an officer with a Ukrainian natural gas company. Pelosi actually used his
mother, Speaker Pelosi, in a promotional video for the company. Pelosi Jr. earlier had served as an executive just under Mike Mozilla
with Countrywide during the height of the mortgage crisis of 2008. Countrywide being one of the worse abusers in the mortgage debacle
that almost destroyed America's, and the world's, economy.
Paul Pelosi Jr. made a fortune, walking away unscathed. This before starting a solar energy company to take advantage of huge
Federal Government loan guarantees. Another money windfall for Pelosi, who walked away with a fortune when that company went bankrupt.
Leaving the Federal Government and the taxpayers to make up for the losses. Nevada Senator Harry Reid's son Rory was involved in
much the same scheme. Reid's children, all lobbyists, got rich off fees and loan guarantees from solar companies with no sufficient
market underpinnings. Both companies went belly up, leaving the Federal Government and the taxpayers holding the bag.
Hunter Biden in China
But it is Hunter Biden's relationship with both China and Ukraine that illustrates the corrupt dealings of the Biden family business.
Joe Biden started sucking up to China in 2012 when he toured the country with then-Vice President Xi Jinping. He then toured America
with Xi as his guest. In 2013 he went to China and took Hunter along on Air Force II. Two weeks later Hunter incorporated an investment
firm with John Kerry's stepson, Christopher Heinz, and Whitey Bulger's nephew. Shortly thereafter they received $1.5 billion dollars
for the fund to invest in Chinese research companies.
https://tpc.googlesyndication.com/safeframe/1-0-35/html/container.html#xpc=sf-gdn-exp-2&p=https%3A//www.commdiginews.com https://tpc.googlesyndication.com/safeframe/1-0-35/html/container.html#xpc=sf-gdn-exp-2&p=https%3A//www.commdiginews.com
Duel use technologies approved for export by Biden and Kerry
One of the companies they invested in was a Chinese arms company that imported technologies with dual-use purposes. The investment
required the approval of both the White House and State Department. It should be little surprise that Secretary of State John Kerry
and Vice President Biden saw to it that the deal went through.
The Russia Hoax: James Clapper throws Barack Obama under the busOther investments of the Biden Heinz Bulger fund included a Chinese company that invested in AI technologies like facial recognition.
Again duel use technologies, which will be incorporated into the modern police surveillance state that China has become. Thanks to
Hunter and Joe Biden, and Christopher Heinz and John Kerry.
Kerry and Biden: Burisma and Ukraine
The Kerry, Biden connection continues in Ukraine, though with a twist. Hunter Biden's dealings in Ukraine were so alarming to Christopher
Heinz that he dissolved his working partnership with Hunter Biden because of it. It was too crooked. Too obvious. Too corrupt, even
for Christopher Heinz. But John Kerry was still tied to it. In spades. The origins of the Hunter Biden deal with Burisma dates back
to 2014. Steve Hilton of Fox News laid out the timeline of events brilliantly last Sunday. As well as the ties between Burisma, John
Kerry, and a handful of Democrat Senators who supported a "cash for gas" initiative to purchase $50 million in natural gas from Ukraine.
https://video.foxnews.com/v/video-embed.html?video_id=6094578904001
Devon Archer and Joe Biden: A curious series of events
On April 16, 2014, Burisma board member and Hunter Biden friend Devon Archer meets with Joe Biden to discuss Ukrainian natural gas.
On April 18th Hunter Biden forms the holding company, Rosemont Seneca, that will be the conduit for Burisma's money. Three days later,
on April 21st, Joe Biden announces the program of US cash for Ukrainian gas, jumpstarting the initiative.
The Coup against Trump: Is John Brennan a Russian Agent?Coincidence? Certainly not. Then it gets even more interesting. Burisma appoints Hunter Biden to its Board of Directors. Even
though he has no experience in oil or gas, or Ukraine, and doesn't speak Ukrainian. It doesn't matter. He is Joe Biden's son. The
fix is in. Devon Archer (far left) is pictured with Joe and Hunter Biden. (Screenshot from Twitter) Burisma pays Rosemont Seneca
$186,000 per month, which Hunter Biden splits with Devon Archer. That's $98,000 apiece, every month. Well more than the $50,000 a
month figure bandied about by the media. At the same time, Burisma pays Hunter Biden's law firm a $300,000 retainer to handle legal
affairs.
Burisma, Kerry, and David Leiter's ML Strategies
Then Burisma hires John Kerry's former Chief of Staff David Leiter to conduct lobbying on behalf of Burisma and Ukrainian natural
gas. It pays Leiter's consulting group, ML Strategies, $90,000. Leiter makes $3,000 contributions, in three $1,000 payments, to Democrat
Massachusetts Senator Ed Markey and New Hampshire Senator Jean Shaheen. Shaheen and Markey write a letter to President Obama supporting
a "cash for gas" relationship with Ukraine, and calling for an expansion of Ukrainian natural gas exploration. Burisma releases a
press release praising Markey and Shaheen's letter. Leiter also makes three $1000 contributions to Connecticut Senator Richard Blumenthal.
Blumenthal immediately announces his support for the Ukrainian "cash for gas" initiative. (
Steve Hilton: The
real Ukraine scandal is US cash for gas -- It involves the Bidens and a growing list of Dems )
Joe Biden work on behalf of ML Strategies
Shortly thereafter Joe Biden makes his famous trip to Ukraine where he demands the firing of the Ukrainian prosecutor Victor Shokin,
who is looking into Burisma Holdings and Hunter Biden.
AG William Barr and Atty. Durham closing in on the Obama, Brennan coup plottersAfter the prosecutor is fired Hunter Biden's lawyers file a brief with the new prosecutor in Ukraine, currying favor, and saying
explicitly that the charges of corruption against Shokin were disinformation planted by Western governments. https://www.youtube.com/embed/KCF9My1vBP4
Hunter Biden continues to receive payments from Burisma until April 2019, one month before Joe Biden announces his run for the Presidency.
He has received close to $6 million dollars thus far. There are reports that Rosemont Seneca received an additional $900,000 payment
intended for Joe Biden himself. https://www.youtube.com/embed/KCF9My1vBP4 Hunter Biden continues to receive payments from Burisma
until April 2019, one month before Joe Biden announces his run for the Presidency. He has received close to $6 million dollars thus
far. There are reports that Rosemont Seneca received an additional $900,000 payment intended for Joe Biden himself. Hunter Biden
continues to receive payments from Burisma until April 2019, one month before Joe Biden announces his run for the Presidency. He
has received close to $6 million dollars thus far. There are reports that Rosemont Seneca received an additional $900,000 payment
intended for Joe Biden himself.
Hunter and Joe Biden's admission of consciousness of guilt
This week Hunter Biden stepped down from the board of the Chinese holding company but retained his 10% equity investment. The owners
of the company have yet to state what exactly Hunter Biden's duties were. The same could be said of Burisma. Joe Biden says he never
discussed his son's business affairs. Hunter says otherwise, in an interview with the New Yorker. Biden's response to his son's Burisma
news. "I hope you know what you are doing". Not exactly an endorsement. Certainly a recognition that Joe Biden knew what Hunter was
up to. And he knew it stank to high heaven. Joe Biden announced yesterday that his son will have no dealings with any government
if he is elected President. This begs the question. If it is improper if Biden is President, then it was improper when Biden was
Vice President. Rather than clearing Biden and his son, it is proof of consciousness of guilt, and acknowledgment of impropriety.
" Wasn't it inappropriate for someone like you in the middle of all this to have your son collecting money from this big credit
card company while you were on the floor protecting its interests?"
Brokaw sets forth the case against Biden
"That's a reference to your son being hired right out of law school by a big company here in Delaware that's in the credit card
business, MBNA. He got about $100,000 a year, as I recall. You received $214,000 in campaign contributions from the company and from
its employees. At the same time, you were fighting for a bankruptcy bill that MBNA really wanted to get passed through the Senate
making it much tougher for everyone to file bankruptcy. Senator Obama was opposed to the bill. Among other things, you couldn't in
fact claim that you had a problem because of big medical bills."
"You voted against an amendment that would call for a warning on predatory lending. You also opposed efforts to strengthen the
protection of people in bankruptcy. This is an issue that you've heard about before. Your son was working for the company at the
same time. In retrospect, wasn't it inappropriate for someone like you in the middle of all this to have your son collecting money
from the big credit card company while you were on the floor protecting its interests?"
Biden response, as with all questions about Burisma: "Absolutely not!"
James Biden and the Obama billion-dollar housing contract
Joe Biden's brother James has been feeding at the trough as well, securing a $1.2 billion dollar contract with the Pentagon, while
his brother was Vice President, to build housing in Iraq. James Biden had no experience in construction or building houses, even
though he landed a contract that would make Halliburton and Dick Cheney turn green. (
Joe Biden's Family Has Been Getting Rich off His Political Career for Decades – PJ Media )
Hillary Clinton and the corrupt Clinton Foundation
Then there is Hillary Clinton's well-documented history of graft, pay to play, and unbridled corruption. The Uranium One scam. The
Clinton Foundation slush fund. Stealing billions of dollars from Haiti by running all aid through the Clinton Foundation. Spending
millions on Chelsea's wedding, all paid for by the Clinton Foundation.
FISA
Court exposes Obama's abuse of NSA to spy on AmericansIn 2016 Ukrainian donors gave more
money to the Clinton Foundation than any other country. Roughy $10 million dollars. More than Saudi Arabia ($7.3 Million). Of
course this pales in comparison to the $240 million the Clinton Foundation received in the Uranium One scam. On a side note, the
person who delivered the Uranium One sample directly to the Russians in Moscow was none other than FBI Director Robert Mueller. So
many curious facts.
The Steele Dossier, the corrupt Ambassador Yovanovich
This doesn't even touch on the Steele Dossier and Sydney Blumenthal getting dirt on Paul Manafort and Donald Trump from Ukraine and
passing it on to the DNC, DOJ and FBI. It doesn't touch on the Clinton loving Ambassador Yovanovich working with George Soros and
Ukraine to manufacture dirt on Manafort and Trump and pass it on to the State Department and DNC.
Obama Brennan coup involved State Dept., DOD, DNI, DOJ, CIA and FBIOr the fact that when the Hunter Biden / Burisma investigation was shut down, so was the investigation the Soros group that worked
to find dirt on Trump. Or the recent revelation the Ambassador Yovanovich had a list of conservative American journalists illegally
spied on. Whether its political corruption. Or old fashioned self-enrichment. Barack Obama ran an administration where senior officials
were lining their pockets in Pay to Play schemes on a level that would make Richard Nixon blush.
Draining the swamp of Democrat corruption and abuse of power
At the same time, senior intelligence and Justice officials were spying on a major Presidential candidate. Laying the groundwork
for a rolling and ongoing coup against the duly elected sitting President of the United States, Donald Trump. That continues to
this day. The release of the IG Horowitz report next week on FISA abuse will demonstrate the abject corruption of the DOJ, FBI
and our intelligence agencies. William Barr and US Attorney John Durham have earth-shaking indictments in the works that will,
at long last, blow the lid off the Russia hoax. Exposing the coup plotters and bringing the final curtain to the Obama legacy.
Yet here we are in the midst of the current political impeachment crisis. The documented corruption and pay to play schemes at
the very top of the Obama team must now be revealed and exposed. Joe Biden and John Kerry are as corrupt and dangerous as Hillary
Clinton ever was. We don't have to take Joe Biden's word for anything. We already have his confession.
"... The relative structural fluidity in a small-scale democracy succumbs to "social viscosity" in a large-scale organization. According to the "iron law," democracy and large-scale organization are incompatible ..."
The iron law of oligarchy is a political theory, first developed by the German syndicalist
sociologist Robert Michels in his 1911 book, Political Parties.
The "iron law of oligarchy" states that all forms of organization, regardless of how
democratic or autocratic they may be at the start, will eventually and inevitably develop
oligarchic tendencies, thus making true democracy practically and theoretically impossible,
especially in large groups and complex organizations.
The relative structural fluidity in a
small-scale democracy succumbs to "social viscosity" in a large-scale organization. According
to the "iron law," democracy and large-scale organization are incompatible.
"... Iron Law of Oligarchy refers to the inherent tendency of all complex organizations to develop a ruling clique of leaders with interests in the organization itself rather than in its official aims. ..."
"... It became difficult for the mass membership to provide any effective counterweight to this professional, entrenched, leadership, the Iron Law of Oligarchy. Aristotle used the term oligarchy as a synonym for rule by the rich. Oligarchy is not always a rule by wealthy people, for which the term is plutocracy . Oligarchy means "the rule of the few" and monarchy means "the rule of the one" ..."
"... Oligarchy can also be compared with aristocracy . In an aristocracy, a small group of wealthy or socially prominent citizens control the government. Members of this high social class claim to be, or are considered by others to be, superior to the other people because of family ties, social rank, wealth, or religious affiliation. ..."
Civil Service is a self-perpetuating oligarchy, the Iron Law of Oligarchy. Many writers
believe that any political system eventually evolves into iron law of oligarchy. James Madison,
the fourth President of the United States said: "Never fear. The iron law of oligarchy always
obtains." In iron law of oligarchy, actual differences between viable political rivals are
small, the oligarchic elite impose strict limits on what constitutes an 'acceptable' and
'respectable' political position. Iron Law of Oligarchy was first defined by German sociologists like Robert
Michels (1876-1936).
According to writers, Zulma Riley, Keith Riley, and Robert Michels, modern Democracy should be considered
as elected Oligarchy
. They called this theory the iron law of oligarchy. Michels discovered that in the Iron Law of
Oligarchy, even in the most egalatarian movements, elites will call
most of the shots.
Iron Law of Oligarchy refers to the inherent tendency of all complex organizations to
develop a ruling clique of leaders with interests in the organization itself rather than in its
official aims.
It became difficult for the mass membership to provide any effective
counterweight to this professional, entrenched, leadership, the Iron Law of Oligarchy.
Aristotle used the term oligarchy as a synonym for rule by the rich. Oligarchy is not always a
rule by wealthy people, for which the term is plutocracy . Oligarchy means "the rule of
the few" and monarchy
means "the rule of the one".
Such power-sharing from one person to a larger group of persons
happened when English nobles got together in 1215 to force King John of England to sign the
Magna Carta, a recognition of failure of oligarchy. Magna Carta guaranteed greater rights to
greater numbers of people, thus setting the stage for English constitutional monarchy .
Oligarchy can also be compared with aristocracy . In an aristocracy, a small
group of wealthy or socially prominent citizens control the government. Members of this high
social class claim
to be, or are considered by others to be, superior to the other people because of family ties,
social rank, wealth, or religious affiliation.
Breaking the iron law of oligarchy: union revitalization in the American labor movement.
Voss, Kim and Sherman, Rachel - The American Journal of Sociology [AJS], 106(2), 303 - 49.
ABSTRACT: This article addresses the question of how social movement organizations are able to
break out of bureaucratic conservatism. The article concludes by drawing out the theoretical
implications of the finding that bureaucratic conservatism can sometimes be overcome in mature
social
movements .
It will be interesting to see how China responds in reality to the naked hegemony of the US
law just passed and signed by Trump about HK. Is China ready to stand up to the bully of dying
empire or be cowed into slicing their response even thinner and thinner but not saying NO
MORE!
We do live in interesting times.
Transferring my post to this thread, about the decline of US fertility rates:
As we all know, constant population growth is essential for the survival of
capitalism, since it is one of the main factors that slow down its tendency of the profit
rate to fall. The article seems to agree with this:
Birthrates have been trending downward overall since 2005, sparking concern about
potential economic and cultural ramifications. Keeping the number of births within a
certain range, called the "replacement level," ensures the population level will remain
stable. A low birthrate runs the risk that the country will not be able to replace the
workforce and have enough tax revenue, while a high birthrate can cause shortages of
resources.
Another related article approaches the issue from another angle:
Virginia Commonwealth University professor Dr. Steven H. Woolf and Eastern Virginia
Medical School student Heidi Schoomaker analyzed life expectancy data for the years
1959-2016 and cause-specific mortality rates for 1999-2017. The data shows that the
decline in life expectancy is not a statistical anomaly, but the outcome of a
decades-long assault on the working class.
So, this is not an "anomaly". If it isn't, then there's an underlying cause, which the
same article hypothetizes:
Obamacare was part of a deliberate drive by the ruling class to lower the life
expectancy of working people. As far as the strategists of American capitalism are
concerned, the longer the lifespan of elderly and retired workers, who no longer
produce profits for the corporations but require government-subsidized medical care to
deal with health issues, the greater the sums that are diverted from the coffers of the
rich and the military machine.
A 2013 paper by Anthony H. Cordesman of the Washington think tank Center for
Strategic and International Studies (CSIS) frankly presented the increasing longevity
of ordinary Americans as an immense crisis for US imperialism. "The US does not face
any foreign threat as serious as its failure to come to grips with the rise in the cost
of federal entitlement spending," Cordesman wrote, saying the debt crisis was driven
"almost exclusively by the rise in federal spending on major health care programs,
Social Security, and the cost of net interest on the debt."
Meanwhile, conditions for the rich have never been better. This is reflected in the
growing life expectancy gap between the rich and the poor. The richest one percent of
men live 14 years longer than the poorest one percent, and the richest one percent of
women 10 years longer than the poorest.
I wasn't aware of this CSIS report. If true, then this is indeed a very interesting
hypothesis.
--//--
The thing I don't understand in the WSWS article linked above is this:
The first nodal point, in the early 1980s, corresponds to the initiation of the social
counterrevolution by the administration of Ronald Reagan, which involved union busting,
strikebreaking, wage-cutting and plant closings on a nationwide scale, combined with cuts
in education, health care and other social programs.
So, Ronald Reagan did a "counterrevolution". That means there was a revolution before
him, which I suppose is the post-war "Keynesian consensus", the "golden age of
capitalism" of 1945-1975.
I really can't understand the logic behind the Trotskyists: they condemn the USSR and
China as "stalinists", i.e. as counterrevolutionaries. But Harry Truman was a
revolutionary? Dwight Eisenhower was a revolutionary? Clement Attlee was a revolutionary?
De Gaulle was revolutionary?
What kind of nonsense is this?
What is most funny is that these same Trotskyists from the same WSWS website use the
rise of labor strikes in China to argue China is a capitalist empire -- but uses the same
strikes as evidence there was a revolution in the West during the post-war (by negative,
since Reagan's "counterrevolution" was characterized by "union busting, strikebreaking,
wage-cutting and plant closings on a nationwide scale, combined with cuts in education,
health care and other social programs").
I think Trotskyism is having an identity crisis. They don't know if they are
essentially a movement whose objective is essentially to tarnish Stalin's image or if
they are closeted social-democrats. They forgot Trotsky fought for the revolution, not
personal vendetta.
Nice link. It's often interesting to hear from the source the explanation for why their
actions acceptable and everything will be OK. The financial industry is generally a con game
built on managing perception and after all its all about the money when we strip away the
facade. As the former ZH was so effective in making known - when it gets serious one has to
lie.
I have now read completely the St. Louis Fed report that I linked to in comment #7 and I want
to provide a quote from it and discuss the obfuscation therein.
"
In addition to owing money to "the public," the U.S. government also owes money to
departments within the U.S. government. For example, the Social Security system has run
surpluses for many years (the amount collected through the Social Security tax was greater
than the benefits paid out) and placed the money in a trust fund. These surpluses were used
to purchase U.S. Treasury securities. Forecasts suggest that as the population ages and
demographics change, the amount paid in Social Security benefits will exceed the revenues
collected through the Social Security tax and the money saved in the trust fund will be
needed to fill the gap. In short, some of the $22 trillion in total debt is intergovernmental
holdings -- money the government owes itself. Of the total national debt, $5.8 trillion is
intergovernmental holdings and the remaining $16.2 trillion is debt held by the public.
"
The US Social Security Insurance program use to be a stand alone entity with a huge trust
fund of Treasuries that wasn't debt but in the Reagan/Greenspan era the funds were "stolen"
(turned into debt) and used to fund "Star Wars" etc. while payment for the program became a
budget item along with managing the contribution amounts to keep it viable into the
future....they took it away from the actuarial folk, spent the money and it is now a
political debt football.
"Thomas Bowers, a former Deutsche Bank executive and head of the American
wealth-management division, killed himself in Malibu, California, on Tuesday, November 19th,
according to the Los Angeles county coroner's initial report.
You have to look at the banker suicide index. Banker suicides go up exponentially prior to
a banking collapse. I lost count of banker suicides during the 2008 collapse. Bank troubles =
suicides of high ranking employees is the algorithm.
The problem is compounded by the lousy reputation Economics has acquired among proponents of
an inclusive economy. Too often the discipline is viewed as the source of the policies that
have produced the excesses and fragilities of our time. Mainstream economics and neoliberalism
are viewed as one and the same.
We beg to differ:
Many of the dominant policy ideas of the last few decades are supported neither by sound
economics nor by good evidence. Neoliberalism – or market fundamentalism, market
fetishism, etc. -- is a perversion of mainstream economics, rather than an application
thereof. And contemporary economics research is rife with new ideas for creating a more
inclusive society. But it is up to us economists to convince their audience about the merits
of these claims.
As important as specific policy prescriptions in different domains of economics are, we also
have a bigger claim: our essays produce overarching themes that taken together provide a
coherent overall vision for economic policy that stands as a genuine alternative to market
fundamentalism. This is a vision that rejects the reliance on competitive equilibrium as a
realistic benchmark, understands that the world is always second-best, highlights the role of
power imbalances in shaping existing institutional arrangements, and emphasizes the need for
imagination in devising alternatives that are both more inclusive and more conducive to
prosperity. We strive for a whole that is greater than the sum of the parts.
We do not intend to duplicate the excellent work being done in policy think tanks in
Washington, D.C. and elsewhere. Many economists engage with these think tanks and their ideas
get airing through them. Our initiative is different in that it is a network of academic
economists. We are committed to policy proposals based on sound scholarship. But we also care
about what these policy ideas imply in turn for the way in which we should practice Economics
in the class room and in the seminar room. And we are less influenced by immediate political
constraints or opportunities of the policy scene in Washington, D.C.
We believe Economics can be an ally of inclusive prosperity. That is why we have embarked on
this project. The initial set of policy briefs on the EfIP website is our first step. We hope
they will stimulate and accelerate academic economists' sustained engagement with creative
ideas for inclusive prosperity and that we will be able to follow up soon with an even richer
set of policy discussions.
We tend to think of propaganda as something generated by the state. This is a prime example
of it coming from ideologues within universities, and making its way to the public via
sympathizers in the mass media. Eventually, these lies become de facto truths, either because
people really do believe in them, or the cost of questioning them becomes too great, so people
conform. In time, younger people -- those who grew up being socialized into the lie -- don't
know any different. In my interviews for my forthcoming book on lessons we must learn from the
communist experience, a Ukrainian immigrant named Olga Grigorenko, recalling her Soviet
childhood, said "Nobody told me that I was living in a lie. I was just living my life in my
country, the Soviet Union. Nobody said it was a lie."
As she grew older, she came to see that in fact she lived within a system of lies. Her
husband, Vladimir, spoke about how the ideology corrupted all knowledge. From the
transcript:
Vladimir: For example, all history was represented as the fight between capitalism
and the workers. It takes a really creative mind to see the system of classes from
Marxism-Leninism presenting itself in ancient Egypt. But that's what they did. All history
books were filled with that point of view. The Florentine Republic was the equal of the Great
October Revolution – things like that. All our history books were like that. Every
scientific paper was supposed to have a prefatory chapter describing how Marx and Engels were
geniuses in that particular field of science, and how their findings anticipated whatever
this scientific article described. Any and all sciences had to show a connection to the
decision of the party in a previous convention.
Olga: But nobody believed in it.
Vladimir: But everybody knew that you had to say these things in order to be
published.
More:
Olga: In high school and middle school, we had to write essays, like normal school
kids do. But you never could write what you think about the subject. Never, ever. The subject
could be interesting, but you never could put what do you think. You have to find some way to
relate that to the communist view.
Vladimir: The general culture taught you this doublethink.
Olga: I remember when I was eight or nine years old, I came home from school and
told my parents a funny anecdote about a famous Red Army hero, one that made him look bad. I
just started to tell my parents, and my father looked at me and said, 'Never do that again.
Not in our house, not anywhere. Just stop, and forget. You can't tell funny stories about
communist leaders.' And I was afraid.
Vladimir: Sooner or later, society would tell you what you shouldn't say. And if
you said it, you would end up in the camp.
We are reproducing that system here, in an American way. It begins with the ideological
corruption of knowledge in the institutions of higher education, then moves out from there. How
difficult do you imagine it would be within the New York Times newsroom, or any major
American newsroom, to mount a serious challenge to the concepts of "whiteness," "patriarchy,"
and the like? In fact, we have an example of it, from this summer:
the leaked transcript of the Times 's internal town hall meeting , in which an
unnamed staffer told editor-in-chief Dean Baquet that "I just feel like racism is in
everything. It should be considered in our science reporting, in our culture reporting, in our
national reporting."
Baquet declined the opportunity to deliver a Journalistic Standards 101 lecture to this
person, and instead gave a fuzzy non-answer (
read the transcript ; you'll see) praising the paper's then-upcoming "1619 Project," a
massive initiative attempting to "reframe" American history around slavery.
If you'll recall, the 1619 Project was named for the year the first African slave arrived on
American shores; the Times said that year, not 1776, ought to be remembered as the
founding of America.
This report seeks to make those conditions clear: that not only is the economy weaker than
the headlines, and the current administration's rhetoric, would have us believe, but also the
gains, however unequal, that it has acquired rest on fragile grounds indeed. The report will do
so by delineating a set of straightforward facts about the current economy, based on and
demonstrated through wide-reaching data, that will illustrate the weaknesses that lie just
below the surface of the most frequently reported numbers.
Here are the key takeaways of the report's analysis:
Wages and incomes continue to stagnate as working Americans struggle to maintain living
standards, especially those with children.
A larger share of America's workers earn low wages than do workers in other high-income
nations.
Wage gaps between white workers and workers of color persist; in fact, some gaps have
even widened.
Pay hikes in rural areas of the country have not kept up with urban locales.
Those at the bottom of the income ladder are falling further behind those at the
top.
Workers' share of national income has not improved from its post-recession low.
Underemployment- and low employment-to-population ratios indicate that the economy is not
providing enough jobs for the people who are willing and able to work.
Public investment as a share of GDP is at its lowest levels since the end of the Second
World War.
The current economic expansion has brought no substantial boosts to productivity,
innovation, and capital investment, limiting its potential for future growth.
Taken together, these data reveal an economy that, years after the end of the Great
Recession, is underperforming on many significant metrics. This broad-based underperformance
calls for a more proactive and progressive economic policy to end wage stagnation, stimulate
investment, and avoid future economic crises. The current federal economic policies, which
consist of poorly targeted tax cuts and deregulation, have done nothing of note to build
broadly shared prosperity.
The major forecasters see an oil supply surplus next year, but those bearish outlooks
largely depend on the health of U.S. shale growth in 2020, an assumption that is looking
increasingly fanciful.
Financial struggles are well-known, but the dominoes continue to fall. As Bloomberg
reported , some drillers have recently seen their credit lines reduced, limiting their
access to fresh capital. Twice a year in the spring and fall, banks reassess their credit lines
to shale drillers, and decide how much they will authorize companies to borrow. This time
around is expected to be the first time in roughly three years that lenders tighten up lending
capacities.
The curtailment in lending comes at a time when scrutiny on shale finances is increasing.
Share prices have fallen sharply this year as investors lose interest. The industry continues
to burn
cash , and lenders and investors shunning the industry.
Of course, if drillers cannot borrow to cover their financing gaps, they may be forced into
bankruptcy. The cutting of the borrowing base "can be a good precursor to potential bankruptcy
because as capital markets stay closed off for these companies, the borrowing base serves as
the only source of liquidity," Billy Bailey, Saltstone Capital Management LLC portfolio
manager, told Bloomberg.
Not every company is entirely cut off from capital markets. As Liam Denning
points out , Diamondback Energy was able to issue $3 billion in new bonds at low interest
rates, which highlights the case of "haves and have nots" within the industry.
But the financial stress helps explain the slowdown in U.S. oil production this year. The
U.S. added about 2 million barrels per day (mb/d) between January 2018 and the end of last
year; but output is only up a few hundred thousand barrels per day in 2019 from January through
August.
Confusingly, the IEA still forecasts a substantial increase in U.S. oil production in 2020
at 1.2 mb/d, but not
everyone agrees with that optimistic outlook. The credit crunch and financial stress in the
shale sector could lead to a disappointment in 2020.
It is against this bewildering backdrop that OPEC+ must decide its next move. The IEA says
that OPEC+ is in for some trouble as a supply glut looms – in large part because of shale
growth. Others agree, to be sure. Commerzbank said that OPEC's efforts to focus on laggards
such as Iraq and Nigeria will be insufficient. "It is a mystery why OPEC should believe that it
can avoid this oversupply by making just a few cosmetic adjustments," the investment bank said.
"By early next year at the latest OPEC thus risks being rudely awakened."
However, at the same time, the physical market is showing some slightly bullish signs. In
the oil futures market, front-month contracts for Brent are
trading at a premium to longer-dated ones. The six-month premium rose to $3.50 per barrel
recently, up from $1.90 last month,
Reuters reports. A large premium is typically associated with a tighter market.
Moreover, there is a chance of a thaw in the U.S.-China trade war, which could provide some
tailwinds to the global economy. It's become impossible to trust the daily rumors coming from
Washington and Beijing, but the two sides have shown some desire to at least call a truce and
not step up the tariffs.
Still, the economy has slowed. The OECD
warned that global GDP will decelerate to just 2.9 percent this year, and remain within a
2.9-3.0 percent range through 2021. This is the weakest rate of growth in a decade, and is down
sharply from the 3.8 percent seen last year. "Two years of escalating conflict over tariffs,
principally between the US and China, has hit trade, is undermining business investment and is
putting jobs at risk," the OECD said.
The U.S. and China, then, have a great deal of influence over the near-term prospects for
oil. As mentioned, there is still a wide range of opinions on the magnitude of the oil supply
surplus in 2020, but a breakthrough in the trade war would immediately shift growth
projections, oil demand trajectories, and, importantly, sentiment. Even the mere expectation of
an economic rebound would send oil prices rising, at least for a little while.
On the other hand, the thaw in the trade war is far from inevitable. The two sides have
shown little evidence, if any, that they are actually making progress on some of the structural
issues at hand. There is still the possibility that the talks fall apart and the trade war
marches on, or even grows worse.
Because it is generally assumed that the oil market has already factored in some degree of
optimism around tariff reduction, which has likely added a few dollars to the barrel of oil, a
reassessment to the downside would surely send oil prices tumbling.
Is it any wonder that the old foreign service establishment "embrace a geopolitical outlook that is simplistic, foolhardy, and
dangerous"?
The foreign service exam of that era (probably no better today) tested substantially on ones knowledge of fiction: novels and
such.
Rather like choosing career foreign service officers based on a person's performance in the entertainment trivia night at the
local watering hole. It was a test of memory not logic or insightfulness or historical perspective. These folks are not latter-day
De Toquevilles or great historians, even if many came from colleges viewed as top drawer.
The plan failed because China was too smart to give the U.S. what it wanted. Now it is
Trump who is under pressure. He needs the trade deal with China because the current trade
war is doing harm to the U.S. economy and endangers his reelection.
The administration isn't bragging about the Atlanta Fed's present forecast of just 0.3%
annualized GDP growth.
Since then GDP growth has fallen below 2%, as businesses cancel capital investment plans
in response to uncertainty about global supply chains, following the Trump Administration
tariff war on China and threatened bans on technology exports to Chinese companies.
Consumer spending kept the economy growing despite shrinking CapEx and a manufacturing
recession that is now in its third quarter. At just 12% of GDP, the manufacturing
recession isn't enough to tip the overall economy into recession.
That means the USA is already in a manufacturing recession for some time now -- but that
doesn't matter, because the American manufacturing sector is just 12% of its GDP, making it
just a drop in the bucket.
But the situation doesn't appear to be better at the financial sector either:
Bridgewater Associates LP, one of the largest investment management companies in the world,
has reportedly bet more than $1 billion that either the S&P 500, Euro Stoxx 50 or both
will fall by March 2020.
The capitalist world still hasn't recovered from the blow of 2008. Marxists have already
predicted a new great recession will happen probably somewhere at the end of 2020, late 2022
best case scenario. Now the bourgeois institutions are seemingly catching up with the real
scientists.
This isn't the only
article I've read over the past several days suggesting China won't agree to a trade deal
anytime soon. The following are amongst the reasons why:
"China's trade has gradually steadied as the nation moves to explore third markets. 'A
substantial decline in trade and a drastic fall in economic growth which some international
observers were worried about didn't occur, pointing to the potential and resilience of the
Chinese economy,' he went on to say.
"The US, for its part, has seen its current account deficit as a percentage of GDP shoot
up from 2.9 percent to 3.2 percent. This suggests the trade war is failing to address the
issue of the US' current account deficit, stressed Zhu, who is currently the Chairman of the
National Institute of Financial Research at Tsinghua University. He added that, more
worryingly, tariffs mean additional costs are put on US companies and consumers."
Evil Outlaw US Empire planners in their hubristic zeal to decouple from China's economy
erred massively in thinking China would be the one harmed and come begging for a trade deal.
Instead, China's geoeconomic strategy is clearly working and is more potent than what the
Empire can bring to the table--Oops! China can now play Trump.
Eric Ciamarella has close ties with Joe Biden and obviously knows all about his corruption
and collaboration with Ukraine's Nazis. He is a registered Dem.
Ciaramella travelled with Biden to Kiev and was invited by Biden to lunch at the White
House, a very unusual event for a low level CIA "analyst" indicating Ciamarella has political
connections above his CIA rank.
Ciaramella also has close links to John Brennan - the primary pusher of the Russiagate Hoax
from within the Obama Regime in 2016.
Brennan set up a CIA Task Force in late 2015 or early 2016 to target Trump and prevent him
winning the election, in what has become known as "Spygate".
Brennan conspired with the FBI, British Intelligence (MI6/MI5) and GCHQ to illegally spy on
Trump and members of his campaign.
This also involved entrapment operations and attempted smears against General Michael Flynn,
George Papadopoulos and Trump himself using long time CIA asset Stefan Halper (who was paid $1m
by Obama), MI6/MI5 asset Joseph Mifsud and long term FBI/CIA informer (since ~1999) and loose
Trump associate Felix Sater.
There was also of course MI6 agent Christopher Steele's Fake "Dossier". Nothing in the
Steele dossier is true, except for Carter Page's visit to an oil investment conference in
Moscow in mid 2016, as part of his job as an Oil Investment Consultant. This information has
always been freely available on the net and was known to the CIA and the FBI at the time.
Carter Page was regular debriefed by, and freely cooperated with, U.S. Intelligence after each
of his regular visits to Russia
The above is the REAL Foreign Meddling in the 2016 election.
There is no credible evidence whatsoever of any Russian government meddling in the 2016 US
election (see below).
The CFR is the leading Globalist organization funded by Big Banks, large Multinationals and
Oligarchs and works directly against the best interests of the 99% of ordinary Americans (and
everyone else on the planet).
Ciaramella also has close links with Dem Operative Alexandra Chalupa who went to the Ukraine
Embassy in DC in early 2016, asking for them to dig up any dirt they could find on Manafort or
Trump.
The problem is that the most lucrative deposits in the North Sea are already exhausted. What is left is higher cost oil, which
might not be economically feasable to extract with prices below at least $70 per barrel.
The uncertainty of the future of Brexit has left the United Kingdom's economy in stagnation
as business investment falters on the eve of the nation's December general election. While
Boris Johnson tries to rally voters to instill their confidence in him to usher in a new era of
economic prosperity and growth in Britain by way of leaving the European Union at any cost, the
economy is, in fact, doing just the opposite. This is just one of the great ironies of Brexit,
the separatist movement that just can't seem to cut the cord.
... ... ...
What 's more, with the complexity of modern transnational supply chains, nothing is simple
and absolutely nothing is isolated. This has led to hesitant investment in a great number of UK
industries including North Sea oil, since, as the UK's Press and Journal puts it, "
with Brexit looming, the North Sea supply chain is only as good as its weakest link ."
The
article goes on to say that "key factors such as licensing and taxation of oil and gas
exploration, development and production activities are already UK government responsibilities,
while the legal and regulatory regime under the Petroleum Act 1998 is generally regarded as
satisfactory. [...] While expectations for this year are optimistic, the added complication of
Brexit could impede recovery. As a consequence of the downturn the market is now oversupplied,
except in a few specialised areas."
As long as Brexit drama continues, uncertainty and a lack of trust in the British economy
will continue to fester, continuing the cycle of economic downturn and inflation in the UK.
This means that North Sea investors, one of the UK's more important economic sectors,
undoubtedly see the writing on the wall and are already looking for foreign failsafes if they
haven't secured them already.
Political theorist Wendy Brown's latest book, In the Ruins of
Neoliberalism: The Rise of Antidemocratic Politics in the West , traces the intellectual
roots of neoliberalism and reveals how an anti-democratic project unleashed monsters –
from plutocrats to neo-fascists – that its mid-20 th century visionaries
failed to anticipate. She joins the Institute for New Economic Thinking to discuss how the
flawed blueprint for markets and the less-discussed focus on morality gave rise to threats to
democracy and society that are distinct from what has come before.
Lynn Parramore: To many people, neoliberalism is about economic agendas. But your book
explores what you describe as the moral aspect of the neoliberal project. Why is this
significant?
Wendy Brown: Most critical engagement with neoliberalism focuses on economic policy
– deregulation, privatization, regressive taxation, union busting and the extreme
inequality and instability these generate. However, there is another aspect to neoliberalism,
apparent both in its intellectual foundations and its actual roll-out, that mirrors these moves
in the sphere of traditional morality. All the early schools of neoliberalism (Chicago,
Austrian, Freiburg, Virginia) affirmed markets and the importance of states supporting without
intervening in them.
But they also all affirmed the importance of traditional morality (centered in the
patriarchal family and private property) and the importance of states supporting without
intervening in it. They all supported expanding its reach from the private into the civic
sphere and rolling back social justice previsions that conflict with it. Neoliberalism thus
aims to de-regulate the social sphere in a way that parallels the de-regulation of markets.
Concretely this means challenging, in the name of freedom, not only regulatory and
redistributive economic policy but policies aimed at gender, sexual and racial equality. It
means legitimating assertions of personal freedom against equality mandates (and when
corporations are identified as persons, they too are empowered to assert such freedom). Because
neoliberalism has everywhere carried this moral project in addition to its economic one, and
because it has everywhere opposed freedom to state imposed social justice or social protection
of the vulnerable, the meaning of liberalism has been fundamentally altered in the past four
decades.
That's how it is possible to be simultaneously libertarian, ethnonationalist and patriarchal
today: The right's contemporary attack on "social justice warriors" is straight out of
Hayek.
LP: You discuss economist and philosopher Friedrich von Hayek at length in your book.
How would you distribute responsibility to him compared to other champions of conservative
formulations for how neoliberalism has played out? What were his blind spots, which seem
evidenced today in the rise of right-wing forces and angry populations around the world?
WB: Margaret Thatcher thumped Hayek's The Constitution of
Liberty and declared it the bible of her project. She studied it, believed it, and
sought to realize it. Reagan imbibed a lot of Thatcherism. Both aimed to implement the Hayekian
view of markets, morals and undemocratic statism. Both accepted his demonization of society
(Thatcher famously quotes him, "there's no such thing") and his view that state policies aimed
at the good for society are already on the road to totalitarianism. Both affirmed traditional
morality in combination with deregulated markets and attacks on organized labor.
I am not arguing that Hayek is the dominant influence for all times and places of
neoliberalization over the past four decades -- obviously the Chicago Boys [Chilean economists of the '70s
and '80s trained at the University of Chicago] were key in Latin America while Ordoliberalism [a German
approach to liberalism] has been a major influence in the European Union's management of the
post-2008 crises. "Progressive neoliberals" and neoliberalized institutions hauled the project
in their own direction. But Hayek's influence is critical to governing rationality of
neoliberalism in the North and he also happens to be a rich and complex thinker with a fairly
comprehensive worldview, one comprising law, family, morality, state, economy, liberty,
equality, democracy and more.
The limitations? Hayek really believed that markets and traditional morality were both
spontaneous orders of action and cooperation, while political life would always overreach and
thus required tight constraints to prevent its interventions in morality or markets. It also
needed to be insulated from instrumentalism by concentrated economic interests, from aspiring
plutocrats to the masses. The solution, for him, was de-democratizing the state itself. He was,
more generally, opposed to robust democracy and indeed to a democratic state. A thriving order
in his understanding would feature substantial hierarchy and inequality, and it could tolerate
authoritarian uses of political power if they respected liberalism, free markets and
individual freedom.
We face an ugly, bowdlerized version of this today on the right. It is not exactly what
Hayek had in mind, and he would have loathed the plutocrats, demagogues and neo-fascist masses,
but his fingerprints are on it.
LP: You argue that there is now arising something distinct from past forms of fascism,
authoritarianism, plutocracy, and conservatism. We see things like images of Italian right groups giving Fascist
salutes that have been widely published. Is that merely atavism? What is different?
WB: Of course, the hard right traffics in prior fascist and ultra-racist iconography,
including Nazism and the Klan. However, the distinctiveness of the present is better read from
the quotidian right than the alt-right.
We need to understand why reaction to the neoliberal economic sinking of the middle and
working class has taken such a profoundly anti-democratic form. Why so much rage against
democracy and in favor of authoritarian statism while continuing to demand individual freedom?
What is the unique blend of ethno-nationalism and libertarianism afoot today? Why the
resentment of social welfare policy but not the plutocrats? Why the uproar over [American
football player and political activist] Colin Kaepernick but not the Panama Papers [a massive
document leak pointing to fraud and tax evasion among the wealthy]? Why don't bankrupt workers
want national healthcare or controls on the pharmaceutical industry? Why are those sickened
from industrial effluent in their water and soil supporting a regime that wants to roll back
environmental and health regulations?
Answers to these questions are mostly found within the frame of neoliberal reason, though
they also pertain to racialized rancor (fanned by opportunistic demagogues and our mess of an
unaccountable media), the dethronement of white masculinity from absolute rather than relative
entitlement, and an intensification of nihilism itself amplified by neoliberal
economization.
These contributing factors do not run along separate tracks. Rather, neoliberalism's aim to
displace democracy with markets, morals and liberal authoritarian statism legitimates a white
masculinist backlash against equality and inclusion mandates. Privatization of the nation
legitimates "nativist" exclusions. Individual freedom in a world of winners and losers assaults
the place of equality, access and inclusion in understandings of justice.
LP: Despite your view of democratized capitalism as an "oxymoron," you also observe that
capitalism can be modulated in order to promote equality among citizens. How is this feasible
given the influence of money in politics? What can we do to mitigate the corruption of
wealth?
WB: Citizens United certainly set
back the project of achieving the political equality required by and for democracy. I
wrote about this in a previous book, Undoing the Demos , and Timothy
Kuhner offers a superb account of the significance of wealth in politics in Capitalism V. Democracy: Money in Politics
and the Free Market Constitution. Both of us argue that the Citizens
United decision, and the several important campaign finance and campaign speech decisions
that preceded it, are themselves the result of a neoliberalized jurisprudence. That is,
corporate dominance of elections becomes possible when political life as a whole is cast as a
marketplace rather than a distinctive sphere in which humans attempt to set the values and
possibilities of common life. Identifying elections as political marketplaces is at the heart
of Citizens United.
So does a future for democracy in the United States depend on overturning that decision?
Hardly. Democracy is a practice, an ideal, an imaginary, a struggle, not an achieved state.
It is always incomplete, or better, always aspirational. There is plenty of that aspiration
afoot these days -- in social movements and in statehouses big and small. This doesn't make the
future of democracy rosy. It is challenged from a dozen directions – divestment
from public higher education, the trashing of truth and facticity, the unaccountability of
media platforms, both corporate and social, external influence and trolling, active voter
suppression and gerrymandering, and the neoliberal assault on the very value of democracy we've
been discussing. So the winds are hardly at democracy's back.
I think Milton Friedman was vastly more important than Hayek is shaping the worldview of
American conservatives on economic policy. Until Hayek won the Nobel he was virtually
forgotten in the US. Don't know about the UK, but his leaving the London School of Economics
undoubtedly reduced his influence there. Hayek was very isolated at the University of Chicago
even from the libertarians at the Department of Economics, largely due to methodological
issues. The Chicago economists thought was really more of as philosopher, not a real
economist like them.
Friedman was working for Hayek, in the sense that Hayek instigated the program that
Friedman fronted.
I was amused by a BBC radio piece a couple of years ago in which some City economist was
trying to convince us that Hayek was a forgotten genius who we ought to dig up and worship,
as if he doesn't already rule the World from his seat at God's right hand.
Citizens United: The conservative originalists keep whining about activist judges making
up rights, like the "right to privacy" in Roe v. Wade. Yet they were able to come up with
Citizens United that gave a whole new class of rights to corporations to effectively give
them the rights of individuals (the People that show up regularly in the Constitution,
including the opening phrase). If you search the Constitution, "company", "corporation" etc.
don't even show up as included in the Constitution. "Commerce" shows up a couple of times,
specifically as something regulated by Congress. Citizens United effectively flips the script
of the Constitution in giving the companies doing Commerce the ability to regulate Congress.
I think Citizen's United is the least conservative ruling that the conservative court could
have come up with, bordering on fascism instead of the principles clearly enunciated
throughout the Constitution. It is likely to be the "Dred Scott" decision of the 21st
century.
2. Neo-liberalism is like Marxism and a bunch of other isms, where the principles look
fine on paper until you apply them to real-world people and societies. This is the difference
between Thaler's "econs" vs "humans". It works in theory, but not in practice because people
are not purely rational and the behavioral aspects of the people and societies throw things
out of kilter very quickly. That is a primary purpose of regulation, to be a rational
fly-wheel keeping things from spinning out of control to the right or left. Marxism quickly
turned into Stalinism in Russia while Friedman quickly turned into massive inequality and
Donald Trump in the US. The word "regulate" shows up more frequently in the Constitution than
"commerce", or "freedom" (only shows up in First Amendment), or "liberty" (deprivation of
liberty has to follow due process of law which is a form of regulation). So the Constitution
never conceived of a self-regulating society in the way Hayek and Friedman think things
should naturally work – writing court rulings on the neo-liberal approach is a radical
activist departure from the Constitution.
The foundation was laid for Citizens United long before, I think, when the Supreme
Court decided that corporations were essentially people, and that money was essentially
speech. It would be nice if some justice started hacking away at those erroneous decisions
(along with what they did with the 2nd Amendment in D.C. v Heller .)
I honestly think the corporations are people was good and the money is speech is terrible.
If most of the big corporations were actually treated like people those people would be in
jail. They are treated better than people are now. Poor people, anyway. When your corporation
is too big not to commit crimes, it's too big and should go in time out at least.
My understanding is that corporate personhood arose as a convenience to allow a
corporation to be named as a single entity in legal actions, rather than having to name every
last stockholder, officer, employee etc. Unfortunately the concept was gradually expanded far
past its usefulness for the rest of us.
"If most of the big corporations were actually treated like people those people would be
in jail."
Thats part of the problem: Corporations CANNOT be put in jail because they are
organizations, not people, but they are given the same 'rights' as people. That is
fundamentally part of the problem.
True, but corporations are directed by people who *can* be jailed. Often they are
compensated as if they were taking full liability when in fact they face none. I think its
long past time to revisit the concept of limited liability.
"Limited Liability" is basic to the concept of the corporation. How about some "limited
liability" for individuals? The whole point of neo-liberalism is "lawlessness" or the "Law of
the Jungle" in unfettered markets. The idea is to rationalize raw power, both over society
and the family, the last stand of male dominance, the patriarchy. The women who succeed in
this eco-system, eschew the nurturing feminine and espouse the predatory masculine. "We came,
we saw, he died." Psychopaths all!
The executives need to go to jail. Until then, corporate fines are just a cost of doing
business and white collar lawbreaking will continue. Blowing up the world's financial system
has less legal consequence than doing 80 in a 65 mph zone. Even if they just did civil asset
forfeiture on executives based on them having likely committed a crime while in their house
and using their money would go along ways to cleaning things up.
The whittling away of white collar crime by need to demonstrate intent beyond reasonable
doubt means the executives can just plead incompetence or inattention (while collecting their
$20 million after acquittal). Meanwhile, a poor person with a baggie of marijuana in the
trunk of their car goes to jail for "possession" where intent does not need to be shown, mere
presence of the substance. If they used the same standard of the mere presence of a fraud to
be sufficient to jail white collar criminals, there wouldn't be room in the prisons for poor
people picked up for little baggies of weed.
Actually, if you research the history, the court DID NOT decide that corporations are
people. The decision was made by the secretary to the court, who included the ruling in the
headnote to Santa Clara County v. Southern Pacific Railroad, 1886. The concept was not
considered in the case itself nor in the ruling the judges made. However, it was so
convenient for making money that judges and even at least one justice on the supreme court
publicized the ruling as if it were an actual legal precedent and have followed it ever
since. I am not a lawyer, but I think that ruling could be changed by a statute, whereas
Citizens United is going to require an amendment to the constitution. On the other hand, who
knows? Maybe the five old, rich, Republican, Catholic Men will rule that it is embedded in
the constitution after all. I think it would be worth a try.
"Neo-liberalism is like Marxism and a bunch of other isms, where the principles look fine
on paper until you apply them to real-world people and societies."
Marx analysed 19th Century capitalism; he wrote very little on what type of system should
succeed capitalism. This is in distinct contrast to neo-liberalism which had a well plotted
path to follow (Mirowski covers this very well). Marxism did not turn into Stalinism; Tsarism
turned into Leninism which turned into Stalinism. Marx had an awful lot less to do with it
than Tsar Nicholas II.
+1000. I think it was Tsar Nicholas II who said, L'etat, c'est moi"./s; Lenin just
appropriated this concept to implement his idea of "the dictatorship of the proletariat."
"Neo-liberalism is like Marxism and a bunch of other isms, where the principles look fine
on paper until you apply them to real-world people and societies."
I'm sorry, but this is fundamentally intellectually lazy. Marxism isn't so much a way to
structure the world, like Neoliberalism is, but a method of understanding Capitalism and
class relations to capitalism.
Edit: I wrote this before I saw New Wafer Army's post since I hadnt refreshed the page
since I opened it. They said pretty much what I wanted to say, so kudos to them.
These critiques of neoliberalism are always welcome, but they inevitably leave me with
irritated and dissatisfied with their failure or unwillingness to mention the political
philosophy of republicanism as an alternative, or even a contrast.
The key is found in Brown's statement " It also needed to be insulated from
instrumentalism by concentrated economic interests, from aspiring plutocrats to the masses.
The solution, for him [von Hayek], was de-democratizing the state itself. He was, more
generally, opposed to robust democracy and indeed to a democratic state."
Contrast this to Federalist Paper No. 10, Madison's famous discourse on factions.
Madison writes that 1) factions always arise from economic interests ["But the most common
and durable source of factions has been the various and unequal distribution of property."],
and 2) therefore the most important function of government is to REGULATE the clash of these
factions ["The regulation of these various and interfering interests forms the principal task
of modern legislation, and involves the spirit of party and faction in the necessary and
ordinary operations of the government."
In a very real sense, neoliberalism is an assault on the founding principles of the
American republic.
Which should not really surprise anyone, since von Hayek was trained as a functionary of
the Austro-Hungarian empire. And who was the first secretary of the Mont Pelerin Society that
von Hayen founded to promote neoliberalist doctrine and propaganda? Non other than Max Thurn,
of the reactionary Bavarian Thurn und Taxis royal family.
Madison's Federalist 10 is much like Aristotle's Politics and the better Roman historians
in correctly tracing back the fundamental tensions in any political community to questions of
property and class.
And, much like Aristotle's "mixed regime," Madison proposes that the best way of
overcoming these tensions is to institutionalize organs of government broadly representative
of the two basic contesting political classes–democratic and oligarchic–and let
them hash things out in a way that both are forced to deal with the other. This is a
simplification but not a terribly inaccurate one.
The problem though so far as I can tell is that it almost always happens that the
arrangement is set up in a way that structurally privileges existing property rights
(oligarchy) over social freedoms (democracy) such that the oligarchic class quickly comes to
dominate even those governmental organs designed to be "democratic". In other words, I have
never seen a theorized republic that upon closer inspection was not an oligarchy in
practice.
1) Support welfare for the banks (e.g. deposit guarantees) and the rich (e.g. non-negative
yields and interest on the inherently risk-free debt of monetary sovereigns).
2) Seek to regulate the thievery inherent in 1).
3) Bemoan the inevitable rat-race to the bottom when 2) inevitably fails because of
unenforceable laws, such as bans on insider trading, red-lining, etc.
Shorter: Progressives ENABLE the injustice they profess, no doubt sincerely at least in
some cases, to oppose.
Rather stupid from an engineering perspective, I'd say. Or more kindly, blind.
I'm fine with the federal government providing basic banking services (which would
inherently protect depositors) but your initial post didn't say anything about that. If we
continue with a private banking system I want deposit guarantees even if they somehow
privilege the banks better than nothing
I have read that originally conservatives (including many bankers) opposed deposit
insurance because it would lead people to be less careful when they evaluated the banking
institution they would entrust with their money. They did not seem to notice that however
much diligence depositors used, they ended up losing their life's savings over and over. Just
as they do not seem to notice that despite having employer-provided insurance tens of
thousands of people every year go bankrupt because of medical bills. Funny how that
works.
Adding that rather than deposit guarantees, the US government could have expanded the
Postal Savings Service to provide the population with what private banks had so miserably
failed to provide – the safe storage of their fiat.
The banking system was failing in 1932, as was the financial system in 2008, not
necessarily because of any lack of solvency of an individual business although some were, but
because of the lack of faith in the whole system; bank panics meant that every depositor was
trying to get their money out at the same time. People lost everything. It is only the faith
in the system that enables the use of bits of paper and plastic to work. So having a
guarantee in big, bold letters of people's savings is a good idea.
Personally, I see little distance between the Neo Liberal treatment of Market and Naked
Greed, coupled with a complete rejection of Rule of Law for the Common Good.
" It means legitimating assertions of personal freedom against equality mandates (and when
corporations are identified as persons, they too are empowered to assert such freedom)."
"We need to understand why reaction to the neoliberal economic sinking of the middle and
working class has taken such a profoundly anti-democratic form." Really? Does anybody here
believe that? This reads like another clumsy attempt to dismiss actual popular anger against
neoliberalism in favour of pearl-clutching progressive angst, by associating this anger with
the latest target for liberal hate, in this case blah blah patriarchy blah blah. The reality
is that liberalism has always been about promoting the freedom of the rich and the strong to
do whatever they feel like, whilst keeping the ordinary people divided and under control.
That's why Liberals have always hated socialists, who think of the good of the community
rather than of the "freedom" of the rich, powerful and well connected.
The "democracy" that is being defended here is traditional elite liberal democracy, full of
abstract "rights" that only the powerful can exert, dominated by elite political parties with
little to choose between them, and indifferent or hostile to actual freedoms that ordinary
people want in their daily lives. Neoliberalism is simply a label for its economic views
(that haven't changed much over the centuries) whereas social justice is the label for its
social wing (ditto).
I think of this every time I wall home through the local high street, where within thirty
metres I pass two elderly eastern European men aggressively begging. (It varies in France,
but this is slightly closer than the average for a city). I reflect that twenty years of
neoliberal policies in France have given these people freedom of movement, and the freedom to
sit there in the rain with no home, no job and no prospects. Oh, and now of course they are
free to marry each other.
I agree with your analysis and assessment of Wendy Brown, as she is portrayed in her
statements in this post. However I quibble your assertion: "Neoliberalism is simply a label
for its economic views (that haven't changed much over the centuries) whereas social justice
is the label for its social wing (ditto)." The word "Neoliberalism" is indeed commonly used
as a label as you assert but Neoliberalism as a philosophy is obscured in that common
usage.
At its heart I believe Neoliberalism might best be characterized as an epistemology based
on the Market operating as the all knowing arbiter of Truth. Hayek exercises notions of
'freedom' in his writing but I believe freedom is a secondary concern once it is defined in
terms of its relation to the decisions of the Market. This notion of the Market as
epistemology is completely absent from Wendy Brown's discussion of her work in this post.
Her assertion that "neoliberalism's aim [is] to displace democracy with markets, morals
and liberal authoritarian statism legitimates a white masculinist backlash against equality
and inclusion mandates" collapses once the Market is introduced as epistemology.
Neoliberalism does not care one way or another about any of Wendy Brown's concerns. Once the
Market decides -- Truth is known. As a political theorist I am surprised there is no analysis
of Neoliberalism as a tool the Elite have used to work their will on society. I am surprised
there is no analysis of how the Elites have allowed themselves to be controlled within and
even displaced by the Corporate Entities they created and empowered using their tool. I am
surprised there is no analysis of the way the Corporate Entities and their Elite have worked
to use Neoliberalism to subordinate nation states under a hierarchy driven by the decisions
of the World Market.
[I admit I lack the stomach to read Hayek -- so I am basing my opinions on what I
understand of Phillip Mirowski's analysis of Neoliberalism.]
I don't disagree with you: I suppose that having been involved in practical politics
rather than being a political theorist (which I have no pretensions to being) I am more
interested of the reality of some of these ideas than their theoretical underpinnings. I have
managed to slog my way through Slobodian's book, and I think your presentation of Hayek's
writing is quite fair: I simply wonder how far it is actually at the origin of the
destruction we see around us. I would suggest in fact that, once you have a political
philosophy based on the value-maximising individual, rather than traditional considerations
of the good of society as a whole, you eventually wind up where we are now, once the
constraints of religious belief, fear of popular uprisings , fear of Communism etc. have been
progressively removed. It's for that reason that I argue that neoliberalism isn't really new:
it represents the essential form of liberalism unconstrained by outside forces – almost
a teleological phenomenon which, as its first critics feared, has wound up destroying
community, family, industries, social bonds and even – as you suggest – entire
nation states.
Your response to my comment, in particular your assertion "neoliberalism isn't really new"
coupled with your assertion apparently equating Neoliberalism with just another general
purpose label for a "political philosophy based on the value-maximizing individual, rather
than traditional ", is troubling. When I put your assertions with Jerry B's assertion at 6:58
pm:
" many people over focus on a word or the use of a word and ascribe way to literal view of a
word. I tend to view words more symbolically and contextually."
I am left wondering what is left to debate or discuss. If Neoliberalism has no particular
meaning then perhaps we should discuss the properties of political philosophies based on the
value-maximizing-individual, and even that construct only has meaning symbolically and
contextually, which is somehow different than the usual notion of meaning as a denotation
coupled with a connotation which is shared by those using a term in their discussion -- and
there I become lost from the discussion. I suppose I am too pedantic to deviate from the
common usages of words, especially technical words like Neoliberalism.
Considering how elites throughout history have used religion as a bulwark to guard their
privileges, it should be of no surprise that they are building a new one, only this time they
are building one that appeals to the religious and secular alike. Neoliberalism will be very
difficult to dismantle.
But what ironies we create. Citizens United effectively gave political control to the big
corporations. In a time when society has already evolved lots of legislation to limit the
power and control of any group and especially in commercial/monopoly cases. So that what CU
created was a new kind of "means of production" because what gets "produced" these days is at
least 75% imported. The means of production is coming to indicate the means of political
control. And that is fitting because ordinary people have become the commodity. Like
livestock. So in that sense Marx's view of power relationships is accurate although
civilization has morphed. Politics is, more and more, the means of production. The means of
finance. Just another reason why we would achieve nothing in this world trying to take over
the factories. What society must have now is fiscal control. It will be the new means of
production. I'm a dummy. I knew fiscal control was the most important thing, but I didn't
quite see the twists and turns that keep the fundamental idea right where it started.
Exactly. The writer seems determined to tie in neoliberalism with a broader conservative
opposition to modern social justice movements, when in reality neoliberalism (the 'neo' part
anyway) was more than happy to co-opt feminism, anti-racism, etc., into its narrative. The
more the merrier, as 'rights' became associated entirely with social issues, and not economic
rights.
The co-optation neoliberalism has exacted on rights movements has dovetailed nicely with
postmodernism's social-constructivism, an anti-materialist stance that posits discourse as
shaping the world and one that therefore privileges subjectivity over material reality.
What this means in practice is that "identity" is now a marketplace too, in which
individuals are naming their identities as a form of personal corporate branding. That's why
we have people labeling themselves like this: demisexual queer femme, on the spectrum, saying
hell no to my tradcath roots, into light BDSM, pronouns they/them.
And to prove this identity, the person must purchase various consumer products to garb and
decorate themselves accordingly.
So the idea of civil rights has now become utterly consumerist and about awarding those
rights based on subjective feelings rather than anything to do with actual material
exploitation.
The clue is in the way the words "oppression" and "privilege" are used. Under those words,
exploitation, discrimination, disadvantage, and simple dislike are conflated, though they're
very different and involve very different remedies.
The law in its majestic equality forbids the rich as well as the poor from sleeping under
bridges and stealing bread = classical Liberalism.
The bizarre thing is to meet younger neoliberal middle class people whom neoliberalism has
priced out of major cities, who have hardly any real savings, and who still are on board with
the project. The dream dies hard.
David – I enjoy reading your comments on NC as they are well reasoned and develop an
argument or counter argument. The above comment reads more like a rant. I do not disagree
with most of your comment. From my experience with Wendy Brown's writing your statement below
is not off base.:
This reads like another clumsy attempt to dismiss actual popular anger against
neoliberalism in favour of pearl-clutching progressive angst, by associating this anger with
the latest target for liberal hate, in this case blah blah patriarchy blah blah
However, in reading Wendy Brown's comments I did not have the same emotional reaction that
comes across in your comment. I have read the post twice to make sure I understand the points
Wendy Brown is trying to make and IMO she is "not wrong" either. . I would advise you to not
"throw out the baby with the bathwater".
As KLG mentions below, WB is a very successful academic at Berkeley who worked with
Sheldon Wolin as a graduate student IIRC (Sheldon Wolin wrote a terrific book entitled
Democracy Incorporated), so she is not just some random journalist.
Much of WB's writing has gender themes in it and there are times I think she goes over the
top, BUT, IMO there is also some truth to what she is saying. Much of the political power and
economic power in the US and the world is held by men so that may be where WB's reference to
patriarchy comes in.
How could there be patriarchy with men begging in the streets is a valid point. And that
is where I divert with WB, in that the term patriarchy paints with too broad a brush. But
speaking specifically to neo-liberalism and not liberalism as you refer to it, that is where
WB's reference to patriarchy may have some merit. Yes, there are many exceptions to the
neoliberalism and patriarchy connection such as Hillary Clinton, Margaret Thatcher, etc., so
again maybe painting with too broad a brush, but it would be wise not to give some value.
The sociologist Raewyn Connell has written about the connection between neoliberalism and
version of a certain type of masculinity embedded with neoliberalism. Like Wendy Brown,
Connell seems to gloss over the examples of Hillary Clinton, Margaret Thatcher, and the class
based elite bourgeois feminism as counterpoints to neoliberal patriarchy. There are
exceptions to every rule.
Women have made enormous strides in politics and the boardroom. But in the halls of political
and economic power the majority of the power is still held by men, and until women become
close to 50% or more of the seats of power, to ignore the influence of patriarchy/oligarch
version of masculinity(or whatever term a person is comfortable with) on neoliberalism would
be foolish.
Neoliberalism is simply a label for its economic views (that haven't changed much over
the centuries) whereas social justice is the label for its social wing (ditto).
I disagree. IMO, neoliberalism is a different animal than the "traditional elite liberal
democracy", and neoliberalism is much darker and as WB mentions "Neoliberalism thus aims to
de-regulate the social sphere in a way that parallels the de-regulation of markets".
If you have not I would highly recommend reading Sheldon Wolin's Democracy Incorporated:
Managed Democracy and the Specter of Inverted Totalitarianism It is an excellent book.
I haven't read that book by Wolin, though his Politics and Vision is in the bookcase next
to me. I'll try to get hold of it. I didn't know she was his student either.
I think the issues she raises about gender are a different question from neoliberalism
itself, and that it's not helpful to believe that you can fight neoliberalism by
"legitimating assertions of personal freedom against equality mandates" whatever that means.
Likewise, it's misleading to suggest that "Privatization of the nation legitimates "nativist"
exclusions", since the actual result is the opposite, as you will realise when you see that
London buses have the same logo as the ones in Paris, and electricity in the UK is often
supplied by a French company, EDF. Indeed, to the extent that there is a connection with
"nativism" it is that privatisation has enabled an international network of distant and
unaccountable private companies to take away management of national resources and assets from
the people. Likewise, neoliberalism is entirely happy to trample over traditional gender
roles in the name of efficiency and increasing the number of workers chasing the same
job.
In other words, I was irritated (and sorry if I ranted a bit, I try not to) with what I saw
as someone who already knows what the answer is, independent of what the question may be. I
suspect her analysis of, say, Brexit, would be very similar. I think that kind of person is
potentially dangerous.
==I think the issues she raises about gender are a different question from neoliberalism
itself==
Again as I said in my comment I would agree in a theoretical sense that gender and
neoliberalism are different issues but again I believe there is a thread of gender, i.e.
oligarchic patriarchy, of the type of neoliberalism that WB talks about.
===not helpful to believe that you can fight neoliberalism by "legitimating assertions of
personal freedom against equality mandates" whatever that means===
What I think that means is the more libertarian version of neoliberalism. That maybe where
our differences lie, in that my sense is WB is talking about a specific form of neoliberalism
and your view is broader.
===it's misleading to suggest that "Privatization of the nation legitimates "nativist"
exclusions"===
On this I see your disagreement with WB and understand your reference to "that
privatisation has enabled an international network of distant and unaccountable private
companies to take away management of national resources and assets from the people".
Where I think WB is coming from is the more nationalistic, Anglosphere that the Trump
administration is pushing with his border wall, etc. In this WB does expose her far left
priors but again there is some value in her points. From her far left view my sense it Wendy
Brown is reacting to the sense that Trump wants to turn the US into the US of the 1950's and
60's and on many fronts that ship has sailed.
=== Indeed, to the extent that there is a connection with "nativism" it is that
privatisation has enabled an international network of distant and unaccountable private
companies to take away management of national resources and assets from the people. Likewise,
neoliberalism is entirely happy to trample over traditional gender roles in the name of
efficiency and increasing the number of workers chasing the same job. ===
Excellent point and having read some of Wendy Brown's books and paper is a point she would
agree with while still seeing some patriarchial themes running through neoliberalism. To your
point above I would recommend reading some of Cynthia Enloe's work specifically Bananas,
Beaches and Bases.
====I think that kind of person is potentially dangerous====
Wow. Dangerous??? Clearly the post has hit a nerve. Many people in our current society are
dangerous but IMO Wendy Brown is not one of them. A bit hyperbolic in her focus on gender?
Maybe but not wrong. A bit too far left (of the bleeding heart kind)? Maybe. But to call
someone who worked for Sheldon Wolin dangerous. C'mon man.
I have gotten into disputes on NC as IMO many people over focus on a word or the use of a
word and ascribe way to literal view of a word. I tend to view words more symbolically and
contextually. I do not overreact to the use a word and instead try to step back and glean a
message or the word in context of what is the person trying to say? So for instance when WB
uses the phrase "Privatization of the nation" I am not going to react because my own
interpretation is WB is reacting to Trump's nationalism and not to the type of privatization
that your example of London shows.
I am disappointed that most of the comments to this post seem to take a critical view of
Wendy Brown's comments. Is she a bit too far left and gender focused (identity political) for
my tastes? Yes and that somewhat hurts her overall message and the arguments she is trying to
discuss which are not unlike her mentor Sheldon Wolin.
Thanks for the reply David. My sense is we have what I call a "positional" debate (i.e.
Tastes Great! Less Filling!). And positional debates tend to go nowhere.
When WB speaks of gender, note that she then mentions sex, followed by race. By "gender"
she is NOT talking about the rights and power of female people under neoliberalism.
She is speaking of the rights of people to claim, that they are the opposite sex and
therefore entitled to the rights, set-asides and affirmative discrimination permitted that
sex -- for instance, to compete athletically on that sex's sports teams, to be imprisoned if
convicted in that sex's prisons, to be considered that sex in instances where sex matters in
employment such as a job as a rape counselor or a health care position performing intimate
exams where one is entitled to request a same-sex provider, and to apply for scholarships,
awards, business loans etc. set aside for that sex.
WB, in addition to being a professor at Berkeley, is also the partner of Judith Butler,
whose book "Gender Trouble" essentially launched the postmodern idea that subjective sense of
one's sex and how one enacts that is more meaningful than the lived reality people experience
in biologically sexed bodies.
By this reasoning, a male weightlifter can become a woman, can declare that he's in fact
always been a woman -- and so we arrive at the farce of a male weightlifter (who, granted,
must under IOC policy reduce his testosterone for one year to a low-normal male range that is
5 standard deviations away from the female mean) winning a gold medal in women's
weightlifting in the Pan-Pacific games and likely to win gold again in the 2020 Olympics.
If that's not privileging individual freedom over collective rights, I don't know what
is.
>That's how it is possible to be simultaneously libertarian, ethnonationalist and
patriarchal today: The right's contemporary attack on "social justice warriors" is straight
out of Hayek.
Anyone who could write such a statement understands neither libertarianism nor
ethnonationalism. The last half-decade has seen a constant intellectual attack by
ethnonationalists against libertarianism. An hour's examination of the now-defunct Alt
Right's would confirm this.
Similarly, the contemporary attack on SJW's comes not out of Hayek, but from Gamergate. If
you do not know what Gamergate is, you do not understand where the current rightwing and
not-so-rightwing thrust of contemporary white identity politics is coming from. My guess is
Brown has never heard of it.
Far from trying to uphold patriarchy, Contemporary neoliberalism seeks a total atomization
of society into nothing but individual consumers of product. Thus what passes for
liberalization of a society today consists in little more than staging sham elections,
opening McDonalds, and holding a gay pride parade.
This is why ethnonationalism and even simple nationalism poses a mortal threat to
neoliberalism, in a way that so-called progressives never will: both are a threat to
globalization, while the rainbow left has shown itself to be little more than the useful
idiots of capital.
Brown strikes me as someone who has a worldview and will distort the world to fit that
view, no matter how this jibes with facts or logic. The point is simply to array her bugbears
into a coalition, regardless of how ridiculous it seems to anyone who knows anything about
it.
Actually, maybe not "Bingo," if by that you mean Wendy Brown is a typical representative
of "pearl clutching progressive angst." Yes, WB is a very successful academic at Berkeley who
worked with Sheldon Wolin as a graduate student IIRC (who was atypical in just about every
important way), but this book along with its predecessor Undoing the Demos are much
stronger than the normative "why are the natives so restless?" bullshit coming from my
erstwhile tribe of "liberals," most of whom are incapacitated by a not unrelated case of
Trump Derangement Syndrome.
Hayek was eloquent. Too bad he didn't establish some end goals. Think of all the misery
that would have been avoided. I mean, how can you rationalize some economic ideology to
"deregulate the social sphere" – that's just the snake eating its tail. That's what
people do who don't have boundaries. Right now it looks like there's a strange bedfellowship,
a threesome of neoliberal nazis, globalists, and old communists. Everybody and their dog
wants the world to work – for everyone. But nobody knows how to do it. And we are
experiencing multiple degrees of freedom to express our own personal version of Stockholm
syndrome. Because identity politics. What a joke. Maybe we need to come together over
something rational. Something fairly real. Instead of overturning Citizens United (which is
absurd already), we should do Creatures United – rights for actual living things on
this planet. And then we'd have a cause for the duration.
Well stated. The -isms seem like distractions, almost red herrings leading us down the
primrose path to a ceaseless is/ought problem. Rather than discuss the way the world is, we
argue how it ought to be.
Not to say theory, study, and introspection aren't important. More that we appear
paralyzed into inaction since everyone doesn't agree on the One True Way yet.
Let us not get to simplistic here. It helps to understand the origins of political,
economic, and even social ideals. The origin of modern capitalism, for there were
different and more limited earlier forms, was in the Dutch Republic and was part of the
efforts of removing and replacing feudalism; liberalism arose from the Enlightenment, which
itself was partly the creation of the Wars of Religion, which devastated Europe. The Thirty
Years War, which killed ½ of the male population of the Germanies, and is considered
more devastating to the Germans than both world wars combined had much of its energy from
religious disagreements.
The Age of Enlightenment, along with much of political thought in the Eighteenth Century,
was a attempt to allow differences in belief, and the often violent passions that they can
cause, to be fought by words instead of murder. The American Constitution, the Bill of
Rights, the whole political worldview, that most Americans unconsciously have, comes from
from those those times.
Democracy, Liberalism, even Adam Smith's work in the Wealth of Nations were
attempts to escape the dictatorship of kings, feudalism, serfdom, violence. Unfortunately,
they have all been usurped. Adam Smith's life's work has been perverted, liberalism has been
used to weaken the social bonds by making work and money central to society. Their evil child
Neoliberalism, a creation of people like Hayek, was supposed to reduce wars (most of the
founders were survivors of the world wars) and was supposed to be be partly
antidemocratic.
Modern Neoliberalism mutates and combines the partly inadvertent atomizing effects of the
ideas of the Enlightenment, Liberalism, Dutch and British Capitalism, the Free Markets of
Adam Smith, adds earlier mid twentieth century Neoliberalism as a fuel additive, and creates
this twisted flaming Napalm of social atomizing; it also clears out any challenges to money
is the worth of all things. Forget philosophy, religion, family, government, society. Money
determines worth. Even speech is only worth the money spent on it and not any inherent worth.
Or the vote.
"liberalism has been used to weaken the social bonds by making work and money central to
society"
I think you may have swapped the cart and the horse.
Money evolved as a way of aiding and organizing useful interactions within groups larger
than isolated villages of a hundred people.
It also enabled an overall increase in wealth through specialization.
Were it not for money, there would be a difficult mismatch between goods of vastly
differing value. A farmer growing wheat and carrots has an almost completely divisible supply
of goods with which to trade. Someone building a farm wagon a month, or making an iron plough
every two weeks has a problem exchanging that for items orders of magnitude less
valuable.
Specialization is a vital step in improving resources and capabilities within societies.
I've hung out with enough friends who are blacksmiths to know that every farmer hammering out
their own plough is a non-starter, for many reasons.
And I've followed enough history to know that iron ploughs mean a lot more food, which
allows someone to specialize in making ploughs rather than growing food for personal
consumption.
The obvious need is for a way of dividing the value of the plough into many smaller
amounts that can be used to obtain grain, cloth, pottery, and so on.
While the exact form of money is not rigidly fixed, at lower technological levels one
really needs something that is portable, doesn't spontaneously self destruct, and has a
clearly definable value . and exists in different concentrations of worth, to allow
flexibility in transport and use.
Various societies have come up with various tokens of value, from agricultural products to
bank drafts, each with different advantages and disadvantages, but for most of history,
precious metals, base metals, and coinage have been the most practical representation of
exchangeable value.
Money is almost certainly an inevitable and necessary consequence of the invention of
agriculture, and the corresponding increase in population density.
Agreed, but as I've suggested elsewhere liberalism always had the capacity within it to
destroy social bonds, societies and even nations, it's just that, at the time, this was
hidden behind the belief that a just God would not allow it to happen. I see liberalism less
as mutating or being usurped than finally being freed of controls. Paradoxically, of course,
this "freedom" requires servitude for others, so that no outside forces (trades unions for
example) can pollute the purity of the market. It's the same thing with social justice:
freedom for identity group comes through legal controls over the behaviour of others, which
is why the contemporary definition of a civil rights activist is someone who wants to
introduce lots of new laws to prevent people from doing things.
frankly, I don't believe the "monsters" neoliberalism has helped create are an unwanted
side effect of their approach, on the contrary, neoliberalism needs those "monsters", like
the authoritarian state, to impose itself on society (ask the mutilated gilets jaunes).
Repression, inequality, poverty, abuse, dispossession, disfranchisement, enviromental
degradation are certainly "monstrous" to those who have to endure them, but not to those who
profit the most from the system and sit on the most powerful positions. Of course, the degree
of exposure to those monstrosities is dependent on the relative position in the pyramid
shaped neoliberal society, the bottom has to endure the most. On the other side, the middle
classes tend to support the neoliberal model as long as it ensures them a power position
relative to the under classes, and the moment those middle classes feel ttheir position
relative to the under classes threatened, the switch to open fascism is not far, we can see
this in Bolivia.
"neoliberalism needs those "monsters", like the authoritarian state, to impose itself on
society"
If I understood Quinn Slobodian's "Globalists" correctly it was precisely this -- that the
neoliberal project while professing that markets were somehow "natural" spent an inordinate
amount of time working to ensure that legal structures be created to insulate them from the
dirty demos.
Their actions in this respect don't square with a serious belief that markets are natural
at all -- if they were, they wouldn't need so damned much hothousing, right?
I think the argument was that markets were "natural", but vulnerable to interference, and
so had to be protected by these legal structures. There's a metaphor there, but it's too late
here for me to find it.
===spent an inordinate amount of time working to ensure that legal structures be created
to insulate them from the dirty demos===
I enjoyed Slobodian's book as well. Interestingly, there is a new book out called The Code
of Capital: How the Law Creates Wealth and Inequality by Katharina Pistor that discusses
those "legal structures".
If you check out Katharina Pistor on Twitter, you can also find good commentaries and even
videos of talks discussing the book and the matter – it is very edifying to open your
eyes to the fundamental role of law in creating such natural phenomena as markets and, among
other things, billionaires.
Thanks deplorado. I do not frequent Pistor's twitter page as much as I would like.
In reading Pistor's book and some of the interviews with Pistor and some of her papers
discussing the themes in the book, I had the same reaction as when I read some of Susan
Strange's books such as The Retreat of the State: complete removal of any strand of
naïveté I may have had as to how the world works. And how hard it will be to undo
the destruction.
As you mention the "dirty demos" above, one of Wendy Brown's recent books was Undoing the
Demos: Neoliberalism's Stealth Revolution.
Never having read any of Susan Strange's writings, I decided to find a book review of The
Retreat of the State. I found this one and found it very interesting, enough so that I'll go
to abebooks.com and get a copy to read.
Hmm. Definitely Monsters from the Id at work here. I am going with the theory that the
wealthier class pushed this whole project all along. In the US, Roosevelt had cracked down
and imposed regulations that stopped, for example, the stock market from being turned into a
casino using ordinary people's saving. He also pushed taxes on them that exceeded 90% which
tended to help keep them defanged.
So lo and behold, after casting about, a bunch of isolated rat-bag economic radicals was
found that support getting rid of regulations, reducing taxes on the wealthy and anything
else that they wanted to do. So money was pumped into this project, think tanks were taken
over or built up, universities were taken over to teach this new theories, lawyers and future
judges were 'educated' to support their fight and that is what we have today.
If WW2 had not discredited fascism, the wealthy would have use this instead as both Mussolini
and Hitler were very friendly to the wealthy industrialists. But they were so instead they
turned to neoliberalism instead. Yes, definitely Monsters from the Id.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics. https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s
He thinks we have been on the wrong path for one hundred years.
This is why we think small state, unregulated capitalism is something it never was when it
existed before.
We don't understand the monetary system or how banks work because:
Our knowledge of privately created money has been going backwards since 1856.
Credit creation theory -> fractional reserve theory -> financial intermediation
theory
"A lost century in economics: Three theories of banking and the conclusive evidence" Richard
A. Werner http://www.sciencedirect.com/science/article/pii/S1057521915001477
This is why we come up with crazy ideas like "financial liberalisation".
If corporations are to be people, then they, like the extremely wealthy, need to be reined
in politically. One step we could take is to only allow money donations to political
campaigns to take place when the person is subject or going to be subject to the politicians
decisions. I live in Illinois, I should be able to donate money to the campaigns of those
running for the U.S> Senate from Illinois, but Utah? If I donate money to a Utah candidate
for the Senate, I am practicing influence peddling because that Senator does not represent
me.
If corporations are to be people, they need a primary residence. The location of their
corporate headquarters should suffice to "place" them, and donations to candidates outside of
their set of districts would be forbidden.
Of course, we do have free speech, so people are completely free to speak over the
Internet, TV, hire halls in the district involved and go speak in person. They just couldn't
pay to have someone else do that for them.
To allow unfettered political donations violates the one ma, one vote principle and also
encourages influence peddling. In fact, it seems as if our Congress and Executive operates
only through influence peddling.
"The Syrian president said he saw links between the death of Le Mesurier and the deaths of
US financier Jeffry Epstein, Al Qaeda chieftain Osama bin Laden and Islamic State (outlawed
in Russia) leader Abu Bakr al-Baghdadi. 'American billionaire Jeffrey Epstein was killed
several weeks ago, they said he had committed suicide in jail. However, he was killed because
he knew a lot of vital secrets connected with very important people in the British and
American regimes, and possibly in other countries as well,' Assad pointed out....
"'Both of us know that they [representatives of the White Helmets] are naturally part of
Al Qaeda. I believe that these people, as well as the previously liquidated bin Laden and
al-Baghdadi had been killed chiefly because they knew major secrets. They turned into a
burden once they had played out their roles. A dire need to do away with them surfaced after
they had fulfilled their roles,' Assad explained.
"According to him, the death of Le Mesurier is the work of the CIA that got rid of the
founder of the White Helmets independently or through the intelligence services of other
countries. 'Of course, this is the work of the secret services. But which secret service?
When we talk about Western secret services in general, about Turkish and some other ones in
our region, these are not the secret services of sovereign states, rather these are
departments of the main intelligence agency - the CIA,' he stressed."
Many will nod their heads in agreement with Assad's hypothesis. Indeed, one of the more
amazing happenings related to taking terrorists prisoners is the resulting lack of
information related to the NATO-Terrorist bond we know exists but rarely sees the light of
day in the form of documents, radio intercept logs and other items, although we're constantly
treated to a massive parade of captured arms and munitions including chemical weapon
precursors stamped with their NATO country of origin.
I don't know how well this will retain format but it is the latest from the US Fed on
providing "liquidity" to the private banking system
"
Friday, 11/15/2019- Thursday, 12/12/2019 The Desk plans to conduct overnight repo operations
on each business day as well as a series of term repo operations over the specified period.
OVERNIGHT OPERATIONS DATES AGGREGATE OPERATION LIMIT
Friday, 11/15/2019 - Thursday, 12/12/2019 At least $120 billion
TERM OPERATION DATE MATURITY DATE TERM AGGREGATE OPERATION LIMIT
Tuesday, 11/19/2019 Tuesday, 12/3/2019 14-days At least $35 billion
Thursday, 11/21/2019 Thursday, 12/5/2019 14-days At least $35 billion
Monday, 11/25/2019 Monday, 1/6/2020 42-days At least $25 billion
Tuesday, 11/26/2019 Tuesday, 12/10/2019 14-days At least $35 billion
Wednesday, 11/27/2019 Thursday, 12/12/2019 15-days At least $35 billion
Monday, 12/2/2019 Monday, 1/13/2020 42-days At least $15 billion
Tuesday, 12/3/2019 Tuesday, 12/17/2019 14-days At least $35 billion
Thursday, 12/5/2019 Thursday, 12/19/2019 14-days At least $35 billion
Monday, 12/9/2019 Monday, 1/6/2020 28-days At least $15 billion
Tuesday, 12/10/2019 Monday, 12/23/2019 13-days At least $35 billion
Thursday, 12/12/2019 Thursday, 12/26/2019 14-days At least $35 billion
"
Some take away quotes from various ZH postings
"
In short, the Fed's dual mandate has been replaced by a single mandate of promoting financial
stability (or as some may say, boosting JPMorgan's stock price) similar to that of the
ECB.
Here BofA adds ominously that "by deciding to dynamically assess bank demand for reserves
and reduce the risk of air pockets in repo markets, we believe the Fed has entered
unchartered territory of monetary policy that may stretch beyond its dual mandate." And the
punchline: "By running balance-sheet policy to ensure overnight funding markets remain flush,
the Fed is arguably circumventing the most important brake on excess leverage: the
price."
So if NOT QE is in fact, QE, and if the Fed is once again in the price manipulation
business, what then?
According to BofA's Axel, the most worrying part of the Fed's current asset purchase
program is the realization that an ongoing bank footprint in repo markets is required to
maintain control of policy rates in the new floor system, or as we put it less politely,
banks are now able to hijack the financial system by indicating that they have an overnight
funding problem (as JPMorgan very clearly did) and force the Fed to do their (really
JPMorgan's) bidding.
And this is where BofA's warning hits a crescendo, because while repo is fully
collateralized and therefore contains negligible counterparty credit risk, "there may be a
situation in which banks want to deleverage quickly, for example during a money run or a
liquidation in some market caused by a sudden reassessment of value as in 2008."
Got that? Going forward please refer to any market crash as a "sudden reassessment of
value", something which has become impossible in a world where "value" is whatever the Fed
says it is... Well, the Fed or a bunch of self-serving venture capitalists, who pushed the
"value" of WeWork to $47 billion just weeks before it was revealed that the company is
effectively insolvent the punch bowl of endless free money is taken away.
Therefore, to Bank of America, this new monetary policy regime actually increases systemic
financial risk by making repo markets more vulnerable to bank cycles. This, as the bank
ominously warns, "increases interconnectedness, which is something regulators widely
recognize as making asset bubbles and entity failures more dangerous."
It is, however, BofA's conclusion that we found most alarming: as Axel writes, in his
parting words:
"some have argued, including former NY Fed President William Dudley, that the last
financial crisis was in part fueled by the Fed's reluctance to tighten financial conditions
as housing markets showed early signs of froth. It seems the Fed's abundant-reserve regime
may carry a new set of risks by supporting increased interconnectedness and overly easy
policy (expanding balance sheet during an economic expansion) to maintain funding conditions
that may short-circuit the market's ability to accurately price the supply and demand for
leverage as asset prices rise."
What I didn't include in comment # 137 above but did in the last Weekly Open Thread is the
following about the recent NOT SHORT TERM actions of the US Fed:
The POMO is a Permanent Open Market Operation (purchases from the primary private banks of
Treasuries & MBS) that bought $20 billion between mid-August to mid-September, another
bought $20 billion between mid-September to mid-October and $60 billion between mid-October
to mid-November....totaling $100 billion of US taxpayers money, so far, and is expected to
continue at the $60 billion/month until, supposedly, the middle of next year. (This is the
one that should concern folks the most because the economy has supposedly not crashed yet and
here the Fed is "foaming the runway" of the private banking system on the backs of Americans
already
@ William Gruff # 156 who wrote
"
There is no increase in the domestic US production of anything but bullshit, which America is
cranking out in record quantities, and with delusional fascists leading that productivity
surge.
"
I agree and want to summarize my comments # 137, 138 to add that on top of the manufacturing
recession that you write of and link to that the US has been in a financial recession since
the August/September time frame.
The US Fed has and continues to foam the private banking runway with billions of dollars
to prop up and delay price/value assessment. One reason that I can think of for that is the
coming IPO of Aramco for Saudi Arabia.
Another reason is likely to be a huge game of musical chairs being played where those in
control are arranging a specific set of very few chairs to be available for them when the
music stops. It will all be legal of course since all these financial derivative instruments
that will be in place will have Super-Priority in bankruptcy which gives those creditors of a
bankrupt debtor (America) the right to receive payment before others who would seem to have
superior claims to money or assets. The other losers in this case will be Social Security,
pension funds, state and municipal bonds to say nothing of the savings of the public that
think they are protected with FDIC.
If this event does not incite the pubic to nationalize the private banking system and
imprison many then a super-national cult of folk will own what is left of the Western world
and be defended by xxxx army.
"People of privilege will always risk their complete destruction rather than surrender any
material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a
reason. But the privileged also feel that their privileges, however egregious they may seem to
others, are a solemn, basic, God-given right."
"A business man who was also a biologist and a sociologist would know, approximately, the
right thing to do for humanity. But, outside the realm of business, these men are stupid. They
know only business. They do not know mankind nor society, and yet they set themselves up as
arbiters of the fates of the hungry millions and all the other millions thrown in. History,
some day, will have an excruciating laugh at their expense." ~Jack London, The Iron Heel
"I met a traveller from an antique land,
Who said -- 'Two vast and trunkless legs of stone
Stand in the desert. Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal these words appear:
'My name is Ozymandias, king of kings:
Look on my works, ye mighty, and despair!'
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away."
Percy Bysshe Shelley, Ozymandias
"It seemed that out of every tear of a martyr new confessors were born, and that every groan
on the arena found an echo in thousands of breasts. Caesar was swimming in blood, Rome and the
whole pagan world was mad. But those who had had enough of transgression and madness, those who
were trampled upon, those whose lives were misery and oppression, all the weighed down, all the
sad, all the unfortunate, came to hear the wonderful tidings of God, who out of love for men
had given Himself to be crucified and redeem their sins."
Henryk Sienkiewicz, Quo Vadis
"I know the capacity that is there to make tyranny total in America, and we must see to it
that this agency [the NSA] and all agencies that possess this technology operate within the law
and under proper supervision, so that we never cross over that abyss. That is the abyss from
which there is no return."
Senator Frank Church, 1975
"The enormous gap between what US leaders do in the world and what Americans think their
leaders are doing is one of the great propaganda accomplishments."
Michael Parenti
"People with advantages are loathe to believe that they just happen to be people with
advantages. They come readily to define themselves as inherently worthy of what they possess;
they come to believe themselves 'naturally' elite; and, in fact, to imagine their possessions
and their privileges as natural extensions of their own elite selves."
C. Wright Mills, The Power Elite
"Instead of flooding the entire economy with liquidity, and thereby increasing the danger of
inflation, the Fed could support the stock market directly by buying market averages in the
futures market, thereby stabilizing the market as a whole."
Robert Heller, Federal Reserve Board , 1989
Now, we don't have the legal right to sell gold but I'm just frankly curious about what
people's views are on situations of this nature because something unusual is involved in policy
here. We're not just going through the standard policy where the money supply is expanding, the
economy is expanding, and the Fed tightens. This is a wholly different thing."
Alan Greenspan, Federal Reserve Minutes from May 18, 1993
"We looked into the abyss if the gold price rose further. A further rise would have taken
down one or several trading houses, which might have taken down all the rest in their wake.
Therefore at any price, at any cost, the central banks had to quell the gold price, manage it.
It was very difficult to get the gold price under control but we have now succeeded. The US Fed
was very active in getting the gold price down. So was the U.K."
Eddie George, Governor Bank of England, in a conversation with the CEO of
Lonmin , September 1999
"Through pride we are ever deceiving ourselves. But deep down below the surface of the
average conscience a still, small voice says to us, something is out of tune ."
Carl Jung
"His money came from human misery and death and despair, as always it does. Yet, there is
none to reproach him, neither God nor man, and all fawn upon him and he will be a senator and
crowds will laud him and he will have the ear of the President and all will honor his riches
and consider him worthier than other men because of it.
Mankind adores its betrayers, and murders its saviors."
"... There is no strong evidence of a positive impact of TSR plans on firm performance ..."
"... "Despite the fact that just under 50% of S&P 500 firms have this pay metric as part of their executive compensation plans and that this pay metric is designed to align the interest of shareholders and executives," Enayati told Yahoo Finance, "we find that there's no relationship between the pay metric and top-line business outcomes like 1-, 3-, or 5-year total shareholder return, return on equity, earnings per share growth, or revenue growth." ..."
The analysis, done in conjunction with consultants Pearl Meyer & Partners, examined a decade's
worth of data from every company in the S&P 500 (^GSPC). It compared companies that offer their
top brass a total shareholder return (TSR) plan to those that don't and found the increasingly
popular pay plans haven't significantly boosted any of a number of key metrics.
Total shareholder return is how well an investment in a company has done over a given period.
It's a combination of the stock's price change and dividends paid. With TSR plans, managers are
rewarded with shares, options, or even cash to give them a stake in how well the stock does.
For a growing number of corporate heads, big bonuses based on stock performance is a large
part of their pay.
In 2004, just 17% of S&P 500 companies gave CEOs and top executives some form of a TSR plan. A
decade later, nearly half of the companies in the index offered it.
As for those S&P 500 CEOs that have TSR plans, it represents on average some 29% of their
total direct compensation, though that percentage is a decline from 38% a decade ago. That's
because as more companies adopt TSR plans, they are doing so with less weight than companies who
took on these kinds of bonuses earlier.
The average CEO of an S&P 500 company made $13.8 million – or 204 times their average employee
– in 2014, according to job website Glassdoor.com.
Get the Latest Market Data and News with the Yahoo Finance App
Nonetheless, giving CEOs more for total shareholder return doesn't make a difference,
according to the Cornell study.
"There is no strong evidence of a positive impact of TSR plans on firm performance,"
wrote Hassan Enayati, Kevin Hallock, and Linda Barrington of Cornell University's Institute for
Compensation Studies.
"Despite the fact that just under 50% of S&P 500 firms have this pay metric as part of
their executive compensation plans and that this pay metric is designed to align the interest of
shareholders and executives," Enayati told Yahoo Finance, "we find that there's no relationship
between the pay metric and top-line business outcomes like 1-, 3-, or 5-year total shareholder
return, return on equity, earnings per share growth, or revenue growth."
Interestingly, the researchers discovered that while the number of companies paying top
executives for shareholder return incentives is increasing, the size of those bonuses relative to
total compensation is on the decline.
According to Enayati, part of that has to do with companies decreasing the weight of total
shareholder return compensation plans. "But then also the new adopters are coming in at lower
weights, perhaps just to test the water," he explained.
But Enayati doesn't rule out other performance bonuses. "While there's no evidence that this tool
hits the mark, that isn't to say that other metrics shouldn't be pursued as a solid way to align
those incentives," he said.
The analysis, done in conjunction with consultants Pearl Meyer & Partners, examined a decade's
worth of data from every company in the S&P 500. It compared companies that offer their top brass
a total shareholder return (TSR) plan to those that don't and found the increasingly popular pay
plans haven't significantly boosted any of a number of key metrics. ...
likbez said...
Looks to me like a generic problem of any neoliberal regime that became more acute as secular
stagnation of economics became a "new normal".
High compensation (which is just a part of generic redistribution of wealth up -- the goal
on neoliberalism) drives up ruthless sociopaths making short term stock performance the priority
and displaces engineers who are capable drive the firm into the future.
Short termism and financial machinations to boost the stock price are probably among key reasons
of decline of IBM and HP.
Paradoxically Icahn recently provided us with some interesting insights into bizarre world
of stock buybacks. See video on http://carlicahn.com/
The European Commission said on
Thursday that euro area gross domestic product (GDP) is forecast to expand by 1.1 percent in
2019 and by 1.2 percent in 2020 and 2021.
Compared with the projections the European Union's executive arm published in July, the
growth forecast has been downgraded by 0.1 percentage points for 2019 and 0.2 percentage points
for 2020.
The European economy is in its seventh consecutive year of expansion, but the bloc now
"looks to be heading towards a protracted period of more subdued growth and muted inflation,"
the commission said in a statement.
"The external environment has become much less supportive and uncertainty is running high.
This is particularly affecting the manufacturing sector, which is also experiencing structural
shifts," it said.
The commission said trade tensions between the United States and China and high levels of
policy uncertainty, especially with respect to trade, have dampened investment, manufacturing
and international trade.
"With global GDP growth set to remain weak, growth in Europe will depend on the strength of
more domestically-oriented sectors," it said.
Vice President of the European Commission for the Euro and Social Dialogue Valdis
Dombrovskis said the bloc would face "troubled waters ahead," including "a period of high
uncertainty related to trade conflicts, rising geopolitical tensions, persistent weakness in
the manufacturing sector and Brexit."
Top euro zone officials earlier said Germany and the Netherlands, which run budget
surpluses, should invest more to help boost economic growth in their own economies and
throughout the euro zone.
Dombrovskis said he "urged" all member states with high levels of public debt to pursue
prudent fiscal policies and "member states that have fiscal space should use it now."
"All policy levers will need to be used to strengthen Europe's resilience and support
growth," European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre
Moscovici said.
While
clearly not intended as a tool for the subversion of capitalism, the 2019 Credit
Suisse Global Wealth Report provides a fascinating glimpse at the inequality that the
neoliberal era has produced, who has benefitted and those who have been left behind.
According to the tenth edition of the report, recently released, "The bottom half of wealth
holders collectively accounted for less than 1% of total global wealth in mid-2019, while the
richest 10% own 82% of global wealth and the top 1% alone own 45%." (Note that this a study
about wealth and not income. It measure assets [housing, stocks, bonds etc.] minus debts.)
Further evidence of the incredible inequality generated by neoliberal capitalism:
North America and Europe together account for 57% of total household wealth, but contain
only 17% of the world adult population;
2.9 billion people, 57% of all adults, have wealth below $10,000 US in 2019. Of course
many of these have more debts than assets;
Average wealth per adult in Africa is $6,488 while that figure for North America (which
seems to be defined as Canada and the USA) is $417,694. For India it is $14,569 while in
Latin America the average wealth is $22,502;
Average wealth in "socialist" China has grown more rapidly than elsewhere over the past
two decades to $58,544. (It seems government intervention in the economy is good for wealth
creation);
The share of total global wealth owned by millionaires (47 million or 0.9% of adults) has
grown from 34% in 2000 to 44% today;
About 40% of millionaires reside in the USA and more than half of the 1.1 million who
achieved that status in the past year live in the land of Trump. The U.S. growth of
millionaires exceeded that of the next nine countries combined (Japan, China, Germany, the
Netherlands, Brazil, India, Spain, Canada and Switzerland);
Australia lost 124,000 millionaires over the past year, primarily due to declining real
estate prices;
The wealth of 41 million of the millionaires was between 1 and 5 million dollars. Another
3.7 million are worth between 5 million and 10 million, and almost exactly 2 million adults
now have wealth above 10 million. Of these, 1.8 million have assets in the 10–50
million range, leaving 168,030 with a net worth above 50 million;
Of these 168,030 members of the capitalist ruling class, 80,510 (48%) live in the USA.
China has 18,130 (11%) , Germany 6,800 (4%), the UK 4,640, India 4,460, France 3,700, Canada
(3,530), Japan 3,350, Russia 3,120 and Hong Kong 3,100.
The importance of knowing where rich people are and might be popping up next is what has
produced this annual "most comprehensive and up-to date survey of household wealth".
In ancient Greece people would consult the oracles in order to choose the fruitful path, but
today the most common source of such divination is the wisdom of the dollar and its associated
deities. Rather than seek advice from experts at interpreting the various Hellenic gods, we
consult those who specialize in illuminating where "the money" has been and is going. The
ancient oracles could be found at shrines to the various gods; the modern version of these
advice givers reside in universities, think tanks, mutual fund companies, brokerages, banks and
the ever-present business media. The offerings of those seeking the guidance of today's
financial gods support a multi-billion dollar information and advice industry.
This seems "rational" behavior only because we live in an economic system that distributes
power on a one-dollar-one-vote basis. To divine where the dollars are is to learn where best to
seek the power that comes from them. In other words, the rich get richer and those who want to
catch the crumbs as they fall off the banquet table need to be present at the court of King
Capital.
Like the royal courts of feudal Europe that moved around its realm from castle to castle,
money, in the form of capital, travels around its planetary realm from country to country, city
to city, economic sector to economic sector, searching for the highest profit. This movement of
capital creates real estate and other booms in favored locations then financial crises when the
wealthy decide it is time to move on.
According to supporters, capitalism is supposed to be all about competition. The system is
supposed to reward merit. Winners and losers are legitimate because everyone has an equal
chance to succeed. But this is clearly not true in the actual world as described by the Credit
Suisse report.
How can the 2.9 billion adults who own less than $10,000 in net assets compete fairly
against 47 million millionaires, let alone the 168,030 who own $50 million or more?
The system is rigged. In a neoliberal capitalist competition to buy the most profitable
companies, processes, patents, ideas, and anything else that can be made "property" the winners
will always be those with the most money.
This report illustrates the pyramid of capitalist wealth and the peculiar property of money
that guarantees most of it floats to the top.
The only way for billions of people, most countries and entire continents to escape the
inevitable "the rich get richer and the poor get poorer" is by using the power of collectivity
(call it government, socialism or mutual aid) to counter the power of one-dollar-one-vote
capitalism.
"... The Clinton camp was hardly absent from social media during the 2016 race. The barely-legal activities of Clintonite David Brock were previously reported by this author to have included $2 million in funding for the creation of an online " troll army " under the name Shareblue. The LA Times described the project as meant to "to appear to be coming organically from people and their social media networks in a groundswell of activism, when in fact it is highly paid and highly tactical." In other words, the effort attempted to create a false sense of consensus in support for the Clinton campaign. ..."
"... In terms of interference in the actual election process, the New York City Board of Elections was shown to have purged over one hundred thousand Democratic voters in Brooklyn from the rolls before the 2016 primary, a move that the Department of Justice found broke federal law . Despite this, no prosecution for the breach was ever attempted. ..."
"... In 2017, the Observer reported that the DNC's defense counsel argued against claims that the party defrauded Sanders' supporters by favoring Clinton, reasoning that Sanders' supporters knew the process was rigged. Again: instead of arguing that the primary was neutral and unbiased in accordance with its charter, the DNC's lawyers argued that it was the party's right to select candidates. ..."
"... The DNC defense counsel's argument throughout the course of the DNC fraud lawsuit doubled down repeatedly in defense of the party's right to favor one candidate over another, at one point actually claiming that such favoritism was protected by the First Amendment . ..."
"... The DNC's shameless defense of its own rigging disemboweled the most fundamental organs of the U.S. body politic. This no indication that the DNC will not resort to the same tactics in the 2020 primary race, ..."
"... f Debbie Wasserman Schultz's role as disgraced chairwoman of the DNC and her forced 2016 resignation wasn't enough, serious interference was also alleged in the wake of two contests between Wasserman Schultz and professor Tim Canova in Florida's 23rd congressional district. Canova and Wasserman Schultz first faced off in a 2016 Democratic primary race, followed by a 2018 general congressional election in which Canova ran as an independent. ..."
"... Debacles followed both contests, including improper vote counts, illegal ballot destruction , improper transportation of ballots, and generally shameless displays of cronyism. After the controversial results of the initial primary race against Wasserman Schultz, Canova sought to have ballots checked for irregularities, as the Sun-Sentinel reported at the time: ..."
"... Ultimately, Canova was granted a summary judgment against Snipes, finding that she had committed what amounted to multiple felonies. Nonetheless, Snipes was not prosecuted and remained elections supervisor through to the 2018 midterms. ..."
"... Hillary Clinton's recent comments to the effect that Congresswoman Tulsi Gabbard is being "groomed" by Russia, and that the former Green Party Presidential candidate Dr. Jill Stein is a "Russian asset", were soon echoed by DNC-friendly pundits. These sentiments externalize what Gabbard called the "rot" in the Democratic party outward onto domestic critics and a nation across the planet. ..."
"... Newsweek provided a particularly glaring example of this phenomenon in a recent op-ed penned by columnist Naveed Jamali, a former FBI double agent whose book capitalizes on Russiagate. In an op-ed titled: " Hillary Clinton Is Right. Tulsi Gabbard Is A Perfect Russian Asset – And Would Be A Perfect Republican Agent," ..."
Establishment Democrats and those who amplify them continue to project
blame for the public's doubt in the U.S. election process onto outside influence, despite the clear history of the party's subversion
of election integrity. The total inability of the Democratic Party establishment's willingness to address even one of these critical
failures does not give reason to hope that the nomination process in 2020 will be any less pre-ordained.
The Democratic Party's bias against Sen. Bernie Sanders during the 2016 presidential nomination, followed by the DNC defense counsel
doubling down on its right to rig the race during the
fraud lawsuit brought
against the DNC , as well as the irregularities in the races between former DNC Chairwoman Debbie Wasserman Schultz and Tim Canova,
indicate a fatal breakdown of the U.S. democratic process spearheaded by the Democratic Party establishment. Influences transcending
the DNC add to concerns regarding the integrity of the democratic process that have nothing to do with Russia, but which will also
likely impact outcomes in 2020.
The content of the DNC and
Podesta emails published by WikiLeaks demonstrated that the DNC
acted in favor of Hillary Clinton in the lead up to the 2016 Democratic primary. The emails also revealed corporate media reporters
acting as surrogates of the DNC and its pro-Clinton agenda, going so far as
to promote Donald Trump during the GOP primary process as a preferred " pied-piper
candidate ." One cannot assume that similar evidence will be presented to the public in 2020, making it more important than ever
to take stock of the unique lessons handed down to us by the 2016 race.
Social Media Meddling
Election meddling via social media did take place in 2016, though in a different guise and for a different cause from that which
are best remembered. Twitter would eventually admit to actively suppressing
hashtags referencing the DNC and Podesta emails in the run-up to the 2016 presidential election. Additional
reports indicated that tech giant Google also showed measurable "pro-Hillary
Clinton bias" in search results during 2016, resulting in the alleged swaying of between 2 and 10 millions voters in favor of Clinton.
On the Republican side, a recent episode of CNLive! featured discussion
of the Cambridge Analytica scandal, in which undecided voters were micro-targeted with tailored advertising narrowed with the combined
use of big data and artificial intelligence known collectively as "dark strategy." CNLive! Executive Producer Cathy Vogan noted that
SCL, Cambridge Analytica's parent company, provides data, analytics and strategy to governments and military organizations "worldwide,"
specializing in behavior modification. Though Cambridge Analytica shut down in 2018, related companies remain.
The Clinton camp was hardly absent from social media during the 2016 race. The
barely-legal activities of Clintonite David Brock
were previously reported by this author to have included $2 million in funding
for the creation of an online " troll army " under the name Shareblue. The
LA Times described the project as meant to "to appear
to be coming organically from people and their social media networks in a groundswell of activism, when in fact it is highly paid
and highly tactical." In other words, the effort attempted to create a false sense of consensus in support for the Clinton campaign.
In terms of interference in the actual election process, the New York City Board of Elections was shown to have
purged over one hundred thousand Democratic voters in Brooklyn from the rolls
before the 2016 primary, a move that the Department of Justice found
broke federal law . Despite this, no prosecution
for the breach was ever attempted.
Though the purge was not explicitly found to have benefitted Clinton, the admission falls in line with allegations across the
country that the Democratic primary was interfered with to the benefit of the former secretary of state. These claims were further
bolstered by reports indicating that voting results from the 2016 Democratic
primary showed evidence of fraud.
DNC Fraud Lawsuit
The proceedings of the DNC fraud lawsuit provide the most damning evidence of the failure of the U.S. election process, especially
within the Democratic Party. DNC defense lawyers argued in open court for the party's
right to appoint candidates at its own discretion, while simultaneously denying
any "fiduciary duty" to represent the voters who donated to the Democratic Party under the impression that the DNC would act impartially
towards the candidates involved.
In 2017, the Observer reported that the DNC's defense counsel argued
against claims that the party defrauded Sanders' supporters by favoring Clinton, reasoning that Sanders' supporters knew the process
was rigged. Again: instead of arguing that the primary was neutral and unbiased in accordance with its charter, the DNC's lawyers
argued that it was the party's right to select candidates.
The Observer noted the sentiments of Jared Beck, the attorney representing the plaintiffs of the lawsuit:
"People paid money in reliance on the understanding that the primary elections for the Democratic nominee -- nominating process
in 2016 were fair and impartial, and that's not just a bedrock assumption that we would assume just by virtue of the fact that
we live in a democracy, and we assume that our elections are run in a fair and impartial manner. But that's what the Democratic
National Committee's own charter says. It says it in black and white."
The DNC defense counsel's argument throughout the course of the DNC fraud lawsuit doubled down repeatedly in defense of the party's
right to favor one candidate over another, at one point actually claiming that such favoritism was
protected by the First Amendment . The DNC's lawyers wrote:
"To recognize any of the causes of action that Plaintiffs allege would run directly contrary to long-standing Supreme Court
precedent recognizing the central and critical First Amendment rights enjoyed by political parties, especially when it comes to
selecting the party's nominee for public office ." [Emphasis added]
The DNC's shameless defense of its own rigging disemboweled the most fundamental organs of the U.S. body politic. This no indication
that the DNC will not resort to the same tactics in the 2020 primary race,
Tim Canova's Allegations
If Debbie Wasserman Schultz's role as disgraced chairwoman of the DNC and her forced 2016 resignation wasn't enough, serious interference
was also alleged in the wake of two contests between Wasserman Schultz and professor Tim Canova in Florida's 23rd congressional district.
Canova and Wasserman Schultz first faced off in a 2016 Democratic primary race, followed by a 2018 general congressional election
in which Canova ran as an independent.
Debacles followed both contests, including improper vote counts, illegal
ballot destruction , improper
transportation of ballots, and generally
shameless displays of cronyism. After the controversial
results of the initial primary race against Wasserman Schultz, Canova sought to have ballots checked for irregularities, as the
Sun-Sentinel reported at the time:
"[Canova] sought to look at the paper ballots in March 2017 and took Elections Supervisor Brenda Snipes to court three months
later when her office hadn't fulfilled his request. Snipes approved the destruction of the ballots in September, signing a certification
that said no court cases involving the ballots were pending."
Ultimately, Canova was granted a summary judgment against Snipes, finding that she had committed what amounted to multiple felonies.
Nonetheless, Snipes was not prosecuted and remained elections supervisor through to the 2018 midterms.
Republicans appear no more motivated to protect voting integrity than the Democrats, with
The Nation reporting that the GOP-controlled Senate
blocked a bill this week that would have "mandated paper-ballot backups in case of election machine malfunctions."
Study of Corporate Power
A 2014
study published by Princeton University found that corporate power had usurped the voting rights of the public: "Economic elites
and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average
citizens and mass-based interest groups have little or no independent influence."
In reviewing this sordid history, we see that the Democratic Party establishment has done everything in its power to disrespect
voters and outright overrule them in the democratic primary process, defending their right to do so in the DNC fraud lawsuit. We've
noted that interests transcending the DNC also represent escalating threats to election integrity as demonstrated in 2016.
Despite this, establishment Democrats and those who echo their views in the legacy press continue to deflect from their own wrongdoing
and real threats to the election process by suggesting that mere discussion of it represents a campaign by Russia to attempt to malign
the perception of the legitimacy of the U.S. democratic process.
Hillary Clinton's recent comments to the effect that Congresswoman Tulsi Gabbard is being "groomed" by Russia, and that the former
Green Party Presidential candidate Dr. Jill Stein is a "Russian asset", were soon echoed by DNC-friendly pundits. These sentiments
externalize what Gabbard called the "rot"
in the Democratic party outward onto domestic critics and a nation across the planet.
Newsweek provided a particularly glaring example of this phenomenon in a
recent op-ed penned by columnist Naveed Jamali, a former FBI double agent whose book capitalizes on Russiagate. In an op-ed titled:
" Hillary Clinton Is Right. Tulsi Gabbard Is A Perfect Russian Asset – And Would Be A Perfect Republican Agent," Jamali
argued :
"Moscow will use its skillful propaganda machine to prop up Gabbard and use her as a tool to delegitimize the democratic process.
" [Emphasis added]
Jamali surmises that Russia intends to "attack" our democracy by undermining the domestic perception of its legitimacy. This thesis
is repeated later in the piece when Jamali opines : "They want to see a retreat
of American influence. What better way to accomplish that than to attack our democracy by casting doubt on the legitimacy of our
elections." [Emphasis added]
The only thing worth protecting, according to Jamali and those who amplify his work (including former Clinton aide and establishment
Democrat Neera Tanden), is the perception of the democratic process, not the actual functioning vitality of it. Such deflective tactics
ensure that Russia will continue to be used as a convenient international pretext for
silencing domestic dissent as we move into 2020.
Given all this, how can one expect the outcome of a 2020 Democratic Primary -- or even the general election – to be any fairer
or transparent than 2016?
* * *
Elizabeth Vos is a freelance reporter, co-host of CN Live! and regular contributor to Consortium News. If you value this
original article, please consider
making
a donation to Consortium News so we can bring you more stories like this one.
"... In 2017, the Observer reported that the DNC's defense counsel argued against claims that the party defrauded Sanders' supporters by favoring Clinton, reasoning that Sanders' supporters knew the process was rigged. Again: instead of arguing that the primary was neutral and unbiased in accordance with its charter, the DNC's lawyers argued that it was the party's right to select candidates. ..."
Establishment Democrats and those who amplify them continue to project
blame for the public's doubt in the U.S. election process onto outside influence, despite the clear history of the party's subversion
of election integrity. The total inability of the Democratic Party establishment's willingness to address even one of these critical
failures does not give reason to hope that the nomination process in 2020 will be any less pre-ordained.
The Democratic Party's bias against Sen. Bernie Sanders during the 2016 presidential nomination, followed by the DNC defense counsel
doubling down on its right to rig the race during the
fraud lawsuit brought
against the DNC , as well as the irregularities in the races between former DNC Chairwoman Debbie Wasserman Schultz and Tim Canova,
indicate a fatal breakdown of the U.S. democratic process spearheaded by the Democratic Party establishment. Influences transcending
the DNC add to concerns regarding the integrity of the democratic process that have nothing to do with Russia, but which will also
likely impact outcomes in 2020.
The content of the DNC and
Podesta emails published by WikiLeaks demonstrated that the DNC
acted in favor of Hillary Clinton in the lead up to the 2016 Democratic primary. The emails also revealed corporate media reporters
acting as surrogates of the DNC and its pro-Clinton agenda, going so far as
to promote Donald Trump during the GOP primary process as a preferred " pied-piper
candidate ." One cannot assume that similar evidence will be presented to the public in 2020, making it more important than ever
to take stock of the unique lessons handed down to us by the 2016 race.
Social Media Meddling
Election meddling via social media did take place in 2016, though in a different guise and for a different cause from that which
are best remembered. Twitter would eventually admit to actively suppressing
hashtags referencing the DNC and Podesta emails in the run-up to the 2016 presidential election. Additional
reports indicated that tech giant Google also showed measurable "pro-Hillary
Clinton bias" in search results during 2016, resulting in the alleged swaying of between 2 and 10 millions voters in favor of Clinton.
On the Republican side, a recent episode of CNLive! featured discussion
of the Cambridge Analytica scandal, in which undecided voters were micro-targeted with tailored advertising narrowed with the combined
use of big data and artificial intelligence known collectively as "dark strategy." CNLive! Executive Producer Cathy Vogan noted that
SCL, Cambridge Analytica's parent company, provides data, analytics and strategy to governments and military organizations "worldwide,"
specializing in behavior modification. Though Cambridge Analytica shut down in 2018, related companies remain.
The Clinton camp was hardly absent from social media during the 2016 race. The
barely-legal activities of Clintonite David Brock
were previously reported by this author to have included $2 million in funding
for the creation of an online " troll army " under the name Shareblue. The
LA Times described the project as meant to "to appear
to be coming organically from people and their social media networks in a groundswell of activism, when in fact it is highly paid
and highly tactical." In other words, the effort attempted to create a false sense of consensus in support for the Clinton campaign.
In terms of interference in the actual election process, the New York City Board of Elections was shown to have
purged over one hundred thousand Democratic voters in Brooklyn from the rolls
before the 2016 primary, a move that the Department of Justice found
broke federal law . Despite this, no prosecution
for the breach was ever attempted.
Though the purge was not explicitly found to have benefitted Clinton, the admission falls in line with allegations across the
country that the Democratic primary was interfered with to the benefit of the former secretary of state. These claims were further
bolstered by reports indicating that voting results from the 2016 Democratic
primary showed evidence of fraud.
DNC Fraud Lawsuit
The proceedings of the DNC fraud lawsuit provide the most damning evidence of the failure of the U.S. election process, especially
within the Democratic Party. DNC defense lawyers argued in open court for the party's
right to appoint candidates at its own discretion, while simultaneously denying
any "fiduciary duty" to represent the voters who donated to the Democratic Party under the impression that the DNC would act impartially
towards the candidates involved.
In 2017, the Observer reported that the DNC's defense counsel argued
against claims that the party defrauded Sanders' supporters by favoring Clinton, reasoning that Sanders' supporters knew the process
was rigged. Again: instead of arguing that the primary was neutral and unbiased in accordance with its charter, the DNC's lawyers
argued that it was the party's right to select candidates.
The Observer noted the sentiments of Jared Beck, the attorney representing the plaintiffs of the lawsuit:
"People paid money in reliance on the understanding that the primary elections for the Democratic nominee -- nominating process
in 2016 were fair and impartial, and that's not just a bedrock assumption that we would assume just by virtue of the fact that
we live in a democracy, and we assume that our elections are run in a fair and impartial manner. But that's what the Democratic
National Committee's own charter says. It says it in black and white."
The DNC defense counsel's argument throughout the course of the DNC fraud lawsuit doubled down repeatedly in defense of the party's
right to favor one candidate over another, at one point actually claiming that such favoritism was
protected by the First Amendment . The DNC's lawyers wrote:
"To recognize any of the causes of action that Plaintiffs allege would run directly contrary to long-standing Supreme Court
precedent recognizing the central and critical First Amendment rights enjoyed by political parties, especially when it comes to
selecting the party's nominee for public office ." [Emphasis added]
The DNC's shameless defense of its own rigging disemboweled the most fundamental organs of the U.S. body politic. This no indication
that the DNC will not resort to the same tactics in the 2020 primary race,
Tim Canova's Allegations
If Debbie Wasserman Schultz's role as disgraced chairwoman of the DNC and her forced 2016 resignation wasn't enough, serious interference
was also alleged in the wake of two contests between Wasserman Schultz and professor Tim Canova in Florida's 23rd congressional district.
Canova and Wasserman Schultz first faced off in a 2016 Democratic primary race, followed by a 2018 general congressional election
in which Canova ran as an independent.
Tim Canova with supporters, April 2016. (CanovaForCongress, CC BY-SA 4.0, Wikimedia Commons)
Debacles followed both contests, including improper vote counts, illegal
ballot destruction , improper
transportation of ballots, and generally
shameless displays of cronyism. After the controversial
results of the initial primary race against Wasserman Schultz, Canova sought to have ballots checked for irregularities, as the
Sun-Sentinel reported at the time:
"[Canova] sought to look at the paper ballots in March 2017 and took Elections Supervisor Brenda Snipes to court three months
later when her office hadn't fulfilled his request. Snipes approved the destruction of the ballots in September, signing a certification
that said no court cases involving the ballots were pending."
Ultimately, Canova was granted a summary judgment against Snipes, finding that she had committed what amounted to multiple felonies.
Nonetheless, Snipes was not prosecuted and remained elections supervisor through to the 2018 midterms.
Republicans appear no more motivated to protect voting integrity than the Democrats, with
The Nation reporting that the GOP-controlled Senate
blocked a bill this week that would have "mandated paper-ballot backups in case of election machine malfunctions."
Study of Corporate Power
A 2014
study published by Princeton University found that corporate power had usurped the voting rights of the public: "Economic elites
and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average
citizens and mass-based interest groups have little or no independent influence."
In reviewing this sordid history, we see that the Democratic Party establishment has done everything in its power to disrespect
voters and outright overrule them in the democratic primary process, defending their right to do so in the DNC fraud lawsuit. We've
noted that interests transcending the DNC also represent escalating threats to election integrity as demonstrated in 2016.
Despite this, establishment Democrats and those who echo their views in the legacy press continue to deflect from their own wrongdoing
and real threats to the election process by suggesting that mere discussion of it represents a campaign by Russia to attempt to malign
the perception of the legitimacy of the U.S. democratic process.
Hillary Clinton's recent comments to the effect that Congresswoman Tulsi Gabbard is being "groomed" by Russia, and that the former
Green Party Presidential candidate Dr. Jill Stein is a "Russian asset", were soon echoed by DNC-friendly pundits. These sentiments
externalize what Gabbard called the "rot"
in the Democratic party outward onto domestic critics and a nation across the planet.
Newsweek provided a particularly glaring example of this phenomenon in a
recent op-ed penned by columnist Naveed Jamali, a former FBI double agent whose book capitalizes on Russiagate. In an op-ed titled:
" Hillary Clinton Is Right. Tulsi Gabbard Is A Perfect Russian Asset – And Would Be A Perfect Republican Agent," Jamali
argued :
"Moscow will use its skillful propaganda machine to prop up Gabbard and use her as a tool to delegitimize the democratic process.
" [Emphasis added]
Jamali surmises that Russia intends to "attack" our democracy by undermining the domestic perception of its legitimacy. This thesis
is repeated later in the piece when Jamali opines : "They want to see a retreat
of American influence. What better way to accomplish that than to attack our democracy by casting doubt on the legitimacy of our
elections." [Emphasis added]
The only thing worth protecting, according to Jamali and those who amplify his work (including former Clinton aide and establishment
Democrat Neera Tanden), is the perception of the democratic process, not the actual functioning vitality of it. Such deflective tactics
ensure that Russia will continue to be used as a convenient international pretext for
silencing domestic dissent as we move into 2020.
Given all this, how can one expect the outcome of a 2020 Democratic Primary -- or even the general election – to be any fairer
or transparent than 2016?
* * *
Elizabeth Vos is a freelance reporter, co-host of CN Live! and regular contributor to Consortium News. If you value this
original article, please consider
making
a donation to Consortium News so we can bring you more stories like this one.
"... They also failed to note the voice-modulated phone calls received by the law offices of the Becks which contained a caller-ID corresponding to the law offices of Debbie Wasserman Schultz, a defendant in the case. In light of this context, the Becks hardly appear to be peddlers of conspiracy theory. ..."
The defense counsel also took issue with Jared Beck for what they termed as: " Repeatedly promoted patently false and deeply offensive
conspiracy theories about the deaths of a former DNC staffer and Plaintiffs' process server in an attempt to bolster attention for
this lawsuit." This author was shocked to find that despite the characterization of the Becks as peddlers of conspiracy theory, the
defense counsel failed to mention the motion for protection filed by the Becks earlier in the litigation process.
They also failed to note the voice-modulated phone calls received by the law offices of the Becks which contained a caller-ID
corresponding to the law offices of Debbie Wasserman Schultz, a defendant in the case. In light of this context, the Becks hardly
appear to be peddlers of conspiracy theory.
The DNC defense lawyers then argued:
" There is no legitimate basis for this litigation, which is, at its most basic, an improper attempt to forge the federal courts
into a political weapon to be used by individuals who are unhappy with how a political party selected its candidate in a presidential
campaign ."
The brief continued:
" To recognize any of the causes of action that Plaintiffs allege based on their animating theory would run directly contrary
to long-standing Supreme Court precedent recognizing the central and critical First Amendment rights enjoyed by political parties,
especially when it comes to selecting the party's nominee for public office."
It appears that the defendants in the DNC Fraud Lawsuit are attempting to argue that cheating a candidate in the primary process
is protected under the first amendment. If all that weren't enough, DNC representatives argued that the Democratic National Committee
had no established fiduciary duty "to the Plaintiffs or the classes of donors and registered voters they seek to represent." It seems
here that the DNC is arguing for its right to appoint candidates at its own discretion while simultaneously denying any "fiduciary
duty" to represent the voters who donated to the Democratic Party under the belief that the DNC would act impartially towards the
candidates involved.
Adding to the latest news regarding the DNC Fraud Lawsuit was the recent
finding by the UK Supreme
Court, which stated that Wikileaks Cables were admissible as evidence in legal proceedings.
If Wikileaks' publication of DNC emails are found to be similarly admissible in a United States court of law, then the contents
of the leaked emails could be used to argue that, contrary to the defendant's latest brief, the DNC did in favor the campaign of
Hillary Clinton over Senator Sanders and that they acted to sabotage Sanders' campaign.
The outcome of the appeal of the DNC Fraud Lawsuit remains to be seen.
Elizabeth Vos is the Co-Founder and Editor in Chief at
Disobedient Media .
Globalism sounds like such a nice thing for many, it even has a nice ring to it! At least to
the naïve, whom actually believe that if the world could just get together and work out
its problems under one big umbrella, all would be great. I think most people would agree that
true free trade, coupled with safeguards to protect American jobs would be fine. The corrupted
globalism that this world has become nearly immersed in is a mechanism that, in reality, is
intent on creating a one world corporate owned planet operated under a top-down, locked-down,
political and economic management system backed up by coercion. Whew! That is a mouthful I
agree! It will be run by a partnership of the top .001% of wealthiest elites and administered
by the United Nations. International rules and laws for every single decision will nearly all
come under the auspices the United Nations. This plan has been laid out in various United
Nations publications and official policy.
President Trump has vowed to, and succeeded in some ways, to buck these one world
globalists, not to say he hasn't treated them to overly generous tax breaks since he has been
in charge! Not withstanding the prior, these one world globalists include even some of the most
prominent lawmakers in Washington D.C. far too often. The entrenched snake sales people over at
the White House lawmaking division are far too often part of the plan to decimate America
whether they believe it or not. We can only hope that a large part of them are do not realize
what the end-game is of this globalist cabal. Perhaps this is of course why we so often shake
our heads in disbelief when they utter ideas and beliefs that sound so foreign to ears,
anti-American and even scary!
So far, Pres. Trump seems to have accomplished about as much as any one president ever could
accomplish when walking into a room of entrenched den of thieves! Washington is not going to be
a part of solving the problems of globalism, for they and the globalists are in bed together.
Part of the problem remains that the establishment agenda is overrun by statists who walk in
lock-step with their leaders and party platforms even if corrupted. It is just too profitable
for them to ignore. Yet, the truth is that statism has no sense of proportion. These sometimes
well-meaning politicians, once they are put into power, knowingly or unknowingly become slaves
to their corporate owners. This is corporatocracy, and it is unsustainable. The one world
corporate pirates, comprising a collection of the largest 100 or so family dynasties, do in
fact control approximately 90 percent of the wealth of the world, hidden inside a dark web of
very complex multi-structured organizations and corporate nameplates. Such makes it very
difficult, but not impossible to truly figure out who the real owners are behind the maze. This
is perhaps the reason why I contend that President Trump, an outsider with a new direction for
America, may be our last chance. Most of these types hate Trump because he is hitting them
where it hurts on most fronts and is slowing down the globalist agenda!
Corporate socialism IS globalism. It is a growing and controlled oligarchy. As such, it
affords both the supranational capitalists, world's governments and non-elected quasi
governmental agencies to profit together as a baseball team would. Yes, working together with
one unified grand vision for the profit and powers of both. Globalism is the name. We already
see how nearly everything around us is becoming part of the so-called global order. These,
creating quid-pro-quo systems of control over the entire world economies, whom create wars for
profit, create inflation to inadvertently benefit themselves and enact so-called "free-trade
partnerships" that portend to help creates jobs here at home, only succeed occasionally of
creating low wage service jobs in large part in the parts of the world that the globalists
venture with their self-serving con-game. Limiting competition, being on the inside, having
power over others, this is what the global government and one world monopolistic corporations
are all about. The free trade agreements offer all of its members to petition, (and usually
get) allowances to get around many of the safeguards and traditional legal rules that used to
be sacrosanct in world trade. Especially as to food processing. The move toward monopolization
is perhaps the biggest motivator these have for supporting globalist (un)free trade
agreements.
What the true elite globalists (who reside in both political parties in Washington and world
power centers in particular) want is unbridled control over nearly everything in order to unite
us into a global world of subservient slaves unto them. So, what's the answer?
It is easy to witness that the far leftists often do not divulge they are socialists at all.
In recent years, this is changing, now that millions of young voters have been convinced by
their colleges and mass media outlets that socialism IS the answer. In the past, no candidate
would utter the word socialism for fear of many lost votes. Today, a surprisingly large
percentage of politicians in government are onboard. We can easily spot them if we compare
their voting records. Then compare them to the promises made when running for election! So,
before you get too comfortable with politicians who come off as infectiously kind and
compassionate while often using the words 'fairness', "world community", "social equality",
"open borders", "free trade", "globalism", "social justice" and other such pleasantly
attractive bleeding heart politicians using such catch-phrases, be careful. Although Democrats
will more often than not fall into this category of unsung globalists, many on both sides of
the isle fit the bill as well. Some more than others knowingly use these kind sounding
platforms in order to garner votes from the gullible young in particular. History shows over
and over again how gullible citizens can be duped into voting for someone they thought was a
caring politician, then come to discover they voted for a hidden socialist or communist in
fact. Although we can all agree on the responsibilities of our government as spelled out in the
Constitution, our founding fathers warned the new country that we must beware of politicians
who promise more than that great document promises.
Government / corporate partnerships, whether formal or consensual, create insanely
profitable fortunes for their owners while too often screwing over not only Americans but the
worlds taxpaying citizens and their industrialized countries as well. Who do you think the
prime contractors are who build and supply trillions of dollars of military weapons to the
huge, high testosterone American military machine? These war factories are largely owned by
billion-dollar super elites whose huge goliath corporations very often operate under a
duplicity of names that largely hides the true identities of the owners behind them. These true
owners often use layers of sub-corporations operating under various, differing names and
locations providing legal and illegal tax havens around the world. Apple pays zero US taxes for
example using such a scheme. This is just one case amongst thousands. Often the tax havens are
claimed are justified by the existence of a foreign post office box. Seldom are these caught or
fined by our U.S. authorities. When they do occasionally get caught, the fines are typically
just a miniscule part of the total savings they have accumulated over the past years.
With a little research we can find many of the same board members appearing again and again
on the rosters of the quietly interconnected mega corporations. This creates the long-time
problem of immoral collusions that often allow shifting of profits to other tax havens,
allowing American profits to go untaxed and shifting the responsibility fully onto the American
worker. Does it not make sense that a corporation that makes ridiculous record profits such as
Apple and others do, that they should pay their share? This globalist mindset of the elites
creates record profits at the expense of American workers and their spending powers.
Within our public "screwling system" as I call it, students are increasingly taught that
"globalism" is a new religion of sorts, a "cure-all" for world discourse perhaps! Those with
enough power to create massive changes in culture are behind the politically correct culture,
the green movement and most other leftist power grabs. These are often the very same
supra-national corporations and political kingpins who wish to undermine the America we
remember, its legal system while creating a monopolistic economic and totalitarian one world
state. It is wise to remember the confirmed beliefs and admissions o f the godfathers of the
one world order. Of course I am speaking of the Rockefellers, J.P. Morgan and dozens more of
the wealthiest families of the world whom have for centuries verifiably acted upon and talked
of such plans. Their heirs, as well as the new titans such as Bill Gates, Jeff Bezos (Amazon
fame), Elon Musk (Tesla) and other such billionaire or trillionaire types are nearly all on
board vocally with a one world order system of governance. I will cover this much more further
on.
For over 100 years, much of American education has been stealthily entrenched in
anti-Western "cultural Marxism" propaganda and other damaging indoctrinations (as I document
later). Public schools have long promoted the globalism lie, teaching such as the yellow brick
road towards acceptance of a one world order that delivers utopia. It is hard indeed to find a
young person today in America who still believes strongly in traditional values and ideas of
self-responsibility, detest government interference in their lives, loves the Constitution,
what it stands for and protects. They have been indoctrinated by our schools to the point that
common sense no longer matters, for honest discourse in discussions are heavily discouraged in
many a classroom. I prove further along that most of the liberal ideology being increasingly
touted by the left is borne out of a long dreamt of socialist utopia carried out by a
partnership between the corporate globalists, the U.N. and those elites who desire power over
the world. And I can guarantee to you that these are getting impatient. These, their
cohorts/devotees are those whom desire to make the choices as to everything you buy, eat,
drive, live, your job destiny, how much or how little you make, etc. etc. Most of this agenda
is not so hidden, contained already within the prime vehicle to bring about the one world order
with the United Nations Agenda 21 policies taking place around the world.
Considering that at least 50% of the world's wealth is verifiably controlled by the top 1%
consisting of only 67 of the world's wealthiest individuals (and shrinking), this is pretty
good evidence that we are essentially being controlled by a very small corporate global elite
club designed and run for the few. These stats are verified later. The pace of their
destruction is staggering.
Today, the top 200 corporations are bigger than the combined economies of 182 countries and
have twice the economic influence than 80 per cent of all humanity as I prove!
Globalism has come very far in rendering world with greatly reduced amounts of anything
amounting to a capitalistic system that comes with practical safeguards against abuses that
place too much harm to the hard working stiffs. Increasingly, we witness wage inequalities
worse than in the Great Depression. Truly, the top 10 percent earners have left everyone else
in the dust increasingly over the last 50 years. The top 1 percenters incomes during this time
has gone to the moon at the expense of the masses.
Globalism is the vehicle to achieve the elite globalist goals of a one world order,
separate, nationalistic and independent nations with their own borders must be eliminated,
which shouldn't be too much of a problem to accomplish in much of the world, especially in the
current socialist run countries in and around the European continent and America who largely
embrace socialism. What is ironic is that socialist Briton's have turn their backs on Brexit,
meant to centralize nearly all power to the elite globalists. Little did they realize that you
can't have both, at least in the long run.
The League of Nations was the precursor of the United Nations. From their beginnings, the
primary long-term reason for both of them had always been to be the primary central agency of
the world, an assemblage of the top global power brokers created to steer and carry out the new
world order which has been dreamt of for millennium. Its creation has not been, as it touts,
"to create a harmonious and peaceful world". No, the U.N.'s overarching goal has been to create
a one world government using the ploy of globalism. There are ample records dating back before
its very creation, direct from the U.N.'s own publications and top officers and founders to
support this statement which I document quite fully in order to prove that point. This UN has
with much ambition endorsed and sanctioned one world inspired leaders, corporations, groups,
agencies, NGO's and billionaires from countries all around the globe in a long term unified
vision of this new world order in order to further the one world agenda. The help that the UN
has supplied in the creation of most planned wars, coups and disruptions across the world is
well known by those who have done their homework on that subject. It is this cabal and others
that are the enemies of true freedoms, borders, sovereignty across the globe yet are completely
onboard with creating a one world government. Americanism or any other type of governance
besides their one world order. These are the a major part of the world's Deep State apparatus
who are in fact often hidden forces behind the worlds corporate powered global power
structure.
The global multinational corporatist leaders have pushed their un-free trade treaties, long
creating a horrid record of killing millions of good paying jobs across America and nearly
everywhere they venture. These stealing of good jobs have swelled the bank accounts and powers
of these globalist multinational corporations while boosting their wealth into the top 1%
largely at the expense of the masses who now work for far less. lowered wages.
The globalists new world order plan requires a complete breakdown of the required systems
that have historically allowed nation to prosper on its own merits. Sold by both parties is the
false belief that big government can fix everything. This long-running sales job actually
promotes self-interest above all, using deceptive techniques as I cover. Such a sales job
requires a break away from traditions that bind us with our neighbors and family. It requires a
growth in narcissism, self above God so much so that we can now even witiness the horrid
reality of pedophilia becoming more mainstream! Since President Trump's reign, thousands of
pedophilia people and groups have been arrested as never before! Thousand of killer gang
members have been arrested as never before, especially those inside of the MS-13 ruthless
group. This is just one of many actions by this President that leads to my belief that our new
President is holding up his end of the agreement. Like him or not, he at least is holding up
his promises.
History is replete with all the immense damages that the globalist movement has brought upon
the world. These have sold the lie that globalism is the answer to the inequalities between the
haves and the have nots. While the opposite is the real truth! The truth is now evident when
one looks at the condition of the world they have pushed upon all of us over the last many
years.
The elite new world order operatives have infiltrated all the major nations governmental
agencies, top positions of power. Led by the lure of power, connectedness, money, these are
often not aware that they are actually perpetuating a plan that is deadly for much of the world
if the globalist elites they serve should get their way. Unfortunately for these self serving
minions only are concerned with self promotion often. Yet the fact remains that political
expediency and promotions come with compliance. The heads of nearly every major country are
working together with this huge one world apparatus machine that is enclosed within the UN,
World Bank, IMF, European Union, Trilateral Commission, Council on Foreign Relations, the Royal
Family, the corporation called America, and hundreds of other governmental and non-governmental
centers of power. Many of these hide behind nice sounding, humanitarian nameplates. Nearly all
the crises we see play out are ones they actually create, (of which American hegemony around
the world is a large player). For these, the ends always justify the means.
Continual non-stop conflicts around the world, of which America is often at the forefront of
are exponentially increasing. I will explain why and how America's endless war policies has
been implemented over the last many years, but I cannot divulge my take on who and what is
behind much of the openly visible powers working behind much of the news we hear.
Explained will be real, actual reasons why America has spent over 15 years in Iraq,
Afghanistan and Libya with nothing to show besides disasters and deaths, while earning a bad
reputation around the world as a bully. Be assured that the elites and banking system have made
trillions of dollars from these three examples. And lives mean little. Psychopaths don't care
about anything beyond their own desires and powers, and many of these are psychopaths indeed.
They use false justifications as a passport to sell many of their warring's and destructions.
This is globalism.
I predict that the CIA, (a globalist arm of the U.S. Government and deep state), armed with
an unlimited budget and trillions of dollars derived from their years of secret under the radar
dirty operations, are likely to be an agency to be reviewed, revamped or remodeled within the
not so distant future. The truths behind this clandestine, above the law and corrupted agency
may finally be surfacing as well. Ever since the Trump Russian collusion witch hunt also with
an unlimited budget as well both of these conducted, likely during Pres. Trump's time as
president, we should expect to witness a firestorm of controversy and change more momentous
than anything in American history, hopefully.
President Donald Trump has his work cut out, but his years in office have shown he is no
typical deep state establishment fixture of either political party! What we are now witnessing
is perhaps the most important and fateful elections in America's entire history. The results
will either allow the Republican Party to prove itself to be the party of the people, or become
impotent, simply becoming water boys for the Democrat Party, thereafter having little real
power for decades perhaps. The results of the coming elections leading into 2020, (general and
mid-terms), will in fact be the determining factor for whether America and the world reject
conservativism or falls into the clutches of a highly touted, yet untruthful liberalism that
doesn't even resemble the old party of the people that dems used to own in the far past. So, we
must ask ourselves, how did this all come to such a historic moment as we are living in?
"... By Marshall Auerback, a market analyst and commentator. produced by Economy for All , a project of the Independent Media Institute ..."
"... Doing Capitalism in the Innovation Economy ..."
"... When the government subsidize R&D here, what reason would there be for the resultant products that come from that R&D, be made here? In Canada the SRED (Scientific Research and Experimental Development) tax credits are used by companies to develop products that are then manufactured in China. No Canadian production worker will ever see an hour of labor from those subsidies. That result is baked into the R&D cake. ..."
"... As you point out, "many of the large International Corporations moved their software development and R&D offshore too". What stops them from co-mingling the subsidies and scamming the system for their benefit, since everything done to favor big business resolves to a scam on the peasants. ..."
Posted on
November 5, 2019 by Yves SmithBy Marshall Auerback, a
market analyst and commentator. produced by Economy for All , a project of the
Independent Media Institute
National industrial policy was once something you might read about in today's equivalent of
a friend's Facebook post, as hard as that might sound to believe. It was in newspapers; it was
on the radio. Taxi drivers had opinions about it. That all changed in the last 35 years, when
the rise and fall of the stock market and a shallow conversation about unemployment rates took
over. Industrial policy became an inside-baseball conversation, and to the extent that it was
discussed, it was through the prism of whether it imperiled the golden gospel and great
economic distraction of our time, "the free market."
The decades of free-market propaganda we've been exposed to are basically an exercise in
distracting the public from the meaningful choices that are now made behind closed doors. The
two big political parties that outwardly represent symbolic issues like gun rights and school
prayer spend the bulk of their time and political energy on complex industrial and regulatory
questions.
But much like Nero fiddling while Rome burned, they'd better start considering the question
of a national industrial policy before there's no industry left to manage. Manufacturing is now
at its smallest share of the U.S. economy in 72 years,
reports Bloomberg . Multinational supply chains undermine the negotiating power of workers,
thereby exacerbating inequality.
Are there ways to bring back manufacturing, or should we just capitulate to a mindset that
argues that these jobs are gone for good, that software retention is good enough, even as we
shift what's left of our manufacturing sector overseas to sweatshop economies? That seems
short-sighted. After all, it's pretty easy to steal IP; it's not so easy to steal an auto
manufacturing facility. The real question is: In the absence of some sort of national
industrial strategy, how do Western societies retain a viable middle class?
Decades of American middle-class exposure to favor China and other Asian countries'
industrial capacity have foisted it right back from elite circles into our politics and the
ballot box, in spectacular fashion, through the unlikely Donald Trump, who, in his typically
blunderbuss fashion, has called attention to some serious deficiencies in our current
globalized system, and the competitive threat posed by China to which we have remained
oblivious for all too long.
Not that Trump's 19th-century protectionism represents the right policy response, but his
concerns about Beijing make sense when you compare how much China invests in its own industrial
base relative to the U.S.: Robert D. Atkinson and Caleb Foote of the Information Technology and
Innovation Foundation
write that a recent Harvard Business School "
study estimated that the Chinese governments (national, provincial, and local) paid for a
whopping 22.2 percent of business R&D in 2015, with 95 percent of Chinese firms in 6
industries receiving government cash -- petrochemicals, electronics, metals and materials,
machinery and equipment, pharmaceuticals and biotechnology, and information technology."
In addition to the direct government grants on R&D, Atkinson and Foote
estimate that "the Chinese R&D tax credit is between 3
and 4.6 times more generous than the U.S. credit. To match China's R&D tax credit
generosity, the U.S. rate for the Alternative Simplified Credit would have to be increased from
14 percent to between 35 and 40 percent." Atkinson and Foote also
note that "
97 percent of American federal government funding went to just three sectors:
transportation equipment, which includes such as fighter jets, missiles, and the like ($14
billion); professional, scientific, and technical services ($5 billion); and computer and
electronic products ($4 billion)."
Taken in aggregate,
Atkinson and Foote calculate that "nearly 25 percent of all R&D expenditures in China
come in the form of government subsidies to firms." That's the sort of thing that must enter
the calculations of antitrust advocates when they call for breaking up big tech, without
considering the ramifications to research and development, especially relative to their Chinese
counterparts. (Statistically, as Anne
Marie Knott and Carl Vieregger find in a 2016 paper "Reconciling the Firm Size and Innovation
Puzzle," there are ample studies illustrating that R&D spending and R&D
productivity increase with scale.)
Why does this matter? Robert Kuttner,
writing at the Huffington Post at the inception of Barack Obama's presidency, made a
compelling argument that many of America's great industrial enterprises did not simply spring
up spontaneously via the magic of the "free market":
American commercial leadership in aerospace is no naturally occurring phenomenon. It
reflects trillions of dollars of subsidy from the Pentagon and from NASA. Likewise, U.S.
dominance in pharmaceuticals is the result of government subsidy of basic research, favorable
patent treatment, and the fact that the American consumer of prescription drugs is made to
overpay, giving the industry exorbitant profits to plow back into research. Throwing $700
billion at America's wounded banks is also an industrial policy.
So if we can have implicit industrial policies for these industries, why not explicit
policies to rebuild our auto industry, our steel industry, our machine tool industry, and the
industries of the next century, such as green energy and high-speed rail? And why not devise
some clear standards for which industries deserve help, and why, and what they owe America in
return?"
In fact, Kuttner describes a problem that well preceded Barack Obama. America's belief in
national industrial planning has been undermined to the extent that the U.S. began to adhere to
a doctrine of shareholder capitalism in the 1980s and beyond, a philosophy that minimized the
role of the state, and gave primacy to short-term profitability, as well as production growth
through efficiency (i.e., downsizing) and mergers. Corporate prioritization of maximizing
shareholders' value and the ways American corporations have minimized long-term R&D
expenditures and capital investment, all of which have resulted in the "unproductive disgorging
of corporate cash profits -- through massive dividend payouts and unprecedented spending on
stock repurchases -- over productive investment in innovation," write
Professors Servaas Storm and C.W.M. Naastepad .
Although European companies have not gone quite as far down that route, their "stakeholder
capitalism" culture has been somewhat subverted to the same short-term goals as their American
counterparts, as evidenced via Volkswagen's emissions
scandal and the erosion of workers' rights via the
Hartz labor "reforms" (which actually undermined the unions' stakeholder status in the
companies, thereby freeing up management to adopt many of the less attractive American
shareholder capitalism practices). The European Union too is now belatedly
recognizing the competitive threat posed by China . There's no doubt that the European
political classes are also becoming mindful that there are votes to be won here as well, as
Trump correctly calculated in 2016.
In the U.S., industrial policy is increasingly finding advocates on both the left (Elizabeth
Warren's policy director,
Ganesh Sitaraman ) and the right (
Professor Michael Lind ), via the convenient marriage of national security considerations
and with international investment and trade. If trade policy is ultimately subordinated to
national security concerns, it is conceivable that industrial policy could be
"bi-partisanized," thereby giving primacy to homegrown strategic industries necessary to
sustain viable national defense and security.
But this approach is not without risks: it is unclear whether the "national
security-fication" of the industrial policy renaissance will actually enhance or hinder
creativity and risk-taking, or merely cause these firms to decline altogether as viable
civilian competitors vis a vis Beijing. The
current travails of Boeing provide a salutary illustration of the risks of going too far
down the Pentagon rat hole.
And there are a number of recent studies illustrating that the case for "dual-use" (i.e.,
civilian and military) manufacturing does not substantially enhance civilian industrialization
and, indeed,
may retard overall economic growth. On the other hand, as the venture capitalist William
Janeway highlights in his seminal work, Doing Capitalism in the Innovation Economy , there are advantages at times to
being
"[d]ecoupled from any direct concern with economic return [It allowed] the Defense Department
[to] fund numerous alternative research agendas, underwriting the 'wasteful' search for
solutions that inevitably accompanies any effort to push back the frontiers of knowledge." So
there's a balance to be struck here. But, as Janeway notes
, "the strategic state interventions that have shaped the market economy over generations have
depended on grander themes -- national development, national security, social justice,
liberation from disease -- that transcend the calculus of welfare economics and the logic of
market failure."
Furthermore, to the extent that national security considerations retard offshoring and
global labor arbitrage, it can enhance the prospects for a viable form of "
national developmentalism ," given that both mean tighter labor markets and higher wages,
which in turn will likely push firms toward upgrading R&D spending in order to upgrade on
the high end of the technology curve ( as Seymour
Melman argued years ago ), as well as enhancing productivity gains.
As author Ted Fertik observes :
Higher productivity makes possible more generous welfare states, and helps national
industries compete to supply the world with high-tech products. If technological leadership
and a prosperous, patriotic citizenry are the surest guarantees of military preponderance,
such an economic policy represents the best military strategy in an era of great power
competition.
Both the left and the right are beginning to recognize that it makes no sense to make war on
wage-earners while claiming to protect the same wage earners from Chinese competition. But
governments need to do more than act as a neutral umpire, whose role never extends beyond
fixing market failures. As Janeway has
illustrated , governments have historically promoted the basic research that fueled
innovation and nurtured the talent and skills that "became the foundation of the Innovation
Economy"; "the central research laboratories of the great corporations were first supplemented
and then supplanted by direct state funding of research." But in spite of providing the
foundational research for a number of leading commercial products (e.g., Apple's iPhone), the
government has proved reticent in considering alternative forms of ownership structure (e.g., a
" government
golden share ," which gives veto rights on key strategic issues, such as relocation,
offshoring, special voting rights, etc.), or retaining intellectual property rights and
corresponding royalty streams to reflect the magnitude of their own R&D efforts, as
Professor Mariana Mazzucato
has proposed in the past . At the very least, we need to consider these alternative
ownership structures that focus entrepreneurial development on value creation, as opposed to
capitulating to the depredations of rentier capitalism on the spurious grounds that this is a
neutral byproduct of the market's efficient allocation of resources.
Within the U.S., national industrial policy also suits green advocates, such as Senator
Bernie Sanders, whose Green
New Deal plan , while failing to address domestic/local content, or manufacturing in the
broadest possible sense, at least begins to move the needle with regard to the federal
government building and owning a national renewable grid.
Likewise in Europe, German Economy Minister Peter Altmaier recently published a "
National Industrial Strategy 2030 ," which,
according to Dalia Marin of Bruegel think tank in Brussels , "aims to protect German firms
against state-subsidized Chinese competitors. The strategy identifies key industrial sectors
that will receive special government support, calls for establishing production of electric-car
batteries in Europe, and advocates mergers to achieve economies of scale." It is striking that
EU policymakers,
such as Lars Feld of the German Council of Economic Experts , still apparently think it is
a protectionist step too far to consider coordinating with the car companies (where there is
already a high degree of trans-European policy coordination and international consolidation),
and other sectors, to help them all at the same time --
as Beijing is now doing . Of course, it would help to embed this in a manufacturing-based
Green New Deal, but it represents a healthy corrective to offshoring advocates who continue to
advocate that their car industry should migrate to China,
on the short-term grounds of cost consideration alone .
Essentially, the goal should be to protect the industries that policymakers think will be
strategically important from outsiders, and to further integrate with allies and partners to
achieve efficiencies and production scale. (Parenthetically, it seems particularly perverse
right at this juncture for the UK to break away from all this continental European integration,
and to try to go it alone via Brexit.) The aim should not be to protect private rent-seeking
and increasing private monopolization under the guise of industrial policy, which, as Dalia
Marin
notes , is why EU Competition Commissioner Margrethe Vestager
blocked the proposed merger between France's Alstom and Germany's Siemens. The two
companies "rarely compete with CRRC in third countries, because the Chinese company mainly
focuses on its home market." Hence, the grounds for creating "
heavyweight champions " was really a cover for developing an oligopoly instead.
Much of the focus of negotiation in the seemingly endless trade negotiations between the
U.S. and China has been on American efforts to dismantle the wave of subsidies and industrial
support that Beijing furnishes to its domestic industries. This seems both unrealistic as well
as being the exact opposite of what the U.S. should be doing if it hopes to level, or at least
carve up, the playing field.
Likewise, the problem in both the EU and the U.S. is not the size of these companies
generated by national developmentalism, but a size-neutral form of national regulation that
precludes these companies from stifling competition. The goal of a truly successful and
workable industrial policy should be to create an environment that supports and sustains value
creation and that socializes the benefits of the R&D for society as a whole, rather than
simply licensing it or selling it on to private companies so that it just becomes a vehicle
that sustains rent extraction for private profits alone.
We are slowly but surely starting to move away from market fundamentalism, but we still have
yet to make the full conceptual leap toward a sustainable industrial policy that creates an
economy for all. At least this is now becoming a fit discussion as far as policy making goes,
as many of the neoliberal shibboleths of the past 40 years are gradually being reconsidered and
abandoned. That is a start.
Repressed consumption in a few countries with sustained huge current account surpluses
naturally drives manufacturing outside the US (and other deficit countries). Interestingly,
Pettis says that those imbalances manifest today, not as a conflict between surplus/deficit
countries, but between economic sectors: bankers and owners in surplus/deficit countries vs.
the rest. According to Pettis this can be addressed internally in the US by tackling income
inequality: Tax transfers, reduced health care & educational costs, raising minimum wages
and giving negotiating power to unions. BUT BEFORE DOING THAT, THE US SHOULD IMPOSE CONTROLS
ON FOREIGN CAPITAL INFLOWS (by taxing those) INSTEAD ON TARIFFS ON FOREIGN PRODUCTS. From the
article:
It would have the additional benefit of forcing the cost of adjustment onto banks and
financial speculators, unlike tariffs, which force the cost onto businesses and
consumers.
If the US ever does this, other deficit countries, say the UK, France or Spain for
instance, should do exactly the same, and even more abruptly if these don't want to be awash
with foreign capital inflows and see inequality spiking even further.
It is financialization which is causing this. Please read Michael Hudson. As he has
pointed out it is financialization that is key. There is a reason his book was titled
"Killing the Host". Boeing's decline is also because of financialization. https://evonomics.com/hedge-fund-activists-prey-companies/
How Hedge Fund Activists Prey on Companies
Private equity and hedge are responsible for US manufacturing decline since the 1980s,
along with desire not to innovate-example why Deming's advice ignored by US automakers and
absorbed by the Japanese-who then clobbered the US automakers.
Hudson also knows that rising expenses for homeowners reduced their consumption capacity.
A main cause is rise in housing costs, education, and health.
Melman's main message is that focus on national security destroyed civilian sector. Today
most of US Govt R&D spending still in defense sector, while R&D disappearing in
private sector because of financialization.
Industrial strategy is useless for US unless housing costs come down, unless robots are
used. Hudson has already pointed out US cannot compete with Germany because of housing cost
differences. As Carl Benedikt Frey who focusses on tech has pointed out Midwest revolt was
because most automation was there.
"Frey argues that automation, or what he calls the third industrial revolution, is not only
putting jobs at risk, but is the principal source of growing inequality within the American
economy."
https://nationalinterest.org/feature/technology-trap-more-automation-driving-inequality-89211
" there are more robots in Michigan alone than in the entire American west. Where
manufacturing jobs have disappeared is also where US dissatisfaction is the greatest" https://voxeu.org/article/automation-and-its-enemies
Automation and its enemies
Carl Benedikt Frey, Ebrahim Rahbari 04 November 2019
I don't know that it's so much"free markets," as the financialization of the economy,
where money has mutated free a medium of exchange and necessary tool, to the end goal of
creating as much notational wealth, as the purpose of markets.
Money largely functions as a contract, where the asset is ultimately backed by a debt. So in
order to create the asset, similar amounts of debt have to be generated.
For one thing, it creates a centripedial effect, as positive feedback draws the asset to the
center of the community, while negative feedback pushes the debt to the edges. Since finance
functions the value circulation mechanism of society, this is like the heart telling the
hands and feet they don't need so much blood and should work harder for what they do get. The
Ancients used debt nubiles to reset this process, but we lack the long term perspective.
The other consequence is the government has been manipulated into being debtor of last
resort. Where would those trillions go otherwise and could Wall Street function without the
government soaking up so much excess money. The real elephant in the room is the degree
public debt backs private wealth.
Further note; Since this borrowed money cannot be used to compete with the private sector
for what is a finite amount of profitable investments, it is used to blow up whatever other
countries incur the wrath of our despots.
As Deep Throat explained, if you want to know what's going on, follow the money.
Whenever I see the term "free markets" bandied about I know it's a framing that fits an
ideology but in no way fits the actual facts.
Just like we now have two criminal justice systems, we now have two market systems: crony
capitalism, and actual capitalism.
Crony capitalism is for Exxon Mobil; Verizon; Amazon; Raytheon; JP Morgan. Actual
capitalism is reserved for the plebes, who get "creative destruction". Mom slipped and fell;
the hospital bill arrived and there wasn't enough cash; so they took the house.
It's the obverse of the "socialism" argument. We have socialism across the length and
breadth of the economy: more Federal dollars are spent subsidizing fossil fuels than are
spent educating children. But heaven forbid Bernie should utter the "S" word, because he's
talking about the kind of socialism for you and me.
The problem is avoiding that us versus them polarity and show why what is going on is BS.
That the markets NEED government debt to function and then waste that collective value. Not
that government is some old nanny, trying to quell the 'animal spirits" of the market.
Maintaining infrastructure just isn't as glamorous as guns and bombs. Probably doesn't
threaten to kill you, if you don't give it the money, either.
It should be obvious to most that simply pouring more vodka into the punch bowl does not
create a healthy economy, just a bunch of vultures picking at the carcass.
Finance does function as the circulation mechanism of the body of the community, just as
government, as its executive and regulatory function, is the central nervous system. We had
private government before, called monarchy. Now finance is having its 'let them eat cake'
moment.
As a medium, money is a public utility, like that other medium of roads. You can have the
most expensive car out there, but you still don't own the road.
It's not that society should be either private, or public, but an intelligent mix of
both.
Just winging it a bit here but perhaps it might be an idea to map out money flows to help
decide how to strengthen America's industrial health. As an example, it might be time to end
some subsidies. I understand that there are deliberate tax breaks for corporations that move
their manufacturing overseas. Cut them now for a start. Yeah, I know. Closing the barn door
too late.
To free up cash for R&D, turn back the clock to 1982 and make stock buybacks once more
illegal. Give tax credits to companies that pay for a younger generation of machinist's
education. Have the Federal government match dollar-for-dollar money spent on R&D. If the
government really wants to free up resources, bring out a law that says that it is illegal
for the government to give any subsidies for any corporation with a net worth of $1 billion
or more.
But we all know that none of this will ever happen as there are far too many rice bowls
involved for this to be done – until it is too late. Oh well.
"I understand that there are deliberate tax breaks for corporations that move their
manufacturing overseas. Cut them now for a start. Yeah, I know. Closing the barn door too
late."
Better late than never!
Personally, I think that is the only way to get a handle on this situation – Change
the tax laws.
1. Designate industries as targets to retain/recreate significant manufacturing capability
in the US – semiconductors, flat screens, solar panels, and pharmaceuticals come to
mind. Give them preferential protection with quotas, tariffs etc. instead of just shotgun
tariffs. These industries should be forward looking instead of recreating mid 20th
century.
2. Integrate this into NAFTA and maybe add Central American countries to it. If we need to
use cheap labor, then do it in countries that otherwise provide illegal immigrants to us to
build up their economies. Far better than sending the jobs to China, a major global
competitor.
3. Fund big science such as NASA etc. A lot of discoveries come out that can then be
commercialized with manufacturing inside the US and NAFTA.
It's very refreshing to read articles of this kind. Thank you.
I'm recently retired and my career consisted of a healthy portion of managerial and
executive responsibilities as well as a long denouement of flat out proletarian,
worker-drone, pseudo-Taylorized work. (Think Amazon but not at Amazon.) I've experienced, in
some detail, what I consider to be both sides of the post WWII dynamic as it relates to
technology and who controls the shop floor. Now that I have some time on my hands I've
decided to see if I can better understand what appears to be a central contradiction of
modern industrial practice and especially what I believe to be misguided efforts by
non-industrial corporations to employ industrial-work-process techniques in day-to-day
practice.
It does seem to me that we can do a lot better. A well developed industrial policy should
include both a strategy for improving our productive capacity while simultaneously more
fairly distributing the fruits of productivity more broadly throughout the population.
This article and the comments are very helpful in pointing the way.
For those who have used up their free access to Foreign Policy there's a non-paywalled
version of the Pettis article on the Carnegie endowment website.
There is so much to like in this post I am going to concentrate on the few points with
which I had problems:
1. Any time I hear an economist bemoaning policies which "may retard overall economic
growth." I am tempted to just tune out. 'nega-growth', a variant of Amory Lovins'
'Nega-Watts' maybe. But surely not more military Keynesianism, speeded up planned
obsolescence and just plain junk!
2. Then there is "the convenient marriage of national security considerations and with
international investment and trade." If national security considerations involve insuring
circuit boards for more exceptional (SIC) fighting machines like the F35 or for that matter
more hydrogen bombs that might actually work, count me out. OTOH if they include, for
example, insuring the country has the capability to produce its own medicines and generally
any of the goods and services required for national survival, sign me up.
(national security) Then there is 'climate change', brought to us by Exxon Mobile and the
century-long pursuit of
The Prize in the Middle Eastern deserts.
An anecdote regarding this free market for everything all the time mentality –
My small city's council recently debated whether to pay several tens of thousands of
dollars for a "branding" campaign with a PR/marketing company who in the past has dealt with
Conde Nast, so read high end clientele. My better half, who is a councilor, argued that
spending all that $$$ to attract more tourists wasn't the best use of the city's funds and
that we weren't a "brand" to begin with, but a city. We've already had big problems will
illegal Airbnb's removing significant amounts of housing from the market and housing costs
have skyrocketed in recent years while wages, of course, have not. The city had until
relatively recently been a blue collar suburb but that has changed rapidly. My wife tried to
make the case that the result of this "branding" was likely to push housing costs even higher
and push more long time residents right of of town. The council is pretty liberal, whatever
that means these days, and I don't believe there is a pro-business Republican among them. She
was still on the losing end of a 6-1 vote in favor of the "branding".
Very good article, however I don't think trying to bring manufacturing back by framing it
in terms of 'national security' is a good idea. Although the idea itself is correct,
explicitly promoting it this way would just hand more power over to the national security
industry and that has not served us well at all in the last two decades.
This was a great summary of rational thinking. Thank you MA. I've been almost depressed
this last year or so by the relentless undermining of national sovereignty. Trying to replace
it with everything from global supply chains to the ECB to Brexit-free-trade (even without
Europe) to private property rights to you name it. Sovereignty is a very basic thing –
we agree to it like we agree to our currency. And by that agreement we certainly imply an
"Industrial Policy to create an economy for all." How this wisdom got systematically
gaslighted is a whole nuther story. I'm glad China didn't get hooked.
Apparently, Americans don't need flag-making jobs as they will not Make America Great.
Trump campaign making banners in China – moving fast to beat tariffs deadline. Although
there is the possibility that these are for domestic consumption in China to help rally
Chinese hackers to the cause of supporting the Trump campaign, including voting for Trump.
That would prove there is No Collusion with Russia.
This post started off suggesting it's time to toss the "the free market" and I would add
that it's time to toss "free trade/globalization" too, but it shifted to discussions of
R&D spending, cautions to anti-trust advocates, and considerations of industrial policy
and national security.
If R&D spending and productivity increase with scale, and many sectors of the US
economy are dominated by a handful of large International Corporations does that mean that US
R&D spending and productivity are close to full-scale -- as are the Corporations? How
does scaled-up R&D spending reconcile with "massive dividend payouts and unprecedented
spending on stock repurchases" and the Corporate prioritization of "short-term
profitability"? Should I read the claims about how R&D spending and productivity increase
with 'scale' to mean the scale of the R&D spending -- not the scale of the firm? If so
what sort of calculations should be made by "antitrust advocates when they call for breaking
up big tech" if I separate the scale of a firm from the scale of the R&D spending? Does
it matter where the R&D is done? Haven't many of the large International Corporations
moved their software development and R&D offshore too? ["Software retention"? -- What
"software retention"?]
"Likewise, the problem in both the EU and the U.S. is not the size of these companies
generated by national developmentalism, but a size-neutral form of national regulation that
precludes these companies from stifling competition." What sort of industrial policy will
compel International Cartels to play nice with domestic small and medium-sized businesses?
Will that industrial policy be tied with some kind of changes to the 'free market' for
politicians, prosecutors, courts, and regulators?
If we sell it here, but we don't make it here any more then what kind of industrial policy
will rebuild the factories, the base of industrial capital, skills, and technical know-how?
It will take more than trade disputes or currency rate of exchange tricks, or R&D
spending, or targeted spending on a few DoD programs to rebuild US Industry. Shouldn't an
industrial policy address the little problem of the long distance splaying of industries
across seas and nations, the narrowing and consolidation of supply chains for the parts used
the products still 'made in the usa'? If the US started protecting its 'infant industry' I
think that might impact the way a lot of countries will run their economies. This would
affect a basis for our international hegemony. And if we don't protect our industry, which
will have to be re-built and raised from the razed factory buildings scattered around this
country, how would it ever reach the size and complexity needed to prosper again?
When the government subsidize R&D here, what reason would there be for the
resultant products that come from that R&D, be made here? In Canada the SRED (Scientific
Research and Experimental Development) tax credits are used by companies to develop products
that are then manufactured in China. No Canadian production worker will ever see an hour of
labor from those subsidies. That result is baked into the R&D cake.
As you point out, "many of the large International Corporations moved their software
development and R&D offshore too". What stops them from co-mingling the subsidies and
scamming the system for their benefit, since everything done to favor big business resolves
to a scam on the peasants.
Like the garbage French elite of long ago,
our American garbage elite of today has
learned nothing and forgotten nothing
.
For four years, it has been focused entirely on deep-sixing Donald Trump for his unforgivable
crime of demanding that our ruling caste be held accountable for its legacy of failure. Instead of
focusing on not being terrible at their job of running America's institutions,
our elitists
have decided that the real problem is us Normals being angry about how they are terrible at their
job of running America's institutions
.
So, let's imagine that they finally vanquish Trump, though every time they come up against him
they end up dragging themselves home like Ned Beatty after a particularly tough canoe trip.
What happens then?
What happens then is that it's back to business as usual,
and for decades,
business as usual for our garbage elite has not merely been running our institutions badly but
pillaging and looting our country for power, prestige and cash.
The difference is that in the future they will be much more careful to ensure that no
one who is not in on the scam will ever again come anywhere near the levers of power.
You
can already see it – the demands that we defer to the bureaucrats they own, the attacks on the idea
of free expression, and the campaign to disarm us. Their objective is no more Trumps, just an
endless line of progressive would-be Maduros with the march toward despair occasionally put on
pause for a term by some
Fredocon
Republican
who hates us Normals just as much as the Dems, but won't admit it until after he's out of office.
Our garbage elite talks a good game about its service and moral superiority, but if our betters
were actually better than us, we would not be having this national conversation about how awful
they are.
The fact is that what they want to do is go back to the way it was before Trump
,
back to 2015, aka the year 1 BT – Before Trump. Back then, progressive Democrats got their bizarre
social pathologies normalized. Moderate Democrats got money, power and an open season on the local
talent. Corporate types represented largely by squishy Republicans got globalism and the ability to
ship our jobs out and import Third World serfs in. And the fake conservatives of Conservative,
Inc., got to cash in without the necessity of actually conserving anything.
The only people that the old system didn't work for were the American people.
It's important to remember and to always remind yourself, that everything our elite says about
its motives and morals is a lie and a scam. Take the whole #MeToo thing. This was supposed to be
some sort of revolutionary rebellion against the sexual exploitation of the powerless by the
powerful. It's not, and never was. Rather, it's simply an internal power struggle among and within
the elites to reallocate power among snooty people who don't give a damn about you or me.
The fall of Harvey Weinstein or Matt Lauer or any of the other bigwigs means nothing to the
conservative single mom being exploited by the Democrat donors who own Walmart. It was actually
striving female members of the elite – actresses, models, media figures, executives – leveraging
the monstrosity of the creeps at the top to increase their own power
within
the elite. Do
you see any of these #MeToo heroines, now that they have taken their scalps, helping their
non-elite sisters out in Gun-Jesusland? Yeah, right. They are lining up with the rest of their
elite pals to shaft us.
What you do see is excuses.
They excuse Bill Clinton and his enabler
Felonia Milhous von Pantsuit. They excuse Gropey Joe. They are in the process of excusing Katie
Hill, whose naked hairbrush photo has ensured that none of us will ever sit on a hotel room chair
again. Why no outrage? Why no concern? Because taking out Stumbles McMyturn or Hoover's Dad or
Congresswoman Every Man's Lesbian Fantasy Destroyer does not help the faction of the elite that
benefited from #MeToo. That would help
us
, but not the elite. Throuple Gal was exposed by
Townhall's peppery sister site Redstate, not the mainstream media, and the mainstream media is
horrified – not by her furniture defilement but that word of it got through the gate they yearn to
keep.
The simple fact is that they desperately want Trump out so they can return to the good
old days of winks, nods, and payoffs.
Look at the Biden Family Crime Syndicate and the antics of the junior capo of the Cosa Nose
Candy. In what universe is it A-OK that the crack-fueled Johnny Appleseed of paternity suits that
is Joe's snortunate son was cashing in on $50K a month in sweet, sweet Ukrainian gas gold just
weeks after Ensign Biden got booted because he tooted? And then there's riding on Air Force Two to
the NBA's favorite dictatorship for some commie ducats. Now there are even some Romanian
shenanigans too – is there a single country on earth that Totally-Not-Senile Joe didn't shake down
for the benefit of his daughter-in-law's second hubby?
But our garbage elite's garbage media seems amazingly uninterested in all this – it's fascinated
by the timing of a situation room snap after Trump unleashed the Army's Delta Force on al-Baghdadi
and by dog medal memes, but the Veep's boy's bag-mannery is not merely of no interest but is
something they close their fussy phalanx ranks around to protect. Keep in mind, the premise
underlying the whole star chamber impeachment festival of onanism is that Donald Trump, America's
chief law enforcement officer, was somehow wrong and bad and double-plus ungood because he
allegedly asked the Ukrainians, "Hey, what's the dealio with the Columbia Kid's pay-offs?"
In a non-bizarro political universe, the proper reaction to the Prezzy demanding,
"You best fork over the evidence on these manifestly corrupt antics involving the Vice-President of
the United States or we're cutting you off from the American taxpayers' feeding trough," would be,
"Hell to the yeah, four more years! Four more years!'
But it's not
, because the elite likes its sexual abuse and its foreign
cash and its total lack of accountability to us, the Normals, the people who are supposed to be the
ones that our elite is working for. The elite has not learned its lesson. It has not admitted that
it sucks and resolved to stop sucking.
Instead, it has doubled down. And if it gets power again, it will act to solve what it sees as
the most urgent problem facing America – the fact that we the people have the ability to reject the
elite's utter incompetence and surpassing greed and elect someone with a mandate to burn down the
whole rotten edifice.
If the elitists get power again, they are never letting go of it, not without a fight.
And now, doesn't the elite's obsessive fixation on shutting down conservative dissent,
eliminating competing institutions (like religious entities), and disarming law-abiding Americans
make a lot more sense?
* * *
Our garbage elite is outraged over the success of my action-packed yet hilarious novels of
America torn apart by liberal malice,
People's
Republic
,
Indian
Country
and
Wildfire
.
In a few weeks, Number IV, Collapse, will drop. They call these books "appalling." They don't want
you to read them. That's better than any blurb!
Today's ceremony, however, has very special meaning. Because
today we are not merely transferring power from one
Administration to another, or from one party to another – but
we are transferring power from Washington, D.C. and giving it
back to you, the American People.
THAT is what TRUMP said. And it ******* freaks THEM out.
Today's ceremony, however, has very special meaning. Because
today we are not merely transferring power from one
Administration to another, or from one party to another – but
we are transferring power from Washington, D.C. and giving it
back to you, the American People.
THAT is what TRUMP said. And it ******* freaks THEM out.
Today's ceremony, however, has very special meaning. Because
today we are not merely transferring power from one
Administration to another, or from one party to another – but
we are transferring power from Washington, D.C. and giving it
back to you, the American People.
THAT is what TRUMP said. And it ******* freaks THEM out.
Today's ceremony, however, has very special meaning. Because
today we are not merely transferring power from one
Administration to another, or from one party to another – but
we are transferring power from Washington, D.C. and giving it
back to you, the American People.
THAT is what TRUMP said. And it ******* freaks THEM out.
Today's ceremony, however, has very special meaning. Because
today we are not merely transferring power from one
Administration to another, or from one party to another – but
we are transferring power from Washington, D.C. and giving it
back to you, the American People.
THAT is what TRUMP said. And it ******* freaks THEM out.
Today's ceremony, however, has very special meaning. Because
today we are not merely transferring power from one
Administration to another, or from one party to another – but
we are transferring power from Washington, D.C. and giving it
back to you, the American People.
THAT is what TRUMP said. And it ******* freaks THEM out.
He never said the elite are the "super rich". Sorry about your
trump derangement syndrome, comrade. Many wealthy in this
country are good people. This author is referencing the "ruling
elite" Washington-Hollywood-Media complex that comprises the
child trafficking lefties in this country: they ARE the fascist
elite who run the censorship platforms in silicon valley, the
hypocrite millionaire socialists like Warren, or the deep state
mouth pieces like Adam Schitt....
Trump is the elite? Trump represents the elite? If that's so
why are the elite trying to take him out? I don't think you
understand who the elite are that the author is referring to.
He's talking about the political elite...the DC power
brokers...the political "establishment."
"For four years, it has been focused entirely on deep-sixing
Donald Trump for his unforgivable crime of demanding that our
ruling caste be held accountable for its legacy of failure."
Donald Trump is our savior? Look at all the elite lackeys he put
in his Cabinet, the exact type of people Kurt Schlichter claims
Trump is removing. Trump passed $1.5 trillion tax cut bill
benefiting the rich, expanded military spending $700 billion.
Chief Economic Advisor - Daniel Cohn - Goldman Sachs
Secretary of State - Rex Tillerson - Exxon Mobil
Secretary of Treasury - Steve Mnuchin - Goldman Sachs
Commerce Secretary - Wilbur Ross - Rothschilds and more
Transportation Secretary - Elaine Chao - wife of Mitch
McConnell, from Chinese family shipping magnate
Secretary of Labor - Andy Puzder - CEO CKE Restaurants
Education Secretary - Betsy DeVos - husband CEO of Amway
"... On the other hand, as Targ explains, are the Trumpian, "America First" nationalist capitalists. This faction of the ruling class, while also supporting global dominance and a permanent war economy (military-related spending will consume 48 percent of the 2020 federal budget) favors trade restrictions, economic nationalism, building walls and anti-immigrant policies. Although Trump is inconsistent, bumbling and sometimes contradictory, he's departed from the neocon's agenda by making overtures to North Korea and Russia, voicing doubts about NATO as an expensive relic from the past that is being dangerously misused outside of Europe, not being afraid to speak bluntly to EU allies, frequently mentioning ending our "endless, ridiculous and costly wars," asserting that the U.S. is badly overextended and saying "The job of our military is not to police the world." ..."
"... This is a high stakes intra-ruling class struggle and neither side cares a fig about what's best for the American people or those beyond our borders. At this point it's impossible to know how it will play out but grasping the underlying dynamics explains much about current U.S. domestic and foreign policy. This understanding may, in turn, point toward how opponents of America's oligarchic elites can most expeditiously use their time and energy. ..."
"... Foremost is the fact that Trump's intra-elite enemies despise him not for being a neo-fascistic demagogue, a despicable human being devoid of a conscience, or for the brouhaha over Ukraine. Their animus is rooted in the conviction that Trump has been a foot dragging imperialist, an equivocal caretaker of empire, unreliable pull-the-trigger Commander-in-chief (e.g.Iran) and transparent truth-teller about the real motives behind U.S. foreign policy. These are his unforgivable sins and if he's impeached or denied the Oval Office by some other means, they will be real reasons. ..."
"... One of Trump's most traitorous acts is that he's been consistent, at least rhetorically, in being opposed to U.S. troops being killed in "endless wars." One need not agree with his reasons to find merit in this worthy objective. His motives probably include Nativism, racism, foreign investment stability, the wars causing more refugees to come here, his massive ego, appeals to his voting base, or simply because he believes both he and the "real America" would be better off. For him, the latter two are synonymous. ..."
"... For this treachery, those arrayed against Trump include at least, the Pentagon-CIA-armaments lobby, MSM editors like those at CNN, The New York Times ..."
Over the past few months President Trump has unilaterally by Tweet and telephone begun to
dismantle the U.S. military's involvement in the Middle East. The irony is amazing, because in
a general overarching narrative sense, this is what the marginalized antiwar movement has been
trying to do for decades.
1
Prof. Harry Targ, in his important piece "United States foreign policy: yesterday, today,
and tomorrow," (MR online, October 23, 2919), reminds us of the factional dispute among U.S.
foreign policy elites over how to maintain the U.S. empire. On the one hand are the neoliberal
global capitalists who favor military intervention, covert operations, regime change,
strengthening NATO, thrusting China into the enemy vacuum and re-igniting the Cold War with
Russia. All of this is concealed behind lofty rhetoric about humanitarianism, protecting human
rights, promoting democracy, fighting terrorism and American exceptionalism. Their mantra is
Madeleine Albright's description of the United States as the world's "one indispensable
nation."
On the other hand, as Targ explains, are the Trumpian, "America First" nationalist
capitalists. This faction of the ruling class, while also supporting global dominance and a
permanent war economy (military-related spending will consume 48 percent of the 2020 federal
budget) favors trade restrictions, economic nationalism, building walls and anti-immigrant
policies. Although Trump is inconsistent, bumbling and sometimes contradictory, he's departed
from the neocon's agenda by making overtures to North Korea and Russia, voicing doubts about
NATO as an expensive relic from the past that is being dangerously misused outside of Europe,
not being afraid to speak bluntly to EU allies, frequently mentioning ending our "endless,
ridiculous and costly wars," asserting that the U.S. is badly overextended and saying "The job
of our military is not to police the world."
I would add that Trump is also an "American exceptionalist" but ascribes a very different
provincial meaning to the term, something closer to a crabbed provincialism, an insular
"Shining City on a Hill," surrounded by a moat.
This is a high stakes intra-ruling class struggle and neither side cares a fig about
what's best for the American people or those beyond our borders. At this point it's impossible
to know how it will play out but grasping the underlying dynamics explains much about current
U.S. domestic and foreign policy. This understanding may, in turn, point toward how opponents
of America's oligarchic elites can most expeditiously use their time and energy.
Foremost is the fact that Trump's intra-elite enemies despise him not for being a
neo-fascistic demagogue, a despicable human being devoid of a conscience, or for the brouhaha
over Ukraine. Their animus is rooted in the conviction that Trump has been a foot dragging
imperialist, an equivocal caretaker of empire, unreliable pull-the-trigger Commander-in-chief
(e.g.Iran) and transparent truth-teller about the real motives behind U.S. foreign policy.
These are his unforgivable sins and if he's impeached or denied the Oval Office by some other
means, they will be real reasons.
One of Trump's most traitorous acts is that he's been consistent, at least rhetorically,
in being opposed to U.S. troops being killed in "endless wars." One need not agree with his
reasons to find merit in this worthy objective. His motives probably include Nativism, racism,
foreign investment stability, the wars causing more refugees to come here, his massive ego,
appeals to his voting base, or simply because he believes both he and the "real America" would
be better off. For him, the latter two are synonymous.
For this treachery, those arrayed against Trump include at least, the
Pentagon-CIA-armaments lobby, MSM editors like those at CNN, The New York Times and
The Washington Post , NSA, Zionist neocons, the DNC, establishment Democrats, some
hawkish Republican senators, many lifestyle liberals still harboring a sentimental faith in
American goodness and even EU and NATO elites who've benefited from being faithful lackeys to
Washington's global imperialism.
In a recent interview, Major Danny Sjursen, retired army officer and West Point instructor
with tours of duty in Iraq and Afghanistan, notes that "The last bipartisan issue in American
politics today is warfare, forever warfare." In terms of the military, that means " even the
hint of getting out of the establishment interventionist status quo is terrifying to these
generals, terrifying to these former intelligence officers from the Obama administration who
seem to live on MSNBC now." Sjursen adds that many of these generals (like Mattis) have already
found lucrative work with the military industrial complex.
2
In response to Trump's announcement about removing some U.S. troops from the region, we find
an op-ed in The New York Times by Admiral William McRaven where he states that Trump
"should be out of office sooner than later. It's time for a new person in the Oval Office,
Republican, Democrat or Independent. The fate of the nation depends on it." The unmistakeable
whiff of support for a soft coup is chilling. If Trump can't be contained, he must be deposed
one way or another.
And this is all entirely consistent with the fact that the national security state was
totally caught off guard by Trump's victory in 2016. For them, Trump was a loose cannon,
erratic and ultra-confrontational, someone they couldn't control. Their favored candidate was
the ever reliable, Wall Street-friendly, war-mongering Hillary Clinton or even Jeb Bush. Today,
barring a totally chastised Trump, the favorites include a fading Biden, Pence, a reprise of
Clinton or someone in her mold but without the baggage.
For Trump's establishment enemies, another closely related failing is his habit of blurting
out inconvenient truths. I'm not the first person to say that Trump is the most honest
president in my lifetime. Yes, he lies most of the time but as left analyst Paul Street puts
it, "Trump is too clumsily and childishly brazen in laying bare the moral nothingness and
selfishness of the real material-historical bourgeois society that lives beneath the veils of
'Western civilization' and 'American democracy.'"
3
All his predecessors took pains or were coached to conceal their imperialist actions behind
declarations of humanitarian interventionism but Trump has pulled the curtains back to reveal
the ugly truths about U.S. foreign policy. As such, the carefully calibrated propaganda fed to
the public in endless reiterations over a lifetime is jeopardized whenever Trump utters a
transparent truth. This is intolerable.
Here are a few examples culled from speeches, interviews and press reports:
+ At a May 10, 2017 Oval Office meeting with Russian Foreign Minister Sergei Lavrov and
Russian Ambassador Sergey Kislayak, Trump said he was unconcerned about Moscow's interference
in the U.S. election because "We do the same thing in elections in other countries." [White
House officials were so alarmed they tried to limit access to the transcript].
+ When asked about whether Putin is a killer, Trump sarcastically asked whether "our
country was so innocent?" and added, "Our country does plenty of killing."
+ His reaction to Saudi Arabia's murder of Khashoggi was that "they really messed up."
[Translation: He/our government didn't care about what happened except that the Saudis
bungled the job. Uttering this inconvenient truth removed the usual fig leaf claim of moral
outrage and checked off another box on the Trump-Must-Go list maintained by the
globalists].
+ "The Kurds are no angels." [This dried up all the crocodile tears being shed by both
Dems and Republicans].
+ On Libya: Asked about a role for the U.S. in Libya, Trump responded "I do not see a
role in Libya. I think the United States has, right now, enough roles. We're in a role
everywhere." He did say "I would just go in and take the oil," and repeated this intention
regarding Syria. [Once again Trump sabotaged any pretense of righteous motives behind
Washington's foreign policy in the Middle East. To wit: It's always been about blood for
oil].
+ When firing John Bolton, his former national security advisor, Trump remarked "He made
some very big mistakes. When he talked about the Libya model for Kim Jong Un, that was not a
good statement to make. You just look at what happened with Gaddafi." [Here, Trump's truth
telling undermined the standard U.S. position by saying it makes perfect sense for other
countries to obtain nukes if they wish to avoid being destroyed by us.]
+ "We're in many, many countries. I do know the exact number of countries we have troops
in but I'm embarrassed to say it because it's so foolish. We're in countries that don't even
like us some people, whether it's – – you call it the military-industrial complex
or beyond that, they'd like me to stay the want me to fight forever That's what they want to
do, fight. A lot of companies want to to fight because they make their weapons based on
fighting, not based on peace. And they take up a lot of people. I want to bring our soldiers
back home."
+ During a private military briefing, Trump stunned officials by scowling, "Seriously,
who gives a shit about Afghanistan?" And he continued, "So far we've in for $7 trillion,
fellas. $7 trillion including Iraq. Worst decision ever "
+ On Ukraine: "The people of Crimea would rather be with Russia than where they
were."
+ On Syria, "Let someone else fight over this long blood stained sand." And more broadly,
he said "The same people that I watched and read -- give me and the United States advice --
were the people I've been watching and reading for many years. They are the ones who got us
into the Middle East mess but never have the vision or courage to get us out. They just
talk."
+ Responding to South Carolina Republican Sen. Lindsay Graham's criticism: "The people of
South Carolina don't want us to get into another war with Turkey, a NATO member, or with
Syria. Let them fight their own wars."
+ On Middle East wars: "All of those lives lost, the young men and women gravely wounded
-- so many -- the Middle East is less safe, less stable, and less secure than before these
conflicts began."
As noted earlier, the endgame is not in sight. Trump seems without a clear strategy for
moving forward and from all reports he can't depend on his current coterie of White House
advisors to produce one. Further, he may lack the necessary political in-fight skills or
tenacity to see it through. When some of his Republican "allies" savaged his announcement to
withdraw troops from Syria, he backtracked and made some, at least cosmetic concessions.
However, the fact that Trump's position remains popular with his voter base and especially with
veterans of these wars will give pause to Republicans. If some finally join the Democrats in
voting for impeachment over Ukraine-gate they may minimize re-election risks by hiding their
real motives behind pious claims -- as will most Democrats -- about "protecting the
constitution and the rule of law".
Now, lest I be misunderstood, nothing I've written here should be construed as support for
Donald Trump or that I believe he's antiwar. Trump is aberration only in that his brand of
Western imperialism means that the victims remain foreigners while U.S. soldiers remain out of
harm's way. He knows that boots on the ground can quickly descend into bodies in the ground and
unlike his opponents, coffins returning to Dover Air Base are not worth risking his personal
ambitions. This is clearly something to build upon. We don't know if Trump views drones, cyber
warfare and proxies as substitutes but his intra-elite opponents remain extremely dubious. In
any event, that's another dimension to expose and challenge.
Finally, we know the ruling class in a capitalist democracy -- an oxymoron -- expends
enormous time and resources to obtain a faux "consent of the governed" through misinformation
conveyed via massive, lifelong ideological indoctrination. For them, citizen's policing
themselves is more efficient than coercion and precludes raising questions that might
delegitimize the system. Obviously force and fear are hardly unknown -- witness the mass
incarceration and police murder of black citizens -- but one only has to look around to see how
successful this method of control has been.
Nevertheless, as social historian Margaret Jacoby wisely reminds us, "No institution is safe
if people simply stop believing the assumptions that justify its existence."
4 Put another way, the system simply can't accommodate certain "dangerous ideas."
Today, we see promising political fissures developing, especially within the rising
generation, and it's our responsibility to help deepen and widen these openings through
whatever means at our disposal.
"... I noticed that the Treasury General Account cash balance hit $435 billion at the end of October, up over $300 billion from the balance in that account at the end of August. That action basically pulled over $300 billion in cash liquidity from the financial system, all while short term money market rates spiked as high as 10 percent ..."
"... I suspect something along the lines of the stock market drop in the fourth quarter of last year when they basically pulled the same stunt ahead of their partial government shutdown. ..."
"... The D party reminds me of the 'union' I belonged to while building refrigerated truck bodies in the south. On Sundays, the head of the 'union' sat in the same pew as the owner of the factory. When real union folks started agitating from within, they were fired. ..."
Yves here. Hahaha! While you
were distracted by the impeachment drama, the Trump Administration soldiered on with launching
more corporate gimmies, this one in the form of another tax break.
By Jake Johnson, staff writer at Common Dreams. Originally published at
Common Dreams
President Donald Trump's Treasury Department on Thursday took the
first step toward eliminating remaining regulations designed to prevent corporations from
avoiding U.S. taxes by storing profits overseas, a move critics decried as yet another harmful
giveaway to big business.
Treasury Secretary Steve Mnuchin, a former Goldman Sachs executive, said in a statement that the 2017
GOP tax law -- which disproportionately
benefited the rich -- rendered Obama-era rules against offshore tax avoidance "obsolete" by
significantly reducing the corporate tax rate.
Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, disagreed with
Mnuchin's assessment, warning in a statement
that the Treasury Department's plan "only provides an opening for corporations to again dodge
their taxes."
"The corporations that got a massive taxpayer handout are getting another gift from Donald
Trump," said Wyden. "The Obama administration had essentially shut down inversion --
transactions whose only purpose is to help big multinational corporations move overseas to
avoid paying taxes."
According to Bloomberg, the Treasury Department's proposal, detailed in a policy
guidance
(pdf) released Thursday, "could make it easier for firms to use accounting tactics to minimize
their U.S. earnings and inflate their foreign profits, which are frequently taxed at rates
lower than the current 21 percent domestic corporate levy."
"The existing regulations were aimed at stopping American companies from moving their
headquarters to a lower-tax country, a process known as a corporate inversion," noted
Bloomberg .
Contrary to Mnuchin's claim that the GOP's 2017 tax law eliminated incentives for
corporations to shift profits overseas, advocacy groups and Democratic lawmakers have
argued the law made it easier for businesses to avoid U.S. taxes.
"The Tax Cuts and Jobs Act (TCJA) will allow companies to avoid taxes on $235 billion in
profits each year going forward," a coalition of more than 50 progressive organizations led by
Americans for Tax Fairness wrote in a
letter (pdf) to Congress last May.
"Moreover, the law created new incentives for multinational corporations to move their real
operations offshore," the groups said. "The law guarantees that U.S. multinational corporations
will pay at most one-half the domestic tax rate on their offshore earnings, with many companies
paying little or nothing in taxes on these earnings."
The majority of Trump's base believes, as an article of faith, that we need to eliminate
corporate taxes so the poor starving business owners can support more employees.
Completely denying reality, of course, and offering no solutions to it. It's the
"temporarily embarassed millionaire's club".
Pretty much. Both parties are in the pocket of the monopolies that have grown up since
deregulation became the thing, imo. Once upon a time the FDR/New Deal Dems opposed monopoly
power. The New Dems seem to love monopoly power.
And at the same time, he's not doing any of this all by himself.
I think it's more along the lines of he knows an idea that will benefit himself when he hears
it.
One sees why the Democrats are pushing so hard for the "Russiagate" thing, and making a
circus of impeachment – because on matters of substance they are as bad as the
Republicans.
The Democrats have no problem blocking any serious attempt at enforcing the laws against
illegal immigration (something favored by the super-rich, who love cheap labor more than
anything else – Bernie Sanders 2015). The Democrats have no problem blocking Trump's
(admittedly somewhat pathetic) attempts to pull us out of these pointless winless foreign
wars. But as regards Trump's massive corporate tax cut – they basically just let it
pass with only a few pro-forma grumbles. Because you gotta have your priorities. Especially
when these priorities have been paid for.
I dont get distracted, I see it all. These people will all be destroyed by the Almighty in
his great day along with adherents to and all nation/states. This is the love of money and me
me me attitude forecast in the last days.
you and me both, I have been seeing it for a long time. I would like to remind people that
there is a world of difference between a guy on the bottom wanting more, and a guy on the top
wanting more.
Given the left-wing surge through Sanders I am convinced that the corporate paid-for
Democrats see the writing on the wall. Their paid mission is now to discredit the Democratic
party as much as possible to make sure that 1) in short-term Trump wins and continue the
corporate and 1%-er welfare-programs and 2) that no left-winger, similar to Sanders can ever
rule through the Democratic party since it has become a joke and it will cost a lot of time
and money to build a new party that will be trusted
No, no, no It's certainly a move in 11 dimensional chess. First we lure these corporations
back onto American soil. Then, once they're comfy, we nationalize them all and seize all
their overseas holdings. Surely, that's the plan.
The good news is that all it will take to reverse these executive orders that benefit the
few are new executive orders by a different president.
On the related topic of the Mnuchin Treasury acting in the shadows while the spotlight is
trained elsewhere, I noticed that the Treasury General Account cash balance hit $435
billion at the end of October, up over $300 billion from the balance in that account at the
end of August. That action basically pulled over $300 billion in cash liquidity from the
financial system, all while short term money market rates spiked as high as 10 percent
and this president was railing against Fed policy makers for tight monetary conditions and
high interest rates. I hate to think what would have happened to their precious stock market
if the Powell Fed had not implemented new policies to offset the current administration's
borrowing for the purpose of hoarding cash. I suspect something along the lines of the
stock market drop in the fourth quarter of last year when they basically pulled the same
stunt ahead of their partial government shutdown.
Why is the US Treasury hoarding cash? There is no apparent reason to do so in the name of
lowering interest payments as the Fed remits its interest income to the Treasury at the end
of each fiscal year. I expect we will find out soon enough.
The D party reminds me of the 'union' I belonged to while building refrigerated truck
bodies in the south. On Sundays, the head of the 'union' sat in the same pew as the owner of
the factory. When real union folks started agitating from within, they were fired.
"... Washington's basic purpose in deploying the US forces in oil and natural gas fields of Deir al-Zor governorate is to deny the valuable source of income to its other main rival in the region, Damascus. ..."
Before the evacuation of 1,000 American troops from northern
Syria to western Iraq, the Pentagon had 2,000 US forces in Syria.
After the drawdown of US
troops at Erdogan's insistence in order for Ankara to mount a ground offensive in northern Syria,
the US has still deployed 1,000 troops, mainly in oil-rich eastern Deir al-Zor province and
at al-Tanf military base.
Al-Tanf military base is strategically located in southeastern Syria on the border between Syria,
Iraq and Jordan, and it straddles on a critically important Damascus-Baghdad highway, which
serves as a lifeline for Damascus.
Washington has illegally occupied 55-kilometer area around
al-Tanf since 2016, and several hundred US Marines have trained several Syrian militant groups there.
It's worth noting that rather than fighting the Islamic State, the purpose of continued presence
of the US forces at al-Tanf military base is to address Israel's concerns regarding the expansion of
Iran's influence in Iraq, Syria and Lebanon.
Regarding the oil- and natural gas-rich Deir al-Zor governorate, it's worth pointing out
that Syria used to produce modest quantities of oil for domestic needs before the war – roughly 400,000
barrels per day, which isn't much compared to tens of millions barrels daily oil production in the
Gulf states.
Although Donald Trump crowed in a characteristic blunt manner in a tweet after the withdrawal of
1,000 American troops from northern Syria that Washington had deployed forces in eastern Syria where
there was oil,
the purpose of exercising control over Syria's oil is neither to smuggle oil
out of Syria nor to deny the valuable source of revenue to the Islamic State.
There is no denying the fact that the remnants of the Islamic State militants are still found in
Syria and Iraq but its emirate has been completely dismantled in the region and its leadership is on
the run. So much so that the fugitive caliph of the terrorist organization was killed in the bastion
of a rival jihadist outfit, al-Nusra Front in Idlib, hundreds of kilometers away from the Islamic State
strongholds in eastern Syria.
Much like the "scorched earth" battle strategy of medieval warlords – as in the case of the Islamic
State which early in the year burned crops of local farmers while retreating from its former strongholds
in eastern Syria –
Washington's basic purpose in deploying the US forces in oil and
natural gas fields of Deir al-Zor governorate is to deny the valuable source of income to its other
main rival in the region, Damascus.
After the devastation caused by eight years of proxy war, the Syrian government is in dire need
of tens of billions dollars international assistance to rebuild the country. Not only is Washington
hampering efforts to provide international aid to the hapless country, it is in fact squatting over
Syria's own resources with the help of its only ally in the region, the Kurds.
Although Donald Trump claimed credit for expropriating Syria's oil wealth, it bears mentioning
that "scorched earth" policy is not a business strategy, it is the institutional logic of the deep
state.
President Trump is known to be a businessman and at least ostensibly follows a non-interventionist
ideology; being a novice in the craft of international diplomacy, however, he has time and again been
misled by the Pentagon and Washington's national security establishment.
Regarding Washington's interest in propping up the Gulf's autocrats and fighting their wars in regional
conflicts, it bears mentioning that in April 2016, the Saudi foreign minister
threatened
that the Saudi kingdom would sell up to $750 billion in treasury securities and other
assets if the US Congress passed a bill that would allow Americans to sue the Saudi government in the
United States courts for its role in the September 11, 2001 terror attack – though the bill was eventually
passed, Saudi authorities have not been held accountable; even though 15 out of 19 9/11 hijackers were
Saudi nationals.
Moreover, $750 billion is only the Saudi investment in the United States, if we add its investment
in Western Europe and the investments of UAE, Kuwait and Qatar in the Western economies, the sum total
would amount to trillions of dollars of Gulf's investments in North America and Western Europe.
Furthermore, in order to bring home the significance of the Persian Gulf's oil in the energy-starved
industrialized world, here are a few stats from the OPEC data:
Saudi Arabia has the world's
largest proven crude oil reserves of 265 billion barrels and its daily oil production exceeds 10 million
barrels; Iran and Iraq, each, has 150 billion barrels reserves and has the capacity to produce 5 million
barrels per day, each; while UAE and Kuwait, each, has 100 billion barrels reserves and produces 3
million barrels per day, each; thus, all the littoral states of the Persian Gulf, together, hold 788
billion barrels, more than half of world's 1477 billion barrels of proven oil reserves.
No wonder then, 36,000 United States troops have currently been deployed in their numerous military
bases and aircraft carriers in the oil-rich Persian Gulf in accordance with the Carter Doctrine of
1980, which states: "Let our position be absolutely clear: an attempt by any outside force to gain
control of the Persian Gulf region will be regarded as an assault on the vital interests of the United
States of America, and such an assault will be repelled by any means necessary, including military
force."
Additionally, regarding the Western defense production industry's sales of arms to the Gulf Arab
States,
a report
authored
by William Hartung of the US-based Center for International Policy found that the Obama administration
had offered Saudi Arabia more than $115 billion in weapons, military equipment and training during
its eight-year tenure.
Similarly, the top items in Trump's agenda for his maiden visit to Saudi Arabia in May 2017 were:
firstly, he threw his weight behind the idea of the Saudi-led "Arab NATO" to counter Iran's influence
in the region; and secondly, he announced an unprecedented arms package for Saudi Arabia. The package
included between $98 billion and $128 billion in arms sales.
Therefore, keeping the economic dependence of the Western countries on the Gulf Arab States in mind,
during the times of global recession when most of manufacturing has been outsourced to China, it is
not surprising that when the late King Abdullah of Saudi Arabia decided to provide training and arms
to the Islamic jihadists in the border regions of Turkey and Jordan against the government of Bashar
al-Assad in Syria, the Obama administration was left with no other choice but to toe the destructive
policy of its regional Middle Eastern allies, despite the sectarian nature of the proxy war and its
attendant consequences of breeding a new generation of Islamic jihadists who would become a long-term
security risk not only to the Middle East but to the Western countries, as well.
Similarly, when King Abdullah's successor King Salman decided, on the whim of the Crown Prince Mohammad
bin Salman, to invade Yemen in March 2015, once again the Obama administration had to yield to the
dictates of Saudi Arabia and UAE by fully coordinating the Gulf-led military campaign in Yemen not
only by providing intelligence, planning and logistical support but also by selling billions of dollars'
worth of arms and ammunition to the Gulf Arab States during the conflict.
In this reciprocal relationship, the US provides security to the ruling families of the Gulf Arab
states by providing weapons and troops; and in return, the Gulf's petro-sheikhs contribute substantial
investments to the tune of hundreds of billions of dollars to the Western economies.
Regarding the Pax Americana which is the reality of the contemporary neocolonial order,
according to a January 2017
infographic
by the New York Times, 210,000 US military personnel were stationed all over the world,
including 79,000 in Europe, 45,000 in Japan, 28,500 in South Korea and 36,000 in the Middle East.
Although Donald Trump keeps complaining that NATO must share the cost of deployment of US troops,
particularly in Europe where 47,000 American troops are stationed in Germany since the end of the Second
World War, 15,000 in Italy and 8,000 in the United Kingdom, fact of the matter is that the cost is
already shared between Washington and host countries.
Roughly, European countries pay one-third of the cost for maintaining US military bases in Europe
whereas Washington chips in the remaining two-third. In the Far Eastern countries, 75% of the cost
for the deployment of American troops is shared by Japan and the remaining 25% by Washington, and in
South Korea, 40% cost is shared by the host country and the US contributes the remaining 60%.
Whereas the oil-rich Gulf Cooperation Countries (GCC) – Saudi Arabia, UAE, Kuwait and Qatar – pay
two-third of the cost for maintaining 36,000 US troops in the Persian Gulf where more than half of
world's proven oil reserves are located and Washington contributes the remaining one-third.
* * *
Nauman Sadiq is an Islamabad-based attorney, columnist and geopolitical analyst focused on the
politics of Af-Pak and Middle East regions, neocolonialism and petro-imperialism.
I am always amazed (and amused) at
how much smarter "journalists" are
than POTUS. If ONLY Mr. Trump would
read more and listen to those who
OBVIOUSLY are sooo much smarter!!!!
Maybe then he wouldn't be cowed and
bullied by Erdogan, Xi, Jung-on,
Trudeau (OK so maybe that one was
too far fetched) to name a few.
Please note the sarcasm. Do I really
need to go in to the success after
success Mr. Trump's foreign policy
has enjoyed? Come on Man.
What a load of BOLOCKS...The ONLY, I
mean The Real and True Reason for
American Armored presence is one
thing,,,,,,,Ready for IT ? ? ? To
Steal as much OIL as Possible, AND
convert the Booty into Currency,
Diamonds or some other intrinsically
valuable commodity, Millions of
Dollars at a Time......17 Years of
Shadows and Ghost Trucks and Tankers
Loading and Off-Loading the Black
Gold...this is what its all
about......M-O-N-E-Y....... Say It
With Me.... Mon-nee, Money Money
Mo_on_ne_e_ey, ......
From the sale of US oil in Syria
receive 30 million. dollars per
month. Image losses are immeasurably
greater. The United States put the
United States as a robbery bandit.
This is American democracy. The
longer the troops are in Syria, the
more countries will switch to
settlements in national currencies.
"Our interests", "strategic
interests" is always about money,
just a euphemism so it doesn't
look as greedy as it is. Another
euphemism is "security' ,meaning
war preparations.
...The military power of the USA
put directly in the service of "the
original TM" PIRATE STATE.
U are
the man Norm! But wait... now things
get a little hazy... in the
classic... 'alt0media fake
storyline' fashion!
"President Trump is known to be a
businessman and at least ostensibly
follows a non-interventionist
ideology; being a novice in the
craft of international diplomacy,
however, he has time and again been
misled by the Pentagon and
Washington's national security
establishment."
Awww! Poor "DUmb as Rocks
Donnie" done been fooled agin!
...In the USA... the military men
are stirring at last... having been
made all too aware that their
putative 'boss' has been operating
on behalf of foreign powers ever
since being [s]elected, that the
State Dept of the once Great
Republic has been in active cahoots
with the jihadis ...
and that those who were sent over
there to fight against the
headchoppers discovered that the
only straight shooters in the whole
mess turned out to be the Kurds who
AGENT FRIMpf THREW UNDER THE BUS
ON INSTRUCTIONS FROM JIHADI HQ!
How to Tax Our Way Back to Justice: It is absurd that the working class is now paying
higher tax rates than the richest people in America.
By Emmanuel Saez and Gabriel Zucman
America's soaring inequality has a new engine: its regressive tax system. Over the past
half century, even as their wealth rose to previously unseen heights, the richest Americans
watched their tax rates collapse. Over the same period, as wages stagnated for the working
classes, work conditions deteriorated and debts ballooned, their tax rates increased.
Stop to think this over for a minute: For the first time in the past hundred years, the
working class -- the 50 percent of Americans with the lowest incomes -- today pays higher tax
rates than billionaires.
The full extent of this situation is not visible in official statistics, which is perhaps
why it has not received more attention so far. Government agencies like the Congressional
Budget Office publish information about the distribution of federal taxes, but they disregard
state and local taxes, which account for a third of all taxes paid by Americans and are in
general highly regressive. The official statistics keepers do not provide specific
information on the ultra-wealthy, who although few in number earn a large fraction of
national income and therefore account for a large share of potential tax revenue. And until
now there were no estimates of the total tax burden that factored in the effect of President
Trump's tax reform enacted at the end of 2017, which was particularly generous for the
ultra-wealthy.
To fill this gap, we have estimated how much each social group, from the poorest to
billionaires, paid in taxes for the year 2018. Our starting point is the total amount of tax
revenue collected in the United States, 28 percent of national income. We allocate this total
across the population, divided into 15 income groups: the bottom 10 percent (the 24 million
adults with the lowest pretax income), the next 10 percent and so on, with finer-grained
groups within the top 10 percent, up to the 400 wealthiest Americans.
The Regressive American Tax System
How combined federal, state and local taxes fall on American adults, by income
percentile.
Three regressive taxes account for most of the burden on the working class:
Our data series include all taxes paid to the federal, state and local governments: the
federal income tax, of course, but also state income taxes, myriad sales and excise taxes,
the corporate income tax, business and residential property taxes and payroll taxes. In the
end, all taxes are paid by people. The corporate tax, for example, is paid by shareholders,
because it reduces the amount of profit they can receive in dividends or reinvest in their
companies.
You will often hear that we have a progressive tax system in the United States -- you owe
more, as a fraction of your income, as you earn more. When he was a presidential candidate in
2012, Senator Mitt Romney famously lambasted the 47 percent of "takers" who, according to
him, do not contribute to the public coffers. In reality, the bottom half of the income
distribution may not pay much in income taxes, but it pays a lot in sales and payroll taxes.
Taking into account all taxes paid, each group contributes between 25 percent and 30 percent
of its income to the community's needs. The only exception is the billionaires, who pay a tax
rate of 23 percent, less than every other group.
The tax system in the United States has become a giant flat tax -- except at the top,
where it's regressive. The notion that America, even if it may not collect as much in taxes
as European countries, at least does so in a progressive way, is a myth. As a group, and
although their individual situations are not all the same, the Trumps, the Bezoses and the
Buffetts of this world pay lower tax rates than teachers and secretaries do.
This is the tax system of a plutocracy. With tax rates of barely 23 percent at the top of
the pyramid, wealth will keep accumulating with hardly any barrier. So too will the power of
the wealthy, including their ability to shape policymaking and government for their own
benefit.
From Kennedy Through Trump, the Rich Have Done Very, Very Well
Here's the change in total wealth per adult since 1962, on average, from the poorest to
the richest slices of America. Circles representing wealth are proportionate, which is why
they're almost too small to see for the bottom 50 percent of Americans. All wealth figures
are in 2018 dollars.
By Bill Marsh/The New York Times | Source: Emmanuel Saez and Gabriel Zucman, University of
California, Berkeley; wealth includes all non-financial assets plus financial assets net of
debts; tax rates account for all taxes paid at all levels of government (federal, state and
local) and are expressed as a fraction of pre-tax income; adults in analysis are age 20 and
older.
The good news is that we can fix tax injustice, right now. There is nothing inherent in
modern technology or globalization that destroys our ability to institute a highly
progressive tax system. The choice is ours. We can countenance a sprawling industry that
helps the affluent dodge taxation, or we can choose to regulate it. We can let multinationals
pick the country where they declare their profits, or we can pick for them. We can tolerate
financial opacity and the countless possibilities for tax evasion that come with it, or we
can choose to measure, record and tax wealth.
If we believe most commentators, tax avoidance is a law of nature. Because politics is
messy and democracy imperfect, this argument goes, the tax code is always full of "loopholes"
that the rich will exploit. Tax justice has never prevailed, and it will never prevail.
For example, in response to Elizabeth Warren's wealth tax proposal -- which we helped
develop -- pundits have argued that the tax would raise much less revenue than expected. In a
similar vein, world leaders have become convinced that taxing multinational companies is now
close to impossible, because of international tax competition. During his presidency, Barack
Obama argued in favor of reducing the federal corporate tax rate from 35 percent to 28
percent, with a lower rate of 25 percent for manufacturers. In 2017, under President Trump,
the United States cut its corporate tax rate to 21 percent. In France, President Emmanuel
Macron is in motion to reduce the corporate tax in 2022 to 25 percent from 33 percent.
Britain is ahead of the curve: It started slashing its rate under Prime Minister Gordon Brown
in 2008 and is aiming for 17 percent by 2020. On that issue, the Browns, Macrons and Trumps
of the world agree: The winners of global markets are mobile; we can't tax them too much.
But they are mistaken. Tax avoidance, international tax competition and the race to the
bottom that rage today are not laws of nature. They are policy choices, decisions we've
collectively made -- perhaps not consciously or explicitly, certainly not choices that were
debated transparently and democratically -- but choices nonetheless. And other, better
choices are possible.
Take big corporations. Some countries may have an interest in applying low tax rates, but
that's not an obstacle to making multinationals (and their shareholders) pay a lot. How? By
collecting the taxes that tax havens choose not to levy. For example, imagine that the
corporate tax rate in the United States was increased to 35 percent and that Apple found a
way to book billions in profits in Ireland, taxed at 1 percent. The United States could
simply decide to collect the missing 34 percent. Apple, like most Fortune 500 companies, does
in fact have a big tax deficit: It pays much less in taxes globally than what it would pay if
its profits were taxed at 35 percent in each country where it operates. For companies
headquartered in the United States, the Internal Revenue Service should collect 100 percent
of this tax deficit immediately, taking up the role of tax collector of last resort. The
permission of tax havens is not required. All it would take is adding a paragraph in the
United States tax code.
The same logic can be applied to companies headquartered abroad that sell products in
America. The only difference is that the United States would collect not all but only a
fraction of their tax deficit. For example, if the Swiss food giant Nestlé has a tax
deficit of $1 billion and makes 20 percent of its global sales in the United States, the
I.R.S. could collect 20 percent of its tax deficit, in addition to any tax owed in the United
States. The information necessary to collect this remedial tax already exists: Thanks to
recent advances in international cooperation, the I.R.S. knows where Nestlé books its
profits, how much tax it pays in each country and where it makes its sales.
Collecting part of the tax deficit of foreign companies would not violate any
international treaty. This mechanism can be applied tomorrow by any country, unilaterally. It
would put an end to international tax competition, because there would be no point any more
for businesses to move production or paper profits to low-tax places. Although companies
might choose to stop selling products in certain nations to avoid paying taxes, this would be
unlikely to be a risk in the United States. No company can afford to snub the large American
market.
These examples are powerful because they show, contrary to received wisdom, that the
taxation of capital and globalization are perfectly compatible. The notion that external or
technical constraints make tax justice idle fantasy does not withstand scrutiny. When it
comes to the future of taxation, there is an infinity of possible futures ahead of us.
What Taxes Should Look Like
A proposal to return tax rates at the top to where they were in 1950.
Are these ideas for greater economic justice realistic politically? It is easy to lose
hope -- money in politics and self-serving ideologies are powerful foes. But although these
problems are real, we should not despair. Before injustice triumphed, the United States was a
beacon of tax justice. It was the democracy with the most steeply progressive system of
taxation on the planet. In the 1930s, American policymakers invented -- and then for almost
half a century applied -- top marginal income tax rates of close to 90 percent on the highest
earners. Corporate profits were taxed at 50 percent, large estates at close to 80
percent.
The history of taxation is full of U-turns. Instead of elevating some supposedly
invincible and natural constraints -- that are often invincible and natural only in terms of
their own models -- economists should act more like plumbers, making the tax machinery work,
fixing leaks. With good plumbing -- and if the growing political will to address the rise of
inequality takes hold -- there is a bright future for tax justice.
Emmanuel Saez and Gabriel Zucman are economists at the University of California,
Berkeley.
"... If you think that a person who does such research as this "Structural ambiguity in the Georgian verbal noun" is a serious analyst, I have a bridge to sell. Knowing language is just a first step in knowing cultures and nations. The idea that some barely 30 years old kid can have a profound understanding of factors forming geopolitical balance by merely studying language or working in the Wold Bank is preposterous ..."
"... It is not even the issue of IQ-driven so called intelligence metric. I met many people with IQ through the roof and some of them were one of the most impressive dumbfvcks I ever encountered in my life. The issue here is deeper--you literally have brainwashed political operatives, most of them not even book-smart, who are excreted every year from the American "humanities" programs who have "credentials" but have zero actual serious skills which are imperative for a serious statesmanship. They simply do not teach this in the US, nor can it be changed because the whole machine of the US "humanities" education pulsates between two extremes: one is of a complete deconstruction of the American history and culture into one non-stop genocide by whites of everyone else or, on the other extreme, utterly delusional exceptionalist shining city on the hill narrative with latter being as false as the former one. Few common sense and objective views which exist in between are pure coincidence which are there despite a totally corrupt educational system in the US when dealing with humanities. ..."
"... That is why, US elites having "analysts" like Ciaramella will not get out of this rut because the only thing they can reproduce are such specimens as this guy perfectly honed for one thing--to exist in the self-contained system of corruption, treachery, snitching, dirty intrigue and delusion, also known as American political system. ..."
Whistle While You Work... In the CIA or in the White House. Evidently, if to believe
media frenzy, the name of the so called "whistle blower" against Trump is 33 years old Eric
Ciaramella, whose profile nails him directly as a snitch to the Brennan's cabal of putchists
who continue to rape Constitution and eradicate the last remnants of the Republic, turning it
into the Third World shithole mafia state.
OK, that clarifies it somewhat but this is not what is truly interesting about
this CIA "analyst" who, at this moment still may or may not be a blowjo...pardon me,
whistle-blower for Adan Schiff and his collection of treasonous operatives. No. The thing which
catches one's attention who have at least some serious military or intelligence background is
this:
Ciaramella grew up in Prospect, Connecticut, as one of three children. He spent time
attending Woodland Regional High School in Beacon Falls, Connecticut, and then graduated from
Chase Collegiate School, in Waterbury, Connecticut, in 2004, according to the prep school's
alumni magazine. After high school, Ciaramella attended Yale University, graduating in 2008
as a Russian and East European studies major. In 2007, he was awarded a grant by the Yale Macmillan
Center for European Union Studies to "research on the perceptions of the EU among rural
Italian residents." While at Yale, Ciaramella, who speaks Russian, Ukrainian and Arabic, led
a protest over the departure of an Arabic department professor, according
to the Yale Daily News. The student newspaper wrote, "Students convened outside Silliman
at 9 a.m., all dressed in white to symbolize their future goal of bridging the gap between
the United States and the Middle East through the use of the Arab language, said Eric
Ciaramella '08, one of the students who led the protest." Ciaramella also studied at Harvard
University, focusing on Russia, Eastern Europe, Central Asia, according to the school's
website. He
received a grant in 2009 for research on "Language in the Public Sphere in Three
Post-Soviet Capital Cities," Tbilisi, Georgia; Yerevan, Armenia; Baku, Azerbaijan. Ciaramella
was additionally a corresponding author for Harvard's Department of Linguistics and wrote a
paper in 2015 titled, "Structural ambiguity in the Georgian verbal noun."Ciaramella worked at
the World Bank after college,
according to a 2011 publication by the international financial institution. In the World
Bank report, "Russia: Reshaping Economic Geography," published in June 2011, Ciaramella is
listed in the acknowledgments for making "important contributions" to the research. On a
now-deleted Linkedin profile, he described himself as being a "Consultant, Poverty
Reduction/Economic Management" at World Bank.
Ah, that's warmer. And it is an Exhibit A of a main reason why the United States
finds itself where it is today and why current American so called "elites" cannot find their
own ass with both hands in a brightly lit room. One is bound to struggle with own ass finding
when having background such as Ciaramella's, and his background with slight deviations within
narrow confines of humanities education, from Law to Political "Science", is a background of
the overwhelming majority of people who "shape" US policies both domestically and abroad.
Ciaramella is a classic product of the US Ivy League degree mills for good ol' boys and girls
and, as is expected, possesses zero required instruments for serious foreign policy analysis in
which power factor is at the center of an issue and it is beyond, wrong as they are, so called
modelling and methodology used in the US for studying this issue--a body of absolutely
overwhelming evidence of utter and humiliating, I may add, failure of American institutions
dealing with country studies. No bigger evidence exists than a wasteland of Russia Studies
field in the United States.
If you think that a person who does such research as this "Structural ambiguity in the
Georgian verbal noun" is a serious analyst, I have a bridge to sell. Knowing language is
just a first step in knowing cultures and nations. The idea that some barely 30 years old kid
can have a profound understanding of factors forming geopolitical balance by merely studying
language or working in the Wold Bank is preposterous.
It is not even the issue of IQ-driven so
called intelligence metric. I met many people with IQ through the roof and some of them were
one of the most impressive dumbfvcks I ever encountered in my life. The issue here is
deeper--you literally have brainwashed political operatives, most of them not even book-smart,
who are excreted every year from the American "humanities" programs who have "credentials" but
have zero actual serious skills which are imperative for a serious statesmanship. They simply
do not teach this in the US, nor can it be changed because the whole machine of the US
"humanities" education pulsates between two extremes: one is of a complete deconstruction of
the American history and culture into one non-stop genocide by whites of everyone else or, on
the other extreme, utterly delusional exceptionalist shining city on the hill narrative with
latter being as false as the former one. Few common sense and objective views which exist in
between are pure coincidence which are there despite a totally corrupt educational system in
the US when dealing with humanities.
That is why, US elites having "analysts" like Ciaramella will not get out of this rut because
the only thing they can reproduce are such specimens as this guy perfectly honed for one
thing--to exist in the self-contained system of corruption, treachery, snitching, dirty
intrigue and delusion, also known as American political system. In this case, forestalling any
undeniably upcoming claims from these types of guys about their "honor", duty to a country or
"democracy" it should be made patently clear that they have none, other than personal and
narrow political interests and ambitions attached to a destruction of America which, at least
nominally, was so far known as a land of laws and of the Constitution and which it is no more.
Good historical rundown of
Uncle Sam's blatant theft of resources in Syria .. has historical precedent too I believe;
the wars in Southeast Asia (the golden triangle and the drug trade). Afghanistan (heroin and
the poppies); imagine, we come and destroy your country and then steal your resources in the
aftermath. Sickening
@joost #33 I like to think that Trump's saying that the US army are going to steal Syria's
oil is very much the same strategy. What better way to turn world opinion against US
occupation of Syria?
Good historical rundown of
Uncle Sam's blatant theft of resources in Syria .. has historical precedent too I believe;
the wars in southeast asia (the golden triangle and the drug trade). Afghanistan (heroin and
the poppies); imagine, we come and destroy your country and then steal your resources in the
aftermath. Sickening
@49 Tim Glover. Exactly, imagine Obama saying that. Trump seems to have a habit of using
reverse psychology on people. This strategy works very well when nobody likes you and you
have the power of Twitter at your disposal.
People tend to overestimate the power of the US president. Every one of them, being democrat
or republican, gets assimilated by the borg. Resistance is futile, unless you are perceived
to be an idiot and do just enough to please your overlords. The Borg likes what he says, "we
are there for the oil" and they are getting reckless, exposing themselves for what they are.
Group think distorts perception and that is their weak spot. The borg will get more open
about their crimes and their true intentions. This breaks global support for the petrodollar
and that will be the end of the "outlaw" US empire.
I am surprised that I've not seen any commentary regarding the US's announcement that they
will continue to steal Syria's oil, and more importantly what anyone - Syria, Russia or
anyone else - might do about this blatant crime.
Clearly this challenges Syria's sovereignty as well as Russia's declared aim to restore
Syrian territory in full.
Any thoughts how this situation might evolve? IMO Russia has to remain a facilitator
rather than an actor. A "no-fly zone" enforced by Syrians and SAA ground troops?
Stripes: Carolina Army Guard troops move into eastern Syria with Bradley Fighting Vehicles
WASHINGTON – National Guard members from North and South Carolina began moving into
eastern Syria with heavy armored vehicles on Thursday as part of the Pentagon's new mission
to secure oil fields wrestled from the Islamic State, a military spokesman said.
Soldiers with the North Carolina-based 4th Battalion, 118th Infantry Regiment and the
South Carolina-based 218th Maneuver Enhancement Brigade were deployed to Deir al-Zour to
protect American-held oil fields around that city, Army Col. Myles Caggins, the spokesmen
for the U.S.-led anti-ISIS mission known as Operation Inherent Resolve, tweeted Thursday.
Caggins' tweet included photos of soldiers loading M2A2 Bradley Fighting Vehicles onto Air
Force C-17 Globemaster cargo jets to be used on the mission. . . .
For now, the new deployment will not include M1 Abrams tanks, the Pentagon official said
Thursday.
here
Why use regulars when we can call up the National Guard?
US hold on the oilfields depends mostly on Iraq. The oilfields of Deir Ezzor are in open
country with few towns and apart from the Euphrates flood plain is sparsely populated.
The only cover for guerrilla style attacks against US or its proxies on the oilfields will
be the occasional dust storm.
Apart from Iraq, syria setting up S-300 at deir Ezzor and taking control of the airspace
would also be a game changer but this may not happen.
Lebanon and Iraq are both undergoing US color revolutions at the moment so its a matter of
waiting for the dust to settle on both these moves to see where US is positioned in the
region.
Yet the US military is overwhelmingly the #1 most trusted US institution among Americans,
despite it forcibly wasting their hard earned money to kill tens of millions of innocents
abroad. At the same time the US is also filled to the brim with draft dodgers.
If anybody thinks Bolton and his chickenhawking buddies isn't representative of the whole
US, think again.
Don Bacon 73 "Really? I thought the protests were like many other protests around the world,
over economic issues."
As was the Syrian 'revolution'. Plenty of small US companies willing to go in. US already
has buyers as they have been shipping oil out of east Syria for some time. Turkey, Israel ect
plus many more willing to buy at a discount. And considering the oilfields are simply stolen,
oil can be sold at a discount.
Chairman Jerome Powell, however, signals that it expects to hold off on further rate
changes for now
No, you don't. And you know you won't.
Let's just remember: just one year ago, Powell was the "rise the interest rates" guy. Now
he's speaking of an "expectation to hold off further [downwards] rate changes".
American corporate debt is through the roof. Any interest rate rising will trigger another
2008. Only this time, it will be the jewels of the crown (Apple, Microsoft etc.) which will
be in the bail out queue.
Continuing on the economic front, we have that the USA has lost the trade war:
US real GDP growth slowed to an annual rate of 1.9% in the third quarter of 2019, according
to advance official estimates, only slightly slower than the 2% annual rate in Q2. The
year-on year rate slowed to 2% from 2.3% in Q2.
But the big news was the sharp contraction in business investment, which fell 3%, the
worst figure since the mini-recession of 2015-6. Structures investment (oil rigs etc)
dropped 15% from Q2, which had also seen an 11% fall. Equipment investment (computer
hardware, transport etc) also dropped nearly 4%. Only so-called 'intellectual property'
investment (software, patents etc) held up.
History shows that when business investment falls consistently, real GDP follows in a
year or so. So far, on a year-on-year basis, business investment is still positive, but
slowing fast. Business investment is falling because corporate profits are also stagnating
at best.
As I've been saying here for some time now, Trump's "decoupling" strategy is failed by
design. Even if manufacturing goes out of China, it won't go back to the USA. The reason for
this is that the USA issues the world's universal fiat currency -- the USD -- so, when it
raises its debt, inflation won't go up but costs of production do: the USA pays its debt in
the form of deindustrialization, not rising inflation (as is the case of the rest of the
world).
And manufacturing won't simply go out of China. Yes, low value manufacturing has been
exiting China for two decades now, mainly to India and Vietnam. But the Chinese already knew
of that, and were preparing for this before Trump even dreamed about being POTUS. That's why
it changed its short term economic paradigm in 2012, redirecting its development towards
higher technology, sustainable (but lower) growth with a focus on domestic consumption.
This is the true nature of socialist "praxis". As Lenin once wrote: Marxism is the
analysis of the concrete situation in a concrete moment. Deng Xiaoping translated it to the
Chinese people when he said that communists don't have a style: they get the job done (the
cat who can kill the mouse, regardless of its color). These teachings still reverberate to
the newer generations:
In the article "Farm lessons from China" published on The India Express, Indian scholars
Ashok Gulati and Sakshi Gupta suggest that India should pay attention to China's three
lessons to improve agricultural production.
[...]
What is more worthy of mention are China's water conservancy, highways, and other
infrastructure. In the 70 years since the founding of the People's Republic of China,
China's investment in water conservancy has created a record in human history. By the end
of 2018, China had completed more than 11 million rural water supply facilities, benefiting
940 million rural people, and the rural centralized water supply rate reached 86
percent.
These achievements would be impossible with any single or group of private companies.
Without such large-scale and organized national input, it is unlikely China's agriculture
would have reached the level it has today.
Last but not least: game is over for the EU, too: Lacking market space, German economy
trapped in overproduction 'black hole' The writer of this article uses bourgeois
economics terminology, but he essentially is saying that Germany's profit rate is secularly
falling, thus confirming (once more) Marx's Law of the Tendency of the Profit Rate to
Fall.
Numbers came out for the EU as a whole today, signaling total stagnation (+0.2%) in Q3.
Nothing is going to come out of there, and it's no wonder even Germanophile Putin is focusing
on partnership and cooperation with China -- after all, cultural and ethnic identities won't
bring food on the table of the little Russians, will it?
Who
Is Eric Ciaramella? This morning in a comment, Mike Sylwester linked to a blog at American
Thinker that discussed possible "whistleblower" candidates: Who is the
whistleblower? Eric Ciaramella is the third candidate discussed. There's some shocking
material available about Ciaramella, who was a Susan Rice protege and was brought into the
White House by H. R. McMaster, a truly disastrous appointment. Of course I have no idea whether
Ciaramella is Sammy #1. I merely offer here some material re Ciaramella to show what Trump has
been up against throughout his first term. These are excerpts only--the portions that pertain
to Ciaramella--of longer blogs:
Ciaramella was involved in 2016 correspondence about $1 billion loan guarantee which Biden
had held up, pending firing of prosecutor Viktor Shokin. Ciaramella associate of Clintonista
neocon Victoria Nuland, whose name turns up too often, even re Steele https://t.co/vmkWBdjKU5 -- Stephen McIntyre
(@ClimateAudit)
Mc Master Caught Leaking to Make Himself Indespensible
On June 11, Cernovich posted again on Medium.
The Right News has a copy (emphasis mine):
Meet Eric Ciaramella -- H.R. McMaster Appoints Susan Rice Ally to be his Personal Aide
This is an explosive article, excerpted below (emphases in the original):
Ciaramella's ascension is surprising considering pro-Trump sources within the Obama
administration disclosed to me in December, 2016 that Ciaramella's helped draft Susan Rice's
anti-Trump talking points before the Inauguration .
In fall of 2016 as Obama's director for Ukraine on the NSC, Ciaramella was the main force
pushing Trump-Russia conspiracy theories.
Some suspect Ciaramella was one of the original leakers who told the media about classified
conversations Trump had with Russian diplomat Sergei Lavrov . While it's unproven that
Ciaramella leaked that conversation, it is now a fact of life that he will have access to every
conversation Trump has with foreign officials, as part of his official duties for McMaster.
W hen this story first came to me, my question was, "This is a huge personnel move. Why
hasn't Politico run it?"
My sources told me other outlets passed on the story, because, "This isn't the type of
information the mainstream media wants out there ."
Note the second sentence in the third paragraph:
it is now a fact of life that he will have access to every conversation Trump has with
foreign officials, as part of his official duties for McMaster.
Meet Eric
Ciaramella -- H.R. McMaster Appoints Susan Rice Ally to be his Personal
Aide W est Wing officials confirmed to Cernovich Media that Eric Ciaramella, who worked
closely with Susan Rice while at NSC , was recently promoted to be H.R. McMaster's personal
aide. Ciaramella will have unfettered access to McMaster's conversations with foreign leaders .
Ciaramella's ascension is surprising considering pro-Trump sources within the Obama
administration disclosed to me in December, 2016 that Ciaramella's helped draft Susan Rice's
anti-Trump talking points before the Inauguration . In fall of 2016 as Obama's director for
Ukraine on the NSC, Ciaramella was the main force pushing Trump-Russia conspiracy theories.
Some suspect Ciaramella was one of the original leakers who told the media about classified
conversations Trump had with Russian diplomat Sergei Lavrov . While it's unproven that
Ciaramella leaked that conversation, it is now a fact of life that he will have access to every
conversation Trump has with foreign officials, as part of his official duties for McMaster. W
hen this story first came to me, my question was, "This is a huge personnel move. Why hasn't
Politico run it?" My sources told me other outlets passed on the story, because, "This isn't
the type of information the mainstream media wants out there ." Staunchly pro-Ukraine and
anti-Russia, Ciaramella is the media's dream, which explains why this high-profile personnel
move hasn't been covered in any mainstream media outlets. The only result for Ciaramella in
Google News is a 2015 article about a meeting of religious leaders from the Ukraine meeting
with Barack Obama.
EXCLUSIVE: Internet Abuzz – Schiff's Ukrainian Hoax Linked to Members of
Obama's NSC Including Eric Ciaramella and Charles Kupchan https://t.co/xyHFeyPp7U via
@gatewaypundit
Where is the line between "working class" and "middle class"? Maybe there isn't
any.
Defining the "middle class" has devolved to a pundit parlor game, so let's get real for a
moment (if we dare): the "middle class" is no longer defined by the traditional metrics of
income or job type (blue collar, white collar), but by an entirely different set of
metrics:
1. Household indebtedness, i.e. how much of the income is devoted to debt service, and
2. How much of the household spending is funded by debt.
3. The ability of the household to set aside substantial savings / capital investment.
4. The security of the households' employment.
5. The dependence of the household wealth on speculative asset bubbles inflated by central
bank policies.
6. The percentage of the household income that is unearned, i.e. derived not from labor but
from productive assets.
7. The exposure of the households' employment to automation, AI or offshoring.
8. How much of the household income is government transfers: benefits, subsidies, etc.
After writing about the middle class and America's class structure in depth for over a
decade, it seems to me the actual, real-world class structure is something along these
lines:
1. No formal earned income, dependent on government transfers, possibly supplemented by
informal "black market" income; no family wealth.
2. The Working Poor, those laboring at minimum wage or part-time jobs with few if any
benefits. This class depends on government transfers to get by: EBT (food stamps), housing
subsidies, school lunch subsidies, Medicaid, etc. Highly exposed to reductions in hours, tips,
gigs, etc. and layoffs.
3. The "muddle class" which muddles through on earned income, much of which goes to
debt service (student loans, auto loans, mortgages, credit cards) and skyrocketing big-ticket
expenses: rent, healthcare, childcare, etc. Unable to save enough to move the needle on
household capital, any net worth is dependent on speculative asset bubbles continuing to
inflate. Highly exposed to layoffs or destabilizing changes in employment status: from
full-time to part-time, loss of benefits, etc.
4. The Protected Class with secure income/earnings and benefits: this includes the
nomenklatura of government employees, mid-level technocrat / managerial employees in
academia, government-funded non-profits, etc., and retirees with Medicare, Social Security and
other income (pensions, unearned investment income, etc.) and family assets (home owned free
and clear, substantial 401K nest eggs, etc.)
5. "Winner Take Most" Corporate America / market-economy households: top managers and
salespeople, entrepreneurs, successful business owners, speculators in financialization/asset
bubbles, marketers, those earning substantial royalties, etc. Most work crazy-hard and make
sacrifices, as per this article from The Atlantic: Why
You Never See Your Friends Anymore : Our unpredictable and overburdened schedules are
taking a dire toll on American society.
6. The wealthy and super-wealthy. Many continue working hard despite being worth tens of
millions or hundreds of millions of dollars, as per this article from NYT.com: Why Don't Rich
People Just Stop Working?Are the wealthy addicted to money, competition, or just
feeling important? Yes.
7. The upper reaches of this class constitute a Financial Aristocracy / Oligarchy / New
Nobility, those who have leveraged mere wealth into political, social and financial
power .
8. The Mobile Creatives Class , currently small but expanding, which essentially
obsoletes the entire status quo of working for an employer (often to get benefits), going
heavily into debt for a college degree, vehicle, house, wedding, etc., hiring employees and
paying outrageous prices to live in an overcrowded, soul-destroying city, etc.
Where is the line between "working class" and "middle class"? Maybe there isn't any.
The old definitions of working and middle class were social more than financial--the
middle class was better educated (school teacher, etc.) than the working class (factory
worker, skilled tradesperson) but both could aspire to owning a home and giving their children
a more secure life than they had started with.
The working class was not limited to the working poor : working-class
jobs provided security and social mobility, just like white-collar middle class jobs.
What differentiates classes now is debt, employment security and the ability to build
household capital that isn't just a sand castle of speculative bubble "wealth." The worker
with tradecraft skills (welding, logger, etc.) has more security and earning power than a
college graduate with few skills that can't be outsourced or automated.
Many college graduates work in sectors that are highly exposed to layoffs and downsizing
once the economy contracts: food and beverages, hospitality, etc.
All of which leads us to a highly verboten conclusion: both political parties and the
corporate media have abandoned the 2/3 of the workforce that is working/middle class. The
bottom 20% dependent on government transfers has more security than those earning just enough
to disqualify the household for transfers, while the top 15% in the Protected Class are doing
just fine unless they're over-indebted.
The winner take most class and the wealthy dominate both political parties and the
media which is now dependent on advertising that appeals to the top 10% of households that
collect more than 50% of the national income.
The political parties take care of the government dependent class to keep the rabble from
rebelling, and they keep the government gravy train flowing to the Protected Class (healthcare,
national defense, academia, government employees) to insure their support at election time, but
they take their marching orders from the Aristocracy / Oligarchy that fund their campaigns and
enrich them with $100,000 speaking fees, seats on the board of directors, etc.
The Working/Middle Class gets nothing but lip-service, and that's been the case for
decades. The political parties and the media abandoned the Working/Middle Class long ago,
buttering their bread with the soaring wealth of the Aristocracy / Oligarchy and relegating
everyone outside the Protected Class who labors for their livelihood to the servitude of
politically impotent tax donkey / debt-serfdom.
Please examine these charts closely. They look busy but show that income inequality has been
rising for over three decades.
Here's income by quintile. The top 5% have done extremely well, the Protected Class
15% below them have done just fine, and the bottom 80%, well, who cares about them as long as
they're politically passive and make their loan payments?
Cumulative income reveals the widening gap between the bottom 80% and the top 5%. The
gap was not very big in the early 1990s, but look at it now:
Another chart of the top 5% pulling away from the rest of us:
No wonder the media depends on luxury/aspirational advertising: the top 5% are the
only ones with the money and credit to blow on status-signifying fripperies:
Where does this lead? To this--a collapse of buffers: debt is not income, and
eventually the buffers of borrowing more to keep afloat thin and break down. When the financial
buffers of the middle two-thirds of working / middle class households break down, the economy
and the social-political order will break down, too.
Don't think it won't happen just because it hasn't happened yet.
For the Furrowed Brow Society, things are finally looking up. Small in number and feeble
in influence, so-called "Never Trumper" Republicans have spent three years now peeking out
from behind the congressional drapes to express dismay over President Trump's antics.
Your John Kasiches, your Mitt Romneys, your Bens Sasse: They are among a handful of
national Republican figures who all reliably emerge to criticize Trump on the occasion of his
latest embarrassment. After every new indignity, the informal society assembles like an
ineffectual version of the Avengers. Picture Captain America and Iron Man just sort of
grunting ruefully and shaking their heads while they watch Fox News.
Has this resulted in any noticeable change in the president's policy or demeanor? Of
course not. Will the Republican Party finally come to its senses and turn to this crew to
lead it into the future? Also no.
. . . But!
The air of desperation surrounding the president these days has to be heartening. Even
some Frequent Trumpers are starting to wonder whether it might be time to get off the train.
Suddenly, the Never Trumpers are so ascendant that Trump is lashing out at them, pleading
with his administration officials to stop giving them jobs (this would seem to be within his
control, but whatever).
And so we've reached a remarkable moment in the discourse: Some of these people seem
positively delighted to be called -- this is almost unbelievable, but I promise it's true --
"human scum."
"The Never Trumper Republicans, though on respirators with not many left, are in certain
ways worse and more dangerous for our Country than the Do Nothing Democrats," Trump tweeted
on Wednesday afternoon, amid a fairly standard-issue tirade and blizzard of bonkers retweets.
"Watch out for them, they are human scum!"
Hey, at least he called them "human," which is more grace than he usually affords
immigrants. But even in today's uniquely debased political culture, the phrase "human scum"
would seem to rise below our very low bar. And yet . . .
"Apparently, I'm human scum," the conservative cybersecurity expert and former homeland
security official Paul Rosenzweig wrote in The Atlantic, in a column headlined "I'm Proud to
Be Called Human Scum."
If you're keeping score at home, the Republican Party is now overwhelmingly composed of
people gleefully calling themselves "deplorable," and a separate, opposed group proudly
self-identifying as "human scum."
Extremely normal, healthy stuff.
So I reached out to one of the few Republicans I could think of who does not seem to be in
a hurry to brand himself as some sort of nightmare person -- who seems to genuinely want to
rise above all this: America's Most Popular Governor™ Charlie Baker. Baker doesn't
spend a lot of time firing back at the president's daily dumpster fire, which is probably
wise.
"Governor Baker and Lt. Governor Polito did not support President Trump because he doesn't
have the right temperament for the office," Baker's press secretary, Sarah Finlaw, said in an
e-mail, "and the administration doesn't respond to sophomoric name-calling and will stay
focused on working for the residents of Massachusetts. Washington, DC would be well served to
follow suit."
So if he wasn't on the human scum list before, he probably is now. Sorry about that,
Governor.
It's tempting to think that people like Baker, Bill Weld, and Romney (who must have
thought everyone was telling him to "grow a Pierre" these last few years) will one day soon
restore the Republican Party to some semblance of sanity. Even if you don't have much use for
the small government/fiscal conservatism that supposedly drove the Republican Party before it
abandoned even the pretense of responsibility, that ethos would be a lot less damaging than
what we've got now.
But I'm not sure that kind of reversal is even possible anymore. Nobody who abetted this
nonsense should be taken seriously ever again, but that category includes the vast majority
of elected Republicans in Washington. ...
Although they are not officially called taxes, insurance premiums paid by employers are
just like taxes – but taxes paid to private insurers instead of paid to the
government.
---
This is Saez, and official member of tour Orwellian group here. He almost calls premium
taxes. He needs to equate taxes and insurance premiums to prove his priors, it is all one
cost. He is using the tax concept to prove a prior that emichael and the gang insist
upon.
No need to complain about his assumption, we will choose our own fiction, just note he
used the term taxes.
Let me help out more. The Supreme Court called mandatory Obamacare premiums taxes. Saez
needs to use the word taxes so he can prove his priors, and his priors are ordained by our
Orwellian masters. So it is OK to say Medicare for All is paid with taxes, we now have that
in our talking points.
Fell free to say Medicare for All taxes are wonderful gifts from Godot as our prior
dictate, but you are hereby ordered by the official in charge of talking points that Medicare
for All taxes is an acceptable semantic. It is OK, we have it from the high central planners,
it is OK to use medicare taxes, we now have an expectation story to explain it as a cost
savings. We have met our expectation theory requirements.
Impoverished economics? Unpacking the economics Nobel Prize
When the world is facing large systemic crises, why is the economics profession celebrating
small technical fixes?
By Ingrid Harvold Kvangraven
This week it was announced that Abhijit Banerjee, Esther Duflo and Michael Kremer won the
Economics Nobel Prize (or more accurately: the 'Sveriges Riksbank Prize in Economic Sciences in
Memory of Alfred Nobel'). The trio of economists were awarded the prize for "their experimental
approach to alleviating global poverty".
On social media and in mainstream newspapers, there was an exceptional level of praise for
the laureates, reflecting their existing rockstar status within development economics. The
Financial Times even claimed that the "Economics Nobel for poverty work will help restore
profession's relevance". However, the widespread calls for celebration need to be considered
with a cautionary counterweight.
The experimental approach to poverty alleviation relies on so-called Randomized Control
Trials (RCTs). Inspired by studies in medicine, the approach targets specific interventions to
a randomly selected group (schools, classes, mothers, etc), and then compares how specific
outcomes change in the recipient group versus those who did not receive the treatment. As the
groups are assumed to be otherwise similar, the difference in outcomes can be causally
attributed to the intervention.
While the laureates were first pioneering this work in the 1990s in Kenyan schools, the
approach is now widely considered the new "gold standard" in development economics, also
sometimes simply called "New Economics". The approach has become enormously influential among
governments, international agencies and NGOs. The body of work pioneered by the laureates, or
the randomistas as they are sometimes called, is meant to alleviate poverty through simple
interventions such as combating teacher absenteeism, through cash transfers, and through
stimulating positive thinking among the people living in poverty. Sound good so far?
While the laureates' approach to poverty research and policy may seem harmless, if not
laudable, there are many reasons for concern. Both heterodox and mainstream economists as well
as other social scientists have long provided thorough critique of the turn towards RCTs in
economics, on philosophical, epistemological, political and methodological grounds. The
concerns with the approach can be roughly grouped into questions of focus, theory, and
methodology.
Focus: tackling symptoms and thinking small
The approach that is being promoted is concerned with poverty, not development, and is thus
a part of the larger trend in development economics that is moving away from development as
structural transformation to development as poverty alleviation. This movement towards
"thinking small" is a part of a broader trend, which has squeezed out questions related to
global economic institutions, trade, agricultural, industrial and fiscal policy, and the role
of political dynamics, in favor of the best ways to make smaller technical interventions.
The interventions considered by the Nobel laureates tend to be removed from analyses of
power and wider social change. In fact, the Nobel committee specifically gave it to Banerjee,
Duflo and Kremer for addressing "smaller, more manageable questions," rather than big ideas.
While such small interventions might generate positive results at the micro-level, they do
little to challenge the systems that produce the problems.
For example, rather than challenging the cuts to the school systems that are forced by
austerity, the focus of the randomistas directs our attention to absenteeism of teachers, the
effects of school meals and the number of teachers in the classroom on learning. Meanwhile,
their lack of challenge to the existing economic order is perhaps also precisely one of the
secrets to media and donor appeal, and ultimately also their success.
The lack of engagement with the conditions that create poverty has led many critics to
question to what extent RCTs will actually be able to significantly reduce global poverty. A
further consequence of this impoverished economics is that it limits the types of questions we
can ask, and it leads us "to imagine too few ways to change the world".
Theory: methodological individualism lives on
In a 2017 speech, Duflo famously likened economists to plumbers. In her view the role of an
economist is to solve real world problems in specific situations. This is a dangerous
assertion, as it suggests that the "plumbing" the randomistas are doing is purely technical,
and not guided by theory or values. However, the randomistas' approach to economics is not
objective, value-neutral, nor pragmatic, but rather, rooted in a particular theoretical
framework and world view – neoclassical microeconomic theory and methodological
individualism.
The experiments' grounding has implications for how experiments are designed and the
underlying assumptions about individual and collective behavior that are made. Perhaps the most
obvious example of this is that the laureates often argue that specific aspects of poverty can
be solved by correcting cognitive biases. Unsurprisingly, there is much overlap between the
work of randomistas and the mainstream behavioral economists, including a focus on nudges that
may facilitate better choices on the part of people living in poverty.
Another example is Duflo's analysis of women empowerment. Naila Kabeer argues that it
employs an understanding of human behavior "uncritically informed by neoclassical microeconomic
theory." Since all behavior can allegedly be explained as manifestations of individual
maximizing behavior, alternative explanations are dispensed with. Because of this, Duflo fails
to understand a series of other important factors related to women's empowerment, such as the
role of sustained struggle by women's organizations for rights or the need to address unfair
distribution of unpaid work that limits women's ability to participate in the community.
Note that there is nothing embedded in RCTs that forces randomistas to assume individuals
are rational optimizing agents. These assumptions come from the economics tradition. This is
therefore not a critique of RCTs per se, but of the way RCTs are employed in the laureates'
work and in most of mainstream economics.
Method: If you didn't randomize it, is it really knowledge?
While understanding causal processes is important in development economics, as in other
social science disciplines, RCTs do so in a very limited way. The causal model underlying RCTs
focuses on causal effects rather than causal mechanisms. Not only do RCTs not tell us exactly
what mechanisms are involved when something works, they also do not tell us whether the policy
in question can be reliably implemented elsewhere. In order to make such a judgement, a broader
assessment of economic and social realities is unavoidable.
Assuming that interventions are valid across geographies and scale suggests that micro
results are independent of their macroeconomic environment. However, while "effects" on
individuals and households are not separate from the societies in which they exist, randomistas
give little acknowledgement to other ways of knowing about the world that might help us better
understand individual motivations and socio-economic situations. As it is difficult to achieve
truly random sampling in human communities, it is perhaps not surprising that when RCTs are
replicated, they may come to substantially different results than the original.
Not only do RCTs rarely have external validity, but the specific circumstances needed to
understand the extent to which the experiments may have external validity are usually
inadequately reported. This has led even critics within the mainstream to argue that there are
misunderstandings about what RCTs are capable of accomplishing. A deeper epistemological
critique involves the problematic underlying assumption that there is one specific true impact
that can be uncovered through experiments.
Recent research has found that alternative attempts to assess the success of programs
transferring assets to women in extreme poverty in West Bengal and Sindh have been far superior
to RCTs, which provide very limited explanations for the patterns of outcomes observed. The
research concludes that it is unlikely that RCTs will be able to acknowledge the central role
of human agency in project success if they confine themselves to quantitative methods
alone.
There are also serious ethical problems at stake. Among these are issues such as lying,
instrumentalizing people, the role of consent, accountability, and foreign intervention, in
addition to the choice of who gets treatment. While ethical concerns regarding potential harm
to groups is discussed extensively in the medical literature, it receives less attention in
economics, despite the many ethically dubious experimental studies (e.g. allowing bribes for
people to get their drivers' licences in India or incentivizing Hong Kong university students
into participation in an antiauthoritarian protest). Finally, the colonial dimensions of
US-based researchers intervening to estimate what is best for people in the Global South cannot
be ignored.
Why it matters: limits to knowledge and policy-making
There will always be research that is more or less relevant for development, so why does it
matter what the randomistas do? Well, as the Nobel Committee stated, their "experimental
research methods now entirely dominate development economics". A serious epistemological
problem arises when the definition of what rigour and evidence means gets narrowed down to one
single approach that has so many limitations. This shift has taken place over the past couple
of decades in development economics, and is now strengthened by the 2019 Nobel Prize. As both
Banerjee and Duflo acknowledged in interviews after the prize was announced, this is not just a
prize for them, but a prize for the entire movement.
The discipline has not always been this way. The history of thought on development economics
is rich with debates about how capital accumulation differs across space, the role of
institutions in shaping behavior and economic development, the legacies of colonialism and
imperialism, unequal exchange, the global governance of technology, the role of fiscal policy,
and the relationship between agriculture and industry. The larger questions have since been
pushed out of the discipline, in favor of debates about smaller interventions.
The rise of the randomistas also matters because the randomistas are committed to provoke
results, not just provide an understanding of the situations in which people living in poverty
find themselves. In fact, it is one of their stated goals to produce a "better integration
between theory and empirical practice". A key argument by the randomistas is that "all too
often development policy is based on fads, and randomised evaluations could allow it to be
based on evidence".
However, the narrowness of the randomized trials is impractical for most forms of policies.
While RCTs tend to test at most a couple of variations of a policy, in the real world of
development, interventions are overlapping and synergistic. This reality recently led 15
leading economists to call to "evaluate whole public policies" rather than assess "short-term
impacts of micro-projects," given that what is needed is systems-level thinking to tackle the
scale of overlapping crises. Furthermore, the value of experimentation in policy-making, rather
than promoting pre-prescribed policies, should not be neglected.
The concept of "evidence-based policy" associated with the randomistas needs some unpacking.
It is important to note that policies are informed by reflections on values and objectives,
which economists are not necessarily well-suited to intervene in. Of course, evidence should be
a part of a policy-making process, but the pursuit of ineffective policies is often driven by
political priorities rather than lack of evidence.
While randomistas might respond to this by arguing that their trials are precisely meant to
de-politicize public policy, this is not necessarily a desirable step. Policy decisions are
political in nature, and shielding these value judgements from public scrutiny and debate does
little to strengthen democratic decision making. Suggesting that policy-making can be
depoliticized is dangerous and it belittles the agency and participation of people in
policy-making. After all, why should a policy that has been proven effective through an RCT
carry more weight than, for example, policies driven by people's demands and political and
social mobilisation?
While the Nobel Prize does leave those of us concerned with broader political economy
challenges in the world anxious, not everything is doom and gloom. Firstly, the Nobel directs
attention to the persistence of poverty in the world and the need to do something about it.
What we as critical development economists now need to do is to challenge the fact that the
Prize also legitimizes a prescriptive view of how to find solutions to global problems.
Secondly, the fact that a woman and a person of color were awarded a prize that is usually
reserved for white men is a step forward for a more open and inclusive field. Duflo herself
recognizes that the gender imbalance among Nobel Prize winners reflects a "structural" problem
in the economics profession and that her profession lacks ethnic diversity.
However, it is obvious that to challenge racism, sexism and Eurocentrism in economics, it is
not enough to simply be more inclusive of women and people of color that are firmly placed at
the top of the narrow, Eurocentric mainstream. To truly achieve a more open and democratic
science it is necessary to push for a field that is welcoming of a plurality of viewpoints,
methodologies, theoretical frameworks, forms of knowledge, and perspectives.
This is a massive challenge, but the systemic, global crises we face require broad,
interdisciplinary engagement in debates about possible solutions.
Ingrid Harvold Kvangraven is a Lecturer in International Development at the University of York.
Reply Saturday, October 26, 2019 at 11:52 AM Paine said in reply
to anne... Development v poverty amelioration
A Very basic goal conflict indeed.
Transformation
will never come
thru,
More effective off sets
to
Institutionally produced
misery powerlesses,
helplessness
The poverty of poor economics The winners of the Nobel Prize in Economics experiment on the poor, but their research doesn't
solve poverty. By Grieve Chelwa and Seán Muller
Monday, the Swedish Academy of Sciences awarded the "Nobel Prize" in economics to Abhijit
Banerjee, Esther Duflo and Michael Kremer for "their experimental approach to alleviating
global poverty."
...
Banerjee and Duflo teach at MIT while Kremer is at Harvard. The trio have been at the
forefront of pushing the use of randomized control trials (RCTs) in the sub-discipline of
economics known as development economics.... The main idea behind their work is that RCTs allow
us to know what works and doesn't work in development because of its "experimental" approach.
RCTs are most well-known for their use in medicine and involve the random assignment of
interventions into "treatment" and "control" groups. And just like in medicine, so the argument
goes, RCTs allow us to know which development pill to swallow because of the rigor associated
with the experimental approach. Banerjee and Duflo popularized their work in a 2011 book "Poor
Economics: A Radical Rethinking of the Way to Fight Global Poverty."
Even though other Nobel prize awards often attract public controversy (peace and literature
come to mind), the economics prize has largely flown under the radar with prize announcements
often met with the same shrugging of the shoulders as, for example, the chemistry prize. This
year has however been different (and so was the year that Milton Friedman, that high priest of
neoliberalism, won).
A broad section of commentary, particularly from the Global South, has puzzled over the
Committee's decision to not only reward an approach that many consider as suffering from
serious ethical and methodological problems, but also extol its virtues and supposed benefits
for poor people.
Many of the trio's RCTs have been performed on black and brown people in poor parts of the
world. And here, serious ethical and moral questions have been raised particularly about the
types of experiments that the randomistas, as they are colloquially known, have been allowed to
perform. In one study in western Kenya, which is one-half of the epicenter of this kind of
experimentation, randomistas deliberately gave some villages more money and others less money
to check if villages receiving less would become envious of those receiving more. The study's
authors, without any sense of shame, titled their paper "Is Your Gain My Pain?" In another
study in India, the other half of the epicenter, researchers installed intrusive cameras in
class rooms to police teacher attendance (this study was actually favorably mentioned by the
Swedish Academy). There are some superficial rationalizations for this sort of thing, but
studies of this kind -- and there are many -- would never have seen the light of day had the
experimental subjects been rich Westerners.
There are also concerns around the extractive nature of the RCT enterprise. To execute these
interventions, randomistas rely on massive teams of local assistants (local academics,
students, community workers, etcetera) who often make non-trivial contributions to the
projects. Similarly, those to be studied (the poor villagers) lend their incalculable emotional
labor to these projects (it is often unclear whether they have been adequately consulted or if
the randomistas have simply struck deals with local officials). The villagers are the ones that
have to deal with all the community-level disruptions that the randomistas introduce and then
leave behind once they've gone back to their cushy lives in the US and Europe.
And while there is an increasing amount of posturing to compensate for this exploitation,
with some researchers gushing about how they and their "native assistants" are bosom buddies,
the payoffs of the projects (lucrative career advancement, fame, speaking gigs, etcetera) only
ever accrue to the randomistas and randomistas alone. The extreme case is obviously this week's
award.
Beyond the ethics of the Nobel winners, their disciples, and the institutions they have
created in their image are two serious methodological problems that fundamentally undermine
their findings.
The first is that the vast majority of studies conducted using these methods (our rough
guess is more than 90%) have no formal basis for generalization. In other words, there is no
basis to believe that the findings of these studies can be applied beyond the narrow confines
of the population on which the experiments are undertaken. This is simply fatal for policy
purposes.
The prize giving committee addresses this only in passing by saying that "the laureates have
also been at the forefront of research on the issue of [whether experimental results apply in
other contexts]." This is misleading at best and false at worst. There are some advocates of
randomised trials who have done important research on the problem, but the majority of key
contributions are not by advocates of randomised trials and the three awardees have been
marginal contributors. The more important point is simply that if the problem of whether
experimental results are relevant outside the experiment has not been resolved, how can it be
claimed that the trio's work is "reducing world poverty?"
The second contradiction is more widely understood: despite the gushing headlines in the
Western press, there is simply no evidence that policy based on randomized trials is better
than alternatives. Countries that are now developed did not need foreign researchers running
experiments on local poor people to grow their economies. There is ample historical evidence
that growth, development and dramatic reductions in poverty can be achieved without randomised
trials. Randomistas claim that their methods are the holy grail of development yet they have
not presented any serious arguments to show why theirs is the appropriate response. Instead,
the case that such methods are crucial for policy is largely taken for granted by them because
they think they are doing "science." But while they are certainly imitating what researchers in
various scientific disciplines do, the claim that the results are as reliable and useful for
economic and social questions is unsupported. It is instead a matter of blind faith -- as with
the conviction many such individuals appear to have of a calling to save the poor, usually
black and brown, masses of the world.
We do not have a view on whether these individuals ought to have been awarded the prize --
prizes are usually somewhat dubious in their arbitrariness and historical contingency. But the
claims made about the usefulness and credibility of the methods employed are concerning, both
because they are unfounded and because they inform a missionary complex that we believe is more
of a threat to the progress of developing countries than it is an aid.
Grieve Chelwa teaches economics at the University of Cape Town. Seán Muller teaches
economics at the University of Johannesburg.
How curious that China starting from being among the poorest of countries, far poorer
than India in 1980, and having a population that is now 1.4 billion could have raised hundreds
of millions to middle class well-being, could have raised hundreds of millions from poverty and
coming ever closer to ending severe poverty in 2020, would have no economist worth a Nobel
prize for work on poverty. To me, this is a travesty of awarding the Nobel Prize for work on
poverty to 3 Massachusetts economists.
Distressing that the astonishing and wonderful progress China has made against poverty
should be given no attention and credit by the Nobel Prize folks or by the articles about the
prize that I have so far read. This tells me that the Massachusetts work on poverty and
evaluation of the work is highly problematic, which I already knew from reading the work.
Oh No! Interest on the Debt Is Half As Large as the 1990s Peak!
By Dean Baker
The Washington Post had a piece * on newly released data on the federal budget deficit.
The piece included the obligatory comments from the always wrong budget "experts" at the
Committee for a Responsible Federal Budget. It also warned readers:
"U.S. debt is considered one of the safest investments in the world and interest rates
remain low, which is why the government has been able to borrow money at cheap rates to
finance the large annual deficits. But the costs are adding up. The government spent about
$380 billion in interest payments on its debt last year, almost as much as the entire federal
government contribution to Medicaid."
"Almost as much as the entire federal government contribution to Medicaid!" Think about
that. Try also thinking about the fact that interest payments were around 1.7 percent of GDP
last year (before deducting money refunded from the Federal Reserve). That compares to a peak
of 3.2 percent of GDP in 1991. Are you scared yet?
It's also not quite right to claim that interest rates in the United States are especially
low, at least not compared to other rich countries. The U.S. pays an interest rate on 10-year
government bonds that is more two full percentage points higher than the interest rate paid
by Germany and the Netherlands. It's even higher than the interest rate paid by Greece.
Read the transcript of Trump's announcement this morning. He explicitly says he is keeping
the oil, and might invite in Exxon to use it. Logistics are sketchy, because who will buy it?
The pipelines will go through Syrian controlled territory. But he also says that a deal might
be possible. It's ridiculous.
Revenue from Syria's oilfields is about a $million/day. That is a small fraction of what it
costs to maintain even one little US military base in Syria.
Try to hold tight to a sense of perspective, folks. Trump is a businessman. Not a very
good one, perhaps, but certainly not so stupid that he cannot see that as an incredibly bad
deal. This "keeping the oil" nonsense is empty posturing intended to appeal to shallow
thinkers who don't know the difference between Syria and Venezuela and who don't really care
what American foreign policy is so long as it is done with an arrogant swagger. Now that may
be the majority of the US population, but these kinds are not even going to remember the
tweet this time next week, much less even care.
"Keeping the oil" is not only tactically, strategically, and logistically
untenable, it is such a baldfaced violation of so many US and international laws, treaties,
and agreements that even America's fig leaf of last resort, Canada, would have to condemn it.
This is just childish posturing to throw the appearance of bravado on America's exit from the
theatre. People functioning at the level of many posters here need to stop taking it so
seriously.
Revenue from Syria's oilfields is about a $million/day. That is a small fraction of what it
costs to maintain even one little US military base in Syria.
Try to hold tight to a sense of perspective, folks.
Posted by: William Gruff | Oct 27 2019 18:18 utc | 45
The point of "keeping the oil" is not to profit from it, but to deny it to the Syrians.
That's what Bibi wants.
@ 53
"Keeping the oil" is also meant to send a political message that you-know-who is still in
charge here, a Carter Doctrine policy that has been in tatters recently.
On the Syrian oil, US apparently was raking in 30 million a month in an operation that was
small enough to be kept from the public. If they take over the oilfields publicly and boost
oil infrastructure, the monthly take will rise considerably.
The oil fields on the east bank of the Euphrates produced the bulk of Syrian oil. If
production there was only 50% of Syrian production, the figures in dollar terms would still
be high.
200,0000 BPD would be just over half Syria pre war oil production, so 200,000 X say $40
per barrel brings the take up to $8 million per day. Not bad when its money for nothing.
William Gruff
Trump has made no effort or even noises to pull out of Tanf. I think he wants to continue
holding the Syrian border where he can. Denying the oil to Syria is a plus for him and that
also has the bonus of partly paying the cost of stationing the US along that border.
Zionism, oil, getting returns on military expenditure seems to be Trump's foreign policy or
as foreign policy is termed in the US 'War Policy"
"Keeping the oil" is also meant to send a political message that you-know-who is still in
charge here, a Carter Doctrine policy that has been in tatters recently.
Posted by: Don Bacon | Oct 27 2019 18:51 utc | 60
Sure, that's also true. The NeoCon warmongers only got convincing very late in the game,
when US Special Forces were already withdrawing from most of Rojava, and could not be
stopped, except for this massively mounted late defence of the oil-fields. As the NeoCons
were resisting from the beginning, what was it that changed Trump's mind? Bibi sounds like
the answer, but I'm open to others.
"So why did Trump state so emphatically that Russia and China love U.S. presence
there???"
Reverse psychology. If Trump can get that narrative to fly then the mindless Russophobic
and Sinophobic brainwash victims in the US will start screaming for the US to get out. After
all, jello-brained Americans believe they must do the opposite of whatever China and Russia
think is good. The USA certainly cannot do anything that China or Russia might approve of,
right? So if they want us to stay then we have to leave.
Russia loves the US stealing Syria's oil. Listen, Russia delivered a beat down to murican
regime change policy the likes of which the world has never seen before. It is epic
humiliation beyond all endurance! The Syrian state is saved and the prospects of a Libya just
a few hours from Russia's border are now gone! The US is scared shittless to attack Iran head
on, so the status quo is returning to this region faster than murica's tiny brain can
process. So what to do? Grab the oil! Be a thug and criminal! No more pretense, just sin
proudly like the evil turd you are! Lol! And Russia can point at that turd and condemn it on
the world stage for the whole world to see. No excuses...no sympathy. Of course that bravado
wont last long. When push comes to shove, murica will fold like the dodgy piece of toilet
paper it is and go home. Be patient and enjoy the Evil Empire's death agony a while
longer...make popcorn...
The Redirection, Mar 5, 2007
Is the Administration's new policy benefitting our enemies in the war on terrorism?
By Seymour M. Hersh
To undermine Iran, which is predominantly Shiite, the Bush Administration has decided, in
effect, to reconfigure its priorities in the Middle East. In Lebanon, the Administration has
cooperated with Saudi Arabia's government, which is Sunni, in clandestine operations that are
intended to weaken Hezbollah, the Shiite organization that is backed by Iran. The U.S. has
also taken part in clandestine operations aimed at Iran and its ally Syria. A by-product of
these activities has been the bolstering of Sunni extremist groups that espouse a militant
vision of Islam and are hostile to America and sympathetic to Al Qaeda. . . here
InsurgeIntel, May 22, 2015
Pentagon report predicted West's support for Islamist rebels would create ISIS
Anti-ISIS coalition knowingly sponsored violent extremists to 'isolate' Assad, rollback 'Shia
expansion'
by Nafeez Ahmed
The newly declassified DIA [Defense Intelligence Agency -- headed by General Flynn!] document
from 2012 confirms that the main component of the anti-Assad rebel forces by this time
comprised Islamist insurgents affiliated to groups that would lead to the emergence of ISIS.
Despite this, these groups were to continue receiving support from Western militaries and
their regional allies. . .
here
Some more history on how Russia's changed the US attitude toward Syria oil shipments to
foreign customers. Specifically, whereas until 2015 US air force pilots were not given
permission to fire on ISIS oil shipments, that policy changed when Russia entered the war.
In September 2015, the Federation Council, Russia's upper house of parliament authorised
the Russian president to use armed forces in Syria.[9][10] Russia acknowledged that Russian
air and missile strikes targeted not only ISIL, but also rebel groups in the Army of Conquest
coalition like al-Nusra Front, al-Qaeda's Syrian branch, and even FSA.
On 30 September 2015, Russia launched its first airstrikes against targets in Rastan,
Talbiseh, and Zafaraniya in Homs province of Syria. Moscow gave the United States a one-hour
advance notice of its operations. The Homs area is crucial to President Bashar al-Assad's
control of western Syria. -- wiki here
CBSNEWS, Nov 23, 2015
U.S. airstrikes against ISIS target oil tanker trucks
Two airstrikes, the most recent over the weekend, have destroyed almost 500 tanker trucks
ISIS uses to smuggle oil and sell it on the black market.
By one estimate, these attacks have destroyed roughly half the trucks ISIS uses to bring in
$1 million a day in revenues.
Until now, the U.S. has not gone after the tankers for fear of killing the civilian drivers.
. . here
That's the first time (and probably the last time) ever that the US military had any
consideration for civilian casualties. But they were ISIS employees so. . .cut 'em some
slack. Still, only half the trucks were destroyed at that time (more were destroyed much
later).
"... "The banks must be restrained, and the financial system reformed, and balance restored to the economy, before there can be any sustained recovery." ~ Jesse, July 2009 ..."
"... "Being in a position to know and nevertheless shunning knowledge creates direct responsibility for the consequences." ~Albert Speer ..."
"... Those who corrupt the public mind are just as evil as those who steal from the public purse ..."
"... 'The banks are circling the wagons. Somebody's got a problem.' ~Charles R. Geisst, as quoted in There's Nothing Normal About the Fed Pumping Hundreds of Billions Weekly to Unnamed Banks on Wall Street ..."
"... "Crowd-pleasers [demagogues] are generally brainless swine who can go out on a stage and whip their supporters into an orgiastic frenzy -- then go back to the office and sell every one of the poor bastards down the tube for a nickel apiece." ~Hunter S. Thompson ..."
"... "A confident, aggressive delivery style - often larded with jargon, clichés, and flowery phrases - makes up for the lack of substance and sincerity in their interactions with others ... they are masters of impression management; their insight into the psyche of others combined with a superficial - but convincing - verbal fluency allows them to change their personas skillfully as it suits the situation and their game plan. The most debilitating characteristic of even the most well-behaved psychopath is the inability to form a workable team." ~Paul Babiak and Robert Hare, Snakes in Suits ..."
"... "Any idea pushed into the popular mind with considerable force will keep on going until some opposing force -- or the slow resistance of friction -- stops it at last." ~Charlotte Perkins Gilman ..."
"... "Evil, when we are in its power, is not felt as evil but as a necessity, or even a duty. Power is as pitiless to the man who possesses it, or thinks he does, as it is to its victims; the latter it crushes, the former it intoxicates. The truth is, no one really possesses it." ~Simone Weil ..."
"... "People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right." ~John Kenneth Galbraith ..."
"... "Fascism begins the moment a ruling class, fearing the people may use their political democracy to gain economic democracy, begins to destroy political democracy in order to retain its power of exploitation and special privilege." ~Thomas Clement Douglas ..."
"When you go far enough to the right you meet the same idiots coming around from the left." ~Clint Eastwood, Interview, Time Magazine, February 20, 2005
"A mighty bubble of wealth is blown before our eyes, as empty, as transient, as contradictory to the laws of solid material, as
confuted by every circumstance of actual condition, as any other bubble which man or child ever blew before." ~Edward Chancellor,
Devil Take the Hindmost
"Life is a school of probability." Walter Bagehot
"Above all, don't lie to yourself. The man who lies to himself and listens to his own lies comes to a point when he cannot distinguish
the truth within him, or around him, and so loses all respect for himself and for others." Fyodor Dostoevsky, The Brothers Karamazov
"The banks must be restrained, and the financial system reformed, and balance restored to the economy, before there can be any
sustained recovery." ~ Jesse, July 2009
"He who does not shout the truth when he knows it makes himself the accomplice of liars and forgers." ~Charles Péguy
"Being in a position to know and nevertheless shunning knowledge creates direct responsibility for the consequences." ~Albert
Speer
"Evil, I think, is the absence of empathy." ~Captain G. M. Gilbert, Army Psychologist, Nuremberg Trials
"Those who corrupt the public mind are just as evil as those who steal from the public purse." ~Adlai Stevenson
"A dead thing can go with the stream, but only a living thing can go against it." G. K. Chesterton, The Everlasting Man
"We can believe what we choose. We are answerable for what we choose to believe." ~John Henry Newman
"The trust of the innocent is the liar's most useful tool." ~Stephen King, Needful Things
"The bully type, the false 'tough,' has been the first to break down under the actual fire of battle. The quiet, the calm, the
determined have made the best soldiers. Why? Obviously the bully is insecure in himself -- he blusters to muster his own courage."
~Pearl S. Buck, What America Means to Me
"Narcissists damage and hurt but they do so offhandedly and naturally, as an afterthough. They are aware of what they are doing
to others - but they do not care." ~Sam Vaknin, Malignant Self-Love
"We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. It is not merely that
at present the rule of naked force obtains almost everywhere. Probably that has always been the case. Where this age differs from
those immediately preceding it is that a liberal intelligentsia is lacking. Bully-worship, under various disguises, has become a
universal religion." ~George Orwell
"Crowd-pleasers [demagogues] are generally brainless swine who can go out on a stage and whip their supporters into an orgiastic
frenzy -- then go back to the office and sell every one of the poor bastards down the tube for a nickel apiece." ~Hunter S. Thompson
The so-called paradox of freedom is the argument that freedom in the sense of absence of any constraining control must lead to
very great restraint, since it makes the bully free to enslave the meek. The idea is, in a slightly different form, and with very
different tendency, clearly expressed in Plato." ~Karl Popper
"A confident, aggressive delivery style - often larded with jargon, clichés, and flowery phrases - makes up for the lack of substance
and sincerity in their interactions with others ... they are masters of impression management; their insight into the psyche of others
combined with a superficial - but convincing - verbal fluency allows them to change their personas skillfully as it suits the situation
and their game plan. The most debilitating characteristic of even the most well-behaved psychopath is the inability to form a workable team."
~Paul Babiak and Robert Hare, Snakes in Suits
"There are two ways to be fooled. One is to believe what isn't true; the other is to refuse to believe what is true."
~Sřren Kierkegaard
"The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated communist, but people for whom the distinction
between fact and fiction, true and false, no longer exists." ~Hannah Arendt
"Narcissists are unstable and go through repeated cycles of self-destruction, with other people usually paying the heft of the
price. Narcissists tend to be divisive, vindictive, confrontational, aggressive, hate-filled, raging, incoherent, judgment-impaired,
and irrational. Narcissists are liars, confabulators, and miserable failures, although some of them are geniuses at disguising the fact that they
are, in fact, losers." ~Sam Vaknin
"Any idea pushed into the popular mind with considerable force will keep on going until some opposing force -- or the slow resistance
of friction -- stops it at last." ~Charlotte Perkins Gilman
"Religion used to be the opium of the people. To those suffering humiliation, pain, illness, and serfdom, religion promised the reward
of an after life. But now we are witnessing a transformation: a true opium of the people is the belief in nothingness after death, the
huge solace, the huge comfort of thinking that for our betrayals, our greed, our cowardice, our murders, that we are not going to be
judged." ~Czeslaw Milosz, The Discreet Charm of Nihilism
"Evil, when we are in its power, is not felt as evil but as a necessity, or even a duty. Power is as pitiless to the man who possesses
it, or thinks he does, as it is to its victims; the latter it crushes, the former it intoxicates. The truth is, no one really possesses
it." ~Simone Weil
Fīat jūstitia ruat cćlum. Let justice be done, though the heavens may fall.
"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual
myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may
seem to others, are a solemn, basic, God-given right." ~John Kenneth Galbraith
"When Fascism came into power, most people were unprepared, both theoretically and practically. They were unable to believe that
man could exhibit such propensities for evil, such lust for power, such disregard for the rights of the weak, or such yearning for
submission. Only a few had been aware of the rumbling of the volcano preceding the outbreak." ~Erich Fromm, Escape from Freedom
"I understand why an equality that was founded upon God involved neither contradiction nor disorder. Demagogy enters at the moment
when, for want of a common denominator, the principle of equality degenerates into the principle of identity." ~Antoine de Saint-Exupéry,
Flight to Arras
"Fascism begins the moment a ruling class, fearing the people may use their political democracy to gain economic democracy, begins
to destroy political democracy in order to retain its power of exploitation and special privilege." ~Thomas Clement Douglas
"As everything in what used to be called creation becomes a commodity, human beings begin to
look at one another, and at themselves, in a funny way, and they see price tags. There was a
time when people spoke, at least occasionally, of 'inherent worth' -- if not of things, then at
least of persons.
It is sometimes said that since everything is for sale under the rule of The Market, nothing
is sacred. The Market is not omnipotent -- yet. But the process is under way and it is gaining
momentum."
"Behold the aggrieved, reactive creature fashioned by neoliberal reason and its effects, who
embraces freedom without the social contract, authority without democratic legitimacy, and
vengeance without values or futurity. Far from the calculating, entrepreneurial, moral, and
disciplined being imagined by Hayek and his intellectual kin, this one is angry, amoral, and
impetuous, spurred by unavowed humiliation and thirst for revenge.
The intensity of this energy is tremendous on its own, and also easily exploited by
plutocrats, rightwing politicians, and tabloid media moguls whipping it up and keeping it
stupid. It does not need to be addressed by policy producing its concrete betterment because it
seeks mainly psychic anointment of its wounds. For this same reason it cannot be easily
pacified -- it is fueled mainly by rancor and unavowed nihilistic despair. It cannot be
appealed to by reason, facts, or sustained argument because it does not want to know, and it is
unmotivated by consistency or depth in its values or by belief in truth.
Its conscience is weak while its own sense of victimization and persecution runs high. It
cannot be wooed by a viable alternative future, where it sees no place for itself, no prospect
for restoring its lost supremacy. The freedom it champions has gained credence as the needs,
urges, and values of the private have become legitimate forms of public life and public
expression.
Having nothing to lose, its nihilism does not simply negate but is festive and even
apocalyptic, willing to take Britain over a cliff, deny climate change, support manifestly
undemocratic powers, or put an unstable know-nothing in the most powerful position on earth,
because it has nothing else. It probably cannot be reached or transformed yet also has no
endgame.
But what to do with it? And might we also need to examine the ways these logics and energies
organize aspects of left responses to contemporary predicaments?"
"As I have stated strongly before, and just to reiterate, if Turkey does anything that
I, in my great and unmatched wisdom, consider to be off limits, I will totally destroy
and obliterate the Economy of Turkey
(I've done before!)
"
Donald J. Trump
"China uses a host of monopolizing strategies to extend its geopolitical and commercial
power, everything from below cost pricing to grab market share, patent trolling,
espionage, mergers, and financial manipulation. In fact, the CCP is best understood as
a giant monopoly that also controls a nation of 1.4 billion people and a large military
apparatus...
China's biggest asset in gaining power was how most people in the West just didn't
realize that the CCP aimed to use it. Now China's cover is blown. The raw exercise of
power to censor a random Houston Rockets basketball executive has made millions of
people take notice. Everyone knows, the Chinese government isn't content to control its
own nation, it must have all bow down to its power and authority.
Matt overstates the headline I think. The empowerment of China may have gone into higher
gear with Bill Clinton perhaps, but has been fully supported by every President, both
parties, and especially the moneyed interests in the US, who place their short term greed
first and foremost.
Follow the money. China is certainly not alone among organizations, and even nations, in
playing on the personal greed, divided loyalties, and lust for power of our political and
financial class.
This in itself is nothing new. But the extent of it, and the fashionable acceptance of it
amongst our society's elites, the industrialization of political corruption and big money
in politics, has been breathtaking.
"I thought of this upside down debt pyramid when I was at Citibank in the early '60s. I first gave talks on it inside the bank,
trying to influence the bank because I saw too much borrowing short term and lending long term. It was just awful! I kept on
warning the bank, but was just brushed aside.
When Nixon closed the gold window I said, 'This is my chance to get out,' so I took it. [laughing] It was a great move on my part
because I could buy gold and gold mining shares when gold was F$50 an ounce or less. Now Citibank is on the problem list because it
has so many bad assets."
"Among the items of interest in JPMorgan Chase's written [earnings] presentation was that it spent $6.7 billion in this past
third quarter buying up its own stock and thus boosting its stock price artificially beyond outside investor demand. The third
quarter buybacks of its stock came on top of spending $5 billion in the second quarter and $4.7 billion in the first quarter,
bringing its net repurchases of its own stock just so far this year to a whopping $16.4 billion -- money that could have otherwise
gone to loans to small businesses to kickstart innovation and job growth in America.
The [House Financial Services'] Subcommittee notes that buybacks have skyrocketed from less than $200 billion in 2000 to a record
$811 billion last year. The mega banks on Wall Street are responsible for a big chunk of those dollars.
Another unprecedented and totally crazy aspect of today's banking scene is that criminal felony charges no longer matter. You can be
a bank like JPMorgan Chase, holding $1.6 billion in deposits for risk-adverse savers, while also being regularly charged with
crimes."
"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an
industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial
crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
This behaviour is criminal. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear
weapons proliferation and large-scale tax evasion; assisting in major financial frauds and in concealment of criminal assets; and
committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.
And yet none of this conduct has been punished in any significant way."
"Twenty-five years ago, when most economists were extolling the virtues of financial deregulation and innovation, a maverick
named Hyman P. Minsky maintained a more negative view of Wall Street; in fact, he noted that bankers, traders, and other financiers
periodically played the role of arsonists, setting the entire economy ablaze. Wall Street encouraged businesses and individuals to
take on too much risk, he believed, generating ruinous boom-and-bust cycles. The only way to break this pattern was for the
government to step in and regulate the moneymen.
Many of Minsky's colleagues regarded his 'financial-instability hypothesis,' which he first developed in the nineteen-sixties, as
radical, if not crackpot. Today, with the subprime crisis seemingly on the verge of metamorphosing into a recession, references to
it have become commonplace on financial web sites and in the reports of Wall Street analysts. Minsky's hypothesis is well worth
revisiting."
John Cassidy,
The Minsky Moment
, The New Yorker, 4 February 2008.
"The more people rationalize cheating, the more it becomes a culture of dishonesty. And that can become a vicious, downward cycle.
Because suddenly, if everyone else is cheating, you feel a need to cheat, too."
Stephen Covey
"The prevalence of the corporation in America has led men of this generation to act, at times, as if the privilege of doing business
in corporate form were inherent in the citizen; and has led them to accept the evils attendant upon the free and unrestricted use of
the corporate mechanism as if these evils were the inescapable price of civilized life, and, hence to be borne with resignation.
Through size, corporations, once merely an efficient tool employed by individuals in the conduct of private business have become an
institution -- an institution which has brought such concentration of economic power that so-called private corporations are sometimes
able to dominate the state.
Coincident with the growth of these giant corporations, there has occurred a marked concentration of individual wealth; and that the
resulting disparity in incomes is a major cause of the existing depression [1933].
We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."
Supreme Court Justice Louis D. Brandeis
"You can know the value of every item of merchandise, but if you don't know the value of your own soul it is all a vanity.
This, this then is the essence of all wisdom -- that you should know who you will be when your Day of Reckoning arrives."
Rumi
"A fair amount of the earnings growth the S&P 500 has exhibited in recent years might be ephemeral, related to gains in the value
of companies'
investments
rather than the underlying strength of their operations. Under the hood, then, profit margins
aren't as good as they appear. If business starts to falter, companies' may take an ax to costs, with bad repercussions for the
economy."
Justin Lahart, Wall Street Journal,
Squeeze on U.S. Companies May Be Worse Than It Seems
"Every bubble rests on two pillars: a) it's different this time; b) some other sucker will buy this worthless asset from me at a
higher price, so I should hold on against my better judgment."
Louis-Vincent Gave
"Price discovery is not a sexy function of markets, but it is critical to the efficient allocation of scarce capital and
resources, and to the preservation of the long term wealth of investors and the economy as a whole. If price discovery is
compromised by manipulation, then we will all be gradually impoverished and the economy will be imbalanced and unstable.
Over the past 25 years the forces of regulatory liberalisation and demutualisation of markets have allowed the largest global banks
to set the rules, processes and infrastructure of global markets to their own self-interested requirements."
"There seems little question that in 1929, modifying a famous cliche, the economy was fundamentally unsound. This is a
circumstance of first-rate importance. In 1929 the rich were indubitable rich. The figures are not entirely satisfactory, but it
seems certain that the five per cent of the population with the highest incomes in that year received approximately one-third of all
income. The proportion of personal income received in the form of interest, dividends, and rent – the income, broadly speaking, of
the well-to-do – was about twice as great as in the years following the Second World War.
This highly unequal income distribution meant that the economy was dependent on a high level of investment or a high level of luxury
consumer spending or both. The rich cannot buy great quantities of bread. If they are to dispose of what they receive it must be on
luxuries or by way of investment in new plants and new projects. Both investment and luxury spending are subject, inevitably, to
more erratic influences and to wider fluctuations than the bread and rent outlays of the $25-week workman. This high bracket
spending and investment was especially susceptible, one may assume, to the crushing news from the stock market in October 1929."
John Kenneth Galbraith,
The Great Crash of 1929
"Wall Street got the credit for this prosperity and Wall Street was dominated by just a
small group of wealthy men. Rarely in the history of this nation had so much raw power
been concentrated in the hands of a few businessmen.
Everything was not fine that spring with the American economy. It was showing ominous
signs of trouble. Steel production was declining. The construction industry was sluggish.
Car sales dropped. Customers were getting harder to find. And because of easy credit,
many people were deeply in debt. Large sections of the population were poor and getting
poorer.
Just as Wall Street had reflected a steady growth in the economy throughout most of the
20s, it would seem that now the market should reflect the economic slowdown. Instead, it
soared to record heights. Stock prices no longer had anything to do with company profits,
the economy or anything else. The speculative boom had acquired a momentum of its own.
On September 5th, economist Roger Babson gave a speech to a group of businessmen.
'Sooner or later, a crash is coming and it may be terrific.'
The market took a
severe dip. They called it the "Babson Break." The next day, prices stabilized, but
several days later, they began to drift lower. Though investors had no way of knowing it,
the collapse had already begun."
The market fluctuated wildly up and down. On September 12th, prices dropped ten percent.
They dipped sharply again on the 20th. Stock markets around the world were falling, too.
Then, on September 25th, the market suddenly rallied.
Practically every business leader in American and banker, right around the time of 1929,
was saying how wonderful things were and the economy had only one way to go and that was
up.
There came a Wednesday, October 23rd, when the market was a little shaky, weak. And
whether this caused some spread of pessimism, one doesn't know. It certainly led a lot of
people to think they should get out.
And so, Thursday, October the 24th -- the first Black Thursday -- the market, beginning in
the morning, took a terrific tumble. The market opened in an absolutely free fall and some
people couldn't even get any bids for their shares and it was wild panic. And an ugly
crowd gathered outside the stock exchange and it was described as making weird and
threatening noises. It was, indeed, one of the worst days that had ever been seen down
there.
But Monday was not good. Apparently, people had thought about things over the weekend,
over Sunday, and decided maybe they might be safer to get out. And then came the real
crash, which was on Tuesday, when the market went down and down and down, without seeming
limit...Morgan's bankers could no longer stem the tide. It was like trying to stop Niagara
Falls. Everyone wanted to sell.
In brokers' offices across the country, the small investors -- the tailors, the grocers,
the secretaries -- stared at the moving ticker in numb silence. Hope of an easy
retirement, the new home, their children's education, everything was gone."
PBS American Experience,
The Great Crash of 1929
"Our
basic trouble was not an insufficiency of capital
. It was
an insufficient
distribution of buying power coupled with an over-sufficient speculation
in
production.
While wages rose in many of our industries, they did not as a whole rise
proportionately to the reward to capital
, and at the same time
the purchasing power
of other great groups of our population was permitted to shrink
.
We accumulated
such a superabundance of capital that our great bankers were vying with
each other, some of them employing questionable methods, in their efforts to lend
[leverage]
this capital at home and abroad
. I believe that we are at the threshold
of a fundamental change in our popular economic thought, that in the future we are going
to
think less about the producer and more about the consumer.
Do what we may have to do to inject life into our ailing economic order,
we cannot make
it endure for long unless we can bring about a wiser, more equitable distribution of the
national income."
Franklin D. Roosevelt, 1932
"People of privilege will always risk their complete destruction rather than surrender any
material part of their advantage. Intellectual myopia, often called stupidity, is no doubt
a reason. But the privileged also feel that their privileges, however egregious they may
seem to others, are a solemn, basic, God-given right."
John Kenneth Galbraith
"It's not just political spin, however, that explains the rose-colored coverage [in the
media]. Another explanation is that the media is plain stupid -- quick to accept guidance
from economists on Wall Street, for example, who have a vested interest in making
everything wonderful."
John Crudele
"It is difficult to get a man to understand something, when his salary depends on his not
understanding it."
Upton Sinclair
"Experience, however, shows that neither a state nor a bank ever have had the unrestricted
power of issuing paper money without abusing that power; in all states, therefore, the
issue of paper money ought to be under some check and control; and none seems so proper
for that purpose as that of subjecting the issuers of paper money to the obligation of
paying their notes either in gold coin or bullion."
David Ricardo
"When depreciated, mutilated, or debased coinage or currency is in concurrent circulation
with money of high value in terms of precious metals, the good money automatically
disappears.
My thought about Barr holding fire on Epstein is that he may have known that was a red
herring, false flag, or whatever you want to call it. That whole Epstein affair sounded like
a juicy distraction to me, in the manner of "if it bleeds it leads". When someone actually
dies who is the center of contraversial activity, you may be sure, unfortunately, that
someone, he or another, is getting close to truths that ought not see the light of day.
Somewhat in the nature of the baiting of Putin as Ukraine was beginning its time of troubles.
The old revolutionary dictum "Hold your fire until you see the whites of their eyes" may have
been in Barr's mind at the time of Epstein's demise.
Certainly such investigations as the one he is involved in take much time to sort out the
who-what-where in terms sufficiently damaging to become a credible enterprise. We have seen
such attempts fail in the past. I hope he takes his time and gets all his ducks in a row
before the hammer falls as fall it must. It is so vital to this country that this attempt
succeed; for if it fails only the shambles of Kiev style fisticuffs in Congress can be the
result. Not pretty.
In b's post we are reminded of the power of the press to misinform. I would suggest we
badly need divestiture of our media from the huge corporations now more wealthy than some
countries. The latter are too powerful in this country now, and they do need to be whittled
down to size. We not only need fact finders, we need eloquent voices to present those facts
to the public. We need free speech!
He is a deep state creature...his father Donald Barr was an OSS guy and original CIA
[which morphed from the wartime OSS]...
Barr senior was also Epstein's mentor and got him his start at the deeply establishment
Dalton School [and probably Epstein's handler as an asset or 'agent' as they are
called]...
So things go a bit deeper than the surface when it comes to Barr junior...and what he is
doing here...
There is a probably valid school of thought that the deep establishment has a faction that
is pro-Trump and behind the general idea of disengaging from wasteful overseas adventures,
since it is becoming clear that this is a ruinous path that the US cannot really afford
anymore...
I would also agree with the theory that says that these two 'deep' factions ['nationalist'
vs 'globalist'] are at war...with the 'DNC-Hillary-MSM-interventionist faction' possibly on
the decline, but still powerful enough to blow up a lot of the plans that Trump and his deep
backers would like to get done...
Epstein is a whole 'nuther can of worms here and I would not be surprised if he was not
actually dead...Trump himself is deeply entangled with many of the prime players in the
Epstein web...it all depends if he is more useful alive than dead...
Btw...pulling off a deception like a fake death is kindergarten level for these kinds of
operators and the unlimited resources they possess to shape so-called 'reality' as brought to
us on our little screens...
So really I find it kind of silly that the right wingers are looking at Barr as some kind
of White Knight...there really are none of those in these circles...as much as the sheeple
would like to believe that...
re: source of "God has an infinite sense of humor"...
Was told that in 1994[?] conversation w Jerry, a fellow worker, abt the baffling condition
of Mankind. Never heard it before or since. At the time it was one of most incisive and
impinging viewpoints; it still is.
It was said to me dryly, not coy and no smile, almost plaintively as tho it would be
ignored and pass thru unrecognized. I never met a more rational or sharper mind.
Once, I remarked I was looking for an obscure book that was mentioned in another book, as
"1 of the 3 best autobios ever written in English" by someone I never heard of. J:"Who and
what?" Me:"Kropotkin and Revolutionist".
J:"Oh, sure! I think my wife still has a copy" and he brought it in next day.[An awesome
read, too!]
Thanks for your reply! I was also thinking that perhaps it was a cynical observation made
by a stoic son of a Baptist or Methodist Minister, like the retort in M*A*S*H about
how someone like that (Hawkeye, IIRC) got into the Army--"He got drafted," which caused the
audience to erupt in laughter (definitely a context-dependent joke).
flankerbandit 111
"There is a probably valid school of thought that the deep establishment has a faction that
is pro-Trump and behind the general idea of disengaging from wasteful overseas adventures,
since it is becoming clear that this is a ruinous path that the US cannot really afford
anymore..."
I think this what is occuring. And when Trump says swamp, I think it is the section of the
swamp that this faction believe set the US on a ruinous path.
Good post my friend, no wonder the demoncrazies went berserk over Trump dipping in to
their honeypot. I could never definitively find a reason for those spectacular ammunition
storage bonfires in Ukraine. I figured it was either to disable their sale or cover up
theft.
W. Gruff, thanks for the process insight.
I was long-aware the removal of the Smith-Mundt Act was loaded into the 2012 NDAA. No attempt
on Trump's watch has been made to bring a needed, modern form of it back. I didn't vote for
Trump, and until the damn looney media is reeled back into factual, in-context reporting, it
will remain obvious Trump is only expanding a variety of nefarious things on the absence of
legislation such as the S-M Act.
Humans have an amazing capacity to suspend disbelief, a trait that novelists, Hollywood and,
sadly, criminals, have used to notable effect. Here are some typical frauds.
Wire transfer scams: A retired businessman in his 80s was contacted by people who claimed
they wanted to do business with him. Thinking he was back in the game and investing in a real
deal, he wired them $400,000. When he discovered he'd been defrauded, he complained to the
scammers, who then passed him along to new crooks who said they could get his money back if
he would wire them $400,000 -- which he did.
Third-party scams: Some victims play an unwitting role in facilitating scammers' attempts
to defraud a third party. For example, a gentleman in his 80s gave scammers between $600,000
and $1 million from his bank accounts. After the fraud was discovered by his family and
financial institution, he lost access to his funds. But that didn't stop the scammers. They
set up a PayPal account under his name and Social Security number, convinced him to go to
TitleMax® and borrow money using his car as collateral, then had him put the funds in the
PayPal account to which they had access.
Gift card scams: Gift cards can be used to launder money without even having to
physically send the cards anywhere. A scammer convinces the victim to go to a store, get one
or several cards, and load each one up with money. Then, they have the victim scratch off a
protective strip on the back of the card to reveal its code number, take a picture of the
number, and then text the picture to a cellphone number.
Computer-hacking scams: A common ruse aimed at seniors involves a contact from someone
claiming to be a Microsoft employee. The fake Microsoft rep claims the senior's computer has
a virus or some other problem, which they're happy to fix. The senior simply needs to click
on an email link or download an attachment the rep sends them -- and pay a fee. With one
click by the victim, the scammer gains control of the victim's computer. One victim paid
about $300 -- over and over -- to the same scammers, who kept "fixing" her computer since
they could break it as often as they chose. The victim had no idea what was happening.
Door-to-door scams: A fraudster knocks on a senior's door and says her trees need to be
trimmed or gutters need to be cleaned. I know of two people who each paid a crook $30,000 to
trim the hedges at their house. No trimming took place; the criminal just hung out for a
while and reappeared to help the elderly client write a check for their services.
Transaction settlement scams: A scammer claims they need someone to act as an agent or
middleman to help settle a transaction, such as a divorce or property settlement. The victim
receives a check that looks legitimate, deposits it in their own account or a trust account,
then wires the money to the scammer. Of course, the check was fake, but the victim's real
money is gone.
Family member financial abuse: I could devote a whole article to this type of abuse.
Financial frauds within a family can be difficult to resolve. Is an elderly parent
voluntarily giving real gifts to a family member? Or is fraud involved? Without proper
documentation, financial fraud within a family can devolve into a he said/she said conflict
among siblings and others.
"... The real world politics of affirmative action, targeted (as opposed to universal) benefit programs and the like reside in these complexities. The equity graphic conveys the initial insight, but the assumptions packed into its story make it harder rather than easier to think through the controversies that bedevil equity politics. ..."
"... This goes back to what I call justice vs fairness. Justice is supposed to be blind, with the same outcome for all. It ain't so at the moment, but let's suppose we'd get a perfect justice. It still would not be fair. Fine of 1k may mean bankruptcy for some, and way beyond the level of recognition for someone else. ..."
"... But if you start getting into "fair", it has its own problems. Namely, fair depends on the context, and the context may vary – what is fair in one context may be deeply unfair in another, and it's possible that there's no solution where something is "fair" in all possible (or even majority) contexts. ..."
"... Precisely a point. Abstract words require context when applied to concrete cases. The main case for 'equal' is likely "all men are created equal" in the Declaration of Independence. The context there especially is a retort to the divine right of royalty. ..."
"... I think this argues for why a human element – judges – are indispensible for taking into account context and setting consequences appropriately. So Yves' introduction about the co-optation of the judiciary by Law & Economics is pertinent. It is vital for society to require the judiciary to act in the public interest. ..."
"... The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. Anatole France ..."
"... Another angle: all three are cheating, trying to watch the game without paying. If everybody did that. The point of the pictures is to simplify the concepts enough to provide a working definition – though as Studebaker wrote, it isn't a very good definition. ..."
"... Neo-liberal economics has resulted in more and more Americans finding themselves on the ' outside' , looking in, and a great many of them are quite upset about that because they remember a better time, and understand that in a very real sense, they're situation is the result of the callous, and willful behavior of elites who've profited in ruining their quality of life. ..."
"... Indeed. "The baseball game is dependent on the wall." Because, for one, who wants to run all the way to the river and wade in after the stupid ball? Baseball is an enjoyable distraction. So, to carry this metaphor, is the economy. Equity, to me, was always an equal share of something. A stake in something. Equal justice under the law. Without equity, as is now dawning on me, there can be no hope of equality. ..."
"... Neoliberalism is "accumulation by dispossession" (David Harvey) so there's no equity there. Hence no equality. ..."
Yves here. To give you a bit of break rom the loud warble
coming from far too many news outlets, here's a point of entry into a classic debate about
fairness, or more specifically, equality versus equity.
In case you missed it, there's been a war on equity in the form of the law and economics
movement. From ECONNED:
The third avenue for promoting and institutionalizing the "free market" ideology was
inculcating judges. It was one of the most far-reaching actions the radical right wing could
take. Precedents are powerful, and the bench turns over slowly. Success here would make the
"free markets" revolution difficult to reverse.
While conservative scholars like Richard Posner and Richard Epstein at the University of
Chicago trained some of the initial right-leaning jurists, attorney Henry Manne gave the
effort far greater reach. Manne established his "law and economics" courses for judges, which
grew into the Law and Economics Center, which in 1980 moved from the University of Miami to
Emory in Atlanta and eventually to George Mason University.
Manne had gotten the backing of over 200 conservative sponsors, including some known for
extreme right-wing views, such as the Adolph Coors Company, plus many of the large U.S.
corporations that were also funding the deregulation.
Manne is often depicted as an entrepreneur in the realm of ideas. He took note of the fact
that, at the time, the University of Chicago had one of the few law schools that solicited
funding from large corporations. Manne sought to create a new law school, not along
conventional brick-and-mortar lines (his efforts here failed), but as a network. He set out
to become a wholesaler, teaching law professors and judges. However, although Manne presented
his courses as teaching economics from a legal perspective, they had a strong ideological
bias:
The center is directed by Henry Manne, a corporate lawyer who has undertaken to demolish
what he calls "the myth of corporate responsibility." "Every time I hear a businessman
acknowledge public interest in what they do," Manne warns, "they invite political control
over their activities." At Manne's center in Miami, interested judges learn how to write
decisions against such outside political control couched in the new norms of market
efficiency.
Manne approached his effort not simply as education, but as a political movement. He would
not accept law professors into his courses unless at least two came from a single school, so
that they could support each other and push for others from the law and economics school of
thought to be hired.
The program expanded to include seminars for judges, training in legal issues for
economists, and an economics institute for Congressional aides. A 1979 Fortune article on the
program noted that the instructors "almost to a man" were from the "free market" school of
economics. Through 1980, 137 federal district and circuit court judges had finished the basic
program and 56 had taken additional "advanced" one-week courses.
It is hard to overstate the change this campaign produced, namely, a major shift in
jurisprudence. As Steven Teles of the University of Maryland noted:
In the beginning, the law and economics (with the partial exception of its application
to antitrust) was so far out of the legal academic mainstream as to be reasonably
characterized as "off the wall." . . . Moving law and economics' status from "off the wall"
to "controversial but respectable" required a combination of celebrity and organizational
entrepreneurship. . . . Mannes' programs for federal judges helped erase law and economics'
stigma, since if judges -- the symbol of legal professional respectability -- took the
ideas seriously, they could not be crazy and irresponsible.
Now why was law and economics vantage seen as "off the wall?" Previously, as noted above,
economic thinking had been limited to antitrust, which inherently involves economic concepts
(various ways to measure the power of large companies in a market). So extending economic
concepts further was at least novel, and novel could be tantamount to "off the wall" in some
circles. But with hindsight, equally strong words like "radical," "activist," and
"revolutionary" would apply.
Why? The law and economics promoters sought to colonize legal minds. And, to a large
extent they succeeded. For centuries (literally), jurisprudence had been a multifaceted
subject aimed at ordering human affairs. The law and economics advocates wanted none of that.
The law and economics advocates wanted none of that. They wanted their narrow construct to
play as prominent a role as possible.
For instance, a notion that predates the legal practice is equity, that is, fairness. The
law in its various forms including legislative, constitutional, private (i.e., contract),
judicial, and administrative, is supposed to operate within broad, inherited concepts of
equity. Another fundamental premise is the importance of "due process," meaning adherence to
procedures set by the state. By contrast, the "free markets" ideology focuses on efficiency
and seeks aggressively to minimize the role of government. The two sets of assumptions are
diametrically opposed.
By Peter Dorman, professor of economics at The Evergreen State College. Originally
published at Econospeak
Here's the graphic, widely used to explain why equity outcomes require unequal treatment of
different people.
Benjamin Studebaker (hat tip Naked Capitalism ) doesn't like it at all: "I hate it so
much." But his complaints, about the way the graphic elides classic debates in political
theory, strike me as being too redolent of grad school obsessions. The graphic is not trying to
advance one academic doctrine over another; it just makes a simple case for compensatory
policy. I agree in a general way with this perspective.
Consider the Americans with Disabilities Act of 1990, which mandates special facilities in
public buildings to accommodate people in wheelchairs or facing other mobility challenges. This
is unequal treatment: extra money is spent to install ramps that only a few will use, rather
than for amenities for everyone. But it's a great idea! Yes, compensation is concentrated on a
minority, but it aims to allow everyone to participate in public activities, and in doing this
it embodies a spirit of solidarity that ought to embrace all of us. By making a simple,
intuitive case for focused compensation, the graphic captures the spirit behind the ADA and
many other policies that take account of inequalities that would otherwise leave some members
of the community excluded and oppressed.
Unfortunately, however, there are serious limitations to the graphic; above all, it embodies
assumptions that beg most of the questions people ask about compensatory programs. Some are
challenges from conservatives of a more individualistic bent, others might be asked by friendly
critics on the left, but all are worthy of being taken seriously.
1. Watching the game over the fence is binary: either you can see it or you can't. In the
real world, however, most activities are matters of degree. You can learn more or less of a
particular subject in school, have a better or worse chance of getting the job you want, live
in a bigger or smaller house or apartment. How much compensation is enough? At what point do we
decide that the gains from ex post equity are not large enough to justify the other costs of
the program, not only monetary but possible conflicts with other social objectives? Every
teacher who has thought about how much extra attention to give those students who come to the
classroom with extra needs has faced this problem.
2. Watching the game is passive, an act of pure consumption. Things get more complex when
inequalities involve activities that produce goods of value to others. For instance, how would
the graphic address compensatory programs for the baseball players ? Yes, a player from
an underserved, overlooked community should get an extra chance to show they should be on the
team. But should the criteria for who makes the team be relaxed? How and how much? In case you
haven't noticed, this gets to the core of debates over affirmative action. Again, I am in favor
of the principle of taking extra steps to compensate for pre-existing inequalities, but the
graphic offers no guidance in figuring out how far to go in that direction.
3. Height is a largely inherited condition, but what about differences in opportunity that
are at least partly the result of the choices we make ourselves? This is red meat to
conservatives, who denounce affirmative action and other compensatory policies on the grounds
that they undermine the incentive to try hard and do one's best. I think this position is too
extreme, since inherited and environmental conditions are obviously crucial in many contexts,
but it would also be a mistake to say that individual choices play no role at all. Again we are
facing questions of degree, and the graphic, with it's clear intimation that inequality is
inborn and ineluctable, doesn't help.
4. The inequality depicted in the graphic is height, which is easily and uncontroversially
measured. Most social inequalities are anything but. Student A went to a high school with a
library; student B's high school didn't have one. That's a meaningful inequality, and if an
opportunity can be awarded to only one of them, like entrance into a selective college program,
it ought to be considered. But how big an effect should we attribute to it? Damned if I
know.
5. There is no real scarcity facing the three game-watchers in the graphics. There are
enough boxes to allow everyone to get a good view and enough fence space for everyone to share. In the real world neither tends to be true. Resources that can be devoted to compensatory
programs are limited, especially on a global scale, which, if you're really an egalitarian, is
how you should think about these things. Even locally, the money often runs short. The college
I used to teach at could be criticized for not doing enough for students from low income and
rural backgrounds with weak K-12 systems (I certainly did), but even with the best of
intentions the money was not there. Of course, where the goods to be distributed are
competitive, like slots in a school or job openings at a company, the problem is that there's
not enough fence space to go around. Yes, we should take action to provide more opportunities
and reduce the competitive scarcity. No, this won't make the scarcity go away completely.
6. The graphic shows us three individuals and asks us to visually compare their heights.
America has a population of over 320 million, and even "small" communities can have a cast of
thousands. Surely we are not expected to make individual calculations for every
person-by-person comparison. No, those using the graphic usually have in mind group
comparisons -- differences requiring compensatory interventions according to race, class,
gender, ability status, etc. But while that makes things easier by reducing the number of
comparisons, it makes everything else much harder to figure out: How do we measure group
advantages and disadvantages? How do we account for intersections? Are they additive,
multiplicative or something else? Do all members of the group get assigned the same
advantage/disadvantage rankings? If not, on what criteria? These are tremendously difficult
questions. I am not suggesting that they force us to abandon an egalitarian commitment to
substantive, ex post equality -- quite the contrary, in fact. We do have to face them if we
want to reduce the inequality in this world. My point here is that, by depicting just these
three fans watching a baseball game over a fence, one tall, one medium, one short, the graphic
is a dishonest guide to navigating actual situations.
My bottom line is that, while I agree with the spirit of the graphic that policies, whether
at a single office, a large institution or an entire country, should take account of the
inequalities people face in real life and try to compensate for them, how and how far to go is
difficult to resolve. Achieving ex post equality is complicated in the face of so many factors
that affect our chances in life, and on top of this, equality is only one of many values we
ought to respect.
The real world politics of affirmative action, targeted (as opposed to
universal) benefit programs and the like reside in these complexities. The equity graphic
conveys the initial insight, but the assumptions packed into its story make it harder rather
than easier to think through the controversies that bedevil equity politics.
This goes back to what I call justice vs fairness. Justice is supposed to be blind, with the same outcome for all. It ain't so at the moment,
but let's suppose we'd get a perfect justice. It still would not be fair. Fine of 1k may mean bankruptcy for some, and way beyond the
level of recognition for someone else.
But if you start getting into "fair", it has its own problems. Namely, fair depends on the
context, and the context may vary – what is fair in one context may be deeply unfair in
another, and it's possible that there's no solution where something is "fair" in all possible
(or even majority) contexts.
Justice is blind really means it declaratively sets the context and recognises no other.
But if we lock the context for fairness, we'll generate some unfair outcomes.
That all said, the fact that the perfect outcome is unachievable doesn't mean we'd not
strive for a better one.
Precisely a point. Abstract words require context when applied to concrete cases. The main
case for 'equal' is likely "all men are created equal" in the Declaration of Independence.
The context there especially is a retort to the divine right of royalty.
Abstractions are particularly subject to korinthenkacking, "questions of degree".
Commitment to decisions tend to binarism, and (imo) usually based on one or two factors, with
a third for nuance.
For all the dithers, there is an egalatarianism inherent in the image; universally,
everyone has been a child and at some point has felt the pain of being too small. That
emotional impact is part of its success.
I think this argues for why a human element – judges – are indispensible for
taking into account context and setting consequences appropriately. So Yves' introduction
about the co-optation of the judiciary by Law & Economics is pertinent. It is vital for
society to require the judiciary to act in the public interest. Manne's framing of this as
"political control" is not completely wrong. The kind of judicial reform we (I) would like to
see needs to articulate what "public interest" means. I find Dorman's grappling with this
graphic to be a helpful start. The left seems deficient in thinking about this kind of
complexity (though perhaps I've missed it).
Wow, hadn't seen this before. Kinda fun to think about. Maybe the whole point is just to
illustrate the difference in the definitions of the two words in an Ikea sorta way. Haven't
seen the Studebaker critique so I don't know what his issues are.
I also have no idea what the "classic debates in political theory" wrt this graphic are.
But a few thoughts occur to me–can the short guy cut a hole in the the fence, or do the
"rules" say that the only way to see the game, without buying a ticket of course, is by
looking OVER the fence?
Is there a legitimate reason for the fence at all? If so, what is it? If not, why is it
there? Why are there no wheel chairs in the picture, when the discussion involves disabled
accommodation? Why do the kibitzers in the graphic appear to be minorities, no whites?
Gotta take the dog to the vet now. Will look for the Studebaker piece later. Maybe he
answers my questions.
The law, in its majestic equality, forbids the rich as well as the poor to sleep under
bridges, to beg in the streets, and to steal bread. Anatole France
I have always found this graphic both confusing and troubling. Why are the three central
figures watching the game outside the park? Isn't the difference between the outside the
fence watchers and the comfortably seated audience inside the park a question of equality and
equity? Are equity standards only applied to people relegated to not only 'second class
seating' but standing room only areas? Finally, do the people inside the park get to decide
not only who gets into the park but also how well or poorly the excluded fence watchers
execute a workaround to subvert the exclusionary practices implied by the presence of a
fence?
Another angle: all three are cheating, trying to watch the game without paying. If
everybody did that. The point of the pictures is to simplify the concepts enough to provide a working
definition – though as Studebaker wrote, it isn't a very good definition.
In simplifying it so much, it leaves a tremendous amount out and dodges a legion of
questions – both our writers seem to agree that it dodges crucial questions.
In the end, it's just a cartoon. You're right: the field would have guards out there to
prevent this sort of thing, unless they were consciously offering charity.
Why has no one made note of the fact that the people in the graphic are all excluded,
presumedly because of lack of the price of a ticket?
And is that lack of money due to the fact that they are all people of color, and so
subject to the economic inequality, based on racial prejudice, that plagues our system?
To me, the graphic portrays, in sub-text, the notion that people with less can/should be
happy with less than full participation in the culture in which they live, so long as that
austerity is ' properly' distributed amongst those ' outside ' the fence.
Neo-liberal economics has resulted in more and more Americans finding themselves on the '
outside' , looking in, and a great many of them are quite upset about that because
they remember a better time, and understand that in a very real sense, they're situation is
the result of the callous, and willful behavior of elites who've profited in ruining their
quality of life.
To take my analysis a bit further, IMO, it is the ' nouveau poor ' who, because of
their belief that they deserve the better life they clearly remember, and so recently lost,
insist that the ' equality ' portrayed in the left panel is reasonable, and should be
accepted because it is obviously evenly distributed.
This misinformed opinion might be attributed to their lack of experience with their new
life ' outside ', where people over time learn to cooperate in making do with
less.
There is a rich literature dealing with this reality, think The Prince and the Pauper, or
even the teachings of Jesus, and the Buddha.
The folks who believe in MAGA, are refusing to adjust, and believe that somehow, they will
regain their rightful place in an economy that has clearly decided to leave them behind, and
' outside '.
Our job then, is to help them understand that their only real hope for a better life is in
solidarity with the rest of us, in our fight to get everyone a place inside the fence.
This job is obviously a long, up hill battle, largely because of the long history of the
PTB stigmatizing socialism, dividing to conquer, and of course the MSM's total abandonment of
their civic duty.
I odce spent a few months in Cuba. It is absolutely not a model for most things. One
anecdote: an employee of the film industry (ICAIC) told me she gave some desperately poor
friends movie theater tickets. They ended up not going because they couldn't afford the bus
fare.
A bigger issue: the daily struggle to get enough to eat beyond rice, beans, and sugar.
We can debate the role of the US in turning Cuba into a near prison, and all sanctions need
to stop now, but it is what it is.
We can debate the role of the US in turning Cuba into a near prison, and all sanctions
need to stop now, but it is what it is.
And we can debate why, without sanctions, the US has the largest prison population in the
world at the highest rate of imprisonment. Tthough, of course, there is "no daily struggle"
for food or healthcare )
Cuba is an actual country with 11 million real people in it, not just a set of talking
points or a hypothetical. Of all the manifestations of North American arrogance, being made
into fairy tales pisses off Latin Americans, including the left, about as much as any. We can
abolish the current prison model and also abolish the sanctions on Cuba and do other things
not to make their already difficult lives worse.
A country a hundred miles from Disney World has the boot of the US state pressing down on
its suffering people and most American leftists only talk about it in terms of an internal US
political debate. Exhibit 10000 of why the American left sucks.
And yes, Cuba today distributes what resources it does have so unequally that it is not a
great model of social justice.
In the graphic, there are at least three games going on: the baseball game, about which we
don't learn very much; the game of the fence, which is solved with box arrangements, or by
taking it down; and the game of the definitions of 'equality' and 'equity', which comes
through the fourth wall into the world in which the cartoonist is trying to prove something.
According to my communistic prejudices, I would have said the only just solution would be to
remove the wall, but it could be that the baseball game is dependent on the wall -- I would
think most goods produced by labor, especially performances, would require some defining
structure -- and certainly the word game requires the wall as part of its raw material.
Or, replace the wall with clear plexiglass, thus retaining the nature of the game but
removing the market barriers that keep people without access to funds from enjoying the
game.
Indeed. "The baseball game is dependent on the wall." Because, for one, who wants to run
all the way to the river and wade in after the stupid ball? Baseball is an enjoyable
distraction. So, to carry this metaphor, is the economy. Equity, to me, was always an equal
share of something. A stake in something. Equal justice under the law. Without equity, as is
now dawning on me, there can be no hope of equality.
Little Manu Macron, in a burst of
hypocrisy, told Trump that the difference between France and the US was that France was based
more on social justice. Justice. I really don't see that as fundamentally French. But I
definitely don't see it as fundamentally USA. "Equity" is as much verbiage as "Equality". We
might want to start looking at the antonyms. Neoliberalism is "accumulation by dispossession"
(David Harvey) so there's no equity there. Hence no equality.
A version of this graphic was used at a civic engagement seminar on multi-modal
transportation accessibility I attended last night. It featured one twist – the
replacement of the slotted fence with a chain link fence so that all could see the game
"because the cause of the inequity was addressed. The systemic barrier was removed." In the
context of the presentation about accessibility in the city, the presenter mentioned
universal design
. This reminded me of Bucky Fuller's anticipatory design since both seek to
think comprehensively (i.e. inclusively) about design challenges and to accommodate the
maximum number of beneficiaries while doing harm to the least number possible. Seem equitable
to me! The designer of the equity meme has a great post at Medium that
provides a thorough overview of how the graphic has evolved (including the the chain link
fence addition), the variety of interpretations, and how the "famous" meme has spread far and
wide.
Is Mr. Dorman damning this image with faint praise? I think it's a brilliant way of
illustrating how an issue can be turned on it's head and looked at from a different
perspective.
It presents the difference between equality of opportunity vs. equality of outcome. Even
some self-labeled progressives (perhaps in order to appease conservatives?) have claimed they
are only interested in the former, not the latter. The graphic shows how meaningless that way
of judging results is.
The first step in trying to achieve good outcomes for all is to listen to all. This gets
my goat:
"Surely we are not expected to make individual calculations for every person-by-person
comparison."
Well, that's what individuals do, and if you respect them you take their perceptions of
inequity as data for your distributed computation. Not everyone wants the same thing. Some
people don't even like baseball.
And yes, that fence around the field is a good starter for a conversation about the
problems of enclosure. You wouldn't need the damn boxes if you hadn't blocked the view.
Wow, hadn't seen this before. Kinda fun to think about. Maybe the whole point is just to
illustrate the difference in the definitions of the two words in an Ikea sorta way. Haven't
seen the Studebaker critique so I don't know what his issues are.
I also have no idea what the "classic debates in political theory" wrt this graphic are.
But a few thoughts occur to me–can the short guy cut a hole in the the fence, or do the
"rules" say that the only way to see the game, without buying a ticket of course, is by
looking OVER the fence?
Is there a legitimate reason for the fence at all? If so, what is it? If not, why is it
there? Why are there no wheel chairs in the picture, when the discussion involves disabled
accommodation? Why do the people in the graphic appear to be minorities, no whites?
Gotta take the dog to the vet now. Will look for the Studebaker piece later. Maybe he
answers my questions.
I think a big challenge in the US is the general assumption that equality, equity, etc.
are a zero-sum game. If somebody gets something, then other people have lost. I think this
thinking is one of the reasons that we have seen low productivity growth over the past couple
of decades.
If the lower-class elements in society can get better conditions and opportunities, they
also have the opportunity to contribute more to society which increases the total size of the
pool for everybody to split. High inequality, such as now, means that many people are not
able to contribute to their full potential, which means the total size of the pool can be
smaller than it otherwise might be.
I don't think it is accidental that one of the great economic booms of all time occurred
from about 1950 to 2000 when the US:
1. Helped fund reconstruction of Europe and Japan after WW II;
2. Instituted the GI Bill which allowed many people who would never have gone to higher
education to do so;
3. Desegregated schools and generally allowed minorities to participate more fully;
4. Encouraged women to participate more fully in society; and
5. Disabled people could participate more fully.
All of these factors contributed to substantial growth in the 50s-90s period as more and
more groups become economically prosperous. However, we are now going to the ultimate
meritocracy where the economic winners are beginning to crush the people who have not done as
well and concentrate wealth at the top. As a result, the growth has stagnated as mobility is
decreasing and the upper pools are not growing.
1950-2000? I think the key date is 1973, when labor productivity was detached from wage
compensation. That's your neoliberalism kicking in, and it kicks on (and down).
What's behind the
ever-increasing need for emergency repos?
A couple of correspondents have an eye on
shadow banking.
Shadow Banking
The shadow banking system consists of lenders, brokers, and other credit intermediaries who
fall outside the realm of traditional regulated banking.
It is generally unregulated and not subject to the same kinds of risk, liquidity, and
capital restrictions as traditional banks are.
The shadow banking system played a major role in the expansion of housing credit in the run
up to the 2008 financial crisis, but has grown in size and largely escaped government oversight
since then.
Let's recap before reviewing excellent comments from a couple of valued sources.
The Fed keeps increasing the size and duration of "overnight" funding. It's now up $120 billion
a day, every day, extended for weeks. That is on top of new additions.
Three Fed Statements
Emergency repos were needed for "
end-of-quarter funding
".
Balance sheet expansion is "
not QE
". Rather, it's "
organic growth
".
This is
"not monetary policy
".
Three Mish Comments
Hmm. A quick check of my calendar says the quarter ended on September 30 and today is
October 23.
Hmm. Historically "organic" growth was about $2 to $3 billion.
Hmm. Somehow it takes an emergency (but let's no longer call it that), $120 billion "
at
least
" in repetitive "
overnight
" repos to control interest rates, but that does
not constitute "monetary policy"
I made this statement:
I claim these "non-emergency", "non-QE", "non-monetary policy"
operations suggest we may already be at the effective lower bound for the Fed's current balance
sheet holding
.
Shadow Banking Suggestion by David Collum
Pater Tenebrarum at the Acting Man blog pinged me with these comments on my article, emphasis
mine.
While there is too much collateral and not enough reserves to fund it,
we don't know
anything about the distribution [or quality] of this collateral
. It could well be that some
market participants do not have sufficient high quality collateral and were told to bugger off
when they tried to repo it in the private markets.
Such market participants would become unable to fund their leveraged positions in CLOs or
whatever else they hold.
Mind, I'm not saying that's the case, but the entire shadow banking system is opaque
and
we usually only find out what's what when someone keels over or is forced to report a huge loss.
Reader Comments
Axiom7: Euro banks are starving for dollar funding and if there is a hard Brexit both UK and
German banks are in big trouble. I wonder if this implies that the EU will crack in negotiations
knowing that a DB fail is too-big-to-bail?
Cheesie: How do you do repos with a negative interest rate?
Harry-Ireland: [sarcastically], Of course, it's not QE. How can it be, it's the greatest
economy ever and there's absolutely nobody over-leveraged and the system is as healthy as can
be!
Ian: Taking bad collateral to keep banks solvent is not QE.
In regards to point number four, I commented:
This is not
TARP
2009.
[The Fed is not swapping money for dodgy collateral] Someone or someones is caught in some sort of
borrow-short lend-long scheme and the Fed is giving them reserves for nothing in return. Where's
the collateral?
Pater Tenebrarum partially agrees.
Yes, this is not "TARP" - the Fed is not taking shoddy collateral, only treasury and agency
bonds are accepted. The primary dealers hold a huge inventory of treasuries that needs to be
funded every day in order to provide them with the cash needed for day-to-day operations - they
are one of the main sources of the "collateral surplus".
Guessing Game
We are all guessing here, so I am submitting possible ideas for discussion.
Rehypothecation
I am not convinced the Fed isn't bailing out a US major bank, foreign bank, or some other
financial institution by taking
rehypothecated
,
essentially non-existent, as collateral.
Rehypothecation is the practice by banks and brokers of using, for their own purposes, assets
that have been posted as collateral by their clients.
In a typical example of rehypothecation, securities that have been posted with a prime
brokerage as collateral by a hedge fund are used by the brokerage to back its own transactions
and trades.
Current Primary Dealers
Amherst Pierpont Securities LLC
Bank of Nova Scotia, New York Agency
BMO Capital Markets Corp.
BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse AG, New York Branch
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman Sachs & Co. LLC
HSBC Securities (USA) Inc.
Jefferies LLC
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
It's important to note those are not "shadow banking" institutions, while also noting that
derivative messes within those banks would be considered "shadow banking".
Tenebrarum Reply
In this case the problem is specifically that the primary dealers are holding huge
inventories of treasuries and bank reserves are apparently not sufficient to both pre-fund the
daily liquidity requirements of banks and leave them with enough leeway to lend reserves to repo
market participants.
The Fed itself does not accept anything except treasuries and agency MBS in its repo
operations, and only organizations authorized to access the federal funds market can participate
by offering collateral in exchange for Fed liquidity (mainly the primary dealers, banks, money
market funds,...).
Since most of the repo lending is overnight - i.e., is reversed within a 24 hour period
(except for term repos) - I don't think re-hypothecated securities play a big role in this.
But private repo markets are broader and have far more participants, so possibly there is a
problem elsewhere that is propagating into the slice of the market the Fed is connected with.
Note though, since the Treasury is borrowing like crazy and is at the same time rebuilding its
deposits with the Fed (which lowers bank reserves, ceteris paribus), there is a several-pronged
push underway that is making short term funding of treasury collateral more difficult at the
moment.
So I'm not sure a case can really be made that there is anything going on beyond what meets
the eye - which is already bad enough if you ask me.
Preparation for End of LIBOR
What about all the LIBOR-based derivatives with the end of LIBOR coming up?
Libor is a scandal-plagued benchmark that is used to set the price of trillions of dollars of
loans and derivatives globally. A group of banks and regulators in 2017 settled on a replacement
created by the Federal Reserve known as the secured overnight financing rate, or SOFR. Companies
must move away from Libor by the end of 2021, when banks will no longer be required to publish
rates used to calculate it.
"We don't expect that 100% of the Libor-based positions today will migrate 100% to SOFR,"
Jeff Vitali, a partner at Ernst & Young, said this week during a panel at an Association for
Financial Professionals conference in Boston. "It is going to be a scenario where entities are
going to have to prepare and be flexible and build flexibility into their systems and models and
processes that can handle multiple pricing environments in the same jurisdiction."
Repro Quake
I invite readers to consider Tenebrarum's "
Repro
Quake - A Primer
" but caution that it is complicated.
He informs me "a credit analyst at the largest bank in my neck of the woods sent me a mail to
tell me this was by far the best article on the topic he has come across".
Note: That was supposed to be a private comment to me. I placed it in as an endorsement.
Tenebrarum live in Europe. Here are his conclusions.
What Else is the Fed Missing?
Contrary to similar spikes in repo rates in 2008, it was probably not fear of counterparty
risk that led to the recent repo quake. What's more, the Federal Reserve without a doubt knew
that something like this was coming. We say this because even we knew it – it was not a secret.
A number of analysts have warned of just such a situation for months.
It is astonishing that the Fed somehow seemed unprepared and quite surprised by the extent
of the liquidity shortage.
We would submit that this fact alone is a good reason for markets
to be concerned. If the Fed is not even able to properly gauge such a "technical problem" in
advance, what else is there it does not know?
Effective Lower Bound
Finally, Tenebrarum commented: "
I agree on your effective lower bound comment, since
obviously, the 'dearth' of excess reserves was pushing up all overnight rates, including the FF
rate
."
that some of this
money is leaking out to continue to prop up the stock market.
I've been trading for 46 years and current valuations are beyond
ridiculous. for example, Tesla made a buck a share in the last
quarter. woop di do. and the stock zooms to $300++ a share with a
market cap of $58 bil. 60% more than Ford???!!! We
know
that Porsche and BMW and Mercedes and Audi are going to build a
much better EV. another one, Cintas. They rent uniforms. what
a sexy business! valued at a p/e of 32 with a $28 bil. market
cap. Book value of
$29
a share. the stock is at
$270
!!!
the list goes on and on and on Carvana, etc.
personally, I have 5% bitcoin 5% gold and have a nice chunk in
a very high quality diversified commodity mutual fund.
Commodities (relative to stocks) are at multi decade lows. a
deep value trade. very best wishes to you. Argento
On occasion, it is important to revisit issues that have been
swept under the rug or simply overlooked. For most people, the
derivatives market falls into this category, partly because they
don't understand exactly what derivatives are or why this market
is so important.
Anyone paying attention knows that the size
of the derivatives market dwarfs the global economy. Paul Wilmott
who holds a doctorate in applied mathematics from Oxford
University has written several books on derivatives. Wilmott
estimates the derivatives market at $1.2 quadrillion, to put that
in perspective it is about 20 times the size of the world economy.
That is an OLD guess... today it is estimated that derivatives
exceeds $2 quadrillion, and that just commodity derivatives
approaches the old figure. Interest rate based derivatives
still dominate, my guess is much higher.
The globalist criminal elites will not be held responsible for any of these crimes. They're
bound together by ties of blackmail forged by guys like Epstein, mutually assured
incrimination in serial swindles which cross Left and Right political boundaries and literal
murder in the case of guys like Seth Rich.
The cozy proximity of recently-murdered Epstein himself to crypto-converso AG Barr's
family only makes me more certain that they will get away with this heist like they've done
with dozens of other billion-dollar swindles.
If they were only stealing money it would be bad enough, but the fact that these same
grifters are our "diplomats" and warmakers is positively Orwellian. Watching these petty
hoodlums play nuclear chicken with Russia so they can squeeze more shekels from the supine
Ukraine would be laughable if I could get the first-strike nightmares of my Cold War
childhood out of my head long enough to laugh.
"... "I've always felt that the media leaned left. That wasn't a surprise to anyone. "But what we've seen over the past three years is something entirely different. This is the media actively engaging on one side of a partisan warfare. It's overt." ..."
"... "We had a media cheerleading the FBI for meddling in American politics. Can you ever imagine a time in American history where the media would have played such a role? ..."
"... "I keep warning my friends on the other side of the aisle: Think about the precedent you are setting here," Strassel said. ..."
The anti- Trump "Resistance" has devastated core American
institutions and broken longstanding political norms in seeking to defeat and now oust from office President Donald Trump, said Kimberley
Strassel, a columnist for the Wall Street Journal and member of the Journal's editorial board.
"And this, to me, is the irony, right? We've been told for three years that Donald Trump is wrecking institutions," Strassel
said in an interview with The Epoch Times for the "American Thought Leaders" program.
" But in terms of real wreckage to institutions, it's not on Donald Trump that public faith in the
FBI and the
Department of Justice has precipitously fallen.
That's because of Jim Comey and Andy McCabe. It's not on Donald Trump that the Senate confirmation process for the Supreme Court
is in ashes after what happened to Brett Kavanaugh. It's not on Donald Trump that we are turning
impeachment into a partisan political tool."
The damage inflicted by the anti-Trump Resistance is the subject of Strassel's new book, "Resistance (At All Costs): How Trump
Haters Are Breaking America."
Strassel uses the term "haters" deliberately, to differentiate this demographic from Trump's "critics."
In Strassel's view, all thoughtful critics of Trump - and she counts herself among them - would look at Trump the same way that
they have examined past presidents - namely, to call him out when he does something wrong, but also laud him when he does something
right.
" The 'haters' can't abide nuance. To the Resistance, any praise - no matter how qualified - of Trump is tantamount to American
betrayal, " Strassel writes in "Resistance (At All Costs)."
She told The Epoch Times: "Up until the point at which Donald Trump was elected, what happened when political parties lost is
that they would retreat, regroup, lick their wounds, talk about what they did wrong.
"That's not what happened this time around. Instead, you had people who essentially said we should have won."
From the moment Trump was elected, this group believed Trump to be an illegitimate president and therefore felt they could use
whatever means necessary to remove him from office , Strassel said.
'Unprecedented Acts'
"One thing I try really hard to do in this book is enunciate what rules and regulations and standards were broken, what political
boundaries were crossed, because I think that that's where we're seeing the damage," Strassel said.
The "unprecedented acts" of the Resistance have caused the public to lose trust in longstanding institutions such as the FBI,
the CIA, and the Department of Justice, and cheapened important political processes like impeachment, she said.
The Resistance fabricated and pushed the theory that it was Trump's collusion with Russia that won him the presidency, not the
support of the American people, and lied about the origins of the so-called evidence -- the Steele dossier -- that was used by the
FBI to justify a counterintelligence investigation into the Trump campaign, Strassel said.
"We have never, in the history of this country, had a counterintelligence investigation into a political campaign," she said.
In an anecdote that Strassel recounts in her book, she asked former House Intelligence Committee Chairman Devin Nunes (R-Calif.)
if there was anything in America's laws that could have prohibited this situation.
Nunes, who had helped write or update many laws concerning the powers of the intelligence community, replied, "I would never have
conceived of the FBI using our counterintelligence capabilities to target a political campaign.
"If it had crossed any of our minds, I can guarantee we'd have specifically written: 'Don't do that.'"
In Strassel's view, the Resistance is partially fueled by deep-seated anger, or what others have termed "Trump derangement syndrome"
-- an inability to look rationally at a man so far outside of Washington norms.
But at the same time, in Strassel's view, much of the Resistance is motivated by a desire to amass political power using whatever
means necessary.
"That involves removing the president who won. That involves some of these other things that you hear them talking about now:
packing the Supreme Court, getting rid of the electoral college, letting 16-year-olds vote," she said.
"These are not reforms. Reforms are things that the country broadly agrees are going to help improve stuff. This is changing
the rules so that you get power, and you stay in power."
The impeachment inquiry into the president, based on his phone call with Ukraine's president, is just another example of how the
Resistance is violating political norms and relying on flimsy evidence to try to remove him from office, she said.
Testimony in the inquiry has taken place behind closed doors, led by three House committees, and Democrats have so far refused
to release transcripts from the depositions of former and current
State Department employees.
"[Impeachment] is one of the most serious and huge powers in the Constitution. It was meant always by the founders to be reserved
for truly unusual circumstances. They debated not even putting it in because they were concerned that this is what would happen,"
Strassel said.
In the impeachment inquiries against Richard Nixon and Bill Clinton, Strassel said, American leaders "understood the great importance
of convincing the American public that their decision to use this tool was just and legitimate.
"So if you look back at Watergate, they had hundreds of hours of testimony broadcast over TV that people tuned into and watched.
It's one of the reasons that Richard Nixon resigned before the House ever held a final impeachment vote on him, because the public
had been convinced. He knew he had to go," she said.
But now, instead of access to the testimonies, the public is receiving only leaked snippets and dueling narratives.
"You have Democrats saying, 'Oh, this is very bad.' And Republicans saying, 'Oh, it's not so bad at all.' What are Americans
supposed to think?" Strassel said.
Bureaucratic Resistance
Within the federal bureaucracy, there is a "vast swath of unelected officials" who have "a great deal of power to slow things
down, mess things up, file the whistleblower complaints, leak information, actively engage against the president's policies," Strassel
said.
"It's their job to implement his agenda. And yet a lot of them are part of the Resistance, too," she said.
Data shows that in the lead-up to the 2016 presidential election, government bureaucrats overwhelmingly contributed toward the
Clinton campaign over the Trump campaign.
Ninety-five percent, or about $1.9 million, of bureaucrats' donations went to Clinton, according to
The Hill's analysis of donations from federal workers up until September 2016. In particular, employees at the Department of
Justice gave 97 percent of their donations to Clinton. For the State Department, it was even higher -- 99 percent.
"Imagine being a CEO and showing up and knowing that 95 percent of your workforce despises you and doesn't want you to be there,"
Strassel said.
Strassel pointed to when former acting Attorney General Sally Yates, a holdover from the Obama administration, publicly questioned
the constitutionality of Trump's immigration ban and directed Justice Department employees to disobey the order.
"It was basically a call to arms," Strassel said. "What she should've done is honorably resigned if she felt that she could
not in any way enforce this duly issued executive order.
"It really kicked off what we have seen ever since then: The nearly daily leaks from the administration, the whistleblower
complaints," as well as "all kind of internal foot-dragging and outright obstruction to the president's agenda."
According to a
report by the Senate Committee on Homeland Security and Governmental Affairs, in Trump's first 126 days in office, his administration
"faced 125 leaked stories -- one leak a day -- containing information that is potentially damaging to national security under the
standards laid out in a 2009 Executive Order signed by President Barack Obama."
Activist Media
Strassel says the media has played a critical role in bolstering the anti-Trump Resistance.
"I've been a reporter for 25 years," Strassel said.
"I've always felt that the media leaned left. That wasn't a surprise to anyone. "But what we've seen over the past three years
is something entirely different. This is the media actively engaging on one side of a partisan warfare. It's overt."
Along the way, the media have largely abandoned journalistic standards, "whether it be the use of anonymous sources, whether it
be putting uncorroborated accusations into the paper, whether it's using biased sources for information and cloaking them as neutral
observers," she said.
Among the many examples of media misinformation cited in Strassel's book is a December 2017 CNN piece that claimed to have evidence
that then-candidate Trump and his son Donald Trump Jr. had been offered early access to hacked emails from the Democratic National
Committee. But it turned out
the date was wrong . Trump
Jr. had received an email about the WikiLeaks release one day after WikiLeaks had made the documents public.
"If it hurts Donald Trump, they're on board," Strassel said. And in many cases, the attacks on Trump have been contradictory.
"He's either the dunce you claim he is every day or he's the most sophisticated Manchurian candidate that the world has ever
seen. You can't have it both ways.
"He's either a dictator and an autocrat who is consolidating power around himself to rule with an iron fist, or he's the evil
conservative who's cutting regulations."
Contrary to claims of authoritarianism, Trump has significantly decreased the size of the federal government. Notably, he reduced
the Federal Register, a collection of all the national government's rules and regulations, to the lowest it's been since Bill Clinton's
first year in office.
"You can't be a libertarian dictator," Strassel said.
In addition to the barrage of attacks on Trump, the media has actively sought to "de-legitimize anybody who has a different viewpoint
than they do, or who is reporting the facts and the story in a way other than they would like them to be presented."
"They would love to make it sound as though none of us are worthy of writing about this story," she said.
"The media is supposed to be our guardrails, right? When a political party transgresses a political boundary, they're supposed
to say 'No, that's beyond the pale.'"
Instead, "they indulged this behavior," Strassel said.
"We had a media cheerleading the FBI for meddling in American politics. Can you ever imagine a time in American history where
the media would have played such a role?
"In a way, I blame that for so much else that has gone wrong."
Long-Term Consequences
Strassel says the actions taken by the Resistance will have long-term consequences for America.
"I keep warning my friends on the other side of the aisle: Think about the precedent you are setting here," Strassel said.
For example, if Joe Biden wins the presidency in 2020
but Republicans take back the House, would the Republican-dominated House immediately launch impeachment proceedings against Biden
for alleged corruption in Ukraine?
"I wouldn't necessarily use the word [corruption], but there's a lot of Republicans who happily would. And if they thought
they'd get another shot at the White House, why not?" Strassel said.
It's short-term thinking, she said, just like Sen. Harry Reid's decision in 2013 to drop the number of votes needed to overcome
a filibuster for lower-court judges.
"Did he really stop to think about the fact that it paved the way for Republicans to get rid of the filibuster for Supreme
Court judges?" Strassel said.
If there's any rule in Washington, "it's that when you set the bar low, it just keeps going lower," Strassel said.
"Donald Trump is going to be president for at most another five years. But the actions and the destruction that's coming with
some of this could be with us for a very long time," she said.
"Should anyone allow their deep disregard for one particular man to so change the structure and the fabric of the country?"
Former national security officials fight back as Trump attacks impeachment as 'deep
state' conspiracy
"What is happening currently is not normal," said Andrea Kendall-Taylor, who served as
a U.S. intelligence officer on Russia and Eurasia before stepping down in 2018. "This
represents a deviation from the way that these institutions regularly function. And when the
institutions don't work, that is a national security threat."
She was among 90 national security veterans who signed an open letter published Sunday
in support of the anonymous whistleblower who filed a complaint that Trump had acted
improperly in asking the Ukrainian president to investigate Biden in a July phone
call.
Trump has attempted to intimidate other government officials into not cooperating by
casting those who offered information to the whistleblower as "close to spies." The open
letter emphasized that the whistleblower "is protected from certain egregious forms of
retaliation."
"... Yes, about 10 percent of all American workers are making $100,000 or more a year, but most of those high paying jobs are concentrated in the major cities along the east and west coasts. For much of the rest of the country, these are very challenging times as the cost of living soars but their paychecks do not. ..."
The truth is that most American families are deeply struggling, but you hardly ever hear this from the mainstream media.
Yes, about 10 percent of all American workers are making $100,000 or more a year, but most of those high paying jobs are concentrated
in the major cities along the east and west coasts. For much of the rest of the country, these are very challenging times as the
cost of living soars but their paychecks do not.
According to the Social Security Administration
, the median income in the United States last year was just $32,838.05. In other words, 50 percent of American workers made more
than $32,838.05 and 50 percent of American workers made less than $32,838.05 in 2018. Let's be generous and round that number up
to $33,000, and when you break it down on a monthly basis it comes to just $2,750 a month. Of course nobody can support a middle
class lifestyle for a family of four on $2,750 a month before taxes, and so in most families more than one person is working these
days. In fact, in many families today more than one person is working multiple jobs in a desperate attempt to make ends meet, and
it still is often not quite enough.
If you want to look at the Social Security wage statistics for yourself, you can find them
right here . As you will see, I am not making these
numbers up.
These days many would have us feel bad if we are not making at least $100,000 a year, but according to the report only about 10
percent of all American workers make that much money.
Instead, most Americans are in what I would call "the barely getting by" category. Here are some key facts that I pulled out of
the report
-33 percent of all American workers made less than $20,000 last year.
-46 percent of all American workers made less than $30,000 last year.
-58 percent of all American workers made less than $40,000 last year.
-67 percent of all American workers made less than $50,000 last year.
That means that approximately two-thirds of all American workers are making $4,000 or less a month before taxes.
Ouch.
But these numbers help us to understand why survey after survey has shown that most Americans
are living paycheck to paycheck . After paying the bills, there just isn't much money left for most of us.
And for an increasing number of Americans, even paying the bills has become exceedingly difficult. In fact, a brand new report
from UBS says that
44 percent of all U.S. consumers "don't make enough money to cover their expenses"
Low-income consumers are struggling to make ends meet despite the "greatest economy ever," and if a recession strikes or the
employment cycle continues to decelerate -- this could mean the average American with insurmountable debts will likely fall behind
on their debt servicing payments, according to a UBS report, first reported by
Bloomberg .
UBS analyst Matthew Mish wrote in a recent report that 44% of consumers don't make enough money to cover their expenses.
That means that about half the country is flat broke and struggling just to survive financially.
Of course those at the top of the economic food chain often don't have a lot of sympathy for those that are hurting. Many of them
have the attitude that those that are struggling should just go out and get one of the "good jobs" that the mainstream media is endlessly
touting.
But most jobs in the United States are not "good jobs".
Today, the poverty level for a household of four in the United States is $25,750. More than 40 percent of the workers in this
country make less than that each year.
Starting a business is always an option, but that takes money, and thanks to government regulations it is harder than ever to
run a small business successfully.
Just look at what is happening to our dairy farmers. There are few occupations that are more quintessentially "American" than
being a dairy farmer, and since most people drink milk and eat cheese, you would think that it would be a pretty safe profession.
But instead, dairy farms are shutting down at a pace that is absolutely chilling all over the nation. For example, just check
out what has been going on
in Wisconsin
At this rate, the Dairy State could lose 735 dairy farms this year, which would be a decline of 9%. In 2018, the state lost
691 farms, a rate of decline of 7.9%.
Over the last decade the state has lost more than 5,000 farms, or 40% of its licensed dairy farms. To state the obvious, the
current rate of exits is more than double that of the last decade.
Saudi Aramco has fully restored the damaged production from the Abqaiq and Khurais
facilities from just a few weeks ago, an impressive turnaround in such a short period of
time.
But now, Riyadh faces another challenge that could prove more daunting.
The oil market has demonstrated its inability to sustain a price rally as market
traders are giving no premium to geopolitical risk. Instead, weak demand dominates, and
oversupply looms. Brent fell below $60 per barrel this week as a wave of dismal economic news
deepened fears of a global economic slowdown.
Oil demand forecasts have already been slashed several times this year, and the IEA's
executive director said this week that another downward revision was likely. "Looking at the
global economy weakening China, the driver of global oil demand, experiencing the lowest
economic growth since 30 years. The advanced economies are slowing down. We may well revise
down our demand numbers in the next days or months to come," the IEA's Fatih Birol
said.
Top officials from OPEC and the non-OPEC partners recognize the predicament. "Of
course, demand is affected by the status of the global economy, and the economy is slowing
down," Russian Energy Minister Alexander Novak said in Moscow. But for now, there appears to
be no change of strategy. "There are no crisis events that call for an emergency
meeting."
That may change if things continue to worsen. In a report on October 3, Standard
Chartered marveled at how oil demand growth has plunged to a 10-year low. "This is the third
consecutive month of y/y demand falls according to our disaggregated monthly balance model,
the first time this has happened since 2009," the investment bank wrote. "Over the past 10
years, oil demand has risen y/y in 113 months and fallen in just seven. However, five of
those seven falls have occurred in the past eight months.
In short, not since the global financial crisis has oil demand growth been this weak.
Standard Chartered estimates that seven countries have posted year-on-year declines in demand
of at least 100,000 bpd – Mexico, Canada, Saudi Arabia, Italy, the Netherlands, Turkey
and Korea.
There are a few surprising and notable aspects about the current slide in oil prices.
First, it comes just a few weeks after the largest supply disruption in oil market history.
After a brief spike, prices fell back and the lasting impact has been negligible.
But another intriguing issue with the current downturn is the fact that the U.S. shale
industry is being squeezed by poor financials, and production has already slowed
dramatically. The recent fall in prices will put even more pressure on embattled
drillers.
One would think that oil traders would begin factoring shale production growth
undershooting expectations, which, all things equal, would put upward pressure on prices. But
that is not the case.
That brings the focus back to demand. "For the market to be pushing prices lower at a
point when the US oil industry is already in distress implies a more pessimistic market view
of the global economy than is currently priced in most other asset markets in our view,"
Standard Chartered said. WTI is not far away from a sub-$50 price.
Saudi energy minister Prince Abdulaziz bin Salman drew a similar conclusion in comments
to reporters in Moscow this week, but seemed more confident that the market would wake up to
the fact that shale will disappoint. "There are things that are real, and things that are
perceived. We are driven by negative expectations," Prince Abdulaziz said. "On the demand
side, yes it's been lower, but people need to understand that supply also may become
lower."
For now, lower-than-expected shale output is not sowing the seeds of a price rebound,
not with the global economy slamming on the brakes.
If oil continues to lurch downwards, OPEC+ may have to revisit its plan of staying the
course. As of now, the production cut agreement is set to expire in March, but an economic
downturn may require deeper production cuts, or at a minimum, an extension of the current
arrangement.
"how oil demand growth has plunged to a 10-year low. "This is the third consecutive month of
y/y demand falls according to our disaggregated monthly balance model, the first time this
has happened since 2009"
Remarkable to me, is how this demand growth decrease for oil has occurred despite any
significant economic slowdown- the global GDP growth has been over 2% since 2010.
Yes a recession will reduce oil consumption, World Bank forecasted 2.6 % World economic
growth in June 2019 and the IMF forecasted 3.2% World economic growth in 2019 in July
2019.
From 2015 to 2018 World real GDP growth ranged from 2.6% to 3.1% according to World
Bank
For the IMF using real GDP growth at market exchange rates they predict 2.7% growth in
2019 (similar to World Bank) and World Real GDP growth was 2.5% to 3.2% at market exchange
rates from 2015 to 2018 based on IMF estimates.
Bottom line, at the World level a recession was not expected by major international
agencies midyear 2019. Forecasts often change.
Yes predictions can be too high or too low, one only knows which after the fact, your
guess may be good or it may not, time will tell.
Keep in mind the "consumption" numbers are often a combination of output estimates and stock
estimates, the stock estimates in particular are notoriously bad especially at the World
level.
We don't really know what recent consumption has been, so the "slowdown" in consumption
may not be real. In addition "consumption" of all liquids is of little interest, the
important numbers are C+C, light and middle distillates, and residual fuel (aka fuel oil),
the propane and ethane and other NGL output (with the exception of C5) is of little
importance for transportation, the EIA's C+C and OPEC's crude output numbers are the only
important numbers.
Based on EIA C+C data the long term trend in the rate of increase in oil output is 811
kb/d from Jan 1982 to July 2019. Over the long term consumption increase is the same as
output increase because if that were not the case stocks would either build to beyond
capacity or be drawn to zero it consumption and production were not balanced over the long
run.
The other consumption predictions thrown around such as 1200 kb/d or 1400 kb/d are all
liquids numbers including biofuel, NGL, and other oils not used for transportation, I ignore
those estimates a they are of little consequence.
It is obvious that C&C consumption has stalled for many months. I think a lot of GDP
growth is due to luxury things being bought by the super rich, and GDP driven by ordinary
people has stalled.
In the short run, consumption can be higher than output by drawing from oil stocks. We
have output data that is pretty good, we do not have very good oil stock data for the World,
consequently it is far from clear that oil consumption has stalled, we do not know.
An alternative view of income (real GDP per capita), average rate of growth over past 5
years is 2.3% per year for the US.
Hugo- certainly we all expect global recession to cut into demand for all industrial
materials, like in 2009.
But there has not been a global recession lately, with over 2% gdp growth/yr since 2010.
The sources you quote anticipate growth slowdown upcoming, but this does not relate to the
oil consumption growth slowdown already experienced in the recent past.
China growing at about 6% annually and India at 8%, so a slowdown could mean 5% and 7% in
those nations. Advanced economies are growing more slowly, especially Japan with shrinking
population, per capita real GDP growth was close to 2% for the World in 2017 and 2018,
average rate of growth in real GDP per capita (2010 US$) at market exchange rates from 1975
to 2018 was 1.46% per year.
For China, real GDP per capita grew at 8.9% per year from 1990 to 2012, from 2012 to 2018
the rate of growth slowed to 6.2%. India's real GDP per capita growth has been 6.1% from 2012
to 2018 (an increase from the 4.6% annual growth rate of real GDP per capita from 1993 to
2013.)
The piece on India is an opinion piece, growth has slowed from 7% to 6%.
For China consumption growth (typically about 2/3 of GDP) was 7%, down from a blistering
9.8%. Industrial growth is not the only measure that is important, in fact consumption growth
is what drives an economy especially in a huge market like China with almost 1.4 billion
people.
Denise,the info on India is incorrect . The last quarter growth was 5 % . Core sector growth
was -0.5% yes negative . It is in a slowdown of MASSIVE proportion . By the way an ex member
of the prime ministerial economic council has said that the government is inflating growth by
anything from 1.5-2% . He resigned because he would not toe the govt line .
I only have annual data from World bank and in 2018 growth using PPP measure was 6.98% for
real GDP. IMF has 2018 real GDP growth at 7.3% and projects 7.5% for 2019. RBI is saying 6.1%
for real GDP growth.
You ignore the fact that the ex chief economic adviser admitted that growth is overstated by
1.5-2.0 % . So it could be anything between 3-3 .5% ,which is paltry for the nation of it^s
size and a sizable decline from peak of 9.8% .
Most estimates are around 7%, so if it is overstated by 2% we would be at 5%, nobody has
said it is overstated by 4%. Forecasts change and sometimes there are recessions, just the
way capitalism works.
Capitalism is not perfect, but when properly regulated and combined with a highly
progessive tax system, it is likely better than any other economic system humans have come up
with.
"Dennis has talking about the world consuming less oil. We are starting to see the reality
of how global oil consumption is reduced."
Is it strange, with so much consumer debt and economies on steroids by what the central
banks are doing ?
Somehow the monetary system is sick and a bubble is waiting to burst. That's my simple view
of it.
Last weeks low on the Brent price chart touched the major supporting trendline that supports
the entire up trend since lows of 2016. WTI is still 4-5 $ away from it's major supporting
trendline from 2016. That little bounce we got last week was just a technical bounce. The
only way to $20's oil is through these trendline. Do they hold or not? I think they both have
to give way to get to $20's not just one of them. Brent can break below it's trendline and be
a false break if WTI never confirms the move.
Can't imagine $20/bo would last more than a week or two. All oil development will cease at
that price level and shortages would develop within a month. Only people that believe the
Saudi America hype think $20/bo is possible. Perhaps there are enough fools who believe that
hype to make $20/bo a reality before 2050. Some day we might get to $20/bo, but it will be 20
or 30 years down the road, before we see a 12 month average Brent oil price under $30/b0 in
2019 US$, perhaps even 50 years when we consider the difficulty of replacing petroleum liquid
fuel in air and water transport.
I don't think 20$ for more than a month even in 30 or 50 or 100 years. More wells will be
closed, there is less economy of scale, oil field equipment and service will be much more
expensive than now, enviromental regulations will be more strict to the black stuff since
it's less important. So less and less lobby influence.
And running all these injections on old wrestled out Saudi oil fields will cost much, so
the few barrels being squeezed out won't be cheap. Fracking a few D-Class Permian wells with
old museum-equipment won't come cheap, too.
Piplelines will be stopped, so only rail and truck transport – all adds up.
If you need oil as an exotic chemical feedstock and fuel for ancient museum cars and
planes in 100 years (normal energy is perhaps mainly from fusion plants and deep geothermal
power plants) it doesn't matter it costs 100$ a barrel. It will be produced from old stripper
wells – no oil industry left to explore new fields (and collapse price with this).
There isn't any application that truly requires oil. Hydrocarbons (and therefore diesel, jet
fuel, etc.) can come from biomass, coal, kerogen, or from electrolytic H2 and carbon
extracted from air and water.
As you point out, as volumes fall economies of scale will reverse and the true costs of
pollution will be recognized, and oil will no longer be burnt.
Petrochemicals might grow, but oil will have trouble competing with coal and natural gas
– they'll no longer be burnt as fuel, so they'll be dirt cheap. China is already using
coal as a chemical feedstock.
There may come a time after 2040 (possibly not until 2050) where OPEC nations compete with
each other for market share and the price of oil might fall to the marginal cost of the
cheapest middle east barrels, which might be as low as $20/bo in 2017 US$. In any case I
doubt it would be higher than $40/bo in 2017$, much depends on if it is possible to replace
fossil fuels in air and water transport, if not then oil prices might rise as oil demand for
petrochemical, air transport and water transport might be higher than oil supply by 2065
which would drive oil prices higher. Guesses for 2020 are not good, guesses for 2065 are
pretty ridiculous and are likely to be far wide of the mark.
Maybe trendlines hold Dennis. The Brent chart is very clean. Meaning price touched the
underneath side of the original trendline coming off of Jan 2016 during Saudi attacks. Price
kissed the underneath side and got rejected. And went straight down to the secondary
trendline coming off Jan 2016 and bounced a bit.
We should find out fairly soon if this trendline hold. I've been telling you since April
that price was going to revisit these trendline before either gathering enough support to
move higher or break lower opening the way up to the $20's
WTI still has a ways to go to reach it's supporting trendline. If Brent has a break below
here. WTI should reach it's trendline.
Wed. should be a important day. No trade deal is not good for oil. A trade deal of some
sorts is not really good for oil as the dollar will rocket higher on a trade deal. 10y Bond
yields will go higher on a deal. Unless market views a trade deal as bad for US equities.
Since a deal probably means no more rate cuts any time soon. That could very well happen.
And if US equities happen to have a negative reaction to a trade deal i can't see it being
any good for the price of oil.
If you need lower bond yields to roll over a bunch of debt yet you know making a trade
deal will in fact send them higher. Do you make the deal? Personally i think stocks are going
to get taken to the woodshed sooner or later in order to save government bonds.
This is where Watcher tells me they can just QE it and have both.
$100 pops every bubble created in wake of 2009. That is what will happen if QE is done again
like it was done before.
It seems as if ole David Hughes, which I have a lot of respect, decided to come on the
website and leave a few comments. Basically, Hughes's reply was, "WHAT'S THE BIG DEAL IN
2018?" He went on to say that we all know these wells decline 50+% in the first year, so why
start to make a STINK about it now?
I also had several email replies from some other folks. And then we had a bit of a TIT for
TAT here in this blog with HUNTY.
However, what is going on in the Permian is only a small part of the overall situation.
Regardless if we bicker about the future Permian revisions due to the incomplete TRRC data,
the fact remains, if you look at the "Annual Compounded Decline Rate" presently, it resembles
a 70-75% STEEP CLIFF. And, the Permian isn't the only one that looks like that. You can add
the Bakken and Eagle Ford to varying degrees.
So, while a portion of the "OIL FOLKS" and a large percentage of the "DUMBED DOWN PUBLIC"
believe there is NOTHING TO SEE HERE, they couldn't be more wrong.
Furthermore, the U.S. public debt just ballooned by $227 billion in less than two weeks
and $814 billion since August 1st. While everyone has seemingly become NUMB to the amount of
these figures, the rate at which debt is being added in the United States and globally is
heading up in an exponential trend. But, there is nothing to see here.
And, then we have the fun taking place in the REPO MARKETS when, according to a specialist
in the field, a large BLOCK of CASH has been removed from the market and hasn't come back, I
gather it's just another sign that EVERYTHING IS OKAY . .nothing to see here.
Also, ExxonMobil, the largest U.S. oil company, had to borrow $7 billion in August to
repay the huge $11 billion in short term paper it borrowed 1H 2019 in order to pay dividends
and fortify its balance sheet as its Permian stake is destroying its bottom line.
And today, we see that ExxonMobil just sold its $4.5 billion upstream assets in Norway.
Yes, this is part of Exxon's plan to sell $15 billion by 2021 to focus on KEY ASSETS. I
gather that really means, they are going to have to fill in the RED they will be suffering in
the Permian as its U.S. upstream earnings continue to suffer. But again nothing to see
here
Lastly while the NOTHING TO SEE here mentality will continue even as the U.S. and global
economy heads over the cliff, taking the highly leveraged debt-based financial system down
with it, I'll make sure that I schedule some time from my day to come in here and read all
the "I TOLD YOU SO" comments.
OPEC sells oil under the free market equilibrium theory, expressing the belief that there
should be a single price for oil (more or less) at any given time, and that members interests
are common enough to work together towards that one price of oil. But maybe the interests of
poor producers (who need to sell anyway) and rich producers are not exactly the same. I think
it was either Watcher or HHH who pointed that when Argentina introduced fixed oil prices, it
thus decoupled from supporting the illusion of one oil price by equilibrium. Argentina is not
an oil exporter and it still seems to have already been perceived as a problem.
But what if some rich exporter, UAE or Brunei for example, wanted to sell oil for
substantially higher price, like 120$, for example? Could they just stop selling oil for 60$
and say "we are not going to labour towards some incremental price increase anymore, from now
on only 120$ for our oil please" ? What would happen?
The astonishing lack of economical diversification in countries of OPEC (significantly,
besides Iran) is a bit suspicious and may be the expression of attempts to force them to rely
on selling oil by NOT having a choice of not selling oil (something like that was depicted in
"Syriana" movie where the progressive prince was taken down). Therefore, it is not only Saudi
Arabia that props petrodollar but the entire OPEC, by its very exsitence and policy, does so
too.
It evolves from the fundamental concept that there is nothing negative for a country that
is self-sufficient to decide to leave the oil underground for their grandchildren.
Norway is the obvious example of this. They are self-sufficient. They do not leave the oil
underground for their grandchildren. Instead it has grown the largest Sovereign Wealth Fund
in the world.
At some point it may occur to some people that oil underground is a Sovereign Wealth Fund
in and of itself. Why produce and export that oil merely to convert wealth from one form into
another? And dare I note the original form is likely quite a bit superior to the new form
that is defined by unelected officials at central banks.
In the case of KSA, people think they produce oil to become wealthy, since they are
producing far beyond their domestic consumption. But in their case it's not quite that. They
produce because a choice noted above would generate invasion in the pre shale days. Anyone
without an army who chooses to leave their oil underground and has a big portion of global
supply would likely have their oil taken away from them.
Think about that. If someone decides so just keep their own oil there's probably no price
you can offer them to change their minds because they have made the correct decision that oil
is far more important than money. Such a decision would have to be changed by military
force.
That's why Argentina's declaration of its own price is such a dangerous thing. It
introduces all of the above thinking into too many minds -- many of which are sitting on
billions of barrels.
Well, Norway is not self-sufficient. It must import a lot of food, like KSA. It does not
produce enough food even for its 5 milion citizens (like KSA, they tried, and failed). It
must import a lot of other things, too. The biggest industry there is still oil and gas.
Likewise, the biggest industry in KSA and UAE is oil and gas. Difference or similarity?
The largest sovereign fund, by the very fact of being 'largest' is certainly a hostage of
global economy.
So Norway is not a good example. It is a virtue signaling country par excellence. They
signal virtue, not wisdom.
The interesting example would be Russia. Russia is self-sufficient, and can defend
herself. Why not to decouple from global economy? Why pump 11 mbd, and not 6 mbd like in the
nineties?
In trying to make up for my ignorance on Rome's history I came across P. A. Brunt's
"Social Conflicts in the Roman Republic." His account of the innovation of the office of the
tribune gave me a good sense of the intensity of those conflicts:
"In 494 a great body of the plebs sat down en masse outside Rome and refused to serve in
the army. Such a 'secession' or strike undoubtedly occurred in 287, and similar revolutionary
action must have been taken now, to account for the concession the patricians were forced to
make: the creation of the tribunate of the plebs. The ten tribunes were plebeians annually
elected by an assembly organized in voting units calle tribes; these were local divisions of
the state, originally four within the city and seventeen in the adjoining countryside. This
assembly was truly democratic at the start, when the tribes were probably more or less equal
in numbers; the rich had no superior voting power.
The original function of the tribunes was to protect humble Romans against oppression by
the magistrates; they did so by literally stepping between them and their intended victims
(intercessio). The magistrates did not dare touch their persons, which were 'sacrosanct';
that meant that the whole plebs were sworn to avenge them by lynching whoever laid hands on
them. But their power was confined to the city; outside the walls, Roman territory was still
too insecure for any restriction to be allowable on the discretion of the magistrates to act
as they thought best for the public safety. This limitation on tribunician power subsisted
throughout the Republic, long after its rationale had disappeared." p.52
In this light, it seems that the obstructionist quality of tribunician power that Yves'
refers to stemmed from the original need to allow plebs to put the kabosh on patrician power
to avoid revolution. Another instance of when peace brought about by a veto power eventually
makes the veto power appear unnecessary.
The limitation on the power of the tribunes in rural areas was relevant to a factor in
Rome's development Brunt places a lot of weight on: the breakdown of plebian farmholding, in
part through loss of land through absence brought about by conscription, but also by
patrician gang violence. In his telling this alienation by dispossession was ongoing to
varying degrees during the Republic.
During the New Deal, the union leaders were effectively tribunes without veto power, but
still considerable influence as they controlled a large number of voters belonging to
respective unions.
Similar short story was with Russian "Soviets" -- worker and peasant consuls until Stalin
centralization of governance. They were kind of power check on Bolshevik party Politburo (a
kind of Senate, the Bolsheviks party nobility )
If we assume that most politicians are latent psychopaths, they need to be more tightly controlled by the people. which means no
re-election of Senators after two terms.
Notable quotes:
"... " Politicians are more likely than people in the general population to be sociopaths . I think you would find no expert in the field of sociopathy/psychopathy/antisocial personality disorder who would dispute this... That a small minority of human beings literally have no conscience was and is a bitter pill for our society to swallow -- but it does explain a great many things, shamelessly deceitful political behavior being one." ..."
" Politicians
are more likely than people in the general population to be sociopaths . I think you would find no expert in the field of
sociopathy/psychopathy/antisocial personality disorder who would dispute this... That a small minority of human beings literally
have no conscience was and is a bitter pill for our society to swallow -- but it does explain a great many things, shamelessly
deceitful political behavior being one."
- Dr. Martha Stout, clinical psychologist and former instructor at Harvard Medical School
The answer, then and now, remains the same:
None . There is
no difference between psychopaths and politicians. Nor is there much of a difference between the havoc wreaked on innocent lives by uncaring, unfeeling, selfish, irresponsible,
parasitic criminals and
elected officials who lie to their constituents , trade political favors for campaign contributions, turn a blind eye to the
wishes of the electorate, cheat taxpayers out of hard-earned dollars, favor the corporate elite, entrench the military industrial
complex, and spare little thought for the impact their thoughtless actions and hastily passed legislation might have on defenseless
citizens.
Charismatic politicians, like criminal psychopaths,
exhibit a failure to accept responsibility for their actions , have a high sense of self-worth, are chronically unstable, have
socially deviant lifestyles, need constant stimulation, have parasitic lifestyles and possess unrealistic goals.
It doesn't matter whether you're talking about Democrats or Republicans.
Political psychopaths are all largely cut from the same pathological cloth, brimming with
seemingly easy charm and boasting calculating minds
. Such leaders eventually create pathocracies: totalitarian societies bent on power, control, and destruction of both freedom in
general and those who exercise their freedoms.
Once psychopaths gain power, the result is usually some form of totalitarian government or a pathocracy. "At that point, the
government operates against the interests
of its own people except for favoring certain groups," author James G. Long notes. "We are currently witnessing deliberate polarizations
of American citizens, illegal actions, and massive and needless acquisition of debt. This is
typical of psychopathic systems
, and very similar things happened in the Soviet Union as it overextended and collapsed."
In other words, electing a psychopath to public office is tantamount to national hara-kiri, the ritualized act of self-annihilation,
self-destruction and suicide. It signals the demise of democratic government and lays the groundwork for a totalitarian regime that
is legalistic, militaristic, inflexible, intolerant and inhuman.
Incredibly, despite clear evidence of the damage that has already been inflicted on our nation and its citizens by a psychopathic
government, voters continue to elect psychopaths to positions of power and influence.
According to investigative journalist
Zack Beauchamp , "In 2012, a group of psychologists evaluated every President from Washington to Bush II
using 'psychopathy trait estimates derived from personality
data completed by historical experts on each president.' They found that presidents tended to have the psychopath's characteristic
fearlessness and low anxiety levels -- traits that appear to help Presidents, but also
might
cause them to make reckless decisions that hurt other people's lives."
The willingness to prioritize power above all else, including the welfare of their fellow human beings, ruthlessness, callousness
and an utter lack of conscience
are among the defining traits of the sociopath.
When our own government no longer sees us as human beings with dignity and worth but as things to be manipulated, maneuvered,
mined for data, manhandled by police, conned into believing it has our best interests at heart, mistreated, jailed if we dare step
out of line, and then punished unjustly without remorse -- all the while refusing to own up to its failings -- we are no longer operating
under a constitutional republic.
Worse, psychopathology is not confined to those in high positions of government. It can
spread like a virus among the populace.
As an academic study into pathocracy
concluded , "[T]yranny does not flourish because perpetuators are helpless and ignorant of their actions. It flourishes because
they actively identify with those who promote vicious acts as virtuous."
People don't simply line up and salute. It is through one's own personal identification with a given leader, party or social order
that they become agents of good or evil.
Much depends on how leaders "
cultivate a sense of identification with their followers ," says Professor Alex Haslam. "I mean one pretty obvious thing is that
leaders talk about 'we' rather than 'I,' and actually what leadership is about is cultivating this sense of shared identity about
'we-ness' and then getting people to want to act in terms of that 'we-ness,' to promote our collective interests. . . . [We] is the
single word that has increased in the inaugural addresses over the last century . . . and the other one is 'America.'"
The goal of the modern corporate state is obvious: to promote, cultivate, and embed a sense of shared identification among its
citizens. To this end, "we the people" have become "we the police state."
We are fast becoming slaves in thrall to a faceless, nameless, bureaucratic totalitarian government machine that relentlessly
erodes our freedoms through countless laws, statutes, and prohibitions.
Any resistance to such regimes depends on the strength of opinions in the minds of those who choose to fight back. What this means
is that we the citizenry must be very careful that we are not manipulated into marching in lockstep with an oppressive regime.
But what does this really mean in practical terms?
It means holding politicians accountable for their actions and the actions of their staff using every available means at our disposal:
through investigative journalism (what used to be referred to as the Fourth Estate) that enlightens and informs, through whistleblower
complaints that expose corruption, through lawsuits that challenge misconduct, and through protests and mass political action that
remind the powers-that-be that "we the people" are the ones that call the shots.
Remember, education precedes action. Citizens need to the do the hard work of educating themselves about what the government is
doing and how to hold it accountable. Don't allow yourselves to exist exclusively in an echo chamber that is restricted to views
with which you agree. Expose yourself to multiple media sources, independent and mainstream, and think for yourself.
For that matter, no matter what your political leanings might be, don't allow your partisan bias to trump the principles that
serve as the basis for our constitutional republic. As Beauchamp notes, "A system that actually holds people accountable to the broader
conscience of society may be one of the best ways to keep conscienceless people in check."
That said, if we allow the ballot box to become our only means of pushing back against the police state, the battle is already
lost.
Resistance will require a citizenry willing to be active at the local level.
Yet as I point out in my book
Battlefield America: The War
on the American People , if you wait to act until the SWAT team is crashing through your door, until your name is placed on a
terror watch list, until you are reported for such outlawed activities as collecting rainwater or letting your children play outside
unsupervised, then it will be too late.
This much I know: we are not faceless numbers. We are not cogs in the machine. We are not slaves.
We are human beings, and for the moment, we have the opportunity to remain free -- that is, if we tirelessly advocate for our
rights and resist at every turn attempts by the government to place us in chains.
The Founders understood that our freedoms do not flow from the government. They were not given to us only to be taken away by
the will of the State. They are inherently ours. In the same way, the government's appointed purpose is not to threaten or undermine
our freedoms, but to safeguard them.
Until we can get back to this way of thinking, until we can remind our fellow Americans what it really means to be free , and
until we can stand firm in the face of threats to our freedoms, we will continue to be treated like slaves in thrall to a bureaucratic
police state run by political psychopaths.
The solution, dear Zerohedge, is to pass a law demanding any official's psychological profile for public scrutiny. (By humans
and by our superiors, Artificial Intelligence.)
Bravo! The inner workings of psychopathy. All is justified. Included the Joker cults 911 mass murder with dancing after the
fact. I want to see real dancing Israelis now. Dancing like hell to try to save their own murderous lives now. That's what we
do with murderers out here in the west. We line them up and watch them DANCE for their lives.
What I find hilarious is the psychopathic politicians/bureaucrats/cia-fbi types/all matter of deep staters getting upset at
Trumps words/tweets/style.
Pilfering the country for profit perfectly ok. Unseemly (by their standards) speech or tweets are not.
See, while they are pilfering Uncle Sam, ie you, they do it with charm (one of the strongest signs of a psychopath) and manners.
What a narcissist/psychopath fears most is being outed as a fraud. And unfortunately, as long as Washington DC plays nice, throws
in some lines about American values, helping the less fortunate, helping the kids, the majority fall in line with their pilfering,
and whatever they want goes.
What they fear most about Trump is he hurts their Big Government brand. Either by his rhetoric, his logic, his investigative
actions, or his brassness. This also includes Republicans, who only fell in line when the base forced them to fall in line.
"... "Along with the wreckage of the family, we are seeing record levels of depression and mental illness, dispirited young people, soaring suicide rates, increasing numbers of angry and alienated young males, an increase in senseless violence, and a deadly drug epidemic," he said. ..."
Share U.S. Attorney General
William Barr raised concerns about the increase in secularism in society in a speech on
Oct. 11, speaking about how that has contributed to a number of social issues plaguing
communities across the nation.
Barr, who
delivered his remarks to students at the University of Notre Dame's law school, drew
attention to the comprehensive effort to drive away religion and traditional moral systems in
society and to push secularism in their place.
"We see the growing ascendancy of secularism
and the doctrine of moral relativism," Barr said.
He said that the forces of secularism are using mass media and popular culture, the
promotion of greater reliance on government intervention for social problems, and the use of
legal and judicial institutions to eliminate traditional moral norms.
Barr explored several of the consequences of "this moral upheaval," highlighting its effect
on all parts of society.
"Along with the wreckage of the family, we are seeing record levels of depression and
mental illness, dispirited young people, soaring suicide rates, increasing numbers of angry and
alienated young males, an increase in senseless violence, and a deadly drug epidemic," he
said.
"Over 70,000 people die a year from drug overdoses," he said. "But I won't dwell on the
bitter results of the new secular age. Suffice it to say that the campaign to destroy the
traditional moral order has coincided, and, as I believe, has brought with it, immense
suffering and misery."
Barr said religion has come under increasing attack over the past 50 years, underscoring how
secularists are using society's institutions to systematically destroy religion and stifle
opposing views.
"Secularists and their allies have marshaled all the forces of mass communication, popular
culture, the entertainment industry, and academia in an unremitting assault on religion and
traditional values. These instruments are used not only to affirmatively promote secular
orthodoxy but also to drown out and silence opposing voices," he said.
He said that people are moving away from "micro-morality" observed by Christians, a system
of morality that seeks to transform the world by focusing on their own personal morality and
transformation. Instead, he said the modern secularists are pushing a "macro-morality," which
focuses on political causes and collective actions to address social problems.
"In the past, when societies are threatened by moral chaos, the overall social costs of
licentiousness and irresponsible personal conduct become so high that society ultimately
recoils and reevaluates the path it is on," Barr said.
"But today, in the face of all the increasing pathologies, instead of addressing the
underlying cause, we have cast the state in the role as the alleviator of bad consequences. We
call on the state to mitigate the social costs of personal conduct and irresponsibility. So the
reaction to growing illegitimacy is not sexual responsibility but abortion; the reaction to
drug addiction is safe injection sites."
"The call comes for more and more social programs to deal with this wreckage, and while we
think we are resolving problems, we [actually] are underwriting them."
He also pointed out how the law has been used to "break down traditional moral values and
establish moral relativism as the new orthodoxy," giving the example of how laws have been used
to aggressively force religious people and entities to subscribe to practices and policies that
are antithetical to their faith .
"The forces of secularism have been continually seeking to eliminate the laws that reflect
traditional moral norms," he said.
Barr also highlighted the role of religion in society, saying it promotes moral discipline
while it influences people's conduct.
"Religion also helps promote moral discipline in society. We're all fallen. We don't
automatically conform our conduct to moral rules, even when we know that they're good for us.
But religion helps teach, train, and habituate people to want what's good," he said.
"It doesn't do this primarily by formal laws -- that is, by coercive power -- it does this
through moral education and by framing society's informal rules -- the customs and traditions
which reflect the wisdom and experience of the ages. In other words, religion helps frame a
moral culture within society that instills and reinforces moral discipline."
With the -3.4% drop in September, following the -3.0% drop in August, -5.9% drop in July,
-5.3% drop in June, and the -6.0% drop in May, we repeat our message from the previous four
months: the shipments index has gone from "warning of a potential slowdown" to "signaling an
economic contraction. "
The report continues:
The weakness in spot market pricing for many transportation services, especially trucking,
is consistent with the negative Cass Shipments Index and, along with airfreight and railroad
volume data, strengthens our concerns about the economy and the risk of ongoing trade policy
disputes. Weakness in commodity prices, and the ongoing decline in interest rates, have all
joined the chorus of signals calling for an economic contraction.
The only time on the chart a sharp drop of the index was followed quickly by a recession
was the end of 2001. But remember, no one (except Presidential candidate Bush) was
predicting a recession and of course, accordingly to Menzie, it was proper they did
not.
More observations
A similar but larger drop during 2005 but no recession for years.
A very tiny drop (quite common in size) late 2007 was quickly followed by the start of
great recession.
A very similar drop but of greater size occurred during 2011 with no recession.
The index on chart remained mostly negative until the election of 2017, with no
recession.
Need I observe that the index recovered after the election of President Trump.
I do not claim to know the Cass index better than the people who created the report, but
it seems that anyone interested might look up reports from the times of the above list.
This quick look would seem that the index is not very good at calling recessions. Perhaps
that is why they use the term contraction instead,. But we already know that GDP growth
rate has slowed but that is not the same as recession.
So to answer the title question, who knows? But this index has a very bad record of
calling when GDP turns negative.
By the way, another look at the index can be found at:
Ed Hanson: What are you babbling about? I was *in* the Bush Administration in
2001 (until June). I don't recall anybody in the Executive Office of the President
(including my boss, the Chair of the CEA) saying we were in, or about to be in, a
recession.
Where *do* you get your information?
Oh, and FYI, the NBER dating for the recession is March 2001 to November 2001
– not the end of 2001.
@ Menzie
Maybe Cass already seasonally adjust theses numbers?? But I was thinking right now
that the Christmas season could make these numbers look "overly positive" when say,
the November and December numbers come out. I'm wondering (again assuming it's not
already adjusted for in the numbers) if there is a statistical method to "smooth
out" those numbers, or say compare the Cass index for this end year, Specifically
November and December numbers to Christmas season numbers for other recession or
"contraction" years.
Looks like Ed is now casting G Bush II in the role of Carnac the Magnificent,
predictor of future events, knower of all things.
This would be the same guy who also predicted in 2001 that he would" retire $1Trillion
in debt over the next four years "? The same guy who proposed borrowing another $4
Trillion to privatize Social Security? The same guy who warned about paying down debt
too quickly?
The same guy who, along with a Republican congress, presided over a $6 Trillion
increase in the national debt?
The guy, who as Business Insider said, pushed through "An extremely large tax cut that
failed to pay for itself, two wars on the nation's credit card, an unfunded expansion
of an entitlement program, and general overspending (that) turned what could've been a
cushy surplus into a huge deficit."?
Yes, that guy. No surprise he's Ed's go-to guy on fiscal matters.
Is it possible that this drop is similar to what happened in 2015? That led to specific
industry contractions, but not an overall drop in GDP. It appears the drop is deeper now
than in 2015, and it appears that the rate of contraction is remaining mostly greater than
it was in 2015. However, it has not been contracting as long – yet. Is there a way to
stare into the cloudy plastic crystal ball and figure out whether volumes and prices will
recover in the next six months or so?
Professor Chinn,
Thanks for the September 2019 update of the Cass Freight Index Report. I notice that FRED
(FRGSHPUSM649NCIS) shows only the August 2019 update data. Updating FRED for the September
2019 index value of 1.199, the probit model of being in a recession now is about 8% down
from about 18% in May 2019.
I also notice that the probability seems to have a "hair trigger". The probability of
recession from the model was only 2% in December 2007. The model I got shows:
USRECM = -1.94 -16.17*log difference(-12)(Cass Index) + error
McFadden R sq. 0.51
NObs 237 (2000 M01 to 2019M09)
"Do not forget that Trump's military spending is also boosting the economy."
Yes – GDP has many components and with Trump's mishandling of Syria, it looks like
World War III is about to start. Which means military spending is about to soar!
Watched some unpatriotic Midwestern farmers on the news discussing their lack of
interest–and lack of resources–in purchasing new equipment. Report also
discussed pending layoffs at Caterpillar and John Deere. They're crying about making far
less on their crops than they should have and thus refuse to go deeper in debt to buy more
equipment.
Obviously the Fake Newsers–aided by these ungrateful aggies– will stop at
nothing to smear our glorious leader in his continued fight for truth, justice, and the
American way.
How hard will it be to really MAGA if these nervous nellies and their snooty media cohorts
continue acting like enemies of the people?
How to Tax Our Way Back to Justice https://nyti.ms/2M7DK6C
NYT - Emmanuel Saez and Gabriel Zucman - October 11
It is absurd that the working class
is now paying higher tax rates than
the richest people in America.
America's soaring inequality has a new engine: its regressive tax system. Over the past
half century, even as their wealth rose to previously unseen heights, the richest Americans
watched their tax rates collapse. For the working classes over the same period, as wages
stagnated, work conditions deteriorated and debts ballooned, tax rates increased.
Stop to think this over for a minute: For the first time in the past hundred years, the
working class -- the 50 percent of Americans with the lowest incomes -- today pays higher tax
rates than billionaires.
The full extent of this situation is not visible in official statistics, which is perhaps
why it has not received more attention. Government agencies like the Congressional Budget
Office publish information about the distribution of federal taxes, but they disregard state
and local taxes, which account for a third of all taxes paid by Americans and are in general
highly regressive. The official statistics keepers do not provide specific information on the
ultra-wealthy, who although few in number earn a large fraction of national income and
therefore account for a large share of potential tax revenue. And until now there were no
estimates of the total tax burden that factored in the effect of President Trump's tax reform
enacted at the end of 2017, which was particularly generous for the ultra-wealthy.
To fill this gap, we have estimated how much each social group, from the poorest to
billionaires, paid in taxes for the year 2018. Our starting point is the total amount of tax
revenue collected in the United States, 28 percent of national income. We allocate this total
across the population, divided into 15 income groups: the bottom 10 percent (the 24 million
adults with the lowest pretax income), the next 10 percent and so on, with finer-grained
groups within the top 10 percent, up to the 400 wealthiest Americans.
The Regressive American Tax System
(graphic at the link)
How combined federal, state and local taxes fall on American adults, by income
percentile.
Our data series include all taxes paid to the federal, state and local governments: the
federal income tax, of course, but also state income taxes, myriad sales and excise taxes,
the corporate income tax, business and residential property taxes and payroll taxes. In the
end, all taxes are paid by people. The corporate tax, for example, is paid by shareholders,
because it reduces the amount of profit they can receive in dividends or reinvest in their
companies.
You will often hear that we have a progressive tax system in the United States -- you owe
more, as a fraction of your income, as you earn more. When he was a presidential candidate in
2012, Senator Mitt Romney famously lambasted the 47 percent of "takers" who, according to
him, do not contribute to the public coffers. In reality, the bottom half of the income
distribution may not pay much in income taxes, but it pays a lot in sales and payroll taxes.
Taking into account all taxes paid, each group contributes between 25 percent and 30 percent
of its income to the community's needs. The only exception is the billionaires, who pay a tax
rate of 23 percent, less than every other group.
The tax system in the United States has become a giant flat tax -- except at the top,
where it's regressive. The notion that America, even if it may not collect as much in taxes
as European countries, at least does so in a progressive way, is a myth. As a group, and
although their individual situations are not all the same, the Trumps, the Bezoses and the
Buffetts of this world pay lower tax rates than teachers and secretaries do.
This is the tax system of a plutocracy. With tax rates of barely 23 percent at the top of
the pyramid, wealth will keep accumulating with hardly any barrier. So, too, will the power
of the wealthy, including their ability to shape policymaking and government for their own
benefit.
From Kennedy Through Trump, the Rich Have Done Very, Very Well
(graphic at the link)
Here's the change in total wealth per adult since 1962, on average, from the poorest to
the richest slices of America. Circles representing wealth are proportionate, which is why
they're almost too small to see for the bottom 50 percent of Americans. All wealth figures
are in 2018 dollars.
The good news is that we can fix tax injustice, right now. There is nothing inherent in
modern technology or globalization that destroys our ability to institute a highly
progressive tax system. The choice is ours. We can countenance a sprawling industry that
helps the affluent dodge taxation, or we can choose to regulate it. We can let multinationals
pick the country where they declare their profits, or we can pick for them. We can tolerate
financial opacity and the countless possibilities for tax evasion that come with it, or we
can choose to measure, record and tax wealth.
If we believe most commentators, tax avoidance is a law of nature. Because politics is
messy and democracy imperfect, this argument goes, the tax code is always full of "loopholes"
that the rich will exploit. Tax justice has never prevailed, and it will never prevail.
For example, in response to Elizabeth Warren's wealth tax proposal -- which we helped
develop -- pundits have argued that the tax would raise much less revenue than expected. In a
similar vein, world leaders have become convinced that taxing multinational companies is now
close to impossible, because of international tax competition. During his presidency, Barack
Obama argued in favor of reducing the federal corporate tax rate from 35 percent to 28
percent, with a lower rate of 25 percent for manufacturers. In 2017, under President Trump,
the United States cut its corporate tax rate to 21 percent. In France, President Emmanuel
Macron is in motion to reduce the corporate tax in 2022 to 25 percent from 33 percent.
Britain is ahead of the curve: It started slashing its rate under Prime Minister Gordon Brown
in 2008 and is aiming for 17 percent by 2020. On that issue, the Browns, Macrons and Trumps
of the world agree: The winners of global markets are mobile; we can't tax them too much.
But they are mistaken. Tax avoidance, international tax competition and the race to the
bottom that rage today are not laws of nature. They are policy choices, decisions we've
collectively made -- perhaps not consciously or explicitly, certainly not choices that were
debated transparently and democratically -- but choices nonetheless. And other, better
choices are possible.
Take big corporations. Some countries may have an interest in applying low tax rates, but
that's not an obstacle to making multinationals (and their shareholders) pay a lot. How? By
collecting the taxes that tax havens choose not to levy. For example, imagine that the
corporate tax rate in the United States was increased to 35 percent and that Apple found a
way to book billions in profits in Ireland, taxed at 1 percent. The United States could
simply decide to collect the missing 34 percent. Apple, like most Fortune 500 companies, does
in fact have a big tax deficit: It pays much less in taxes globally than what it would pay if
its profits were taxed at 35 percent in each country where it operates. For companies
headquartered in the United States, the Internal Revenue Service should collect 100 percent
of this tax deficit immediately, taking up the role of tax collector of last resort. The
permission of tax havens is not required. All it would take is adding a paragraph in the
United States tax code.
The same logic can be applied to companies headquartered abroad that sell products in
America. The only difference is that the United States would collect not all but only a
fraction of their tax deficit. For example, if the Swiss food giant Nestlé has a tax
deficit of $1 billion and makes 20 percent of its global sales in the United States, the
I.R.S. could collect 20 percent of its tax deficit, in addition to any tax owed in the United
States. The information necessary to collect this remedial tax already exists: Thanks to
recent advances in international cooperation, the I.R.S. knows where Nestlé books its
profits, how much tax it pays in each country and where it makes its sales.
Collecting part of the tax deficit of foreign companies would not violate any
international treaty. This mechanism can be applied tomorrow by any country, unilaterally. It
would put an end to international tax competition, because there would be no point any more
for businesses to move production or paper profits to low-tax places. Although companies
might choose to stop selling products in certain nations to avoid paying taxes, this would be
unlikely to be a risk in the United States. No company can afford to snub the large American
market.
These examples are powerful because they show, contrary to received wisdom, that the
taxation of capital and globalization are perfectly compatible. The notion that external or
technical constraints make tax justice idle fantasy does not withstand scrutiny. When it
comes to the future of taxation, there is an infinity of possible futures ahead of us.
What Taxes Should Look Like
A proposal to return tax rates at the top to where they were in 1950.
(graphic at the link)
Are these ideas for greater economic justice realistic politically? It is easy to lose
hope -- money in politics and self-serving ideologies are powerful foes. But although these
problems are real, we should not despair. Before injustice triumphed, the United States was a
beacon of tax justice. It was the democracy with the most steeply progressive system of
taxation on the planet. In the 1930s, American policymakers invented -- and then for almost
half a century applied -- top marginal income tax rates of close to 90 percent on the highest
earners. Corporate profits were taxed at 50 percent, large estates at close to 80
percent.
The history of taxation is full of U-turns. Instead of elevating some supposedly
invincible and natural constraints -- that are often invincible and natural only in terms of
their own models -- economists should act more like plumbers, making the tax machinery work,
fixing leaks. With good plumbing -- and if the growing political will to address the rise of
inequality takes hold -- there is a bright future for tax justice.
(Emmanuel Saez and Gabriel Zucman are economists at the University of California,
Berkeley, and the authors of "The Triumph of Injustice: How the Rich Dodge Taxes and How to
Make Them Pay," from which this essay is adapted.)
In a nation grappling with growing inequality, stagnating social mobility, crushing
personal debt, and crumbling job security, efforts to set America's generations against one
another persist. Don't blame the system, blame the "greedy" boomers. Or the "slacker" Gen
Xers. Or "entitled" millennials. But who gains from such discourses?
Efforts to foment that warfare, intentionally or not, serve specific agendas. Numerous
writers warn that age-group hostilities are "coming." And then, pitting generations against
one another, aside from their war metaphors, writers reach for doomsday predictions,
lachrymose empathy for "our kids," and questionable data. All this relies on the invention of
mendacious attributes, conferring on millions of diverse people implausible character flaws
or virtues. Karl Mannheim, the 20th-century sociologist known for explaining the uses of
generational units, would be rolling over in his grave.
Here is the hidden history of a perverse political discourse: It started with the
so-called boomers. As they aged toward peak midlife wages in the 1980s, they got saddled with
a reputation for being rich and greedy. The media concocted a lie that made it seem as if
they wouldn't ever need Social Security.
Bill Gates was born in 1955. That makes him what is commonly called a boomer. Rene Lavoie
was also born in 1955. The Globe recently recounted the problems that led this white Army vet
to spend time in Boston's homeless shelters. According to the principal investigator of a
recent study, Dennis Culhane, many people of Lavoie's age are indeed part of a boom -- "a
boom in aging homeless people." They were "less well educated people who faced economic
challenges in their youth -- falling wages and rising housing costs -- and never recovered
financially. ... Now in their 50s and 60s, they are biologically older than most people their
age. ... The average lifespan for a homeless person is 64."
Unlike Gates's co-billionaires in the .01 percent, 29 percent of people 55 and over have
nothing at all saved for retirement, according to the Government Accountability Office, and
many of the rest have little. Ageism in the workforce is one reason they lose a job and then
can't find an equally good one -- or find any work at all. Boomers are often treated as
"deadwood." Corporations drop them by the thousands. Even Xers are now old enough to be at
risk of having their resumes discarded. When people suffering from middle ageism stop looking
for work they are omitted from the unemployment data. At midlife, some submit to deaths of
despair.
Succeeding cohorts (all containing the same disparities -- of class, race, gender, and
education) have also been treated as if they were a single human with a character flaw.
During the 1990s recessions, when the so-called Xers couldn't find work, they too were
branded with a slur -- "slackers" -- while boomers were represented as the horde bullies who
held onto all the good jobs.
The baleful technique is still at work today. Given the same problem -- lack of decent
jobs for all ages, especially people without college degrees and people over 50 -- it's the
turn of the millennials. One of them complains about the stereotypes, defensively, in Vox:
"We demand participation trophies, can't find jobs, and live with our parents until we're
30." His response is to bash -- you guessed it -- the boomers, who "have a ton of maladaptive
personality characteristics."
In the Atlantic, pundits Niall Ferguson, from the Hoover Institution, and Eyck Freymann
defend millennials because their "early working lives were blighted by the financial crisis"
-- but ignore how home foreclosures, sluggish growth, and job losses also blighted people
around Ferguson's own age (55).
Millennials are supposed to be so ignorant and cruel that they would dismiss old people's
needs because of the boomers' alleged wealth. "Cutting old-age benefits for boomers would be
an easy call if millennials are anywhere on the line of fire," write the original concoctors
of the age-war distraction, Neil Howe and William Strauss, in their latest pandering assault,
"Millennials Rising: The Next Great Generation."
We frequently hear that our elders' retirement needs will "break the bank" despite their
lifelong pay-ins. If Republicans manage to destroy the whole system of social trust, cutting
Social Security could indeed be one of the dire outcomes of the lies of generational warfare.
Otherwise, experts say, its financial failure is not remotely in the cards. For families it
has always been the most popular government program, because it provides a measure of
dignified independence for older people and a measure of relief for their adult children.
Younger people should support the expansion of Social Security for another reason, writes
one millennial who doesn't take the bait. Nick Guthman argues in The Hill that because of
student debt, "Millennials and Generation Z will need Social Security even more than our
parents and grandparents do."
The 2100 Act, now before Congress, would raise the cap on taxable-wage contributions.
Conservatives reject this easy fix, but it is overwhelmingly popular with the public.
Manipulating cohort characteristics damages far more than attitudes toward Social
Security, bad as the effect of that contrived skepticism could be. Blaming an older
generation that is already maligned allows many real perpetrators to smugly hide from their
irresponsibility. Will the climate movement find youngsters blaming the boomers for
ecological destruction, because some drove big cars? Wouldn't it be better to turn on the
CEOs of Exxon, who hid the dangers of burning fossil fuels that their scientists discovered
so thoroughly that few of us knew to stop flying?
Persistent precarity is indeed the historical issue that is obscured by these discourses.
The fact of American decline is this: Most people in each generation have had it worse than
their parents. According to a report on The State of Working America, the United States lags
behind its peer countries in the OECD (Organization for Economic Cooperation and Development)
in measurements of father-son mobility. In the United States, the "sons" have been receiving
stagnant wages, fewer benefits, jobs in the insecure gig economy. Many women too have lost
the progress narrative of rising expectations. That progress narrative, when upward mobility
was more widespread, supported the American Dream. It gave hope that democracy would work for
increasing numbers.
Don't blame your parents. Every article manipulating cohort stereotypes lets the
government and corporations off the hook for outsourcing abroad, the crash of rust-belt
industries, de-unionization, and the decades of cascading downward mobility we now endure.
You can't even want to get justice until you know the true sources of injustice.
How do imaginary reputations and hostile emotions get nailed onto struggling groups,
decade after decade, in this pernicious way? Naming each imagined age cohort makes it
possible. The process is called reification. Naming makes vague temporal proximity into a
thing.
Only the name baby boomers had an adequate demographic and historical reason to exist.
These millions were born (from 1946 to 1964) of the relative affluence that spread after
World War II. Their numbers did give them unifying experiences as they grew up -- made their
elders build new schools for them, made their working lives more competitive. Now they are
confronted by a president who, after promising not to, is cutting their security and health
care in devious ways.
But, even undergoing historical events together, age-peers don't build the same memories,
share the same beliefs, behave uniformly. During Vietnam, some young men were conscripted
into the war while others fought to end it. Stark differences likewise mark the current group
of young people (unimaginatively called "post-millennials"). Some of them are woke and ready
to take on racism, sexism, homophobia, gun control, global warming. At the same age,
neo-Nazis are setting fire to synagogues.
Once cohorts are reified by name, the labels become dog-whistles. Envy and fear can divide
a nation and abet destructive political changes. Malice can turn one generation against
another.
We could mitigate the divisiveness. Editors could stop soliciting age-war articles by
second-rate phrasemakers. We ordinary people need to defy the lies, and build
intergenerational bonds. Let us understand that capitalist and neoliberal choices have
worsened life, for decades, for every later, unequal subculture. And a comforting, unifying
cross-age coalition should eject politicians unwilling to maintain and repair our precious
communal institutions.
"... The lawsuit also aggressively contests Boeing's spin that competent pilots could have prevented the Lion Air and Ethiopian Air crashes: ..."
"... When asked why Boeing did not alert pilots to the existence of the MCAS, Boeing responded that the company decided against disclosing more details due to concerns about "inundate[ing] average pilots with too much information -- and significantly more technical data -- than [they] needed or could realistically digest." ..."
"... The filing has a detailed explanation of why the addition of heavier, bigger LEAP1-B engines to the 737 airframe made the plane less stable, changed how it handled, and increased the risk of catastrophic stall. It also describes at length how Boeing ignored warning signs during the design and development process, and misrepresented the 737 Max as essentially the same as older 737s to the FAA, potential buyers, and pilots. It also has juicy bits presented in earlier media accounts but bear repeating, like: ..."
"... Then, on November 7, 2018, the FAA issued an "Emergency Airworthiness Directive (AD) 2018-23-51," warning that an unsafe condition likely could exist or develop on 737 MAX aircraft. ..."
"... Moreover, unlike runaway stabilizer, MCAS disables the control column response that 737 pilots have grown accustomed to and relied upon in earlier generations of 737 aircraft. ..."
"... And making the point that to turn off MCAS all you had to do was flip two switches behind everything else on the center condole. Not exactly true, normally those switches were there to shut off power to electrically assisted trim. Ah, it one thing to shut off MCAS it's a whole other thing to shut off power to the planes trim, especially in high speed ✓ and the plane noise up ✓, and not much altitude ✓. ..."
"... Classic addiction behavior. Boeing has a major behavioral problem, the repetitive need for and irrational insistence on profit above safety all else , that is glaringly obvious to everyone except Boeing. ..."
"... In fact, Boeing 737 Chief Technical Pilot, Mark Forkner asked the FAA to delete any mention of MCAS from the pilot manual so as to further hide its existence from the public and pilots " ..."
"... This "MCAS" was always hidden from pilots? The military implemented checks on MCAS to maintain a level of pilot control. The commercial airlines did not. Commercial airlines were in thrall of every little feature that they felt would eliminate the need for pilots at all. Fell right into the automation crapification of everything. ..."
At first blush, the suit filed in Dallas by the Southwest Airlines Pilots Association (SwAPA) against Boeing may seem like a family
feud. SWAPA is seeking an estimated $115 million for lost pilots' pay as a result of the grounding of the 34 Boeing 737 Max planes
that Southwest owns and the additional 20 that Southwest had planned to add to its fleet by year end 2019. Recall that Southwest
was the largest buyer of the 737 Max, followed by American Airlines. However, the damning accusations made by the pilots' union,
meaning, erm, pilots, is likely to cause Boeing not just more public relations headaches, but will also give grist to suits by crash
victims.
However, one reason that the Max is a sore point with the union was that it was a key leverage point in 2016 contract negotiations:
And Boeing's assurances that the 737 Max was for all practical purposes just a newer 737 factored into the pilots' bargaining
stance. Accordingly, one of the causes of action is tortious interference, that Boeing interfered in the contract negotiations to
the benefit of Southwest. The filing describes at length how Boeing and Southwest were highly motivated not to have the contract
dispute drag on and set back the launch of the 737 Max at Southwest, its showcase buyer. The big point that the suit makes is the
plane was unsafe and the pilots never would have agreed to fly it had they known what they know now.
We've embedded the compliant at the end of the post. It's colorful and does a fine job of recapping the sorry history of the development
of the airplane. It has damning passages like:
Boeing concealed the fact that the 737 MAX aircraft was not airworthy because, inter alia, it incorporated a single-point failure
condition -- a software/flight control logic called the Maneuvering Characteristics Augmentation System ("MCAS") -- that,if fed
erroneous data from a single angle-of-attack sensor, would command the aircraft nose-down and into an unrecoverable dive without
pilot input or knowledge.
The lawsuit also aggressively contests Boeing's spin that competent pilots could have prevented the Lion Air and Ethiopian Air
crashes:
Had SWAPA known the truth about the 737 MAX aircraft in 2016, it never would have approved the inclusion of the 737 MAX aircraft
as a term in its CBA [collective bargaining agreement], and agreed to operate the aircraft for Southwest. Worse still, had SWAPA
known the truth about the 737 MAX aircraft, it would have demanded that Boeing rectify the aircraft's fatal flaws before agreeing
to include the aircraft in its CBA, and to provide its pilots, and all pilots, with the necessary information and training needed
to respond to the circumstances that the Lion Air Flight 610 and Ethiopian Airlines Flight 302 pilots encountered nearly three
years later.
And (boldface original):
Boeing Set SWAPA Pilots Up to Fail
As SWAPA President Jon Weaks, publicly stated, SWAPA pilots "were kept in the dark" by Boeing.
Boeing did not tell SWAPA pilots that MCAS existed and there was no description or mention of MCAS in the Boeing Flight Crew
Operations Manual.
There was therefore no way for commercial airline pilots, including SWAPA pilots, to know that MCAS would work in the background
to override pilot inputs.
There was no way for them to know that MCAS drew on only one of two angle of attack sensors on the aircraft.
And there was no way for them to know of the terrifying consequences that would follow from a malfunction.
When asked why Boeing did not alert pilots to the existence of the MCAS, Boeing responded that the company decided against
disclosing more details due to concerns about "inundate[ing] average pilots with too much information -- and significantly more
technical data -- than [they] needed or could realistically digest."
SWAPA's pilots, like their counterparts all over the world, were set up for failure
The filing has a detailed explanation of why the addition of heavier, bigger LEAP1-B engines to the 737 airframe made the plane
less stable, changed how it handled, and increased the risk of catastrophic stall. It also describes at length how Boeing ignored
warning signs during the design and development process, and misrepresented the 737 Max as essentially the same as older 737s to
the FAA, potential buyers, and pilots. It also has juicy bits presented in earlier media accounts but bear repeating, like:
By March 2016, Boeing settled on a revision of the MCAS flight control logic.
However, Boeing chose to omit key safeguards that had previously been included in earlier iterations of MCAS used on the Boeing
KC-46A Pegasus, a military tanker derivative of the Boeing 767 aircraft.
The engineers who created MCAS for the military tanker designed the system to rely on inputs from multiple sensors and with
limited power to move the tanker's nose. These deliberate checks sought to ensure that the system could not act erroneously or
cause a pilot to lose control. Those familiar with the tanker's design explained that these checks were incorporated because "[y]ou
don't want the solution to be worse than the initial problem."
The 737 MAX version of MCAS abandoned the safeguards previously relied upon. As discussed below, the 737 MAX MCAS had greater
control authority than its predecessor, activated repeatedly upon activation, and relied on input from just one of the plane's
two sensors that measure the angle of the plane's nose.
In other words, Boeing can't credibly say that it didn't know better.
Here is one of the sections describing Boeing's cover-ups:
Yet Boeing's website, press releases, annual reports, public statements and statements to operators and customers, submissions
to the FAA and other civil aviation authorities, and 737 MAX flight manuals made no mention of the increased stall hazard or MCAS
itself.
In fact, Boeing 737 Chief Technical Pilot, Mark Forkner asked the FAA to delete any mention of MCAS from the pilot manual so
as to further hide its existence from the public and pilots.
We urge you to read the complaint in full, since it contains juicy insider details, like the significance of Southwest being Boeing's
737 Max "launch partner" and what that entailed in practice, plus recounting dates and names of Boeing personnel who met with SWAPA
pilots and made misrepresentations about the aircraft.
Even though Southwest Airlines is negotiating a settlement with Boeing over losses resulting from the grounding of the 737 Max
and the airline has promised to compensate the pilots, the pilots' union at a minimum apparently feels the need to put the heat on
Boeing directly. After all, the union could withdraw the complaint if Southwest were to offer satisfactory compensation for the pilots'
lost income. And pilots have incentives not to raise safety concerns about the planes they fly. Don't want to spook the horses, after
all.
But Southwest pilots are not only the ones most harmed by Boeing's debacle but they are arguably less exposed to the downside
of bad press about the 737 Max. It's business fliers who are most sensitive to the risks of the 737 Max, due to seeing the story
regularly covered in the business press plus due to often being road warriors. Even though corporate customers account for only 12%
of airline customers, they represent an estimated 75% of profits.
Southwest customers don't pay up for front of the bus seats. And many of them presumably value the combination of cheap travel,
point to point routes between cities underserved by the majors, and close-in airports, which cut travel times. In other words, that
combination of features will make it hard for business travelers who use Southwest regularly to give the airline up, even if the
737 Max gives them the willies. By contrast, premium seat passengers on American or United might find it not all that costly, in
terms of convenience and ticket cost (if they are budget sensitive), to fly 737-Max-free Delta until those passengers regain confidence
in the grounded plane.
Note that American Airlines' pilot union, when asked about the Southwest claim, said that it also believes its pilots deserve
to be compensated for lost flying time, but they plan to obtain it through American Airlines.
If Boeing were smart, it would settle this suit quickly, but so far, Boeing has relied on bluster and denial. So your guess is
as good as mine as to how long the legal arm-wrestling goes on.
Update 5:30 AM EDT : One important point that I neglected to include is that the filing also recounts, in gory detail, how Boeing
went into "Blame the pilots" mode after the Lion Air crash, insisting the cause was pilot error and would therefore not happen again.
Boeing made that claim on a call to all operators, including SWAPA, and then three days later in a meeting with SWAPA.
However, Boeing's actions were inconsistent with this claim. From the filing:
Then, on November 7, 2018, the FAA issued an "Emergency Airworthiness Directive (AD) 2018-23-51," warning that an unsafe condition
likely could exist or develop on 737 MAX aircraft.
Relying on Boeing's description of the problem, the AD directed that in the event of un-commanded nose-down stabilizer trim
such as what happened during the Lion Air crash, the flight crew should comply with the Runaway Stabilizer procedure in the Operating
Procedures of the 737 MAX manual.
But the AD did not provide a complete description of MCAS or the problem in 737 MAX aircraft that led to the Lion Air crash,
and would lead to another crash and the 737 MAX's grounding just months later.
An MCAS failure is not like a runaway stabilizer. A runaway stabilizer has continuous un-commanded movement of the tail, whereas
MCAS is not continuous and pilots (theoretically) can counter the nose-down movement, after which MCAS would move the aircraft
tail down again.
Moreover, unlike runaway stabilizer, MCAS disables the control column response that 737 pilots have grown accustomed to and
relied upon in earlier generations of 737 aircraft.
Even after the Lion Air crash, Boeing's description of MCAS was still insufficient to put correct its lack of disclosure as
demonstrated by a second MCAS-caused crash.
We hoisted this detail because insiders were spouting in our comments section, presumably based on Boeing's patter, that the Lion
Air pilots were clearly incompetent, had they only executed the well-known "runaway stabilizer," all would have been fine. Needless
to say, this assertion has been shown to be incorrect.
Excellent, by any standard. Which does remind of of the NYT zine story (William Langewiesche
Published Sept. 18, 2019) making the claim that basically the pilots who crashed their planes weren't real "Airman".
And making
the point that to turn off MCAS all you had to do was flip two switches behind everything else on the center condole. Not exactly
true, normally those switches were there to shut off power to electrically assisted trim. Ah, it one thing to shut off MCAS it's
a whole other thing to shut off power to the planes trim, especially in high speed ✓ and the plane noise up ✓, and not much altitude
✓.
And especially if you as a pilot didn't know MCAS was there in the first place. This sort of engineering by Boeing is criminal.
And the lying. To everyone. Oh, least we all forget the processing power of the in flight computer is that of a intel 286. There
are times I just want to be beamed back to the home planet. Where we care for each other.
One should also point out that Langewiesche said that Boeing made disastrous mistakes with the MCAS and that the very future
of the Max is cloudy. His article was useful both for greater detail about what happened and for offering some pushback to the
idea that the pilots had nothing to do with the accidents.
As for the above, it was obvious from the first Seattle Times stories that these two events and the grounding were going to
be a lawsuit magnet. But some of us think Boeing deserves at least a little bit of a defense because their side has been totally
silent–either for legal reasons or CYA reasons on the part of their board and bad management.
Classic addiction behavior. Boeing has a major behavioral problem, the repetitive need for and irrational insistence on profit
above safety all else , that is glaringly obvious to everyone except Boeing.
"The engineers who created MCAS for the military tanker designed the system to rely on inputs from multiple sensors and with
limited power to move the tanker's nose. These deliberate checks sought to ensure that the system could not act erroneously or
cause a pilot to lose control "
"Yet Boeing's website, press releases, annual reports, public statements and statements to operators and customers, submissions
to the FAA and other civil aviation authorities, and 737 MAX flight manuals made no mention of the increased stall hazard or MCAS
itself.
In fact, Boeing 737 Chief Technical Pilot, Mark Forkner asked the FAA to delete any mention of MCAS from the pilot manual
so as to further hide its existence from the public and pilots "
This "MCAS" was always hidden from pilots? The military implemented checks on MCAS to maintain a level of pilot control. The commercial airlines did not. Commercial
airlines were in thrall of every little feature that they felt would eliminate the need for pilots at all. Fell right into the
automation crapification of everything.
Job Growth Remains Slow in September, but Unemployment Rate Falls to 3.5 Percent
By Dean Baker
Manufacturing employment hit a record low as a share of private sector employment.
The Bureau of Labor Statistics reported that the economy added 136,000 jobs in September,
after adding 168,000 in August. The 157,000 average for the last three months is considerably
slower than the 179,000 average for the last year, but this slowing is expected in a tight
labor market.
The September job growth led to a 0.2 percentage point drop in the unemployment rate to
3.5 percent, a fifty-year low. The employment-to-population ratio (EPOP) rose 0.1 percentage
point to 61.0 percent, a new high for the recovery that is 0.6 percentage points above the
year-ago level.
The EPOPs for both prime-age (ages 25 to 54) men and women rose by 0.1 percentage point in
September. The 74.0 percent rate for women is a new high for the recovery, although still
below the peak of 74.9 percent hit in April of 2000. The 86.4 percent rate for men is 0.3
percentage points below the March level and 1.6 percentage points below the prerecession
peak.
The unemployment rate for Hispanics fell to 3.9 percent, the lowest on record, 0.6
percentage points below the year-ago level. The unemployment rate for workers without a high
school degree also fell sharply to 4.8 percent, 0.8 percentage points below the year-ago
level. The share of unemployment due to voluntary quits, a measure of workers' confidence in
their labor market prospects, jumped 1.7 percentage points to 14.6 percent, a level more
typical for a strong labor market.
Other data in the household survey were more mixed. While the mean duration of
unemployment spells edged down 0.1 weeks to 22.0 weeks, the median duration rose 0.5 weeks to
9.4 weeks. The share of long-term unemployed also rose by 2.1 percentage points to 22.7
percent.
The number of involuntary part-time workers edged down by 31,000. The number of workers
choosing to work part-time also fell, dropping by 124,000 in September. The percentage of the
workforce choosing to work part-time has been dropping over the last year, after rising
sharply following the implementation of the ACA. This likely due to workers having greater
difficulty getting health care outside of employment.
Another negative item is an increase in the number of multiple job holders, especially
among women. The share of employed women who have multiple jobs rose to 5.9 percent, 0.5
percentage points above the year-ago level. The vast majority of these women report that they
work a second job in addition to a full-time job.
The picture on the establishment side is more negative. Slower job growth is to be
expected in a tighter labor market, but it has virtually stopped altogether on the
goods-producing side. The goods-producing sector has added a total of just 2,000 jobs over
the last three months, with construction adding 8,000 jobs, manufacturing adding 4,000, and
mining and logging losing 10,000. A big part of this is the fallout from the trade war and
the resulting drop in investment. Also, lower world oil prices are a big hit to the mining
sector. The manufacturing share of private sector employment sunk to a new all-time low in
September of 9.96 percent.
On the service side, job growth in the high-paying professional and technical services
sector has slowed sharply in the last two months, added an average of 13,900, compared to an
average of 23,900 over the last year. Restaurant employment has also slowed sharply, with the
sector adding an average of just 1,500 jobs over the last four months. This should be
expected in a tight labor market, where workers have higher-paying options. Retail lost
11,400 jobs in September, bringing its losses over the last year to 60,900, just under 0.4
percent of total employment.
A big job gainer in recent months is health care, which added 38,800 jobs in September
after adding 37,200 in August. The sector has accounted for almost a third of job growth in
the private sector over the last two months.
In contrast to the evidence of a tight labor market in the household survey, wage growth
appears to be slowing slightly. The average hourly wage rose 2.9 percent over the last year,
although the annualized rate of wage growth, comparing the last three months (July, August,
September) with the prior three months (April, May, June), was a slightly higher 3.4
percent.
[Graph]
This is a generally positive report with some serious warning signs. The goods sector is
very weak and likely to get weaker, according to a wide variety of measures of manufacturing.
The evidence of slowing wage growth is also striking in a labor market with 3.5 percent
unemployment.
Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he
paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that
benefit the wealthy.
His claim sparked a debate about the fairness of the tax system. In the end, the expert
consensus was that, whatever Buffett's specific situation, most wealthy Americans did not
actually pay a lower tax rate than the middle class. "Is it the norm?" the fact-checking
outfit Politifact asked. "No."
Time for an update: It's the norm now.
For the first time on record, the 400 wealthiest Americans last year paid a lower total
tax rate -- spanning federal, state and local taxes -- than any other income group, according
to newly released data.
That's a sharp change from the 1950s and 1960s, when the wealthy paid vastly higher tax
rates than the middle class or poor.
Since then, taxes that hit the wealthiest the hardest -- like the estate tax and corporate
tax -- have plummeted, while tax avoidance has become more common.
President Trump's 2017 tax cut, which was largely a handout to the rich, plays a role,
too. It helped push the tax rate on the 400 wealthiest households below the rates for almost
everyone else.
The overall tax rate on the richest 400 households last year was only 23 percent, meaning
that their combined tax payments equaled less than one quarter of their total income. This
overall rate was 70 percent in 1950 and 47 percent in 1980.
For middle-class and poor families, the picture is different. Federal income taxes have
also declined modestly for these families, but they haven't benefited much if at all from the
decline in the corporate tax or estate tax. And they now pay more in payroll taxes (which
finance Medicare and Social Security) than in the past. Over all, their taxes have remained
fairly flat.
The combined result is that over the last 75 years the United States tax system has become
radically less progressive.
The data here come from the most important book on government policy that I've read in a
long time -- called "The Triumph of Injustice," to be released next week. The authors are
Emmanuel Saez and Gabriel Zucman, both professors at the University of California, Berkeley,
who have done pathbreaking work on taxes. Saez has won the award that goes to the top
academic economist under age 40, and Zucman was recently profiled on the cover of Bloomberg
BusinessWeek magazine as "the wealth detective."
They have constructed a historical database that tracks the tax payments of households at
different points along the income spectrum going back to 1913, when the federal income tax
began. The story they tell is maddening -- and yet ultimately energizing.
"Many people have the view that nothing can be done," Zucman told me. "Our case is, 'No,
that's wrong. Look at history.'" As they write in the book: "Societies can choose whatever
level of tax progressivity they want." When the United States has raised tax rates on the
wealthy and made rigorous efforts to collect those taxes, it has succeeded in doing so.
And it can succeed again.
Saez and Zucman portray the history of American taxes as a struggle between people who
want to tax the rich and those who want to protect the fortunes of the rich. The story starts
in the 17th century, when Northern colonies created more progressive tax systems than Europe
had. Massachusetts even enacted a wealth tax, which covered financial holdings, land, ships,
jewelry, livestock and more.
The Southern colonies, by contrast, were hostile to taxation. Plantation owners worried
that taxes could undermine slavery by eroding the wealth of shareholders, as the historian
Robin Einhorn has explained, and made sure to keep tax rates low and tax collection
ineffective. (The Confederacy's hostility to taxes ultimately hampered its ability to raise
money and fight the Civil War.)
By the middle of the 20th century, the high-tax advocates had prevailed. The United States
had arguably the world's most progressive tax code, with a top income-tax rate of 91 percent
and a corporate tax rate above 50 percent.
But the second half of the 20th century was mostly a victory for the low-tax side.
Companies found ways to take more deductions and dodge taxes. Politicians cut every tax that
fell heavily on the wealthy: high-end income taxes, investment taxes, the estate tax and the
corporate tax. The justification for doing so was usually that the economy as a whole would
benefit.
The justification turned out to be wrong. The wealthy, and only the wealthy, have done
fantastically well over the last several decades. G.D.P. growth has been disappointing, and
middle-class income growth even worse.
The American economy just doesn't function very well when tax rates on the rich are low
and inequality is sky high. It was true in the lead-up to the Great Depression, and it's been
true recently. Which means that raising high-end taxes isn't about punishing the rich (who,
by the way, will still be rich). It's about creating an economy that works better for the
vast majority of Americans.
In their book, Saez and Zucman sketch out a modern progressive tax code. The overall tax
rate on the richest 1 percent would roughly double, to about 60 percent. The tax increases
would bring in about $750 billion a year, or 4 percent of G.D.P., enough to pay for universal
pre-K, an infrastructure program, medical research, clean energy and more. Those are the
kinds of policies that do lift economic growth.
One crucial part of the agenda is a minimum global corporate tax of at least 25 percent. A
company would have to pay the tax on its profits in the United States even if it set up
headquarters in Ireland or Bermuda. Saez and Zucman also favor a wealth tax; Elizabeth
Warren's version is based on their work. And they call for the creation of a Public
Protection Bureau, to help the I.R.S. crack down on tax dodging.
I already know what some critics will say about these arguments -- that the rich will
always figure out a way to avoid taxes. That's simply not the case. True, they will always
manage to avoid some taxes. But history shows that serious attempts to collect more taxes
usually succeed.
Ask yourself this: If efforts to tax the super-rich were really doomed to fail, why would
so many of the super-rich be fighting so hard to defeat those efforts?
NYT: The data here come from the most important
book on government policy that I've read in a
long time -- called "The Triumph of Injustice,"
to be released next week. The authors are
Emmanuel Saez and Gabriel Zucman ...
Seriously, what am I missing in failing to find that debt or the issuing of Treasury
securities increases inequality? I will suppose I am wrong, since I want to understand the
matter, but absent an explanation I will conclude I am right and the effect on inequality is
of no significance. Corporate debt is another matter and here I understand that this
increases inequality, but Treasury debt?
I think (trying not to dwell on why Biden is not being arraigned) it has to do with
financialization vice manufacturing focus of US "growth".
If material 'wealth' grows through imports..... that creates a large outflow of USD. To
make safe places to put newly printed USD the government borrows from both the foreign
holders of USD and top 1% US citizens who don't enough pay taxes.
How can Joe six pack who has a large negative net worth and loses to foreign imports get
in on accumulating T Bills and FX arbitrage?
Just thinking.
Shorter: Milton Friedman sold US a bill of goods when he said "deficits were delayed
taxes" on PBS when my kids were toddlers.
'Altogether, there are 31 states (plus the District of Columbia) with party registration;
in the others, such as Virginia, voters register without reference to party. Among the party
registration states are some of the nation's most populous: California, New York, Florida,
North Carolina, Pennsylvania, New Jersey, Arizona, and Massachusetts.
The basic facts: In 19 states and the District, there are more registered Democrats than
Republicans. In 12 states, there are more registered Republicans than Democrats. In
aggregate, 40% of all voters in party registration states are Democrats, 29% are Republicans,
and 28% are independents. Nationally, the Democratic advantage in the party registration
states approaches 12 million.' ...
The most populous dozen states have enough electoral votes
to decide presidential elections. Most are in Dem hands,
but a few are not. However, many of the remaining
less populous states have electoral vote advantages
(2 more votes than they would have if electoral vote
distribution were strictly based on population) and
they are dominated by GOP voters.
It strikes me that the electorate is really dominated
by independent voters, not party-affiliated, and this
makes the process potentially much less polarized in
reality than some make it out to be. (yes, independent
voters are said to vote along party lines *anyway*, but
this is because there are effectively only two parties
to vote for, given that 'splinter' parties are practically
useless & ultimately disruptive.)
But it remains an interesting strategy to continue to
insist that polarization is on-going, increasing, and
will ultimately destroy US politics. It had better not.
"But it remains an interesting strategy to continue to insist that polarization is on-going,
increasing, and will ultimately destroy US politics. It had better not."
You can deny that polarization is increasing.
Opposite sides now do not listen to each other and resort to war propaganda methods. This
is visible on this blog too. Each side sing their own song, paying little or no attention to
the arguments of the other side.
Another interesting sign of polarization is that on most important cases Congress votes
now strictly along the party lines.
And in Congressional committees Demorats abuse their dominance to the extent previously
impossible: Obsessed with Russiagate sad clown Schiff is a typical example here. Example of
both polarization and degradation at the same time.
A measure of U.S. manufacturing unexpectedly fell deeper into contraction, posting the
weakest reading since the end of the last recession as a global slowdown and the U.S.-China
trade war increasingly weigh on the sector.
---
You heard he news. Doldrumming along.
Cars, end of cycle, Asians not buying US houses, Boeing, Global trade wars. And all of
refusing to pay our government bills. Oil is back to 55$, been there for five yeas while CPI
has been rising 1.5% a year, that signals a bit of deflation coming. A bouncing along with 1%
real growth for a few quarters while dipping our toes in negative pricing.
Job Growth Remains Slow in September, but Unemployment Rate Falls to 3.5 Percent
By Dean Baker
Manufacturing employment hit a record low as a share of private sector employment.
The Bureau of Labor Statistics reported that the economy added 136,000 jobs in September,
after adding 168,000 in August. The 157,000 average for the last three months is considerably
slower than the 179,000 average for the last year, but this slowing is expected in a tight
labor market.
The September job growth led to a 0.2 percentage point drop in the unemployment rate to
3.5 percent, a fifty-year low. The employment-to-population ratio (EPOP) rose 0.1 percentage
point to 61.0 percent, a new high for the recovery that is 0.6 percentage points above the
year-ago level.
The EPOPs for both prime-age (ages 25 to 54) men and women rose by 0.1 percentage point in
September. The 74.0 percent rate for women is a new high for the recovery, although still
below the peak of 74.9 percent hit in April of 2000. The 86.4 percent rate for men is 0.3
percentage points below the March level and 1.6 percentage points below the prerecession
peak.
The unemployment rate for Hispanics fell to 3.9 percent, the lowest on record, 0.6
percentage points below the year-ago level. The unemployment rate for workers without a high
school degree also fell sharply to 4.8 percent, 0.8 percentage points below the year-ago
level. The share of unemployment due to voluntary quits, a measure of workers' confidence in
their labor market prospects, jumped 1.7 percentage points to 14.6 percent, a level more
typical for a strong labor market.
Other data in the household survey were more mixed. While the mean duration of
unemployment spells edged down 0.1 weeks to 22.0 weeks, the median duration rose 0.5 weeks to
9.4 weeks. The share of long-term unemployed also rose by 2.1 percentage points to 22.7
percent.
The number of involuntary part-time workers edged down by 31,000. The number of workers
choosing to work part-time also fell, dropping by 124,000 in September. The percentage of the
workforce choosing to work part-time has been dropping over the last year, after rising
sharply following the implementation of the ACA. This likely due to workers having greater
difficulty getting health care outside of employment.
Another negative item is an increase in the number of multiple job holders, especially
among women. The share of employed women who have multiple jobs rose to 5.9 percent, 0.5
percentage points above the year-ago level. The vast majority of these women report that they
work a second job in addition to a full-time job.
The picture on the establishment side is more negative. Slower job growth is to be
expected in a tighter labor market, but it has virtually stopped altogether on the
goods-producing side. The goods-producing sector has added a total of just 2,000 jobs over
the last three months, with construction adding 8,000 jobs, manufacturing adding 4,000, and
mining and logging losing 10,000. A big part of this is the fallout from the trade war and
the resulting drop in investment. Also, lower world oil prices are a big hit to the mining
sector. The manufacturing share of private sector employment sunk to a new all-time low in
September of 9.96 percent.
On the service side, job growth in the high-paying professional and technical services
sector has slowed sharply in the last two months, added an average of 13,900, compared to an
average of 23,900 over the last year. Restaurant employment has also slowed sharply, with the
sector adding an average of just 1,500 jobs over the last four months. This should be
expected in a tight labor market, where workers have higher-paying options. Retail lost
11,400 jobs in September, bringing its losses over the last year to 60,900, just under 0.4
percent of total employment.
A big job gainer in recent months is health care, which added 38,800 jobs in September
after adding 37,200 in August. The sector has accounted for almost a third of job growth in
the private sector over the last two months.
In contrast to the evidence of a tight labor market in the household survey, wage growth
appears to be slowing slightly. The average hourly wage rose 2.9 percent over the last year,
although the annualized rate of wage growth, comparing the last three months (July, August,
September) with the prior three months (April, May, June), was a slightly higher 3.4
percent.
[Graph]
This is a generally positive report with some serious warning signs. The goods sector is
very weak and likely to get weaker, according to a wide variety of measures of manufacturing.
The evidence of slowing wage growth is also striking in a labor market with 3.5 percent
unemployment.
Japan has a shrinking population. Can you explain to me why on the Earth they need
economic growth?
This preoccupation with "growth" (with narrow and false one dimensional and very
questionable measurements via GDP, which includes the FIRE sector) is a fallacy promoted by
neoliberalism.
Neoliberalism proved to be quite sophisticated religions with its own set of True
Believers in Eric Hoffer's terminology.
A lot of current economic statistics suffer from "mathiness".
For example, the narrow definition of unemployment used in U3 is just a classic example of
pseudoscience in full bloom. It can be mentioned only if U6 mentioned first. Otherwise, this
is another "opium for the people" ;-) An attempt to hide the real situation in the neoliberal
"job market" in which has sustained real unemployment rate is always over 10% and which has a
disappearing pool of well-paying middle-class jobs. Which produced current narco-epidemics
(in 2018, 1400 people were shot in half a year in Chicago (
http://www.chicagotribune.com/news/breaking/ct-met-weekend-shooting-violence-20180709-story.html
); imagine that). While I doubt that people will hang Pelosi on the street post, her
successor might not be so lucky ;-)
Everything is fake in the current neoliberal discourse, be it political or economic, and
it is not that easy to understand how they are deceiving us. Lies that are so sophisticated
that often it is impossible to tell they are actually lies, not facts. The whole neoliberal
society is just big an Empire of Illusions, the kingdom of lies and distortions.
I would call it a new type of theocratic state if you wish.
And probably only one in ten, if not one in a hundred economists deserve to be called
scientists. Most are charlatans pushing fake papers on useless conferences.
It is simply amazing that the neoliberal society, which is based on "universal deception,"
can exist for so long.
A Secretive Committee of Wall Street Insiders Is the Least of the New York Fed's Concerns.
In July 17, Mary Callahan Erdoes, head of JPMorgan Chase & Co.'s $2.2 trillion asset and wealth management division, walked into
the wood-paneled tenth-floor conference room at the Federal Reserve Bank of New York to address some fellow Wall Street luminaries
-- Bridgewater Associates' Ray Dalio, Dawn Fitzpatrick of Soros Fund Management, short-seller Jim Chanos, and LBO kingpin David Rubenstein
among them.
All are members of the Investor Advisory Committee on Financial Markets (IACFM) -- a forum to provide financial insight to the
New York Fed. Chairing the meeting was New York Fed president John C. Williams, vice chair of the powerful, rate-setting Federal
Open Market Committee, who was a year into his tenure.
Erdoes held forth at the meeting, which included a buffet lunch.
---
And so on.
This is us, we have a unexhaustable desire for these secret meetings to meet, so we vote, every year to convene them. If these
secret meeting did not occur then we could never do a deal with the super wealthy and our precious will not be insured. Reply Saturday,
October 05, 2019 at 06:04 PM
Infectious Narratives in Economics
By Robert Shiller - Bloomberg
"Narrative EconomicsHow Stories Go Viral & Drive Major Economic Events"
Concerns that inventions of new machines powered by water, wind, horse, or steam, or that
use human power more efficiently, might replace workers and cause massive unemployment have
an extremely long history, going back to ancient times. Aristotle imagined a future in which
"the shuttle would weave and the plectrum touch the lyre without a hand to guide them." In
such a world, "chief workmen would not want servants, nor masters slaves," he concluded.
Still, it wasn't until the 19th century, an era that brought innovations such as the
water-powered textile loom, the mechanical thresher, and the Corliss steam engine, that
concerns about technology-based unemployment took center stage. The narrative was
particularly contagious during economic depressions when many were unemployed.
The phrase "technological unemployment" first appeared in 1917, but it started its
epidemic upswing in 1928. The count for "technological unemployment" skyrockets in the 1930s
in Google Ngrams, tracing a hump-shaped pattern, rising through time for a while and then
falling, much as is regularly seen with infection diseases. The "technological unemployment"
curve peaked in 1933, the worst year of the Great Depression.
Frequency of Appearance
Appearances in books, as a share of all words
[Graph]
It is curious that the narrative epidemic of technological unemployment began in 1928, a
time of prosperity before the Great Depression. How did the epidemic start? In March 1928,
U.S. Senator Robert Wagner stated his belief that unemployment was much higher than
recognized, and he asked the Department of Labor to do a study. Later that month the
department delivered the study that produced the first official unemployment rates published
by the U.S. government. The study estimated that there were 1,874,030 unemployed people in
the United States and 23,348,602 wage earners, implying an unemployment rate of 7.4%. This
high estimated unemployment rate came at a time of great prosperity, and it led people to
question what would cause such high unemployment amidst abundance.
A month later, the Baltimore Sun ran an article referring to the theories of Sumner H.
Slichter, who in later decades became a prominent labor economist. In the article, readers
are told that Slichter noted several causes of unemployment but said technological
unemployment was "at present the most serious." The reason: "We are eliminating jobs through
labor-saving methods faster than we are creating them." These words, alongside the new
official reporting of unemployment statistics, created a contagion of the idea that a new era
of technological unemployment had arrived. The earlier agricultural depression, with its
associated fears of labor-saving machinery, began to look like a model for an industrial
depression to follow.
Stuart Chase, who later coined the term the "New Deal," published Men and Machines in May
1929, during a period of rapidly rising stock prices. The real, inflation-corrected, U.S.
stock market, as measured by the S&P Composite Index, rose a final 20% in the five months
after the book's publication, before the infamous October 1929 crash. But concerns about
rising unemployment were apparent even during the boom period. According to Chase, we were
approaching the "zero hour of accelerating unemployment":
Machinery saves labour in a given process; one man replaces ten. A certain number of these
men are needed to build and service a new machine, but some of them are permanently
displaced. If purchasing power has reached its limits of expansion because
mechanization is progressing at an unheard of rate, only unemployment can result. In other
words, from now on, the better able we are to produce, the worse we shall be off.
This is the economy of the madhouse.
This is significant: The narrative of out-of-control unemployment was already starting to
go viral before there was any sign of the stock market crash of 1929.
During the week before the October 28–29 stock market crash, a national business
show was running in New York in a convention center (since demolished) adjacent to Grand
Central Station that many Wall Street people passed through to and from work. The show
emphasized immense progress in robot technology in the office workplace. After the show moved
to Chicago in November, the following description appeared in the Chicago Daily Tribune:
Exhibits in the national business show yesterday revealed that the business office of the
future will be a factory in which machines will replace the human element, when the robot --
the mechanical man -- will be the principal office worker.
There were addressers, autographers, billers, calculators, cancelers, binders, coin
changers, form printers, duplicators, envelope sealers and openers, folders, labelers, mail
meters, pay roll machines, tabulators, transcribers, and other mechanical
marvels.
A typewriting machine pounded out letters in forty different languages. A portable
computing machine which could be carried by a traveling salesman was on exhibit.
By 1930 the crash itself was often attributed to the surplus of goods made possible by new
technology. According to the Washington Post, "When the climax was reached in the last months
of 1929 a period of adversity was inevitable because the people did not have enough money to
buy the surplus goods which they had produced."
Fear of robots was not strong in most of the 1920s, when the word robot was coined.
Historian Amy Sue Bix offers a theory to explain why this was so: The kinds of innovations
that received popular acclaim in the 1920s didn't obviously replace jobs. If asked to
describe new technology, people would perhaps think first of the Model T Ford, whose sales
had burgeoned to 1.5 million cars a year by the early part of the decade. Radio stations,
which first appeared around 1920, provided an exciting new form of information and
entertainment, but they did not obviously replace many existing jobs. More and more homes
were getting wired for electricity, with many possibilities for new gadgets that required
electricity.
By the 1930s, Bix notes, the news had replaced stories of exciting new consumer products
with stories of job-replacing innovations. Dial telephones replaced switchboard operators.
Mammoth continuous-strip steel mills replaced steel workers. New loading equipment replaced
coal workers. Breakfast cereal producers bought machines that automatically filled cereal
boxes. Telegraphs became automatic. Armies of linotype machines in multiple cities allowed
one central operator to set type for printing newspapers by remote control. New machines dug
ditches. Airplanes had robot copilots. Concrete mixers laid and spread new roads. Tractors
and reaper-thresher combines created a new agricultural revolution. Sound movies began to
replace the orchestras that played at movie theaters. And, of course, the decade of the 1930s
saw massive unemployment in the United States, with the unemployment rate reaching an
estimated 25% in 1933.
It is difficult to know which came first, the chicken or the egg. Were all these stories
of job-threatening innovations spurred by the exceptional pace of such innovations? Or did
the stories reflect a change in the news media's interest in such innovations because of
public concern about technological unemployment? The likely answer is "a little of both."
The "labor-saving machines" narrative was strongly connected to an underconsumption or
overproduction theory: the idea that people couldn't possibly consume all of the output
produced by machines, with chronic unemployment the inevitable result. The theory's origins
date to the 1600s, but it picked up steam in the 1920s. It was mentioned in newspaper
articles within days of the stock market crash of October 28–29, 1929.
The real peak of these narratives was in the 1930s, during which time they appeared five
times as often as in any other decade, according to a search of Proquest's database of
newspapers.
The topic now appears largely in articles about the history of economic thought, but it is
worth considering why it had such a strong hold on the popular imagination during the Great
Depression, why the narrative epidemic could recur, and the appropriate mutations or
environmental changes that would increase contagion.
Today, underconsumption sounds like a bland technical phrase, but it had considerable
emotional charge during the Great Depression, as it symbolized a deep injustice and
collective folly. At the time it was mostly a popular theory, not an academic theory.
In the 1932 presidential campaign, Franklin Roosevelt ran against incumbent Herbert
Hoover, who had been unsuccessful with deficit spending to restore the economy. Roosevelt
gave a speech in which he articulated the already-popular theory of underconsumption. His
masterstroke was putting it in the form of a story inspired by Lewis Carroll's famous
children's book Alice's Adventures in Wonderland. In that book, a bright and inquisitive
little girl named Alice meets many strange creatures that talk in nonsense and
self-contradictions. Roosevelt's version of this story replaced his opponent with the
Jabberwock, a speaker of nonsense:
A puzzled, somewhat skeptical Alice asked the Republican leadership some simple
questions.
Will not the printing and selling of more stocks and bonds, the building of new plants and
the increase of efficiency produce more goods than we can buy? No, shouted the Jabberwock,
the more we produce the more we can buy.
What if we produce a surplus? Oh, we can sell it to foreign consumers.
How can the foreigners buy it? Why we will lend them the money.
Of course, these foreigners will pay us back by sending us their goods? Oh, not at all,
says Humpty Dumpty. We sit on a high wall called a tariff.
How will the foreigners pay off these loans? That is easy. Did you ever hear of a
moratorium?
On the face of it, underconsumption seemed to explain the high unemployment of the Great
Depression, but academic economists never seriously embraced the theory, which had never been
soundly explained.
The massive unemployment caused by the Great Depression set off serious social problems.
For example, in the United States it caused the forced deportation (then called repatriation)
of a million workers of Mexican origin. The goal was to free up jobs for "real" Americans.
The popular narrative supported these deportations, and there was little public protest.
Newspaper reports showed photos of happy Mexican Americans waving goodbye at the train
station on their way back to their original home to help the Mexican nation.
The dial telephone also played an important part in narratives about unemployment and the
associated underconsumption. During the Great Depression, there rose a narrative focus on the
loss of telephone operators' jobs, and the transition to dial telephones was troubled by
moral qualms that by adopting the dial phone one was complicit in destroying a job. Three
weeks after dial phones were installed in the U.S. Senate in 1930, Senator Carter Glass
introduced a resolution to have them torn out and replaced with the older phones. Noting that
operators' jobs would be lost, he expressed true moral indignation against the new
phones:
I ask unanimous consent to take from the table Senate resolution 74 directing the sergeant
at arms to have these abominable dial telephones taken out on the Senate
side . I object to being transformed into one of the employees of the
telephone company without compensation.
His resolution passed, and the dial phones were removed. It is hard to imagine that such a
resolution would have passed if the nation had not been experiencing high unemployment. This
story fed a contagious economic narrative that helped augment the atmosphere of fear
associated with the contraction in aggregate demand during the Great Depression.
The loss of jobs to robots (that is, automation) became a major explanation of the Great
Depression, and, hence, a perceived major cause of it. Even if the man hasn't lost his job
yet, he will consume less owing to the prospect or possibility of losing his job. The U.S.
presidential candidate who lost to Herbert Hoover in 1928, Al Smith, wrote in the Boston
Globe in 1931:
We know now that much unemployment can be directly traced to the growing use of machinery
intended to replace man power. The human psychology of it is simple and
understandable to everybody. A man who is not sure of his job will not spend his money. He
will rather hoard it and it is difficult to blame him for so doing as against the day of
want.
Albert Einstein, the world's most celebrated physicist, believed this narrative, saying in
1933 that the Great Depression was the result of technical progress:
According to my conviction it cannot be doubted that the severe economic depression is to
be traced back for the most part to internal economic causes; the improvement in the
apparatus of production through technical invention and organization has decreased the need
for human labor, and thereby caused the elimination of a part of labor from the economic
circuit, and thereby caused a progressive decrease in the purchasing power of the
consumers.
By that time, people had begun to label labor-saving inventions as "robots," even if there
were no mechanical men to be seen. One article in the Los Angeles Times in early 1931, about
a year into the Great Depression, said that robots then were already the "equivalent of 80
million hand-workers in the United States alone," while the male labor force was only 40
million.
Though the technological unemployment narrative faded after 1935 (as revealed by Google
Ngrams), it did not go away completely. Instead, it continued to exert some influence in the
runup to World War II, until new narrative constellations about the war became
contagious.
Many historians point to massive unemployment in Germany to explain the accession to power
of the Nazi Party and Adolf Hitler in the election of 1933, the worst year of the Depression.
But rarely mentioned today is the fact that a Nazi Party official promised that year to make
it illegal in Germany to replace men with machines.
To go viral again, the labor-saving machines narrative needed a new twist after World War
II, a twist that could seem to reinforce the newly rediscovered appreciation of human
intelligence, and, ultimately, of the human brain. The narrative turned to the new
"electronic brains" -- that is, computers.
Q. What tax changes did the Affordable Care Act make?
A. The Affordable Care Act made several changes to the tax code intended to increase health
insurance coverage, reduce health care costs, and finance health care reform.
The Affordable Care Act (ACA) made several changes to the tax code intended to increase
health insurance coverage, reduce health care costs, and finance health care reform.
To increase health insurance coverage, the ACA provided individuals and small employers with
a tax credit to purchase insurance and imposed taxes on individuals with inadequate coverage
and on employers who do not offer adequate coverage. To reduce health care costs and raise
revenue for insurance expansion, the ACA imposed an excise tax on high-cost health plans. To
raise additional revenue for reform, the ACA imposed excise taxes on health insurers,
pharmaceutical companies, and manufacturers of medical devices; raised taxes on high-income
families; and increased limits on the income tax deduction for medical expenses. Reply Wednesday, October 02, 2019 at 10:31 AM anne said in reply to
anne... ACA tax provisions in effect in 2018 include the following:
A refundable tax credit for families to purchase health insurance through state and federal
marketplaces.
A tax credit for small employers to purchase health insurance for their workers.
A tax on individuals without adequate health insurance coverage (the "individual
mandate").
A tax on employers offering inadequate health insurance coverage (the "employer
mandate").
Excise taxes on health insurance providers, pharmaceutical manufacturers and importers, and
medical device manufacturers and importers.
An additional 0.9 percent Medicare tax on earnings and a 3.8 percent tax on net investment
income (NII) for individuals with incomes exceeding $200,000 and couples with incomes exceeding
$250,000.
Additionally, these ACA tax provisions are scheduled to take effect in the future:
An excise tax on employer-sponsored health benefits whose value exceeds specified thresholds
(the "Cadillac tax") starting in 2022.
[ This summary may be helpful to have. As far as I am aware, there is now no significant
"public" criticism of Obamacare taxes. What criticism there is amounts to Republican political
opposition to Obamacare which has had almost no voting resonance.
Democrats ran in support of Obamacare in the last congressional election, and this was
considered a reason there is no Democratic control of the House of Representatives.
Nonetheless, Republican political opposition to Obamacare continues. ] Reply Wednesday, October 02, 2019 at 10:49 AM anne said in reply to
anne... Correcting:
Democrats ran in support of Obamacare in the last congressional election, and this was
considered a prime reason there is [now[ Democratic control of the House of Representatives.
Nonetheless, Republican political opposition to Obamacare continues even though the issue of
protecting Obamacare evidently only helped Democrats in the latest national election.
Reply Wednesday, October 02, 2019 at 03:00 PM anne said in reply
to anne... https://www.nytimes.com/2019/09/25/health/employer-health-insurance-cost.html
September 25, 2019
Employer Health Insurance Is Increasingly Unaffordable, Study Finds
A relentless rise in premiums and deductibles is putting insurance out of reach for many
workers, especially those with low incomes.
By Reed Abelson
Jessie McCormick had to quit her job to afford health care.
Ms. McCormick, 27, who has a heart condition, had an opportunity to move from part time to
full time in her job at a small nonprofit in Washington. Working full time would qualify her
for the firm's health plan.
But she calculated that her out-of-pocket costs would be at least $1,200 per month, about
double the money she had left after paying her rent and utilities.
Instead, she quit her job last summer so her income would be low enough to enroll in
Medicaid, which will cover all her medical expenses. "I'm trying to do some side jobs," she
said.
Employers remain the main source of health insurance in the United States, covering about
153 million people. But premiums and deductibles are pushing employer-based coverage
increasingly out of reach, according to a new analysis released Wednesday by the Kaiser Family
Foundation, which conducts a survey of employers every year.
The average premium paid by the employer and the employee for a family plan now tops $20,000
a year, with the worker contributing about $6,000, according to the survey. More than a quarter
of all covered workers and nearly half of those working for small businesses face an annual
deductible of $2,000 or more.
The new data on employer coverage come as the Democratic presidential candidates debate
sweeping reforms to diminish the role of private insurance in the American health system,
including expanding the federal Medicare program to everyone or giving people the option to
enroll in a government-run plan.
Many of the arguments for both systems center on expanding health insurance to more of the
estimated 27 million people who lack it. But millions of people who already have coverage are
deeply dissatisfied with the current system as well.
"For some reason, we like to focus on coverage when the issue for workers, people and the
public generally is cost," said Drew Altman, the chief executive of the foundation. About 2,000
small and large businesses responded in detail to the survey.
Small employers in particular, and their workers, are struggling.
"Health insurance in the United States is incredibly prohibitive for small businesses," said
Shalin Madan, the founder of a small investment advisory firm in Florida. He is not required to
provide health insurance to his workers, because his business is too small and he outsources
much of the work.
A policy for his own family, he said, runs about $2,000 a month ($24,000 per year), with a
$13,000 deductible. "I'm out $37,000 before I see a return on investment, if you will," Mr.
Madan said.... Reply Wednesday, October 02, 2019 at 10:58 AM EMichael said in reply
to anne... I'd have to know how many family members and his county to give him credit for
accurately quoting his costs.
I know a couple in Fl with two kids and their costs are not remotely close to his. And they
receive no subsidy due to their income level. Reply Wednesday, October 02, 2019 at 11:18 AM anne said in reply to
EMichael... I'd have to know how many family members and his county to give him credit for
accurately quoting his costs....
[ The example makes no sense, but I did not realize that. I appreciate what I take as a
necessary specific correction and caution about the article in all. There will be better
articles. ] Reply Wednesday, October 02, 2019 at 11:44 AM anne said in reply to
anne... A policy for his own family, he said, runs about $2,000 a month ($24,000 per year),
with a $13,000 deductible. "I'm out $37,000 before I see a return on investment, if you will,"
Mr. Madan said....
[ Supposing we are considering a family of 4, this example does not make sense to me. The
quoted cost is beyond any of which I am aware. The reporter needed to have checked this example
but did not, and that means the article is problematic.
And internal system inequality
is very different
From inter system inequality
Deng famously declared it's all right if some advance before others
Internally
He understood development involved greater internal inequality at not just one initial
stage
But at various stages ie domestic inequality
Is not constantly subject to improving Gini
On the path to the technical frontier ...
"... Meanwhile, greed -- once best known for its place on the list of Seven Deadly Sins -- became a point of pride for Wall Street's Masters of the Universe. With a sophisticated smile, the rallying cry of the rich and fashionable became "1 got mine -- the rest of you are on your own." ..."
And yet America's policies were headed in the wrong direction. The big banks kept lobbying Congress to pass a bill that would
gut families' last refuge in the bankruptcy courts -- the same bill we describe in this book. (It went by the awful name Bankruptcy
Abuse Prevention and Consumer Protection Act, but it should have been called the Gut the Safety Net and Pay OIT the Big Banks Act.).
The proposed law would carefully preserve bankruptcy protections for the likes of Donald Trump and his friends, while ordinary families
that had been crushed by debts from medical problems or job losses were thrown under the bus.
When we wrote The Two-Income Trap, it was already pretty clear that the big banks would win this battle. The fight kept going
for two more years, but the tide of blame-the-unlucky combined with relentless lobbying and campaign contributions finally overwhelmed
Congress.
In 2005, the Wall Street banking industry got the changes they wanted, and struggling families lost out. After the law was rewritten,
about 800,000 families a year that once would have turned to bankruptcy to try to get back on their feet were shut out of the system.1
That was 800,000 families -- mostly people who had lost jobs, suffered a medical catastrophe, or gone through a divorce or death
in the family. And now, instead of reorganizing their finances and building some security, they were at the mercy of debt collectors
who called twenty or thirty times a day -- and could keep on calling and calling for as long as they thought they could squeeze another
nickel from a desperate family.
As it turned out, the new law tore a big hole in the last safety net for working families, just in time for the Great Recession.
Meanwhile, the bank regulators kept playing blind and deaf while the housing bubble inflated. Once it burst, the economy collapsed.
The foreclosure problem we flagged back in 2003 rolled into a global economic meltdown by 2008, as millions of people lost their
homes, and millions more lost their jobs, their savings, and their chance at a secure retirement. Overall, the total cost of the
crash was estimated as high as S14 trillion.2
Meanwhile, America's giant banks got bailed out, CEO pay shot up, the stock market roared back, and the investor class got rich
beyond even their own fevered dreams.3
A generation ago, a fortune-teller might have predicted a very different future. With so many mothers headed into the workforce,
Americans might have demanded a much heavier investment in public day care, extended school days, and better family leave policies.
Equal pay for equal work might have become sacrosanct. As wages stagnated, there might have been more urgency for raising the minimum
wage, strengthening unions, and expanding Social Security. And our commitment to affordable college and universal preschool might
have become unshakeable.
But the political landscape was changing even faster than the new economic realities. Government was quickly becoming an object
of ridicule, even to the president of the United States. Instead of staking his prestige on making government more accountable and
efficient, Ronald Reagan repeated his famous barb "The nine most terrifying words in the English language are Tin from the government
and I'm here to help."'8 After generations of faithfulness to the promise of the Constitution to promote general welfare, at the
moment when the economic foundations of the middle class began to tremble, our efforts to strengthen each other and offer a helping
hand had become the butt of a national joke.
Those who continued to believe in what we could do together faced another harsh reality: much of government had been hijacked
by the rich and powerful. Regulators who were supposed to watch out for the public interest shifted their loyalties, smiling benignly
as giant banks jacked up short-term profits by cheating families, looking the other way as giant power companies scam mod customers,
and partying with industry executives as oil companies cut comers on safety and environmental rules. In this book we told one of
those stories, about how a spineless Congress rewrote the bankruptcy laws to enrich a handful of credit card companies.
Meanwhile, greed -- once best known for its place on the list of Seven Deadly Sins -- became a point of pride for Wall Street's
Masters of the Universe. With a sophisticated smile, the rallying cry of the rich and fashionable became "1 got mine -- the rest
of you are on your own."
These shifts played nicely into each other. Every' attack on "big government" meant families lost an ally, and the rules tilted
more and These shifts played nicely into each other. Every attack on "big government" meant families lost an ally, and the rules
tilted more and more in favor of those who could hire armies of lobbyists and lawyers. Lower taxes for the wealthy -- and more money
in the pockets of those who subscribed to the greed-is-good mantra. And if the consequence meant less money for preschools or public
colleges or disability coverage -- the things that would create more security for an overstretched middle class -- then that was
just too bad.
Little by little, as the middle class got deeper and deeper in trouble, government stopped working for the middle class, or at
least it stopped working so hard. The rich paid a little less and kept a little more. Even if they didn't say it in so many words,
they got exactly what they wanted. Remember the 90 percent -- America's middle class, working class, and poor -- the ones who got
70 percent of all income growth from 1935 through 1980?
From 1980-2014, the 90 percent got nothing.9 None. Zero. Zip. Not a penny in income growth. Instead, for an entire generation,
the top 10 percent captured all of the income growth in the entire country. l(X) percent.
It didn't have to be this way. The Two-Income Trap is about families that w'ork hard, but some things go wrong along the way --
illnesses and job losses, and maybe some bad decisions. But this isn't what has put the middle class on the ropes. After all, people
have gotten sick and lost jobs and made less-than-perfect decisions for generations -- and vet, for generations America's middle
class expanded. creating more opportunity to build real economic security and pass on a brighter future to their children.
What would it take to help strengthen the middle class? The problems facing the middle-class family are complex and far-reaching,
and the solutions must be too. We wish there could be a simple silver bullet, but after a generation of relentless assault, there
just isn't. But there is one overriding idea. Together we can. It's time to say it out loud: a generation of I-got-mine policy-making
has failed -- failed miserably, completely, and overwhelmingly. And it's time to change direction before the entire middle class
has been replaced by hundreds of millions of Americans barely hanging on by their fingernails.
Americas middle class was built through investments in education, infrastructure, and research -- and by' making sure we all have
a safety net. We need to strengthen those building blocks: Step up investments in public education. Rein in the cost of college and
cut out- standing student loans. Create universal preschool and affordable child care. Upgrade infrastructure -- mass transit, energy,
communications -- to make it more attractive to build good, middle-class jobs here in America. Recognize that the modem economy can
be perilous, and a strong safety net is needed now more than ever. Strengthen disability coverage, retirement coverage, and paid
sick leave. And for heavens sake, get rid of the awful banker-backed bankruptcy law, so that when things go wrong, families at least
have a chance at a fresh start. We welcome the re-issue of The Two-Income Trap because we see the original book as capturing a critical
moment, those last few minutes in which the explanation of why so many hardworking, plav-by- tho-mlcs people were in so much trouble
was simple: It was their own fault. If only they would just pull up their socks, cinch their belts a little tighter, and stop buying
so much stuff, they -- and our country -- would be just fine. That myth has died. And we say', good riddance.
(2) This is not Capitalism, this is Neoliberalism.
But with those minor modifications you point stands: "The real trouble with Neoliberalism:
bought/corrupt economists" ... "And this means that [neoliberal/neo-classical] economics is
proto-scientific garbage."
Here is an extended quote from your comment so that people can more fully appreciate this
line of thinking:
== quote ==
Chris Dillow quotes Martin Wolf: "What we increasingly seem to have is an unstable rentier
capitalism, weakened competition, feeble productivity growth, high inequality and, not
coincidentally, an increasingly degraded democracy."
Chris Dillow then sets out to explain the trouble with Capitalism: "The Bank of England
has given us a big clue here. It points out that the rising profit share (a strong sign of
increased monopoly) is largely confined to the US. In the UK, the share of profits in GDP has
flatlined in recent years. Few, however, would argue that UK capitalism is less dysfunctional
than its US counterpart. Which suggests that the problem with capitalism is not increased
monopoly. So what is it? Here, I commend some brilliant work by Michael Roberts. Many of the
faults Martin discusses have their origin in a declining rate of profit ― a decline
which became acute in the 1970s but which was never wholly reversed."
The whole intellectual/moral misery of economists is contained in this paragraph. Chris
Dillow's explanation starts with the "share of profits in GDP" and ends with the "rate of
profit". Not only are these entirely different things but macroeconomic profit is not
defined, to begin with.
The simple reason is that neither Chris Dillow nor Martin Wolf nor Michael Roberts knows
what profit is.#1 This sad fate they share with Walrasians, Keynesians, Marxians, Austrians,
and MMTers. The dirty secret of economics is that since Adam Smith/Karl Marx economists do
not know what profit is.#2, #3
And this means that economics is proto-scientific garbage but economists have not realized
it to this day.
"... One of the reasons that I doubt Biden's version of the story stems from my experience in Venezuela. After Chavez took power, Venezuelans told me that he had found that a critical subsidiary of the Venezuelan oil company PDVSA was basically a CIA shop. The names of CIA on the Board of Directors were not just ordinary CIA, but were recognizable figures at the very top. ..."
"... To me this is entirely plausible. Control of oil is critical to US global hegemony. And what better way to control foreign oil than to have trusted American asset sit on the BOD? ..."
One of the reasons that I doubt Biden's version of the story stems from my experience in
Venezuela. After Chavez took power, Venezuelans told me that he had found that a critical
subsidiary of the Venezuelan oil company PDVSA was basically a CIA shop. The names of CIA on
the Board of Directors were not just ordinary CIA, but were recognizable figures at the very
top.
To me this is entirely plausible. Control of oil is critical to US global hegemony. And
what better way to control foreign oil than to have trusted American asset sit on the BOD?
This brings us to Hunter Biden's appointment to Ukrainian energy giant Burisma. After the
coup in 2014, why wouldn't Biden want a trusted asset on the board of the biggest natural gas
producer in Ukraine? IOW it was unpublicized standard operating procedure.
Capitalism, Alone: Four important--but somewhat hidden--themes
I review here four important, but perhaps not immediately apparent, themes from my
Capitalism, Alone. The book contains many other, more topical, subjects that are likely to
attract readers' and reviewers' attention much more than the somewhat abstract or
philosophical issues briefly reviewed here.
1. Capitalism as the only mode of production in the world. During the previous high
point of the British-led globalization, capitalism shared the world with various feudal or
feudal-like systems characterized with unfree labor: forced labor was abolished in
Austria-Hungary in 1848, serfdom in Russia in 1861, slavery ended in the US in 1865, and in
Brazil only in 1888, And labor tied to land continued to exist in India and to a lesser
degree in China. Then, after 1917, capitalism had to share the world with communism which, at
its peak, included almost a third of the world population. It is only after 1989, that
capitalism is not only a dominant, but the sole, system of organizing production (Chapter
1).
2. The global historical role of communism. The existence of capitalism (economic
way to organize society) throughout the world does not imply that the political systems must
be organized in the same way everywhere. The origins of political systems are very different.
In China and Vietnam, communism was the tool whereby indigenous capitalism was introduced
(explained below). The difference in the "genesis" of capitalism, that is, in the way
capitalism was "created" in various countries explains why there are at least two types of
capitalism today. I am doubtful that there would ever be a single type of capitalism covering
the entire globe.
To understand the point about the different origins, one needs to start from the question
of the role of communism in global history and thus from the interpretation (histoire
raisonéee) of the 20th century (Chapter 3).
There are two major narratives of the 20th century: liberal and Marxist; they are both
"Jerusalem"-like in the Russian philosopher Berdiaff's terminology. They see the world
evolving from less developed toward more developed stages ending in either a terminus of
liberal capitalist democracy or Communism (society of plenty).
Both narratives face significant problems in the interpretation of the 20th century.
Liberal narrative is unable to explain the outbreak of the First World War which, given the
liberal arguments about the spread of capitalism, (peaceful) trade, and interdependence
between countries and individuals that ostensibly abhor conflict should never have happened,
and certainly not in the way it did -- namely by involving in the most destructive war up to
date all advanced capitalism countries. Second, liberal narrative treats both fascism and
communism as essentially "mistakes" (cul de sacs) on the road to a chiliastic liberal
democracy without providing much of reasoning as to why these two "mistakes" happened. Thus
the liberal explanations for both the outbreak of the War and the two "cul de sacs" are often
ad hoc, emphasizing the role of individual actors or idiosyncratic events.
Marxist interpretation of the 20th century is much more convincing in both its explanation
of World War I (imperialism as the highest stage of capitalism) and fascism (an attempt by
the weakened bourgeoise to thwart left-wing revolutions). But Marxist view is entirely
powerless to explain 1989, the fall of communist regimes, and hence unable to provide any
explanation for the role of communism in global history. The fall of communism, in a strict
Marxist view of the world, is an abomination, as inexplicable as if a feudal society having
had experienced a bourgeois revolution of rights were suddenly to "regress" and to reimpose
serfdom and the tripartite class division. Marxism has therefore given up trying to provide
an explanation for the 20th century history.
The reason for this failure lies in the fact that Marxism never made a meaningful
distinction between standard Marxist schemes regarding the succession of socio-economic
formations (what I call the Western Path of Development, WPD) and the evolution of poorer and
colonized countries. Classical Marxism never asked seriously whether the WPD is applicable in
their case. It believed that poorer and colonized countries will simply follow, with a time
lag, the developments in the advanced countries, and that colonization and indeed imperialism
will produce the capitalist transformation of these societies. This was Marx's explicit view
on the role of English colonialism in Asia. But colonialism proved too weak for such a global
task, and succeeded in introducing capitalism only in small entropot enclaves such as Hong
Kong, Singapore and parts of South Africa.
Enabling colonized countries to effect both their social and national liberations (note
there was never a need for the latter in advanced countries) was the world-historical role of
communism. It was only Communist or left-wing parties that could prosecute successfully both
revolutions. The national revolution meant political independence. The social revolution
meant abolishment of feudal growth-inhibiting institutions (power of usurious landlords,
labor tied to land, gender discrimination, lack of access to education by the poor, religious
turpitude etc.). Communism thus cleared the path for the development of indigenous
capitalism. Functionally, in the colonized Third World societies, it played the same role
that domestic bourgeoisies played in the West. For indigenous capitalism could be established
only once feudal institutions were swept away.
The concise definition of communism is hence: communism is a social system that enabled
backward and colonized societies to abolish feudalism, regain economic and political
independence, and build indigenous capitalism.
3. The global dominion of capitalism was made possible thanks to (and in turn it
exacerbates) certain human traits that, from an ethical point, are questionable . Much
greater commercialization and greater wealth have in many ways made us more polished in our
manners (as per Montesquieu) but have done so using what were traditionally regarded as vices
-- desire for pleasure, power and profit (as per Mandeville). Vices are both fundamental for
hyper-commercialized capitalism to be "born" and are supported by it. Philosophers accept
them not because they are by themselves desirable, but because allowing their limited
exercise allows the achievement of a greater social good: material affluence (Smith;
Hume).
Yet the contrast between acceptable behavior in hyper-commercialized world and traditional
concepts of justice, ethics, shame, honor, and loss of face, create a chasm which is filled
with hypocrisy; one cannot openly accept that one has sold for a sum of money his/her right
to free speech or ability to disagree with one's boss, and thus arises the need to cover up
these facts with lies or misrepresentation of reality.
From the book:
"The domination of capitalism as the best, or rather the only, way to organize production
and distribution seems absolute. No challenger appears in sight. Capitalism gained this
position thanks to its ability, through the appeal to self-interest and desire to own
property, to organize people so that they managed, in a decentralized fashion, to create
wealth and increase the standard of living of an average human being on the planet by many
times -- something that only a century ago was considered almost utopian.
But this economic success made more acute the discrepancy between the ability to live
better and longer lives and the lack of a commensurate increase in morality, or even
happiness. The greater material abundance did make people's manners and behavior to each
other better: since elementary needs, and much more than that, were satisfied, people no
longer needed to engage in a Hobbesian struggle of all against all. Manners became more
polished, people more considerate.
But this external polish was achieved at the cost of people being increasingly driven by
self-interest alone, even in many ordinary and personal affairs. The capitalist spirit, a
testimony to the generalized success of capitalism, penetrated deeply into people's
individual lives. Since extending capitalism to family and intimate life was antithetical to
centuries-old views about sacrifice, hospitality, friendship, family ties, and the like, it
was not easy to openly accept that all such norms had become superseded by self-interest.
This unease created a huge area where hypocrisy reigned. Thus, ultimately, the material
success of capitalism came to be associated with a reign of half-truths in our private
lives."
4. Capitalist system cannot be changed. The dominion of hyper-commercial capitalism
was established thanks to our desire to permanently keep on improving our material
conditions, to keep on getting richer, a desire which capitalism satisfies the best. This has
led to the creation of a system of values that puts monetary success as its top. In many ways
it is a desirable evolution because "believing" in money alone does away with other
traditional and discriminatory hierarchical markers.
In order for capitalism to exist it needs to grow and to expand to ever new areas and new
products. But capitalism exists not outside of us, as a external system. It is individuals,
that is, us, who, in our daily lives, create capitalism and provide it with new fields of
action -- so much that we had transformed our homes into capital, and our free time into a
resource. This extraordinary commodification of almost all, including what used to be very
private, activities was made possible by our internalization of the system of values where
money acquisition is placed on the pinnacle. If this were not the case, we would not have
commodified practically all that can be (as of now) commodified.
Capitalism, in order to expand, needs greed. Greed has been entirely accepted by us. The
economic system and the system of values are interdependent and mutually reinforcing. Our
system of values enables hyper-commercialized capitalism to function and expand. It then
follows that no change in the economic system can be imagined without a change in the system
of values that underpins it, which the system promotes, and with which we are, in our
everyday activities, fully comfortable. But to produce such a change in values seems, at
present, to be an impossible task. It has been tried before and ended in the most ignominious
failure. We are thus locked in capitalism. And in our activities, day in, day out, we support
and reinforce it.
Helicopter money makes complete sense when the Pols can be counted on to vote for low
multiplier stimulus that is too small if it even exists. The Fed could just put $10k in
everyone's bank account. It would lower the dollar and create a ton of demand for current
goods rather than old paintings and cars.
LOL!!! Helicopter money makes complete sense when you can count on the Fed to give it to the
banksters? I mean, what other distribution channel does the bankster-owned Fed have?
Certainly not direct access to each of my bank accounts!
Sure, sure, kurt. Where does the article spell out exactly how those $10K deposits will be
made into everyone's bank account? Answer: it doesn't! kurt made it all up.
Sure, helicopter money may not be a bad idea, but the issue always boils down to
implementation and distribution and you can be that it will be a dead letter the moment any
such proposal lands on the desk of deficit hawks like Team Pelosi.
Lots of bright, desperate ideas have been proposed, but no one has a clue as to how it
will happen. Its best chance for political success is for the money to be doled out to the
usual suspects banksters and corporations.
Because doing what is right in a slump is nearly (read always) always politically impossible
- especially since the emergence of the Right Wing psyops media.
The 10k is from Brad Delong, not this article - but as a matter of reality, all discussions
of "helicopter drop" central bank actions that I have ever read would result in either
everyone getting the same amount - an amount that would be a huge marginal increase for poor
people and not much for rich people - or for the recipients to be completely randomized. It
doesn't work like fiscal to give it to the banks - which is exactly what happened with QE and
negative real interest rates. Why? Because 1. bad animal spirits and 2. nothing to invest in
without demand. This is pretty econ 201 level stuff, but you know some folks have an Ivy MBA
so they must be much smarter than me with my BA and MA from state schools. Again - my reply
guy proves he doesn't even understand the basics of what "helicopter drop" means and oddly
has frequently lamented that the Fed didn't do it.....
"According to the most recent data from the U.S. Census Bureau,
in 2018, over 30 percent of U.S. households earned over $100,000 (i.e., the upper
class).
Fewer than 30 percent of households earned between $50,000 and $100,000 (i.e., the
middle class).
The share of U.S. households making at least $100,000 has more than tripled since 1967,
when just 9 percent of all U.S. households earned that much (all figures are adjusted for
inflation).
In 2018, the share of households earning less than $50,000 (i.e., the lower class)
dropped below 40 percent for the first time since the U.S. Census data on this metric started
to be collected in 1967. Back then, 54 percent of households earned less than
$50,000.
So the next time you hear someone allege that the economy is leaving an increasing share
of American households behind or see a pundit bemoan the "shrinking middle class," take a
closer look at the data and keep in mind that a "shrinking middle class" may actually be a
sign of growing prosperity."
40% of multinational profits are shifted to tax havens each year
Researchers from the University of California, Berkeley and the University of Copenhagen
estimate that close to 40% of multinational profits (more than $650 billion in 2016) are
shifted to tax havens each year. This shifting reduces corporate income tax revenue by nearly
$200 billion, or 10% of global corporate tax receipts.
Explore the map to see how much profit and tax revenue your country loses (or attracts) in
this game for profits. The tax havens can be hard to find, but you can zoom in by pressing the
full-screen button.
Click here for full screen
Non-tax havens (% of corporate tax revenue lost)
> 20%
> 8%
> 4%
< 4%
Tax havens
No data
About the research
Researchers from the University of California, Berkeley and the University of Copenhagen
have produced a database showing where corporations book their profits globally. Exploiting
these data, the authors develop a methodology to estimate the amount of profits shifted to tax
havens by multinational companies and how much each country loses in profit and tax revenue
from such shifting. Globally, multinational firms shifted more than $650 billion in profits to
tax havens in 2016 and this shifting reduced global corporate tax receipts by close to 10%.
Multinational firms shift profits to tax havens to reduce their global tax bills. Take the
example of Google: In 2017, Google Alphabet reported $23 billion in revenue in Bermuda, a small
island in the Atlantic where the corporate income tax rate is zero. Globally, about $650
billion in profits are shifted to such tax havens by multinational from all countries.
You can explore the map to see which countries attract and lose profits in this shell game.
By clicking on each country you can see the amount of profits shifted to tax havens and to
which havens the profits were shifted. You can also see the implied loss of corporate income
tax revenue. Some countries are marked in green; these are tax havens. For the tax havens we
report how much profits they attract from high-tax countries and what the effective corporate
income tax rate is.
The loss of profit is the highest for the (non-haven) European Union countries. U.S.
multinationals shift comparatively more profits (about 60% of their foreign profits) than
multinationals from other countries (40% for the world on average). The shareholders of U.S.
multinationals thus appear to be the main winners from global profit shifting. Moreover, the
governments of tax havens derive sizable benefits from this phenomenon: by taxing the large
amount of paper profits they attract at low rates (less than 5%), they are able to generate
more tax revenue, as a fraction of their national income, than the United States and non-haven
European countries that have much higher tax rates.
Until recently, this research would not have been possible, because firms usually do not
publicly disclose the countries in which their profits are booked, and national accounts data
did not make it possible to study multinational corporations separately from other firms. But
in recent years, the statistical institutes of most of the world's developed countries
(including the key tax havens) have started releasing new macroeconomic data known as foreign
affiliates statistics. These data allow to obtain a comprehensive view of where multinational
companies book their profits, and in particular to estimate the amount of profit booked in tax
havens globally. To further our understanding of this issue we need more and better data. In
particular it would be desirable that all countries publish foreign affiliates statistics, and
that these statistics be extended to always include information on taxes paid. Reply Monday, September 23, 2019 at 02:18 PM anne said in reply to
anne... This map is a terrific tool, do explore. Every country is described in terms of tax
revenue lost or the benefit of being a tax haven. For the United States the loss of tax revenue
to tax havens is 17%. For Germany 29% (I had no idea).
... Reply Monday, September 23, 2019 at 02:24 PM point said in reply to
anne... It may be had the USA not lowered its corporate tax rates toward zero the percentage
lost could be higher.
Perhaps there would be a way to display the tax rates as well as the losses and gains. I
presume the havens are even lower than the USA. Reply Monday, September 23, 2019 at 04:51 PM anne said in reply to
point... It may be had the USA not lowered its corporate tax rates toward zero the percentage
lost could be higher.
Perhaps there would be a way to display the tax rates as well as the losses and gains. I
presume the havens are even lower than the USA.
I am struck by the variety of ways in which the actual spiritual state of Americans is
denied by people who have every reason to know what that state is: our educators, artists,
and politicians. It is hard for me to believe, for example, that educators do not know the
sorry truth behind the lack of real education here. It seems very clear to me that until the
educators themselves believe in what they teach, there is no hope for their students. But the
educators cannot accept this, because in order to do so they would have to overhaul every
aspect of their private lives, which effort would hurl them forever beyond the bounds of the
academic life.
James Baldwin, 1961
The catastrophe which is education in this country is not new. For the majority of students
in the United States, black students in particular, education has never meant anything more
than a training to stay in one's place. Over the past several decades, however, with the
American Empire in an accelerating free-fall, American education, ever the handmaiden of
society's rich and powerful, has in tandem spiraled downward: our schools endlessly drill our
children with boring and meaningless "worksheets"; we subsidize and celebrate the digital
economy by "teaching" children with computers and computer programs; we script our teachers to
guarantee a minimum of human interaction in the classroom; we strip our schools of art and
music, making sure that our students never see beauty or truth in the world; and, of course, we
drill our students for weeks and months on end with testing, and more testing, and still more
testing, lest our students find any joy whatsoever in learning. In short, our schools dull the
intelligence and curiosity of our young people such that they will never question the
meaningless and unpleasant lives they will be forced to lead in a society that is everywhere
falling apart around them.
In higher education, too, we see this dramatic narrowing of the already slim chances that
any of our students will achieve a real education. Our state legislatures, in the most telling
example, cut state support for higher education requiring that university administrations jack
up tuition, tuition that rises far more rapidly than does inflation. Higher tuition yields both
higher student debt and more students working twenty, thirty, or forty hours a week in paying
jobs while they attend school. Our indebted students then must hew as closely as they possibly
can to career paths which enable them to minimize and pay back their debts; and the long hours
of minimum wage work taken on by our students all but guarantee that they cannot be serious
students, cannot devote the hours they need to study and reflection, cannot, in short, do the
work most necessary for them to become educated, mature, human beings. But then educated,
mature human beings do not fit well into our global economy.
In the face of this disaster, our university faculty refuse to take any stand against the
strangling of education in this country. We mouth words in our classrooms about truth, and the
search for truth, and the value and necessity of honesty and ethics, and democracy, and
responsible citizenship. Privately, we condemn the various assessment schemes we're compelled
to carry out; privately, we denounce the rapid multiplication of educationally meaningless
administrative and compliance positions on our campuses. And privately, we bemoan the ignorance
of our students, their lack of curiosity and their lack of academic preparation. But when it
comes to denouncing all the various assaults upon education occurring across the entire
spectrum of our educational landscape, when we are compelled to speak to the reasons why our
students enter our universities uneducated, and still more seriously, why they leave our
universities uneducated, we lose our voice. As more than one of my colleagues has said to me in
explanation of his silence: "I don't want to stick my neck out."
As one who never finished the 'official' "education" process, I can look back and see that
I was reacting to an almost subconscious realization that I was 'there' for the wrong
reasons, according to the received wisdom of that, and every other, time. This disconnect
between the 'ideal' of education and the 'reality' of the "Paper Chase," is perennial.
Historically speaking, a 'proper' higher education serves the purpose of producing a 'well
rounded' person. Traditionally, that process was reserved for those with a high amount of
disposable income; the children of the wealthy. The "lower orders" beavered on in technical
colleges and apprenticeships. The odd 'special' case was made in the 'proper' universities
for the exceptionally bright and the token 'charity' student. Call it an institutional case
of virtue signalling.
Today, those two disparite streams of education have been melded into one almost
monolithic bloc. The original utilitarian view of education, previously reserved for the
'technical' fields has invaded and corrupted the "higher" educational sphere. Now, everything
has a "price." Presumably, that formulation also applies to the students enmeshed in the new,
magisterial 'education' instrumentality. Roughly speaking, the 'students' are now the
'product' of the universities, not the education.
Finally, all this might be a socially 'agreed upon' process to short circuit the
production of intellectually and emotionally 'well balanced' individuals. There is nothing
more fear producing in any ruling elite than the prospect of an 'aware' public.
As a consumer, and producer of higher education curricula over 20 years in academia, this
article is spot on in how it describes the bezzle. And the area of specialization for me
(family finance – human ecology) is the prototypical example of the Neoliberal
university coaxing students into believing that incremental change, small bits of
knowledge/courses will change their lives for our students for the better -- while large
institutions continue to cheat, obscure malfeasance, and promote the administrative culture.
Its sickening on so many levels.
It is sickening to experience (teaching and learning). And if we remembered more than we
forget, it would take about 20 seconds to remember how the market has changed higher
education in terms content (what is studied), how we study (crammage), and why we study.
Lastly, if we imagine the exact same degree type for two different eras we can see the main
focus very clear:
1. Tuition at Cal Berkley in 1970? Around 1K 2019 – more like 1K per credit
hour.
2. Paying for your future assumes that we have a future (climate change, job market
opportunities)
3. Debt peonage and rentier education squatting requires the right mix of desperation and
time
When I think about the time/money/energy that is wasted in this country (not just in
universities – anyone just has to spend 1 minute with someone who participates in
fantasy football or sports gaming to see how out of wack we are as a culture and as a
people.
The hollowed out spaces in universities are now more about pretending to be competent,
maintaining the status quo -- each unit within departments competing against one another for
resources and students rather than we are all in this together (for the student).
If education can be seen in the lens of abuse, we have the profiteers abusers, and the
admin enables with chaos for everyone else.
Crazy
As Regina Spektor says: Living in Den of Thieves – its contagious
What Barber is saying: Teaching is hard, and my students aren't very bright (look in a
mirror, sir, neither are you). Revolutions are fun. Let's do that instead.
Yes, most people are educated, especially these days, to be conformist, to adopt the
current economic fantasies, and to be highly verbal.
But Barber does himself no favors: What can he possibly mean by the American Church? I am
detecting someone who has spent too much time in the U.S. South (Tennessee) where the
"church" is those nice Methodists down the street. Along with some required singing of
Amazing Grace. So what he may think of as an insightful critique of Americans' flexible
morals doesn't get to the center of the problem. The American "church" is utilitarianism.
Whatever one can get away with one gets away with. Actions have no consequences among the
perfected.
And the mention of the Greeks by Barber and Deneen is gratuitous. Neither of them has much
use for the Greeks and Greek philosophy. Each of them likely considers Greek philosophy
mainly to be the support that makes the American Church intellectually legitimate.
I understand the moral problem of anyone trying to get an education in the U S of A these
days. My alma mater is one of the main cheerleaders for fundamentialist free-market fantasy.
(Alma mater: What an idea.) Yet the diploma is only a start: Education has to go throughout
one's life, and sentimental education (is that even a "thing" here in the U S of A?) has to
go on everyday for the rest of one's post-diploma life.
Actually, the diploma is the end of the beginning. The start is "the first five" years of
life (talk, read, sing) which is likely to expose the growing brain to stimuli that allows
for future "discovery". The beginning of formal education (K-12), unfortunately for many,
starts with poverty (25% of all school children) and impoverished school resources (including
underpaid, over-worked teachers) that conspire toward an assembly-line methodology (testing,
and more testing). Those who make it to college (honestly) are well-versed in manufacturing
"acceptable" papers on topics not understood. But then the college curricula (more demanding
than H.S.) and the concept of "critical thinking" (ignoring the social implications of 18-20
y.o.'s on their own) makes the idea of "learning how to learn" a difficult grasp. Some get
it, some don't.
It is after getting the college diploma, and maybe of few years of travel (for pleasure or
a job) that a much broader, mature perspective of the world (Plato) emerges. (Hopefully those
Classics, or an introduction to NC, comes across your path.) It is then the real learning
starts.
I agree wholeheartedly with your diagnosis (not to mention greatly appreciate your lovely
prose), however, I think your theory of change as stated here – "force the issue and
meaning of education before American society" – misses the mark.
I have spent the better part of 2 decades studying, first history, then education, with
the goal of becoming an educator (accumulating no small amount of debt in the process). So
long as I stuck to diagnosing the problem as you did here, and keeping my calls to arms
strictly in the rhetorical realm, I was welcomed as an "ally" and fellow traveler by a not
insignificant portion of my colleagues.
Unfortunately for my career (not to mention mental health), I wasn't satisfied with that,
and began to delve and a very focused and specific way into the actual structure of
educational systems, and looking for levers to gain the power necessary to change them (or,
more specifically, to shift power from those who hold it to those who do not). That was when
I learned just how thin of a gruel "allyship" really is in academia.
I think you are assuming educators have real power. They do not. Power, real power, comes
from control over the material necessities and niceties of life. The primary social function
of our educational institutions, from pre-k through endowed chairmanship is to sort people
into an unequal society. If the "real issue and meaning of education" (i.e. creating the
conditions and connections necessary for truly democratic life) were to take hold in such an
institution, it would either destroy the institution or turn it into something else
entirely.
I agree "an educated people" is indeed our only hope, because to me an educated people is
synonymous with a democratic people. Indeed, I think education is the inevitable result of
people getting together to solve problems nonviolently with a coequal distribution of power.
Where it has truly taken root (e.g. Freedom schools in the 60s, the meetings organized by
populist party at the turn of the 19th/20th century), it has had a material function and base
that is diametrically opposed to the way virtually all today's "educators" earn their daily
bread.
IMO, the way people become true "educators" – those who "force the issue and meaning
of education before American society" – is by serving the educational function in a
democratic movement. They are people who are delegated authority democratically (i.e. without
coercion) by those they serve because they, in essence, are effective hubs for the
uninhibited flow of social information. In other words, they are authentically democratic
leaders, whose power is entirely dependent on maintaining trust because trust is fundamental
to the uninhibited flow of social information, and the temptation to violate social trust is,
well, why human societies have more drama than ant colonies.
You are a professor, and no doubt do a great deal of good for a great many students (I did
a brief stint of that as well, and in no way am trying to undermine how valuable and
rewarding it can be), but you will never be, in that role, an "educator" in the truly
democratic sense because every one of your students knows you could, if you wanted,
completely screw them over and there's not a family blogging thing they could do about
it.
You can, however, be a real educator (i.e. democratic leader) in your spare time, and are
in a unique and special institutional position to prepare future (and support present) real
democratic educator/leaders to manage one hell of a clusterfamilyblog of a global
civilizational collapse that is coming whether we want it to or not. I hope you will do so
with a hard-nosed evaluation of the relationship between power, information flows, democracy,
and the material world, as I fear anything less will be far from adequate.
These comments appear to me to be the epitome of neoliberal doctrine:
1. People have everything they need to excel
2. Its never been easier to study as information has been democratized
3. Invocation of Maslow, ambient culture (interesting view of life-stage development for
young adults too
4. Individualistic lens – "addressing the big issues of your time"
Maybe I read this wrong, or it started with "NC folk" – but there is no mention
of:
Debt peonage
Administrative culture
Global Labor Markets
Real Costs for Students – Tuition Inflation (higher than healthcare costs over last 30
years)
– Parking predation
– Textbook Bezzles
– Adjunct – itus
– Pay to Play Tenure
– Darwinian death struggle among college units in departments (Survival =
Resources)
– Forgetting – a major theme (making meaning of one's education) – moving
onto CV building
Social Costs of Expensive Higher Education (delay family formation)
Long term wealth implications for this generation's graduates
Education is not a solitary event, with isolated moments of brainstorming and
individualistic memes of hardwork. It is a system with millions of parts -- and these parts
have been bent to serve our neoliberal masters in about every domain imaginable.
And in my experience, (as Yves says) this is not a bug in the system -- it was a feature
of a system reboot designed especially for these outcomes
Last year I went to the local library book sale, and bought a stack of college textbooks
– chemistry, physics, elec engineering, calc, etc. The stack was 3′ tall, and it
cost me $26.
A few months ago, I downloaded the latest Linux & Java development workbench onto the
computer I built from components sourced from Ebay/Amazon. Full, up-to-date, latest edition
of Java development workbench on killer hardware $650, including 21″ monitor. Software
and how-to materials all free. I have done this several times during my career, and it's
never been easier or cheaper to do.
To glean those textbooks, all I have to do is read, do the probs at the back of the
chapter. To build salable skills, all I have to do is think up a problem to solve, and write
the software to solve it. Effort. Those two things – ID useful problem, and the
marshalling of components to solve it – gives me demonstrable evidence of competency,
and I can parlay that into a good job.
When I look a the amount of time expended on smart phones, Facebook, etc. I become less
sympathetic about people's plight – in general. One counter-example: the 450-year
systematic repression of blacks is one issue that merits societal redress.
And whether this cultural malady of victimhood is by design (by the "elites", for ex), or
by circumstance, it is not mandatory . No one is making people watch TV. There are
choices, and some are making different, better choices, and benefiting from it.
Visit http://www.coursera.org .
Tell my why I would go into debt to get what I need when it's available (from many of the
elite schools and professors) for free.
So, if taking initiative to address my own needs is what you call NeoLiberal, then I'm all
for neoliberalism. I get confused about all the political classifications afoot these days,
so I'm not real sure what bin I fit into, exactly.
Lastly, I doubt anyone could name 100 parts (types, not instances) of their educational
experience, let alone millions. It's not nearly as complex as all that.
While there a many areas where the web and libraries do indeed offer the curious and
disciplined an opportunity to better themselves with book knowlege of software. Much of what
we hope to understand about our world – fundamental research, and many speciality areas
of knowlege require a 'craft' or hands on component that no amount of book reading can
replace. Skill crafts of cabinetmakers, tailors, chefs and and product designers, or in my
field of biology. Lab 'bench craft' is fundamental to learning: microbiology, molecular
biology and much of fundamental physics requires labs. I understand from engineering friends
that trial test rigs during university are also fundamental to locking in skills. Many areas
of STEM require significant funds to back the student, because the study work loads make
academic excellence really challenging, and part time jobs nearly impossible. I know, I
worked 20 hours in a lab on weekends during much of my undergraduate. At graduate school the
extra hours 'spare' ideally are spent working on one's bench craft as free slave labour to
the senior ranking (i.e. higher skilled, greater knowledgeable senior scientists). In biology
labs, there is almost a medieval apprentice, journeyman, master craftsman route of skill
acquisition. There is as much an art to casting an agarose gel as there is in knowing the
tweak of the 'recipe' for the molecular attributes desired. It is with great relief that I am
not part of the US system, but sitting in a well funded more democratic (free) educational
system in Europe. Our world needs to radically think how to put much ore cash into STEM and
fundamental research. Incentivise school students (everywhere on planet) to commit the insane
hours needed for genetics, molecular biology and all the other emerging areas of life
sciences. It requires countries to overhaul education to allow curious minds regardless of
family finances. I agree with many NC readers that wide systematic overhaul is needed to
untangle many of these difficult and decaying situations (not just US).
Yes. It is still possible to get an education if you are self-motivated and
self-disciplined. Either inside or outside the academy – and which academy is
secondary. But in my view education requires teachers – this is missing from your model
and a very important part of the Academy.
However, Credentialling is only available if you pay the price of attaching yourself to
the academy. DOn;t worry – credentials are becoming less and less important as changing
times and institutional decay make truly educated and adaptable people more and more
important and the obedient credentialled irrelevent and useless.
Only how many hundreds of job ads on Indeed use "do you have a bachelors degree" as a
screening question? And straight into the circular disposal unit your digital submission goes
if you don't.
Ah well pesky reality of the job market and all, sure does reduce philosophizing about
"the pointlessness of credentials and formal education" down to size. And no my position is
not that noone can succeed without credentials, just that it's obviously harder.
I've never had an employer, in the last 35 years, who would give you any credibility for
stuff you learnt on your own.
If it isn't on your school transcripts or a diploma, you don't get to negotiate with it.
If you have great knowledge, acquired on your own, and use it on the job, you will get no
mention of it, no credit, nada. They will keep taking until they are made to stop, and nary
so much as a "thank you".
But that's just my experience of 35 years on the job.
"I've never had an employer, in the last 35 years, who would give you any credibility for
stuff you learnt on your own."
+1 and most WILL NOT give any credibility for class you take either, under no
circumstances.
There are two things employers give weight to:
1) on the job experience
2) credentialing, not taking a class in this or that but having a bachelors or a masters. And
this #2 is only as a screening device, #1 is still paramount, #2 can be used to screen out
but seldom is it by itself an "in". Now there are unique circumstances, if you are still in
your 20s, some will let you start out with just a degree as "you have to start somewhere",
but after that age, no you need #1 and best to have #2 as well.
+1 on this as well. My experience is that either you have the knowledge certified by
diploma or you are considered to know nothing about the subject & that is even more true
when dealing with people with neither diploma nor knowledge of/in the subject matter. They
use what little they know and what they know is to look at a diploma.
Ignoring opinions/knowledge from non-certified people is something actively taught at
universities and especially at business schools – if things go wrong then the defense
can be: He/she was the expert and had the diploma to show for it. People in positions of
responsibility are experts at avoiding responsibility, credentials help to deflect
blame/responsibility so it is often used.
IT has been slightly different, in the older days, but now it is settling in and even IT
recruiters no longer need to take chances on the uncredentialled.
Plinking away on a keyboard may feel like you're doing "real work", but there's a lot more
that's necessary to keep any kind of civilization going than developing a new Java app.
Training yourself to do any of these myriad other tasks takes more capital, financial and
otherwise, than the $700 you've laid out above. Not to mention that staring at a computer
screen is profoundly unhealthy and not suitable work for us jumped-up monkeys.
But that's where we are now, aren't we? The only work that Americans think of as "good real
work" these days is on a family-blogging computer, and everything else that keeps things
going has had the living wage taken away from it and the training ignored.
Everything is a waste of time if it's not improving one's usefulness to the economic
system I guess you would argue. And whether it's spending time on facebook and smart phones,
or taking care of old people, or raising kids, or engaging in political activism, or
increasing one's understanding of the world, or volunteering, or hanging out with friends
which Americans increasingly don't even have, or etc.. Because you know it's not just
Facebook people spend time on.
This is the philosophy of a tool. Your soul was bought on the cheap and you don't even
have the inner spirit to miss it.
As I re-read my piece a key question descended upon me. Since Maslow's hierarchy is a
guide, or a possibility, it's not a given that someone ever will "self-actualize", or will do
so in some socially- or ecologically-useful manner. So what happened to make you
"self-acualize" in a direction that might include an NC and the values it espouses?
A parent? A book? A Ken Burns documentary? Did you decide one day to sail outside the safe
harbors of conformity, and got swept – with malice afore-thought, and cocktail in hand
– into the currents of worldliness?
This is a key question for you democratic educators, ref. funemployed above: "Where's the
launch button?"
When I first encountered Maslow, I was puzzled, thinking I was missing something profound.
Now I'm simply amazed that he can be celebrated as an intellectual with penetrating insight
for stating the obvious.
"Food, clothes and shelter
All the poor man asking for"
– Misty in Roots
None of the answers I have received when younger, about how society was organized made any
sense in justice or fairness. Thus, the quest for better answers began. If that is an
awakening, then perhaps it is genetic. Some just seek to know more. Or perhaps more have had
that curiosity defeated by society's need for conformity earlier. The quest for knowledge
often is the lonelier path, for conforming to thr tribe brings fellowship and norms to
follow. There is safety in the middle of the pack.
Now, having observed a better understanding of the intrinsic unfairness of societal
arrangements and structures, the question turns to what nudges to the body may be possible to
limit the damage we bring upon ourselves as a species to strive for better returns (profits?
Benefits?) without the understanding of what "better" or "returns" means.
Smokers know smoking is bad, but the nicotine calls are here and now answered.
Feed scrollers know it doesn't improve their lives, but the hope for just a bit of pleasure
keeps the finger scrolling.
As to the digital opiate of the masses, is it because they have been conditioned/addicted
to lose their own agency to said opiate? Perhaps the very discussions here in NC is but a
different flavour of the same digital opiate. Or to paraphrase Mulder, "The answer IS out
there", and we just have to discover it.
The more things change Check out Thorstein Veblen, The Higher Learning in America (1918)
or John Dewey The Public and its Problems and other works. Formal education, divorced as it
is from the practices of everyday life, presents these sorts of problems as a feature, not a
bug. That said, it has been my experience over the past 35 years that education can be and is
world opening for many young students. I have also found that the problem often rests with
the educator as much as it does the system of education. Well recognized philosophies of
education underlay a fundamental split teaching practice, (e.g., transmission of "facts"
versus enlivenment of knowing). Those that don't take the time to learn how to teach end up
frustrated that the "system" is failing. That a tenured full professor is lamenting thus,
just as Veblen did a century ago, is suggestive.
The prof can complain about students, but I think the students know what's going on better
than does the prof. The problems are much higher up the ladder than lowly students readiness
for college humanities courses. I expect the students are learning a great deal that's not in
the official curriculum. See:
tools for an economic system that prizes 'flexibility' (geographic, interpersonal,
ethical
Learning tools to develope flexible ethics kind of creeps me out.
Yup, training up thinkers is tough, I agree.
I think this is corollary to the above article–and if you've been in the classroom any
year for the past forty this should ring sickeningly familiar:
I loved the book about Summerhill – the alternative education option in the UK (back
in the 70s). Everyone was aghast because they thought it was remiss not to educate children
rigidly. It never got traction here in the US. But last night there was a segment on
alternative education in the UK, allowing children to go at their own pace, find their own
interest and above all learn that they didn't need an intermediary (teacher basically) to
learn – they could be successful autodidacts. It sounds like it is taking off in
England. How nice. Summerhill is still alive and kicking – it advertises itself as a
student democracy. Choose what you want to study. I certainly still like the idea because I
had my nose in a book from about the age of 7. I always read what interested me and it has
been a true pleasure. That's gotta be worth somthin.
Permit me to add three more books to your recommendation:
1. The Teenage Liberation Handbook: How to Quit School and Get a Real Life and
Education by Grace Llewellyn. I don't think this one's in print anymore.
2. The Underground History of American Education by John Taylor Gatto. Still in
print. Here's the author's website: https://www.johntaylorgatto.com/
3. The Day I Became an Audidact by Kendall Hailey. As far as I can tell, no longer
in print.
Enjoy your self-education outside the system, everyone!
From the OED: educate, v. [f. L. ēducāt- ppl. stem of ēducāre to rear, bring up
(children, young animals), related to ēdūcĕre to lead forth (see educe), which
is sometimes used nearly in the same sense.] 1 To rear, bring up (children, animals) by
supply of food and attention to physical wants. Obs. 2 To bring up (young persons) from
childhood, so as to form (their) habits, manners, intellectual and physical aptitudes. b To
instruct, provide schooling for (young persons). 3 To train (any person) so as to develop the
intellectual and moral powers generally. 4 To train, discipline (a person, a class of
persons, a particular mental or physical faculty or organ), so as to develop some special
aptitude, taste, or disposition. b To train (animals).
It would seem that Prof. Barber bemoans the demise of meaning 3, if that ever was the purpose
or function of our educational system.
Meanings 2 and 4 are alive and well. A special aptitude for narrow-minded submission is
successfully cultivated, the more so as the academic ladder is scrambled up.
But it's in Deneen's characterization of our students as "individuals without a past
cultureless ciphers".
I get that.
Americans have no use for History (with a capital H). American History is trail of carnage
and savagery on the scale of Attila and Hitler. Any discussion of History is replete with
irony, exceptions and contradictions. Things that Americans do not do well, and things that
you do not want rattling around in the heads of right-thinking citizens. Critical thinking
could be the catastrophic result.
OK then! Well enculturated Americans know that we have an exceptional past and we are an
exceptional people. But, History meh!
What we do have is a future. That's what America is all about. The wonderful, wonderful
future with it's myriad fabulous possibilities. Really, you could wet your pants just
thinking about it!
By 8th grade students are well versed in basic math and language arts. At that point the
student and family should have a choice between a college bound liberal arts education or a
technical education where they have a choice of several knowledge disciplines to choose to
study during High school. That way kids who leave high school and are not college bound at
least have one skill they can take anyplace in the USA and get a job.. Auto Mechanic, Diesel
Mechanic, Marine Mechanic, Chef, Software Development, Website Development, Cosmetology,
Adobe Creative Suite (video and photo editing), etc. Not all of those careers would be
offered at every high school. But at least 2 or 3 at a minimum and more choices the better.
After 12 years of state schooling students should have a skill or a plan to attend college to
acquire that skill.
"... The United States hasn't "grown lazy and risk-averse"--and Breshidsky wouldn't know it even if explained--it was made such by Real Revolution in Military Affairs whose arrival through new technological means, operational concepts and new force structure , simply removed most (not all) "advantages", often grossly exaggerated, the United States thought it enjoyed for the last 30 years or so. ..."
Leonid Bershidsky is (butt) hurt, badly. So, after
Vladimir Putin's air and anti missile defense trolling yesterday--you can see (in Russian)
Rouhani's and Erdogan's priceless reactions here:
whose biography you can read here , for
some reason (wink, wink) takes it too personally and lets it rip in his piece at
Bloomberg (another "fine" specimen of US "fair and balanced" propaganda outlet). Here is
what bothers Mr. Bershidsky:
One can almost feel Bershidsky's pain but the problem with this statement is not
the fact that there is only one gangster in this story, and that is not Russia, but in the fact
that Bershidsky, who hails from an army of brilliant (ahem) "influencers" with degrees in
anything but applicable serious professional skills crucial for military and geopolitical
analysis, has, as expected, misrepresented risk-aversion for the exercise of sound
operational judgement.
The United States hasn't "grown lazy and risk-averse"--and Breshidsky
wouldn't know it even if explained--it was made such by Real Revolution in Military Affairs
whose arrival through new technological means, operational concepts and new force structure , simply
removed most (not all) "advantages", often grossly exaggerated, the United States thought it
enjoyed for the last 30 years or so.
Actually, one of the major reasons this had happened was
the category of public with MBAs, stock trading, marketing, finances, banking and journalism
backgrounds who could understand some financial bottom lines, for which they tirelessly worked,
but had and continue (as Bershidsky so vividly demonstrates) to have huge difficulties with
grasping technological, tactical, operational and strategic realities of our modern world.
Then, Bershidsky makes this bizarre assertion (one would expect it from an amateur):
In reality, it's the S-400 that Russia has been trying hard to sell to Saudi Arabia, so far without
success. It has also offered the missiles to Qatar. Neither the S-300 nor the S-400 has seen
any real combat use . Theoretically, and as seen in exercises, these are powerful weapons.
But not even Syria's Bashar Al-Assad, who has had a few opportunities to use the S-300s he
received from Russia last year, has done so.
First, Bashar Assad doesn't have full control of S-300 in Syria, at least not yet
and it is Russia which defines S-300s use within her military and diplomatic agenda in Syria,
not Syrians. It is an obvious fact, which was confirmed couple of days ago:
Unlike Israelis or US Military-Industrial-Media Complex Russians, when the deal is
a very serious real kinetic military affair between Russia and nations which matter globally
(US), or regionally (Israel), seldom runs around praising oneself and own capabilities, since
this may adversely affect, usually behind the scene, diplomatic effort. It is one thing to show
off salvos of 3M14 burning jihadists in their compounds in Syria, or reveal weapons, such as in
Putin's speech on March 1, 2018, to cool the heads of some homicidal lunatics in D.C., totally
another--describing everyday contingencies between all players in the region. In fact, Russia
officially was very low key on that and that is understandable.
There is, however, a risible line in Bershidsky's "assertion" about S-300 and S-400 not seeing
"any combat use". I would love to use Sergei Lavrov's meme here but I have to restrain myself,
because at this stage it wouldn't help the situation. Evidently, Leonid Bershidsky who never
spent a day in any serious military position, thinks that "combat use" is when things only
"shoot". Well, there is one problem, well, actually two, with this assertion because from the
get go he misses:
1. Both S-300 and S-400 systems were delivered to Syria with one thought in mind--to precisely
prevent this "combat use" by means of deploying capability which drastically reduces tactical
and operational options for all bogeys (Israel, ahem) to make them much more cooperative in a
political, as opposed to combat, field. It worked, brilliantly in a strategic sense--with IAF
being effectively pushed out of Syria's airspace, while reducing the number of its sorties
drastically still. This is not to mention the fact that other systems, such as S1 and Tor M2s,
not to mention a very well organized work of Battle Management Centers and Early Warning and
Electronic Warfare systems, performing admirably by shooting down all, but one, jihadists'
drones and missiles. That is real combat performance and a very impressive one. I will abstain
from describing Trump's "very smart missiles"
70% of which (including, rumor has it, JASSM) had been taken down by Syrian Air Defense
.
2. Now, most important--COMBAT record of the Soviet/Russian Air Defense systems. Discarding a
fear of being called a Russian chauvinist, nationalist or accused of gloating (been there, done
that), specifically for Bershidsky--combat record of Soviet/Russian AD systems is without
equals in history. No one comes even close to a number of combat episodes Soviet/Russian
systems took part in and came out victorious against bogeys. Not least among them is Israeli
Air Force. I will quote from my latest:
While estimates vary wildly, approximately 1,737 U.S. aircraft (not counting helicopters)
have been lost to hostile actions between 1961 and 1973 in South East Asia, largely over
Vietnam.1 The majority of these losses were due to AAA (Anti-Air Artillery) and SAMs (Surface
to Air Missiles). During almost 24 months of the Rolling Thunder operation the U.S. lost 881
aircraft; in 1967 alone, the United States lost 62 aircraft to SAMs while losing 205 to AAA.
In 1973, during the 19-days long Yom Kippur War, the Israeli Air Force lost over 100
aircraft, most of them to SAMs.
This is just a highly abbreviated list of Surface-to-Air
missiles engaging all kinds of aerial threats from high value attack and fighter jet
aircraft, to bombers, to cruise missiles since the early 1960s. The feature which unifies all
entries in this list is the fact that all these surface-to-air missiles and the targeting and
launch systems for them were and are Soviet/Russian made.
Putting it in simpler, more
straightforward language -- Soviet/Russian Air Defense systems, when used by skilled
operators, have an unrivaled combat history. No other nation has a comparable record of the
use of such systems in combat and thus of gaining such a combat experience.
For Bershidsky--all data was taken specifically from Western sources to avoid
being accused of pro-Russian bias. Numbers do not lie, when confirmed. Those have been
confirmed (unlike modern-day economic fuzzy data) and even at the lower end of estimates (not
to mention a factor of often NON-Soviet/Russian manning of systems--in stochastic combat models
multipliers less than 1 are introduced for degraded capability) make a dramatic impression.
So, in this case, one has to start thinking what this record means for new systems? It means an
enormous array of data which is behind honing, design concepts, algorithms, sensors, targeting
systems that is, which allow for steady improvements in capability. In the end, this was a
major reason Turks "exchanged" F-35 for S-400. I am sure they were made privy to mathematical
expectations and probabilities of success for various air attack scenarios against Turkey.
They, obviously, loved what they heard and saw and now Turkish officers (the second team) are
in Russia training for S-400. So, unless the whole Saudi (ARAMCO) oil facility attack is a
false flag by Saudis themselves or by a triumvirate of purveyors of liberty and democracy in
the Middle East, aka KSA, Israel and USA, there is pretty much only one thing Saudis can do
about defending oil facilities against drone and missile attacks--get systems which work. I
know, that makes Leonid Bershidsky's life miserable--after all, he dedicated his journo carrier
to writing on things most of which he cannot grasp or doing a hack job for
someone else's interests .
But in general, I am getting really tired when majors in
marketing or broadcasting pretend to be "experts" in fields which are beyond their grasp. No
wonder the West is in steep decline. Posted by smoothiex12
The above summary does not do justice to Martyanov's truly seminal book. I can only say that I
consider this book as an absolutely indispensable "must read" for every person in the USA who
loves his/her country and for every person who believes that wars, especially nuclear ones,
must be avoided at all costs. Asia Times About The Book
In Losing Military Supremacy, his latest, groundbreaking book, crack Russian military-naval
analyst Andrei Martyanov deconstructs in detail how, "the United States faces two nuclear and
industrial superpowers, one of which fields a world-class armed forces. If the
military-political, as opposed to merely economic, alliance between Russia and China is ever
formalized – this will spell the final doom for the United States as a global power."
My Blog List
Last week total crude inputs to US refineries 17.495 Mbbl/day. Domestic sourced crude 12.4
Mbbl/day.
US imported 6.725Mbbl/day of crude oil.
The small net import you hear on TV news is from refining imported crude 4.626 Mbbl/day in
finished product for export and 3.295 Mbbl/day in crude exported.
As to "isolationist" I would rather not "run amok" in the Middle East. The US has been
acting like a 'Juramentado........' whom US soldiers encountered fighting Moros in the
Philippines.
The key to the success of neoliberal was a bunch on bought intellectual prostitutes like Milton Friedman and the drive to
occupy economic departments of the the universities using money from the financial elite. which along with think tank continued
mercenary army of neoliberalism who fought and win the battle with weakened New Del capitalism supporters. After that
neoliberalism was from those departments like the centers of infection via indoctrination of each new generation of students.
Which is a classic mixture of Bolsheviks methods and Trotskyite theory adapted tot he need of financial oligarchy.
Essentially we see the tragedy of Lysenkoism replayed in the USA. When false theory supported by financial oligarchy and then
state forcefully suppressed all other economic thought and became the only politically correct theory in the USA and Western
Europe.
Notable quotes:
"... The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to the empowerment of workers and the regulation of banks and other major industries. ..."
"... Neoliberalism's premise is that free markets can regulate themselves; that government is inherently incompetent, captive to special interests, and an intrusion on the efficiency of the market; that in distributive terms, market outcomes are basically deserved; and that redistribution creates perverse incentives by punishing the economy's winners and rewarding its losers. So government should get out of the market's way. ..."
"... Now, after nearly half a century, the verdict is in. Virtually every one of these policies has failed, even on their own terms. ..."
"... Economic power has resulted in feedback loops of political power, in which elites make rules that bolster further concentration. ..."
"... The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This is a story of power using theory. The mixed economy was undone by economic elites, who revised rules for their own benefit. They invested heavily in friendly theorists to bless this shift as sound and necessary economics, and friendly politicians to put those theories into practice. ..."
"... The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact do not regulate themselves. Managed markets turn out to be more equitable and more efficient. ..."
"... The British political economist Colin Crouch captured this anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy, but succeeded superbly as power politics for economic elites. ..."
"... The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As government ceased to buffer market forces, daily life has become more of a struggle for ordinary people. ..."
"... After the Berlin Wall came down in 1989, ours was widely billed as an era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation after nation, with echoes of the 1930s. ..."
"... As the great political historian Karl Polanyi warned, when markets overwhelm society, ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with dictators, undermining the neoliberal premise of capitalism and democracy as complements. ..."
"... Classically, the premise of a "free market" is that government simply gets out of the way. This is nonsensical, since all markets are creatures of rules, most fundamentally rules defining property, but also rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In Polanyi's words, "laissez-faire was planned." ..."
"... Around the same time, the term neoconservative was used as a self-description by former liberals who embraced conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were neoliberals in economics. ..."
"... Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife, Bradley, and other far-right foundations to promote such variants of free-market theory as law and economics, public choice, rational choice, cost-benefit analysis, maximize-shareholder-value, and kindred schools of thought. These theories colonized several academic disciplines. All were variations on the claim that markets worked and that government should get out of the way. ..."
"... Market failure was dismissed as a rare special case; government failure was said to be ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in every major case where neoliberal theory generated policy, the result was political success and economic failure. ..."
"... For example, supply-side economics became the justification for tax cuts, on the premise that taxes punished enterprise. ..."
"... Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if government just got out of the way, market forces would remain more competitive because monopoly pricing would invite innovation and new entrants to the market. In practice, industry after industry became more heavily concentrated. ..."
"... Human capital theory, another variant of neoliberal application of markets to partly social questions, justified deregulating labor markets and crushing labor unions. Unions supposedly used their power to get workers paid more than their market worth. Likewise minimum wage laws. But the era of depressed wages has actually seen a decline in rates of productivity growth ..."
"... Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from the only one ..."
"... Air travel has been a poster child for advocates of deregulation, but the actual record is mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline, often at the cost of worker pay and pension funds. ..."
"... Ticket prices have declined on average over the past two decades, but the traveling public suffers from a crazy quilt of fares, declining service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of having to change plans. ..."
"... A similar example is the privatization of transportation services such as highways and even parking meters. In several Midwestern states, toll roads have been sold to private vendors. The governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying higher tolls often for decades. Investment bankers who broker the deal also take their cut. Some of the money does go into highway improvements, but that could have been done more efficiently in the traditional way via direct public ownership and competitive bidding. ..."
"... The Affordable Care Act is a form of voucher. But the regulated private insurance markets in the ACA have not fully lived up to their promise, in part because of the extensive market power retained by private insurers and in part because the right has relentlessly sought to sabotage the program -- another political feedback loop. The sponsors assumed that competition would lower costs and increase consumer choice. But in too many counties, there are three or fewer competing plans, and in some cases just one. ..."
"... In practice, this degenerates into an infinite regress of regulator versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with the industry doing end runs to Congress to further rig the rules. Straight-ahead public insurance such as Medicare is generally far more efficient. ..."
"... Several forms of deregulation -- of airlines, trucking, and electric power -- began not under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic presidents, as much as Republicans, promoted trade deals that undermined social standards. Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a choke point under Barack Obama than under George W. Bush. ..."
"... Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust, and then IMF pile-on. Greece is still suffering the impact. ..."
"... In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and insulated from foreign speculative capital. They developed world-class industries as state-led cartels that favored domestic production and supply. East Asia got into trouble only when it followed IMF dictates to throw open capital markets, and in the aftermath they recovered by closing those markets and assembling war chests of hard currency so that they'd never again have to go begging to the IMF ..."
"... The basic argument of neoliberalism can fit on a bumper sticker. Markets work; governments don't . If you want to embellish that story, there are two corollaries: Markets embody human freedom. And with markets, people basically get what they deserve; to alter market outcomes is to spoil the poor and punish the productive. That conclusion logically flows from the premise that markets are efficient. Milton Friedman became rich, famous, and influential by teasing out the several implications of these simple premises. ..."
"... The failed neoliberal experiment also makes the case not just for better-regulated capitalism but for direct public alternatives as well. Banking, done properly, especially the provision of mortgage finance, is close to a public utility. Much of it could be public. ..."
The
invisible hand is more like a thumb on the scale for the world's elites. That's why market
fundamentalism has been unmasked as bogus economics but keeps winning politically.This article appears in the Summer 2019 issue of The American Prospect magazine.
Subscribe here .
Since the late 1970s, we've had a grand experiment to test the claim that free markets
really do work best. This resurrection occurred despite the practical failure of laissez-faire
in the 1930s, the resulting humiliation of free-market theory, and the contrasting success of
managed capitalism during the three-decade postwar boom.
Yet when growth faltered in the 1970s, libertarian economic theory got another turn at bat.
This revival proved extremely convenient for the conservatives who came to power in the 1980s.
The neoliberal counterrevolution, in theory and policy, has reversed or undermined nearly every
aspect of managed capitalism -- from progressive taxation, welfare transfers, and antitrust, to
the empowerment of workers and the regulation of banks and other major industries.
Neoliberalism's premise is that free markets can regulate themselves; that government is
inherently incompetent, captive to special interests, and an intrusion on the efficiency of the
market; that in distributive terms, market outcomes are basically deserved; and that
redistribution creates perverse incentives by punishing the economy's winners and rewarding its
losers. So government should get out of the market's way.
By the 1990s, even moderate liberals had been converted to the belief that social objectives
can be achieved by harnessing the power of markets. Intermittent periods of governance by
Democratic presidents slowed but did not reverse the slide to neoliberal policy and doctrine.
The corporate wing of the Democratic Party approved.
Now, after nearly half a century, the verdict is in. Virtually every one of these policies
has failed, even on their own terms. Enterprise has been richly rewarded, taxes have been cut,
and regulation reduced or privatized. The economy is vastly more unequal, yet economic growth
is slower and more chaotic than during the era of managed capitalism. Deregulation has produced
not salutary competition, but market concentration. Economic power has resulted in feedback
loops of political power, in which elites make rules that bolster further concentration.
The culprit isn't just "markets" -- some impersonal force that somehow got loose again. This
is a story of power using theory. The mixed economy was undone by economic elites, who revised
rules for their own benefit. They invested heavily in friendly theorists to bless this shift as
sound and necessary economics, and friendly politicians to put those theories into
practice.
Recent years have seen two spectacular cases of market mispricing with devastating
consequences: the near-depression of 2008 and irreversible climate change. The economic
collapse of 2008 was the result of the deregulation of finance. It cost the real U.S. economy
upwards of $15 trillion (and vastly more globally), depending on how you count, far more than
any conceivable efficiency gain that might be credited to financial innovation. Free-market
theory presumes that innovation is necessarily benign. But much of the financial engineering of
the deregulatory era was self-serving, opaque, and corrupt -- the opposite of an efficient and
transparent market.
The existential threat of global climate change reflects the incompetence of markets to
accurately price carbon and the escalating costs of pollution. The British economist Nicholas
Stern has aptly termed the worsening climate catastrophe history's greatest case of market
failure. Here again, this is not just the result of failed theory. The entrenched political
power of extractive industries and their political allies influences the rules and the market
price of carbon. This is less an invisible hand than a thumb on the scale. The premise of
efficient markets provides useful cover.
The grand neoliberal experiment of the past 40 years has demonstrated that markets in fact
do not regulate themselves. Managed markets turn out to be more equitable and more
efficient. Yet the theory and practical influence of neoliberalism marches splendidly on,
because it is so useful to society's most powerful people -- as a scholarly veneer to what
would otherwise be a raw power grab. The British political economist Colin Crouch captured this
anomaly in a book nicely titled The Strange Non-Death of Neoliberalism . Why did
neoliberalism not die? As Crouch observed, neoliberalism failed both as theory and as policy,
but succeeded superbly as power politics for economic elites.
The neoliberal ascendance has had another calamitous cost -- to democratic legitimacy. As
government ceased to buffer market forces, daily life has become more of a struggle for
ordinary people. The elements of a decent middle-class life are elusive -- reliable jobs and
careers, adequate pensions, secure medical care, affordable housing, and college that doesn't
require a lifetime of debt. Meanwhile, life has become ever sweeter for economic elites, whose
income and wealth have pulled away and whose loyalty to place, neighbor, and nation has become
more contingent and less reliable.
Large numbers of people, in turn, have given up on the promise of affirmative government,
and on democracy itself. After the Berlin Wall came down in 1989, ours was widely billed as an
era when triumphant liberal capitalism would march hand in hand with liberal democracy. But in
a few brief decades, the ostensibly secure regime of liberal democracy has collapsed in nation
after nation, with echoes of the 1930s.
As the great political historian Karl Polanyi warned, when markets overwhelm society,
ordinary people often turn to tyrants. In regimes that border on neofascist, klepto-capitalists get along just fine with
dictators, undermining the neoliberal premise of capitalism and democracy as complements. Several authoritarian thugs,
playing on tribal nationalism as the antidote to capitalist cosmopolitanism, are surprisingly popular.
It's also important to appreciate that neoliberalism is not laissez-faire. Classically, the
premise of a "free market" is that government simply gets out of the way. This is nonsensical,
since all markets are creatures of rules, most fundamentally rules defining property, but also
rules defining credit, debt, and bankruptcy; rules defining patents, trademarks, and
copyrights; rules defining terms of labor; and so on. Even deregulation requires rules. In
Polanyi's words, "laissez-faire was planned."
The political question is who gets to make the rules, and for whose benefit. The
neoliberalism of Friedrich Hayek and Milton Friedman invoked free markets, but in practice the
neoliberal regime has promoted rules created by and for private owners of capital, to keep
democratic government from asserting rules of fair competition or countervailing social
interests. The regime has rules protecting pharmaceutical giants from the right of consumers to
import prescription drugs or to benefit from generics. The rules of competition and
intellectual property generally have been tilted to protect incumbents. Rules of bankruptcy
have been tilted in favor of creditors. Deceptive mortgages require elaborate rules, written by
the financial sector and then enforced by government. Patent rules have allowed agribusiness
and giant chemical companies like Monsanto to take over much of agriculture -- the opposite of
open markets. Industry has invented rules requiring employees and consumers to submit to
binding arbitration and to relinquish a range of statutory and common-law
rights.
Neoliberalism as Theory, Policy, and Power
It's worth taking a moment to unpack the term "neoliberalism." The coinage can be confusing
to American ears because the "liberal" part refers not to the word's ordinary American usage,
meaning moderately left-of-center, but to classical economic liberalism otherwise known as
free-market economics. The "neo" part refers to the reassertion of the claim that the
laissez-faire model of the economy was basically correct after all.
Few proponents of these views embraced the term neoliberal . Mostly, they called
themselves free-market conservatives. "Neoliberal" was a coinage used mainly by their critics,
sometimes as a neutral descriptive term, sometimes as an epithet. The use became widespread in
the era of Margaret Thatcher and Ronald Reagan.
To add to the confusion, a different and partly overlapping usage was advanced in the 1970s
by the group around the Washington Monthly magazine. They used "neoliberal" to mean a
new, less statist form of American liberalism. Around the same time, the term
neoconservative was used as a self-description by former liberals who embraced
conservatism, on cultural, racial, economic, and foreign-policy grounds. Neoconservatives were
neoliberals in economics.
Beginning in the 1970s, resurrected free-market theory was interwoven with both conservative
politics and significant investments in the production of theorists and policy intellectuals.
This occurred not just in well-known conservative think tanks such as the American Enterprise
Institute, Heritage, Cato, and the Manhattan Institute, but through more insidious investments
in academia. Lavishly funded centers and tenured chairs were underwritten by the Olin, Scaife,
Bradley, and other far-right foundations to promote such variants of free-market theory as law
and economics, public choice, rational choice, cost-benefit analysis,
maximize-shareholder-value, and kindred schools of thought. These theories colonized several
academic disciplines. All were variations on the claim that markets worked and that government
should get out of the way.
Each of these bodies of sub-theory relied upon its own variant of neoliberal ideology. An
intensified version of the theory of comparative advantage was used not just to cut tariffs but
to use globalization as all-purpose deregulation. The theory of maximizing shareholder value
was deployed to undermine the entire range of financial regulation and workers' rights.
Cost-benefit analysis, emphasizing costs and discounting benefits, was used to discredit a good
deal of health, safety, and environmental regulation. Public choice theory, associated with the
economist James Buchanan and an entire ensuing school of economics and political science, was
used to impeach democracy itself, on the premise that policies were hopelessly afflicted by
"rent-seekers" and "free-riders."
Market failure was dismissed as a rare special case; government failure was said to be
ubiquitous. Theorists worked hand in glove with lobbyists and with public officials. But in
every major case where neoliberal theory generated policy, the result was political success and
economic failure.
For example, supply-side economics became the justification for tax cuts, on the premise
that taxes punished enterprise. Supposedly, if taxes were cut, especially taxes on capital and
on income from capital, the resulting spur to economic activity would be so potent that
deficits would be far less than predicted by "static" economic projections, and perhaps even
pay for themselves. There have been six rounds of this experiment, from the tax cuts sponsored
by Jimmy Carter in 1978 to the immense 2017 Tax Cuts and Jobs Act signed by Donald Trump. In
every case some economic stimulus did result, mainly from the Keynesian jolt to demand, but in
every case deficits increased significantly. Conservatives simply stopped caring about
deficits. The tax cuts were often inefficient as well as inequitable, since the loopholes
steered investment to tax-favored uses rather than the most economically logical ones. Dozens
of America's most profitable corporations paid no taxes.
Robert Bork's "antitrust paradox," holding that antitrust enforcement actually weakened
competition, was used as the doctrine to sideline the Sherman and Clayton Acts. Supposedly, if
government just got out of the way, market forces would remain more competitive because
monopoly pricing would invite innovation and new entrants to the market. In practice, industry
after industry became more heavily concentrated. Incumbents got in the habit of buying out
innovators or using their market power to crush them. This pattern is especially insidious in
the tech economy of platform monopolies, where giants that provide platforms, such as Google
and Amazon, use their market power and superior access to customer data to out-compete rivals
who use their platforms. Markets, once again, require rules beyond the benign competence of the
market actors themselves. Only democratic government can set equitable rules. And when
democracy falters, undemocratic governments in cahoots with corrupt private plutocrats will
make the rules.
Human capital theory, another variant of neoliberal application of markets to partly social
questions, justified deregulating labor markets and crushing labor unions. Unions supposedly
used their power to get workers paid more than their market worth. Likewise minimum wage laws.
But the era of depressed wages has actually seen a decline in rates of productivity growth.
Conversely, does any serious person think that the inflated pay of the financial moguls who
crashed the economy accurately reflects their contribution to economic activity? In the case of
hedge funds and private equity, the high incomes of fund sponsors are the result of transfers
of wealth and income from employees, other stakeholders, and operating companies to the fund
managers, not the fruits of more efficient management.
There is a broad literature discrediting this body of pseudo-scholarly work in great detail.
Much of neoliberalism represents the ever-reliable victory of assumption over evidence. Yet
neoliberal theory lived on because it was so convenient for elites, and because of the inertial
power of the intellectual capital that had been created. The well-funded neoliberal habitat has
provided comfortable careers for two generations of scholars and pseudo-scholars who migrate
between academia, think tanks, K Street, op-ed pages, government, Wall Street, and back again.
So even if the theory has been demolished both by scholarly rebuttal and by events, it thrives
in powerful institutions and among their political allies.
The Practical Failure of
Neoliberal Policies
Financial deregulation is neoliberalism's most palpable deregulatory failure, but far from
the only one. Electricity deregulation on balance has increased monopoly power and raised costs
to consumers, but has failed to offer meaningful "shopping around" opportunities to bring down
prices. We have gone from regulated monopolies with predictable earnings, costs, wages, and
consumer protections to deregulated monopolies or oligopolies with substantial pricing power.
Since the Bell breakup, the telephone system tells a similar story of re-concentration,
dwindling competition, price-gouging, and union-bashing.
Air travel has been a poster child for advocates of deregulation, but the actual record is
mixed at best. Airline deregulation produced serial bankruptcies of every major U.S. airline,
often at the cost of worker pay and pension funds.
Ticket prices have declined on average over
the past two decades, but the traveling public suffers from a crazy quilt of fares, declining
service, shrinking seats and legroom, and exorbitant penalties for the perfectly normal sin of
having to change plans. Studies have shown that fares actually declined at a faster rate in the
20 years before deregulation in 1978 than in the 20 years afterward, because the prime source
of greater efficiency in airline travel is the introduction of more fuel-efficient planes.
The
roller-coaster experience of airline profits and losses has reduced the capacity of airlines to
purchase more fuel-efficient aircraft, and the average age of the fleet keeps increasing. The
use of "fortress hubs" to defend market pricing power has reduced the percentage of nonstop
flights, the most efficient way to fly from one point to another.
Robert Bork's spurious arguments that antitrust enforcement hurt competition became the
basis for dismantling antitrust. Massive concentration resulted. Charles Tasnadi/AP Photo
In addition to deregulation, three prime areas of practical neoliberal policies are the use
of vouchers as "market-like" means to social goals, the privatization of public services, and
the use of tax subsides rather than direct outlays. In every case, government revenues are
involved, so this is far from a free market to begin with. But the premise is that market
disciplines can achieve public purposes more efficiently than direct public provision.
The evidence provides small comfort for these claims. One core problem is that the programs
invariably give too much to the for-profit middlemen at the expense of the intended
beneficiaries. A related problem is that the process of using vouchers and contracts invites
corruption. It is a different form of "rent-seeking" -- pursuit of monopoly profits -- than
that attributed to government by public choice theorists, but corruption nonetheless. Often,
direct public provision is far more transparent and accountable than a web of contractors.
A further problem is that in practice there is often far less competition than imagined,
because of oligopoly power, vendor lock-in, and vendor political influence. These experiments
in marketization to serve social goals do not operate in some Platonic policy laboratory, where
the only objective is true market efficiency yoked to the public good. They operate in the
grubby world of practical politics, where the vendors are closely allied with conservative
politicians whose purposes may be to discredit social transfers entirely, or to reward
corporate allies, or to benefit from kickbacks either directly or as campaign
contributions.
Privatized prisons are a case in point. A few large, scandal-ridden companies have gotten
most of the contracts, often through political influence. Far from bringing better quality and
management efficiency, they have profited by diverting operating funds and worsening conditions
that were already deplorable, and finding new ways to charge inmates higher fees for necessary
services such as phone calls. To the extent that money was actually saved, most of the savings
came from reducing the pay and professionalism of guards, increasing overcrowding, and
decreasing already inadequate budgets for food and medical care.
A similar example is the privatization of transportation services such as highways and even
parking meters. In several Midwestern states, toll roads have been sold to private vendors. The
governor who makes the deal gains a temporary fiscal windfall, while drivers end up paying
higher tolls often for decades. Investment bankers who broker the deal also take their cut.
Some of the money does go into highway improvements, but that could have been done more
efficiently in the traditional way via direct public ownership and competitive bidding.
Housing vouchers substantially reward landlords who use the vouchers to fill empty houses
with poor people until the neighborhood gentrifies, at which point the owner is free to quit
the program and charge market rentals. Thus public funds are used to underwrite a privately
owned, quasi-social housing sector -- whose social character is only temporary. No permanent
social housing is produced despite the extensive public outlay. The companion use of tax
incentives to attract passive investment in affordable housing promotes economically
inefficient tax shelters, and shunts public funds into the pockets of the investors -- money
that might otherwise have gone directly to the housing.
The Affordable Care Act is a form of voucher. But the regulated private insurance markets in
the ACA have not fully lived up to their promise, in part because of the extensive market power
retained by private insurers and in part because the right has relentlessly sought to sabotage
the program -- another political feedback loop. The sponsors assumed that competition would
lower costs and increase consumer choice. But in too many counties, there are three or fewer
competing plans, and in some cases just one.
As more insurance plans and hospital systems become for-profit, massive investment goes into
such wasteful activities as manipulation of billing, "risk selection," and other gaming of the
rules. Our mixed-market system of health care requires massive regulation to work with
tolerable efficiency. In practice, this degenerates into an infinite regress of regulator
versus commercial profit-maximizer, reminiscent of Mad magazine's "Spy versus Spy," with
the industry doing end runs to Congress to further rig the rules. Straight-ahead public
insurance such as Medicare is generally far more efficient.
An extensive literature has demonstrated that for-profit voucher schools do no better and
often do worse than comparable public schools, and are vulnerable to multiple forms of gaming
and corruption. Proprietors of voucher schools are superb at finding ways of excluding costly
special-needs students, so that those costs are imposed on what remains of public schools; they
excel at gaming test results. While some voucher and charter schools, especially nonprofit
ones, sometimes improve on average school performance, so do many public schools. The record is
also muddied by the fact that many ostensibly nonprofit schools contract out management to
for-profit companies.
Tax preferences have long been used ostensibly to serve social goals. The Earned Income Tax
Credit is considered one of the more successful cases of using market-like measures -- in this
case a refundable tax credit -- to achieve the social goal of increasing worker take-home pay.
It has also been touted as the rare case of bipartisan collaboration. Liberals get more money
for workers. Conservatives get to reward the deserving poor, since the EITC is conditioned on
employment. Conservatives get a further ideological win, since the EITC is effectively a wage
subsidy from the government, but is experienced as a tax refund rather than a benefit of
government.
Recent research, however, shows that the EITC is primarily a subsidy of low-wage employers,
who are able to pay their workers a lot less than a market-clearing wage. In industries such as
nursing homes or warehouses, where many workers qualified for the EITC work side by side with
ones not eligible, the non-EITC workers get substandard wages. The existence of the EITC
depresses the level of the wages that have to come out of the employer's
pocket.
Neoliberalism's Influence on Liberals
As free-market theory resurged, many moderate liberals embraced these policies. In the
inflationary 1970s, regulation became a scapegoat that supposedly deterred salutary price
competition. Some, such as economist Alfred Kahn, President Carter's adviser on deregulation,
supported deregulation on what he saw as the merits. Other moderates supported neoliberal
policies opportunistically, to curry favor with powerful industries and donors. Market-like
policies were also embraced by liberals as a tactical way to find common ground with
conservatives.
Several forms of deregulation -- of airlines, trucking, and electric power -- began not
under Reagan but under Carter. Financial deregulation took off under Bill Clinton. Democratic
presidents, as much as Republicans, promoted trade deals that undermined social standards.
Cost-benefit analysis by the Office of Information and Regulatory Affairs (OIRA) was more of a
choke point under Barack Obama than under George W. Bush.
"Command and control" became an all-purpose pejorative for disparaging perfectly sensible
and efficient regulation. "Market-like" became a fashionable concept, not just on the
free-market right but on the moderate left. Cass Sunstein, who served as Obama's
anti-regulation czar,uses the example of "nudges" as a more market-like and hence superior
alternative to direct regulation, though with rare exceptions their impact is trivial.
Moreover, nudges only work in tandem with regulation.
There are indeed some interventionist policies that use market incentives to serve social
goals. But contrary to free-market theory, the market-like incentives first require substantial
regulation and are not a substitute for it. A good example is the Clean Air Act Amendments of
1990, which used tradable emission rights to cut the output of sulfur dioxide, the cause of
acid rain. This was supported by both the George H.W. Bush administration and by leading
Democrats. But before the trading regime could work, Congress first had to establish
permissible ceilings on sulfur dioxide output -- pure command and control.
There are many other instances, such as nutrition labeling, truth-in-lending, and disclosure
of EPA gas mileage results, where the market-like premise of a better-informed consumer
complements command regulation but is no substitute for it. Nearly all of the increase in fuel
efficiency, for example, is the result of command regulations that require auto fleets to hit a
gas mileage target. The fact that EPA gas mileage figures are prominently disclosed on new car
stickers may have modest influence, but motor fuels are so underpriced that car companies have
success selling gas-guzzlers despite the consumer labeling.
Image removed
Bill Clinton and his Treasury Secretary, Robert Rubin, were big promoters of financial deregulation.
Politically, whatever rationale there was for liberals to make common ground with
libertarians is now largely gone. The authors of the 2017 Tax Cuts and Jobs Act made no attempt
to meet Democrats partway; they excluded the opposition from the legislative process entirely.
This was opportunistic tax cutting for elites, pure and simple. The right today also abandoned
the quest for a middle ground on environmental policy, on anti-poverty policy, on health policy
-- on virtually everything. Neoliberal ideology did its historic job of weakening intellectual
and popular support for the proposition that affirmative government can better the lives of
citizens and that the Democratic Party is a reliable steward of that social compact. Since
Reagan, the right's embrace of the free market has evolved from partly principled idealism into
pure opportunism and obstruction.
Neoliberalism and Hyper-Globalism
The post-1990 rules of globalization, supported by conservatives and moderate liberals
alike, are the quintessence of neoliberalism. At Bretton Woods in 1944, the use of fixed
exchange rates and controls on speculative private capital, plus the creation of the IMFand
World Bank, were intended to allow member countries to practice national forms of managed
capitalism, insulated from the destructive and deflationary influences of short-term
speculative private capital flows. As doctrine and power shifted in the 1970s, the IMF, the
World Bank, and later the WTO, which replaced the old GATT, mutated into their ideological
opposite. Rather than instruments of support for mixed national economies, they became
enforcers of neoliberal policies.
The standard package of the "Washington Consensus" of approved policies for developing
nations included demands that they open their capital markets to speculative private finance,
as well as cutting taxes on capital, weakening social transfers, and gutting labor regulation
and public ownership. But private capital investment in poor countries proved to be fickle. The
result was often excessive inflows during the boom part of the cycle and punitive withdrawals
during the bust -- the opposite of the patient, long-term development capital that these
countries needed and that was provided by the World Bank of an earlier era. During the bust
phase, the IMF typically imposes even more stringent neoliberal demands as the price of
financial bailouts, including perverse budgetary austerity, supposedly to restore the
confidence of the very speculative capital markets responsible for the boom-bust cycle.
Dozens of nations, from Latin America to East Asia, went through this cycle of boom, bust,
and then IMF pile-on. Greece is still suffering the impact. After 1990, hyper-globalism also
included trade treaties whose terms favored multinational corporations. Traditionally, trade
agreements had been mainly about reciprocal reductions of tariffs. Nations were free to have
whatever brand of regulation, public investment, or social policies they chose. With the advent
of the WTO, many policies other than tariffs were branded as trade distorting, even as takings
without compensation. Trade deals were used to give foreign capital free access and to
dismantle national regulation and public ownership. Special courts were created in which
foreign corporations and investors could do end runs around national authorities to challenge
regulation for impeding commerce.
At first, the sponsors of the new trade regime tried to claim the successful economies of
East Asia as evidence of the success of the neoliberal recipe. Supposedly, these nations had
succeeded by pursuing "export-led growth," exposing their domestic economies to salutary
competition. But these claims were soon exposed as the opposite of what had actually occurred.
In fact, Japan, South Korea, smaller Asian nations, and above all China had thrived by
rejecting every major tenet of neoliberalism. Their capital markets were tightly regulated and
insulated from foreign speculative capital. They developed world-class industries as state-led
cartels that favored domestic production and supply. East Asia got into trouble only when it
followed IMF dictates to throw open capital markets, and in the aftermath they recovered by
closing those markets and assembling war chests of hard currency so that they'd never again
have to go begging to the IMF. Enthusiasts of hyper-globalization also claimed that it
benefited poor countries by increasing export opportunities, but as the success of East Asia
shows, there is more than one way to boost exports -- and many poorer countries suffered under
the terms of the global neoliberal regime.
Nor was the damage confined to the developing world. As the work of Harvard economist Dani
Rodrik has demonstrated, democracy requires a polity. For better or for worse, the polity and
democratic citizenship are national. By enhancing the global market at the expense of the
democratic state, the current brand of hyper-globalization deliberately weakens the capacity of
states to regulate markets, and weakens democracy itself.
When Do Markets Work?
The failure of neoliberalism as economic and social policy does not mean that markets never
work. A command economy is even more utopian and perverse than a neoliberal one. The practical
quest is for an efficient and equitable middle ground.
The neoliberal story of how the economy operates assumes a largely frictionless marketplace,
where prices are set by supply and demand, and the price mechanism allocates resources to their
optimal use in the economy as a whole. For this discipline to work as advertised, however,
there can be no market power, competition must be plentiful, sellers and buyers must have
roughly equal information, and there can be no significant externalities. Much of the 20th
century was practical proof that these conditions did not describe a good part of the actual
economy. And if markets priced things wrong, the market system did not aggregate to an
efficient equilibrium, and depressions could become self-deepening. As Keynes demonstrated,
only a massive jolt of government spending could restart the engines, even if market pricing
was partly violated in the process.
Nonetheless, in many sectors of the economy, the process of buying and selling is close
enough to the textbook conditions of perfect competition that the price system works tolerably
well. Supermarkets, for instance, deliver roughly accurate prices because of the consumer's
freedom and knowledge to shop around. Likewise much of retailing. However, when we get into
major realms of the economy with positive or negative externalities, such as education and
health, markets are not sufficient. And in other major realms, such as pharmaceuticals, where
corporations use their political power to rig the terms of patents, the market doesn't produce
a cure.
The basic argument of neoliberalism can fit on a bumper sticker. Markets work;
governments don't . If you want to embellish that story, there are two corollaries: Markets
embody human freedom. And with markets, people basically get what they deserve; to alter market
outcomes is to spoil the poor and punish the productive. That conclusion logically flows from
the premise that markets are efficient. Milton Friedman became rich, famous, and influential by
teasing out the several implications of these simple premises.
It is much harder to articulate the case for a mixed economy than the case for free markets,
precisely because the mixed economy is mixed. The rebuttal takes several paragraphs. The more
complex story holds that markets are substantially efficient in some realms but far from
efficient in others, because of positive and negative externalities, the tendency of financial
markets to create cycles of boom and bust, the intersection of self-interest and corruption,
the asymmetry of information between company and consumer, the asymmetry of power between
corporation and employee, the power of the powerful to rig the rules, and the fact that there
are realms of human life (the right to vote, human liberty, security of one's person) that
should not be marketized.
And if markets are not perfectly efficient, then distributive questions are partly political
choices. Some societies pay pre-K teachers the minimum wage as glorified babysitters. Others
educate and compensate them as professionals. There is no "correct" market-derived wage,
because pre-kindergarten is a social good and the issue of how to train and compensate teachers
is a social choice, not a market choice. The same is true of the other human services,
including medicine. Nor is there a theoretically correct set of rules for patents, trademarks,
and copyrights. These are politically derived, either balancing the interests of innovation
with those of diffusion -- or being politically captured by incumbent industries.
Governments can in principle improve on market outcomes via regulation, but that fact is
complicated by the risk of regulatory capture. So another issue that arises is market failure
versus polity failure, which brings us back to the urgency of strong democracy and effective
government.
After Neoliberalism
The political reversal of neoliberalism can only come through practical politics and
policies that demonstrate how government often can serve citizens more equitably and
efficiently than markets. Revision of theory will take care of itself. There is no shortage of
dissenting theorists and empirical policy researchers whose scholarly work has been vindicated
by events. What they need is not more theory but more influence, both in the academy and in the
corridors of power. They are available to advise a new progressive administration, if
that administration can get elected and if it refrains from hiring neoliberal
advisers.
There are also some relatively new areas that invite policy innovation. These include
regulation of privacy rights versus entrepreneurial liberties in the digital realm; how to
think of the internet as a common carrier; how to update competition and antitrust policy as
platform monopolies exert new forms of market power; how to modernize labor-market policy in
the era of the gig economy; and the role of deeper income supplements as machines replace human
workers.
The failed neoliberal experiment also makes the case not just for better-regulated
capitalism but for direct public alternatives as well. Banking, done properly, especially the
provision of mortgage finance, is close to a public utility. Much of it could be public. A
great deal of research is done more honestly and more cost-effectively in public, peer-reviewed
institutions such as the NIH than by a substantially corrupt private pharmaceutical industry.
Social housing often is more cost-effective than so-called public-private partnerships. Public
power is more efficient to generate, less prone to monopolistic price-gouging, and friendlier
to the needed green transition than private power. The public option in health care is far more
efficient than the current crazy quilt in which each layer of complexity adds opacity and cost.
Public provision does require public oversight, but that is more straightforward and
transparent than the byzantine dance of regulation and counter-regulation.
The two other benefits of direct public provision are that the public gets direct evidence
of government delivering something of value, and that the countervailing power of democracy to
harness markets is enhanced. A mixed economy depends above all on a strong democracy -- one
even stronger than the democracy that succumbed to the corrupting influence of economic elites
and their neoliberal intellectual allies beginning half a century ago. The antidote to the
resurrected neoliberal fable is the resurrection of democracy -- strong enough to tame the
market in a way that tames it for keeps.
Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at
Brandeis University's Heller School. His latest book is The Stakes: 2020 and the Survival of American
Democracy . In addition to writing for the Prospect, he writes for HuffPost, The Boston
Globe, and The New York Review of Books.
Sunday, August 2, 2009Cute Perl Gem to Get the Minimum/Maximum Value Saw this
little nugget on #[email protected] the other night. It determines the minimum of two
values:
[$b, $a]->[$a <= $b]
It takes advantage of the fact that Perl doesn't have a Boolean return type for true or false,
so the comparison operators return 1 or 0 for true and false, respectively, which are then used
by this code to index the array ref.
To get the maximum of the two values, just flip the operator to >= Posted by Luke at
9:41 PM
This is a classic catch 22 situation with this "oath" described below...
Also I think a lot of professors of neo-classical economics look like the member of Komsomol
described below ;-) For them it is about opening new opportunities for advancement not about the
truth and the level of corresponding to the reality of this pseudo-scientific neo-classical garbage, with the smoke screen of
mathematics as a lipstick on the pig (mathiness)
Most such people will teach students complete garbage understanding that this is a complete garbage with a smile.
Still, in in Soviet way it is possible for some to accept the position and work to undermine neo-classical economics acting within
the institution using Aesopian language in lectures and papers.
"... Consider an example from the contemporary United States. Today a number of private universities, colleges, and schools in several states require teachers and professors to take a "loyalty oath" to ensure that they do not "hold or foster undesirable political beliefs.... ..."
"... From a political standpoint she disagreed with the practice of taking loyalty oaths, and later, in her role as professor of the sociology of law, she voiced political positions counter to those mentioned in the oath and challenged the oath-taking practice itself. ..."
"... However, before she could do this, she first had to take the oath, understanding that without this act she would not be employed or recognized by the institution as a legitimate member with a voice authorized to participate in teaching, research, and the institution's politics (committees, meetings, elections, and so forth), including even the possibility to question publicly the practice of taking oaths. ..."
"... "The oath did not mean much if you took it, but it meant a lot if you didn't." ..."
"... However, "when a vote had to be taken, everyone roused -- a certain sensor clicked in the head: 'Who is in favor?' -- and you raised your hand automatically" (see a discussion of such ritualized practices within the Komsomol in chapter a). ..."
"... Participating in these acts reproduced oneself as a "normal" Soviet person within the system of relations, collectivities, and subject positions, with all the constraints and possibilities that position entailed, even including the possibility, after the meetings, to engage in interests, pursuits, and meanings that ran against those that were stated in the resolutions one had voted for. ..."
"... These acts are not about stating facts and describing opinions but about doing things and opening new possibilities. ..."
A general shift at the level of concrete ritualized forms of discourse, in which the
formal dimension's importance grows, while the
informal, substantiative dimension opens up to new meanings, can and does occur in different historical and
cultural contexts.
Consider an example from the contemporary United States. Today a number of private
universities, colleges, and schools in several states require teachers and professors to take a
"loyalty oath" to ensure that they do not "hold or foster undesirable political
beliefs....
While the statutes vary, [these institutions] generally deny the right to teach to those who
cannot or will not take the loyalty oath" (Chin and Rao 2003, 431 -32). Recently, a sociologist
of law took such a loyalty oath at a Midwestern university when her appointment as a professor
began.
From a political standpoint she disagreed with the practice of taking loyalty oaths, and
later, in her role as professor of the sociology of law, she voiced political positions counter
to those mentioned in the oath and challenged the oath-taking practice itself.
However, before
she could do this, she first had to take the oath, understanding that without this act she
would not be employed or recognized by the institution as a legitimate member with a voice
authorized to participate in teaching, research, and the institution's politics (committees,
meetings, elections, and so forth), including even the possibility to question publicly the
practice of taking oaths.
Here, the informal, substantiative dimension of the ritualized act experiences a shift, while the
formal dimension remains fixed and important: taking the oath opens a world of
possibilities where new informal, substantiative meanings become possible, including a professorial position
with a recognized political voice within the institution. In the sociologist's words, "The
oath did not mean much if you took it, but it meant a lot if you didn't." 3
^
This example illustrates the general principle of how some discursive acts or whole types of
discourse can drift historically in the direction of an increasingly expanding formal
dimension and increasingly open or even irrelevant informal, substantiative dimension. During Soviet late
socialism, the formal dimension of speech acts at formal gathering and rituals became
particularly important in most contexts and during most events.
One person who participated in large Komsomol meetings in the 1970s and 1980s described how
he often spent the meetings reading a book. However, "when a vote had to be taken, everyone
roused -- a certain sensor clicked in the head: 'Who is in favor?' -- and you raised your hand
automatically" (see a discussion of such ritualized practices within the Komsomol in chapter
a).
Here the emphasis on the formal dimension of organizational discourse was unique both
in scale and substance. Most ritualized acts of "organizational discourse" during this time
underwent such a transformation.
Participating in these acts reproduced oneself as a
"normal" Soviet person within the system of relations, collectivities, and subject positions,
with all the constraints and possibilities that position entailed, even including the
possibility, after the meetings, to engage in interests, pursuits, and meanings that ran
against those that were stated in the resolutions one had voted for.
It would obviously be wrong to see these acts of voting simply as informal, substantiative statements
about supporting the resolution that are either true (real support) or false (dissimulation of
support). These acts are not about stating facts and describing opinions but about doing
things and opening new possibilities.
"... The United States also cannot resist the urge to meddle. Worse, U.S. officials seemingly can't even decide which faction it wants to back. Washington's official policy continues to support the GNA, which the United Nations recognizes as the country's legitimate government -- even though its writ extends to little territory beyond the Tripoli metropolitan area. President Donald Trump, however, had an extremely cordial, lengthy telephone conversation in April with Haftar and appeared impressed with Haftar's professed determination to combat terrorist groups and bring order and unity to Libya. Neither Libyan faction now seems certain about Washington's stance. ..."
"... One poster child for such continuing arrogance is Samantha Power, an influential national security council staffer in 2011 and later U.S. ambassador to the United Nations. In her new book, The Education of an Idealist , Power takes no responsibility whatever for the Libya debacle. Indeed, flippant might be too generous a term for her treatment of the episode. "We could hardly expect to have a crystal ball when it came to accurately predicting outcomes in places where the culture was not our own," she contends. American Conservative analyst Daniel Larison correctly excoriates her argument as "a pathetic attempt by Power to deny responsibility for the effects of a war she backed by shrugging her shoulders and pleading ignorance. If Libyan culture was so opaque and hard for the Obama administration to understand, they should never have taken sides in an internal conflict there. If the 'culture was not our own' and they couldn't anticipate what was going to happen because of that, then how arrogant must the policymakers who argued in favor of intervention have been?" ..."
"... Obama and company not only destroyed Libya, they also helped to unleash a wave of jihadis who are terrorizing vast swaths of west Africa, especially Mali and Burkina Faso. Their stupidity and lack of foresight is mind-boggling! ..."
"... I understand the role which the Obama administration played in getting the Libyan intervention started. However the major destruction of Libya's fragile structure of governance under Qaddafi was done by the French, Brits, and Italians. ..."
The United States cannot resist the urge to meddle. Worse, U.S. officials can't seem to
decide which faction they want to back.
The Western-created disaster in Libya continues to grow worse. Fighting between Field
Marshal Khalifa Haftar's so-called Libyan National Army (LNA) and the even more misnamed
Government of National Accord (GNA) has intensified in and around Tripoli. The LNA boasted on
September 11 that its forces had routed troops of the Sarraj militia, a GNA ally, killing
about two hundred of them. That total may be exaggerated, but there is no doubt that the
situation has become increasingly violent and
chaotic in Tripoli and other portions of Libya, with innocent civilians bearing the brunt
of the suffering.
An article in Bloomberg News provides a
succinct account of the poisonous fruits of the U.S.-led "humanitarian" military
intervention in 2011. "Libya is enduring its worst violence since the 2011 NATO-backed ouster
of Muammar el-Qaddafi, which ushered in years of instability that allowed Islamist radicals to
thrive and turned the country into a hub for migrants destined to Europe. Haftar had launched
the war as the United Nations was laying the ground for a political conference to unite the
country. It is now more divided than ever." The country has become the plaything not only of
rival domestic factions but major
Middle East powers , including Egypt, Saudi Arabia, Turkey, Qatar, and the United Arab
Emirates. Those regimes are waging a ruthless geopolitical competition, providing arms and in
some cases even launching airstrikes on behalf of their preferred clients.
The United States also cannot resist the urge to meddle. Worse, U.S. officials seemingly
can't even decide which faction it wants to back. Washington's official policy continues to
support the GNA, which the United Nations recognizes as the country's legitimate government
-- even though its writ extends to little territory beyond the Tripoli metropolitan area.
President Donald Trump, however, had an extremely cordial, lengthy telephone conversation in
April with Haftar and
appeared impressed with Haftar's professed determination to combat terrorist groups and
bring order and unity to Libya. Neither Libyan faction now seems certain about Washington's
stance.
Given the appalling aftermath of the original U.S.-led intervention, one might hope that
advocates of an activist policy would be chastened and back away from further meddling in that
unfortunate country. Yet, that is not the case. Neither the Trump administration nor the
humanitarian crusaders in Barack Obama's administration who caused the calamity in the first
place seem inclined to advocate a more cautious, restrained U.S. policy.
One poster child for such continuing arrogance is Samantha Power, an influential
national security council staffer in 2011 and later U.S. ambassador to the United Nations. In
her new book, The Education of an
Idealist , Power takes no responsibility whatever for the Libya debacle. Indeed,
flippant might be too generous a term for her treatment of the episode. "We could hardly expect
to have a crystal ball when it came to accurately predicting outcomes in places where the
culture was not our own," she contends. American Conservative analyst Daniel Larison
correctly
excoriates her argument as "a pathetic attempt by Power to deny responsibility for the
effects of a war she backed by shrugging her shoulders and pleading ignorance. If Libyan
culture was so opaque and hard for the Obama administration to understand, they should never
have taken sides in an internal conflict there. If the 'culture was not our own' and they
couldn't anticipate what was going to happen because of that, then how arrogant must the
policymakers who argued in favor of intervention have been?"
The answer to Larison's rhetorical question is "extraordinarily arrogant." It is not as
though prudent foreign-policy experts didn't warn Power and her colleagues about the probable
consequences of intervening in a volatile, fragile country like Libya. Indeed, as Robert Gates,
Obama's secretary of defense, confirms in his memoir, Duty: Memoirs of a Secretary at War , the Obama
administration itself was deeply divided about the advisability of intervention. The Joint
Chiefs of Staff, Vice President Joe Biden, and Gates were opposed. Among the most outspoken
proponents of action were Power and her mentor, Secretary of State Hillary Clinton. Gates notes
further that Obama was deeply torn, later telling his secretary of defense that the decision
was a "51 to 49" call.
The existence of a sharp internal division is sufficient evidence by itself that Power's
attempt to absolve herself and other humanitarian crusaders of responsibility for the
subsequent tragedy is without merit. Indeed, it has even less credibility than Pontius Pilate's
infamous effort to evade guilt. They were warned of the probable outcome, yet they chose to
disregard those warnings.
Power, Clinton, Obama and other proponents of ousting Qaddafi turned Libya into a chaotic
Somalia on the Mediterranean, and the blood of innocents shed since 2011 is on their hands.
Given the stark split within the president's national security team, the Libya intervention was
especially reckless and unjustified. The default option in such a case should have been against
intervention, not plunging ahead.
The Trump administration should learn from the blunders of its predecessor and resist any
temptation to meddle further. America does not have a dog in the ongoing fight between Haftar
and the GNA, and we should simply accept whatever outcome emerges. Washington's arrogant
interference has caused enough suffering in Libya already.
Ted Galen Carpenter, a senior fellow in security studies at the Cato Institute and a
contributing editor at the National Interest , is the author of thirteen books and more than
eight hundred articles on international affairs. His latest book is NATO: The Dangerous Dinosaur .
The outcome in Libya is what the intent was - chaos, per the Yinon plan. The side effect
of mass immigration to Europe was warned by Gaddafi! All was known, yet the destabilization
war continued.
Obama and company not only destroyed Libya, they also helped to unleash a wave of jihadis
who are terrorizing vast swaths of west Africa, especially Mali and Burkina Faso. Their
stupidity and lack of foresight is mind-boggling!
Libya was and still is the case of a civil war into which foreign powers have intervened.
The major parties of that war have always been the Tripolitanian West and the Cyrenaican
East. Whoever is on top considers the others to be the rebels. That is how the demise of
Qaddafi began. For him Benghazi was the rebel's nest which needed some cleaning. Nothing has
changed. Haftar is the new Qaddafi.
I understand the role which the Obama administration played in getting the Libyan
intervention started. However the major destruction of Libya's fragile structure of
governance under Qaddafi was done by the French, Brits, and Italians.
You can always make things worse. It is one thing that Trump and friends are good at.
They don't consider that a criticism either, since they want what the rest of us consider
worse -- more war, more enemies, more inequality in outcomes at home, more desperation at
home giving more power to the haves over the have-nots.
Mortimer Adler's "How to Read a Book" is a timeless classic that still applies to articles
produced for electronic consumption. One of Adler's primary admonitions was to consider the
author's expertise, credibility, and potential biases. With regard to this article, scrolling
down to the end reveals the author's association with the Koch Brother financed Cato
Institute. The Koch Brothers and their money have done more to destroy American democracy
than any foreign tyrant or Presidential folly.
And oh, by the way, what did the Neocons and the Vulcans of the W Administration do to the
entire Middle East other than create a contiguous geographic belt of Iranian Shiite influence
from Tehran to Beirut?
"... The aim of the panel, called the Joint Authorities Technical Review, was to expedite getting the 737 Max into the air by creating a vehicle for achieve consensus among foreign regulators who had grounded the 737 Max before the FAA had. But these very regulators had also made clear they needed to be satisfied before they'd let it fly in their airspace. ..."
"... The FAA hopes to give the 737 Max the green light in November, while the other regulators all have said they have issues that are unlikely to be resolved by then. The agency is now in the awkward position of having a body it set up to be authoritative turn on the agency's own procedures. ..."
"... the FAA had moved further and further down the path of relying on aircraft manufactures for critical elements of certification. Not all of this was the result of capture; with the evolution of technology, even the sharpest and best intended engineer in government employ would become stale on the state of the art in a few years. ..."
"... Although all stories paint a broadly similar picture, .the most damning is a detailed piece at the Seattle Times, Engineers say Boeing pushed to limit safety testing in race to certify planes, including 737 MAX ..The article gives an incriminating account of how Boeing got the FAA to delegate more and more certification authority to the airline, and then pressured and abused employees who refused to back down on safety issues . ..."
"... In 2004, the FAA changed its system for front-line supervision of airline certification from having the FAA select airline certification employees who reported directly to the FAA to having airline employees responsible for FAA certification report to airline management and have their reports filtered through them (the FAA attempted to maintain that the certification employees could provide their recommendations directly to the agency, but the Seattle Times obtained policy manuals that stated otherwise). ..."
"... On Monday, the Post and Courier reported about the South Carolina plant that produced 787s found with tools rattling inside that Boeing SC lets mechanics inspect their own work, leading to repeated mistakes, workers say. These mechanic certifications would never have been kosher if the FAA were vigilant. Similarly, Reuters described how Boeing weakened another safety check, that of pilot input. ..."
"... As part of roughly a dozen findings, these government and industry officials said, the task force is poised to call out the Federal Aviation Administration for what it describes as a lack of clarity and transparency in the way the FAA delegated authority to the plane maker to assess the safety of certain flight-control features. The upshot, according to some of these people, is that essential design changes didn't receive adequate FAA attention. ..."
"... But the report could influence changes to traditional engineering principles determining the safety of new aircraft models. Certification of software controlling increasingly interconnected and automated onboard systems "is a whole new ballgame requiring new approaches," according to a senior industry safety expert who has discussed the report with regulators on both sides of the Atlantic. ..."
"... For instance, the Journal reports that Canadian authorities expect to require additional simulator training for 737 Max pilots. Recall that Boeing's biggest 737 Max customer, Southwest Airlines, was so resistant to the cost of additional simulator training that it put a penalty clause into its contract if wound up being necessary. ..."
"... Patrick Ky, head of the European Union Aviation Safety Agency, told the European Parliament earlier this month, "It's very likely that international authorities will want a second opinion" on any FAA decision to lift the grounding. ..."
"... Most prominently, EASA has proposed to eventually add to the MAX a third fully functional angle-of-attack sensor -- which effectively measures how far the plane's nose is pointed up or down -- underscoring the controversy expected to swirl around the plane for the foreseeable future. ..."
"... It's hard to see how Boeing hasn't gotten itself in the position of being at a major competitive disadvantage by virtue of having compromised the FAA so severely as to have undercut safety. ..."
"... has Boeing developed a plan to correct the trim wheel issue on the 787max? i haven't seen a single statement from them on how they plan to fix this problem. is it possible they think they can get the faa to re-certify without addressing it? ..."
"... Don't forget that the smaller trim wheels are in the NG as well. any change to fix the wheels ripples across more planes than just the Max ..."
"... The self-inflicted wound caused by systematic greed and arrogance – corruption, in other words. Boeing is reaping the wages of taking 100% of their profits to support the stock price through stock buybacks and deliberately under-investing in their business. Their brains have been taken over by a parasitic financial system that profits by wrecking healthy businesses. ..."
"... Shareholder Value is indeed the worst idea in the world. That Boeing's biggest stockholder, Vanguard, is unable to cleanup Boeing's operations makes perfect sense. I mean vanguards expertise is making money, not building anything. Those skills are completely different. ..."
"... One maxim we see illustrated here and elsewhere is this: Trust takes years to earn, but can be lost overnight. ..."
The FAA evidently lacked
perspective on how much trouble it was in after the two international headline-grabbing crashes
of the Boeing 737 Max. It established a "multiagency panel" meaning one that included
representatives from foreign aviation regulators, last April. A new Wall Street Journal article
reports that the findings of this panel, to be released in a few weeks, are expected to
lambaste the FAA 737 Max approval process and urge a major redo of how automated aircraft
systems get certified .
The aim of the panel, called the Joint Authorities Technical Review, was to expedite getting
the 737 Max into the air by creating a vehicle for achieve consensus among foreign regulators
who had grounded the 737 Max before the FAA had. But these very regulators had also made clear
they needed to be satisfied before they'd let it fly in their airspace.
The JATR gave them a venue for reaching a consensus, but it wasn't the consensus the FAA
sought. The foreign regulators, despite being given a forum in which to hash things out with
the FAA, are not following the FAA's timetable. The FAA hopes to give the 737 Max the green
light in November, while the other regulators all have said they have issues that are unlikely
to be resolved by then. The agency is now in the awkward position of having a body it set up to
be authoritative turn on the agency's own procedures.
The Seattle Times, which has broken many important on the Boeing debacle, reported on how
the FAA had moved further and further down the path of relying on aircraft manufactures for
critical elements of certification. Not all of this was the result of capture; with the
evolution of technology, even the sharpest and best intended engineer in government employ
would become stale on the state of the art in a few years.
However, one of the critical decisions the FAA took was to change the reporting lines of the
manufacturer employees who were assigned to FAA certification.
From a May post :
Although all stories paint a broadly similar picture, .the most damning is a detailed
piece at the Seattle Times,
Engineers say Boeing pushed to limit safety testing in race to certify planes, including 737
MAX ..The article gives an incriminating account of how Boeing got the FAA to delegate
more and more certification authority to the airline, and then pressured and abused employees
who refused to back down on safety issues .
As the Seattle Times described, the problems extended beyond the 737 Max MCAS software
shortcomings; indeed, none of the incidents in the story relate to it.
In 2004, the FAA changed its system for front-line supervision of airline certification
from having the FAA select airline certification employees who reported directly to the FAA
to having airline employees responsible for FAA certification report to airline management
and have their reports filtered through them (the FAA attempted to maintain that the
certification employees could provide their recommendations directly to the agency, but the
Seattle Times obtained policy manuals that stated otherwise).
Mind you, the Seattle Times was not alone in depicting the FAA as captured by Boeing. On
Monday, the Post and Courier reported about the South Carolina plant that produced 787s found
with tools rattling inside that
Boeing SC lets mechanics inspect their own work, leading to repeated mistakes, workers say.
These mechanic certifications would never have been kosher if the FAA were vigilant. Similarly,
Reuters described how Boeing weakened another safety check, that of pilot input.
One of the objectives for creating this panel was to restore confidence in Boeing and the
FAA, but that was always going to be a tall order, particularly after more bad news about
various 737 Max systems and Boeing being less than forthcoming with its customers and
regulators emerged.
From the Wall Street Journal :
As part of roughly a dozen findings, these government and industry officials said, the
task force is poised to call out the Federal Aviation Administration for what it describes as
a lack of clarity and transparency in the way the FAA delegated authority to the plane maker
to assess the safety of certain flight-control features. The upshot, according to some of
these people, is that essential design changes didn't receive adequate FAA attention.
The report, these officials said, also is expected to fault the agency for what it
describes as inadequate data sharing with foreign authorities during its original
certification of the MAX two years ago, along with relying on mistaken industrywide
assumptions about how average pilots would react to certain flight-control emergencies .
The FAA has stressed that the advisory group doesn't have veto power over modifications to
MCAS.
But the report could influence changes to traditional engineering principles determining
the safety of new aircraft models. Certification of software controlling increasingly
interconnected and automated onboard systems "is a whole new ballgame requiring new
approaches," according to a senior industry safety expert who has discussed the report with
regulators on both sides of the Atlantic.
If the FAA thinks it can keep this genie the bottle, it is naive. The foreign regulators
represented on the task force, including from China and the EU, have ready access to the
international business press. And there will also be an embarrassing fact on the ground, that
the FAA, which was last to ground the 737 Max, will be the first to let it fly again, and
potentially by not requiring safety protections that other regulators will insist on. For
instance, the Journal reports that Canadian authorities expect to require additional simulator
training for 737 Max pilots. Recall that Boeing's biggest 737 Max customer, Southwest Airlines,
was so resistant to the cost of additional simulator training that it put a penalty clause into
its contract if wound up being necessary.
It's a given that the FAA will be unable to regain its former stature and that all of its
certifications of major aircraft will now be second guessed subject to further
review by major foreign regulators. That in turn will impose costs on Boeing, of changing its
certification process from needing to placate only the FAA to having to appease potentially
multiple parties. For instance, the EU regulator is poised to raise the bar on the 737 Max:
Patrick Ky, head of the European Union Aviation Safety Agency, told the European
Parliament earlier this month, "It's very likely that international authorities will want a
second opinion" on any FAA decision to lift the grounding.
Even after EASA gives the green light, agency officials are expected to push for
significant additional safety enhancements to the fleet. Most prominently, EASA has proposed
to eventually add to the MAX a third fully functional angle-of-attack sensor -- which
effectively measures how far the plane's nose is pointed up or down -- underscoring the
controversy expected to swirl around the plane for the foreseeable future.
A monopoly is a precious thing to have. Too bad Boeing failed to appreciate that in its zeal
for profits. If the manufacturer winds up facing different demands in different regulatory
markets, it will have created more complexity for itself. Can it afford not to manufacture to
the highest common denominator, say by making an FAA-only approved bird for Southwest and
trying to talk American into buying FAA-only approved versions for domestic use only? It's hard
to see how Boeing hasn't gotten itself in the position of being at a major competitive
disadvantage by virtue of having compromised the FAA so severely as to have undercut
safety.
Even if Boeing finds solutions that international regulators can finally accept, their
implementation will take additional months. The AoA sensor and trim wheel issues will
likely require hardware changes to the 600 or so existing MAX airplanes. The demand for
simulator training will further delay the ungrounding of the plane. There are only some two
dozen 737 MAX simulators in this world and thousands of pilots who will need to pass
through them.
has Boeing developed a plan to correct the trim wheel issue on the 787max? i haven't seen
a single statement from them on how they plan to fix this problem. is it possible they think
they can get the faa to re-certify without addressing it?
The self-inflicted wound caused by systematic greed and arrogance – corruption, in
other words. Boeing is reaping the wages of taking 100% of their profits to support the stock
price through stock buybacks and deliberately under-investing in their business. Their brains
have been taken over by a parasitic financial system that profits by wrecking healthy
businesses.
It's not only Boeing – the rot is general and it is terrible to see the destruction
of American productive capacity by a parasitic finance sector.
Shareholder Value is indeed the worst idea in the world. That Boeing's biggest
stockholder, Vanguard, is unable to cleanup Boeing's operations makes perfect sense. I mean
vanguards expertise is making money, not building anything. Those skills are
completely different.
Shareholder value does what it intended to do, which is to maximise stock value in the
short term, even if it significantly cuts value in the long term.
By that measure allowing Boeing to take over the FAA and self-certify the 737-MAX was a
big success, because of short term maximization of stock value that resulted. It is now
someone else's problem regarding any long term harm.
Having worked at Boeing and the FAA, this report is very welcome. One thing: federal
hiring practices in a way lock out good people from working there. Very often the fed
managing some project has only a tenuous grasp is what is going on.
But has the job bc they
were hired in young and cheap, which is what agencies do with reduced budgets. That and job
postings very often stating that they are open only to current feds says it all.
So deferring
to the airline to "self-certify" would be a welcome relief to feds in many cases. At this
point, I doubt the number of their "sharpest and best intended" engineers is very high.
If
you want better oversight, then increase the number and quality of feds by making it easier
to hire, and decrease the number of contractors.
I deal with federal and state regulators (not airplane) all the time. Very well meaning
people, but in many cases are utterly unqualified to do the technical work. So it works well
when they stick to the policy issues and stay out of the technical details.
However, we have
Professional Engineers and other licensed professionals signing off on the engineering
documents per state law. You can look at the design documents and the construction
certification and there is a name and stamp of the responsible individual.
The licensing laws clearly state that the purpose of licensing is to hold public health
and safety paramount. This is completely missing in the American industrial sector due to the
industrial exemptions in the professional engineering licensing laws. Ultimately, there is
nobody technically responsible for a plane or a car who has to certify that they are making
the public safe and healthy.
Instead, the FAA and others do that. Federal agencies and the
insurance institute test cars and give safety ratings. Lawyers sue companies for defects
which also helps enforce safety.
One maxim we see illustrated here and elsewhere is this: Trust takes years to earn, but
can be lost overnight.
Boeing management and the FAA, having lost the trust of most people in the world through
their actions lately, seem to nevertheless think it will be a simple matter to return to the
former status quo. It seems as likely, or perhaps more likely, that they will never be
able to return to the former status quo. They have been revealed as poseurs and imposters,
cheerfully risking (and sometimes losing) their customers' lives so they can buy back more
stock.
This image will be (rightfully) hard for them to shake.
So people are going to quit their jobs rather than fly on Boeing planes? Joe and Marge
Six-Pack are going to choose flights not based on what they can afford but based on what make
of plane they are flying on? As if the airlines will even tell them in advance?
There are close to zero consequences to Boeing and FAA management. Click on the link to
the Purdue Sacklers debacle. The biggest inconvenience will be paying the lawyers.
From 1992 to 1999 I worked for the FAA running one of their labs in OKC. My role, among
other things, was to provide data to the Administrator on employee attitudes, business
practice changes, and policy impact on morale and safety. Back then, likely as now, it was a
common complaint heard from FAA execs about the conflict of interest of having to be both an
aviation safety regulatory agency and having to promote aviation. Congress seemed fine with
that – apparently still is. There is FAA pork in nearly every Congressional district
(think airports for example). Boeing is the latest example of how mission conflict is not
serving the aviation industry or public safety. With its headquarters within walking distance
of Capitol Hill, aviation lobbyists do not even get much exercise shuttling.
The 1996 Valuejet crash into the Florida swamps shows how far back the mission conflict
problem has persisted. Valuejet was a startup airline that was touted as more profitable than
all the others. It achieved that notoriety by flying through every FAA maintenance loophole
they could find to cut maintenance costs. When FAA started clamping down, Senate Majority
Leader Daschle scolded FAA for not being on the cutting edge of industry innovation. The
message was clear – leave Valuejet alone. That was a hard message to ignore given that
Daschle's wife Linda was serving as Deputy FAA Administrator (the #2 position) – a
clear conflict of interest with the role of her spouse – a fact not lost on
Administrator Hinson (the #1 position). Rather than use the disaster as an opportunity to
revisit FAA mission conflict, Clinton tossed Administrator Hinson into the volcano of public
outcry and put Daschle in charge. Nothing happened then, and it looks like Boeing might
follow Valuejet into the aviation graveyard.
Nothin' like regulatory capture. Along with financialized manufacturing, the cheap &
profitable will outdo the costly careful every time. Few businesses are run today with the
moral outlook of some early industrialists (not enough of them, but still present) who,
through zany Protestant guilt, cared for their reputations enough to not make murderous
product, knowing how the results would play both here and in Heaven. Today we have PR and
government propaganda to smear the doubters, free the toxic, and let loose toxins.
From food to clothing, drugs to hospitals, self-propelled skateboards to aircraft,
pesticides to pollution, even services as day care & education, it is time to call the
minions of manufactured madness to account. Dare we say "Free government from Murder
Inc."?
This is an excellent summary of the untenable situation that Boeing and the Federal
Government have gotten themselves into. In their rush to get richer the Elite ignored the
fact that monopolies and regulatory capture are always dangerously corrupt. This is not an
isolated case. FDA allows importation of uninspected stock pharmaceutical chemicals from
China. Insulin is unaffordable for the lower classes. Diseases are spreading through homeless
encampments. EPA approved new uses of environmentally toxic nicotinoid insecticide,
sulfoxaflor. DOD sold hundreds of billions of dollars of armaments to Saudi Arabia that were
useless to protect the oil supply.
The Powers-that-be thought that they would be a hegemon forever. But, Joe Biden's green
light for the Ukraine Army's attack against breakaway Donbass region on Russia's border
restarted the Cold War allying Russia with China and Iran. This is a multi-polar world again.
Brexit and Donald Trump's Presidency are the Empire's death throes.
NC readers know what the problem is as two comments above indicate clearly. Isn't the FAA
ashamed to keep conniving with the money and permitting dangerous planes to fly?
Boeing just got a WTO ruling against Airbus. It seems that one rogue produces others. Time
to clean the stable and remove the money addiction from safety regulation
I think that I can see an interesting situation developing next year. So people will be
boarding a plane, say with Southwest Airlines, when they will hear the following announcement
over the speakers-
"Ladies and gentlemen, this is your Captain speaking. On behalf of myself and the
entire crew, welcome aboard Southwest Airlines flight WN 861, non-stop service from Houston
to New York. Our flight time will be of 4 hours and 30 minutes. We will be flying at an
altitude of 35,000 feet at a ground speed of approximately 590 miles per hour.
We are pleased to announce that you have now boarded the first Boeing 737 MAX that has
been cleared to once again fly by the FAA as being completely safe. For those passengers
flying on to any other country, we regret to announce that you will have to change planes at
New York as no other country in the world has cleared this plane as being safe to fly in
their airspace and insurance companies there are unwilling to issue insurance cover for them
in any case.
So please sit back and enjoy your trip with us. Cabin Crew, please bolt the cabin doors
and prepare for gate departure."
"The Trade War Spurs China's Technology Innovators Into Overdrive" [
Industry Week ]. "In Shenzhen's glitzy financial district, a five-year-old outfit creates a
360-degree sports camera that goes on to win awards and draw comparisons to GoPro Inc.
Elsewhere in the Pearl River Delta, a niche design house is competing with the world's best
headphone makers. And in the capital Beijing, a little-known startup becomes one of the biggest
purveyors of smartwatches on the planet. Insta360, SIVGA and Huami join drone maker DJI
Technology Co. among a wave of startups that are dismantling the decades-old image of China as
a clone factory -- and adding to Washington's concerns about its fast-ascending international
rival.
Within the world's No. 2 economy, Trump's campaign to contain China's rise is in fact
spurring its burgeoning tech sector to accelerate design and invention. The threat they
pose is one of unmatchable geography: by bringing design expertise and innovation to the place
where devices are manufactured, these companies are able to develop products faster and more
cheaply ." •
Gee, didn't we have this advantage once? Thanks, neoliberals!
Sep 16, 2019 Welcome
to the world where things don't add up. For instance, some people did some things to
the Saudi Arabian oil refinery at Abqaiq over the weekend. Like, sent over a salvo of cruise
missiles and armed drone aircraft to blow it up. They did a pretty good job of disabling the
works. It is Saudi Arabia's largest oil processing facility, and for now, perhaps months, a
fair amount of the world's oil supply will be cut off. President Trump said "[we] are waiting
to hear from the Kingdom as to who they believe was the cause of this attack, and under what
terms we would proceed!" Exclamation mark his.
How many times the past few years has our government declared that "we have the finest
intelligence services in the world." Very well, then, why are we waiting for the Kingdom of
Saudi Arabia to tell us who fired all that stuff into Abqaiq? Whoever did it, it was
unquestionably an act of war. And, of course, what are we going to do about it? (And what will
some people do about it?)
Let's face it: the USA has had a hard-on for Iran for forty years, ever since they overthrew
their shah, invaded the US embassy in Tehran, and took fifty-two American diplomats and staff
hostage for 444 days. On the other hand, the Arabians and Iranians have had a mutual hard-on
for centuries, long before the Saud family was in charge of things, and back when Iran was
known as Persia, a land of genies, fragrant spices, and a glorious antiquity (while Arabia was
a wasteland of sand populated by nomads and their camels). The beef was formerly just about
which brand of Islam would prevail, Sunni or Shia. Lately (the past fifty years) it has been
more about the politics of oil and hegemony over the Middle East. Since the US invaded Iraq and
busted up the joint, the threat has existed that Iran would take over Iraq, with its majority
Shia population, especially the oil-rich Basra region at the head of the Persian Gulf. The
presence of Israel greatly complicates things, since Iran has a hard-on for that nation, too,
and for Jews especially, often expressed in the most belligerent and opprobrious terms, such as
"wiping Israel off the map." No ambiguity there. The catch being that Israel has the capability
of turning Iran into an ashtray.
The world has been waiting for a major war in the Middle east for decades, and it might have
one by close of business today. Or perhaps some people will do nothing . The
Iran-backed Houthi rebels of Yemen supposedly claimed responsibility for the attack. That's
rich. As if that rag-tag outfit has a whole bunch of million-dollar missiles and the knowledge
and capacity to launch them successfully, not to mention the satellite guidance mojo. A
correspondent suggests that the missiles were fired from a pro-Iranian military base in Iraq,
with the Houthis brought in on flying carpets to push the launch buttons.
President Trump is trumpeting America's "energy independence," meaning whatever happens over
there won't affect us. Well, none of that is true. We still import millions of barrels of oil a
day, though much less from Saudi Arabia than before 2008. The shale oil "miracle" is hitting
the skids these days. Shale oil production has gone flat, the rig-count is down, companies are
going bankrupt, and financing for the debt-dependent operations is dwindling since the
producers have demonstrated that they can't make a profit at it. They're trapped in the
quandary of diminishing returns, frontloading production, while failing to overcome steep
decline curves in wells that only produce for a couple of years.
It's also the case that shale oil is ultra-light crude, containing little heavier
distillates such as diesel and aviation fuel (basically kerosene). Alas, American refineries
were all built before shale oil came along. They were designed to crack heavier oil and can't
handle the lighter shale. The "majors" don't want to invest their remaining capital in new
refineries, and the many smaller companies don't have the ability. So, this makes necessary a
high volume of oil swapping around the world. Without diesel and aviation fuel, US trucking and
commercial aviation has a big problem, meaning the US economy has a big problem.
With the new crisis in the Middle East, benchmark West Texas Intermediate oil is up from
around $55-a-barrel to just over $60 at the market open (European Brent crude is just above
$70). That's a pop, but not a spectacular one, considering that a whole lot more damage might
ensue in the days ahead. China, Korea, and Japan stand to lose bigly if the players in the
Middle East really go at it and bust up each other's assets. If that happens, the world will
never be the same. You can kiss the global economy goodbye for good. Let's hope some people
don't do something.
Not just the Saudi's. The Houthis support Palestine, and the Muslim Brotherhood.
They also control the Straits of Mandeb where most of Israel's oil transits to Asia.
Hence the war in Yemen an the problems in the Sudan. So its no wonder its not just
the Saudi's who are fighting the Houthis. The Houthis are fighting against the U.K.,
Germany, the U.S., Israel and the UAE, who are all supporting the Saudi's. Yemen, one
of the worlds oldest civilizations
Iran never said "wiping Israel off the map."It was Ahmadinejad that said "..wipe
the Zionist entity off the map".
This author should know better than to repeat Zionist lies.
Kunstler has some huge holes in his game. He seems to take many of the US MSM
talking points as good coin. Like, exhibit A, the "wipe Israel off the map" quote
which has long since been shown to be a mis-translation. Often his bigotry also slips
like when he dismisses Houthi capabilities and gets wrong what actually hit the
refineries. These were DRONES not missiles. That is why they were able to evade the
Saudi air defenses. But Houthis are to uncouth to pull of such an operation and
moreover how dare they defend themselves or accept assistance from Iran even if it
were true they are supplying the Houthis with weapons and intelligence. Of course, he
also fails to explain, following like a dog on a leash the US media, why Iran would
launch such an attack considering it may provoke the Israelis or the US. Sure they
may hate the Saudis but they certainly do not want a war where, though they would not
technically lose, would see their society destroyed. Again Cui Bono.
Kunstlers's roots are definitely showing here. His usual barbed wit has simply
disappeared and he seems to have bitten off and swallowed whole the officialbullshit , very unwise at this stage.
"A correspondent suggests" just doesn't cut it. Correspondents have suggested all
sorts of things and he should learn to ignore these voices and rely on facts
instead.
He forgets the fact that Saudi Arabia has been waging war on Yemen since 2015 and
that the damage inflicted upon the Saudi oil installations is only a tiny fraction of
the retribution that the Saudis deserve.
Kunstler predictably forgets the fact that Israel has been illegally attacking
Iranian interests in Syria for several years and that as a result many Iranians have
been killed by Israel in recent times. The fact is that these illegal forays are also
acts of war, which of course Kunstler forgets to tell us.
One other fact pertains to his boasting that Israel could wipe Iran off the map,
which is not just bad taste, but ignores the fact that Iran has enough conventional
power to do the same to its postage stamp sized and bellicose neighbour.
We now know that when the chips are down, Kunstler will simply revert to type and
tow the crooked official zio line. We don't need Kunstler for that, we all ready have
a zionist media, a craven Congress and Trump's government of crazies, very important
facts.
If the Yemenis are being assisted by Iran I say that's a good thing. The Saudi
beasts are being assisted by our jew rulers. If I was a Yemeni blowing up that oil
infrastructure would have been on top of my list. And Israel is the country that
would be turned into an ashtray. The US is gone, over run invaded, already lost.
"Let's face it:" says Kunstler. Iran started it forty years ago, "ever since they
overthrew their shah ..." Bad Iranians attacking the USA.
But if we go back a few decades further, we find USUKisrael smashing the elected
government of Iran and installing The Shah! So Kunstler is lying when he says "their
shah"; he should say OUR shah. I think he probably knows this. He's not accidentally
mixing things up.
Catastrophic or not the neocons are itching for a big confrontation and Iran fits
the bill.
Keep in mind that most collateral damage will be suffered by the Saudis.
The US is now the biggest producer of oil, just imagine the boost that the US shale
investors will get in an industry that was about to have its bubble burst.
No longer will it struggle to break even, no it will make a good profit, more
importantly the bubble will not hit the financial sector hard.
Now KSA will suffer a blow, but that will only serve the US - new loans and new
contracts will reverse the money stream and tie the Saudi regime even more to
Washington.
As a bonus it will please the Israelis when finally Iran will be taken out and
Hezbollah isolated.
Wild cards - how hard can Iran retaliate beyond KSA, is it able and willing to
strike against Israel? How hard can it strike US targets in the region? And finally
will they go full on against the Arabian energy infrastructure. If a couple of Houthi
cruise missiles in a single strike can drop total oil production by 5% and raise
prices by 20%, imagine what kind of havoc a real Iranian campaign can cause (again
ignoring the oil bonanza the US oil industry will score).
I really believe there is now a 50/50% that Washington will gamble a full blown
war against Iran, its perceived benefits outweighing the dangers.
If anything Israel will be the deciding factor, if Tel Aviv does not fear Iranian
retribution and gives the go ahead, we'll have a war on our hands,
The US is certainly stretched thin defending the national and security interest
across the globe - aka defending and expanding the empire.
However there is enough fire power to defeat the Iranian military as an organized
force and Teheran as a government, it all depends on the US rules of engagement and
how far they are willing to push this war.
But afterwards it will be no better than Iraq or Afghanistan.
That may actually be the excuse to do what some strategists have been itching to
do since the Korean war, that is to use a couple of tactical nukes - the ultimate
terror weapon of state.
The current NPR is a strong sign in favor of nuclear weapons in conflict as it
greatly reduces the threshold. Iran's perceived threat to global oil production could
be used to set an example.
In what condition will Saudi Arabia be in, after Iran has been subdued? Also the
plethora of US bases in the area will also be fat juicy targets for Iranian
missiles.
Did the condition of South East Asia other than the ubiquitous Domino Theory,
worry many when they went to war in Viet Nam, what about Iraq?
Oil and Israel are key.
Oil prices and Israel's safety.
They want to take out Iran, but this small attack shows how vulnerable the
regional energy infrastructure really is. That can be a temporary advantage, in
boosting US oil income, but that can be easily off set by the impact of rising oil
prices on all other sectors and the public.
That's why I think it is 50/50 at best, and slowly leaning to less likely we'll
see a major escalation.
Otoh, if I were the Houthis, I'd launch a couple of additional strikes to press
the message.
Saudi Arabia supplies oil to China, so to believe Iran was behind the drone attack
on Saudi oil is a bit of a stretch. The question is was it the U.S. and Israel
coordinating that attack? Israel's influence on the U.S. in the middle east is what
is getting America running in circles
"... the attack dented the image of invincibility of Aramco's infrastructure ..."
"... Saudi Military stated the Aramco facilites were attacked with 18 missiles and 7 drones. They state cruise missiles were used. However, now they state the attack was simply "backed" by Iran. The weapons were all Iranian design. ..."
"... That Iran is backing the Houthis we already knew and nobody doubts. But those drones and missiles didn't come from Iranian territory nor were they operated by Iranian personel. It's a free market world, and everybody can buy weapons from anybody. ..."
"... The GOAL of exaggerating the attack could be to simply increase oil prices or to justify war with Iran. Tensions with Iran will be elevated for weeks, if not months. That will mean higher oil prices than otherwise. ..."
"... The timing is also suspicious because it comes just before the Israeli election and just after John Bolton was dismissed. ..."
"... Russian oil experts say 3 to 6 months to repair damage from strike as components must come from Europe according to TASS. As the remains of the uavs have been recovered their effective range can be determined. I suspect they were launched from within Saudi territory. ..."
"... It is embarrassing to the Saudis because they scarcely bother to unpack the weapons the US sends them-at premium prices - and dare not allow any of their countrymen to learn how to use them. And it is embarrassing to the Americans because they understand all this and ship over arms that don't work simply to ensure that those petrodollars circulate. ..."
"... Hence the current campaign to convince us that Iran was responsible. Mind you, that propaganda is only effective so long as the American people don't really believe it because, if they did, they might demand war (you can imagine Pelosi, Schumer and Biden insisting on it) and Washington doesn't want that. Jingoism isn't about fighting it's about threatening. ..."
1) USA: that would only help if Trump was decided to go to a hot war against Iran. By his
declarations since yesterday, we already know that isn't going to happen. He didn't even jump
to the "Iran did it!" bandwagon right away. He said he increased sanctions against Iran --
but Iran is already sanctioned to the maximum by the USA, so that's empty rhetoric.
2) Israel: wars in Israel only work as an election boost to the incumbent Prime Minister when Israel emerges with a clear
victory. ...
3) Saudi Arabia: it has a 188 billion barrel reserve to cover up for the losses for a
couple of days, so they benefited a little bit from the 20% price rise. But so did everybody
else -- including enemies of the USA, such as Russia and Venezuela. Besides, the attack
dented the image of invincibility of Aramco's infrastructure, and Saudi Arabia's image as a
neofascist ideal State.
4) Iran: Iran can block the Hormuz Strait -- a much more benign and cheap way to stop
Saudi oil from being exported. If Iran attacks its neighbors' oil infrastructure, then it
kind of states it's fair game for its neighbors to attack theirs. This is bad move for Iran
from a purely game theory standpoint, let alone from the geopolitical one.
5) Masters of the Universe: yes, the oil price went up 20% in one day. But let's remember
that even a USD 100.00 a barrel isn't that impressive from a historical standpoint: when the
Iraq invasion happened, the barrel reached USD 300.00. Yes, a selected elite benefited a lot
from this, but the USA didn't become a capitalist utopia because of that. We must not
overestimate the effects of oil prices on capitalism and, specially, on the USA: the West is
in terminal decline for a myriad of factors, not because of one silver bullet. Higher oil
prices won't save the West.
My hypothesis is this: the USA/Saudi Arabia are too embarassed to admit their
anti-aircraft weapons and systems are useless against puny drones and created a big,
subterranean enemy in the form of Iran in order to avoid public embarassment.
The Houthis are telling the truth, and they will do more attacks if the Saudis don't stop
with theirs and settle for peace.
The headline calls that the Saudi Military stated the Aramco facilites were attacked with
18 missiles and 7 drones. They state cruise missiles were used. However, now they state the
attack was simply "backed" by Iran. The weapons were all Iranian design.
That Iran is backing the Houthis we already knew and nobody doubts. But those drones and
missiles didn't come from Iranian territory nor were they operated by Iranian personel. It's
a free market world, and everybody can buy weapons from anybody.
US and Saudis say that over 20 missiles and drones were used in the attack. They say that
this showed that Iran did the attack or participated in the attack because the Houthi only
claim to have used 10 drones.
Peter AU 1 and I have said that it's possible to account for the excess damage as an
attempt to exaggerate damage caused by the Houthi attack.
The GOAL of exaggerating the attack could be to simply increase oil prices or to justify
war with Iran. Tensions with Iran will be elevated for weeks, if not months. That will mean
higher oil prices than otherwise.
The timing is also suspicious because it comes just before the Israeli election and
just after John Bolton was dismissed.
And despite Trump's backing away from his asinine "locked and loaded" comment, war with
Iran is still very possible. The Iraq War started 18 months after 9-11.
Russian oil experts say 3 to 6 months to repair damage from strike as components must come
from Europe according to TASS. As the remains of the uavs have been recovered their effective
range can be determined. I suspect they were launched from within Saudi territory.
Their main argument is that the attacks came "from the north".
If that's true, then the question remains: why didn't the Saudi radars detect it? Either b
is lying, or the Saudi military is lying.
It's really hilarious at this point: the attack caught the West so low-guarded and stunned
them so much that they can't even come up with a unified official narrative.
Houthi Armed Forces Spokesman
is at this moment tweeting a series of statements explaining how the last attack was done
that includes drone capabilities and types of munitions used!!!!!!!!!!! An example:
"Drones have fission heads carrying four precision bombs."
Given that the entire relationship between the USA and the KSA is an elaborate protection
racket the failure of all those high priced systems to protect the oil fields against
Ansrullah drones is particularly embarrassing.
It is embarrassing to the Saudis because they scarcely bother to unpack the weapons the
US sends them-at premium prices - and dare not allow any of their countrymen to learn how to
use them. And it is embarrassing to the Americans because they understand all this and ship
over arms that don't work simply to ensure that those petrodollars circulate.
Hence the current campaign to convince us that Iran was responsible. Mind you, that
propaganda is only effective so long as the American people don't really believe it because,
if they did, they might demand war (you can imagine Pelosi, Schumer and Biden insisting on
it) and Washington doesn't want that.
Jingoism isn't about fighting it's about threatening.
And, now that 57 varieties of Israeli Fascism are squabbling about whether the Prime
Minister goes to jail for theft, even that distraction is no longer useful.
Statement from the Iranians "Saudi press conference shows they are clueless about how attack
was executed and know nothing about the military capabilities of their adversary".
Seems about right. Statement by bevin is on target.
"... Committee members Sen. Tom Udall (D-N.M.) and Sen. Tim Kaine (D-Vir.) explicitly announced their opposition to war with Iran. And prominent war powers critic Sen. Jeff Markley (D-Ore.) quipped that, "[b]ack when Presidents used to follow the Constitution, they sought consent for military action from Congress, not foreign governments that murder reporters," referring to the assassination of Saudi-American journalist Jamal Khashoggi. ..."
"... "Diplomacy by Twitter has not worked so far and it surely is not working with Iran. The president needs to stop threatening military strikes via social media," said Sen. Ben Cardin (D-Mary.) in response to a question from the National Interest . "The attack on Saudi Arabia is troubling whether it was perpetrated by Houthi rebels or Iran. The U.S. should regain its leadership by working with our allies to isolate Iran for its belligerent actions in the region." ..."
"... "The U.S. should not be looking for any opportunity to start a dangerous and costly war with Iran. Congress has not authorized war against Iran and we've made it crystal clear that Saudi Arabia needs to withdraw from Yemen," he continued. ..."
"... Sen. Chris Murphy (D-Conn.) has long been a critic of Saudi Arabia's war in Yemen, proposing a successful bill to cut off U.S. support for the Saudi-led war effort. (He did not have enough votes to override the veto.) After the attacks, he wrote a long Twitter thread explaining how "the Saudis sowed the seeds of this mess" in Yemen. ..."
"... "It's simply amazing how the Saudis call all our shots these days. We don't have a mutual defense alliance with KSA, for good reason. We shouldn't pretend we do," Murphy added. "And frankly, no matter where this latest drone strike was launched from, there is no short or long term upside to the U.S. military getting more deeply involved in the growing regional contest between the Saudis and Iranians." ..."
"... "Having our country act as Saudi Arabia's bitch is not 'America First,'" said Democratic presidential candidate Tulsi Gabbard, invoking a popular Trump slogan. Sen. Rand Paul (R-Ken.), who had invoked Trump's antiwar message in a public feud with Rep. Liz Cheney (R-Wyo.) over the weekend, took to CNN to warn against striking Iran. ..."
"... "This is a regional conflict, that there's no reason the superpower of the United States needs to be getting into bombing mainland Iran. It would be a needless escalation of this," he told journalist Jake Tapper. "Those who loved the Iraq War, the Cheneys, the Boltons, the Kristols, they all are clamoring and champing at the bit for another war in Iran. But it's not a walk in the park." ..."
"... "In order to have clean ships by the first of January next year, all the world's shipping fleet from about now until the end of the year are busy emptying their tanks of heavy sulphur fuel oil and filling their tanks with low sulphur fuel oil, which is the new standard," Latham explained, claiming that the attack could have taken up to 20 percent of the world's desulphurization capacity out of commission. ..."
"... "This little accident was designed to be maximally disruptive to the world's oil market. It could not have happened at a worse time." "But what is really interesting is in Amsterdam this morning, I saw that for fuel oil -- the sulphurous stuff -- the price went down," Latham continued, speculating that international powers might delay the new environmental regulations by months and inadvertently drive down the price of oil in the long run. ..."
"... On Sunday, Trump tapped into emergency U.S. oil reserves, in order to stabilize prices. It's not clear, however, that the United States has enough oil to cope with wider attacks on energy infrastructure. "If the Iranians did this, they have shown they have pretty immense capabilities clearly," Parsi told the National Interest . "In the case of a full-scale war, imagine what this will do for the global economy. It's not that difficult to imagine what that will do to Trump's re-election prospects. I think that is something Trump understands." ..."
Retired Lt. Col. Daniel L. Davis pointed out that the puncture marks do not actually show
the origin of the attack. "Missiles can fly from almost anywhere. They have the ability to
maneuver! And certainly drones can, too," the Defense Priorities senior fellow told the
National Interest . "There hasn't been the time to do an actual analysis on the
ground, so let's wait and see."
Mark Latham, managing partner at the London-based analysis firm Commodities Intelligence,
told the National Interest that the puncture marks pointed to a cruise missile with no
explosive warhead. Removing the payload would allow the missile to carry more fuel and launch
from farther away from its target.
... ... ...
"Mr. X is a sophisticated fellow. He's sourced some Iranian cruise missiles.
He's removed the explosive payload. He's replaced the explosive payload with fuel," he said.
"So this isn't your twenty dollar Amazon drone. This is a sophisticated military operation."
"The culprit behind the Abqaiq attack is most definitely the Islamic Republic, either
directly or through one of its proxies," argued Varsha Koduvayur, a senior research analyst at
the Foundation for the Defense of Democracies.
"The attack fits the pattern of Iran signaling to the Gulf states that if it can't get its
oil out, it will cause their oil exports to become collateral damage," Koduvayur told the National Interest . "It's because of how strong our coercive financial tools are that
Iran is resorting to attacks like this: it's lashing out."
Violating an Obama-era agreement to regulate Iran's nuclear research program, the Trump
administration imposed massive sanctions on Iran's oil industry beginning in May 2018. The goal
of this "maximum pressure" campaign was to force Iran to accept a "better" deal. Since then,
Iranian forces have captured a British oil tanker and allegedly sabotaged tankers from other
countries.
There were some signals that Trump was planning to use the ongoing United Nations General
Assembly in New York to open a new
diplomatic channel with Iran, especially after the
firing of hawkish National Security Advisor John Bolton. But the weekend attack sent Trump
into reverse.
"Remember when Iran shot down a drone, saying knowingly that it was in their 'airspace'
when, in fact, it was nowhere close. They stuck strongly to that story knowing that it was a
very big lie," he said in a Monday morning Twitter post, referring to a June incident
when Iranian and American forces almost went to war. "Now they say that they had nothing to do
with the attack on Saudi Arabia. We'll see?"
He also hinted at a violent U.S. response.
"There is reason to believe that we know the culprit, are locked and loaded depending on
verification, but are waiting to hear from the Kingdom as to who they believe was the cause of
this attack, and under what terms we would proceed!" Trump wrote on Sunday.
"Saudi Arabia is not a formal treaty ally of ours, so there are no international agreements
that obligate us to come to their defense," John Glaser, director of foreign-policy studies at
the CATO Institute, stated. "This does not amount to a clear and present danger to the United
States, so no self-defense justification is relevant. He would therefore need authorization
from Congress."
Members of the Senate Foreign Relations Committee had mixed reactions to the attack.
Sen. Lindsey Graham (R-S.C.) proposed putting "on the table an attack on Iranian oil
refineries" in order to "break the regime's back." His press office did not respond to a
follow-up question from the National Interest asking whether the president would have
the authority to do so.
Amy Grappone, spokeswoman for Sen. Todd Young (R-Ind.), told the National Interest
that the Senator "will support an appropriate and proportionate response" after "studying the
latest intelligence pertaining to Iran's malign activities, including these recent attacks in
Saudi Arabia."
Sen. Bob Menendez (D-N.J.), the ranking Democrat on the committee, condemned the attack with
a backhanded insult towards Saudi Arabia. "Despite some ongoing policy differences with the
kingdom, no nation should be subjected to these kinds of attacks on it soil and against its
people," he wrote on Twitter, declining to name Iran as the culprit.
Committee members Sen. Tom Udall (D-N.M.) and Sen. Tim Kaine (D-Vir.) explicitly announced
their opposition to war with Iran. And prominent war powers critic Sen.
Jeff Markley (D-Ore.) quipped that, "[b]ack when Presidents used to follow the Constitution,
they sought consent for military action from Congress, not foreign governments that murder
reporters," referring to the assassination of Saudi-American journalist Jamal Khashoggi.
"Diplomacy by Twitter has not worked so far and it surely is not working with Iran. The
president needs to stop threatening military strikes via social media," said Sen. Ben Cardin
(D-Mary.) in response to a question from the National Interest . "The attack on Saudi
Arabia is troubling whether it was perpetrated by Houthi rebels or Iran. The U.S. should regain
its leadership by working with our allies to isolate Iran for its belligerent actions in the
region."
"The U.S. should not be looking for any opportunity to start a dangerous and costly war with
Iran. Congress has not authorized war against Iran and we've made it crystal clear that Saudi
Arabia needs to withdraw from Yemen," he continued.
Asked how he would vote on a declaration of war, the senator told the National
Interest : "Let's hope it does not come to that. Congress has not authorized war against
Iran. The majority voted to engage them diplomatically to slow their nuclear ambitions. The
international community is ready to work with the U.S. again to ease economic pressure on Iran
in exchange for their restraint. We are at a dangerous precipice."
In a statement emailed to the National Interest and posted to Twitter, Sen. Tim
Kaine (D-Va.) was even more direct: "The US should never go to war to protect Saudi oil."
Sen. Chris Murphy (D-Conn.) has long been a critic of Saudi Arabia's war in Yemen, proposing
a successful bill
to cut off U.S. support for the Saudi-led war effort. (He did not have enough votes to override
the veto.) After the attacks, he wrote a long Twitter thread
explaining how "the Saudis sowed the seeds of this mess" in Yemen.
"It's simply amazing how the Saudis call all our shots these days. We don't have a mutual
defense alliance with KSA, for good reason. We shouldn't pretend we do," Murphy added. "And
frankly, no matter where this latest drone strike was launched from, there is no short or long
term upside to the U.S. military getting more deeply involved in the growing regional contest
between the Saudis and Iranians."
But the reaction did not fall neatly along party lines.
"Iran is one of the most dangerous state sponsors of terrorism. This may well be the thing
that calls for military action against Iran, if that's what the intelligence supports," said
Sen. Chris Coons (D-Del.) in a Monday interview with Fox News. Others pointed out that
attacking Iran would contradict Trump's own principles.
"Having our country act as Saudi Arabia's bitch is not 'America First,'" said Democratic
presidential candidate Tulsi Gabbard, invoking a popular Trump slogan. Sen. Rand Paul (R-Ken.),
who had invoked Trump's antiwar message in a public feud
with Rep. Liz Cheney (R-Wyo.) over the weekend, took to CNN to warn against striking Iran.
"This is a regional conflict, that there's no reason the superpower of the United States
needs to be getting into bombing mainland Iran. It would be a needless escalation of this," he
told journalist Jake Tapper. "Those who loved the Iraq War, the Cheneys, the Boltons, the
Kristols, they all are clamoring and champing at the bit for another war in Iran. But it's not
a walk in the park."
Davis agreed with Paul's assessment. "There's too many people who have lost touch with
understanding what war is all about. They think it's easy," he told the National
Interest . "Just imagine this. What we go ahead and do this, and Iran makes good on their
threats, and American warships get sunk in the Gulf?" "This is not America's fight," he
concluded. "The American armed forces are not on loan as a Saudi defense force."
"There's another claim that the impact on oil markets is sufficient to impact the vital U.S.
interest in the free flow of energy coming out of that region, but that argument quickly
descends into absurdity when we remember that the Trump administration has been trying to
zero-out Iranian oil exports, for a host of spurious reasons," Glaser told the National
Interest . "Washington is also aggressively sanctioning Venezuela, making it harder for
Caracas to bring oil to market, too. If we really cared about the supply of oil, we wouldn't be
doing this."
In any case, the attack may not have affected oil markets in such a straightforward way.
Latham says that the attack struck an oil desulphurization facility. At the moment,
desulphurized fuel is in high demand from the shipping industry, which is rushing to comply
with new international environmental regulations.
"In order to have clean ships by the first of January next year, all the world's shipping
fleet from about now until the end of the year are busy emptying their tanks of heavy sulphur
fuel oil and filling their tanks with low sulphur fuel oil, which is the new standard," Latham
explained, claiming that the attack could have taken up to 20 percent of the world's
desulphurization capacity out of commission.
"This little accident was designed to be maximally
disruptive to the world's oil market. It could not have happened at a worse time." "But what is
really interesting is in Amsterdam this morning, I saw that for fuel oil -- the sulphurous
stuff -- the price went down," Latham continued, speculating that international powers might
delay the new environmental regulations by months and inadvertently drive down the price of oil
in the long run.
On Sunday, Trump tapped into emergency U.S. oil reserves, in order to stabilize prices. It's
not clear, however, that the United States has enough oil to cope with wider attacks on energy
infrastructure. "If the Iranians did this, they have shown they have pretty immense
capabilities clearly," Parsi told the National Interest . "In the case of a full-scale
war, imagine what this will do for the global economy. It's not that difficult to imagine what
that will do to Trump's re-election prospects. I think that is something Trump
understands."
Matthew Petti is a national security reporter at the National Interest.
"... By Jeff Bryant, a writing fellow and chief correspondent for Our Schools , a project of the Independent Media Institute. He is a communications consultant, freelance writer, advocacy journalist, and director of the Education Opportunity Network, a strategy and messaging center for progressive education policy. His award-winning commentary and reporting routinely appear in prominent online news outlets, and he speaks frequently at national events about public education policy. Follow him on Twitter @jeffbcdm. produced by Our Schools , a project of the Independent Media Institute. ..."
"... One of the first school districts to become entangled in the conglomeration of firms Wise and Sundstrom assembled was Nashville, which in 2016 chose Jim Huge and Associates to help with hiring a new superintendent. The following year the board hired Shawn Joseph, whom Huge had recommended. ..."
"... Shortly after Joseph arrived in Nashville, according to local News Channel 5 investigative reporter Phil Williams, he began pushing the district to give $1.8 million in no-bid contracts to Performance Matters, a Utah-based technology company that sells "software solutions" to school districts. ..."
"... In addition to pushing Performance Matters, Williams reported, Joseph gave an "inside track" to Discovery Education, a textbook and digital curriculum provider and another company he and his team had ties to from their work in Maryland. ..."
"... By June 2018, Nashville school board member Amy Frogge was questioning Joseph about possible connections these vendors might have to ERDI. A district audit would confirm that ERDI's affiliated companies -- including Performance Matters, Discovery Education, and six other companies -- had signed contracts totaling more than $17 million with the district since Joseph had been hired. ..."
"... "Too often, national search firms are also driven by money-making motives and/or connections with those seeking profit," Frogge contended. That conflict of interest is a concern not only in Nashville but also in other districts where school leaders with deep ties to education vendors and consultants have resulted in huge scandals that traumatized communities and cost taxpayers millions. ..."
Lambert here:
More corruption in the professional class.
By Jeff Bryant, a writing fellow and chief correspondent for Our Schools , a project of the
Independent Media Institute. He is a communications consultant, freelance writer, advocacy
journalist, and director of the Education Opportunity Network, a strategy and messaging center
for progressive education policy. His award-winning commentary and reporting routinely appear
in prominent online news outlets, and he speaks frequently at national events about public
education policy. Follow him on Twitter @jeffbcdm. produced by Our Schools , a project of the
Independent Media Institute.
In July 2013, the education world was rocked when a breaking story by Chicago independent
journalist Sarah Karp
reported that district CEO Barbara Byrd-Bennett had pushed through a no-bid $20 million
contract to provide professional development to administrators with a private, for-profit
company called SUPES Academy, which she had worked for a year before the deal transpired.
Byrd-Bennett was also listed as a senior associate for PROACT Search, a superintendent search
firm run by the same individuals who led SUPES.
By 2015, federal investigators
looked into the deal and found reason to charge
Byrd-Bennett for accepting bribes and kickbacks from the company that ran SUPES and PROACT. A
year-and-a-half later, the story made national headlines when Byrd-Bennett was convicted and
sentenced to prison for those charges. But anyone who thought this story was an anomaly
would be mistaken. Similar conflicts of interest among private superintendent search firms,
their associated consulting companies, and their handpicked school leaders have plagued
multiple school districts across the country.
In an extensive examination, Our Schools has discovered an intricate web of businesses that
reap lucrative school contracts funded by public tax dollars. These businesses are often able
to place their handpicked candidates in school leadership positions who then help make the
purchasing decision for the same businesses' other products and services, which often include
professional development, strategic planning, computer-based services, or data analytics. The
deals are often brokered in secrecy or presented to local school boards in ways that make
insider schemes appear legitimate.
As in the Byrd-Bennett scandal, school officials who get caught in this web risk public
humiliation, criminal investigation, and potential jail time, while the businesses that
perpetuate this hidden arrangement continue to flourish and grow.
The results of these scandals are often disastrous. School policies and personnel are
steered toward products that reward private companies rather than toward research-proven
methods for supporting student learning and teacher performance. School governance becomes
geared to the interests of well-connected individuals rather than the desires of teachers and
voters. And when insider schemes become public, whole communities are thrown into chaos,
sometimes for years, resulting in wasted education dollars and increased disillusionment with
school systems and local governance.
While media accounts generally frame these scandals as examples of corrupt school leaders
who got caught and brought to justice, reporters rarely delve into the corporate-operated
enterprises that undergird the whole system.
A Potent Business Model
Months before Byrd-Bennett's conviction, another individual connected to the Chicago
scandal, SUPES co-owner Gary Solomon,
pleaded guilty to wire fraud charges related to a scheme that diverted over $5 million in
public money from the Chicago contracts into his private pocket.
Solomon, who had been forced out of a previous job as a high school administrator after he
was accused of racist
comments and "preying" on female students, cofounded SUPES -- along with sister companies
PROACT Search and Synesi Associates -- with his former student Thomas Vranas, who also pleaded
guilty to charges stemming from the Chicago deals.
Although Solomon and Vranas got caught and were convicted for their scheme, they
nevertheless stumbled on a potent business model that combined PROACT's superintendent search
services with SUPES Academy professional development programs and consulting by Synesi
Associates to help districts "implement
reform strategies." Combining leader recruitment with leadership training and consulting gave
Solomon and Vranas three ways into a business relationship with a school district and multiple
ways to upsell clients into more expensive new contracts.
New administrators PROACT helped place in leadership roles could be reliable allies for
pitching professional development services to the district. School districts that had employed
SUPES might be more inclined to hire PROACT for a leadership search. And Synesi would have an
inside track for its consulting services. Further, any of the firm's school leader contacts who
became idle between full-time jobs, which often happens in this profession, would be able to
work for the firm as "associates."
School districts may have welcomed this arrangement as a form of "one-stop shopping" for
their needs, but it's not hard to see how it could lead to conflicts of interest and a veil for
fraud.
Chicago was not the only district that fell for the pitch. Shortly after news of the
Byrd-Bennett scandal broke, school districts in
DeKalb County , Illinois;
Fayette County (Lexington), Kentucky; and
Lancaster , Pennsylvania ended their contracts with PROACT.
In Iowa City, Iowa, a local reporter
found the district had a contract with Synesi Associates to conduct an audit of the
district and then hired PROACT to recruit candidates for a vacant director position. At the
same time, superintendent Stephen Murley took 34 days off work to do paid consulting for those
two organizations and for SUPES Academy.
In St. Louis ,
superintendent Kelvin Adams started consulting for SUPES shortly after the school board awarded
a $125,000 contract to the firm, Sarah Karp and Melissa Sanchez reported. The district also
awarded a $16,500 no-bid deal to Synesi.
But Solomon and Vranas did not invent this money-making strategy, nor did it die when they
were convicted and sent to jail.
From Retail Store to Mega-Mall
In June 2016, the Chicago Sun Times
reported that in the wake of the Byrd-Bennett scandal, parts of SUPES Academy were
purchased by Joseph Wise and his partner David Sundstrom. Their Chicago-based firm Atlantic
Research Partners (ARP) had already gotten at least $5 million in recent business from Chicago
schools. (Sundstrom would later
contend ARP rescinded the agreement to acquire SUPES and that the "only remaining
connection between the companies" was a licensing of training material.)
Wise founded ARP with Sundstrom in 2007 after both had been ousted from their jobs in the
Duval County, Florida, school district due to alleged
"serious misconduct." According to the ARP website, the project's mission was to launch a
"teacher-training program focused on instructional coaching and school capacity-building."
Around the same time ARP was acquiring parts of SUPES, the company also
merged with Jim Huge and Associates, a firm with deep experience in school superintendent
and other talent searches. Huge had also
served as chief strategy officer for PROACT Search. The announced rationale of the merger
was "to maximize seamless delivery of the intensive executive services to schools and school
leaders."
Undoubtedly, what Wise and Sundstrom assembled was similar to the three-part business model
Solomon and Vranas put together. What was different, though, was Wise and Sundstrom would
expand on the model with their
subsequent acquisition of Education Research and Development Institute (ERDI).
According to Louisiana school teacher and wily blogger
Mercedes Schneider , Sundstrom registered an entity called ERDI Partners as a business with a Florida address in 2017.
But an entity called ERDI had been in existence since at least 2005 when an article in
Education Week described the company as
an intermediary organization bringing together school administrators and education vendors to
help companies improve the products and services they offer school systems. Specifically, ERDI
arranged get-togethers by paying superintendents consulting fees plus expenses to travel to
conferences at luxury resorts where they would meet with company representatives. The
companies, in turn, underwrote the conferences with substantial fees paid to ERDI.
Critics of ERDI
argue that the company's model for paying school administrators for their advice on
education products inevitably leads to conflict of interest issues when those administrators
are presented with offers to purchase products promoted by ERDI.
Byrd-Bennett had a relationship with ERDI dating back to at least 2014 and was listed as senior
advisor on the firm's website while she was employed as Chicago schools' CEO.
With the acquisition of ERDI, Wise and Sundstrom could transform their business model from a
lone retail operation to a mega-mall of
education vendors of all kinds.
'The Search Was Manipulated'
One of the first school districts to become entangled in the conglomeration of firms Wise
and Sundstrom assembled was Nashville, which in 2016
chose Jim Huge and Associates to help with hiring a new superintendent. The following year
the board
hired Shawn Joseph, whom Huge had recommended.
Shortly after Joseph arrived in Nashville, according
to local News Channel 5 investigative reporter Phil Williams, he began pushing the district to
give $1.8 million in no-bid contracts to Performance Matters, a Utah-based technology company
that sells "software solutions" to
school districts.
Williams found Joseph had spoken at the company's conference and he had touted the company's
software products in promotional materials while he was employed in his previous job in
Maryland. Williams also unearthed emails
showing Joseph began contract talks with Performance Matters two weeks before he formally
took office in Nashville. What also struck Williams as odd was that despite the considerable
cost of the contract, district employees were
not required to use the software.
In addition to pushing Performance Matters, Williams reported, Joseph gave an
"inside track" to Discovery Education, a textbook and digital curriculum provider and another company he and his team had
ties to from their work in Maryland. With Joseph's backing, Discovery Education received an
$11.4 million contract to provide a new science, technology, engineering, art, and math (STEAM)
program even though a smaller company came in with a
bid that was a fraction of what Discovery proposed.
By June 2018, Nashville school board member Amy Frogge was
questioning Joseph about possible connections these vendors might have to ERDI. A district
audit would confirm that ERDI's affiliated companies -- including Performance Matters,
Discovery Education, and six other companies -- had signed contracts totaling more than $17
million with the district since Joseph had been hired.
Frogge also came to realize that all these enterprises were connected to the firm who had
been instrumental in hiring Joseph -- Jim Huge and Associates.
"The search that brought Shawn Joseph to Nashville was clearly manipulated," Frogge told Our
Schools in an email, "and the school board was kept in the dark about Joseph's previous tenure
in Maryland and his relationships with vendor companies."
Frogge said some of the manipulation occurred when the search firm told school board members
that disputes among current board members -- over charter schools, school finances, and other
issues -- indicated the district was "'too dysfunctional' to hire top-level superintendents and
therefore needed to hire a less experienced candidate."
But
previous investigations of school leadership search firms conducted by Our Schools have
found companies like these frequently forego background checks of prospective candidates they
recommend, promote favored candidates regardless of their experience or track record, and push
board members to keep the entire search process, including the final candidates, confidential
from public scrutiny.
"Too often, national search firms are also driven by money-making motives and/or connections
with those seeking profit," Frogge contended. That conflict of interest is a concern not only
in Nashville but also in other districts where school leaders with deep ties to education
vendors and consultants have resulted in huge scandals that traumatized communities and cost
taxpayers millions.
In the Youngstown City School District in Ohio, CEO Krish Mohip
became mired in questions about his role as a paid consultant for ERDI while the district
had a $261,914 contract with a partner company of ERDI. Under calls for his resignation, Mohip
left before his contract was up.
Beaufort County School District in South Carolina became the
subject of an FBI investigation because of contracts with ERDI and 30 other companies
connected to the firm while superintendent Jeff Moss worked as a paid consultant for ERDI. He
resigned from the district two years before his contract was up.
In Pittsburgh, superintendent Anthony Hamlet drew
scrutiny when reporters found the district spent more than $14 million on dozens of no-bid
contracts to firms connected to ERDI at the same time Hamlet was serving as a paid consultant
with the company.
In Baltimore County, Maryland, Shaun Dallas Dance made national
headlines when he was convicted of perjury committed during his time as superintendent of
the district. Dance had concealed $4,600 he'd been paid by ERDI. After Dance participated in
confidential meetings with vendors at an ERDI conference, the district extended contracts from
companies connected to the firm.
Obviously, school board members could avoid these conflicts by avoiding leadership search
firms and consultants connected to ERDI. But that is easier said than done.
After Baltimore County's troubles with Dance, it hired
the independent firm Ray and Associates to conduct a search to find an interim leader. The
search resulted in six finalists, from which the board chose Verletta White. Shortly after she
took the job, the board's ethics review panel found she had violated financial disclosure rules
and "used the prestige of her office or public position for private gain" by accepting
compensation from ERDI.
Indeed, superintendent search firms
frequently fail to find conflicts of interest and other problems in the candidate
background checks they conduct. And some of these firms operate side businesses that also lead
to conflict of interest issues.
A Revolving Door of Business Deals Funded by Taxpayers
One of the largest superintendent search firms in the United States, Schaumburg,
Illinois-based Hazard, Young, and Attea (HYA), is part of
the ECRA Group , a consulting firm providing an array of services to schools.
ECRA claims to have worked with over 1,000 districts, but a close examination of how the
company worked with a number of school districts in Illinois reveals how the firm uses a
revolving-door business model in which its search service rotates administrators into and out
of leadership positions while the company uses those leadership connections to successfully
upsell districts into expensive long-term consulting contracts funded by taxpayers.
ECRA's business relationships with Oak Park Elementary District 97 in Illinois go back to at
least 2010 when it was
hired to help replace outgoing superintendent Constance Collins. With HYA's
help , the district
hired Albert Roberts. In 2013, during Roberts' tenure, school board minutes
show the district considered a plan to hire ECRA to analyze the district's achievement data
at a cost of $74,000 a year. The following year, the district
hired ECRA to produce an analysis of the achievement gap between white and nonwhite
students in the district. Board minutes from 2015
show the district continuing to work with ECRA.
When Roberts retired, District 97 used HYA again for a superintendent search that resulted
in hiring
Carol Kelley. Kelley currently appears in ECRA's marketing literature touting the firm's Strategic Dashboard, which
District 97 apparently employs.
Former superintendent Collins was
hired to lead Round Lake District 116, also in Illinois, just before HYA and ECRA acquired
the district's superintendent search and strategic planning contracts. Under her tenure, Round
Lake paid ECRA $75,918 for consulting services in
2016 ,
2017 , and 2018 .
Collins
retired from Round Lake in 2018, but, according to her LinkedIn page, she became an HYA
associate in 2017. She also serves on the advisory board of ECRA, according to her bio at a nonprofit for developing school
leaders.
Another Illinois district, Niles Township High School District 219, placed its
superintendent on administrative leave after it became known she was the daughter of the
president of ECRA, which had a contract with the district worth $149,419 and $120,389 in the
final two years of her tenure. (She claimed that relationship with ECRA
dated to before she was made superintendent, but she decided to resign anyway.)
Huntley Community School District 158, also in Illinois, had contractual arrangements with
ECRA dating to at least 2009 when
John Burkey was superintendent. When Burkey
resigned in 2017, District 158
hired HYA to find a new superintendent at a cost of $17,500. At the end of a hiring process
in which HYA kept all finalists
confidential , District 158 announced it had hired Scott Rowe. Under his leadership, District 158
spent $94,980.11 on ECRA in 2018
alone.
One more example in Illinois: Evanston/Skokie School District 65 has hired ECRA for a
variety of consulting services since at least 2010 when it paid the firm $22,737.50, according
to state records, to survey
the district's administrators. By 2013, Evanston/Skokie
considered ECRA a "long-standing partner" and hired
the firm to help pick its new superintendent. Outgoing superintendent Hardy Murphy also
recommended
the district hire the firm for teacher appraisal work.
Based on HYA's recommendations
, Evanston/Skokie
hired Paul Goren in 2014, and under his tenure, checks continued to flow to ECRA's
consulting business, including $129,855.92 in 2015 .
However, Goren's tenure was troubled and brief, and in 2019 he
resigned with a $100,000 severance package. A local reporter
noticed that unmentioned in the district's settlement statement was that under his
leadership "the district's own progress reports [showed] declines in test scores across all
groups of students and district losing ground against its own five-year targets."
ECRA's own leadership has also been embroiled in conflict of interest issues. Current ECRA
president Glenn "Max" McGee
resigned from his last superintendent job, in Palo Alto, California after an outside
investigation found the district had mishandled claims of sexual assault. With a payout of
roughly $150,000, McGee, on his way out the door,
recommended the district hire HYA to conduct the search for his replacement, just after he
had accepted the offer to become leader of ECRA. The district went with McGee's
recommendation.
When asked whether this relationship among McGee, ECRA, and the Palo Alto district was a
possible conflict of interest, McGee told Our Schools in a phone call that he "stayed out of
the search" to fill his old position. Of his replacement, Don Austin from nearby Palos Verdes
Peninsula Unified School District in California, McGee admitted being an acquaintance of "many
years."
Who's to Blame?
When controversies arise over superintendents and contracts with outside services, private
firms that are responsible for pushing these hiring and outsourcing decisions are
quick to blame school board members who signed off on the decisions. And critics of public
schools frequently
use these scandals to argue that democratically elected school boards are dysfunctional and
need to be scrapped for other governance structures.
These criticisms leave a lot of context out.
First, being a school board member is customarily a part-time job paying very little money.
And school board members are elected to serve as representatives of parents and voters, not to
be experts on school finance and administration.
"School board members, although often well intentioned, are sometimes too unqualified and
uninformed to exercise effective oversight of spending, and board members are not aware of the
personal relationships and personal interests that may be driving decisions by administrative
leaders," Nashville board member Frogge explained.
Also, there are multiple ways superintendents can keep board members in the dark about the
inner workings of contractor relationships and district operations.
"From the beginning, Joseph surrounded himself with those who promoted him, including
organizations he hired to 'train' the board," Frogge explained. "Joseph also prohibited all
district employees from speaking to school board members, which prevented board members from
recognizing leadership problems during the early days of his tenure. When board members finally
began to confront Joseph about problems, including disturbing financial irregularities and his
failure to follow board policy, Joseph lied to board members, exacted retribution from those
questioning him, and stirred up controversy to distract from the issues at hand."
That said, Frogge noted school boards have alternatives to using private search firms that
promote tainted candidates willing to feed the search firms' side businesses.
"School board members need to become better informed and more savvy about profit motives and
organizations that seek to influence their selection," she wrote. "School boards can instead
opt to hire a local school boards association (for example, the Tennessee School Boards
Association) or a local recruiter with a reputation for personal integrity to conduct a search.
They can also choose to hire from within."
How school boards decide to avoid conflicts of interest with school leaders and outside
consulting firms is "critical" according to Frogge because decisions that are driven by these
insiders "can lead to catastrophic outcomes for students and staff."
Among those negative outcomes are increased community acrimony, wasted education funds, and
career debacles for what could perhaps have been promising school leaders.
In the case of Joseph and Nashville, controversies with his leadership decisions strongly
divided
the city's black community, and taxpayers were
stuck with a $261,250 bill for buying out the rest of his contract. As a result of the
fallout, Joseph
lost his state teaching license, and he
vowed never to work in the state again.
In the meantime, HYA continues to win contracts for high-profile superintendent
searches, and ERDI's conferences bringing school leaders and vendors together continue to
sell out .
After 2008 free market economists should be treated at their face value: as academic
charlatans. Now they are treated as goods which are past their shelf life in China and that's a
progress.
Notable quotes:
"... The Chinese don't need, and don't want, a bunch of arrogant pro-US intellectuals giving them lectures. I can't say I blame them. ..."
"... No, that is because after WW2 the US was the only major economy left standing that hadn't been wrecked, and they were in the box seat to set the agenda post Bretton-Woods (and cement for themselves the leading dominant role). The USD is being used increasingly as a cudgel to enforce US hegemony, and that will lead much of the world to seek alternatives. It's happening now, slowly at first, and will only gain speed from here. ..."
During my last visit I stopped by the offices of what remained of the Unirule Institute of
Economics. The well-respected organization was formed in 1993 by six economists, most
importantly Mao Yushi (no relation to Mao Zedong) and Sheng Hong. My organization, the Cato
Institute, gave the former the 2012 Milton Friedman Prize for Advancing Liberty to honor his
work on behalf of human freedom. Now retired at the age of ninety, Mao Yushi paid a price for
activism. Noted his award citation, Mao "has faced severe punishment, exile, and near
starvation for remarks critical of a command-based economy and society." The late Liu Xiaobo, a
Nobel laureate, said of Mao: his "bravery is worthy of our respect."
However, despite the hardship of its founder, Unirule was no revolutionary political
organization. Its name stood for "universal rules," essentially the rule of law. Its focus was
moving toward a more market-oriented economy. The group's work was scholarly, performed by
economists and academics. Its publications were high-brow, its books often published in China.
Unirule's international contacts were mainstream and focused on economic reform.
That Unirule prospered demonstrated how far the PRC had come from the bad old days under Mao
Zedong. Economic integration with the West by no means delivered a libertarian China. Still,
the increasingly vibrant private economy expanded personal autonomy, opening up space absent
since the PRC's founding seventy years ago.
As for politics, other than the question of the Chinese Communist Party's monopoly of power,
most issues could be at least discussed and sometimes debated in academic and other settings. A
vaguely independent media developed, which reported on misdeeds of local governments and
officials. Although this slightly diluted authoritarianism might have appeared to be weakness
to a few who pined for the days of the Cultural Revolution, the system offered a release valve
for people who had no control over their rulers.
That gave CCP officials additional ideas to consider and solutions to employ. Unirule
sponsored lectures, ran conferences, and published books. The group consulted with both local
governments and state companies. Even the national authorities appeared to respect if not
necessarily love Unirule. (In 1980 the government even invited Nobel Laureate Milton Friedman
to Beijing to get his advice.) Asked Jude Blanchette, at the Center for Strategic and
International Studies: "Without independent voices offering alternative viewpoints, how can
China's leaders make effective decisions."
Allowing discussion -- if not exactly dissent -- also might have drained away some of the
dissatisfaction that otherwise would have accumulated against the regime. The pervasiveness of
corruption and intensity of resulting public disgust highlighted the threat both from and to
Communist rule, which came much more from the natural consequences of the monopoly of power
rather than from the expression of discontent with that monopoly.
However, Xi Jinping's ascension to head of both party and government became a dramatic
political inflexion point...
... ... ...
The state agency which sponsored it dropped the affiliation. Newspapers stopped running
articles by its staffers. Discussions of its activities on social media, including the Chinese
phenomenon WeChat, were blocked. Venues cancelled Unirule events. The website was closed down.
Then the organization was twice pushed out of professional spaces. Last year the landlord,
under pressure from regulators, welded the office door shut with staffers still inside; they
had to call the police for rescue. About ten employees and a mass of books, papers and files
ultimately crammed into a small apartment ten floors up in an aged apartment building in a
distant suburb.
The group's latest book, a collection of academic papers, is ready for publication but was
rejected by the PRC's information overseers. The process has been transferred from state to
party, ensuring that everything will be assessed for its propaganda value. More seriously,
Unirule's business license was cancelled, a move the group was fighting. Sheng said he planned
to focus on economic research if the CCP interdict took hold.
... ... ...
A few weeks after my visit Unirule's life appears to have run out. The group announced that
the local government had declared it to be "unregistered and unauthorized." Although Unirule
plans to fight the diktat in court, Sheng admitted that it had essentially no chance of
prevailing and has begun the liquidation process. "We no longer have any space for survival,"
Sheng told the Wall Street Journal . He previously noted that Unirule had been careful
to follow the rules, so the Xi regime wished for the reformers to "disappear by ourselves."
Apparently Xi or someone else high up grew tired of waiting.
... ... ...
Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to
President Ronald Reagan, he is the author of several books, including Foreign Follies: America's New Global Empire .
Nixon's initiative to integrate China with the USA was the biggest strategic mistake the
US ever did. It did not lead to democratization, but rather helped build a powerful
totalitarian Orwellian state.
China clearly has a long term strategic plan how to become the
world leader, and to this end, it steals western technology, locks other nations into dept
traps, builds fifth columns in other countries, uses propaganda and cultural subversion. It
is not yet too late to withdraw all western investment from China and to isolate the country.
Due to the behavior of the CCP, it has very few actual friends.
The strategic plan and task to defeat capitalism had been handed over to China after the
Soviet Union has failed in this endeavor because economically it was no match for capitalist
USA, plus it did not integrate science and technological innovation which without it
capitalism can not be defeated.
China has achieved economic quantity and quality, and is
heading towards full scientific and technological superiority over capitalist USA in the long
run.
In this way socialism through science defeats and overtakes capitalism. Science and more
science, the only way to defeat capitalism.
out of the 3 countries - USA, Russia, China - most of the world is clearly happy with USA
having the leading role, because it is the least evil. Yes, USA is not perfect, Trump is not
a great leader (to say it diplomatically), they have made mistakes (the invasion of Iraq
etc), but they are still much better than USSRv2.0 or totalitarian China.
Even in Asia, China
is widely disliked due to its arrogant and bullying behavior. The Japanese, the Koreans, the
Vietnamese, the Indonesians, none of them really like China.
The fact, that US dollar is the
leading currency has much to do with the world public perception of the stability of the
country. Ie all countries believe the US is the most stable country. So China will have real
trouble convincing the world that yuan is better. I do not believe that China will become a
leading power anytim soon.
You can keep telling yourself that, but its a crock and we non-Americans know it only too
well. Dishonesty and an inability to face truth seems to be an American trait, and the
corruption is only growing worse as the US declines.
"The Japanese, the Koreans, the Vietnamese, the Indonesians, none of them really like
China"
News for you buddy. None of these nations like each other... LOL!! You ever hear Koreans
talking about the Japanese? Now that's hatred...
" The fact, that US dollar is the leading currency has much to do with the world public
perception of the stability of the country."
No, that is because after WW2 the US was the only major economy left standing that hadn't
been wrecked, and they were in the box seat to set the agenda post Bretton-Woods (and cement
for themselves the leading dominant role). The USD is being used increasingly as a cudgel to
enforce US hegemony, and that will lead much of the world to seek alternatives. It's
happening now, slowly at first, and will only gain speed from here.
Pound Sterling used to dominate the world, now where is it? In the future, people will say
the same of the greenback.
I traveled for 1 year across Asia - SE Asia, Thailand, Vietnam, Cambodia, Laos, Indonesia
and 5 months across china. China is almost universally disliked all over Asia due to its
arrogant behavior. And even the famous Chinese investments are increasingly being perceived
as a form of Chinese neocolonialism and rejected
https://www.washingtonpost....
You know how African-Americans commit all sorts of violent crimes, hate speech, and racist
slurs just because they were victims of racial discrimination in America decades ago? It's
the same justification for violence Chinese mainlanders commit against everyone else just
because they suffered from century of humiliation. I'm suspecting that the CCP/PLA is being
coached by the black lefists in the US who have deep hatred against their perceived WASP
establishment. The pattern of angst and diatribes are almost the same.
In the survey you posted above, China is more popular than the USA in Indonesia. Other
countries like Malaysia, Laos, Bangladesh, North Korea are missing. Also, people generally tell to English speaking foreigners what they expect they want to
hear. If the survey was made by Chinese, the results would be different.
The answer is simple and obvious. Democracy and rule of law means that they all go to
jail. In all post-authoritarian shifts, the judicial branch of the government goes into
overdrive, prosecuting past leaders for their crimes. They're really stuck to
authoritarianism no-matter how hard they want democracy.
The CCP is just like a mafia. You won't get in unless you have blood in your hands, and
death is the only way out (unless you can defect to another country and if you can stomach
your immediate family members going to jail for you).
China is doing just great. Its citizens are enjoying a quality of life unprecedented in
China's history (even the author do not dispute this). So why should a democratic majority
89% (PEW) happy individuals must suffer for the selfish few?
History has shown that intellectuals make lousy leaders but great at fomenting chaos +
rebellions. And everyone knows that "soft-spoken criticisms", when weaponized, can kill
millions just as effectively as a nuclear bomb!
Our results have profound implications for the idea that the financial markets are Pareto
efficient which I explore
here in my paper on asset pricing in perpetual youth models. In that paper I assume that
monetary and fiscal policy are passive to
generate realistic asset market volatility. My paper with Pawel shows that the same results can
be generated in a realistic OLG model even when monetary and fiscal policy are active.
The way out of this apparent degeneracy of theory is to adopt an idea I first advocated in
my book on self-fulfilling
prophecies . The way that people form beliefs must be modeled as a new fundamental with the
same methodological status as preferences, technologies and endowments.
Our paper makes a mockery of the attempt to ground neoclassical theory in
'fundamentals'.
Much has justifiably been made of President Trump's blustering, bullying approach to trade
policy, which has already had catastrophic effects on many American farmers. Now, Trump's
trade war with China is having similarly disastrous repercussions internationally. One need
look no further than longtime US ally Germany, a prosperous country now facing its first
major recession since Chancellor Angela Merkel took power 13 years ago.
A bit of context: Germans value stability above all else. That the German word for debt
– Schuld – is also the word for guilt, is a linguistic testament to a deep
cultural truth. Debt is considered so shameful that Germans don't have real credit cards,
will rent for decades instead of buying property, and are comfortable living with a rapidly
decaying infrastructure that simply would not fly in other wealthy European countries.
Part of the reason behind Merkel's record-tying four electoral victories is that Germans
are not prone to asking questions when everything seems to be working fine, and their economy
-- built on excessive exports and domestic austerity -- has, thus far, served them well. The
2008 financial crisis hit German businesses hard, but unemployment barely increased. For
nearly two decades now, Germany has survived by capitalizing on other countries' spending and
exporting job cuts to its trade partners.
Indeed, Germany's trade surplus in 2018 was the largest in the world for the third year
running, reaching $299 billion and accounting for over 8 percent of GDP. ...
With the US-China spat driving the cost of materials up and the number of orders for
exported goods down, the key German sectors of manufacturing, trade, services, and
construction have contracted so quickly and sharply that business leaders could hardly
believe the numbers were true.
Yet, according to Germany's highly-regarded IFO Institute's Business Climate Index, there
is good reason to believe these sectors have "not a single ray of light" for the immediate
future.
Despite Washington's justifiable concerns over data security, Merkel's government has
invited Huawei to build up Germany's woeful digital infrastructure and is planning a massive
EU-China summit for when Berlin takes over the rotating European presidency in 2020. ...
One of the key U.S. borrowing markets saw a massive surge Monday, a sign the Federal
Reserve is having trouble controlling short-term interest rates.
Amid the settlement of Treasury coupon auctions and the influx of quarterly corporate tax
payments, the rate on overnight repurchase agreements soared by 153 basis points to 3.80%,
the largest daily increase since December, based on ICAP pricing.
---------
The would be Treasury trying to tilt the curve, deposit short borrow long. Finance, in
general, is rescaling to accommodate the next 2 trillion in debt while rolling over trillions
of 'Uncle can do it later' debt. A quick downturn, readjustment, and the 'Uncle do it later'
payments to the wealthy will continue.
This is common, our progressive tribe has moles who suddenly rush off and do a deal with
the wealthy leaving the rest of us in the dark.
Repo Squeeze Threatens to Spill Over Into Funding Markets
By Stephen Spratt
September 17, 2019, 3:19 AM PDT Updated on September 17, 2019, 5:24 AM PDT
Cross-currency basis, FX forwards, eurodollar futures shift
Sale of $78 billion in Treasuries led to sudden cash squeeze
----------------
Treasury is ahead of finance in paying for the 'Uncle do it later' trick. The short rate
has jumped 10 basis points, not much but there was a reading on the overnight market of 7%.
This may mean nothing, but more likely means higher consumer credit charges. W have to pay
for 'Uncles later'.
Homoploutia, a concept I introduce in "Capitalism, Alone". In today's liberal capitalism,
it is common that the same people are rich *both* in terms of capital they own and earnings
they receive. This was almost unheard of in classical capitalism where capitalists seldom
doubled as wage workers.
So here, using @lisdata, you have a nice illustration of advanced capitalist countries
where people in the top decile by capital and labor income increasing coincide (right end)
and Brazil and Mexico where they do not.
Note the ambivalence * of homoploutia: in some sense it is desirable (and risk-reducing)
that capitalists also work, or that high earners possess capital too. But in another way, it
makes inequality-reducing policies more difficult.
Yes, under neoliberalism like under Bolshevism, your social position is not determined solely
by the capital you own. It is also determined by the position you hold in the industry or
government (and your earnings/wages are derivative of that).
So we see the reincarnation of the idea of Soviet Nomenklatura on a new level in a
different social system. The term can still serve its purpose, and IMHO is better than
"Homoploutia."
It is also interesting that older middle-class folk, who due to their private savings,
401K, Roth and ISA accounts, SS pension (say $6K-7K a month for a couple), and sometimes
government or industry pension are formally millionaires (with some multimillionaires) are
not generally viewed as belonging to the upper 10%. They are looked at as an aberration by
the most sociologists.
That's because they are now retired and no longer hold any meaningful for the upper 10%
level position in the industry or government. In other words, they do not belong to
Nomenklatura. Or more correctly no longer belong to Nomenklatura (for those who retired from
high level positions)
And, correspondingly, often are treated as junk in the neoliberal society.
Even if the timing remains vague and the conditions uncertain, the government does seem to
have decided to launch a vast reform of the retirement pensions system, with the key element
being the unification of the rules applied at the moment in the various systems operating
(civil servants, private sector employees, local authority employees, self-employed, special
schemes, etc).
Let's make it clear: setting up a universal system is in itself an excellent thing, and a
reform of this type is long overdue in France. The young generations, particularly those who
have gone through multiple changes in status (private and public employees, self-employed,
working abroad, etc), frequently have no idea of the retirement rights which they have
accumulated. This situation is a source of unbearable uncertainties and economic anxiety,
whereas our retirement system is globally well financed.
But, having announced this aim of clarification and unification of rights, the truth is that
we have not said very much. There are in effect many ways of unifying the rules. Now there is
no guarantee that those in power are capable of generating a viable consensus in this respect.
The principle of justice invoked by the government seems simple and plausible: one Euro
contributed should give rise to the same rights to retirement, no matter what the scheme, and
the level of salary or of earned income. The problem is that this principle amounts to making
the inequalities in income as they exist at present sacrosanct, including when they are of
mammoth proportions (under-paid piece work for some, excessive salaries for others), and to
perpetuating them at the age of retirement and dependency which is in no way particularly
"fair".
Aware of the difficulty, the High Commissioner Jean-Paul Delevoye's Plan stipulates that a
quarter of the contributions will continue to be allocated to "solidarity', that is to say, for
example, to subsidies for children and interruptions of career, or to finance a minimum
retirement pension for the lowest salaries. The difficulty is that the way this calculation has
been made is highly controversial. In particular, this estimate purely and simply takes no
account of social inequalities in life expectancy. For example, if a low wage earner spends 10
years in retirement while a highly-paid manager spends 20 years, we have forgotten to take into
account the fact that a large share of the contributions of the low wage earner serves in
practice to pay the retirement of the highly-paid manager (which is in no way compensated for
by the allowance for strenuous and tedious work)
More generally, there are naturally multiple parameters to be fixed to define what one
considers to be "solidarity". The government's proposals are respectable but they are far from
being the only ones possible. It is essential that a broad public debate take place and that
alternative proposals should emerge. The Delevoye Plan for example provides for a replacement
rate equal to 85% for a full career (43 years of contributions) at Minimum Wage level. This
rate would then very rapidly fall to 70%, to only 1.5 Smic (Minimum Wage) before stabilising at
this precise level of 70% until approximately 7 Smic ( 120,000 Euros gross annual salary). This
is one possible choice, but there are others. One could thus imagine that the replacement rate
would go gradually from 85% of the Smic to 75%-80% around 1.5 – 2 Smic, before gradually
falling to around 50%-60%, approximately 5-7 Smic.
Similarly the government's project provides for a financing of the system by a retirement
contribution of which the global rate would be fixed at 28.1% on all the gross incomes below
120,000 Euros per annum, before falling suddenly to only 2.8% beyond this threshold. The
official justification is that retirement rights in the new system would be capped at this wage
level. The Delevoye Report goes as far as congratulating themselves because the super-managers
will nevertheless be subject to this contribution (which will not be capped) of 2.8%, to mark
their solidarity with the older generations. In passing, once again no account is taken of the
salaries between 100,000 Euros and 200,000 Euros which usually correspond to very long life
expectancies and which benefit greatly from the contributions paid by the lower waged with
shorter life expectancies. In any event, this contribution of 2.8% to solidarity by those
earning over 120,000 Euros is much too low, particularly given the levels of remuneration;
their very legitimacy is open to challenge.
More generally it is perhaps time to abandon the old idea according to which reduction of
inequalities should be left to income tax, while the retirement schemes should content
themselves with reproducing them. In a world in which fabulous salaries and questions of
retirement and dependency have taken on a new importance, the most legible norms of justice
could be that all levels of salary (including the highest) should finance the retirement scheme
at the same rates (even if the pensions themselves are capped) while leaving to income tax the
task of applying higher levels to the top incomes
To be clear: the present government has a big problem with the very concept of social
justice. As everyone knows, it has chosen from the outset to grant huge fiscal gifts to the
richest (suppression of the wealth tax (the ISF), the flat tax on dividends and incomes). If
today it does not demand a significant effort from the most privileged it will have
considerable difficulty in convincing the public that its pension reform is well-founded.
"... In our current economy, corporations have sunk $2.5 trillion in buying back their own stocks because this generates the highest work-free return. This reflects two realities: ..."
"... Thanks to the Federal Reserve and other central banks injecting trillions of dollars of nearly free credit into the financial sector, corporations can borrow billions of dollars to play with at near-zero rates that are historically unprecedented. ..."
"... Recall the basic mechanism of stock buybacks: By reducing the number of shares outstanding, sales and profits go up on a per share basis -- not because the company generated more revenues and profits, but because the number of shares has been reduced by the buybacks. ..."
"... A bubble economy is a sick economy, for bubbles are proof there is too much capital chasing too few productive uses for that capital. ..."
The
one we're most familiar with
is simple
human greed
,
the desire to exploit a windfall and catch a work-free ride to riches.
The
second dynamic
gets much less attention.
Financial
manias arise when there is no other more productive, profitable use for capital. And these periods
occur when there is an abundance of credit available to inflate the bubbles
.
Humans respond to the incentives the system presents: If dealing illegal drugs can net $20,000 a
month compared with $2,000 a month from a regular job, a certain percentage of the workforce is going
to deal drugs.
In our current economy, corporations have sunk $2.5 trillion in buying back their own stocks
because this generates the highest work-free return. This reflects two realities:
Corporations can't find any other more productive, profitable use for their capital than buying
back their own shares (enriching the managers via stock options and the 10% of American households
who own 93% of the stocks).
Thanks to the Federal Reserve and other central banks injecting trillions of dollars of nearly
free credit into the financial sector, corporations can borrow billions of dollars to play with at
near-zero rates that are historically unprecedented.
So borrow billions at 2.5%, pour it all into buying back your own stock and reap the gains as your
stock rises 10%.
Recall the basic mechanism of stock buybacks: By reducing the number of shares outstanding, sales
and profits go up on a per share basis -- not because the company generated more revenues and profits,
but because the number of shares has been reduced by the buybacks.
(Note to New Green Deal advocates: If corporations reckoned they could earn more by investing
the $2.5 trillion in alternative energy projects rather than stock buybacks, they would have done so.)
As various sources have outlined, corporate stock buybacks have been the primary driver of higher
stock prices.
This is driving the third dynamic of bubbles
:
As the bubble continues inflating beyond any rational valuation,
rational investors
throw in the towel and join the frenzy
. Once again, this willingness to abandon
rationality is partly fueled by greed and also by a dearth of other more attractive investments.
A bubble economy is a sick economy, for bubbles are proof there is too much capital chasing
too few productive uses for that capital.
The Fed and other central banks have created trillions of dollars, yuan, euros and yen for
corporations and financiers to play with and, to a lesser degree, for homebuyers to play with via low
mortgage rates and federal guarantees on mortgages.
As a result, the housing bubble is the one regular folks can play. And despite claims that it's not
a bubble because of organic demand, housing is definitely in a bubble, along with stocks and bonds,
art, etc.
When you create trillions of dollars, yuan, euros and yen out of thin air, you create the
incentives to inflate bubbles. When your real economy is sick and offers few productive uses for all
this excess capital, that only adds fuel to the speculative fire.
Here's the problem
: All bubbles burst, regardless of other conditions.
Creating more trillions won't change this, adding more gamblers to the casino won't change this,
claiming a bubble economy is healthy won't change this and promising a trade deal with China won't
change this.
All of America's bubbles will pop, and sooner rather than later.
The stock market
moves a bit faster than the housing and bond markets, but the bubbles that are visible in every market
will all burst, much to everyone's dismay.
We can add a
fourth dynamic
of bubbles:
Nobody believes bubbles
can burst until it's too late to get out unscathed.
Agree with respect to points 1 and 2 but is at least Kotkin's is a bit more insightful
than the recent Markovits book on meritocracy. In the latter, Markovits divides the entire
country into middle class and elites, with the owners and Kotkin's clerisy combined and
subject to the same structure, rewards and stresses.
Never a mention of capital or ownership of the means of production. Guess one should not
be shocked that a Yale professor considers himself elite, but a little surprising that he
does not understand that he serves at the pleasure of the owners. That's a club and he's not
in it as the comic-laureate Carlin would say. A little class consciousness goes a long
way.
This is the conflict between financial elite and Silicon Valley modules against traditional manufactures and extractive
industries like oil, gas, coil, iron ore, etc.
Notable quotes:
"... The First Estate, once the province of the Catholic Church, has morphed into what Samuel Coleridge in the 1830s called "the Clerisy," a group that extends beyond organized religion to the universities, media, cultural tastemakers and upper echelons of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy, notably in tech but also Wall Street, that is consolidating control of most of the economy. ..."
A recent
OECD report , is under assault, and shrinking in most places while prospects for upward
mobility for the working class also declines.T
he anger of the Third Estate, both the growing property-less Serf class as well as the
beleaguered Yeomanry, has produced the growth of populist, parties both right and left in
Europe, and the election of Donald Trump in 2016. In the U.S., this includes not simply the
gradual, and sometimes jarring, transformation of the GOP into a vehicle for populist rage, but
also the rise on the Democratic side of politicians such as Sens. Bernie Sanders and Elizabeth
Warren, each of whom have made class politics their signature issue.
Today's neo-feudalism recalls the social order that existed before the democratic
revolutions of the 17th and 18th Century, with our two ascendant estates filling the roles of
the former dominant classes.
The First Estate, once the province of the Catholic Church, has
morphed into what Samuel Coleridge in the 1830s called "the Clerisy," a group that extends
beyond organized religion to the universities, media, cultural tastemakers and upper echelons
of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy,
notably in tech but also Wall Street, that is consolidating control of most of the economy.
Together these two classes have waxed while the Third Estate has declined. This essentially
reversed the
enormous gains made by the middle and even the working class over the past 50 years. The
top 1% in America captured just 4.9 percent of total U.S. income growth in 1945-1973, but since
then the country's richest classes has gobbled up an astonishing 58.7% of all new wealth in the
U.S., and 41.8 percent of total income growth during 2009-2015 alone.
In this period, the Oligarchy has benefited from the financialization of the economy and the
refusal of the political class in both parties to maintain competitive markets. As a result,
American industry has become increasingly concentrated. For example, the five largest banks now account
for close to 50 percent of all banking assets, up from barely 30 percent just 20 years ago.
(RELATED: The
Biggest Bank You've Never Heard Of)
Warren Buffett, Jeffrey Immelt, Charles Schwab and Jamie Dimon, at Georgetown University.
Chip Somodevilla/Getty Images.
The concentration numbers in tech are even more frightening. Once a highly competitive
industry, it is now among the most concentrated
. Like the barbarian chieftains who seized land after the fall of Rome, a handful of companies
-- Facebook , Google
, Apple, Microsoft
and
Amazon -- have gained total control over a host of markets, from social media to search,
the software operating systems, cloud computing and e-commerce. In many key markets such as
search, these companies enjoy market shares reaching to eighty or ninety percent.
As they push into fields such as entertainment, space travel, finance and autonomous
vehicles, they have become, as technology analyst
Izabella Kaminska notes, the modern-day "free market" equivalents of the Soviet planners
who operated Gosplan, allocating billions for their own subjective priorities. Libertarians
might point out that these tech giants are still privately held firms but they actually
represent
, as one analyst put it, "a new form of monopoly power made possible by the 'network effect' of
those platforms through which everyone must pass to conduct the business of life."
The role of the Clerisy
The new feudalism, like the original, is not based simply around the force of arms, or in
this case what Marx called "the cash nexus." Like the church in Medieval times, the Clerisy
sees itself as anointed to direct human society, a modern version of what historian Marc Bloch
called the "oligarchy of priests and monks whose task it was to propitiate heaven." This
modern-day version of the old First Estate sets down the ideological tone in the schools, the
mass media, culture and the arts. There's also a Clerisy of sorts on the right, and what's left
of the center, but this remains largely, except for Fox, an insignificant remnant.
Like their predecessors, today's Clerisy embraces an orthodoxy, albeit secular, on a host of
issues from race and gender to the environment. Universities have become increasingly dogmatic
in their worldview.
One study of 51 top colleges found the proportion of liberals to conservatives as much as
70:1, and usually at least 8:1. At elite liberal arts schools like Wellesley, Swarthmore and
Williams, the proportion reaches 120:1.
The increasing concentration of media in ever
fewer centers -- London, New York, Washington, San Francisco -- and the decline of the
local press has accentuated the elite Clerisy's domination. With most reporters well on the
left, journalism, as a 2019 Rand report reveals, is
steadily moving from a fact-based model to one that is dominated by predictable opinion. This,
Rand suggests has led to what they called "truth decay."
The new geography of feudalism
The new feudalism increasingly defines geography not only in America but across much of the
world. The great bastion of both the Oligarchy and high reaches of the Clerisy lies in the
great cities, notably New York, London, Paris, Beijing, Shanghai, Tokyo, San Francisco, Los
Angeles and Seattle. These are all among the most expensive places to live in the world and
play a dominant role in the global media.
Yet these cities are not the progressive, egalitarian places evoked by great urbanists like
the late Jane Jacobs, but more closely resemble the "gated" cities of the Middle Ages, and
their equivalents in places as diverse as China and Japan. American cities now have higher
levels of inequality, notes one recent study , than Mexico.
In fact, the
largest gaps( between the bottom and top quintiles of median incomes are in the
heartland of progressive opinion, such as in the metropolitan areas of San Francisco, New York,
San Jose, and Los Angeles. (RELATED: Got Income
Inequality? Least Affordable Cities Are Also the Bluest)
In some of the most favored blue cities, such as Seattle ,
Portland and San Francisco , not
only is the middle class disappearing, but there has been something equivalent of "ethnic
cleansing" amidst rising high levels of inequality, homelessness and social disorder.
Long-standing minority communities like the Albina neighborhood in
Portland are disappearing as 10,000 of the 38,000 residents have been pushed out of the
historic African-American section. In San Francisco, the black population has dropped from 18%
in the 1970s to single digits and what remains, notes Harry Alford ,
National Black Chamber of Commerce president, "are predominantly living under the poverty level
and is being pushed out to extinction."
This exclusive and exclusionary urbanity contrasts with the historic role of cities. The
initial rise of the Third Estate was tied intimately to the " freedom of the city . " But with
the diminishing prospects for blue-collar industries, as well as high housing costs, many
minorities and immigrants are increasingly migrating away from
multi-culturally correct regions like
Chicago , New York, Los Angeles and San Francisco for less regulated, generally less "woke"
places like Phoenix, Dallas-Ft. Worth, Houston, Atlanta and Las
Vegas.
Yet even as the middle-class populations flee, poverty remains deeply entrenched in our big
cities, with a rate roughly twice that of the suburbs. The much-celebrated urban renaissance
has been largely enjoyed by the upper echelons but not the working classes.
In the city of Philadelphia , for example, the "center city" income rose, but citywide
between 2000 and 2014, for every district that, like downtown, gained in income, two suffered
income declines. Similarly, research shows
that the number of high poverty (greater than 30 percent below the poverty line) neighborhoods
in the U.S. has tripled since 1970 from 1,100 to 3,100.
Undermining the Third Estate
The impact of the rising Clerisy and Oligarchs poses a direct threat to the future of the
Third Estate. On the economic side, relentless consolidation and financialization has
devastated Main Street. In the great boom of the 1980s, small firms and start-ups powered the
economy, but more recently the
rates of entrepreneurship have dropped as mega-mergers, chains and on-line giants slowly
reduced the scope of opportunities. Perhaps most disturbing of all has been the decline in new
formations among younger people.
This phenomenon is most evident in the tech world. Today is not a great time to start a tech
company unless you are in the charmed circle of elite firms with access to venture and private
equity funds. The old garage start-up culture of Silicon Valley is slowly dying, as large firms
gobble up or crush competitors. Indeed, since the rise of the tech economy in the 1990s, the
overall degree of industry
concentration has grown by 75 percent.
Like the peasant farmer or artisan in the feudal era, the entrepreneur not embraced by the
big venture firms lives largely at the sufferance of the tech overlords. As one online
publisher notes on his firm's status with Google:
If you're a Star Trek fan, you'll understand the analogy. It's a bit like being
assimilated by the Borg. You get cool new powers. But having been assimilated, if your
implants were ever removed, you'd certainly die. That basically captures our relationship to
Google.
The Clerisy's War on the Middle Class
For generations, the Clerisy has steadfastly opposed the growth of suburbia, driven in large
part by the aesthetic concerns –the conviction that single-family homes are fundamentally
anti-social– and, increasingly, by often dubious assertions on their environmental
toxicity. In places like California, the United Kingdom, Australia and Canada, government
policies discourage peripheral construction where home ownership rates tend to be higher, in
favor of dense, largely rental housing.
This marks a dramatic turnaround. During the middle of the 20th Century, ownership rates in
the United States leaped from 44 percent in 1940 to 63 percent in the late 1970s. Yet in the
new generation this prospect is fading. In the United States, home ownership among post-college
millennials (aged 25-34) has dropped from 45.4 percent in 2000 to 37.0 percent in 2016, a drop
of 18 percent from the 1970s, according to
Census Bureau data . In contrast, their parents and grandparents witnessed a dramatic rise
of homeownership from 44 percent in 1940 to 63 percent 30 years later.
But the Clerisy's war on middle- and working-class aspiration goes well beyond housing.
Climate change policies already enacted in California
and Germany
have driven millions into "energy poverty." If adopted, many of the latest proposals for such
things as the Green New Deal all but guarantee the
rapid reduction of millions of highly productive and often well-paying energy, aerospace,
automobile and logistics jobs.
Political implications
The war of the Estates is likely to shape our political landscape for decades to come. Parts
of the Third Estate –those working with their hands or operating small businesses–
increasingly flock to the GOP, according to a recent CityLab report. Trump also has a case to make with these workers, as real wages
for
blue-collar workers are now rising for the first time in decades. Unemployment is near
record lows not only for whites but also Latinos and African-Americans. Of course, if the
economy weakens, he may lose some of this support. (RELATED: Trump Blasts Media For
'Barely' Covering 'Great' Economy, Low Unemployment)
But the emergence of neo-feudalism also lays the foundation for a larger, more potent and
radicalized left. As opportunities for upward mobility shrink, a new generation, indoctrinated
in leftist ideology sometimes from grade school and ever more predictably in undergraduate and
graduate school, tilts heavily to the left, embracing what is essentially an updated socialist
program of massive redistribution, central direction of the economy and racial
redress.
Antifa members in Berkeley, California. AFP/Getty/Amy Osborne.
In France's most recent presidential election, the
former Trotskyite Jean-Luc Melenchon won the under-24 vote, beating the "youthful" Emmanuel
Macron by almost two to one. Similarly in the United Kingdom, the birthplace of modern
capitalism, the
Labour Party , under the neo-
Marxist Jeremy Corbyn , won over 60 percent of the vote among voters under 40, compared to
just 23 percent for the Conservatives. Similar trends can be seen across Europe, where the Red
and
Green Party enjoys wide youth support.
The shift to hard-left politics also extends to the United States– historically not a
fertile area for Marxist thinking. In
the 2016 primaries , the openly socialist
Bernie Sanders easily outpolled Hillary Clinton and Donald Trump combined. A 2016 poll by
the Communism Memorial
Foundation found that 44 percent of American millennials favored socialism while another 14
percent chose fascism or communism. By 2024,
these millennials will be by far
the country's biggest voting bloc .
In the current run-up to the Democratic nomination these young voters
overwhelming tilt toward Sanders and his slightly less radical colleague Warren, while former
Vice President Joe Biden retains the support of older Democrats. The common themes of the "new"
Left, with such things as guaranteed annual incomes, rent control, housing subsidies, and free
college might prove irresistible to a generation that has little hope of owning a home, could
remain childless, and might never earn enough money to invest in much of anything. (RELATED: Bernie Sanders Says 'Health Care For All' Will Require Tax Increases)
At the end, the war of the estates raises the prospect of rising autocracy, even under
formally democratic forms. In his assessment in "Democracy in America ," Alexis de
Tocqueville suggests a new form of tyranny -- in many ways more insidious than that of the
monarchical state -- that grants favors and entertainments to its citizens but expects little
in obligation. Rather than expect people to become adults, he warns, a democratic state can be
used to keep its members in "perpetual childhood" and "would degrade men rather than tormenting
them."
With the erosion of the middle class, and with it dreams of upward mobility, we already see
more extreme, less liberally minded class politics. A nation of clerics, billionaires and serfs
is not conducive to the democratic experiment; only by mobilizing the Third Estate can we hope
that our republican institutions will survive intact even in the near future.
Mr. Kotkin is the Presidential Fellow in Urban Futures at Chapman University and the
executive director of the Center for Opportunity Urbanism. His next book, "The Coming Of
Neo-Feudalism," will be out this spring.
The views and opinions expressed in this commentary are those of the author and do not
reflect the official position of the Daily Caller.
"... Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work. ..."
The Economic Cycle Research Institute's
(ECRI) Lakshman Achuthan recently sat down with CNBC's
Michael Santoli to discuss the jobs growth downturn. Keep in mind, this conversation was held on
Wednesday, several days before Friday's
disappointing
jobs report.
Achuthan told Santoli there's a "
very clear cyclical downturn
in jobs growth, there's really no debating that, and it looks set to continue
."
Achuthan said January 2019 marked the cyclical peak in jobs growth, has been moving lower ever
since, and the trend is far from over.
Both nonfarm payrolls and the household survey
year-over-year growth are in cyclical downturns,
he said.
While the economic narratives via the mainstream financial press continue to cheerlead that the
consumer will lift all tides thanks to the supposedly strong jobs market, Achuthan believes the
downturn in jobs growth will start to "undermine consumer confidence." And it's the loss in consumer
confidence that could tilt the economy into recession.
He also said when examining cyclically
sensitive sectors of the economy, there are already "questionable jobs numbers," such as a significant
surge in the construction unemployment rate.
Achuthan said nonfarm payroll growth has plunged to a 17-month low, and the household survey is
even weaker. He said the top nonfarm payroll line would be revised down by half a million jobs in the
coming months, which would underline the weakness in employment.
Achuthan emphasized to Santoli that
ECRI's recession call won't be "taken off the table.
We've been talking
about a growth rate cycle slowdown.
We're slow-walking toward -- some recessionary window of vulnerability
-- we're
not there today -- but this piece of the puzzle [jobs growth downturn] is looking a bit wobbly. This is the main message that Wall
Street is missing."
As Wall Street bids stocks to near-record highs on "trade optimism" and the belief that the consumer
will save the day, in large part because of solid jobs growth.
ECRI's Leading Employment
Index, which correctly anticipated this downturn in jobs growth, is at its worst reading since the
Great Recession
.
And Wall Street's bet today is that the Fed can achieve a soft landing –
as in 1995-96 – when it started the rate cut cycle the same month the inflation downturn was signaled
by the U.S. Future Inflation Gauge (USFIG) turning lower.
And now it should become increasingly clear to readers why President Trump has sounded the alarm about the need for 100bps rate
cuts, quantitative easing, and emergency payroll tax cuts - it's because he's been briefed about the economic downturn that has
already started.
I don't agree with him that the Fed can do anything to correct this,
nor do they have an incentive to do so. The Fed is not on the
consumer's side. They will appropriate funds to whoever they want to,
just like 08, and give the middle finger to everyone else.
Job quality is horrible, particularly for US citizen STEM workers.
This has been the case since the downturn that began in the late
1990s. Trump needs to fully cancel the OPT program and almost
eliminate the H-1B program. Major employers don't even bother
considering US citizen STEM talent before they hire foreign
nationals.
Yes, but they don't bother to come out and tell you its a fake ad. One of the tragedies of the online job application process is that it forces a person, with little to no knowledge of a company and its internals, to pick, out of potentially hundreds of roles, which one would be best for them.
Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work.
"... The probability that a recession will come soon -- or be severe when it does -- depends in part on the state of ever-changing popular narratives about the economy. These are stories that provide a framework for piecing together the seemingly random bits of information that one picks up from friends, the news or social media. ..."
"... The last recession 10 years ago was exceptionally severe, and it is worth examining closely for insights into how the spread of economic narratives drove human behavior. ..."
"... It now appears that while Sept. 15, 2008, was a logical moment for the start of a panic, that's not really what happened. That was when Lehman Brothers, an old-line investment bank, failed, and while this was a major economic event, the evidence suggests that it did not foster a viral narrative among the broad population. ..."
"... Since Lehman was an investment bank, and did not accept deposits from small savers, most people weren't much moved by its demise. Instead, the big change seems to have come on Sept. 25, 2008. That was when the government seized Washington Mutual -- a giant savings and loan association, known as WaMu, that had suffered a sudden mass exodus of depositors -- and sold its assets to JPMorgan Chase for $1.9 billion. ..."
"... Roosevelt's memorable words, "The only thing we have to fear is fear itself," became, in Mr. Bush's Rose Garden speech, "Anxiety can feed anxiety." The New York Times noted that parallel then. It seemed to many people, in real time, that the Great Depression might be repeating itself. ..."
"... Even before Mr. Bush's speech, Great Depression narratives had been emerging strongly. For example, the number of articles in the ProQuest News & Newspapers database containing the words "Great Depression" rose fivefold from 2007 to 2008. The term, with its emotional resonance, had exploded into an epidemic. ..."
"... But the Great Depression narrative is still alive, though it does not dominate at the moment. President Trump's exuberant speeches, if one believes them, still encourage big spending and confidence. Yet older, troubling narratives are waiting to become viral again. ..."
"... New crises that shake up the economy often surprise economists because no exogenous cause appears to be a sufficient explanation for a downturn. People begin to suddenly frame current events in the context of stories they had heard many times before. ..."
"... This may seem puzzling until we realize that an old narrative has renewed itself in an epidemic, and people have begun to respond reflexively in their day-to-day decisions. If enough people begin to act fearfully, their anxiety can become self-fulfilling, and a recession, sometimes a big one, may follow. ..."
What People Say About the Economy Can Set Off a Recession
By Robert J. Shiller
When will the next recession arrive?
Economists are evaluating such factors as President Trump's endlessly shifting tariff
policy, the monetary policy of the Federal Reserve and other central banks, and such "leading
indicators" as the yields in the bond market.
It is good to look at these things. They provide insights about the state of the markets
and the economy, but they have severe limitations as forecasting tools. This approach will
not produce a definitive advance reading of a major shift from growth to contraction: a
recession.
Forecasting such a shift is extremely difficult. But if we are to have a chance at
success, it is critical to insert into the discussion another factor entirely: an examination
of the popular narratives that may be infecting individual economic decision-making.
The probability that a recession will come soon -- or be severe when it does -- depends in
part on the state of ever-changing popular narratives about the economy. These are stories
that provide a framework for piecing together the seemingly random bits of information that
one picks up from friends, the news or social media.
For consumers these narratives affect decisions on whether to spend or save, whether to
take a demanding or an easy job, whether to take a risk or stick with something safer. For
businesspeople the prevailing narratives affect deliberations on whether to hire more help or
lay off employees, whether to expand or retrench or even start a new enterprise.
For most people, such important decisions are fraught with ambiguity and uncertainty.
Hardly any of us have precise formulas to decide our plans. So we allow ourselves to be
influenced by the emotions, theories and scripts suggested in the stories we hear from
others.
Fortunately, the widespread digitization of text, combined with enhanced capabilities for
natural-language processing, is beginning to give us new insights into the history of
economic narratives. We are beginning to develop a new economics, one that studies these
changing economic stories and metaphors systematically.
In my new book, I describe narratives that can periodically surge into epidemics and are
capable of changing the economy's direction or of turning small booms and recessions into big
ones.
These narratives cluster around several issues:
■ Public confidence or the lack of it.
■ Social norms regarding extravagance or modesty in consumption.
■ The rise or fall of monetary standards of value.
■ The replacement of manual workers by machines.
■ The threat of artificial intelligence to all human labor.
■ Real estate booms and busts.
■ Stock market bubbles.
■ Profiteering by big business.
■ Wage-price spirals that are pinned on labor unions.
Changes in the current environment may cause a subtle mutation in these perennial stories,
causing them to go viral and sometimes increasing their contagious effects or extending the
period in which they expand. Much as epidemiologists study infectious diseases, we economists
can study the spread and transformation of these powerful stories.
The last recession 10 years ago was exceptionally severe, and it is worth examining
closely for insights into how the spread of economic narratives drove human behavior.
It now appears that while Sept. 15, 2008, was a logical moment for the start of a panic,
that's not really what happened. That was when Lehman Brothers, an old-line investment bank,
failed, and while this was a major economic event, the evidence suggests that it did not
foster a viral narrative among the broad population.
Since Lehman was an investment bank, and did not accept deposits from small savers, most
people weren't much moved by its demise. Instead, the big change seems to have come on Sept.
25, 2008. That was when the government seized Washington Mutual -- a giant savings and loan
association, known as WaMu, that had suffered a sudden mass exodus of depositors -- and sold
its assets to JPMorgan Chase for $1.9 billion.
That event was often seen to resemble the Great Depression and the collapse of the banking
system in 1933. People feared the possibility of spreading bank failures and therefore of
personal tragedies.
The public was transfixed when President George W. Bush spoke from the White House Rose
Garden on Oct. 10, 2008, about the risk of a serious economic downturn.
While Mr. Bush did not utter the word "depression," he used language that closely
resembled that of the first inaugural address of President Franklin D. Roosevelt in 1933,
perhaps the worst time of the Great Depression.
Roosevelt's memorable words, "The only thing we have to fear is fear itself," became, in
Mr. Bush's Rose Garden speech, "Anxiety can feed anxiety." The New York Times noted that
parallel then. It seemed to many people, in real time, that the Great Depression might be
repeating itself.
Even before Mr. Bush's speech, Great Depression narratives had been emerging strongly. For
example, the number of articles in the ProQuest News & Newspapers database containing the
words "Great Depression" rose fivefold from 2007 to 2008. The term, with its emotional
resonance, had exploded into an epidemic.
In contrast, other big historical events, like the panic of 1907, have been almost totally
forgotten by the public and are unlikely to develop into a big new epidemic.
But the Great Depression narrative is still alive, though it does not dominate at the
moment. President Trump's exuberant speeches, if one believes them, still encourage big
spending and confidence. Yet older, troubling narratives are waiting to become viral
again.
New crises that shake up the economy often surprise economists because no exogenous cause
appears to be a sufficient explanation for a downturn. People begin to suddenly frame current
events in the context of stories they had heard many times before.
This may seem puzzling until we realize that an old narrative has renewed itself in an
epidemic, and people have begun to respond reflexively in their day-to-day decisions. If
enough people begin to act fearfully, their anxiety can become self-fulfilling, and a
recession, sometimes a big one, may follow.
Robert J. Shiller is Sterling Professor of Economics at Yale.
Thomas Piketty's New Book Brings Political Economy Back to Its Sources
In the same way that Capital in the Twenty-First Century transformed the way economists look
at inequality, Piketty's new book Capital and Ideology will transform the way political
scientists look at their own field.
By Branko Milanovic
Thomas Piketty's books are always monumental. Some are more monumental than others. His
Top Incomes in France in the Twentieth Century: Inequality and Redistribution,
1901–1998 (published in French as Les hauts revenus en France au XXe siècle)
covered more than two centuries of income and wealth inequality, in addition to social and
political changes in France. His international bestseller Capital in the Twenty-First Century
(Le capital au XXI siècle) broadened this approach to the most important Western
countries (France, the United States, United Kingdom, and Germany). His new book Capital and
Ideology (to be published in English in March 2020; already published in France as Capital et
idéologie) broadens the scope even further, covering the entire world and presenting a
historical panorama of how ownership of assets (including people) was treated, and justified,
in various historical societies, from China, Japan, and India, to the European-ruled American
colonies, and feudal and capitalist societies in Europe. Just the mention of the geographical
and temporal scope of the book suffices to give the reader an idea of its ambition.
Before I review Capital and Ideology, it is worth mentioning the importance of Piketty's
overall approach, present in all three of his books. His approach is characterized by the
methodological return of economics to its original and key functions: to be a science that
illuminates the interests and explains the behaviors of individuals and social classes in
their quotidian (material) life. This methodology rejects the dominant paradigm of the past
half-century, which increasingly ignored the role of classes and heterogeneous individuals in
the process of production and instead treated all people as abstract agents that maximize
their own income under certain constraints. The dominant paradigm has emptied almost all
social content from economics and presented a view of society that was as abstract as it was
false.
The reintroduction of actual life into economics by Piketty and several other economists
(not entirely coincidentally, most of them are economists interested in inequality) is much
more than just a return to the sources of political economy and economics. This is because
today, we have vastly more information (data) than was available to economists a century ago,
not only about our own contemporary societies but also about past societies. This combination
between political economy's original methodology and big data is what I call "turbo-Annales,"
after the French group of historians that pioneered the view of history as a social science
focusing on the broad social, economic, and political forces that shape the world. The topics
that interested classical political economy and the authors associated with the Annales
School can now be studied empirically, and even econometrically and experimentally -- things
which they could not do, both because of the scarcity of data and unavailability of modern
methodologies.
It is within this context that, I believe, we ought to consider Piketty's Capital and
Ideology. How successful was his approach, applied now to the world and over a very long
time-horizon?
"The dominant paradigm has emptied almost all social content from economics and presented
a view of society that was as abstract as it was false."
For the purposes of this review, I divide Piketty's book into two parts: the first, which
I already mentioned, looks at ideological justifications of inequality across different
societies (Parts 1 and 2 of the book, and to some extent Part 3); the second introduces an
entirely new way of studying recent political cleavages in modern societies (Part 4). I am
somewhat skeptical about Piketty's success in the first part, despite his enormous erudition
and his skills as a raconteur, because success in discussing something so geographically and
temporally immense is difficult to reach, even by the best-informed minds who have studied
different societies for the majority of their careers. Analyzing each of these societies
requires an extraordinarily high degree of sophisticated historical knowledge regarding
religious dogmas, political organization, social stratification, and the like. To take two
examples of authors who have tried to do it, one older and one more recent: Max Weber, during
his entire life (and more specifically in Economy and Society), and Francis Fukuyama in his
two-volume masterpiece on the origins of the political and economic order. In both cases, the
results were not always unanimously approved by specialists studying individual societies and
religions.
In his analysis of some of these societies, Piketty had to rely on somewhat
"straightforward" or simplified discussions of their structure and evolution, discussions
which at times seem plausible but superficial. In other words, each of these historical
societies, many of which lasted centuries, had gone through different phases in their
developments, phases which are subject to various interpretations. Treating such evolutions
as if they were a simple, uncontested story is reductionist. It is a choice of one plausible
historical narrative where many exist. This compares unfavorably with Piketty's own rich and
nuanced narrative in Top Incomes in France in the Twentieth Century.
While I am somewhat skeptical about that first part of the book, I am not skeptical about
the second. In this part, we find the Piketty who plays to his strength: bold and innovative
use of data which produces a new way of looking at phenomena that we all observe but were
unable to define so precisely. Here, Piketty is "playing" on the familiar Western economic
history "terrain" that he knows well, probably better than any other economist.
This part of the book looks empirically at the reasons that left-wing, or social
democratic parties have gradually transformed themselves from being the parties of the
less-educated and poorer classes to become the parties of the educated and affluent middle
and upper-middle classes. To a large extent, traditionally left parties have changed because
their original social-democratic agenda was so successful in opening up education and
high-income possibilities to the people who in the 1950s and 1960s came from modest
backgrounds. These people, the "winners" of social democracy, continued voting for left-wing
parties but their interests and worldview were no longer the same as that of their
(less-educated) parents. The parties' internal social structure thus changed -- the product
of their own political and social success. In Piketty's terms, they became the parties of the
"Brahmin left" (La gauche Brahmane), as opposed to the conservative right-wing parties, which
remained the parties of the "merchant right" (La droite marchande).
To simplify, the elite became divided between the educated "Brahmins" and the more
commercially-minded "investors," or capitalists. This development, however, left the people
who failed to experience upward educational and income mobility unrepresented, and those
people are the ones that feed the current "populist" wave. Quite extraordinarily, Piketty
shows the education and income shifts of left-wing parties' voters using very similar
long-term data from all major developed democracies (and India). The fact that the story is
so consistent across countries lends an almost uncanny plausibility to his hypothesis.
It is also striking, at least to me, that such multi-year, multi-country data were
apparently never used by political scientists to study this phenomenon. This part of
Piketty's book will likely transform, or at least affect, how political scientists look at
new political realignments and class politics in advanced democracies in the years to come.
In the same way that Capital in the Twenty-First Century has transformed how economists look
at inequality, Capital and Ideology will transform the way political scientists look at their
own field.
Branko Milanovic is a senior scholar at the Stone Center on Socio-Economic Inequality at the
Graduate Center, City University of New York.
Should We Worry About Income Gaps Within or Between Countries?
The rise of populist nationalism throughout the West has been fueled partly by a clash between the objectives of equity in rich
countries and higher living standards in poor countries. Yet advanced-economy policies that emphasize domestic equity need not
be harmful to the global poor, even in international trade.
By DANI RODRIK
At the beginning of classes every autumn, I tease my students with the following question: Is it better to be poor in a rich
country or rich in a poor country? The question typically invites considerable and inconclusive debate. But we can devise a more
structured and limited version of the question, for which there is a definitive answer.
Let's narrow the focus to incomes and assume that people care only about their own consumption levels (disregarding inequality
and other social conditions). "Rich" and "poor" are those in the top and bottom 5 percent of the income distribution, respectively.
In a typical rich country, the poorest 5 percent of the population receive around 1 percent of the national income. Data are a
lot sparser for poor countries, but it would not be too much off the mark to assume that the richest 5 percent there receive 25
percent of the national income.
Similarly, let's assume that rich and poor countries are those in the top and bottom 5 percent of all countries, ranked by
per capita income. In a typical poor country (such as Liberia or Niger), that is around 1,000 U.S. dollars, compared to 65,000
U.S. dollars in a typical rich country (say, Switzerland or Norway). (These incomes are adjusted for cost-of-living, or purchasing-power,
differentials so that they can be directly compared.)
Now, we can calculate that a rich person in a poor country has an income of 5,000 (1,000 x 0.25 x 20) U.S. dollars while a
poor person in a rich country earns 13,000 (65,000 x 0.01 x 20) U.S. dollars. Measured by material living standards, a poor person
in a rich country is more than twice as well off as a rich person in a poor country.
This result surprises my students, most of whom expect the reverse to be true. When they think of wealthy individuals in poor
countries, they imagine tycoons living in mansions with a retinue of servants and a fleet of expensive cars. But while such individuals
certainly exist, a representative of the top 5 percent in very poor countries is likely to be a mid-level government bureaucrat.
The larger point of this comparison is to underscore the importance of income differences across countries, relative to inequalities
within countries.
At the dawn of modern economic growth, before the Industrial Revolution, global inequality derived almost exclusively from
inequality within countries. Income gaps between Europe and poorer parts of the world were small. But as the West developed in
the 19th century, world economy underwent a "great divergence" between the industrial core and the primary-goods-producing periphery.
During much of the postwar period, income gaps between rich and poor countries accounted for the greater part of global inequality.
From the late 1980s onward, two trends began to alter this picture. First, led by China, many parts of the lagging regions
began to experience substantially faster economic growth than the world's rich countries. For the first time in history, the typical
developing-country resident was getting richer at a faster pace than his or her counterparts in Europe and North America.
Second, inequalities began to increase in many advanced economies, especially those with less-regulated labor markets and weak
social protections. The rise in inequality in the United States has been so sharp that it is no longer clear that the standard
of living of the American "poor" is higher than that of the "rich" in the poorest countries (with rich and poor defined as above).
These two trends went in offsetting directions in terms of overall global inequality – one decreased it while the other increased
it. But they have both raised the share of within-country inequality in the total, reversing an uninterrupted trend observed since
the 19th century.
Given patchy data, we cannot be certain about the respective shares of within- and between-country inequality in today's world
economy. But in an unpublished paper based on data from the World Inequality Database, Lucas Chancel of the Paris School of Economics
estimates that as much as three-quarters of current global inequality may be due to within-country inequality. Historical estimates
by two other French economists, François Bourguignon and Christian Morrison, suggest that within-country inequality has not loomed
so large since the late 19th century.
These estimates, if correct, suggest that the world economy has crossed an important threshold, requiring us to revisit policy
priorities. For a long time, economists like me have been telling the world that the most effective way to reduce global income
disparities would be to accelerate economic growth in low-income countries. Cosmopolitans in rich countries – typically the wealthy
and skilled professionals – could claim to hold the high moral ground when they downplayed the concerns of those complaining about
domestic inequality.
But the rise of populist nationalism throughout the West has been fueled partly by the tension between the objectives of equity
in rich countries and higher living standards in poor countries. Advanced economies' increased trade with low-income countries
has contributed to domestic wage inequality. And probably the single best way to raise incomes in the rest of the world would
be to allow a massive influx of workers from poor countries into rich countries' labor markets. That would not be good news for
less educated, lower-paid rich-country workers.
Yet advanced-economy policies that emphasize domestic equity need not be harmful to the global poor, even in international
trade. Economic policies that lift incomes at the bottom of the labor market and diminish economic insecurity are good both for
domestic equity and for the maintenance of a healthy world economy that provides poor economies a chance to develop.
Dani Rodrik is Professor of International Political Economy at Harvard University's John F. Kennedy School of Government.
Trade and income distribution are related but the relationship can be determinative lay shaped by domestic institutions and country
wide foreign trade policy
We need institutions run by and for common workng people
And foreign trade policy to shape impact patterns on domestic households in a pro common working people pattern
Too many well meaning Cosmo humanists assume the corporate message to be binding
A r
Trade off between foreign poor and domestic wage earners
Was part of global progress
Nope
Not necessarily so
Dani has several popularly written papers on tis point
Dani Rodrik is wrong. The idea that poor in the USA live better then top 5% in the most poor counties is a kind of persistent
neoliberal myth that needs to dispelled.
1. Purchase party essentially means that in poor countries dollar is overvalued twice or more. Which means that $5K in poorest
countries is close to $10 or even $15K in the USA and other Western countries.
2. Access to education and medical care is incomparable. In the USA most poor live without medical insurance. That put them
in severe disadvantage with top 5% of a poor country.
3. Top 5% in poor countries typically own very comfortable apartments, in many cases far superior to what is available in the
USA even for middle income families. Cost of the rent on two bedroom apartment in the large city in poor countries is typically
5-10 times less then in the USA. Taking into account very low quality of apartment complexes in the USA, the apartments in poor
countries for top 5% might well belong to luxury apartment class in the USA. I know for sure that in the capital of Tajikistan
(2017 GDP per Capita: $777) they are better.
The low 5% in the USA actually live in the third world country with considerable level of segregation from the rest of population
as for apartments in which they live (look housing of the low paid retail and WalMart employees for actual data; their standard
of living is just horrible, especially for single mothers with children)
3. Level of education. Top 5% in poor country are mostly university educated or better. Low 5% in the USA and other Western
countries usually are functionally illiterate.
1. 32 million adults can not read in the United States equal to 14% of the population.
2. 21% of US adults read below the 5th grade level.
3. 19% of high school graduates can not read.
4. 85% of juveniles who interact with the juvenile court system are considered functionally illiterate.
5. 70% of inmates in America's prisons can not read above the fourth grade level.
4. Military industrial complex and Wall Street had taken ordinary Americans for a ride much like in the UK during the days
of British Empire.
Which for one thing means that due to lack of affordable public transportation you need to own a car outside major metropolises.
Which drops you standard of living. You will be fleeced three times: first by used car dealerships, then by insurance companies
(low credit rating and high risk of default means high premium) and then repair shops which in some cases are really criminal
enterprises exploiting the most poor and vulnerable parts of the population. Parts who has no access to quality cars.
Top 5% in poor countries has access to new small and midsize Japanese models (like Corolla, Nissan Juke, etc )
Also Rodrik method of calculation of income of top 5% of population is highly questionable. He never tried to verify his calculation
with actual statistic of distribution of incomes in say top 10 poorest countries in the world (the list includes three the xUSSR
"stans"; for them top 5% earns probably at least $20K a year, if not more )
IMHO for poor countries the income of the top 5% is probably two to four times higher then Rodrick estimate due to extreme
values of GINI coefficient for such countries. Top 5% on such countries are mostly represented by people working for foreign companies
(compradors), high level professionals and high level government employees. For the latter the salary is just the top of the iceberg
of the real income.
Half of Saudi Arabia's oil production has gone offline following a surprise drone strike.
Drones attacked Abqaiq facility in Saudi Arabia and the Khurais oil field run by Saudi Aramco early Saturday morning, the
kingdom's interior ministry
said
,
sparking a massive fire at a crude processing plant essential to global oil supplies.
The closure will impact nearly
5
million barrels of crude processing per day
, affecting 5 percent of the world's daily oil production. And while Aramco is
confident that it can recover quickly, if it can't, however, the world could face a production shortage of as much 150MM
barrels per month. An outcome which could send oil prices into the triple digits.
Houthi rebels-- who are backed by Iran in a yearlong Saudi-led battle in Yemen-- have apparently asserted responsibility for
the strikes and pledged that more assaults can be expected in the future.
A Houthi spokesperson explained, "We promise the Saudi regime that our future operations will expand and be more painful as
long as its aggression and siege continue," adding that the attack involved ten drones.
The Iran-backed Houthis have recently been behind a number of assaults on Saudi pipelines, vessels and other energy
infrastructure as tensions grow in the region.
There have been no details on the severity of the damage but Agence France-Presse quoted interior ministry spokesperson
Mansour al-Turki as saying that there were no human casualties as a result of the attack.
This latest strike highlights the risk posed by the Houthis to Saudi Arabia's
oil
infrastructure
as tensions between the groups continues to escalate.
The growing power of the Houthis' drone operations is likely to reignite the debate on where the militant group is securing
these weapons. It could very well be that the group has weaponized noncombatant drones, or in a darker scenario, they are
receiving the militarized drones from Iran.
A Saudi-led coalition has been at
war
with
the Houthi movement in Yemen since March 2015. The Iranian-backed rebels hold the funding, Sana'a, and other areas in the Arab
world's most impoverished nation.
The battle has created one of the world's worst humanitarian crisis. The violence has pressed Yemeni citizens to the brink of
starvation. And the death toll has soared to more than 90,000 individuals since 2015, according to the US-based Armed Conflict
Location & Event Data Project, which tracks the conflict.
(Bloomberg) -- Middle East geopolitics have come back with a vengeance to hit the oil
market. What everybody feared has happened. An attack has penetrated the defenses of Saudi
Arabia's massive Abqaiq oil processing facility, the heart of the kingdom's oil production and
export infrastructure, causing an unknown amount of damage. Crude prices will react and
emergency stockpiles will be tapped.
Fires at the plant were brought under control within hours, but the flow of crude from Saudi
Arabia, the world's biggest exporter, will almost certainly be affected, although we don't yet
know by how much or for how long. Traders who have shrugged off tensions in the Middle East for
months will respond to this attack when markets open on Monday.
The height of the price spike will depend on how much we know about the extent of the damage
and how long it will take to repair. An absence of information will lead traders to assume the
worst.
The Abqaiq crude processing plant is the single most important facility in the Saudi oil
sector. In 2018 it processed about half of the kingdom's crude oil production, according to a
prospectus published in May for the state oil company's first international bond. That's
roughly 5 million barrels a day, or one in every 20 barrels of oil used worldwide.
Abqaiq is more important to the Saudi oil sector than the kingdom's Persian Gulf export
terminals at Ras Tanura and Ju'aymah, or the Strait of Hormuz that links the Gulf to the Indian
Ocean and the high seas. Crude can be diverted away from the Persian Gulf and Hormuz by pumping
it across the country to the Red Sea through the East-West oil pipeline. But it cannot bypass
Abqaiq. The East-West pipeline starts at Abqaiq and output from the giant Ghawar, Shaybah and
Khurais fields is all processed there, so an attack on the facility will impact crude flows to
export terminals on both coasts.
The latest attack comes just months after drones, allegedly launched from Iraq by Yemen's
Houthi rebels, targeted pumping stations on the oil pipeline. The damage caused by that earlier
attack was minimal, but highlighted the vulnerability of Saudi Arabia's oil infrastructure,
even when located hundreds of miles from the country's borders.
So what happens now?
Saudi Arabia will probably seek to maintain export levels as much as possible by supplying
customers from stockpiles. It holds crude in storage tanks in the kingdom, as well as at sites
in Egypt, Japan and the Netherlands. But it has been running its crude hoard down since the
beginning of 2016 and it is now back at levels not seen since 2008, according to data from the
Joint Organisations Data Initiative. That means the kingdom has much less to draw on than it
did three years ago.
The attack will also test stockpiles in oil-consuming countries. Members of the
International Energy Agency are required to hold 90 days' worth of oil imports in emergency
stocks and those will be pressed into service if the outage at Abqaiq is prolonged. Non-member
countries like China and India have also been building up their own emergency reserves. Those,
too, will be pressed into service.
Neighboring countries who, just days ago, were being exhorted to stick to output quotas
agreed in December will now pump as much as they can to make up for any losses from Saudi
Arabia. The United Arab Emirates, Kuwait and Iraq will all boost output as much as they are
able. But the one country with lots of spare capacity, Iran, won't see any easing of the
restrictions placed on its oil sales by the U.S. Quite the opposite. Its support for the Houthi
rebels in Yemen, who have claimed responsibility for the attack on Abqaiq, will ensure that any
easing of the pressure being exerted on it remains a distant prospect.
To contact the reporter on this story: Julian Lee in London at [email protected]
To contact the editors responsible for this story: Alaric Nightingale at
[email protected], Steve Geimann
"... Trade wars and sanctions are economic weapons against rival regimes, and like actual military warfare, often lead to unanticipated and sometimes devastating blowback from the targeted regimes. ..."
"... At the same time, western companies were forced to withdraw from Russian mega-deals because of sanctions. The best-known example was Exxon, forced by sanctions to walk away from an Arctic joint venture with Russia's state-owned oil giant, Rosneft, where it had invested $3.2 billion. In their very first effort, the partners successfully drilled oil wells containing 750 million barrels. ..."
"... The trade war with China that has led to tariffs on billions of dollars in Chinese exports to the US, and as a result, Russia and China have moved even closer. It remains an absolute mystery why no one in the west had foreseen the blowback from economic warfare leading to an alliance between two of its most powerful adversaries. ..."
"... The US acts as if it has been blind-sided by the Russian/China moves, even though years before it undertook economic warfare against them, China, the world's largest energy importer, agreed to finance oil and gas multi-billion-dollar pipelines in neighboring Russia. Now Russia has become China's largest energy supplier, equaling or perhaps even surpassing its energy supplies to Europe. ..."
"... As stated by Global Village Space (GBS) , China and Russia rushed to aid Iran, with China replacing Total, in a 25-year deal estimated to be worth some $400 billions. With that, China inherits a bonanza, providing much needed finance and technology to a country that was and could again become one of the world's leading energy producers. China is looking to finance $280 billion to develop Iran's gas, oil and petrochemicals industries, along with $120 billion to improve transport and manufacturing, making it a key partner in China's Road and Belt program. ..."
"... The deal also gives China the right to buy any or all Iranian oil, gas, and petrochemicals products at a minimum guaranteed 12% discount to global benchmarks, plus an additional discount of 6-8% for risk adjusted compensation. Financing will proceed using local currencies, avoiding the costs of converting to a hard currency like the US dollar or the Euro, giving the Beijing yet another 10% cost advantage. ..."
"... In direct defiance of US sanctions against Iran, China has stepped into the breach, increasing its oil purchases from Iran while becoming Iran's major energy trade and finance partner. Like Russia, it seems that Iran is moving towards a military alliance with China. If the west worries about China's expansive moves in the South China Sea, along China's own borders, what to make then of China moving in on Hormuz, where some 30% of world oil is transited each day? ..."
"... It is well known that the US has been in secret meetings with Iran representatives, much to the dismay of the Saudi Arabia and Israel. As Bloomberg reports, after the G7 meeting, Trump publicly and repeatedly stated he was ready to meet with Iran's President, Hassan Rouhani. Bloomberg also reported that in a meeting with his Cabinet, Trump announced that he was ready to ease sanctions as a possible way to open negotiations between the two countries. Treasury Secretary Mnuchin agreed with the President, while National Security Advisor Bolton voiced strong opposition, that only one day later, led to his firing. Secretary of State Pompeo stated that Trump may meet on the sidelines of the upcoming UN meeting with Iran's President. ..."
"... The EU defence industry initiative, the ECB's money transfer service, the EU army (or defence collaboration :) are all longer term policies aimed at reducing the EU's reliance on systems that are controlled by the USA. ..."
"... Sanctions are the modern equivalent of siege warfare, only the target is a nation, not a city. ..."
"... John Bolton is clueless. He's a throwback to ruthless American competition and cowboy capitalism. And he appears to be an idiot. ..."
"... Consumer spending is going to struggle the rest of the year as it rebalances and manufacturing is heading to a full blown recession by December as auto companies try and get their balance sheets under control. ..."
Yves here. Even though most
readers know the general point very well, that US trade and financial sanctions haven't brought
targets to their knees, and had instead pushed them to find allies, but it's useful to have
detail to flesh out the story. There are some bits one can quibble with, like the "annexation
of Crimea" bit, and the US objectives for its sanctions against Russia. At least under the
Obama Administration, the belief was that they would damage the economy severely and force a
regime change.
By Robert Berke, an energy financial analyst with experience as a government consultant
to the State of Alaska. Originally published at
OilPrice
Trade wars and sanctions are economic weapons against rival regimes, and like actual
military warfare, often lead to unanticipated and sometimes devastating blowback from the
targeted regimes.
A prime example was President Obama sanctioning Russia over its annexation of Crimea. The
sanctions were designed to block Russia from any access to western financing, aimed at causing
a dire financial and economic crisis in Russia that would force it to relinquish Crimea and end
support for Ukraine's breakaway territories.
In fact, the sanctions did cause Russia to enter a short-lived recession. But it also had
other, much more drastic results for the West. It forced Russia to move closer to China, and
Moscow saw Beijing as a great alternative to western financing for Russian industries.
At the same time, western companies were forced to withdraw from Russian mega-deals because
of sanctions. The best-known example was Exxon, forced by sanctions to walk away from an Arctic
joint venture with Russia's state-owned oil giant, Rosneft, where it had invested $3.2 billion.
In their very first effort, the partners successfully drilled oil wells containing 750 million
barrels.
As noted by Reuters, the withdrawal was costly:
Exxon will post an after-tax loss of $200 million as a result of pulling out of the
Rosneft deal, but the true costs for the company run much deeper. Exploring and developing
giant offshore fields in Russia was supposed to provide long-term growth for the company,
and, in recent years, has seen falling reserves.
But the opportunity losses are likely to be far higher for Exxon, the company that famously
missed the US shale revolution. The long-term deal with Rosneft, expected to continue for
decades, included exploration for oil in the Black Sea, enormous shale resources in Western
Siberia, and the development of three large blocks in the Arctic (Kara Sea).
The trade war with China that has led to tariffs on billions of dollars in Chinese exports
to the US, and as a result, Russia and China have moved even closer. It remains an absolute
mystery why no one in the west had foreseen the blowback from economic warfare leading to an
alliance between two of its most powerful adversaries.
China's major state-owned oil companies and its Silk Road fund each became 10% partners in
Russia's first major Arctic LNG (liquified natural gas), project in the Yamal Peninsula,
undertaken with Novatek, Russia's largest independent gas producer. The project offers great
prospects for enormous expansion.
The US acts as if it has been blind-sided by the Russian/China moves, even though years
before it undertook economic warfare against them, China, the world's largest energy importer,
agreed to finance oil and gas multi-billion-dollar pipelines in neighboring Russia. Now Russia
has become China's largest energy supplier, equaling or perhaps even surpassing its energy
supplies to Europe.
A similar scenario is taking place in the Persian Gulf where the US has withdrawn from the
Iran nuclear deal, while imposing economic sanctions on Iranian oil exports. The French energy
giant, Total, that in recent years has been a leading international oil company in that
country, was forced to withdraw because of sanctions, just like Exxon in Russia's Arctic, it
left billions of dollars on the table.
This may also answer the question as to why French Prime Minister Macron was so intent on
inviting the Iranian Foreign Secretary to the recent G7 meeting in France. It's also no secret
that French carmakers Peugeot and Renault are the main suppliers to Iran's auto assembly
plants.
As stated by
Global Village Space (GBS) , China and Russia rushed to aid Iran, with China replacing
Total, in a 25-year deal estimated to be worth some $400 billions. With that, China inherits a
bonanza, providing much needed finance and technology to a country that was and could again
become one of the world's leading energy producers. China is looking to finance $280 billion to
develop Iran's gas, oil and petrochemicals industries, along with $120 billion to improve
transport and manufacturing, making it a key partner in China's Road and Belt program.
The deal also gives China the right to buy any or all Iranian oil, gas, and
petrochemicals products at a minimum guaranteed 12% discount to global benchmarks, plus
an additional discount of 6-8% for risk adjusted compensation. Financing will proceed using
local currencies, avoiding the costs of converting to a hard currency like the US dollar or the
Euro, giving the Beijing yet another 10% cost advantage.
GBS further reports that the security for these projects will include up to 5,000 Chinese
security personnel on the ground in Iran to protects Chinese projects and to safeguard the
transit of energy products from Iran to China, including security for the very strategic Hormuz
Straits.
In direct defiance of US sanctions against Iran, China has stepped into the breach,
increasing its oil purchases from Iran while becoming Iran's major energy trade and finance
partner. Like Russia, it seems that Iran is moving towards a military alliance with China. If
the west worries about China's expansive moves in the South China Sea, along China's own
borders, what to make then of China moving in on Hormuz, where some 30% of world oil is
transited each day?
If these are considered winning policies for the West, one has to ask what failure looks
like.
The West is already slowly becoming aware of the blowback this disastrous policy has caused.
Evidence for this can be found in Macron's efforts to persuade Trump towards a peaceful
resolution with Iran.
It is well known that the US has been in secret meetings with Iran representatives, much to
the dismay of the Saudi Arabia and Israel. As Bloomberg reports, after the G7 meeting, Trump
publicly and
repeatedly stated he was ready to meet with Iran's President, Hassan Rouhani. Bloomberg
also reported that in a meeting with his Cabinet, Trump announced that he was ready to ease
sanctions as a possible way to open negotiations between the two countries. Treasury Secretary
Mnuchin agreed with the President, while National Security Advisor Bolton voiced strong
opposition, that only one day later, led to his firing. Secretary of State Pompeo stated that
Trump may meet on the sidelines of the upcoming UN meeting with Iran's President.
The firing of Bolton was
immediately followed by a fall in the price of oil and gold. Allowing Iran to continue to
increase supplies into already well supplied oil markets will add downward pressure on oil
prices. For the Trump administration, this is not necessarily a bad thing unhappy consumers at
the gas pump make for unhappy voters.
Similarly, the Trump Administration badly needs to move towards ending the trade war with
China in order to calm global markets. The recent announcement of the resumption of trade talks
between the US and China in October may provide an opportunity for a similar easing of tariffs
and a path towards further resolution.
Although these actions could help to quell global tensions, it may be too late to reverse
some of the serious damage caused by US-led economic warfare. Once China positions itself in
Iran, it will not likely be interested in withdrawing from its new strategic position in the
Middle East, that it gained as a result of US near sighted foreign policy.
Prior to the election, we may see a breakthroughs in the trade war, and the alleviation of
sanctions with Russia, Iran, China, and perhaps even North Korea, but the US will almost
certainly see the negative consequences from adversaries it helped to expand and
strengthen.
Can't speak much about the effects of the Chinese sanctions but I know a little bit about
the Russian ones. These Russian sanctions are biting hard but not the way they were intended
and it is not only the big oil companies that are losing big. Since they kicked in Russia has
lost about $50 billion in trade with the European Union which kinda stings. But in the same
time frame, the European Union has lost about $240 billion.
Considering that fact that these
sanctions were never for their benefit but for solidarity with the US, that is a very
expensive price tag. The US lost only about $17 billion but I remember reading that after the
sanctions kicked in, trade between the U and Russia actually increased. Europe is a big loser
here, particularly with agriculture. When the EU sanctioned Russian products to the EU, the
Russians did the same to them a few weeks later which came as a shock. Since then Russia has
made huge investments into growing their own food crops and those markets will never come
back again for the EU. As an example, Russia is once more a world leader in the production of
wheat second only to the US and has learned the value of autarky.
You see these results in all sorts of areas as the country started phasing out imports and
replacing them with domestically made products. They even started making marine engines out
of necessity as they were denied purchase of foreign ones. People might remember how Russia
was going to buy two specially built ships from France but France reneged under pressure from
Washington.
France not only had to give back all the money the Russians paid but also had to
compensate Russia for all related costs that the Russians made. In the end France paid Russia
over a billion dollars which was triple what the Russians initially paid. And now the
Russians are constructing their own ships of this class in the Crimea using the knowledge
acquired from France. Perhaps it is things like this that has cause Macron to open up
contacts with Russia once more in spite of what Washington demands.
Add in the purchase of gold stocks, developing financial systems in case the US cuts
Russia off from the SWIFT clearance systems, the development of weaponry that makes the
deployment of nuclear missile systems in Europe futile, you realise that Washington has
massively underestimated the response of counties like Russia, China and Iran and depended on
unicorn wishes instead.
But in the same time frame, the European Union has lost about $240 billion. Considering
that fact that these sanctions were never for their benefit but for solidarity with the US,
that is a very expensive price tag.
Well, Looks like Donald Trump let "The Swamp(tm)" run loose and they went and over-torqued
the screws!
Some decision makers in within the EU have begun to see the US sanctions against
everything and everyone as having the true goals of ablating EU's influence on the world
while hampering EU-based businesses. There are initiatives and polices that hints at "cutting
the cord" are quietly being introduced.
The EU defence industry initiative, the ECB's money transfer service, the EU army (or
defence collaboration :) are all longer term policies aimed at reducing the EU's reliance on
systems that are controlled by the USA.
The 'North Stream' pipeline and keeping the Iran deal kinda alive are more immediate and
direct challenges, as was the total unwillingness to join in any of the planned military
adventures involving Syria and Iran.
France is being rather open about about it. Possibly to test out on behalf of the EU what
the USA is actually willing to do to exact revenge and enforce compliance, possibly also
because opposing the USA in France remains a reliable way to win votes.
It's not just Trump. Our Congress is totally at the beck of special pleaders such as LNG
exporters and arms companies. All seek to use the US economic weapon to further their own
interests.
Plus, Russia is determinedly GMO free. The more the US goes down the GMO route, the less
likely the food trade with the EU – the European dogs wont eat GMO dogfood.
Post Brexit perhaps, Britain will accept US foods, all the more reason to insist on a proper
border if NI remains part of the 'UK'.
It's not just GMO, but the level and quality of technocratic oversight. US government
agencies are incapable of regulating anything in the private sector. While the EU is still
greatly influenced by private money, it has not completely sold out.
What is ignored by media is the harm sanctions inflict on the people living in these
countries. I think it should be considered a crime against humanity and our leaders should be
prosecuted. Sanctions are a weapon that is just as harmful as weapons to kill. We only seem
to look at the economic effects and ignore the social effects.
Sanctions are the modern equivalent of siege warfare, only the target is a nation, not a
city.
I've known in a vague intuitive way that US sanctions would alienate nations and isolate
the US, it's useful seeing how exactly these sanctions are backfiring with more nuance!
What is the next step after you have sanctioned everything and everyone and the reaction
is a shrug and a work around? Sanctions do have their bite, but they are, or are becoming, a
more effective tool for global economic and political realignment than a means to accomplish
their stated purpose.
Good question. I am wondering the same thing. There is a vague pattern here with Russia,
the most resource-rich oil producer. We don't want Russia to take off too fast. What can be
left in the ground should be left in the ground. And maybe that was the existential threat
posed by Exxon – a private, profit seeking US corporation geared to do everything fast
in order to make their profits.
Just thinking about slamming the breaks on manufacturing and
consumption and how this can make a mess of the oil industry if it is going for profits
– race to the bottom (currently). Rather, anyone thinking straight would want to
conserve oil, control it's production and marketing. John Bolton is clueless. He's a
throwback to ruthless American competition and cowboy capitalism. And he appears to be an
idiot.
There was a discussion of China's role in manufacturing drugs for Big Pharma on the news
last night, truly frightening.
They've already been found to be selling us contaminated drugs, what happens when they
refuse to deliver anything other than fentanyl?
I find it hard to understand how we're going to recover from the damage done by the
short-sighted, wholesale outsourcing of our manufacturing to China.
Given the centrality of drugs to American life, we should categorize them as sensitive
items of national security and declare a war on foreign drugs. That would brilliantly combine
the failed policies of the past with the failed policies of the present. We could make
exceptions for most-favored nations like Colombia or Afghanistan.
As in military conflicts, the fog of geoeconomic war together with partisan lens and poor
leadership can prevent adversaries from developing an accurate assessment of reality. The
writer has raised some examples that support his view pertaining to pushback, and he could be
right as The Rev Kev so eloquently pointed out here WRT Russia. However, whether his article
provides an accurate overview of the current state of play remains an open question IMO.
Setting aside deeply troubling questions about our national values and whether sanctions
should ever be employed due to their very damaging effects on domestic populations, together
with their evident past failure to realize policy goals, there are credible accounts that
China is now confronting a U.S. dollar shortage; that China has significant issues in its
financial system and economy; and that the people of China are seeing sharply rising food
prices as a result of decreased supplies of pork and soybeans. These issues are being
perceived as sufficient to cause China's leaders to be receptive to negotiating resolution of
the current tariffs, trade, intellectual property, and investment impasse on terms favorable
to the U.S. Whether this will be so remains to be seen, of course.
A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis
Fukuyama said it was the end of history. It was all going so well, until the neoliberals got to work. The US created an open, globalised world with the Washington Consensus. China went from almost nothing to become a global super power.
That wasn't supposed to happen, let's get the rocket scientists onto it. Maximising profit is all about reducing costs. China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world. "The Washington Consensus was always going to work better for China than the US"
the rocket scientists.
If the US left this running it would be China first and America second. PANIC!
It seems since about the Vietnam war era, US FP has been run by hubristic idiots with
delusions of grandeur. Its foreign policy 101 that you never, never, set policy to drive your
2 largest rivals to alliance.
Yet these morons did exactly that. Since Trump, there have been many retirements form the
State Dept.
And maybe that's not such a bad thing. They show no evidence of competence.
Russia is leasing out old collective farm lands that was abandoned in the eastern part of
the country to Asian countries to farm and grow the export food products needed. It seems the
collective farms were abandoned and now the Russian government is re-purposing the vast
amounts of land available.
"Russia is now considering requests from Asian firms to farm another 1 million hectares
(2.5 million acres) -- an area roughly the size of Jamaica, according to the head of a
government agency."
It may be said that Trump's tariffs are the best things that could have happened to China
and Russia.
Frankly, I think it has pushed up consumer spending and that is about it. In other words,
this economy has overcapacity problems in the auto sector and its relation to junk corporate
debt, is not good.
Consumer spending is going to struggle the rest of the year as it rebalances and
manufacturing is heading to a full blown recession by December as auto companies try and get
their balance sheets under control.
Clowns should be increasingly used in redundancy (layoff, firing) meetings until it
becomes the norm and employers start to compete with each other to offer the best clown
redundancy experience and promote it as a benefit.
It would also create clown jobs, which would probably require more clown schools, meaning
that the tuition prices would go through the roof and young people dreaming of becoming
redundancy clowns would either have to come from wealth or take out massive clown loans to
fund their education for clown universities and grad schools. Shareholders can only take so
much top line costs and Wall Street pressure would force corporations to improve return on
investment and reduce redundancy clown labor expenses. Sadly, redundancy clowns would find
themselves training their own replacements – HB1 clowns from "low cost" countries.
Employers would respond to quality criticisms of the HB1 clown experience by publishing
survey results showing very similar almost ex-employee satisfaction with the new clowns.
Eventually, of course, redundancy clowns will be replaced by AI and robots. It's just the
future and we will need to think about how to adapt to it today by putting in place a UBI for
the inevitable redundant redundancy clowns.
Usually a forum for anodyne statements about international cooperation and proper
environmental stewardship, the lid was blown off the latest Arctic Council meeting in May when
Pompeo delivered an unabashedly martial and provocative speech that deserves far more attention
than it got at the time. So let's take a little tour of what may prove a historic proclamation
(in the grimmest sense possible) of a new Washington doctrine for the Far North.
"In its first two decades, the Arctic Council has had the luxury of focusing almost
exclusively on scientific collaboration, on cultural matters, on environmental research," the
secretary of state began mildly. These
were, he said, "all important themes, very important, and we should continue to do those. But
no longer do we have that luxury. We're entering a new age of strategic engagement in the
Arctic, complete with new threats to the Arctic and its real estate, and to all of our
interests in that region."
In what turned out to be an ultra-hardline address, Pompeo claimed that we were now in a new
era in the Arctic. Because climate change -- a phrase Pompeo, of course, never actually uttered
-- is now making it ever more possible to exploit the region's vast resource riches, a scramble
to gain control of them is now officially underway. That competition for resources has
instantly become enmeshed in a growing geopolitical confrontation between the U.S., Russia, and
China, generating new risks of conflict.
On the matter of resource exploitation, Pompeo could hardly contain his enthusiasm.
Referring to the derision that greeted William Seward's purchase of Alaska in 1857, he
declared:
"Far from the barren backcountry that many thought it to be in Seward's time, the
Arctic is at the forefront of opportunity and abundance. It houses 13% of the world's
undiscovered oil, 30% of its undiscovered gas, and an abundance of uranium, rare earth
minerals, gold, diamonds, and millions of square miles of untapped resources."
Of equal attraction, he noted, was the possibility of vastly increasing maritime commerce
through newly de-iced trans-Arctic trade routes that will link the Euro-Atlantic region with
Asia. "Steady reductions in sea ice are opening new passageways and new opportunities for
trade," he enthused. "This could potentially slash the time it takes to travel between Asia and
the West by as much as 20 days Arctic sea lanes could come [to be] the 21st century's Suez and
Panama Canals." That such "steady reductions in sea ice" are the sole consequence of climate
change went unmentioned, but so did another reality of our warming world. If the Arctic one day
truly becomes the northern equivalent of a tropical passageway like the Suez or Panama canals,
that will likely mean that parts of those southerly areas will have become the equivalents of
uninhabitable deserts.
As such new trade and drilling opportunities arise, Pompeo affirmed, the United States
intends to be out front in capitalizing on them. He then began bragging about what the Trump
administration had already accomplished, including promoting expanded oil and gas drilling in
offshore waters and also freeing up "energy exploration in the Arctic National Wildlife Refuge ," a pristine stretch
of northern Alaska
prized by environmentalists as a sanctuary for migrating caribou and other at-risk species.
Additional efforts to exploit the region's vital resources, he promised, are scheduled for the
years ahead.
A New Arena for Competition (and Worse)
Ideally, Pompeo noted placidly, competition for the Arctic's resources will be conducted in
an orderly, peaceful manner. The United States, he assured his listeners, believes in "free and
fair competition, open, by the rule of law." But other countries, he added ominously,
especially China and Russia, won't play by that rulebook much of the time and so must be
subject to careful oversight and, if need be, punitive action.
China, he pointed out, is already developing trade
routes in the Arctic, and establishing economic ties with key nations there. Unlike the United
States (which already has multiple military bases in the Arctic, including one at Thule in
Greenland, and so has a well-established presence there), Pompeo claimed that Beijing is
surreptitiously using such supposedly economic activities for military purposes, including,
heinously enough, spying on U.S. ballistic missile submarines operating in the region, while
intimidating its local partners into acquiescence.
He then cited events in the distant South China Sea, where the Chinese have indeed
militarized a
number of tiny uninhabited islands (outfitting them with airstrips, missile batteries, and the
like) and the U.S. has responded by
sending its warships into adjacent waters. He did so to warn of similar future military
stand-offs and potential clashes in the Arctic. "Let's just ask ourselves, do we want the
Arctic Ocean to transform into a new South China Sea, fraught with militarization and competing
territorial claims?" The answer, he assured his listeners, is "pretty clear." (And I'm sure you
can guess what it is.)
The secretary of state then wielded even stronger language in describing "aggressive Russian
behavior in the Arctic." In recent years, he claimed, the Russians have built hundreds of new
bases in the region, along with new ports and air-defense capabilities. "Russia is already
leaving snow prints in the form of army boots" there, a threat that cannot be ignored. "Just
because the Arctic is a place of wilderness does not mean it should become a place of
lawlessness. It need not be the case. And we stand ready to ensure that it does not become
so."
And here we get to the heart of Pompeo's message: the United States will, of course,
"respond" by enhancing its own military presence in the Arctic to better protect U.S.
interests, while countering Chinese and Russian inroads in the region:
"Under President Trump, we are fortifying America's security and diplomatic presence in the
area. On the security side, partly in response to Russia's destabilizing activities, we are
hosting military exercises, strengthening our force presence, rebuilding our icebreaker fleet,
expanding Coast Guard funding, and creating a new senior military post for Arctic Affairs
inside of our own military."
To emphasize the administration's sincerity, Pompeo touted the largest NATO and U.S. Arctic
military maneuvers since the Cold War era, the recently completed " Trident Juncture " exercise (which he
incorrectly referred to as "Trident Structure"), involving some 50,000 troops. Although the
official scenario
for Trident Juncture spoke of an unidentified "aggressor" force, few observers had any doubt
that the allied team was assembled to repel a hypothetical Russian invasion of Norway, where
the simulated combat took place.
Implementing the Doctrine
And so you have the broad outlines of the new Pompeo Doctrine, centered on the Trump
administration's truly forbidden topic: the climate crisis. In the most pugnacious manner
imaginable, that doctrine posits a future of endless competition and conflict in the Arctic,
growing ever more intense as the planet warms and the ice cap melts. The notion of the U.S.
going nose-to-nose with the Russians and Chinese in the Far North, while exploiting the
region's natural resources, has clearly been circulating in Washington. By August, it had
obviously already become enough of a commonplace in the White House (not to speak of the
National Security Council and the Pentagon), for the president to offer to buy Greenland.
And when it comes to resources and future military conflicts, it wasn't such a zany idea.
After all, Greenland does have abundant natural resources and also houses that U.S. base in
Thule. A relic of the Cold War, the Thule facility, mainly a radar base, is already being
modernized , at a cost of some $300 million, to better track Russian missile launches.
Clearly, key officials in Washington view Greenland as a valuable piece of real estate in the
emerging geopolitical struggle Pompeo laid out, an assessment that clearly wormed its way into
President Trump's consciousness as well.
Iceland and Norway also play key roles in Pompeo's and the Pentagon's new strategic
calculus. Another former Cold War facility, a base at Keflavik in Iceland has been reoccupied
by the Navy and is now being used in antisubmarine warfare missions. Meanwhile, the Marine
Corps has
stationed several hundred combat troops at bases near Trondheim, Norway, the first
permanent deployment of foreign soldiers on Norwegian soil since World War II. In 2018, the
Pentagon even
reactivated the Navy's defunct Second Fleet, investing it with responsibility for
protecting the North Atlantic as well as the Arctic's maritime approaches, including those
abutting Greenland, Iceland, and Norway. Consider these signs of heating-up times.
And all of this is clearly just the beginning of a major buildup in and regular testing of
the ability of the U.S. military to operate in the Far North. As part of Exercise Trident
Juncture, for example, the aircraft carrier Harry S. Truman and its flotilla of
support ships were sent into the Norwegian Sea, the first time a U.S. carrier battle group had
sailed above the Arctic Circle since the Soviet Union imploded in 1991. Similarly,
Secretary of the Navy Richard Spencer recently announced
plans to send surface warships on trans-Arctic missions, another new military move. (U.S.
nuclear submarines make such journeys regularly, sailing beneath the sea ice.) This article first appeared on TomDispatch. More articles by:Michael T. Klare
Amazing; I had no idea Betsy Voss – advocate of for-profit charter schools (privatizing
education) and The New Curriculum – and Eric Prince (advocate for privatizing war) are
brother and sister. Blood will tell.
Profiteering is naked and in the open now in the west, and public systems increasingly
favour the wealthy – if you want better, you should be ready to pay for it. I guess
that's what all those tax cuts were about – shifting a burden off of the wealthy, so
that now public services are pay-as-you-go because the government can't afford to provide
them for everyone. However, tax cuts also favoured the wealthy – gee, it almost makes
you think the class system is coming back, dunnit?
I recall Jeremy Scahill mentioning in his book on Blackwater (before it started changing its
name faster than you can change your socks) that Erik Prince was related to Betsy deVos. This
was long before Scahill turned his own name and reputation into mud when he walked out of a
London conference back in 2012 or 2013 because the Syrian nun Agnes Mariam de la Croix, who
was known to support President Assad at the time, was a guest speaker at the conference.
The "japanification" of America begins. I've stated in this blog more than once that, if
the USA falls, it certainly won't fall like the USSR. The USSR had a very peculiar economic
system, where the PCSU was both the government and the economy: once Gorbachev destroyed his
party, he destroyed the Soviet Union.
The USA, on the other side, is a capitalist economy, which means its "center of command"
is a diffuse web of oligarchic capitalists who govern "in the shadows".
The government of a capitalist society is only one of the many institutions that, in a
diffused fashion, preserves the "market anarchy" (domesticated chaos) that is indispensable
for the existence of capitalism.
America, therefore, is more lika an onion than a jenga tower: if you destroy (peel) one
layer, you still have many more.
Therefore, if the USA collapses, it will probably do so through a gradual descent into
fragmentation and anarchy in a process that will take decades and maybe centuries, in an
analogous form as the Roman Empire in the West.
... ... ...
Today, Sept. 11, is a date that marks two ends:
1) the end of any pretenstions left of a socialist wave in Latin America after the first
one -- Cuba, 1959 -- was successful (so far, the first and only). The CIA masterfully learned
from its mistakes in the island nation and successfully (and brutally) crushed Latin American
socialism;
2) the beginning of the end of the "End of History" era. After the WTC fell, the USA would
begin the invasions of Afghanistan and Iraq, in what would be the last time the USA acted as
the "king of Nations".
What should've been -- after a wonderful victory in Iraq -- turned out to be a Pyrric
endeavor, as Iran successfully resisted, the rest of the ME didn't budge, and the whole thing
turned into a trillionaire black hole that drained the American coffers, spiked its debt
rates and culminated with the 2008 crisis.
Almost 40% -- or some $15 trillion -- of the world's foreign direct investment is "phantom
capital" designed to minimize the tax bills of multinational firms, according to a study
published by the International Monetary Fund.
Such investments -- which are now equivalent to the combined GDP of China and Germany --
have surged about 10 percentage points in the past decade despite targeted global attempts to
curb tax avoidance, an IMF and University of Copenhagen study found. The capital typically
passes through empty corporate shells that have no real business activity.
"FDI is often an important driver for genuine international economic integration,
stimulating growth and job creation and boosting productivity," the report said. But phantom
capital is "financial and tax engineering" that "blurs traditional FDI statistics and makes
it difficult to understand genuine economic integration."
Almost half of the world's phantom capital is hosted by Luxembourg and the Netherlands,
according to the report, with just 10 economies holding more than 85% of such
investments.
"Luxembourg, a country of 600,000 people, hosts as much FDI as the U.S. and much more than
China," the report said. "FDI of this size hardly reflects brick-and-mortar investments in
the minuscule Luxembourg economy," whose $4 trillion in FDI comes to $6.6 million a
person.
"Unsurprisingly," the study found, an economy's exposure to phantom FDI increases with the
corporate tax rate.
This is a Marxist critique of neoliberalism. Not necessary right but they his some relevant
points.
Notable quotes:
"... The ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. ..."
"... The ex ante tendency toward overproduction arises because the vector of real wages across countries does not increase noticeably over time in the world economy, while the vector of labor productivities does, typically resulting in a rise in the share of surplus in world output. ..."
"... While the rise in the vector of labor productivities across countries, a ubiquitous phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an explanation, why does the vector of real wages remain virtually stagnant in the world economy? The answer lies in the sui generis character of contemporary globalization that, for the first time in the history of capitalism, has led to a relocation of activity from the metropolis to third world countries in order to take advantage of the lower wages prevailing in the latter and meet global demand. ..."
"... The current globalization broke with this. The movement of capital from the metropolis to the third world, especially to East, South, and Southeast Asia to relocate plants there and take advantage of their lower wages for meeting global demand, has led to a desegmentation of the world economy, subjecting metropolitan wages to the restraining effect exercised by the third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was marginally lower -- than it had been in 1968. 5 ..."
"... This ever-present opposition becomes decisive within a regime of globalization. As long as finance capital remains national -- that is, nation-based -- and the state is a nation-state, the latter can override this opposition under certain circumstances, such as in the post-Second World War period when capitalism was facing an existential crisis. But when finance capital is globalized, meaning, when it is free to move across country borders while the state remains a nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large fiscal deficits against its wishes, then it would simply leave that country en masse , causing a financial crisis. ..."
"... The state therefore capitulates to the demands of globalized finance capital and eschews direct fiscal intervention for increasing demand. It resorts to monetary policy instead since that operates through wealth holders' decisions, and hence does not undermine their social position. But, precisely for this reason, monetary policy is an ineffective instrument, as was evident in the United States in the aftermath of the 2007–09 crisis when even the pushing of interest rates down to zero scarcely revived activity. 6 ..."
"... If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a beggar-my-neighbor policy, does lead to a significant export of unemployment from the United States, then it will invite retaliation and trigger a trade war that will only worsen the crisis for the world economy as a whole by dampening global investment. Indeed, since the United States has been targeting China in particular, some retaliatory measures have already appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be because the export of unemployment from the United States is insubstantial, keeping unemployment everywhere, including in the United States, as precarious as it is now. However we look at it, the world would henceforth face higher levels of unemployment. ..."
"... The second implication of this dead end is that the era of export-led growth is by and large over for third world economies. The slowing down of world economic growth, together with protectionism in the United States against successful third world exporters, which could even spread to other metropolitan economies, suggests that the strategy of relying on the world market to generate domestic growth has run out of steam. Third world economies, including the ones that have been very successful at exporting, would now have to rely much more on their home market ..."
"... In other words, we shall now have an intensification of the imperialist stranglehold over third world economies, especially those pushed into unsustainable balance-of-payments deficits in the new situation. By imperialism , here we do not mean the imperialism of this or that major power, but the imperialism of international finance capital, with which even domestic big bourgeoisies are integrated, directed against their own working people ..."
"... In short, the ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop and finds fascism. ..."
"... The first is the so-called spontaneous method of capital flight. Any political formation that seeks to take the country out of the neoliberal regime will witness capital flight even before it has been elected to office, bringing the country to a financial crisis and thereby denting its electoral prospects. And if perchance it still gets elected, the outflow will only increase, even before it assumes office. The inevitable difficulties faced by the people may well make the government back down at that stage. The sheer difficulty of transition away from a neoliberal regime could be enough to bring even a government based on the support of workers and peasants to its knees, precisely to save them short-term distress or to avoid losing their support. ..."
"... The third weapon consists in carrying out so-called democratic or parliamentary coups of the sort that Latin America has been experiencing. Coups in the old days were effected through the local armed forces and necessarily meant the imposition of military dictatorships in lieu of civilian, democratically elected governments. Now, taking advantage of the disaffection generated within countries by the hardships caused by capital flight and imposed sanctions, imperialism promotes coups through fascist or fascist-sympathizing middle-class political elements in the name of restoring democracy, which is synonymous with the pursuit of neoliberalism. ..."
"... And if all these measures fail, there is always the possibility of resorting to economic warfare (such as destroying Venezuela's electricity supply), and eventually to military warfare. Venezuela today provides a classic example of what imperialist intervention in a third world country is going to look like in the era of decline of neoliberal capitalism, when revolts are going to characterize such countries more and more. ..."
"... Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing for long. It has no vision for reinventing itself. Interestingly, in the period after the First World War, when capitalism was on the verge of sinking into a crisis, the idea of state intervention as a way of its revival had already been mooted, though its coming into vogue only occurred at the end of the Second World War. 11 Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize itself. And weapons like domestic fascism in the third world and direct imperialist intervention cannot for long save it from the anger of the masses that is building up against it. ..."
The ideology of neoliberal capitalism was the promise of growth.
But with neoliberal capitalism reaching a dead end, this promise disappears and so does this
ideological prop.
Harry Magdoff's The Age of
Imperialism is a classic work that shows how postwar political decolonization does not
negate the phenomenon of imperialism. The book has two distinct aspects. On the one hand, it
follows in V. I. Lenin's footsteps in providing a comprehensive account of how capitalism at
the time operated globally. On the other hand, it raises a question that is less frequently
discussed in Marxist literature -- namely, the need for imperialism. Here, Magdoff not only
highlighted the crucial importance, among other things, of the third world's raw materials for
metropolitan capital, but also refuted the argument that the declining share of raw-material
value in gross manufacturing output somehow reduced this importance, making the simple point
that there can be no manufacturing at all without raw materials. 1
Magdoff's focus was on a period when imperialism was severely resisting economic
decolonization in the third world, with newly independent third world countries taking control
over their own resources. He highlighted the entire armory of weapons used by imperialism. But
he was writing in a period that predated the onset of neoliberalism. Today, we not only have
decades of neoliberalism behind us, but the neoliberal regime itself has reached a dead end.
Contemporary imperialism has to be discussed within this setting.
Globalization and
Economic Crisis
There are two reasons why the regime of neoliberal globalization has run into a dead end.
The first is an ex ante tendency toward global overproduction; the second is that the
only possible counter to this tendency within the regime is the formation of asset-price
bubbles, which cannot be conjured up at will and whose collapse, if they do appear, plunges the
economy back into crisis. In short, to use the words of British economic historian Samuel
Berrick Saul, there are no "markets on tap" for contemporary metropolitan capitalism, such as
had been provided by colonialism prior to the First World War and by state expenditure in the
post-Second World War period of dirigisme . 2
The ex ante tendency toward overproduction arises because the vector of real wages
across countries does not increase noticeably over time in the world economy, while the vector
of labor productivities does, typically resulting in a rise in the share of surplus in world
output. As Paul Baran and Paul Sweezy argued in Monopoly Capital , following the lead of
Michał Kalecki and Josef Steindl, such a rise in the share of economic surplus, or a shift
from wages to surplus, has the effect of reducing aggregate demand since the ratio of
consumption to income is higher on average for wage earners than for those living off the
surplus. 3
Therefore, assuming a given level of investment associated with any period, such a shift would
tend to reduce consumption demand and hence aggregate demand, output, and capacity utilization.
In turn, reduced capacity utilization would lower investment over time, further aggravating the
demand-reducing effect arising from the consumption side.
While the rise in the vector of labor productivities across countries, a ubiquitous
phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an
explanation, why does the vector of real wages remain virtually stagnant in the world economy?
The answer lies in the sui generis character of contemporary globalization that, for the
first time in the history of capitalism, has led to a relocation of activity from the
metropolis to third world countries in order to take advantage of the lower wages prevailing in
the latter and meet global demand.
Historically, while labor has not been, and is still not, free to migrate from the third
world to the metropolis, capital, though juridically free to move from the latter to the
former, did not actually do so , except to sectors like mines and plantations, which
only strengthened, rather than broke, the colonial pattern of the international division of
labor. 4
This segmentation of the world economy meant that wages in the metropolis increased with labor
productivity, unrestrained by the vast labor reserves of the third world, which themselves had
been caused by the displacement of manufactures through the twin processes of
deindustrialization (competition from metropolitan goods) and the drain of surplus (the
siphoning off of a large part of the economic surplus, through taxes on peasants that are no
longer spent on local artisan products but finance gratis primary commodity exports to
the metropolis instead).
The current globalization broke with this. The movement of capital from the metropolis to
the third world, especially to East, South, and Southeast Asia to relocate plants there and
take advantage of their lower wages for meeting global demand, has led to a desegmentation of
the world economy, subjecting metropolitan wages to the restraining effect exercised by the
third world's labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the
real-wage rate of an average male U.S. worker in 2011 was no higher -- indeed, it was
marginally lower -- than it had been in 1968. 5
At the same time, such relocation of activities, despite causing impressive growth rates of
gross domestic product (GDP) in many third world countries, does not lead to the exhaustion of
the third world's labor reserves. This is because of another feature of contemporary
globalization: the unleashing of a process of primitive accumulation of capital against petty
producers, including peasant agriculturists in the third world, who had earlier been protected,
to an extent, from the encroachment of big capital (both domestic and foreign) by the
postcolonial dirigiste regimes in these countries. Under neoliberalism, such protection
is withdrawn, causing an income squeeze on these producers and often their outright
dispossession from their land, which is then used by big capital for its various so-called
development projects. The increase in employment, even in countries with impressive GDP growth
rates in the third world, falls way short of the natural growth of the workforce, let alone
absorbing the additional job seekers coming from the ranks of displaced petty producers. The
labor reserves therefore never get used up. Indeed, on the contrary, they are augmented
further, because real wages continue to remain tied to a subsistence level, even as
metropolitan wages too are restrained. The vector of real wages in the world economy as a whole
therefore remains restrained.
Although contemporary globalization thus gives rise to an ex ante tendency toward
overproduction, state expenditure that could provide a counter to this (and had provided a
counter through military spending in the United States, according to Baran and Sweezy) can no
longer do so under the current regime. Finance is usually opposed to direct state intervention
through larger spending as a way of increasing employment. This opposition expresses itself
through an opposition not just to larger taxes on capitalists, but also to a larger fiscal
deficit for financing such spending. Obviously, if larger state spending is financed by taxes
on workers, then it hardly adds to aggregate demand, for workers spend the bulk of their
incomes anyway, so the state taking this income and spending it instead does not add any extra
demand. Hence, larger state spending can increase employment only if it is financed either
through a fiscal deficit or through taxes on capitalists who keep a part of their income
unspent or saved. But these are precisely the two modes of financing state expenditure that
finance capital opposes.
Its opposing larger taxes on capitalists is understandable, but why is it so opposed to a
larger fiscal deficit? Even within a capitalist economy, there are no sound economic
theoretical reasons that should preclude a fiscal deficit under all circumstances. The root of
the opposition therefore lies in deeper social considerations: if the capitalist economic
system becomes dependent on the state to promote employment directly , then this fact
undermines the social legitimacy of capitalism. The need for the state to boost the animal
spirits of the capitalists disappears and a perspective on the system that is epistemically
exterior to it is provided to the people, making it possible for them to ask: If the state can
do the job of providing employment, then why do we need the capitalists at all? It is an
instinctive appreciation of this potential danger that underlies the opposition of capital,
especially of finance, to any direct effort by the state to generate employment.
This ever-present opposition becomes decisive within a regime of globalization. As long as
finance capital remains national -- that is, nation-based -- and the state is a nation-state,
the latter can override this opposition under certain circumstances, such as in the post-Second
World War period when capitalism was facing an existential crisis. But when finance capital is
globalized, meaning, when it is free to move across country borders while the state remains a
nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large
fiscal deficits against its wishes, then it would simply leave that country en masse ,
causing a financial crisis.
The state therefore capitulates to the demands of globalized finance capital and eschews
direct fiscal intervention for increasing demand. It resorts to monetary policy instead since
that operates through wealth holders' decisions, and hence does not undermine their
social position. But, precisely for this reason, monetary policy is an ineffective instrument,
as was evident in the United States in the aftermath of the 2007–09 crisis when even the
pushing of interest rates down to zero scarcely revived activity. 6
It may be thought that this compulsion on the part of the state to accede to the demand of
finance to eschew fiscal intervention for enlarging employment should not hold for the United
States. Its currency being considered by the world's wealth holders to be "as good as gold"
should make it immune to capital flight. But there is an additional factor operating in the
case of the United States: that the demand generated by a bigger U.S. fiscal deficit would
substantially leak abroad in a neoliberal setting, which would increase its external debt
(since, unlike Britain in its heyday, it does not have access to any unrequited colonial
transfers) for the sake of generating employment elsewhere. This fact deters any fiscal effort
even in the United States to boost demand within a neoliberal setting. 7
Therefore, it follows that state spending cannot provide a counter to the ex ante
tendency toward global overproduction within a regime of neoliberal globalization, which makes
the world economy precariously dependent on occasional asset-price bubbles, primarily in the
U.S. economy, for obtaining, at best, some temporary relief from the crisis. It is this fact
that underlies the dead end that neoliberal capitalism has reached. Indeed, Donald Trump's
resort to protectionism in the United States to alleviate unemployment is a clear recognition
of the system having reached this cul-de-sac. The fact that the mightiest capitalist
economy in the world has to move away from the rules of the neoliberal game in an attempt to
alleviate its crisis of unemployment/underemployment -- while compensating capitalists
adversely affected by this move through tax cuts, as well as carefully ensuring that no
restraints are imposed on free cross-border financial flows -- shows that these rules
are no longer viable in their pristine form.
Some Implications of This Dead End
There are at least four important implications of this dead end of neoliberalism. The first
is that the world economy will now be afflicted by much higher levels of unemployment than it
was in the last decade of the twentieth century and the early years of the twenty-first, when
the dot-com and the housing bubbles in the United States had, sequentially, a pronounced
impact. It is true that the U.S. unemployment rate today appears to be at a historic low, but
this is misleading: the labor-force participation rate in the United States today is lower than
it was in 2008, which reflects the discouraged-worker effect . Adjusting for this lower
participation, the U.S. unemployment rate is considerable -- around 8 percent. Indeed, Trump
would not be imposing protection in the United States if unemployment was actually as low as 4
percent, which is the official figure. Elsewhere in the world, of course, unemployment
post-2008 continues to be evidently higher than before. Indeed, the severity of the current
problem of below-full-employment production in the U.S. economy is best illustrated by capacity
utilization figures in manufacturing. The weakness of the U.S. recovery from the Great
Recession is indicated by the fact that the current extended recovery represents the first
decade in the entire post-Second World War period in which capacity utilization in
manufacturing has never risen as high as 80 percent in a single quarter, with the resulting
stagnation of investment. 8
If Trump's protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a
beggar-my-neighbor policy, does lead to a significant export of unemployment from the
United States, then it will invite retaliation and trigger a trade war that will only worsen
the crisis for the world economy as a whole by dampening global investment. Indeed, since the
United States has been targeting China in particular, some retaliatory measures have already
appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be
because the export of unemployment from the United States is insubstantial, keeping
unemployment everywhere, including in the United States, as precarious as it is now. However we
look at it, the world would henceforth face higher levels of unemployment.
There has been some discussion on how global value chains would be affected by Trump's
protectionism. But the fact that global macroeconomics in the early twenty-first century will
look altogether different compared to earlier has not been much discussed.
In light of the preceding discussion, one could say that if, instead of individual
nation-states whose writ cannot possibly run against globalized finance capital, there was a
global state or a set of major nation-states acting in unison to override the objections of
globalized finance and provide a coordinated fiscal stimulus to the world economy, then perhaps
there could be recovery. Such a coordinated fiscal stimulus was suggested by a group of German
trade unionists, as well as by John Maynard Keynes during the Great Depression in the 1930s.
9
While it was turned down then, in the present context it has not even been discussed.
The second implication of this dead end is that the era of export-led growth is by and large
over for third world economies. The slowing down of world economic growth, together with
protectionism in the United States against successful third world exporters, which could even
spread to other metropolitan economies, suggests that the strategy of relying on the world
market to generate domestic growth has run out of steam. Third world economies, including the
ones that have been very successful at exporting, would now have to rely much more on their
home market.
Such a transition will not be easy; it will require promoting domestic peasant agriculture,
defending petty production, moving toward cooperative forms of production, and ensuring greater
equality in income distribution, all of which need major structural shifts. For smaller
economies, it would also require their coming together with other economies to provide a
minimum size to the domestic market. In short, the dead end of neoliberalism also means the
need for a shift away from the so-called neoliberal development strategy that has held sway
until now.
The third implication is the imminent engulfing of a whole range of third world economies in
serious balance-of-payments difficulties. This is because, while their exports will be sluggish
in the new situation, this very fact will also discourage financial inflows into their
economies, whose easy availability had enabled them to maintain current account deficits on
their balance of payments earlier. In such a situation, within the existing neoliberal
paradigm, they would be forced to adopt austerity measures that would impose income deflation
on their people, make the conditions of their people significantly worse, lead to a further
handing over of their national assets and resources to international capital, and prevent
precisely any possible transition to an alternative strategy of home market-based growth.
In other words, we shall now have an intensification of the imperialist stranglehold over
third world economies, especially those pushed into unsustainable balance-of-payments deficits
in the new situation. By imperialism , here we do not mean the imperialism of this or
that major power, but the imperialism of international finance capital, with which even
domestic big bourgeoisies are integrated, directed against their own working people.
The fourth implication is the worldwide upsurge of fascism. Neoliberal capitalism even
before it reached a dead end, even in the period when it achieved reasonable growth and
employment rates, had pushed the world into greater hunger and poverty. For instance, the world
per-capita cereal output was 355 kilograms for 1980 (triennium average for 1979–81
divided by mid–triennium population) and fell to 343 in 2000, leveling at 344.9 in 2016
-- and a substantial amount of this last figure went into ethanol production. Clearly, in a
period of growth of the world economy, per-capita cereal absorption should be expanding,
especially since we are talking here not just of direct absorption but of direct and indirect
absorption, the latter through processed foods and feed grains in animal products. The fact
that there was an absolute decline in per-capita output, which no doubt caused a decline in
per-capita absorption, suggests an absolute worsening in the nutritional level of a substantial
segment of the world's population.
But this growing hunger and nutritional poverty did not immediately arouse any significant
resistance, both because such resistance itself becomes more difficult under neoliberalism
(since the very globalization of capital makes it an elusive target) and also because higher
GDP growth rates provided a hope that distress might be overcome in the course of time.
Peasants in distress, for instance, entertained the hope that their children would live better
in the years to come if given a modicum of education and accepted their fate.
In short, the ideology of neoliberal capitalism was the promise of growth. But with
neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological
prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop
and finds fascism. This changes the discourse away from the material conditions of people's
lives to the so-called threat to the nation, placing the blame for people's distress not on the
failure of the system, but on ethnic, linguistic, and religious minority groups, the
other that is portrayed as an enemy. It projects a so-called messiah whose sheer
muscularity can somehow magically overcome all problems; it promotes a culture of unreason so
that both the vilification of the other and the magical powers of the supposed leader
can be placed beyond any intellectual questioning; it uses a combination of state repression
and street-level vigilantism by fascist thugs to terrorize opponents; and it forges a close
relationship with big business, or, in Kalecki's words, "a partnership of big business and
fascist upstarts." 10
Fascist groups of one kind or another exist in all modern societies. They move center stage
and even into power only on certain occasions when they get the backing of big business. And
these occasions arise when three conditions are satisfied: when there is an economic crisis so
the system cannot simply go on as before; when the usual liberal establishment is manifestly
incapable of resolving the crisis; and when the left is not strong enough to provide an
alternative to the people in order to move out of the conjuncture.
This last point may appear odd at first, since many see the big bourgeoisie's recourse to
fascism as a counter to the growth of the left's strength in the context of a capitalist
crisis. But when the left poses a serious threat, the response of the big bourgeoisie typically
is to attempt to split it by offering concessions. It uses fascism to prop itself up only when
the left is weakened. Walter Benjamin's remark that "behind every fascism there is a failed
revolution" points in this direction.
Fascism Then and Now
Contemporary fascism, however, differs in crucial respects from its 1930s counterpart, which
is why many are reluctant to call the current phenomenon a fascist upsurge. But historical
parallels, if carefully drawn, can be useful. While in some aforementioned respects
contemporary fascism does resemble the phenomenon of the 1930s, there are serious differences
between the two that must also be noted.
First, we must note that while the current fascist upsurge has put fascist elements in power
in many countries, there are no fascist states of the 1930s kind as of yet. Even if the fascist
elements in power try to push the country toward a fascist state, it is not clear that they
will succeed. There are many reasons for this, but an important one is that fascists in power
today cannot overcome the crisis of neoliberalism, since they accept the regime of
globalization of finance. This includes Trump, despite his protectionism. In the 1930s,
however, this was not the case. The horrors associated with the institution of a fascist state
in the 1930s had been camouflaged to an extent by the ability of the fascists in power to
overcome mass unemployment and end the Depression through larger military spending, financed by
government borrowing. Contemporary fascism, by contrast, lacks the ability to overcome the
opposition of international finance capital to fiscal activism on the part of the government to
generate larger demand, output, and employment, even via military spending.
Such activism, as discussed earlier, required larger government spending financed either
through taxes on capitalists or through a fiscal deficit. Finance capital was opposed to both
of these measures and it being globalized made this opposition decisive . The
decisiveness of this opposition remains even if the government happens to be one composed of
fascist elements. Hence, contemporary fascism, straitjacketed by "fiscal rectitude," cannot
possibly alleviate even temporarily the economic crises facing people and cannot provide any
cover for a transition to a fascist state akin to the ones of the 1930s, which makes such a
transition that much more unlikely.
Another difference is also related to the phenomenon of the globalization of finance. The
1930s were marked by what Lenin had earlier called "interimperialist rivalry." The military
expenditures incurred by fascist governments, even though they pulled countries out of the
Depression and unemployment, inevitably led to wars for "repartitioning an already partitioned
world." Fascism was the progenitor of war and burned itself out through war at, needless to
say, great cost to humankind.
Contemporary fascism, however, operates in a world where interimperialist rivalry is far
more muted. Some have seen in this muting a vindication of Karl Kautsky's vision of an
"ultraimperialism" as against Lenin's emphasis on the permanence of interimperialist rivalry,
but this is wrong. Both Kautsky and Lenin were talking about a world where finance capital and
the financial oligarchy were essentially national -- that is, German, French, or British. And
while Kautsky talked about the possibility of truces among the rival oligarchies, Lenin saw
such truces only as transient phenomena punctuating the ubiquity of rivalry.
In contrast, what we have today is not nation-based finance capitals, but
international finance capital into whose corpus the finance capitals drawn from
particular countries are integrated. This globalized finance capital does not want the world
to be partitioned into economic territories of rival powers ; on the contrary, it wants the
entire globe to be open to its own unrestricted movement. The muting of rivalry between major
powers, therefore, is not because they prefer truce to war, or peaceful partitioning of the
world to forcible repartitioning, but because the material conditions themselves have changed
so that it is no longer a matter of such choices. The world has gone beyond both Lenin and
Kautsky, as well as their debates.
Not only are we not going to have wars between major powers in this era of fascist upsurge
(of course, as will be discussed, we shall have other wars), but, by the same token, this
fascist upsurge will not burn out through any cataclysmic war. What we are likely to see is a
lingering fascism of less murderous intensity , which, when in power, does not
necessarily do away with all the forms of bourgeois democracy, does not necessarily physically
annihilate the opposition, and may even allow itself to get voted out of power occasionally.
But since its successor government, as long as it remains within the confines of the neoliberal
strategy, will also be incapable of alleviating the crisis, the fascist elements are likely to
return to power as well. And whether the fascist elements are in or out of power, they will
remain a potent force working toward the fascification of the society and the polity, even
while promoting corporate interests within a regime of globalization of finance, and hence
permanently maintaining the "partnership between big business and fascist upstarts."
Put differently, since the contemporary fascist upsurge is not likely to burn itself out as
the earlier one did, it has to be overcome by transcending the very conjuncture that produced
it: neoliberal capitalism at a dead end. A class mobilization of working people around an
alternative set of transitional demands that do not necessarily directly target neoliberal
capitalism, but which are immanently unrealizable within the regime of neoliberal capitalism,
can provide an initial way out of this conjuncture and lead to its eventual transcendence.
Such a class mobilization in the third world context would not mean making no truces with
liberal bourgeois elements against the fascists. On the contrary, since the liberal bourgeois
elements too are getting marginalized through a discourse of jingoistic nationalism typically
manufactured by the fascists, they too would like to shift the discourse toward the material
conditions of people's lives, no doubt claiming that an improvement in these conditions is
possible within the neoliberal economic regime itself. Such a shift in discourse is in
itself a major antifascist act . Experience will teach that the agenda advanced as part of
this changed discourse is unrealizable under neoliberalism, providing the scope for dialectical
intervention by the left to transcend neoliberal capitalism.
Imperialist
Interventions
Even though fascism will have a lingering presence in this conjuncture of "neoliberalism at
a dead end," with the backing of domestic corporate-financial interests that are themselves
integrated into the corpus of international finance capital, the working people in the third
world will increasingly demand better material conditions of life and thereby rupture the
fascist discourse of jingoistic nationalism (that ironically in a third world context is not
anti-imperialist).
In fact, neoliberalism reaching a dead end and having to rely on fascist elements revives
meaningful political activity, which the heyday of neoliberalism had precluded, because most
political formations then had been trapped within an identical neoliberal agenda that appeared
promising. (Latin America had a somewhat different history because neoliberalism arrived in
that continent through military dictatorships, not through its more or less tacit acceptance by
most political formations.)
Such revived political activity will necessarily throw up challenges to neoliberal
capitalism in particular countries. Imperialism, by which we mean the entire economic and
political arrangement sustaining the hegemony of international finance capital, will deal with
these challenges in at least four different ways.
The first is the so-called spontaneous method of capital flight. Any political formation
that seeks to take the country out of the neoliberal regime will witness capital flight even
before it has been elected to office, bringing the country to a financial crisis and thereby
denting its electoral prospects. And if perchance it still gets elected, the outflow will only
increase, even before it assumes office. The inevitable difficulties faced by the people may
well make the government back down at that stage. The sheer difficulty of transition away from
a neoliberal regime could be enough to bring even a government based on the support of workers
and peasants to its knees, precisely to save them short-term distress or to avoid losing their
support.
Even if capital controls are put in place, where there are current account deficits,
financing such deficits would pose a problem, necessitating some trade controls. But this is
where the second instrument of imperialism comes into play: the imposition of trade sanctions
by the metropolitan states, which then cajole other countries to stop buying from the
sanctioned country that is trying to break away from thralldom to globalized finance capital.
Even if the latter would have otherwise succeeded in stabilizing its economy despite its
attempt to break away, the imposition of sanctions becomes an additional blow.
The third weapon consists in carrying out so-called democratic or parliamentary coups of the
sort that Latin America has been experiencing. Coups in the old days were effected through the
local armed forces and necessarily meant the imposition of military dictatorships in lieu of
civilian, democratically elected governments. Now, taking advantage of the disaffection
generated within countries by the hardships caused by capital flight and imposed sanctions,
imperialism promotes coups through fascist or fascist-sympathizing middle-class political
elements in the name of restoring democracy, which is synonymous with the pursuit of
neoliberalism.
And if all these measures fail, there is always the possibility of resorting to economic
warfare (such as destroying Venezuela's electricity supply), and eventually to military
warfare. Venezuela today provides a classic example of what imperialist intervention in a third
world country is going to look like in the era of decline of neoliberal capitalism, when
revolts are going to characterize such countries more and more.
Two aspects of such intervention are striking. One is the virtual unanimity among the
metropolitan states, which only underscores the muting of interimperialist rivalry in the era
of hegemony of global finance capital. The other is the extent of support that such
intervention commands within metropolitan countries, from the right to even the liberal
segments.
Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing
for long. It has no vision for reinventing itself. Interestingly, in the period after the First
World War, when capitalism was on the verge of sinking into a crisis, the idea of state
intervention as a way of its revival had already been mooted, though its coming into vogue only
occurred at the end of the Second World War. 11
Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize
itself. And weapons like domestic fascism in the third world and direct imperialist
intervention cannot for long save it from the anger of the masses that is building up against
it.
Samuel Berrick Saul, Studies in British Overseas Trade, 1870–1914
(Liverpool: Liverpool University Press, 1960).
Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York:
Monthly Review Press, 1966).
One of the first authors to recognize this fact and its significance was Paul Baran in
The Political Economy of
Growth (New York: Monthly Review Press, 1957).
For the role of such colonial transfers in sustaining the British balance of payments and the
long Victorian and Edwardian boom, see Utsa Patnaik, "Revisiting the 'Drain,' or Transfers
from India to Britain in the Context of Global Diffusion of Capitalism," in Agrarian
and Other Histories: Essays for Binay Bhushan Chaudhuri , ed. Shubhra Chakrabarti and
Utsa Patnaik (Delhi: Tulika, 2017), 277-317.
Federal Reserve Board of Saint Louis Economic Research, FRED, "Capacity Utilization:
Manufacturing," February 2019 (updated March 27, 2019), http://fred.stlouisfed.org .
This issue is discussed by Charles P. Kindleberger in The World in Depression,
1929–1939 , 40th anniversary ed. (Oakland: University of California Press,
2013).
Joseph Schumpeter had seen Keynes's The Economic Consequences of the Peace as
essentially advocating such state intervention in the new situation. See his essay, "John
Maynard Keynes (1883–1946)," in Ten Great Economists (London: George Allen
& Unwin, 1952).
Utsa Patnaik is Professor Emerita at the Centre for Economic Studies and Planning,
Jawaharlal Nehru University, New Delhi. Her books include Peasant Class Differentiation (1987),
The Long Transition (1999), and The Republic of Hunger and Other Essays (2007). Prabhat Patnaik
is Professor Emeritus at the Centre for Economic Studies and Planning, Jawaharlal Nehru
University, New Delhi. His books include Accumulation and Stability Under Capitalism (1997),
The Value of Money(2009), and Re-envisioning Socialism(2011).
"... When the issues of poverty and inequality came up, a common neoliberal dodge was to invoke the Horatio Alger myth -- that in America, with hard work one can, or should be able to, raise oneself up by one' bootstraps. This switches the question from security ..."
"... As it happens, mobility has declined over the long term in the United States, but that aside, it's a two-way street. The escalator of life runs in both directions. Moreover, it's a separate issue from that of poverty or inequality. One can have more mobility and the same or worse poverty or inequality. The rising tide goes out as well as in. ..."
"... The neoliberal remedy for poverty and inequality is commonly held to be education, because workers lack the requisite skills to earn a living wage. It's kind of their fault. All that's needed is some reasonable public expenditure. No deeper structural factors are at issue. This mindset is contradicted now in two ways. ..."
When the issues of poverty and inequality came up, a common neoliberal dodge was to invoke
the Horatio Alger myth -- that in America, with hard work one can, or should be able to, raise
oneself up by one' bootstraps. This switches the question from security made possible by
the public sector to an individual responsibility for economic mobility.
As it happens, mobility has declined over the long term in the United States, but that
aside, it's a two-way street. The escalator of life runs in both directions. Moreover, it's a
separate issue from that of poverty or inequality. One can have more mobility and the same or
worse poverty or inequality. The rising tide goes out as well as in.
The neoliberal remedy for poverty and inequality is commonly held to be education, because
workers lack the requisite skills to earn a living wage. It's kind of their fault. All that's
needed is some reasonable public expenditure. No deeper structural factors are at issue. This
mindset is contradicted now in two ways.
First, the idea of education as an essential,
missing ingredient is being supplanted by the idea that what's at issue is power , both
political and economic . The wealthy control streams of income and institutions of
credentialization that could be rerouted, via taxation, to finance education ("free college") that has an equalizing effect on
wealth and enhances economic security..
"Yet, as this report will show, all of these rings -- and more -- were connected to the
same network that involved key figures linked to the Reagan White House and linked to
Roy Cohn -- revealing the true scope of the sordid sexual blackmail operations and sex
rings that involved the trafficking of children within the U.S. and even in Central
America for their exploitation by dangerous and powerful pedophiles in the United
States.
Appalling for both the villainous abuse of children itself and the chilling
implications of government by blackmail, this tangled web of unsavory alliances casts a
lurid light on the political history of the United States from the Prohibition Era
right up to the present day and the Age of Trump, a fact made increasingly clear as
more and more information comes to light in relation to the Jeffrey Epstein case."
Whitney Webb,
Too Big to Fail: Government By Blackmail
"For we wrestle not against flesh and blood, but against principalities and powers,
against the rulers of the darkness of this world, against spiritual wickedness in high
places."
"... The real unemployment rate is probably somewhere between 10%-12%. ..."
"... The U-6 also includes what the labor dept. calls involuntary part time employed. It should include the voluntary part time as well, but doesn't (See, they're not actively looking for work even if unemployed). ..."
"... But even the involuntary part time is itself under-estimated. I believe the Labor Dept. counts only those involuntarily part time unemployed whose part time job is their primary job. It doesn't count those who have second and third involuntary part time jobs. That would raise the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and 'missing labor force' is grossly underestimated. ..."
"... The labor dept. also misses the 1-2 million workers who went on social security disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment insurance. That number rose dramatically after 2008 and hasn't come down much (although the government and courts are going after them). ..."
"... The way the government calculates unemployment is by means of 60,000 monthly household surveys but that phone survey method misses a lot of workers who are undocumented and others working in the underground economy in the inner cities (about 10-12% of the economy according to most economists and therefore potentially 10-12% of the reported labor force in size as well). ..."
"... The SSDI, undocumented, underground, underestimation of part timers, etc. are what I call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%. ..."
The real unemployment rate is probably somewhere between 10%-12%. Here's why: the 3.7% is
the U-3 rate, per the labor dept. But that's the rate only for full time employed. What the
labor dept. calls the U-6 includes what it calls discouraged workers (those who haven't looked
for work in the past 4 weeks). Then there's what's called the 'missing labor force'–i.e.
those who haven't looked in the past year. They're not calculated in the 3.7% U-3 unemployment
rate number either. Why? Because you have to be 'out of work and actively looking for work' to
be counted as unemployed and therefore part of the 3.7% rate.
The U-6 also includes what the labor dept. calls involuntary part time employed. It
should include the voluntary part time as well, but doesn't (See, they're not actively looking
for work even if unemployed).
But even the involuntary part time is itself under-estimated. I believe the Labor Dept.
counts only those involuntarily part time unemployed whose part time job is their primary job.
It doesn't count those who have second and third involuntary part time jobs. That would raise
the U-6 unemployment rate significantly. The labor Dept's estimate of the 'discouraged' and
'missing labor force' is grossly underestimated.
The labor dept. also misses the 1-2 million workers who went on social security
disability (SSDI) after 2008 because it provides better pay, for longer, than does unemployment
insurance. That number rose dramatically after 2008 and hasn't come down much (although the
government and courts are going after them).
The way the government calculates unemployment is by means of 60,000 monthly household
surveys but that phone survey method misses a lot of workers who are undocumented and others
working in the underground economy in the inner cities (about 10-12% of the economy according
to most economists and therefore potentially 10-12% of the reported labor force in size as
well). The labor dept. just makes assumptions about that number (conservatively, I may
add) and plugs in a number to be added to the unemployment totals. But it has no real idea of
how many undocumented or underground economy workers are actually employed or unemployed since
these workers do not participate in the labor dept. phone surveys, and who can blame them.
The SSDI, undocumented, underground, underestimation of part timers, etc. are what I
call the 'hidden unemployed'. And that brings the unemployed well above the 3.7%.
Finally, there's the corroborating evidence about what's called the labor force
participation rate. It has declined by roughly 5% since 2007. That's 6 to 9 million workers who
should have entered the labor force but haven't. The labor force should be that much larger,
but it isn't. Where have they gone? Did they just not enter the labor force? If not, they're
likely a majority unemployed, or in the underground economy, or belong to the labor dept's
'missing labor force' which should be much greater than reported. The government has no
adequate explanation why the participation rate has declined so dramatically. Or where have the
workers gone. If they had entered the labor force they would have been counted. And their 6 to
9 million would result in an increase in the total labor force number and therefore raise the
unemployment rate.
All these reasons–-i.e. only counting full timers in the official 3.7%;
under-estimating the size of the part time workforce; under-estimating the size of the
discouraged and so-called 'missing labor force'; using methodologies that don't capture the
undocumented and underground unemployed accurately; not counting part of the SSI increase as
unemployed; and reducing the total labor force because of the declining labor force
participation-–together means the true unemployment rate is definitely over 10% and
likely closer to 12%. And even that's a conservative estimate perhaps." Join the debate on
Facebook More articles by: Jack Rasmus
Jack Rasmus is author of the recently published book, 'Central Bankers at the End of
Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He blogs
at jackrasmus.com and his twitter handle
is @drjackrasmus. His website is http://kyklosproductions.com .
Speech is controlled by political correctness. Someone behind the scenes decides what
is acceptable and what is not, what is desirable or not, and even what is permissible. You
make one 'mistake' and you are out; from the teaching positions at the universities, or
from the media outlets.
And what is permissible is becoming truly weird. These are comments on an article over
at http://www.thecollegefix.com
"Poll: 73 percent of Republican students have withheld political views in class for fear
their grades would suffer".
I'm ABD (all but dissertation) in Econometrics because my adviser was a Marxist nutcase
from the London School of Economics. I couldn't fight the communists forever; not when they
held all the cards.
Reply: Medina-Merino
I left my PhD program in Anthropology when on a "field trip" , my advisor and his
idiotic tie-dyed moron of a wife (former student of his) crawled into my tent on the
first night of a 2 week research project in black leather bondage harnesses and informed
me it was time for me to join them in a "night of pure pleasure".
Fast forward I got up, got into my car, drove through the night back to campus, parked
outside of the Dean's office, stormed in with wide-blood-shot-eyes when he arrived in his
700-Series turbo-charged Special Edition BMW and told him I wanted to file a complaint
against Professor "Bondo" and when he (Dean Bozo) did not respond to my request in over a
week, I withdrew from my program (ABD also) before the "Drop Deadline" so I could get
full refund of my hard-earned TENS OF THOUSANDS of tuition dollars and used the money to
secure an attorney (who I later learned was on-the-take for the University's own legal
counsel office of "Equity & Fairness") until I ran out of money and then left town to
take a position in Scotland on a research team studying Celtic migrations to the Northern
Coast of the Iberian Peninsula, known for centuries unofficially as the "Celtic Coast". I
loved my work and worked with some amazing and HONEST and RESPECTFUL colleagues.
I learned a big lesson from this EFFIN nightmare be verrrrrrrrrrrrrrry careful of
whose hands you find your career in there are a lot of filthy, abusive, corrupt "faculty"
and even more dishonest and disingenuous and despicable "administrators" in the
contemporary academy and many have brass name-plates on their doors and hold
do-nothing-but-damage-to-the-lives-of those who are often powerless against their callous
and deliberate abuses.
Even today, on my sleepless nights I can still hear Mr. Chips rustling in his
grave
I went on to hold positions of academic renown in Europe and Latin America and
eventually returned to the US when I knew I would be able to secure adjunct positions in
the US and Canada and Puerto Rico to support myself and my family, whose lives I was able
to maintain in a stable trajectory throughout this horror!
Revenge is sweet however today when I receive requests from my former "institution of
higher learning" I respond in the SASE
"NEVER WILL I EVER GIVE YOU ONE CENT FOR NOT HAVING PROTECTED ME FROM ABUSE AT THE HANDS
OF DR. "BONDO" YEARS AGO!" Even today, he is part of campus lore and is whispered about
in hushed tones.
What happened to the "prof" he died of very painful brain cancer (poetic justice) and
his idiot wife went full-tilt into drugs and is sitting in a pool of her own pee in a
very dismal geriatric ward. And the "Dean"? He is likewise awaiting his last days in his
luxury condo in Santa Barbara, CA surrounded by like-minded Lutheran do-gooders holding
prayer circles and burning incense and rubbing crystals for each of their pathetic
selves
Knuth: Well, certainly it seems the way things are going. You take any particular subject
that you are interested in and you try to see if somebody with an American high school
education has learned it, and you will be appalled. You know, Jesse Jackson thinks that
students know nothing about political science, and I am sure the chemists think that students
don't know chemistry, and so on. But somehow they get it when they have to later. But I would
say certainly the students now have been getting more of a superficial idea of mathematics than
they used to. We have to do remedial stuff at Stanford that we didn't have to do thirty years
ago.
Frana: Gio [Wiederhold] said much the same thing to me.
Knuth: The most scandalous thing was that Stanford's course in linear algebra could not get
to eigenvalues because the students didn't know about complex numbers. Now every course at
Stanford that takes linear algebra as a prerequisite does so because they want the students to
know about eigenvalues. But here at Stanford, with one of the highest admission standards of
any university, our students don't know complex numbers. So we have to teach them that when
they get to college. Yes, this is definitely a breakdown.
Frana: Was your mathematics training in high school particularly good, or was it that you
spent a lot of time actually doing problems?
Knuth: No, my mathematics training in high school was not good. My teachers could not answer
my questions and so I decided I'd go into physics. I mean, I had played with mathematics in
high school. I did a lot of work drawing graphs and plotting points and I used pi as the radix
of a number system, and explored what the world would be like if you wanted to do logarithms
and you had a number system based on pi. And I had played with stuff like that. But my teachers
couldn't answer questions that I had.
... ... ... Frana: Do you have an answer? Are American students different today? In one of
your interviews you discuss the problem of creativity versus gross absorption of knowledge.
Knuth: Well, that is part of it. Today we have mostly a sound byte culture, this lack of
attention span and trying to learn how to pass exams. Frana: Yes,
Trumpism Is Bad for Business
It's hard to make plans when the rules keep changing.
By Paul Krugman
With each passing week it becomes ever clearer that Donald Trump's trade war, far from
being "good, and easy to win," is damaging large parts of the U.S. economy. Farmers are
facing financial disaster; manufacturing, which Trump's policies were supposed to revive, is
contracting; consumer confidence is plunging, largely because the public (rightly) fears that
tariffs will raise prices.
But Trump has an answer to his critics: It's not me, it's you. Last week he declared that
businesses claiming to have been hurt by his tariffs should blame themselves, because they're
"badly run and weak."
As with many Trump statements, one immediate thought that comes to mind is, how would
Republicans have reacted if a Democratic president said something like that? In this case,
however, we don't have to speculate.
As some readers may recall, back in 2012 Barack Obama made the obvious and true point that
businesses depend on public investments in things like roads and education as well as on
their own efforts. Referring to those public investments, he said, "You didn't build that."
The usual suspects pounced, taking the line out of context and claiming that he was
disrespecting entrepreneurs; Mitt Romney made this claim a centerpiece of his presidential
campaign.
Attacks on Obama as being anti-business were, of course, made in bad faith. Trump,
however, really is denouncing businesses and blaming them for the problems his policies have
created. And tariffs aren't the only policy area where Trump and American business are now at
odds.
Some of Trump's most consequential actions involve his frantic efforts to dismantle
environmental regulation. Unlike tariffs, this may at first sound like something business
would want.
It turns out, however, that many businesses want to keep those regulations in place. Major
oil and gas producers oppose Trump's relaxation of rules on emissions of methane, a potent
greenhouse gas. Major auto producers have come out against Trump's attempt to roll back fuel
efficiency standards. In fact, in a move that has reportedly enraged Trump, several companies
have reached an agreement with the state of California to stick with Obama-era rules despite
the change in federal policy.
When Trump won his upset victory in 2016, many investors assumed that his rule would be
good for business. And he did indeed give corporations a huge tax cut -- which has almost
entirely been used for higher dividends and stock buybacks, with workers getting essentially
nothing.
Aside from the tax cut, however, it's becoming increasingly clear that Trumpism is bad for
business. Or more precisely, it's bad for productive business.
Imagine yourself as the head of a business that plans and expects to be around for a long
time. Sure, you'd like to pay less in taxes and not have to comply with costly regulations.
But you also want to invest in your company's future. And to do that, you need some assurance
that the rules of the game will be stable, so that whatever investments you make now aren't
suddenly made worthless by future shifts in policy.
The big complaint business has about Trump's trade war isn't just that tariffs raise costs
and prices, while foreign retaliation is cutting off access to important markets. It is that
businesses can't make plans when policy zigzags in response to the president's whims. They
don't want to invest in anything that relies on a global supply chain, because that supply
chain might unravel with Trump's next tweet. But they can't invest on the assumption that
Trump's tariffs will be permanent, either; you never know when or whether he'll declare
victory and surrender.
Environmental policy, it turns out, is similar. Business leaders aren't do-gooders, but
they are realists. Most of them understand that climate change is happening, that it's
dangerous, and that we'll eventually have to transition to a low-emissions economy. They want
to spend now to secure their place in that future economy; they know that investments that
worsen climate change are bound to be long-run losers. But they'll hold off on investing in
our energy future as long as conspiracy theorists who consider global warming a gigantic hoax
-- and/or vindictive politicians determined to erase Obama's achievements -- keep rewriting
the rules.
To be fair, however, some kinds of business do thrive under Trumpism -- namely, businesses
that aren't in it for the long run, operations whose strategy is to take the money and run.
These are good times for mining companies that rush in to extract whatever they can, leaving
a poisoned landscape behind; for real estate speculators sponsoring dubious ventures that
take advantage of newly created tax loopholes; for for-profit colleges that leave their
students with worthless degrees and crippling debt.
In other words, under Trump it's springtime for grifters.
But to say the obvious, these smash-and-grab operations aren't the kinds of business we
want to thrive. Put it this way: Remaking the U.S. economy in the image of Trump University
isn't exactly making America great again.
Krugman became too superficial to read and take seriously. He is now mostly neoliberal
propagandist and Clinton wing of Dems stooge not the analyst.
As for his optimistic take on business realism " Business leaders aren't do-gooders, but they
are realists. Most of them understand that climate change is happening, that it's dangerous,
" compare with John Kenneth Galbraith "People of privilege will always risk their complete
destruction rather than surrender any material part of their advantage." and "The sense of
responsibility in the financial community for the community as a whole is not small. It is
nearly nil."
Why Professor Krugman thinks that "Aside from the tax cut, however, it's becoming
increasingly clear that Trumpism is bad for business. Or more precisely, it's bad for
productive business." and not to Wall Street and Silicon valley is unclear to me.
Even a perverted way of protecting domestic manufactures that Trump clearly practice is
better then nothing.
There is at least one bull market underway: in recession fears.
It's apparent in how ordinary Americans are thinking about the economy. In August, consumer
sentiment suffered its biggest drop since 2012, and Google searches for the term "recession"
surged to their highest levels in more than a decade.
There are also signs that business activity is slackening. The factory sector is slowing
worldwide, and according to a closely watched survey released Tuesday, American manufacturing
began contracting in August for the first time since 2016.
So how worried should Americans really be? The answer isn't as simple as either "run for the
hills" or "everything is fine."
Rather, based on financial market moves and the economic data available so far, a period of
sluggish growth looks more likely than an outright recession.
It might be painful in industries directly affected by the trade wars and the global
manufacturing slowdown. But those sectors are a relatively small share of the economy. Even as
the risk of recession has clearly increased in the last several weeks, there are also sources
of resilience that have every chance of proving powerful enough to keep the decade-long
expansion going.
The economy could experience a rough patch without tilting all the way into recession, which
the National Bureau of Economic Research defines as "a significant decline in economic activity
spread across the economy, lasting more than a few months," and normally visible in a wide
range of indicators.
We recently explored the ways a recession could happen in 2020. But it's worth asking the
opposite question: What are the reasons to think that the long expansion can continue despite
endless trade wars, a slowing global economy and turbulent markets?
In this benign scenario for the year ahead, strong consumer spending powers the economy
forward; the economic damage from the trade wars remains mostly confined to the manufacturing
and agriculture sectors; and the Federal Reserve's shift toward easier money since the start of
2019 kicks in with its usual delayed effects.
American consumers have been the drivers of the expansion this year, increasing their
spending even as businesses display more caution. Because consumer spending accounts for a much
larger share of the economy than business investment does, that has propelled overall
growth.
The Labor Department will release its monthly reading on the job market on Friday, but so
far in 2019 things have been pretty good for American workers.
The unemployment rate has now been 4 percent or lower for more than a year. The longer that
persists, the more employers may be forced to adjust their operations in ways that favor
longer-term growth: by offering better pay and benefits, by investing in productivity-enhancing
equipment, and by investing in training for workers who might lack traditional qualifications
or have a checkered work history.
If business investment drops severely, it could translate into layoffs and a weaker labor
market and thus weaker consumer spending. But there are recent episodes in which business
investment shrank but consumer spending kept growing.
For example, from mid-2015 to mid-2016, there was a huge pullback in business investment,
caused by falling commodity prices and a slowing global economy. Yet personal consumption
expenditures rose 2.7 percent in that 12-month period, about the same rate as now, which kept
the American economy as a whole out of recession.
Similarly, consumer spending kept rising despite a steep pullback in business spending after
the dot-com crash in 2000 and 2001. That helped make the 2001 recession mild by historical
standards -- and it probably wouldn't have been classified a recession at all if the Sept. 11,
2001, terrorist attacks hadn't taken place.
There is plenty of reason to think, in other words, that American consumers will be
resilient even amid business pessimism.
Of course, that is true only so long as any business pullback is moderate and temporary. And
so the optimistic story for the economy in the coming year also relies on some measure of peace
in the trade wars.
One pattern evident since the trade skirmishes began in earnest in early 2018 has been that
businesses are able to adapt to moderate tariffs reasonably well. Through some combination of
relocating supply chains, raising prices, taking a hit to profit margins, or forcing suppliers
to take a hit to profits, they manage to keep the direct economic effect manageable.
The risk for the future is less about a 15 percent tariff on this or that particular
imported good, but rather a roiling series of open-ended trade wars on multiple fronts that
could trigger a breakdown in international commerce.
But the good news is that the trade war has so far had the most direct impact on
manufacturing and commodity-related industries, which are a moderate share of the overall
economy. As of August, only 8.5 percent of American jobs were in manufacturing.
In effect, the shift of the United States economy toward service industries over the last
two generations may have left it better able to endure a global trade and manufacturing
slowdown, particularly compared with export-reliant countries like China and Germany.
Finally, there is the Federal Reserve.
While lots of attention is being paid to whether or how much the Fed will cut interest rates
in the immediate future, the reality is that monetary policy affects the economy with long
lags. Moreover, it's not just actual interest rate adjustments that matter -- it is how markets
perceive the future direction of policy that affects how hard or easy it will be for businesses
and consumers to get money.
So, for example, as the Fed raised its target for interest rates in 2017 and 2018, the cost
for businesses seeking to borrow money rose even faster. The effective rate on BBB-rated
corporate debt -- a proxy for borrowing costs of moderately risky companies -- rose to 4.8
percent in December 2018 from 3.4 percent in September 2017.
One way of interpreting the slowdown in business spending this year is as a delayed result
of that higher cost of corporate borrowing percolating through the economy.
But in early 2019, the Fed signaled a slower path of future interest rate increases, and
this summer it began cutting rates. That has driven the rate on BBB-rated bonds down to 3.3
percent. Perhaps the reverse will happen as those lower rates percolate through the economy and
companies find it easier to justify new projects.
The same applies to consumer home buying, another key economic driver. Mortgage rates spiked
in 2018 and have plummeted lately, which could bode well for housing in the months ahead.
There are a lot of risks out there, and it makes sense for C.E.O.s and ordinary consumers to
be wary of what the future could hold. But for now, a gloomy economic future remains a
far-from-certain possibility.
likbez said in reply to Paine... > Dauntless household spending will re elect the Donald
?
Don't you think that China tariffs might put an end to household spending boom ? :-)
Rampant military spending (aka military Keynesianism ) might help to re-elect Donald...
But the main help will come from neoliberal democrats who are afraid of Sanders or Tulsi
victory more the defeat from Trump.
As a second war party they actually do not need to win the elections. MIC in close
cooperation with the Wall Street will feed them quite nicely in any case. Reply
Friday, September 06, 2019 at 11:05 PM
Top Wealth in the United States: New Estimates and Implications for Taxing the Rich
By Matthew Smith, Owen Zidar and Eric Zwick
Abstract
This paper uses administrative tax data to estimate top wealth in the United States. We
build on the capitalization approach in Saez and Zucman (2016) while accounting for
heterogeneity within asset classes when mapping income flows to wealth. Our approach reduces
bias in wealth estimates because wealth and rates of return are correlated. Overall, wealth
is very concentrated: the top 1% holds as much wealth as the bottom 90%. However, the
"P90-99" class holds more wealth than either group after accounting for heterogeneity.
Relative to a top 0.1% wealth share of more than 20% under equal returns, we estimate a top
0.1% wealth share of [15%] and find that the rise since 1980 in top wealth shares falls by
[half]. Top portfolios depend less on fixed income and public equity, depend more on private
equity and housing, and more closely match the composition reported in the SCF and estate tax
returns. Our adjustments reduce mechanical revenue estimates from a wealth tax and top
capital income shares in distributional national accounts, which depend on well-measured
estimates of top wealth. Though the capitalization approach has advantages over other methods
of estimating top wealth, we emphasize that considerable uncertainty remains inherent to the
approach by showing the sensitivity of estimates to different assumptions.
Thomas Piketty's New Book Brings Political Economy Back to Its Sources
By Branko Milanovic
In the same way that Capital in the Twenty-First Century transformed the way economists
look at inequality, Piketty's new book Capital and Ideology will transform the way political
scientists look at their own field.
Thomas Piketty's books are always monumental. Some are more monumental than others. His Top
Incomes in France in the Twentieth Century: Inequality and Redistribution,
1901–1998(published in French as Les hauts revenus en France au XXe siècle)
covered more than two centuries of income and wealth inequality, in addition to social and
political changes in France. His international bestseller Capital in the Twenty-First
Century(Le capital au XXI siècle) broadened this approach to the most important
Western countries (France, the United States, United Kingdom, and Germany). His new book
Capital and Ideology (to be published in English in March 2020; already published in France
as Capital et idéologie) broadens the scope even further, covering the entire world
and presenting a historical panorama of how ownership of assets (including people) was
treated, and justified, in various historical societies, from China, Japan, and India, to the
European-ruled American colonies, and feudal and capitalist societies in Europe. Just the
mention of the geographical and temporal scope of the book suffices to give the reader an
idea of its ambition.
Before I review Capital and Ideology, it is worth mentioning the importance of Piketty's
overall approach, present in all three of his books. His approach is characterized by the
methodological return of economics to its original and key functions: to be a science that
illuminates the interests and explains the behaviors of individuals and social classes in
their quotidian (material) life. This methodology rejects the dominant paradigm of the past
half-century, which increasingly ignored the role of classes and heterogeneous individuals in
the process of production and instead treated all people as abstract agents that maximize
their own income under certain constraints. The dominant paradigm has emptied almost all
social content from economics and presented a view of society that was as abstract as it was
false.
The reintroduction of actual life into economics by Piketty and several other economists
(not entirely coincidentally, most of them are economists interested in inequality) is much
more than just a return to the sources of political economy and economics. This is because
today, we have vastly more information (data) than was available to economists a century ago,
not only about our own contemporary societies but also about past societies. This combination
between political economy's original methodology and big data is what I call "turbo-Annales,"
after the French group of historians that pioneered the view of history as a social science
focusing on the broad social, economic, and political forces that shape the world. The topics
that interested classical political economy and the authors associated with the Annales
School can now be studied empirically, and even econometrically and experimentally -- things
which they could not do, both because of the scarcity of data and unavailability of modern
methodologies.
It is within this context that, I believe, we ought to consider Piketty's Capital and
Ideology. How successful was his approach, applied now to the world and over a very long
time-horizon?
"The dominant paradigm has emptied almost all social content from economics and presented
a view of society that was as abstract as it was false."
For the purposes of this review, I divide Piketty's book into two parts: the first, which
I already mentioned, looks at ideological justifications of inequality across different
societies (Parts 1 and 2 of the book, and to some extent Part 3); the second introduces an
entirely new way of studying recent political cleavages in modern societies (Part 4). I am
somewhat skeptical about Piketty's success in the first part, despite his enormous erudition
and his skills as a raconteur, because success in discussing something so geographically and
temporally immense is difficult to reach, even by the best-informed minds who have studied
different societies for the majority of their careers. Analyzing each of these societies
requires an extraordinarily high degree of sophisticated historical knowledge regarding
religious dogmas, political organization, social stratification, and the like. To take two
examples of authors who have tried to do it, one older and one more recent: Max Weber, during
his entire life (and more specifically in Economy and Society), and Francis Fukuyama in his
two-volume masterpiece on the origins of the political and economic order. In both cases, the
results were not always unanimously approved by specialists studying individual societies and
religions.
In his analysis of some of these societies, Piketty had to rely on somewhat
"straightforward" or simplified discussions of their structure and evolution, discussions
which at times seem plausible but superficial. In other words, each of these historical
societies, many of which lasted centuries, had gone through different phases in their
developments, phases which are subject to various interpretations. Treating such evolutions
as if they were a simple, uncontested story is reductionist. It is a choice of one plausible
historical narrative where many exist. This compares unfavorably with Piketty's own rich and
nuanced narrative in Top Incomes in France in the Twentieth Century.
While I am somewhat skeptical about that first part of the book, I am not skeptical about
the second. In this part, we find the Piketty who plays to his strength: bold and innovative
use of data which produces a new way of looking at phenomena that we all observe but were
unable to define so precisely. Here, Piketty is "playing" on the familiar Western economic
history "terrain" that he knows well, probably better than any other economist.
This part of the book looks empirically at the reasons that left-wing, or social
democratic parties have gradually transformed themselves from being the parties of the
less-educated and poorer classes to become the parties of the educated and affluent middle
and upper-middle classes. To a large extent, traditionally left parties have changed because
their original social-democratic agenda was so successful in opening up education and
high-income possibilities to the people who in the 1950s and 1960s came from modest
backgrounds. These people, the "winners" of social democracy, continued voting for left-wing
parties but their interests and worldview were no longer the same as that of their
(less-educated) parents. The parties' internal social structure thus changed -- the product
of their own political and social success. In Piketty's terms, they became the parties of the
"Brahmin left" (La gauche Brahmane), as opposed to the conservative right-wing parties, which
remained the parties of the "merchant right" (La droite marchande).
To simplify, the elite became divided between the educated "Brahmins" and the more
commercially-minded "investors," or capitalists. This development, however, left the people
who failed to experience upward educational and income mobility unrepresented, and those
people are the ones that feed the current "populist" wave. Quite extraordinarily, Piketty
shows the education and income shifts of left-wing parties' voters using very similar
long-term data from all major developed democracies (and India). The fact that the story is
so consistent across countries lends an almost uncanny plausibility to his hypothesis.
It is also striking, at least to me, that such multi-year, multi-country data were
apparently never used by political scientists to study this phenomenon. This part of
Piketty's book will likely transform, or at least affect, how political scientists look at
new political realignments and class politics in advanced democracies in the years to come.
In the same way that Capital in the Twenty-First Century has transformed how economists look
at inequality, Capital and Ideology will transform the way political scientists look at their
own field.
Branko Milanovic is a senior scholar at the Stone Center on Socio-Economic Inequality at the
Graduate Center, City University of New York.
When the Fed or the ECB raises rates, New Keynesian economic theory predicts that the hike
will eventually lead to a decrease in inflation, and that the path from point A to point B
will inevitably be accompanied by higher unemployment. But my own research suggests that New
Keynesian economic theory is wrong. After all, if the Fed were to raise the short-term rate
slowly and support equity markets with a guarantee to purchase a broad-based exchange-traded
fund at a fixed price, there is no reason why the rate increase should cause higher
unemployment.
----
Roger Farmer dumping on the Fed. Somehow a lot of economists have figured out that 'Uncle
cannot do it later'.
I have a different disagreement. First I note that the Fed always follows the One Year
Treasury, it is in the charts, that chart cannot be avoided. Second, once Treasury has
started the rate cycles, it is all over, we will complete the rate cycle, including a down
turn. This has been the case since 1980, likely earlier.
So, why do we fake it? For what purpose, except to say something stupid like Uncle can fix
it later. We always end up in the same place, imbalances that need correction, Treasury has
to take its losses. All the fakery does no one any good.
The end of Mankiw and his Phillips Curve
Comment on David Glasner on 'Mankiw's Phillips-Curve Agonistes'
Gregory Mankiw starts his history of the Phillips Curve with gossiping and name dropping:
"The economist George Akerlof, a Nobel laureate and the husband of the former Federal Reserve
chair Janet Yellen, once called the Phillips curve 'probably the single most important
macroeconomic relationship.' So it is worth recalling what the Phillips curve is, why it
plays a central role in mainstream economics and why it has so many critics. The story begins
in 1958, when the economist A. W. Phillips published an article reporting an inverse
relationship between unemployment and inflation in Britain. He reasoned that when
unemployment is high, workers are easy to find, so employers hardly raise wages, if they do
so at all. But when unemployment is low, employers have trouble attracting workers, so they
raise wages faster. Inflation in wages soon turns into inflation in the prices of goods and
services."
David Glasner immediately spots the fatal mistake of Mankiw's account: "I must note
parenthetically that, as I have written recently, a supply-demand framework (aka partial
equilibrium analysis) is not really the appropriate way to think about unemployment, because
the equilibrium level of wages and the rates of unemployment must be analyzed, as, using
different terminology, Keynes argued, in a general equilibrium, not a partial equilibrium,
framework." Unfortunately, David Glasner then gets lost in supply-demand-equilibrium
blather.
The Phillips Curve (better: Bastard or NAIRU Phillips Curve) is the centerpiece of
standard employment theory. Economists get employment theory wrong for 200+ years.#1-#5
The materially/formally inconsistent NAIRU Phillips Curve has to be replaced by the
correct macroeconomic Employment Law which is shown on Wikimedia.#6
From this equation follows:
(i) An increase in the expenditure ratio ρE leads to higher employment L (the Greek
letter ρ stands for ratio). An expenditure ratio ρE greater than 1 indicates a budget
deficit = credit expansion, a ratio ρE less than 1 indicates credit contraction.
(ii) Increasing investment expenditures I exert a positive influence on employment.
(iii) An increase in the factor cost ratio ρF=W/PR leads to higher employment.
The complete employment equation contains in addition profit distribution, the public
sector, and foreign trade.
Items (i) and (ii) cover Keynes' familiar arguments about aggregate demand. The factor
cost ratio ρF as defined in (iii) embodies the macroeconomic price mechanism. The fact of
the matter is that overall employment INCREASES if the AVERAGE wage rate W INCREASES relative
to average price P and productivity R. Roughly speaking, price inflation is bad for
employment and wage inflation is good. This is the exact OPPOSITE of what microfounded
supply-demand-equilibrium economics teaches.
The testable Employment Law tells one that the best policy to stabilize employment on a
high level is a price inflation of zero and a wage inflation equal to productivity increases.
The 2 percent inflation target has always been political idiocy based on defective
theory.
The president of the Nebraska Farmers Union ripped President Trump on Wednesday over his escalating
trade war with China, calling it a "huge unforced error."
John Hansen said that even though China has been engaging in unfair trade practices for some
time and needed to be reigned in, Trump's decision to impose high tariffs on Beijing along with
other trading partners has hurt the United States. "The U.S. should have isolated China from
the rest of the world as they started on this effort," Hansen told Hill.TV. "Instead,
unfortunately, the president has isolated the U.S. from most of the rest of the world
economy."
"It was a huge unforced error so there's that issue," he added.
Hansen said Trump's trade policies haven't gotten to the "nuts and bolts of how do we go
about the business of making sure that farmers get paid a fair price for what they
produce."
Level 4/5 is the ability to read complex information and glean information from it, or in
numeracy, the ability to do algebra and above. You will note that only about 1 in 10 function at
this level. The vast majority function at about 6th to 8th grade competency.
This is just a hypothesis. Where are the facts ? The only facts that we have is that Epstein
always got a "special treatment" and the Maxwell and other accomplices were not arrested as is
usually ion such cases -- when prosecution tries to find "the weakest link" that starts telling
the story and will implicate others.
In most circles, the mystery of exactly how Epstein made his fortune was shrugged off as
simply part of his personal mystique. Epstein played the role of enigmatic billionaire 'to a
T', able to exude the persona of a man who could use his charm and wit to get anything he
wanted without revealing many of the nuts and bolts of how he rose to that position. He claimed
that he would only advise people whose personal wealth was over a billion, yet any 'evidence'
that he moved money around and made investments within the established industry markets were
small-time and insignificant.
... ... ...
Steve Pieczenik, who has a storied history as a psychiatrist and a terrorism expert with
important roles in foreign affairs with many U.S. administrations said the following about
Jeffrey Epstein in the video below:
I want to talk about the Epstein pedophilia ring, what
it really is, is a Mossad Israeli operative ring which goes back decades and decades.Jeff Epstein was picked out by the Mossad as the proper agent of influence, because, number
one, he was grandiose, two, he had some intelligence and he was so narcissistic that they could
manipulate him up and down and create a false front for him, which involved the fact that he
had multi-million dollars, multi-billion dollars.But to make sure that Jeffrey Epstein
was working properly, they had an operative from the Mossad who was named Maxwell, the daughter
of Robert Maxwell, one of the greatest crooks in the world, who was an Israeli Mossad
operative. When he died in 1991, he was either killed or he died, he was one of the biggest
contributors to Israeli national security than anybody else.What the Israelis did,
under the tutelage of two brilliant Mossad chiefs, both of whom used pedophilia as a honey trap
to encapsulate any one of our operatives in America. Jeff Epstein was a willing operative.
He
willingly was involved in pedophilia, the Israelis knew that, they created his story line, they
made believe he was a billionaire, Wexner was the theoretical backup man to him.Acosta,
the Secretary of Labor, was correct when he said that Epstein got off of the prosecutor's
indictment in Florida because he worked in the intelligence service. And it was not only the
Mossad who was involved, clearly the CIA was involved.
Blackmailer And Intelligence
Operative
In the clip below from the Collective Evolution Show on CETV (you can watch the full episode as part of your free 7-day trial
here ), Joe and I discussed not only Epstein's
role as a blackmailer and intelligence operative, but the fact that he is nothing more than one
person in a long line of people who have stepped in to play a role in these child sex
blackmailing operations.
Connecting Epstein's operations to current CIA and Mossad programs and
then further back even before the CIA existed, where these operations were formally being run
by the American mafia and other powerful figures, reveals important patterns that help us piece
together more accurately exactly what is happening in our world. If there is anything to pay
attention to regarding Epstein's death, it is the level of desperation on the part of these
powerful forces to squelch public attention around their very real organized criminal
conspiracy that operates between intelligence, government, law enforcement, mainstream media
and others, in which innocent women and children are taken, raped, and sometimes even tortured
and killed as mere casualties of the self-serving power struggles amongst factions of world
power.
Sep.04 -- Sean Carney, head of municipal strategy at BlackRock, discusses the municipal bond
market posting its best returns since 2014. He speaks with Bloomberg's Taylor Riggs in this
week's "Muni Moment" on "Bloomberg Markets."
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By Laura Ungar, who health issues out of Kaiser Health News' St. Louis office, and Trudy
Lieberman, a journalist for more than 45 years, and a past president of the Association of
Health Care Journalists. Originally published by Kaiser Health
News .
MEMPHIS, Tenn. -- Army veteran Eugene Milligan is 75 years old and blind. He uses a
wheelchair since losing half his right leg to diabetes and gets dialysis for kidney
failure.
And he has struggled to get enough to eat.
Earlier this year, he ended up in the hospital after burning himself while boiling water for
oatmeal. The long stay caused the Memphis vet to fall off a charity's rolls for home-delivered
Meals on Wheels , so he had
to rely on others, such as his son, a generous off-duty nurse and a local church to bring him
food.
"Many times, I've felt like I was starving," he said. "There's neighbors that need food too.
There's people at dialysis that need food. There's hunger everywhere."
Indeed, millions of seniors across the country quietly go hungry as the safety net designed
to catch them frays. Nearly 8% of Americans 60 and older were "food insecure" in 2017,
according to a recent study released
by the anti-hunger group Feeding America. That's 5.5 million seniors who don't have
consistent access to enough food for a healthy life, a number that has more than doubled since
2001 and is only expected to grow as America grays.
While the plight of hungry children elicits support and can be tackled in schools, the
plight of hungry older Americans is shrouded by isolation and a generation's pride. The problem
is most acute in parts of the South and Southwest. Louisiana has the highest rate among states,
with 12% of seniors facing food insecurity. Memphis fares worst among major metropolitan areas,
with 17% of seniors like Milligan unsure of their next meal.
And government relief falls short. One of the main federal programs helping seniors is
starved for money. The Older Americans Act -- passed more than half a century ago as part of
President Lyndon Johnson's Great Society reforms -- was amended in 1972 to provide for
home-delivered and group meals, along with other services, for anyone 60 and older. But its
funding has lagged far behind senior population growth, as well as economic inflation.
The biggest chunk of the act's budget, nutrition services, dropped by 8% over the past 18
years when adjusted for inflation, an AARP report
found in February. Home-delivered and group meals have decreased by nearly 21 million since
2005. Only a fraction of those facing food insecurity get any meal services under the act; a
U.S. Government
Accountability Office report examining 2013 data found 83% got none.
With the act set to expire Sept. 30, Congress is now considering its reauthorization and how
much to spend going forward.
Meanwhile, according to the U.S. Department of Agriculture, only 45% of eligible adults 60
and older have signed up for another source of federal aid: SNAP, the food stamp program for
America's poorest. Those who don't are typically either unaware they could qualify, believe
their benefits would be tiny or can no longer get to a grocery store to use them.
Even fewer seniors may have SNAP in the future. More than 13% of SNAP households with
elderly members would lose benefits under a recent Trump administration proposal.
For now, millions of seniors -- especially low-income ones -- go without. Across the nation,
waits are common to receive home-delivered meals from a crucial provider, Meals on Wheels, a
network of 5,000 community-based programs. In Memphis, for example, the wait to get on the
Meals on Wheels schedule is more than a year long.
"It's really sad because a meal is not an expensive thing," said Sally Jones Heinz,
president and CEO of the Metropolitan
Inter-Faith Association , which provides home-delivered meals in Memphis. "This shouldn't
be the way things are in 2019."
Since malnutrition exacerbates diseases and prevents healing, seniors without steady,
nutritious food can wind up in hospitals, which drives up Medicare and Medicaid costs, hitting taxpayers with an even
bigger bill . Sometimes seniors relapse quickly after discharge -- or worse.
Widower Robert Mukes, 71, starved to death on a cold December day in 2016, alone in his
Cincinnati apartment.
The Hamilton County Coroner listed the primary cause of death as "starvation of unknown
etiology" and noted "possible hypothermia," pointing out that his apartment had no electricity
or running water. Death records show the 5-foot-7-inch man weighed just 100.5 pounds.
A Clear Need
On a hot May morning in Memphis, seniors trickled into a food bank at the Riverside
Missionary Baptist Church, 3 miles from the opulent tourist mecca of Graceland. They picked up
boxes packed with canned goods, rice, vegetables and meat.
Marion Thomas, 63, placed her box in the trunk of a friend's car. She lives with chronic
back pain and high blood pressure and started coming to the pantry three years ago. She's
disabled, relies on Social Security and gets $42 a month from SNAP based on her income,
household size and other factors. That's much less than the average $125-a-month benefit for
households with seniors, but more than the $16 minimum that one in five such households get.
Still, Thomas said, "I can't buy very much."
A day later, the Mid-South Food Bank brought a "mobile pantry" to Latham Terrace, a senior
housing complex, where a long line of people waited. Some inched forward in wheelchairs; others
leaned on canes. One by one, they collected their allotments.
The need is just as real elsewhere. In Dallas, Texas, 69-year-old China Anderson squirrels
away milk, cookies and other parts of her home-delivered lunches for dinner because she can no
longer stand and cook due to scoliosis and eight deteriorating vertebral discs.
As seniors ration food, programs ration services.
Although more than a third of the Meals on Wheels money comes from the Older Americans Act,
even with additional public and private dollars, funds are still so limited that some programs
have no choice but to triage people using score sheets that assign points based on who needs
food the most. Seniors coming from the hospital and those without family usually top waiting
lists.
More than 1,000 were waiting on the Memphis area's list recently. And in Dallas, $4.1
million in donations wiped out a 1,000-person waiting list in December, but within months it
had crept back up to 100.
Nationally, "there are tens of thousands of seniors who are waiting," said Erika
Kelly , chief membership and advocacy officer for Meals on Wheels America. "While they're
waiting, their health deteriorates and, in some cases, we know seniors have died."
Edwin Walker, a deputy assistant secretary for the federal Administration on Aging,
acknowledged waits are a long-standing problem, but said 2.4 million people a year benefit from
the Older Americans Act's group or home-delivered meals, allowing them to stay independent and
healthy.
Seniors get human connection, as well as food, from these services. Aner Lee Murphy, a
102-year-old Meals on Wheels client in Memphis, counts on the visits with volunteers Libby and
Bob Anderson almost as much as the food. She calls them "my children," hugging them close and
offering a prayer each time they leave.
But others miss out on such physical and psychological nourishment. A devastating phone call
brought that home for Kim Daugherty, executive director of the Aging Commission of the
Mid-South , which connects seniors to service providers in the region. The woman on the
line told Daugherty she'd been on the waiting list for more than a year.
"Ma'am, there are several hundred people ahead of you," Daugherty reluctantly explained.
"I just need you all to remember," came the caller's haunting reply, "I'm hungry and I need
food."
A Slow Killer
James
Ziliak , a poverty researcher at the University of Kentucky who worked on the Feeding
America study, said food insecurity shot up with the Great Recession, starting in the late
2000s, and peaked in 2014. He said it shows no signs of dropping to pre-recession levels.
While older adults of all income levels can face difficulty accessing and preparing healthy
food, rates are highest among seniors in poverty. They are also high among minorities. More
than 17% of black seniors and 16% of Hispanic seniors are food insecure, compared with fewer
than 7% of white seniors.
A host of issues combine to set those seniors on a downward spiral, said registered
dietitian Lauri Wright , who
chairs the Department of Nutrition and Dietetics at the University of North Florida. Going to
the grocery store gets a lot harder if they can't drive. Expensive medications leave less money
for food. Chronic physical and mental health problems sap stamina and make it tough to cook.
Inch by inch, hungry seniors decline.
And, even if it rarely kills directly, hunger can complicate illness and kill slowly.
Malnutrition blunts immunity, which already tends to weaken as people age. Once they start
losing weight, they're more likely to grow frail and are more likely to die within a year, said
Dr. John Morley, director of the division of geriatric medicine at Saint Louis University.
Seniors just out of the hospital are particularly vulnerable. Many wind up getting
readmitted, pushing up taxpayers' costs for Medicare and Medicaid. A
recent analysis by the Bipartisan Policy Center found that Medicare could save $1.57 for
every dollar spent on home-delivered meals for chronically ill seniors after a
hospitalization.
Most hospitals don't refer senior outpatients to Meals on Wheels, and advocates say too few
insurance companies get involved in making sure seniors have enough to eat to keep them
healthy.
When Milligan, the Memphis veteran, burned himself with boiling water last winter and had to
be hospitalized for 65 days, he fell off the Metropolitan Inter-Faith Association's radar. The
meals he'd been getting for about a decade stopped.
Heinz, Metropolitan's CEO, said the association is usually able to start and stop meals for
short hospital stays. But, Heinz said, the association didn't hear from Milligan and kept
trying to deliver meals for a time while he was in the hospital, then notified the Aging
Commission of the Mid-South he wasn't home. As is standard procedure, Metropolitan officials
said, a staff member from the commission made three attempts to contact him and left a card at
the blind man's home.
But nothing happened when he got out of the hospital this spring. In mid-May, a nurse
referred him for meal delivery. Still, he didn't get meals because he faced a waitlist already
more than 1,000 names long.
After questions from Kaiser Health News, Heinz looked into Milligan's case and realized
that, as a former client, Milligan could get back on the delivery schedule faster.
But even then the process still has hurdles: The aging commission would need to conduct a
new home assessment for meals to resume. That has yet to happen because, amid the wait,
Milligan's health deteriorated.
A Murky Future
As the Older Americans Act awaits reauthorization this fall, many senior advocates worry
about its funding.
In June, the U.S. House passed a $93 million increase to the Older Americans Act's nutrition
programs, raising total funding by about 10% to $1 billion in the next fiscal year. In
inflation-adjusted dollars, that's still less than in 2009. And it still has to pass in the
Republican-controlled Senate, where the proposed increase faces long odds.
U.S. Rep. Suzanne Bonamici, an Oregon Democrat who chairs the Civil Rights and Human
Services Subcommittee, expects the panel to tackle legislation for reauthorization of the act
soon after members return from the August recess. She's now working with colleagues "to craft a
strong, bipartisan update," she said, that increases investments in nutrition programs as well
as other services.
"I'm confident the House will soon pass a robust bill," she said, "and I am hopeful that the
Senate will also move quickly so we can better meet the needs of our seniors."
In the meantime, "the need for home-delivered meals keeps increasing every year," said
Lorena Fernandez, who runs a meal
delivery program in Yakima, Wash. Activists are pressing state and local governments to
ensure seniors don't starve, with mixed results. In Louisiana, for example, anti-hunger
advocates stood on the state Capitol steps in May and unsuccessfully called on the state to
invest $1 million to buy food from Louisiana farmers to distribute to hungry residents.
Elsewhere, senior activists across the nation have participated each March in "March for Meals"
events such as walks, fundraisers and rallies designed to focus attention on the problem.
Private fundraising hasn't been easy everywhere, especially rural communities without much
wealth. Philanthropy has instead tended to flow to hungry kids, who outnumber hungry seniors
more than 2-to-1, according to Feeding America.
"Ten years ago, organizations had a goal of ending child hunger and a lot of innovation and
resources went into what could be done," said Jeremy Everett, executive director of Baylor
University's Texas Hunger Initiative. "The same thing has not happened in the senior adult
population." And that has left people struggling for enough food to eat.
As for Milligan, he didn't get back on Meals on Wheels before suffering complications
related to his dialysis in June. He ended up back in the hospital. Ironically, it was there
that he finally had a steady, if temporary, source of food.
It's impossible to know if his time without steady, nutritious food made a difference. What
is almost certain is that feeding him at home would have been far cheaper.
"Few economists worked at the Federal Reserve in the early 1950s. Those who were on the
staff of America's central bank were relegated to the basement, at a safe remove from the
corridors where real decisions were made.
Economists had their uses, allowed William McChesney Martin, then the Fed's chairman. But
they also had 'a far greater sense of confidence in their analyses than I have found to be
warranted'. They were best kept down with the surplus furniture and the rats." •
Indeed!
Thatcher was an English politico. It is not what she said, but what she did that counts. She is probably down in Dante's Inferno,
Ring 8, sub-rings 7-10. (Frauds and false councilors.) See, oh wayward sinners:
http://danteworlds.laits.utexas.edu/circle8b.html
Ah, you think that Milton should be at the bottom, eh? Then, I hope that he knows how to ice skate. (He was the worst kind
of 'class traitor.' [His parents were small store owner/managers.])
Ring 8 of the Inferno is for 'frauds' of all sorts, sub-rings 7-10 are reserved for Thieves, Deceivers, Schismatics, and Falsifiers.
Maggie should feel right at home there.
Pop on over to the BP spreadsheet and find the regional consumption tab. For some regions
there are countries broken out and for others, not. But on this tab you can get granularity
on what kind of oil, what constituent part of crude, was consumed.
Japan. The population decline is actually pretty recent -- only since 2010. Their decline
in consumption is popularly attributed to population reduction, and I have gotten this wrong,
too, but consumption decline has been since 1995 with population gain for 15 of those years.
In more detail, their consumption decline is not gasoline. They have increased gasoline burn
since 1995. (The Prius is the 2nd most popular car in Japan and it first went on sale in
1997, so Prius didn't kill gasoline burn, which has increased).
It's middle distillates and Fuel Oil that are way down. Stuff that fuels big commercial
engines. That's what has fallen. Fuel Oil is more than maritime bunker fuel. It powers big
stuff. There was a sharp uptick of Fuel Oil consumption . . of 44% in 2012 because it was
Fuel Oil that was called on to generate electricity when all the reactors were shut down
during the quake panic. But the reactors returned and Fuel Oil resumed its decline.
One last thing that could blow all those paras out of the water. Japan had until recently
more refinery capacity than internal consumption. It's a lot like Singapore. The crude comes
in and product exports and this seems to somehow corrupt all measurements. The govt recently
shut down many of the refineries. It wasn't voluntary. Gov't ordered. Now Japan has to import
fuels, not just crude. Quite a lot. Which likely confuses the consumption measurements
further.
Ok I read this blog quite regularly but now I'm confused. US oil production has actually
fallen since the start of the year?
Dennis, can you respond to that? I thought I was just reading in the last post that the
current completion rate in the Permian was enough to raise production for five more years or
so. July is probably skewed because of the hurricane, but what gives?
It's definitely slowing. See my first post on June monthly production. When you add all the
states with shale production, there is no growth from May to June. Yes, July should be down
significantly due to the hurricane, but I expect no growth from shale.
Dennis sees an increase, Ron sees it plunging. I see it flat for a few months, and slowly
trending down. Pick your poison.
Yes the increase is pretty small for tight oil over the next 5 years only an average
annual rate of increase of 344 kb/d for US tight oil from 2019 to 2024 for the flat
completion rate scenario. This is a far cry from the 1620 kb/d increase in US tight oil
output from Dec 2017 to Dec 2018, a factor of 4.7 times slower on average than the rapid rate
of increase in 2018.
No US C+C output in June 2019 was 12,082 kb/d and in Dec 2018 US C+C output was 12,038
kb/d, so output has risen, but not by much. Yes a flat completion rate could lead to a rise
in tight oil output until 2025, though conventional output could fall to offset this.
Conventional output has been falling of late as fewer new conventional wells have been
completed for the past 6 months.
The current financial strain on shale producers is likely to intensify as many companies that
took on debt after the 2016 oil slump face large debt maturities in the next four years. As
of July, about $9 billion was set to mature throughout the remainder of 2019, but about $137
billion will be due between 2020 and 2022, according to S&P.
Seems that there will be more bancurupt filings in the years to come.
What is interesting is the footnotes. The first one says: " The supply of existing oil
production naturally declines at an **estimated 7 percent per year** without further
investment. Significant investment is needed to offset this natural decline and meet the
projected demand growth." The 7 percent figure caught my eye.
Also see the footnote about the switch over to Biofuels but Biofuels are such a very small
amount.
Continuing to look at the Regional Consumption tab from the World Stat stuff.
There is this category called Others. BP defines it as:
" 'Others' consists of refinery gas, liquefied petroleum gas (LPG), solvents, petroleum
coke, lubricants, bitumen, wax, other refined products and refinery fuel and loss."
This is not trivial afterthought. This is over 20% of the total oil consumption for nearly
all countries/regions. 24% for the whole world, and that deserves a !!!
It's 41% for India, also deserving a !!! I happen to know this derives from LPG, a hugely
popular transportation fuel in India.
China, 30%.
US 22.6%
India's total oil consumption last year was 5.9%. Light distillates had 10% growth,
gasoline 8.9%. Others, 6%. EVs and hybrids did nothing to gasoline burn there, which you
would expect for such a narrow niche product for rich people in year-round warm cities. They
didn't drive much anyway. And of course rural driving is a big thing in India, per the recent
item about political campaigns travelling place to place by road.
China's total oil consumption last year was +5.6%. Light distillates +7.3%. Kerosene/jet
fuel + 14% (!!!) Others, 7.1%.
And ditto.
As noted above Japan's consumption drop has been from lost economic activity, not
population, and it burns more gasoline today than in 1995, so Prius didn't do much there.
Their big loss is in middle distillates, because they shut down a lot of factories. Repeat,
population ROSE in Japan up to 2010. Only since then has it fallen and middle distillate
consumption (and Others consumption) has been falling steadily since 1995, even when
population was rising.
First you lose your economy, then you lose your food.
(Caveat about refinery exports from previous comment)
From the EIA monthly I see the US oil and condensate production was:
April 12. 123 Mbpd
May 12. 115 Mbpd ( – 8 000 bpd / 0,1%)
June 12. 082 Mbpd ( – 33 000 bpd/ 0,3%).
Will be very i teresting to see the production for July and August including new pipeline
capacity. To me it seems like the DUCS that was good have now been used, Baker Hughes drill
statistick document number of riggs still go down. In January EIA and Rystad believed US oil
production would reach 13 Mbpd in 4th Quartile 2019, the truth is this might already be below
12 Mbpd . As they told the growth in US shale have be funded by borrowed money , now
investors have far from get back what they where promissed, they are pissed off
There is no good real time data, at least not publicly available, on global stocks but US
stocks have declined so far this year ( https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=W
). It seems to me that we are starting to see the effect now on lower OPEC production (cut or
whatever reasons) and LTO not growing as fast as forecasted.
A quote from IEA's last OMR (
https://www.iea.org/newsroom/news/2019/august/economic-woes-hold-sway-over-geopolitics.html
): "If the July level of OPEC crude oil production at 29.7 mb/d is maintained through 2019,
the implied stock draw in 2H19 is 0.7 mb/d, helped also by a slower rate of non-OPEC
production growth." Note that this assumes LTO-growth in US causing the market to be
oversupplied next year
The market sentiment is currently bearish on oil for whatever reason (US LTO growth,
economic slowdown, etc.), you can see this on the yield curve that Art provides, the curve
has become more flat ( https://pbs.twimg.com/media/EDENJx2XUAIR5lC.png:large
). I find the herd mentality of the oil market interesting and would not be surprised if the
herd changes direction in a not too distant future. The big question mark I see is what will
happen with the Iran-deal if/when stocks continue to decline.
Even though Norway is "the darling of alternative transport", EV sales are still a small part
of their transportation mix. All-electric 7.8%, Plug-In hybrids, 3.6%, and Hybrids 4.0%.
Without the impact of EVs, their consumption would likely have been higher.
It looks like Nick Cunningham, the author of the article below, reads peakoilbarrel.com
"The more important point is that the oil industry is slowing down more generally.
Most oil forecasters expected explosive production growth to continue through this year
and into 2020. But with June U.S. production at 12.082 mb/d, output is only about 80,000 bpd
above levels seen at the end of 2018. In other words, growth has been pretty slow this
year.
Financial stress is really setting in, forcing drillers to cut back. The rig count fell by
12 in the last week of August, part of an ongoing slide since reaching a peak late last year.
Bankruptcies are on the rise. As the Wall Street Journal notes, an estimated 26 U.S. oil and
gas companies have declared bankruptcy this year, which is close to the full-year 2018 total.
More are expected.
Worse, there is a tsunami of debt that comes due in the years ahead. According to the WSJ,
roughly $9 billion worth of debt was set to mature over the second half of 2019. But a
whopping $137 billion in debt matures between 2020 and 2022, a massive total that stems from
the huge debt issuance following the oil market meltdown a few years ago. A serious reckoning
is just around the corner."
Raymond James recently estimated that over the last three years the U.S. decline rate for oil has doubled from
1.6 to 3.2 million barrels per day. The drilled but uncompleted well inventory ("DUC") is back to normal, so the
number of wells being drilled and the number of wells being completed is now about the same. We need over 12,000 new
horizontal oil wells completed each year to hold production flat and the number of completed wells will need to go up
each year.
The U.S. Energy Information Administration ("EIA") forecast at the beginning of this year was that the U.S.
shale oil plays were just getting started and that production would increase by at least 2 million barrels of oil per
day ("MMBOPD") each year for several more years.
Now if you believe that U.S. shale production will increase by 2 million barrels per day each year for several
more years, then I have a bridge that I think you might be interested in. But let's just play "what if", or what if
it really did increase by 2 million barrels per day for the next five years.
According to the EIA's Drilling Productivity Report, December 2018 shale production, all basins, was 8,232,750
barrels per day and the legacy decline, for all basins, averaged 6.14 percent per month or 505,737 barrels per day.
Legacy decline of over one million barrels per day would be a crippling requirement of shale producers. But not to
worry, that is simply not going to happen. Now total US production did increase by two million barrels per day 2018.
In fact, according to the EI.s Monthly Energy Review, US production increased by 2,064,000 barrels per day in 2018.
But for the first 7 months of 2019, total US production has declined by 54,000 barrels per day.
USA production appears to have hit a snag. July production is now below November 2018 production.
In my opinion, legacy decline in shale production has reached a point where new production only replaces legacy
decline. In fact, legacy decline may have reached a point where it is crippling shale oil production.
Those who have followed this blog for years know that Texas oil production is reported by the Texas Railroad
Commission. But their data is very slow coming in, sometimes it is more than a year before all the data has come in.
However, Dean Fantazzini, Energy economist, Deputy Head of MSU's Chair of Econometrics and Mathematical Methods in
Economics, has developed a program that uses the vintage data to make a pretty good estimate of the actual data. His
past corrected data has been relatively accurate.
If Dr. Fantazzini's data is correct then Texas peaked in December 2018 and has declined by 280,000 by June.
All the below charts were created from the EIA's Drilling Productivity Report. The data is through September 2019
and the last few months is, of course, an estimate. Historically the estimate for those last few months has been
overestimated.
Notice the last six months is pretty much a straight line. That is because most of it is just an estimate.
It looks like the Permian is pretty much the story as far as US shale is concerned.
The Permian is now just over 50% of total US shale production.
Permian Legacy Decline has been slowly rising and now sits at about 6%.
Eagle Ford has the highest legacy decline rate, now about 8.5% per month.
It looks like shale production, outside the Permian, has pretty much hit the wall. Pay no attention to those last
four months. They are just the EIA's wild ass guess.
In conclusion: Very high legacy decline, now over 6% per month, is shale's Achilles heel. Of course, there are
other problems as well. Bankruptcies are rampant, running out of sweet spots and the price of oil is just not high
enough. It appears that the USA has peaked, or peaked until the price of oil rises at least $20 a month.
Dean's charts self correct after a couple of months. Good estimates. Red Queen is already catching up. And,
it will catch up faster the next six months from June, as most of the independents have severely cut back on
capex.
Your Wall Street journal link has a firewall. Never mind, I got through. Good post.
Pioneer has not only reduced its capex, it's reduced its workforce by 25%. Apache has given up on
the Alpine High, their biggest capex. It's 90 % gas, how stupid can you get? Yadda, yadda, Yadda. Just
google the company for capex, and put 2nd quarter 2019. Voila!
Your sure to get a positive statement from the company, but just concentrate on the capex going
forward. For example, we're losing money had over fist, translates to reduced operating expenses will
provide an increased return for 2019. Get serious. None of these companies are going to say, we are
screwed.
EOG could make it, most of the rest are totally screwed.
"I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in
history," Al-Falih told reporters at OPEC's Vienna headquarters. "Until it does I think it's prudent for
those of us who have a lot at stake, and also for us who want to protect the global economy and provide
visibility going forward, to keep adjusting to it."
Dr. Raymond Pierrehumbert will be proven right belatedly.
The article does say US production still has an up side, but prices would have to be higher.
If there is
not enough supply then oil prices will obviously go higher as the did in 2003-2005 and in 2012-13.
US drilling rig count is very low at the moment being only 742, at it's highest recently the US could
have 1,400 drilling rigs working.
1,400 drilling rigs will certainly complete enough wells so new supply would exceed decline rates. When
oil prices are over $100 as they were in 2012 and the number of drilling rigs are 1,400 then you can wake me
up.
You want to focus on horizontal oil rigs. The count was as high as 1100, but many of those rigs
were lower power rigs no longer economic to operate, a lot of the current rigs are higher power and far
more efficient at drilling 3300 meter laterals commonly drilled today.
Holy f*ck Hugo, you are a raving lunatic. The oil prices can't go higher, otherwise there will be a
repeat of 2008. Clearly you are incapable of learning from the past.
Yeah, there is sort of a contradiction there. Sorry about that. But we are seeing the physical limits hit
in much of the world, regardless of the price. But if oil hits $80 to $100 a barrel, a lot more shale
could be produced. But that will not change things in the long run. It could delay peak oil by a year or
two.
Essentially we hybrids you can cut consumption in half for personal transportations. That's a
lot of oil saved. Also hybrids have much smaller battery then EV and as such use it more
efficiently.
(1) Oil fired power plants were phased out after the 1st (US peak 1970 allowed OPEC to impose
embargo) and 2nd oil crisis (peak oil in Iran 1975) not because of a planned, voluntary
transition
(2) Hirsch's slow mitigation. The 2008 oil price shock was a warning. Where are we 10 years
later? Are we on a path away from oil?
(3) EV maintenance cost must include replacement batteries in the car and in your garage (to
store power from solar panels – drive less in winter). The inverter for my solar panels
lasted only 5 years
(4) EV s recharged from grid are mainly coal power driven
(5) The era of cheap, easy oil ended in the early 2000s (when the North Sea peaked), before
the Iraq war
"EV s recharged from grid are mainly coal power driven"
Not in the USA, where coal makes up less than 25% of electricity generating capacity, down
from 40% in less than 10 years (primarily due to replacement with tight nat gas
production).
And some states, like the biggest in the country, get less than 5% electricity from coal,
imported from neighboring states via the grid.
I'm not
sure the end of homogeneity was the driver of diminished respect for what was once called
character. In the US, I hazard that a bigger factor was the widespread acceptance of
libertarian/neoliberal values. As we've documented, that world view was marketed aggressively
and very successfully by a loosely coordinated but well funded right wing campaign, whose
seminal document was the Powell Memo of 1971 which laid out the vision and many of the tactics
for their war on the New Deal and the community values that supported it. For instance, it
would have been well-nigh impossible for a Mike Milken, who'd gone to prison for securities law
violations (and was widely believed to have engaged in considerably more questionable conduct)
to have rehabilitated himself to the degree he did.
From Amar:
John McArthur, in memoriam
He was one of a kind -- and his kindness and empathy (a much used word I know) was
unbounded. It touched all from dining and custodial staff to taxi drivers. My parents apart,
few other people have had such an influence on me. (And he did me the honor of reading
everything I read: every book every article, every draft, the pages a sea of yellow
highlight)
He was also astute, ruthless and got things done. His mind was extraordinary and his
reading voracious and eclectic -- although you would never guess it from his aw shucks manner
and country bumpkin style.
I first actually talked to him in my second year as assistant professor. We had a long
long lunch at his corner table in the faculty club. We talked about everything -- except why
we were having lunch. At the end he said, "Perhaps you'd like to know why i asked you to
lunch. Well I've been reading your stuff and I wanted to put a face to the writing, to know
who this person was who was writing this stuff."
A few days later a copy of Knight's Risk Uncertainty and Profit arrived in interoffice
mail with one of John's classic handwritten notes, which went something along the following
lines. "I think this will suit the way you think of the world."
I had never encountered the book in my doctoral studies, and it was revelatory.
We had lunches, lasting 2-3 hours nearly every year for the last 20 years after I left
HBS. Always at the Charles ("If we ate at HBS there would be someone stopping by every
minute" he said. At the Charles it was only every 10 minutes. And of course he knew every
single waiter and waitress by name).
The stories he told at the lunches.. Such a pity he did not put his wisdom into a memoir.
But that was not his way.
The benefits of a "classical" education.
One of the main supports of the 'civilized' social interactions that you observe here 'Down
South' is a stubborn refusal to put a price on everything. It is not universal, but it
lingers in pockets of calm salted among the storms of modern living.
Welcome to the South.
I have some neighbors who are the opposite of me politically (in fact most of my
neighbors) but are wonderfully nice people on a personal level. Some of us who grew up here
have had the opposite experience of Yves and lived for awhile in the North where all that
politeness is dismissed as a false front.
Which in many cases it is, but the usefulness of all that unthinking social glue should
not be dismissed out of hand. After decades of elites in thrall to Ayn Rand the country may
be in need a few of those social norms that beatnik rebels in the 1950s found so stultifying.
Perhaps the most amazing thing about Epstein was how all those rich people around him thought
that his three teenager a day habit was perfectly acceptable.
I don't know anything about anything, but after living in the Northeast for my whole life
I spent 10 years in North Carolina. After a decade, I realized that I was never going
to stop being a Yankee, and that I detested "Southern courtesy" which mostly involved people
telling me to "Have a Blessed Day!"
I take part of this back: My favorite item of Southern Courtesy is that you can slander
anyone as long as you end the sentence with " bless his heart!"
Seriously, it's a different culture, and not one that I was ever comfortable with.
I see EVs and modern ICE vehicles as too complicated, even though they seem quite reliable
for a few hundred K Km. My God, even modern tire valve stems have batts and transmitters
linked to idiot displays because people are now too stupid to check their tire inflation.
Valve stem price $200 $300 per? Extrapolate to battery and propulsion software, (proprietary
software), that stops all future jobber replacement parts beyond belts and fluids.
Anyway, I have a rebuilt 1981 Westfalia that looks and runs like a dream. It is worth more
than I have invested in it, in fact it is currently worth 7X what my showroom condition 2005
GMC work truck is worth, (The truck with 150,000 Km on it and maintained to new condition).
The most complicated system on the Westie is a resistor pack "running" some intake temp
sensors to adjust mixture mix on startup. My electronic tech buddy was looking to fix a
friends jeep last week. The horn wouldn't work. He thought it was .well, a horn. No it isn't.
It is a sending unit that transits to a brain box that sends a signal to a device that says,
"Make horn noise now". Computerised, of course. My Father- in-law had some kind of Buick that
would flash the occasional warning light about a door. Price to swap out the module? $900.
Excess complexity needless complexity.
I keep seeing a modern Mad Max in my head. Instead of an insanely laughing Mel Gibson hot
wiring a fuel tanker we'll see a meter toting nerd testing leads and wires and asking if
anyone can read this damn code?
Paulo, your meter toting nerd is more likely going to be a nerd with a laptop, an OBD port
dongle and a Controller Area Network Bus (CANBUS) sniffing setup, fuming about a strange
(proprietary) implementation of the CANBUS protocol. My undestanding of the CANBUS
arrangement is that all devices are attached to the Controller Area Network (CAN) and
assigned a unique id. In the case of the friend's jeep, pressing the horn button results in a
packet being sent across the CAN addressed to the horn. All devices on the network receive
the packet but only the horn responds to it and switches on. I assume a second packet would
switch it off.
The theory is that CANBUS should allow a single network/power cable to daisy chain to all
the devices in the vehicle and control them, as opposed to having, for example, several wires
to control three speed wipers with intermittent wiping as well. It remains to be seen how
well CANBUS will stand the test of time but, it is likely to see increased adoption,
especially with EVs.
Hi Paulo,
I share your concern about vehicles becoming too complex to fix with local skill/local
machine, etc. I used to handle many repair tasks myself when younger, but things have become
a complicated spaghetti mess under hood.
And of course, this problem affects just about all kinds of vehicles built in past 3-4
decades. I'd guess well over 95% of the vehicles running around on the roads are 'fragile'
due to complexity of the systems. EV maybe less so, since there are simply less systems at
play.
A guy in Germany has over 900,000 km on a Tesla. I'm guessing he had had to have the battery
pack changed out, but didn't see that info.
Another issue along these lines is the energy supply line.
With Petrol, there a very complicated system to get the juice from the source rock to the
target tank. Such as a refinery.
That looks very fragile to me.
Reliance on that kind of complex system in a chaotic world is very risky.
The supply line for electricity can be just as complex, but just like you point out the
possibilities with the Westfalia, I point out that the electricity supply line can also be
much simpler. If you have some equipment (dry solid material with no moving parts- PV panels,
inverter, wiring/plug), your personal or local supply change for transport juice can be very
short, and durable.
"... First, rising inequality reflects the economic rents captured in resource extraction and production, whether by the owners of those resources or by financiers acting as parasitic middlemen. Second, inequality fosters the extravagant excesses that some now call plutonomy – an economic system in which a small group, the ultra-wealthy, accounts for a large share of total consumption. Under such conditions, a rising tide lifts only yachts, and competitive consumption creates an escalating pattern of what Thorstein Veblen, perhaps the greatest American economist, called conspicuous waste. Lastly, rising inequality is a good indicator of financial instability, which increases the probability of an impending crash. ..."
Rising inequality is
symptomatic of a wide range of economic and political problems that are standing in the way of
achieving a just and sustainable society. But for all the concern about the income and wealth
gap within countries in recent years, there has been surprisingly little acknowledgement of the
forces actually driving the trend.
"Sustainability" is a relatively new organizing principle in global policy. It is new partly
because economists have long been largely hostile to the very idea. Postwar neoclassical growth
theories deliberately ignored resource and environmental limits, disparaged and disdained
ecologists, and promised what was effectively impossible: perpetual growth fueled by unlimited
resources, the free disposal of wastes, and never-ending technological progress. Early warnings
– notably the Club of Rome's pathbreaking 1972 report, The Limits to Growth – were
ridiculed. More recently, the science of limits has gained acceptance, but most economists
remain preoccupied with growth.
But there is at least one dimension of unsustainability that not even economists can
overlook: inequality. Income and wealth disparities, along with other forms of inequality, are
relevant to sustainability for at least three reasons.
First, rising inequality reflects the economic rents captured in resource extraction and
production, whether by the owners of those resources or by financiers acting as parasitic
middlemen. Second, inequality fosters the extravagant excesses that some now call plutonomy
– an economic system in which a small group, the ultra-wealthy, accounts for a large
share of total consumption. Under such conditions, a rising tide lifts only yachts, and
competitive consumption creates an escalating pattern of what Thorstein Veblen, perhaps the
greatest American economist, called conspicuous waste. Lastly, rising inequality is a good
indicator of financial instability, which increases the probability of an impending crash.
For all these reasons, understanding and controlling the rise of inequality is an
ecological, socioeconomic, and political imperative. It is, in other words, a sustainability
issue.
MEASURE FOR MEASURE
To get a grip on economic inequality, we must overcome two major sources of confusion. On the
theoretical side, mainstream economics treats inequality largely as a byproduct of supply and
demand in "labor markets." It is thus regarded as a "microeconomic" phenomenon, driven on the
demand side by technological change, and on the supply side by a barely observable quantum that
goes by the name of human skill.
When economists write about policies that affect inequality, they tend to work within this
market framework. The labor market may be local, regional, or – at the very most –
national. Proposed policies focus mainly on the characteristics and capabilities of individuals
and how they can improve their positions in the market. These matters are undoubtedly
important, particularly when it comes to education and health, but they ignore the broader
"macroeconomic" forces – booms and busts, interest rates and debt, exchange rates and
commodity prices – that affect individuals, firms, economic sectors, and entire
countries.
On the empirical side, there is a question of information: What can we know from the
available data? Most of the data we have come from surveys, and most surveys focus on
households. These data are relevant for judging economic welfare – and also for thinking
about how people with different characteristics (age, gender, race, education, and so on)
interact with markets. Yet householders are not employees, and their income is not the same as
the wages paid for particular kinds of work. So, data collected on households are several steps
away from production, pay, and the forces of structural change.
When it comes to international and comparative analysis, there is yet another problem:
surveys are expensive. More surveys are conducted in stable rich countries than in unstable
poor ones. And they can be conceptually inconsistent, because the questions differ according to
the choices made by those managing the surveys. Are we measuring income? Expenditure? Before or
after tax? As with all surveys, the only answers one gets are to the questions asked.
An alternative approach that has become popular in recent years is to consult income-tax
records. But these data are even more sparse and inconsistent than surveys, and such records
are not available for all countries (indeed, not all countries have an income tax). So, in the
effort to measure inequality within countries and around the world, there has long been less
signal than noise.
INEQUALITY BY THE NUMBERS
For the past two decades, my students and I have been working on ways to address these
measurement shortcomings. We have sought out payroll records that cover a diverse range of
countries over many years, and in broadly consistent terms. With these data, we can measure
economic inequalities in the structure of pay, which then allows us to estimate the associated
inequalities of household income, both across countries and through time.
To explain the philosophy behind this approach, I often refer to a line from the American
philosopher Charles Sanders Peirce's essay "The Fixation of Belief":
Kepler undertook to draw a curve through the places of Mars [ ] and his greatest service
to science was in impressing on men's minds that this was the thing to be done if they wished
to improve astronomy; that they were not to content themselves with inquiring whether one
system of epicycles was better than another, but that they were to sit down to the figures, and
find out what the curve, in truth, was.
We have attempted to follow this advice, and we have had a fair amount of success. Our
measures have proven to be largely reliable and consistent with the existing survey record,
while also sensitive to known historical events: wars, revolutions, and the like. Moreover, we
have been able to look for patterns at the regional and even global level.
What would consistent patterns beyond the national level imply? I believe they are prima
facie evidence that the main source of change in various forms of inequality lies in
transnational developments, not in local conditions. To understand the problem of inequality,
then, we need to study common developments across a continental or even global economic
space.
As it happens, we have identified patterns showing a consistent gradient in levels of income
inequality across both space and time. If one looks across space, there are not too many
surprises. Income inequality within countries and regions rises as one moves from north to
south, reflecting the concentration of advanced industry and middle-class welfare states in
countries that were once the seats of empire. In Europe, inequality also rises as one moves
from "East" to "West," reflecting the legacy of state socialism.
Moreover, countries in close proximity, and with similar income levels and neighborly
diplomatic and trade relations, have relatively similar levels of inequality – as one can
see very clearly in maps. Common sense tells us that if they did not have similar levels of
inequality, regional migration patterns would sooner or later even things out.
Likewise, patterns of inequality change over time. In particular, there is a general
movement toward higher inequality from the 1980s until 2000, after which inequality begins to
stabilize. So far, all of this is what one would expect, which attests to the quality of the
data. Our attempt to capture a much broader picture of inequality across the world has not been
misguided.
WAVES OF INEQUALITY
These movements show, quite plainly, that levels of inequality once widely associated with the
Third World are now quite generalized globally. The First World has not become poorer, but it
has grown much less equal. There are a few exceptions, of course, and they should not come as a
surprise. Measures of inequality in Denmark or Finland, for example, are not far from where
they were a generation back. And some countries in Central and Eastern Europe – the Czech
Republic stands out – have low levels of inequality (though higher than under their
severe post-war communist regimes).
Now, consider another interesting pattern: the temporal movement of inequality within
countries is very similar to that between countries. If one takes a standard measure of
inequality between countries (not weighted for population, lest China and India dominate the
data), one finds that it has risen both between and within countries at the same time. Again,
this no surprise: rich countries comprise relatively wealthy people, whereas the people of poor
countries are poorer. In a global economy, when inequality between people changes, it is
natural that the inequalities between their respective countries change in a similar way.
But here it is important to remember that we are picking out the movement of inequality
within countries, measured separately using national statistics, and standardized by an
international statistical bureau. There are about 155 countries in our most recent data set,
and the predominant patterns across all of them tell the essential story. From 1963 to 1971, no
particular trend stands out. There is a bump in inequality within countries in 1973, followed
by a modest decline. For much of the world – for poorer countries and poorer peoples
alike, though not for the troubled rich – the 1970s were a time of growth and
progress.
Then comes a key turning point. Beginning in 1981, inequality starts rising in waves around
the world, increasing relentlessly until 2000, at which point the waves subside. In this era,
the first major wave is dominated by Latin America and Africa, and subsequent waves are driven
by the collapse of the Soviet Union and the associated regime changes in Eastern Europe.
Finally, economic liberalization in Asia fuels another wave that culminates in the 1997 Asian
financial crisis. From 2000, the rise in inequality slows, and inequalities even decline in
parts of the world, including Latin America, China, and the Russian Federation.
A TALE OF FINANCIAL HISTORY
The message contained in these numbers is neither subtle nor obscure. This is a story about the
relationship between debtors and creditors in the world economy. Under the post-World War II
Bretton Woods framework, stability prevailed – until the system collapsed in 1971, when
the United States ended the dollar's convertibility into gold. In 1973, the oil shock and a
commodity boom led to a surge in credit in Latin America and elsewhere as countries took on
commercial-bank debt to sustain growth in the face of higher fuel prices. As developing
countries grew, their middle classes expanded and inequalities declined.
All of that ended in 1981 with the start of a worldwide debt crisis that emanated from
monetary-policy changes in the US, where interest rates shot up to 22%. No longer able to pay
their debts, developing countries were forced to pursue austerity measures and to abandon their
independent industrial development strategies. Commodity prices collapsed, as did the Soviet
bloc – much of it heavily indebted – a decade later. The Asian crisis of 1997
rounded out this period.
Inequality at the global level peaked in 2000. In the wake of the dot-com bust and the
attacks of September 11, 2001, the US Federal Reserve cut interest rates, and China, growing
strongly and now a member of the World Trade Organization, increased its commodity purchases
worldwide. Prices and credit conditions improved, and for a while global inequality stopped
rising.
The trends in inequality over this period are in keeping with the commonsense insights of
Simon Kuznets back in 1955. Kuznets surmised that inequality would rise sharply during the
initial stages of economic development, and then decline at later stages. China and India
reflect this pattern, but for other developing countries in Asia and Latin America,
industrialization and urbanization have been far enough advanced for decades that rapid growth
reduces inequality and depression increases it. In a very few rich countries – notably
the US and the United Kingdom – rapid growth increases inequalities, because it
concentrates income in globally dominant sectors, especially finance and high technology.
So, in the rough history presented above, there are two key elements to consider: the
structure of the underlying economies and the effects of booms and busts on that structure.
Global forces for boom and bust have tended to affect individual countries and their people in
proportion to their ability to resist them. Countries with strong institutions that were able
to maintain independence and manage their own affairs fared the best. Those that could not
defend themselves against global forces were periodically ravaged by them. In our time, this is
the difference between, say, China and Mexico.
These global forces can be identified by the big turning points. The first was the breakdown
of Bretton Woods and the rush to private debt in the 1970s. The second was the debt crisis of
the 1980s, which was followed by the collapse of oil and commodity prices, and then of
Soviet-style socialist governments, and then by liberalization in Asia, culminating in the 1997
crisis – but not in China, which was poised for another decade of double-digit growth.
The third big turning point occurred in 2000, when lower interest rates, higher commodity
prices, and modest advances in social-welfare policies and national economic development
strategies helped to reduce inequality and poverty in Latin America and Russia, while in China,
too, inequalities peaked and started to decline.
In Europe, events played out somewhat differently. European countries did not reject
neoliberal ideology and re-embrace social-welfare policies after 2000. The introduction of the
euro was followed by nearly a decade of easy credit terms, which fueled a boom in housing and
commercial construction in Spain, Ireland, Portugal, and Greece (where the boom included the
2004 Olympics, among other projects). This period was not unlike the 1970s in Latin America.
But as Herbert Stein, a chairman of the White House Council of Economic Advisers under Richard
Nixon and Gerald Ford, famously observed, "If something cannot go on forever, it will stop." In
2009, the global financial crisis brought the happy early days of the euro to an abrupt
end.
REIN IT IN
What the available evidence demonstrates is that economic inequality has been regulated over
time by the behavior of global finance. The data even show that changes in levels of inequality
within the smaller, open economies are closely related to exchange-rate movements. When
currencies become overvalued, their countries are vulnerable to Dutch disease – eroding
the competitiveness of industry – and to financial crisis. Financial crises and
devaluations quickly reestablish the high level of inequality that human-development programs
were meant to overcome.
Inequality is thus irreducibly a global and, contrary to what many economists like to think,
macroeconomic issue. Labor-market considerations are secondary, crowded out by the dominant
macro movements described above. As such, the only way to address inequality effectively is to
bring the forces of financial instability, debt peonage, and predatory austerity under control.
These forces can be tempered by financial regulation, a function of rich-country governments
and central banks. But regulators are of course subject to capture by big finance, and
central-bank mandates – whether to target full employment or only price stability –
were drafted in an age of national economic policymaking. National central banks – as
also the European Central Bank – are not set up to consider their policies' effects on
peoples beyond their jurisdictional boundaries.
To be sure, there is still much that nation-states around the world can do to fight
inequality when conditions permit. Useful measures include raising the minimum wage,
strengthening trade unions, establishing social-insurance schemes, and building infrastructure
and providing public goods. The problem is that these forms of progress can be – and
regularly are – erased by financial crises and the subsequent imposition of severe
austerity. This means that the capacity to reduce inequalities sustainably depends on the
capacity for insulation from external financial pressures. However difficult it may be, the
rest of the world needs to protect itself from the destabilizing forces of global finance.
In short, economic inequality is tied to the most unstable and unsustainable element of the
world system, which is global finance. Achieving anything sustainably – especially, but
not only, the reduction of extreme inequalities – requires a financial order that is
broadly reformed and that can once again serve as a tool for other institutions and purposes,
and not as their self-serving master. This is particularly important as humanity turns toward
that other, more critical goal: the sustainability of human life on this planet. Global
financial stability is a necessary step on the way to a clean-energy economy – as
envisioned in the Green New Deal and similar proposals. At the end of the day, if we want to
have a sustainable and civilized future, we need to get a grip on global finance.
James K.
Galbraith is Chair in Government/Business Relations at the Lyndon B. Johnson School of Public
Affairs, University of Texas at Austin. His most recent books are Inequality: What Everyone
Needs to Know and Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of
Europe.
Its just from slow growth and the Boomer deleveraging era. Its a global phenom and its
impacts are global into the cultural realm. The college degree boom is a great example of
this phenom. It was really based on the surge in consumer debt boom after WWII boosting these
supply chains in the US to increased consumption to GDP and reduced manufacturing, which fell
in real terms during the 1950-2000 period.
This created traditionally required college degree jobs into a nexus that was originally
based around the Baby Boomer generation and strengthened afterwards. Once growth petered in
2007(and we developed a oversupply since 2000) we now have too many people with college
degrees.
Even the rich aren't as rich as they were in 2007. Real profits are struggling this cycle
and are showing up with weak job growth this year. The unemployment rates flaws are showing
up this cycle as well, as total numbers mean little compared historically than the potential
that is lowest unemployment can go.
Based on that, the current level of labor market saturation seems to be at a late 70's
cycle level. In otherwards, if you adjust the population growth and total size this cycle is
doing no better than the Carter era top in 1979 .then we see the whining.
Both the Reagan and Bush II era expansions were a bit better and probably onto a intro of
a "boom".
Obviously it is noticeably the Korean, Vietnam and Tech era booms which would require
unemployment to fall below 3% to reach, maybe down to 2.5%, which tells you something about
potential unemployment drop peaks.
As it translated into similar impulses in internal policy, which led to neoliberalism and
restoration of the rule of fiancial oligarchy within the USA. The USA experiment with democracy
was actually over in 1945
'Sanders has said that we live in a "corrupt political system designed to protect the
wealthy and the powerful." Warren said it's a "rigged system that props up the rich and
powerful and kicks dirt on everyone else."'
Yet the rest of the article focuses almost entirely on internal US shenanigans. When it comes
to protecting wealth and power, George Kennan hit the nail on the head in 1948, with "we have
about 50% of the world's wealth but only 6.3 of its population. This disparity is
particularly great as between ourselves and the peoples of Asia. In this situation, we cannot
fail to be the object of envy and resentment. Our real task in the coming period is to devise
a pattern of relationships, which will permit us to maintain this position of disparity."
This, which has underpinned US policy ever since, may not be corrupt in the sense of
illegal, but it certainly seems corrupt in the sense of morally repugnant to me.
Approaching from the opposite direction, if someone were to say "I sincerely believe that
the USA has the most open & honest political system and the fairest economic system in
human history" would you not think that person to be incredibly naive (or, cynically, a
liar)?
There has been, for at least the last couple of decades. a determined effort to do away
with corruption – by defining it away. "Citizens United" is perhaps the most glaring
example but the effort is ongoing; that Weiner op-ed is a good current example.
Shinola, I'm reminded of the statement "Raymond Shaw is the kindest, bravest, warmest,
most wonderful human being I've ever known in my life." in the movie Manchurian
Candidate . Much of what is said today just pops out as prepackaged propaganda.
It was possible twenty, thirty, forty years ago to make a reasonable case that the federal
government, as well as many of the state and municipal ones, were fairly honest and
functional. It is still possible that the writer believes what he wrote, but I think saying
that the belief that our system is rigged is mere irresponsible cynicism is at best an
example of charming naïveté and more likely cynical propagandistic fiction
itself.
"... Fortunately, we have some help. Adam Tooze is a prize-winning British historian, now at Columbia University, whose histories of WWII ( The Wages of Destruction ) – and of WWI ( The Deluge ) tell a story of 100 years of spiraling; 'pass-the-parcel' global debt; of recession (some ideologically impregnated) , and of export trade models, all of which have shaped our geo-politics. These are the same variables, of course, which happen to be very much in play today. ..."
"... But first, as Tooze notes, the 'pattern' starts with Woodrow Wilson's observation in 1916, that "Britain has the earth, and Germany wants it". Well, actually it was also about British élite fear of rivals (i.e. Germany arising), and the fear of Britain's élites of appearing weak. Today, it is about the American élite fearing similarly, about China, and fearing a putative Eurasian 'empire'. ..."
"... The old European empires effectively 'died' in 1916, Tooze states: As WWI entered its third year, the balance of power was visibly tilting from Europe to America. The belligerents simply could no longer sustain the costs of offensive war. The Western allies, and especially Britain, outfitted their forces by placing larger and larger war orders with the United States. By the end of 1916, American investors had wagered two billion dollars on an Entente victory (equivalent to $560 billion in today's money). It was also the year in which US output overtook that of the entire British Empire. ..."
"... Wilson was the first American statesman to perceive that the United States had grown, in Tooze's words, into "a power unlike any other. It had emerged, quite suddenly, as a novel kind of 'super-state,' exercising a veto over the financial and security concerns of the other major states of the world." ..."
"... "Americans, meanwhile, were preoccupied with the problem of German recovery. How could Germany achieve political stability if it had to pay so much to France and Belgium? The Americans pressed the French to relent when it came to Germany, but insisted that their own claims be paid in full by both France and Britain. Germany, for its part, could only pay if it could export, and especially to the world's biggest and richest consumer market, the United States. The depression of 1920 killed those export hopes. Most immediately, the economic crisis sliced American consumer demand precisely when Europe needed it most." ..."
"... Britain actually chose the course of deflation and austerity. Pretty much everybody else however, chose to devalue their currency (relative to gold), instead. But American leaders of the 1920s weren't willing to accept this outcome . They did not want their industry and markets disturbed by a flood of cheap French and German products. In 1921 and 1923 – just as today in respect to China – America raised tariffs, terminating a brief experiment with freer trade undertaken after the election of 1912. "The world owed the United States billions of dollars, but the world was going to have to find another way of earning that money than selling goods to the United States". ..."
"... "Between 1924 and 1930, world financial flows could be simplified into a daisy chain of debt. Germans borrowed from Americans, and used the proceeds to pay reparations to the Belgians and French. The French and Belgians, in turn, repaid war debts to the British and Americans. The British then used their French and Italian debt payments to repay the United States, who set the whole crazy contraption in motion again. Everybody could see the system was crazy." Only the United States could fix it. It never did. ..."
"... The flip side to this fixation with a dollar "as good as gold" was not just the inter-war hardship of a war-ravaged Europe, but also the threat of American markets flooded with low-cost European imports: German steelmakers and shipyards underpricing their American competitors with weak marks. Such a situation also prevailed after World War II when the US acquiesced in the undervaluation of the Deutsche mark and yen precisely to aid German and Japanese recovery. ..."
"... Hitler dreamed of conquering Poland, Ukraine, and Russia as a means of gaining the resources to match those of the United States, Tooze argues. "The vast landscape in between Berlin and Moscow would become Germany's equivalent of the American West". Hitler's original aim, Tooze suggests, was more that of a highly modernised and industrial first Reich – a Carolingian 'empire', such as that instigated by the Franks after the Fall of Rome. ..."
"... Although configured differently, the German National Socialist dream of a 'modern' Caroligian empire still underpins an EU vision of Europe today, as its lineal descendent. ..."
"... It is precisely this paradox on which Trump has 'zeroed-in', in order to mobilise his base towards a new view of Europe, as a predatory trade rival. The US, faced by a rising China, is retrenching into a Hobbesian world where hard 'power' is paramount, and will thus be increasingly unsympathetic to European liberal, moral-concern narratives. ..."
"... Here is the point: The EU initially would never have come into being, without America's covert political engineering . And Europe was, (and still is), consequently founded on the premise of unreserved US benignity towards the EU. But that key premise no longer holds: Can a Europe on the cusp of recession successfully manage to balance away from a US now focused on trade war toward Eurasia? ..."
"... A substantive global recession may set the whole 'crazy debt contraption' in motion again. But this time, amplified by a collapsing oil price, toppling Middle Eastern states, etc. Everybody can see the system is crazy. The United States could fix it, but it never will. ..."
"... It has weaponised the financial system so thoroughly that the US will never yield on the dollar status. The question is, do China and Russia have the political will – and capability – to assume the task of mounting a different financial order? ..."
"... In 1916, the US output surpassed that of the entire British Empire. Ninety-eight years later, US output supremacy (in PPP terms) came to an end. China surpassed America. Will a more fractured, increasingly belligerent US domestic polity be able to fix the financial order, as the latter careers from one extreme to a disordered, sanctioned and tariffed other? America most likely, will once again be wedded to a "conservative" [i.e. Hobbesian] vision of pursuing its own future. ..."
Is the
prospect of looming global recession merely an economic matter, to be discussed within the
framework of the Great Financial Crisis of 2008 – which is to say, whether or not, the
Central Bankers have wasted their available tools to manage it? Or, is there a wider pattern of
geo-political markers that may be deduced ahead of its arrival?
Fortunately, we have some help. Adam Tooze is a prize-winning British historian, now at
Columbia University, whose histories of WWII ( The Wages of
Destruction ) – and of WWI (
The Deluge ) tell a story of 100 years of spiraling; 'pass-the-parcel' global
debt; of recession (some ideologically impregnated) , and of export trade models, all of which
have shaped our geo-politics. These are the same variables, of course, which happen to be very
much in play today.
Tooze's books describe the primary pattern of linked and repeating events over the two wars
– yet there are other insights to be found within the primary pattern: How modes of
politics were affected; how the idea of 'empire' metamorphosed; and how debt accumulations
triggered profound shifts.
But first, as Tooze notes, the 'pattern' starts with Woodrow Wilson's observation in 1916,
that "Britain has the earth, and Germany wants it". Well, actually it was also about British
élite fear of rivals (i.e. Germany arising), and the fear of Britain's
élites of appearing weak. Today, it is about the American élite fearing
similarly, about China, and fearing a putative Eurasian 'empire'.
The old European empires effectively 'died' in 1916, Tooze states: As WWI entered its third
year, the balance of power was visibly tilting from Europe to America. The belligerents simply
could no longer sustain the costs of offensive war. The Western allies, and especially Britain,
outfitted their forces by placing larger and larger war orders with the United States. By the
end of 1916, American investors had wagered two billion dollars on an Entente victory
(equivalent to $560 billion in today's money). It was also the year in which US output overtook
that of the entire British Empire.
The other side to the coin was that staggering quantity of Allied purchases called forth
something like a war mobilization in the United States. American factories switched from
civilian to military production. And the same occurred again in 1940-41. Huge profits resulted.
Oligarchies were founded; and America's lasting interest in its outsize military-security
complex was founded.
Wilson was the first American statesman to perceive that the United States had grown, in
Tooze's words, into "a power unlike any other. It had emerged, quite suddenly, as
a novel kind of 'super-state,' exercising a veto over the financial and security concerns
of the other major states of the world."
Of course, after the war – there was the debt. A lot of it. France "was deeply in
debt, owing billions to the United States and billions more to Britain. France had been a
lender during the conflict too, but most of its credits had been extended to Russia, which
repudiated all its foreign debts after the Revolution of 1917. The French solution was to exact
reparations from Germany".
"Britain was willing to relax its demands on France. But it owed the United States even more
than France did. Unless it collected from France -- and from Italy and all the other smaller
combatants as well -- it could not hope to pay its American debts."
"Americans, meanwhile,
were preoccupied with the problem of German recovery. How could Germany achieve political
stability if it had to pay so much to France and Belgium? The Americans pressed the French to
relent when it came to Germany, but insisted that their own claims be paid in full by both
France and Britain. Germany, for its part, could only pay if it could export, and especially to
the world's biggest and richest consumer market, the United States. The depression of 1920
killed those export hopes. Most immediately, the economic crisis sliced American consumer
demand precisely when Europe needed it most."
Wars are frequently followed by economic downturns, but in 1920-21, US monetary authorities
actually sought to drive prices back to their pre-war levels through austerity. They engineered
a depression. They did not wholly succeed, but they succeeded well enough. When the US opted
for massive deflation, it thrust upon every country that wished to return to the gold standard,
an agonizing dilemma. Return to gold at 1913 values, and you would have to match US deflation
with an even steeper deflation of your own – and accept mass unemployment as the
consequence – or devalue.
Britain actually chose the course of deflation and austerity. Pretty much everybody else
however, chose to devalue their currency (relative to gold), instead. But American leaders of
the 1920s
weren't willing to accept this outcome . They did not want their industry and markets
disturbed by a flood of cheap French and German products. In 1921 and 1923 – just as
today in respect to China – America raised tariffs, terminating a brief experiment with
freer trade undertaken after the election of 1912. "The world owed the United States billions
of dollars, but the world was going to have to find another way of earning that money than
selling goods to the United States".
That way was found: (you can guess it) – more debt. Germany resorted to the printing
press. (Printing money was the only way Germany could afford to rearm in anticipation of the
WWII sequel to the First WW). The 1923 hyper-inflation that wiped out Germany's savers, however
also tidied up the country's balance sheet. Post-inflation Germany looked like a very
creditworthy borrower.
"Between 1924 and 1930, world financial flows could be simplified into a daisy chain of
debt. Germans borrowed from Americans, and used the proceeds to pay reparations to the Belgians
and French. The French and Belgians, in turn, repaid war debts to the British and Americans.
The British then used their French and Italian debt payments to repay the United States, who
set the whole crazy contraption in motion again. Everybody could see the system was crazy."
Only the United States could fix it. It never did.
Why? Because "[a]t the hub of the rapidly evolving, American-centered world system, there
was a polity wedded to a conservative vision of its own future" [as global hegemon], Tooze
opines .
The flip side to this fixation with a dollar "as good as gold" was not just the inter-war
hardship of a war-ravaged Europe, but also the threat of American markets flooded with low-cost
European imports: German steelmakers and shipyards underpricing their American competitors with
weak marks. Such a situation also prevailed after World War II when the US acquiesced in the
undervaluation of the Deutsche mark and yen precisely to aid German and Japanese recovery.
Fast forward to today – and here lies the root of Trump's economic Zeitgeist. The US
fear has returned in a new iteration: America's global primacy is being overtaken, this time by
China.
The austerity of the 1920s, and the depression that followed, eviscerated governments
throughout Europe. Yet the dictatorships that replaced them were not, as Tooze emphasizes in The Wages of Destruction , reactionary absolutisms; rather, they aspired to be
modernizers. And none more so, than Adolf Hitler. Tooze writes: "The originality of National
Socialism was that, rather than meekly accepting a place for Germany within a global economic
order dominated by the affluent English-speaking countries, Hitler sought to mobilize the
pent-up frustrations of his population to mount an epic challenge to this order.
Hitler dreamed of conquering Poland, Ukraine, and Russia as a means of gaining the
resources to match those of the United States, Tooze argues. "The vast landscape in between
Berlin and Moscow would become Germany's equivalent of the American West". Hitler's original
aim, Tooze suggests, was more that of a highly modernised and industrial first Reich – a
Carolingian 'empire', such as that instigated by the Franks after the Fall of Rome.
Although configured differently, the German National Socialist dream of a 'modern'
Caroligian empire still
underpins an EU vision of Europe today, as its lineal descendent.
After WWII, a weakened, and chastened Europe definitively turned away from raw 'power'; or
to put it a little differently, it moved beyond power towards a different style of
'empire'. Still Carolingian in essence – that is, with a centralized command (in the
Frankish style), overseeing a self-contained world of laws and rules and tightly regulated
cooperation.
But, with the post-war ethos of 'never again', it evolved into a millenarian project,
grounded in Kant's
'Perpetual Peace' – and of his 'compelling' logic of global governance as the only
solution to the brutal politics of Hobbesian anarchy, (though Kant also feared that the "state
of universal peace" made possible by world government would be an even greater threat to human
freedom than the Hobbesian international order, inasmuch as such a government, with its
monopoly of power, would become "the most horrible despotism").
So, Europe lives a "postmodern system" that does not rest on a balance of power, but on "the
rejection of force" and on "self-enforced rules of behaviour". In the "postmodern world,"
wrote Robert
Cooper (himself a senior EU official): "raison d'état and the amorality of Machiavelli's
theories of statecraft have been replaced by a moral consciousness" in international
affairs.
The result is a paradox. The US solved the 'Kantian paradox' for the EU of its Liberal
rejection of power politics through providing security, which rendered it unnecessary for
Europe's supranational government to provide it. Europeans did not need power to achieve peace,
and neither have they needed power to preserve it.
It is precisely this paradox on which Trump has 'zeroed-in', in order to mobilise his base
towards a new view of Europe, as a predatory trade rival. The US, faced by a rising China, is
retrenching into a Hobbesian world where hard 'power' is paramount, and will thus be
increasingly unsympathetic to European liberal, moral-concern narratives.
Here is the point: The EU initially would never have come into being, without America's
covert political engineering . And Europe was, (and still is), consequently founded on the
premise of unreserved US benignity towards the EU. But that key premise no longer holds: Can a
Europe on the cusp of recession successfully manage to balance away from a US now focused on
trade war toward Eurasia?
What might a looming recession then portend? The pendulum will (almost certainly) now swing
to the other extreme from the 1920s. Trump is a zero-interest, bail-out man. But this extreme
swing in the opposite direction, however, is likely induce similar rounds of 'daisy-chain'
sloughing-off of toxic debt onto someone – anyone – else; of competitive
devaluation, and attempted deflation-export.
A substantive global recession may set the whole 'crazy debt contraption' in motion again.
But this time, amplified by a collapsing oil price, toppling Middle Eastern states, etc.
Everybody can see the system is crazy. The United States could fix it, but it never will.
It has weaponised the financial system so thoroughly that the US will never yield on the
dollar status. The question is, do China and Russia have the political will – and
capability – to assume the task of mounting a different financial order?
Why did the US not fix the system in the inter-war years? Because, Tooze tells us (in coded
terms), the system had proved a gold-mine for the weapons-manufacturing oligarchs, and America
was mightily taken with the unfolding prospect of its leading the world: the 'American century'
ahead.
Also, before WWI, Tooze writes in The Deluge , the ability of the US to act was
hindered by its ineffective political system; dysfunctional financial system, and uniquely
violent racial and labor conflicts. "America was a byword for urban graft, mismanagement and
greed-fuelled politics, as much as for growth, production, and profit".
Well the two 'world wars' – as principal weapons' provider – did not make that
situation much better. Oligarchic fortunes and influence blossomed. The interwar years saw the
intersection of certain oligarchic interests with that of organized crime in America, and WWII
saw
the linking of the Italian mafia into US foreign operations – and thus to the US
political class.
In 1916, the US output surpassed that of the entire British Empire. Ninety-eight years
later, US output supremacy (in PPP terms) came to an end. China surpassed America. Will a more
fractured, increasingly belligerent US domestic polity be able to fix the financial order, as
the latter careers from one extreme to a disordered, sanctioned and tariffed other? America
most likely, will once again be wedded to a "conservative" [i.e. Hobbesian] vision of pursuing
its own future.
a farmer has at least 3 PhD qualifications just to contend in the business
No need for a tongue-in-cheek, you're on track, if manufacturing food is akin to other
manufacturing.
. . .from last year
August 2018, The fall of employment in the manufacturing sector
Today's manufacturing output is at least 5 percent greater than it was in 2000, but it has
become much more capital intensive and much less labor intensive. Accordingly, workers in
the sector are more likely to have at least some college education than their counterparts
of years past. But there are far fewer manufacturing workers overall, with about 7.5
million jobs lost since 1980.
What is most responsible for the manufacturing job losses? Rising trade with China is often
cited as a possible culprit. But competition from China only accounts for about a fourth of
the decline in manufacturing during the 2000s. This theory is further eroded by the fact
that local markets that did not compete with Chinese imports also saw employment
declines.
A skills mismatch -- the gap between the skills workers have and the skills employers need
-- has also contributed to the decline of manufacturing employment.
Prime age men and women with less than a high school degree have been hit particularly hard
by changes to manufacturing employment. As the manufacturing sector has shifted from
low-skilled to high-skilled work, workers who possess higher skill levels (e.g., engineers,
computer programmers, software developers, etc.) have become more sought after than before.
. . here
And the US supply of STEM graduates for any technical profession seems to be wanting.
Meanwhile we must recognize that employment is not directly tied to the economy, given
mechanization.
"... Almost four decades ago then-candidate George H.W. Bush used the phrase "voodoo economic policy" to describe Ronald Reagan's claim that cutting taxes for the rich would pay for itself. He was more prescient than he could have imagined. ..."
"... For voodoo economics isn't just a doctrine based on magical thinking. It's the ultimate policy zombie, a belief that seemingly can't be killed by evidence. It has failed every time its proponents have tried to put it into practice, but it just keeps shambling along. In fact, at this point it has eaten the brains of every significant figure in the Republican Party. Even Susan Collins, the least right-wing G.O.P. senator (although that isn't saying much), insisted that the 2017 tax cut would actually reduce the deficit. ..."
"... During the 2016 campaign Donald Trump pretended to be different, claiming that he would actually raise taxes on the rich. Once in office, however, he immediately went full voodoo. In fact, he has taken magical thinking to a new level. ..."
"... My favorite until now came from Art Laffer, the original voodoo economist and recent recipient of the Presidential Medal of Freedom. Why did George W. Bush's tax-cutting presidency end not with a boom, but with the worst economic slump since the Great Depression? ..."
"... But Trump has gone one better. As it has become increasingly clear that the results of his tax cut were disappointing -- recent data revisions have marked down estimates of both G.D.P. and employment growth, to the point where it's hard to see more than a brief sugar high from $2 trillion in borrowing ..."
"... Officials have floated, then retracted, the idea of a cut in payroll taxes -- that is, a tax break for ordinary workers, rather than the corporations and wealthy individuals who mainly benefited from the 2017 tax cut. But such action seems unlikely, among other things because top administration officials denounced this policy idea when Obama proposed it. ..."
"... The truth is that Trump doesn't have a Plan B, and probably can't come up with one. On the other hand, he might not have to. Who needs competent policy when you're the chosen one and the king of Israel? ..."
From Voodoo Economics to Evil-Eye Economics
Are Democrats hexing the Trump boom with bad thoughts?
By Paul Krugman
Almost four decades ago then-candidate George H.W. Bush used the phrase "voodoo economic
policy" to describe Ronald Reagan's claim that cutting taxes for the rich would pay for
itself. He was more prescient than he could have imagined.
For voodoo economics isn't just a doctrine based on magical thinking. It's the ultimate
policy zombie, a belief that seemingly can't be killed by evidence. It has failed every time
its proponents have tried to put it into practice, but it just keeps shambling along. In
fact, at this point it has eaten the brains of every significant figure in the Republican
Party. Even Susan Collins, the least right-wing G.O.P. senator (although that isn't saying
much), insisted that the 2017 tax cut would actually reduce the deficit.
During the 2016 campaign Donald Trump pretended to be different, claiming that he would
actually raise taxes on the rich. Once in office, however, he immediately went full voodoo.
In fact, he has taken magical thinking to a new level.
True, whenever tax cuts fail to produce the predicted miracle, their defenders come up
with bizarre explanations for their failure.
My favorite until now came from Art Laffer, the original voodoo economist and recent
recipient of the Presidential Medal of Freedom. Why did George W. Bush's tax-cutting
presidency end not with a boom, but with the worst economic slump since the Great Depression?
According to Laffer, blame rests with Barack Obama, even though the recession began more than
a year before Obama took office. You see, according to Laffer, everyone lost confidence upon
realizing that Obama might win the 2008 election.
But Trump has gone one better. As it has become increasingly clear that the results of his
tax cut were disappointing -- recent data revisions have marked down estimates of both G.D.P.
and employment growth, to the point where it's hard to see more than a brief sugar high from
$2 trillion in borrowing -- Trump has invented ever more creative ways to blame other people.
In particular, he's now claiming that the promised boom hasn't arrived because his opponents
are hexing the economy with bad thoughts: "The Democrats are trying to 'will' the Economy to
be bad for purposes of the 2020 Election."
Can opposition politicians really cause a recession with negative thinking? This goes
beyond voodoo economics; maybe we should call it evil-eye economics.
To be fair, the claim that Democrats are hexing his boom is a secondary theme in Trump's
ranting. Mostly he has been blaming the Federal Reserve for its "crazy" interest rate hikes.
And the truth is that last year's rate increases pretty clearly were a mistake.
But blaming the Fed for the tax cut's fizzle won't wash. For one thing, the Fed has
actually raised rates less than in previous economic recoveries. Even more to the point, the
Trump economic team was expecting Fed rate hikes when it made its extravagantly optimistic
forecasts. Administration projections from a year ago envisioned 2019 interest rates
substantially higher than what we're actually seeing.
Put it this way: The Trump tax cut was supposed to create a boom so powerful that it would
not only withstand modest Fed rate hikes, but actually require such hikes to prevent
inflationary overheating. You don't get to turn around and claim betrayal when the Fed does
exactly what you expected it to do.
Aside from blaming everyone but himself, however, how will Trump deal with the failure of
his economic promises? He has taken to demanding that the Fed roll the printing presses,
slashing interest rates and buying bonds -- the actions it normally takes in the face of a
serious recession -- even as he claims that the economy remains strong, and unemployment is
in fact near a historic low.
As many people have noted, these are exactly the actions Republicans, including Trump,
denounced as "currency debasement" when unemployment was far higher than it is today and the
economy desperately needed a boost.
Since the Fed is unlikely to oblige, what else might Trump do? Officials have floated,
then retracted, the idea of a cut in payroll taxes -- that is, a tax break for ordinary
workers, rather than the corporations and wealthy individuals who mainly benefited from the
2017 tax cut. But such action seems unlikely, among other things because top administration
officials denounced this policy idea when Obama proposed it.
Trump has also suggested using executive authority to reduce taxes on capital gains (which
are overwhelmingly paid by the wealthy). This move would have the distinction of being both
ineffectual and illegal.
What about calling off the trade war that has been depressing business investment? This
seems unlikely, because protectionism is right up there with racism as a core Trump value.
And merely postponing tariffs might not help, since it wouldn't resolve the uncertainty that
may be the trade war's biggest cost.
The truth is that Trump doesn't have a Plan B, and probably can't come up with one. On the
other hand, he might not have to. Who needs competent policy when you're the chosen one and
the king of Israel?
"But blaming the Fed for the tax cut's fizzle won't wash. For one thing, the Fed has actually
raised rates less than in previous economic recoveries. Even more to the point, the Trump
economic team was expecting Fed rate hikes when it made its extravagantly optimistic
forecasts. "
Yes the Trump economic team is insane and clueless. But the Fed has been tightening since
2013 when Bernanke began tapering QE.
So now all good liberals are crying recession (which would hurt Trump in the election) but
the Fed is blameless?
Monetary policy is ineffective. Then why don't we get rid of the Fed's vaunted
independence? Then why does it matter if Trump tweets at Powell?
This isn't directed at Anne but at the general comment reader and Krugman admirer.
"... What has caused the rapid decline in US manufacturing employment in recent decades? This column uses novel data to investigate the role of US multinationals and finds that they were a key driver behind the job losses. Insights from a theoretical framework imply that a reduction in the costs of foreign sourcing led firms to increase offshoring, and to shed labour." [link above] ..."
"... It looks like 'free' trade fundamentalists like Krugman are going to have to revisit their ideology... ..."
"... How pathetic can Democrats get with thier anti-worker policies ..."
"... Late 90's US corporations went whole in to industrializing [extreme low wage] China... FOREX, federal deficits, ignoring the US worker, etc. were in the [sympathetic] mix. There is a chicken, which egg is not important. ..."
"... Personally, I think that Trump is exploiting the distress of the working stiff and not doing anything for him. Meanwhile, the Democratic leadership has shown callous indifference toward the working stiff so Trump gets their votes, because at least he will acknowledge that there's a problem unlike kurt and his ilk. ..."
"A new assessment of the role of offshoring in the decline in US manufacturing employment,"
by Christoph Boehm, Aaron Flaaen, Nitya Pandalai-Nayar 15 August 2019 What has caused the rapid decline in US manufacturing employment in recent decades? This
column uses novel data to investigate the role of US multinationals and finds that they were
a key driver behind the job losses. Insights from a theoretical framework imply that a
reduction in the costs of foreign sourcing led firms to increase offshoring, and to shed
labour." [link above]
It looks like 'free' trade fundamentalists like Krugman are going to have to revisit
their ideology...
As for kurt, expect him to continue to deny the fact that 'free' trade has cost a
significant number of jobs and caused enough economic disruption to tilt the election to
Trump in 2016.
Further, expect the Democratic leadership to continue to tout the benefits of 'free' trade
without acknowledging its severe adverse effects, both economically and politically. And of
course, as long as they never acknowledge the adverse effects, they will never have to
address it which will allow Trump to continue to bludgeon them on the issue.
How pathetic can Democrats get with thier anti-worker policies
Late 90's US corporations went whole in to industrializing [extreme low wage] China...
FOREX, federal deficits, ignoring the US worker, etc. were in the [sympathetic] mix. There is
a chicken, which egg is not important.
The US worker lost in the evolutions. Aside from Trump who has tried anything for the US
working stiff?
Personally, I think that Trump is exploiting the distress of the working stiff and not
doing anything for him. Meanwhile, the Democratic leadership has shown callous indifference
toward the working stiff so Trump gets their votes, because at least he will acknowledge that
there's a problem unlike kurt and his ilk.
"... "The US economy is dominated by services, such as finance, healthcare, information services (such as telecoms), professional services (such as computer programming, lawyering, and engineering), housing, and myriad others. And despite the manufacturing slowdown, services are growing at a solid pace. About 70% of what consumers spend their money on is on services, leaving the US as the cleanest dirty shirt." ..."
"... How about this: a good number of the "services" are so parasitic that it cuts down on not only the desire but the ability to buy goods. ..."
"... automobiles have become as expensive as were homes thirty years ago. Those prices have gone up. Wages have stagnated and now are regressing as a function of purchasing power. ..."
That this
year-over-year decline is still so tame, despite the explosive trade-war rhetoric, pandemic
threatened and actual tit-for-tat tariffs, and even tech embargos, is largely due to companies
having found ways to brush off the rhetoric, dodge some of the tariffs, shift parts of their
supply chains around, or push up the tariffs into their supply chains.
By comparison, what happened during the Global Financial Crisis was a "collapse" of world
trade when companies – uncertain if the banking system would still stand the next day
– shut down their ordering process. This was when American consumers lost their jobs by
the millions and curtailed their spending, and when car sales collapsed. From September 2008
through the trough in May 2009, the World Trade Monitor index had plunged 17.5%.
But so far in 2019, there are no signs that the American consumer has pulled back. And
despite the trade war, the index has declined only 3.1% so far from the one-month peak.
The US economy is dominated by services, such as finance, healthcare, information services
(such as telecoms), professional services (such as computer programming, lawyering, and
engineering), housing, and myriad others. And despite the manufacturing slowdown, services are
growing at a solid pace. About 70% of what consumers spend their money on is on services,
leaving the US as the cleanest dirty shirt.
China.
China is experiencing a slowdown in exports that started last fall. In recent years, exports
continued to rise from September through June. But not this time. Exports to the rest of the
world fell 3.5% from September 2018 through June 2019, according to the World Trade Monitor
data for China, which I converted to a three-month moving average to smoothen out the vary
large month-to-month ups and downs of the data. The regular spikes in the chart are related to
the Chinese New Year. Note the 24% plunge during the Financial Crisis:
"The US economy is dominated by services, such as finance, healthcare, information
services (such as telecoms), professional services (such as computer programming, lawyering,
and engineering), housing, and myriad others. And despite the manufacturing slowdown,
services are growing at a solid pace. About 70% of what consumers spend their money on is on
services, leaving the US as the cleanest dirty shirt."
That is one way to interpret what is happening. How about this: a good number of the
"services" are so parasitic that it cuts down on not only the desire but the ability to buy
goods.
The author might make a connection between new auto sales and GDP, but here "in the
trenches," disposable income has been draining off into higher than wage growth inflation in
basic services and healthcare costs. Who can afford a new car when surprise medical bills
absorb the resources once earmarked for long term durable domestic goods? Plus, automobiles
have become as expensive as were homes thirty years ago. Those prices have gone up. Wages
have stagnated and now are regressing as a function of purchasing power.
So we are a banking crisis away from that wile e coyote chart move? DB, looking at you.
Until then we sing the stagflation chops (but there is no inflation, right, wages stagnate as
prices rise).
How else do we end the automobile economy? Seems like this "slowdown" is going about it
very gingerly. We'll still be driving cars for the next decades, just fewer of them. In order
to really but the brakes on we have to create a viable alternative. Which we can do, but we
don't seem willing to offer the alternative until the use of cars has been subdued. Are we
letting commuters down slowly or are we letting the oil industry down slowly, so as not to
topple the entire manufacturing scaffold of the world economy?
This will be a paradigm shift in the American socio-political system. Since at least the
First World War period, the hallmark of American culture has been personal mobility. First
with trains, and later with automobiles, the average American could relatively easily pull up
stakes and move off to some perceived better place. Prior to this, most people were
constrained in their movements by the modes of transport, and the relative costs of those
movement systems. Rural people who had never been farther than the local county courthouse
town were the norm. A radical relocalization is in the offing.
"... Europe and Japan are currently caught in what might be called a monetary black hole – a liquidity trap in which there is minimal scope for expansionary monetary policy ..."
"... "There are strong reasons to believe that the capacity of lower interest rates to stimulate the economy has been attenuated – or even gone into reverse." Good to see that some prominent economists are finally willing to say what I've been pointing out for the past five years. ..."
"... A much better idea for central banking, negotiate the seigniorage fee, up front, then let the central banker do its thing with no interference until the contract expires. Just admit, upfront, central bankers are a creation of government, serve government, let's at least do it twice as efficient as the boomers done it. Screw up half as often! Why not! ..."
Whither Central Banking?
In an environment of secular stagnation in the developed economies, central bankers'
ingenuity in loosening monetary policy is exactly what is not needed. What is needed are
admissions of impotence, in order to spur efforts by governments to promote demand through
fiscal policies and other means.
By LAWRENCE H. SUMMERS and ANNA STANSBURY
CAMBRIDGE – The world's central bankers and the scholars who follow them are having
their annual moment of reflection in Jackson Hole, Wyoming. But the theme of this year's
meeting, "Challenges for Monetary Policy," may encourage an insular – and dangerous
– complacency.
Simply put, tweaking inflation targets, communications strategies, or even balance sheets
is not an adequate response to the challenges now confronting the major economies. Rather,
ten years of below-target inflation throughout the developed world, with 30 more expected by
the market, and the utter failure of the Bank of Japan's extensive efforts to raise inflation
suggest that what was previously treated as axiomatic is in fact false: central banks cannot
always set inflation rates through monetary policy.
Europe and Japan are currently caught in what might be called a monetary black hole
– a liquidity trap in which there is minimal scope for expansionary monetary
policy . The United States is one recession away from a similar fate, given that, as the
figure below illustrates, there will not be nearly sufficient room to cut interest rates when
the next downturn comes. And with ten-year rates in the range of 1.5% and forward real rates
negative, the scope for quantitative easing and forward guidance to provide incremental
stimulus is very limited – even assuming that these tools are effective (which we
doubt).
These developments seem to lend further support to the concept of secular stagnation;
indeed, the issue is much more profound than is generally appreciated. Relative to what was
expected when one of us (Summers) sought to resurrect the concept in 2013, deficits and
national debt levels are far higher, nominal and real interest rates are far lower, and yet
nominal GDP growth has been far slower. This suggests some set of forces operating to reduce
aggregate demand, whose effect has only been partly attenuated by fiscal policies.
Conventional policy discussions are rooted in the (by now old) New Keynesian tradition of
viewing macroeconomic problems as a reflection of frictions that slow convergence to a
classical market-clearing equilibrium. The idea is that the combination of low inflation, a
declining neutral real interest rate, and an effective lower bound on nominal interest rates
may preclude the restoration of full employment. According to this view, anything that can be
done to reduce real interest rates is constructive, and with sufficient interest-rate
flexibility, secular stagnation can be overcome. With the immediate problem being excessive
real rates, looking first to central banks and monetary policies for a solution is
natural.
We are increasingly skeptical that matters are so straightforward. The near-universal
tendency among central bankers has been to interpret the coincidence of very low real
interest rates and nonaccelerating inflation as evidence that the neutral real interest rate
has declined and to use conventional monetary policy frameworks with an altered neutral real
rate.
But more ominous explanations are possible. There are strong reasons to believe that the
capacity of lower interest rates to stimulate the economy has been attenuated – or even
gone into reverse.
The share of interest-sensitive durable-goods sectors in GDP has decreased. The importance
of target saving effects has grown as interest rates have fallen, while the negative effect
of reductions in interest rates on disposable income has increased as government debts have
risen. Declining interest rates in the current environment undermine financial
intermediaries' capital position and hence their lending capacity. As the economic cycle has
globalized, the exchange-rate channel has become less important for monetary policy. With
real interest rates negative, it is doubtful that the cost of capital is an important
constraint on investment.
To take the most ominous case first, with interest-rate reductions having both positive
and negative effects on demand, it may be that there is no real interest rate consistent with
full resource utilization. Interest-rate reductions beyond a certain point may constrain
rather than increase demand. In this case, not only will monetary policy be unable to achieve
full employment, it will also be unable to increase inflation. If demand consistently falls
short of capacity, the Phillips curve implies that inflation will tend to fall rather than
rise.
Even if interest-rate cuts at all points proximately increase demand, there are
substantial grounds for concern if this effect is weak. It may be that any short-run demand
benefit is offset by the adverse effects of lower rates on subsequent performance. This could
happen for macroeconomic or microeconomic reasons.
From a macro perspective, low interest rates promote leverage and asset bubbles by
reducing borrowing costs and discount factors, and encouraging investors to reach for yield.
Almost every account of the 2008 financial crisis assigns at least some role to the
consequences of the very low interest rates that prevailed in the early 2000s. More broadly,
students of bubbles, from the economic historian Charles Kindleberger onward, always
emphasize the role of easy money and overly ample liquidity.
From a micro perspective, low rates undermine financial intermediaries' health by reducing
their profitability, impede the efficient allocation of capital by enabling even the weakest
firms to meet debt-service obligations, and may also inhibit competition by favoring
incumbent firms. There is something unhealthy about an economy in which corporations can
profitably borrow and invest even if the project in question pays a zero return.
These considerations suggest that reducing interest rates may not be merely insufficient,
but actually counterproductive, as a response to secular stagnation.
This formulation of the secular stagnation view is closely related to the economist Thomas
Palley's recent critique of "zero lower bound economics": negative interest rates may not
remedy Keynesian unemployment. More generally, in moving toward the secular stagnation view,
we have come to agree with the point long stressed by writers in the post-Keynesian (or,
perhaps more accurately, original Keynesian) tradition: the role of particular frictions and
rigidities in underpinning economic fluctuations should be de-emphasized relative to a more
fundamental lack of aggregate demand.
If reducing rates will be insufficient or counterproductive, central bankers' ingenuity in
loosening monetary policy in an environment of secular stagnation is exactly what is not
needed. What is needed are admissions of impotence, in order to spur efforts by governments
to promote demand through fiscal policies and other means.
Instead of more old New Keynesian economics, we hope, but do not expect, that this year's
gathering in Jackson Hole will bring forth a new Old Keynesian economics.
Anna Stansbury is a PhD candidate in Economics at Harvard University.
Lawrence H. Summers is a former president of Harvard University, where he is currently
University Professor.
"There are strong reasons to believe that the capacity of lower interest rates to
stimulate the economy has been attenuated – or even gone into reverse." Good to see
that some prominent economists are finally willing to say what I've been pointing out for the
past five years.
Part of the choir, you and many others. The idea that our accounting system stimulates by
methods other than accurate accounting is perfectly nuts.
Then some economists fail to understand that the accounting system adapts when repricing,
and adapting to reflect fundamentals is not stimulating.
We have Summers intimating that our four or five recessions since 1980 cost us long term,
thus the idea of currency banker stimulating was never correct, it was always the central
banker making bankers adapt to the needs of Treasury, basically following the one year
Treasury rate.
And, soon another young kid will show up and claim she has solved the secret of central
banking.
A much better idea for central banking, negotiate the seigniorage fee, up front, then
let the central banker do its thing with no interference until the contract expires. Just
admit, upfront, central bankers are a creation of government, serve government, let's at
least do it twice as efficient as the boomers done it. Screw up half as often! Why
not!
"In the early 1950s, a young economist named Paul Volcker worked as a human calculator in
an office deep inside the Federal Reserve Bank of New York. He crunched numbers for the
people who made decisions, and he told his wife that he saw little chance of ever moving up.
The central bank's leadership included bankers, lawyers and an Iowa hog farmer, but not a
single economist. The Fed's chairman, a former stockbroker named William McChesney Martin,
once told a visitor that he kept a small staff of economists in the basement of the Fed's
Washington headquarters. They were in the building, he said, because they asked good
questions. They were in the basement because ''they don't know their own limitations.''
Martin's distaste for economists was widely shared among the midcentury American elite.
President Franklin Delano Roosevelt dismissed John Maynard Keynes, the most important
economist of his generation, as an impractical ''mathematician.'' President Eisenhower, in
his farewell address, urged Americans to keep technocrats from power. Congress rarely
consulted economists; regulatory agencies were led and staffed by lawyers; courts wrote off
economic evidence as irrelevant.
But a revolution was coming. As the quarter century of growth that followed World War II
sputtered to a close, economists moved into the halls of power, instructing policymakers that
growth could be revived by minimizing government's role in managing the economy. They also
warned that a society that sought to limit inequality would pay a price in the form of less
growth. In the words of a British acolyte of this new economics, the world needed ''more
millionaires and more bankrupts.''
In the four decades between 1969 and 2008, economists played a leading role in slashing
taxation of the wealthy and in curbing public investment. They supervised the deregulation of
major sectors, including transportation and communications. They lionized big business,
defending the concentration of corporate power, even as they demonized trade unions and
opposed worker protections like minimum wage laws. Economists even persuaded policymakers to
assign a dollar value to human life -- around $10 million in 2019 -- to assess whether
regulations were worthwhile.
The revolution, like so many revolutions, went too far. Growth slowed and inequality
soared, with devastating consequences. Perhaps the starkest measure of the failure of our
economic policies is that the average American's life expectancy is in decline, as
inequalities of wealth have become inequalities of health. Life expectancy rose for the
wealthiest 20 percent of Americans between 1980 and 2010. Over the same three decades, life
expectancy declined for the poorest 20 percent of Americans. Shockingly, the difference in
average life expectancy between poor and wealthy women widened from 3.9 years to 13.6
years.
Rising inequality also is straining the health of liberal democracy. The idea of ''we the
people'' is fading because, in this era of yawning inequality, there is less we share in
common. As a result, it is harder to build support for the kinds of policies necessary to
deliver broad-based prosperity in the long term, like public investment in education and
infrastructure.
Economists began to enter public service in large numbers in the middle of the 20th century,
as policymakers struggled to manage the rapid expansion of the federal government. The number
of economists employed by the government rose from about 2,000 in the mid-1950s to more than
6,000 by the late 1970s. At first they were hired to rationalize the administration of
policy, but they soon began to shape the goals of policy, too. Arthur F. Burns became the
first economist to lead the Fed in 1970. Two years later, George Shultz became the first
economist to serve as Treasury secretary. In 1978, Volcker completed his rise from the Fed's
bowels, becoming the central bank's chairman.
The most important figure, however, was Milton Friedman, an elfin libertarian who refused to
take a job in Washington, but whose writings and exhortations seized the imagination of
policymakers. Friedman offered an appealingly simple answer for the nation's problems:
Government should get out of the way. He joked that if bureaucrats gained control of the
Sahara, there would soon be a shortage of sand.
He won his first big victory in an unlikely battle, helping to persuade President Nixon to
end military conscription in 1973. Friedman and other economists showed that a military
comprised solely of volunteers, recruited by offering market-rate wages, was financially
viable as well as politically preferable. The Nixon administration also embraced Friedman's
proposal to let markets determine the exchange rates between the dollar and foreign
currencies, and it was the first to put a price tag on human life to justify limits on
regulation.
But the turn toward markets was a bipartisan affair. The reduction of federal income taxation
began under President Kennedy. President Carter initiated an era of deregulation in 1977 by
naming an economist, Alfred Kahn, to dismantle the bureaucracy that supervised commercial
aviation. President Clinton restrained federal spending in the 1990s as the economy boomed,
declaring that ''the era of big government is over.''
Liberal and conservative economists conducted running battles on key questions of public
policy, but their areas of agreement ultimately were more important. Although nature tends
toward entropy, they shared a confidence that markets tend toward equilibrium. They agreed
that the primary goal of economic policy was to increase the dollar value of the nation's
output. And they had little patience for efforts to limit inequality. Charles L. Schultze,
the chairman of Mr. Carter's Council of Economic Advisers, said in the early 1980s that
economists should fight for efficient policies ''even when the result is significant income
losses for particular groups -- which it almost always is.'' A generation later, in 2004, the
Nobel laureate Robert Lucas warned against any revival of efforts to reduce inequality. ''Of
the tendencies that are harmful to sound economics, the most seductive, and in my opinion the
most poisonous, is to focus on questions of distribution.''
Accounts of the rise of inequality often take a fatalistic view. The problem is described
as a natural consequence of capitalism, or it is blamed on forces, like globalization or
technological change, that are beyond the direct control of policymakers. But much of the
fault lies in ourselves, in our collective decision to embrace policies that prioritized
efficiency and encouraged the concentration of wealth, and to neglect policies that equalized
opportunity and distributed rewards. The rise of economics is a primary reason for the rise
of inequality.
And the fact that we caused the problem means the solution is in our power, too.
Markets are constructed by people, for purposes chosen by people -- and people can change
the rules. It's time to discard the judgment of economists that society should turn a blind
eye to inequality. Reducing inequality should be a primary goal of public policy.
The market economy remains one of humankind's most awesome inventions, a powerful machine
for the creation of wealth. But the measure of a society is the quality of life throughout
the pyramid, not just at the top, and a growing body of research shows that those born at the
bottom today have less chance than in earlier generations to achieve prosperity or to
contribute to society's general welfare -- even if they are rich by historical standards.
This is not just bad for those who suffer, although surely that is bad enough. It is bad
for affluent Americans, too. When wealth is concentrated in the hands of the few, studies
show, total consumption declines and investment lags. Corporations and wealthy households
increasingly resemble Scrooge McDuck, sitting on piles of money they can't use
productively.
Willful indifference to the distribution of prosperity over the last half century is an
important reason the very survival of liberal democracy is now being tested by nationalist
demagogues. I have no special insight into how long the rope can hold, or how much weight it
can bear. But I know our shared bonds will last longer if we can find ways to reduce the
strain."
If we discard political correctness issues, the real problem is that since probably late 60th
most academic economists were and still are elite prostitutes of financial oligarchy.
The level of corruption of academic economists reached really unprecedented levels under
neoliberalism. The level of remuneration (direct but mostly indirect) was raised probably ten
fold.
Because one of the way neoliberals got to power is the infiltration of economic
departments in universities via grants and specially created positions. As well as creating
think tanks staffed with "professional neoliberal revolutionaries" as a proxy of Bolsheviks
Party full time party functionaries.
Joshua Bolten, the president and chief executive of the Business Roundtable, an organization
representing the leaders of the largest American companies, said on Sunday that many C.E.O.s
were already "poised right on top of the brake."
There are two groups in American capitalist class: one anti-Russia and one anti-China.
The anti-Russia one is the "moderate" group, that still believes China can turn capitalist
with due time; they go with Wolfowitz Doctrine, which states Russia, as the successor state of
the USSR and heir of its nuclear arsenal, still represents American's strategic enemy.
The anti-China one is the "far-right" group, which believe China is indeed socialist and
will become more socialist with time (and, therefore, will transform the world around it
socialist). Thy use Huntington's "clash of civilization" doctrine as a screensaver to sell an
anti-China rhetoric to the far-right indentured masses, but deep down know the true fight
continues to be capitalism vs socialism.
Gramsci once stated that success begins with the correct analysis of the conjuncture. If
that is true, then we already know who's gonna win: the anti-China group.
But the Gordian Knot is this: the very existence of two doctrines in the core of the
American elite is already evidence the USA is no longer the world's sole superpower. If it was,
then there would be no dilemma between the anti-Russia and the anti-China: there would simply
be a unified, anti-Eurasia doctrine.
The very fact the American elite now must to compartmentalize its foreign policy is already
a symptom of something that resembles a multipolar order: the USA is still the most powerful
nation in the world, but now it is the first among equals (as opposed to being the king of
nations, the "global cop").
Meanwhile, the post-war alliance continues to crumble. Mark Carney has revived Keynes
"Bancor"; this is a last, desperate attempt of the First World minus the USA to preserve their
dignity. The IMF already has a currency basket, but the problem is that it cannot force any
country to take its loans: nations are still sovereign, and can only be interfered by the IMF
if they ask for its interference. What Carney is asking for is literally an institution with
absolute governance over all nations, genuine executive powers. Will the American elite -- who
has the most formidable Military to date -- accept to relinquish their own power? Spoiler
alert: no.
China and Russia have time and peace on their side. All they need to do is wait and continue
to do what they are already doing, while Western Civilization continues to degenerate. The
problem with this tactic is that the Western elites are not stupid, and will go on the
offensive someday.
Russia has another problem: who's gonna succeed Putin after he retires? After the fall of
the Romanovs, the Bolsheviks crushed the liberal army ("White Army") and the Anarchist-Nazi
army ("Black Army") and were forced to found a new nation under a single party system (since
all the other parties decided to form the White Army and fight a civil war, it had to do so
because it was literally the only party left alive in Russia).
The intense and chaotic situation of the newly born Soviet Union and the premature death of
Lenin resulted in a system with no clear path of succession. Stalin kind of created something
that resembled a POTUS by reforming the office of General Secretary of the CPSU. But this was
never official in the entire history of the USSR and each death of the de facto commander in
chief was succeeded by a bloody palatial struggle. The system finally crumbled when Gorbachev
-- the first and last General Secretary to be born after 1917 -- destroyed the CPSU and, with
it, the entire USSR.
After the "democratization" (i.e. liberalization) of Russia (now "Russian Federation"), a
bad carbon copy of the federal republic was created in a hurry in the vain hope imitating the
capitalist system would make Russia as well organized and prosperous as the First World
countries. But many mannerisms of the old system remains: there is no obsession in Russia with
minority governments, much of the party divisions are artificial (mock liberalism) and, in
practice, the important stuff is still decided between oligarchs, what is left of the State
machine and the Military.
But now there is a high level of American infiltration in Russia. If, after Putin's death,
the liberals make a move to take the government and do a Yeltsin 2.0, it will be up to the
Military (hopefully) to make a decision. Depending on how this trade war between China and the
USA will be at that point, things could pend to one side or the other. My high-risk bet here is
that, 10-20 years from now, there will be a chance Russia may speculate with going back to
socialism but "with Chinese characteristics" (if China is "winning" the trade war).
"... During his meeting with Johnson on Sunday at the G7 in France, the US president raised eyebrows when he responded in the affirmative to questions from reporters on whether he had any second thoughts about the tariff move. ..."
While one may accuse the US president of many things, having second thoughts is hardly one
of them: once Trump has decided on a course of action, he tends to follow through. Which is why
the global press gasped when a rare case of doubt emerged this morning during Trump's breakfast
meeting with the UK's Boris Johnson at the Biarritz G-7, when the US president acknowledged
having second thoughts about the escalating the trade war with China... only for his top
spokeswoman to later retract and say Trump meant he regretted not raising tariffs even
more.
During his meeting with Johnson on Sunday at the G7 in France, the US president raised
eyebrows when he responded in the affirmative to questions from reporters on whether he had any
second thoughts about the tariff move.
Every president of the USA for the past 50 years has cultivated US exports to China. You
want to just throw it away, only two or three years before the purchasing power of China
exceeds that of the USA???
China - 1.5 billion.
USA - 326 million
China growth rate 2018: 6.4%
USA growth rate 2018: 2.8% source
China now produces twice as many graduates a year as the US source
As of 2015, China had already taken global lead in manufacturing output:
source
China - $2,010 billion
USA - $1,867 billion
World market size, based on population:
source
China - 18.7%
USA - 4.3%
Greedy US corporations have been in bed with China robbing the US citizen with all those
job exports to China.
If things were produced in US, the corporations would have made less money, but the US
citizen would have been better off. The trade deficit which has been running for decades
wouldn't have been that much.
Anyone with a lick of commonsense knew Trump's detractors would be gunning for him during
his trip to Europe. Trump has not disappointed these people by continuing his effort to come
across as too clever for his own good. Trump gave these people more ammunition when he said
he has doubts about his actions.
During breakfast with the UK's Boris Johnson at the G-7 meeting in Biarritz, France Trump
acknowledged having second thoughts about the escalating the trade war with China. The
article below explores how this may cause Trump a great deal of grief.
Unlike such "thesis creepers", Morgan Stanley's view on the fundamental picture has been
consistent all year. Consistently bearish that is. Here is Wilson again:
We've argued all along that the economy would continue to slow and that the second half
recovery most were expecting would fail to materialize for a multitude of reasons. The most
differentiated part of our view has centered around the US corporate profits recession that
is now happening. If we are going to slip into an economic recession we believe it will be
because this profits recession worsens to the point where companies will decide it is time to
reduce head count. Part of our call this year was that companies would cut capex and
inventory from bloated levels reached last year and that labor looked vulnerable at some
point due to the rapidly deteriorating margins we expected. This call was not predicated on
the trade situation getting worse although we never expected any grand bargain as some were
forecasting.
As Wilson also cautions, at this point the evidence is clear that significant number of
companies are now at a critical juncture where they need to make a decision on head count:
While we can't say with any certainty whether companies will pull that lever or not, the
probability of such an outcome has risen considerably and we have written about this
extensively in prior notes. Perhaps the most compelling argument that companies are moving in
this direction is the fact that hours worked have declined materially which is what typically
happens before head count reductions occur in large numbers
If you listen to Trump carefully, seeing him for what he is not what you think he is, what
you want him to be or, most importantly, what he wants you to see , you hear a man who fully
believes the Fed controls the economy.
You hear a man that firmly believes in the power of the government to remake the world in
whatever image it wants , whenever it wants.
You hear a man so solipsistic he can only see the world in terms he defined more than thirty
years ago.
You hear a man who fundamentally doesn't believe trade results in both sides winning but
that everyone either wins a deal or loses. If he didn't extract maximum pain from the other
side he 'lost.'
It's the source of Trump's inherent mercantilism.
And that fault in Donald Trump's character is leading him to ever more extreme behavior as
he refuses to reconcile the world we have versus the world he wants.
So he keeps pressuring, embarrassing and humiliating people he wants to make deals with. And
when they refuse to do so, he explodes and, like a child who didn't get his cookie, uses the
power of the Presidency to still try to get what he wants.
Treating his opposition like the Democrats and the Media this way is fine. They treat him
far worse than he does them; giving back in kind what he gets. But his stance on the Fed, who
are actually helping him in the long run, is insane. And it proves the point that no matter how
smart you are, if you are mis-educated and have spent a life building wealth based on that
mis-education, you will not be able to see the other side of the problem.
The strong dollar he is so angry about isn't a function of the Fed's raising interest rates.
It's not about policy bifurcation between the Fed and the ECB and the Bank of Japan.
It's come about because of the continued application of the same mis-education Trump
received about the role of interest rates that the Fed consistently (and wrongly) applies.
The world is just short dollars Don. And lowering borrowing costs won't help the situation.
It's what created it in the first place.
Trump's not a multi-dimensional analyst. He isn't a 4-d chess player. He's actually a very
simple creature. He believes the crap spewed by CNBC. He's hired advisers who worked there for
pity's sake.
The Fed is now in fear for its independence and Trump, again very child-like, wants the
world remade in his image yesterday and on his time table not the world's.
So, all of the radical changes he has pushed to the flow of global capital through his near
daily abuse of sanctions and tariffs have created immense uncertainty in dollar funding markets
around the world.
And with a $60 trillion synthetic short position against the dollar extent thanks to a
decade of zero-bound interest rates courtesy of the Fed, dollar hoarding is a very real
thing.
More recently, the amount of US currency in circulation outside the United States has now
exceeded 70% . The world is hoarding dollars for they fear the cancellation of their own
currencies as talk of eliminating cash in Europe has escalated with the prospect of Christine
Lagarde replacing Draghi.
As Americans have moved increasingly toward debit and credit cards, the rest of the world
has been sucking-up US dollars beyond belief. Anyone who questions whether the US dollar is
the reserve currency, well the cash is not being held by governments or central banks. The
people are now hoarding US dollars at record levels.
Every day that Trump complains about the Fed or China or Europe or Iran is another day in
which he himself helps force more dollars into those mattresses overseas. Some of those
hundreds of billions get converted into gold and bitcoin.
Further, the Fed lowering rates will only signal to those people that they have the right
idea because the Fed wouldn't be doing that if the global economy was in such good shape.
They would be raising rates.
And it's a point Trump refuses to understand. Lowering rates here will not free up capital
at home to be lent. Banks are already as loathe to lend as I am to write anything on a Thursday
lest I misread the upcoming episode of Trump's version of Freaky Friday in Fedlandia.
If banks were confident of the returns on their loan prospects they wouldn't still be
hoarding excess reserves at the Fed like everyone else.
They've disgorged more than $1 trillion over the past year as the Fed has wound down its
balance sheet. This is the Fed, in its own ham-fisted way trying to free up dollars for
circulation. Because when you create a backwards market you have to do things backwards to
unwind them.
The Fed never intended for the trillions it printed bailing out the world in 2008-09 to
circulate. If it did it would have never paid interest on excess reserves (IOER) in the first
place.
This is also why the recovery has been a long, slow water-torture affair only kept alive by
China blowing a massive credit bubble which Trump wants to prick but without it he would have
never gotten the opportunity to MAGA.
Raising rates has capital pouring into the U.S. and out of China, searching for yield as the
yuan falls. But he, like all children, like the infantilized Baby Boomer he is, wants it all
and he wants it now, before re-election.
This is ultimately what all of this whining is about, Trump's re-election.
What this means, of course, is that we have at least another year of the best soap opera
fake money can buy. I'm just waiting for someone to take on the role of Kramer banging open the
door to Don's apartment randomly and saying, "Hello! Deflation is Here . or is that
Inflation?"
"If you listen to Trump carefully, seeing him for what he is not what you think he is,
what you want him to be or, most importantly, what he wants you to see, you hear a man who
fully believes the Fed controls the economy."
Yeah?
So does Shark Street.
They spend days parsing Fed statements.
Hard to believe they even know what business fundamentals are anymore...
One thing I don't understand in all this talk of a replacement reserve currency for the world
is why there is no mention of the IMF's Special Drawing Rights (SDR) currency. This is a
basket of currencies fashioned to act as a global reserve currency at some, currently
unknown, point in the future. Both the USD and Yuan are in the basket - China doesn't want to
be the reserve currency, but she wants adequate voting rights over the SDR, and this is a
continuing negotiation, to downgrade the US's legacy majority vote.
And although I haven't studied Carney's proposal well, I get the point that while the US
is at most 15% of global GDP, more than half of all trades are closed in USD. So he's looking
for ways to close some of those trades in alternative currencies. Russia and China and I
think Iran are helping this by trading directly in each other's currencies, but I suspect
that such things for most companies would be very unwieldy with today's global supply
chains.
The fact is that, still today, the US Dollar is a damn useful currency to trade in. Are
the sanctions worth it? Obviously, increasingly not. But I can't imagine trying to go outside
of it without a very strong platform to switch to.
vk with your comments about the USD as reserve currency (Triffin Paradox) and for pointig out
global capitalist exploitation is unrelated to nationalism....exactly correct and right on. I
make this same point once in awhile. Lol. But not nearly as well explained as you do here.
This is the non-sequitor behind the Brexit fallacy as well, that rejecting the EU for a
nationalist trade and economic policy will somehow make Britain Great again. Pure nonsense
and not a coincidence that Mercer/Bannon created this policy like Trump's policies with
outright lies through a complicit media/political campaign.
The sad fact of the matter is Britain can't even feed itself. So, Brexiteers, welcome to a
steady diet of overpriced sovereignty on a bun after the October 31st crash out.
And yes of course Keynes was correct about the need for a neutral global reserve currency
for trade rather than a national currency serving as world reserve currency. As james and b
suggest has great utility for the wealthiest Amerikkkans, while NC correctly views the strong
dollar as the reason for the hollowing of the Amerikkkan blue collar worker.
And bet your bottom dollar (pun intended) China has no desire for the yuan to become the
world reserve currency. That is the entire point of their global currency strategy: to
maintain the yuan subordinate to the USD.
Said differently: The U.S. abuses is 'exorbitant privilege'. The hope is that China would be
less inclined to do so.
The real solution though is a different system with some global exchange medium that can
not be manipulated by one country or a block of selfish countries.
b @20
I agree that US abuses, but that is what hegemony always does. Power corrupts and has
always done so. If there ever was a hegemony less inclined to do so, the history certainly
shows not to expect that from China or Communists. Hence, I would not wish to desire outcome
in which China gets close to hegemony.
I agree that a different system would be the solution. Currently, such option does not yet
exist? Or at least function? For that reason, it would seem safe to say that other countries
have no reason to de-couple from the least bad master of all bad ones available.
Perhaps it has already been stated in this thread, but once the US dollar was decoupled
from gold in 1971, it gave the Fed and the banksters the ability to create an infinite number
of digital and paper dollars. The US used this power to build 1000 military bases around the
world and use its sanctions to freeze dollars to anyone who challenged its policies and
power.
The call to replace the fiat dollar with some other form of bankster digital fiat should
be a non-starter. Only commodity-based currencies, which have intrinsic value and cannot be
created out of thin air, are the only viable form money for a world which could be free of
endless war paid for by endless debt and economic slavery.
It is astonishing to see how British Imperialism, from before Hobbes wrote Leviathan to
the present day, has fooled everyone by teaching us to focus on the particulars and our
physical senses instead of taking in the bigger picture and registering the totality and
spirit of what is occurring.
This is the beginning of dividing the world into two spheres. A Multi-Polar sphere, led by
China and Russia, and a U.S. led sphere.
In the current world order, the U.S. has lost its place of leadership. Militarily it has
been surpassed by Russia and economically it has been surpassed by China.
In terms of the economy, China's GDP (PPP basis) is some 20% larger than the U.S. In terms
of what counts, producing useful products, the difference is much larger than that. In fact
the U.S. hasn't produced the value of products that it consumes for more than 30 years, and
is currently running a trade deficit of more than 2% of GDP. The accumulated foreign debt,
resulting from these on-going trade deficits is a major strategic threat.
Not only has the U.S. lost its position of leadership, its perspectives are rapidly
deteriorating. 30+ years of Globalization has destroyed its industrial base, and without an
industrial base it cannot compete either economically or militarily.
To stop the on-going loss of its leadership position, the U.S. must redevelop its
industrial base. But it cannot do so in world of open borders in which it has to compete with
China. Thus, the U.S. is seeking to create its own sphere, accompanied by its loyal vassals,
where it can redevelop its industrial base and ultimately recover its industrial strength and
leadership, isolated from its competitors.
This, in my opinion, is the strategic intent of Trump's economic and trade policies. He is
not looking to achieve a trade deal with China, but rather to shut down trade between China
(and the Multi-Polar sphere in general), and a U.S. led economic sphere, which consists of
the U.S. and its vassal states. He is also looking to limit or harm the Multi-Polar sphere in
every way, short of all out war, in order to ensure the loyalty of as many vassals as
possible.
Posted by: dh-mtl | May 23, 2019 1:15:10 PM | 39
It seems to me that this comment is quite pertinent to this thread.
Regarding the US dollar as a reserve currency: This reserve currency status and the
resulting overpricing of the U.S. dollar has been a windfall to the global elites, but has
been devastating to the United States itself, being a major factor in the destruction of the
U.S. as an industrial economy.
In addition, the fact that the U.S. dollar has a dual purpose, as the currency of the U.S.
and as the reserve currency of the world, has resulted in considerable financial instability.
When the U.S. adjusts its monetary policy based on domestic needs, resulting wild swings in
the exchange rate send shock waves around the world.
A world reserve currency is used as a reference for other currencies and must be stable. A
domestic currency must be able to adjust based on the monetary policy required for the
domestic economy. These two separate functions are incompatible.
Over the past five decades the U.S. dollar has been anything but stable. In this sense
Mark Carney's analysis is spot on.
I believe that the Chinese, Russians, etc. recognize this situation and have long been
looking for an alternative to the U.S. dollar as a world reserve currency. The recent
weaponization of the dollar for geo-political purposes has only made the situation more
urgent.
I believe that what is required is a world reserve currency that is separate from any
domestic currency, similar to what Carney is calling for. However, my bet is that this world
reserve currency will take the form of a crypto-currency backed by gold. Only with the
backing of gold will the currency have the transparency required to be a world reference
currency, acceptable to all.
Carney's plan just creates a stronger coupling to the Empire by transforming a system that
uses the dollar as reserve currency into a system that uses what might be termed the
'e-dollar' for everything.
The proposal likely leads to a revived TPP because global currency requires
"harmonization" of regulatory regimes.
Most importantly: European poodles will be on an even shorter lease. (No gas from
Russia!)
Western globalist elites have already de-coupled from nation-states. The e-dollar makes
would force everyone to catch-up.
An exorbitant privilege" is likely to continue in one form or another. They will not give
up the ability to use currency as a tax without real pressure (which is currently
nonexistent).
Bonus: "the Russians hacked our currency!" is the perfect way for the in-group to crush
resistance by stealing from their critics.
ADKC - careful here. Don't over subscribe Chinese elitist propaganda for the truth just
because their government says so. The BRI to date isn't a proven winner, far from it, except
for the Chinese who insist on imperialistic control over these ventures both for their
companies and imported Chinese workers. Proof of benefits to the foreign countries has yet to
be determined.
In fact, there is evidence that at least in some respects
BRI looks to be an empty boondoggle like the empty skyscrapers in the Chinese urban
skyline.
China is sending empty freight trains to Europe through one of its key Belt and Road
Initiative (BRI) projects: the China-Europe Railway Express. The bizarre phenomenon caught
the attention of Depth Paper (等深线), a Chinese online news platform. In
a rare move by a Chinese media outlet in today's media environment, Depth Paper probed
critically into one of the BRI's most visible "connectivity" projects, uncovering the
perverse incentives that are luring China's local governments and companies to create huge
"bubbles" of ostensibly flourishing rail routes that run tens of thousands of kilometers
across the vast landmass of Eurasia.
The revelation partly confirms what some observers have suspected all along: that
China's central government lacks the ability to keep BRI strategically tight and
coordinated. Sub-national stakeholders, as they do in other policy areas, have the
incentives to bend the initiative to their own narrowly defined interests and in the
process undermine the overarching strategy, if such a strategy indeed exists at all. The
curious case uncovers some important dynamics playing out among Belt and Road's diverse
stakeholders.
Yes, Barflies, there are also downsides to central government planning even in the Zen
Master Paradiso, which of course is 100% free of corruption and perverse incentives:
The elevation of the freight service in political importance created powerful incentives
for players to "rig the game". Depth Paper reveals two groups of schemers in the game:
Provincial and local governments: As the number of freight trips to and from Europe
become a measurable indicator, local governments, particularly those sitting at key railway
hubs, saw a clear opportunity to boost their visibility under the BRI (and probably to the
leadership). At their disposal were subsidies to lower the cost of freight services and
make them competitive with cargo ships.
The Ministry of Finance provides a guiding subsidy ceiling of
0.8USD/container/kilometer. But ambitious local governments circumvent it by inventing all
kinds of additional rewards to lure businesses to their train terminals, sometimes even
compensating for the extra mileage of truck transportation to bring containers from
thousands of kilometers away. According to a chart collated by Sino Trade and Finance, many
municipal government offer around 3000USD per container for a one-way Europe bound trip and
a whole train could receive a total of 123,000USD worth of subsidies per trip. These local
governments also use tax rebate and land use subsidies to sweeten the deal for freight
service companies.
International railway service companies : Competition with each other and
pressure from local governments eager for BRI visibility has incentivized the companies who
actually run the numerous rail routes to Europe to increase the number of train trips.
Every month these companies have to book planned trips from the railway regulators and get
what is called a "route slip" that permits them to run those trains. The ratio of actual
trips to the applied number is called "realization rate" that regulators use to monitor
rail capacity utilization.
The interplay of these incentives drives both groups to boost indicators that make them
look good in this game, creating scenes that are outright bizarre. The government of Xi'an
is one of the most active players starting from 2018. The city, 1000 kilometers to the west
of Beijing and the former capital of Tang Dynasty more than a millennium ago, considers
itself the "starting point of the ancient Silk Road" and strives to restore its glory in
the Belt and Road era. With full support from its provincial bosses, it is the most
generous with subsidies, dwarfing other provinces by a wide margin. "Subsidized per
container transportation price from Xi'an is constantly below RMB 8500, while it costs over
20000 RMB from Shandong," a trade agent told Depth Paper.
The subsidies are of the scale that they bend the gravity of trade. In the most extreme
cases, traders in the far west Xinjiang Autonomous Region, which already borders Central
Asia and is itself a Belt and Road rail hub, would move their cargo thousands of kilometers
to the east to capitalize on the Xi'an government's free handouts before transporting west
across the Eurasian continent. Similarly, traders in coastal Shandong provinces would truck
their goods all the way to Xi'an and load them onto trains, as it is cheaper even after
taking into account the 5000 RMB per container transportation cost by truck (for which the
Xi'an government also partially remunerates). The result is that Europe-bound freight train
trips from Xi'an grew by a whopping 536.6% in just one year from 2017 to 2018.
The railway service companies, on the other hand, blow up their trip numbers even when
they have very little to ship. Before Xi'an arrived on the scene in 2018, the competition
between Chongqing and Chengdu, two nearby cities, was so fierce that the two cities would
refuse to merge cargo loads back from Germany despite neither being able to fill a whole
train themselves. When the pressure (and reward) to be the top railway service company
facilitating "Belt and Road" trips to Europe becomes huge, the companies simply start
loading empty containers to their trains. They must ensure that each train meets the
regulator's 40-container minimum before it leaves the station, but there is no obligation
and no ability (for lack of demand) to fill those containers.
In the most extreme case, one train carried 40 empty containers and just one full
container all the way to Europe. This makes the China Railway Express's impressive growth
number highly dubious, and most certainly a "bubble". Even with all their tricks, companies
can barely fulfill their promise to regulators: they have overbooked railway resources. In
Q2 of 2019, Chongqing's "realization rate" dipped to as low as 64% for some routes.
China will unquestionably need even more infrastructure if it's to accommodate all the
additional migrants McKinsey anticipates. But just because China needs things that haven't
yet been built, that doesn't mean that everything that gets built is truly needed. Even the
casual observer driving around China can see that something is wrong. You can see it in the
industrial parks that are empty except for a small handful of factories, and in the
government buildings that are so large it seems impossible that they will ever fill in with
civil servants, and in the airports that only sporadically host an arriving plane, and in
the glut of exhibition centres and museums that every town seems compelled to build.
Urbanisation – the construction of new housing and infrastructure – has been
the driving force behind the Chinese economy for close to two decades. It has created
demand for massive volumes of steel, cement, and glass; for the ships that bring iron ore
from overseas; for the power plants and coal mines needed by the steel mills; and for the
machinery that is needed on construction sites.
But this constant and nonstop building has become an addiction for local governments.
it's a way of stimulating the local economy and maintaining growth, all loosely justified
by the needs of migrants. The World Bank calls urbanisation an "enabling parallel [process]
in rapid growth"; in other words, urbanisation can support growth, but it can't drive it.
China has put the cart before the horse, and the result is waste on an epic scale.
Tieling's story is one of how ambition and a lack of restraint by local governments,
masquerading as planning for the future, have laid the foundation for financial problems
that have been replicated throughout China – and how the promise of further migration
isn't going to fix them.
I see many many people have bought into anti-China propaganda. So the MSM lies about Israel
and Russia and Syria and WMD and Iran but when it comes to China it tells the truth. Gotcha.
ADKC , Aug 25 2019 0:04 utc |
59vk , Aug
25 2019 0:05 utc |
60
@ Posted by: donkeytale | Aug 24 2019 23:29 utc | 53
But it is not us, alleged "pro-China propagandists" who are "buying into Chinese elite
propaganda". It is its main enemy -- the USA -- that
is stating China is a superpower (the term "great power" is used + subliminar message of
the document).
As a famous philosopher once said: the best way to know yourself is to know your
enemy.
And, by knowing its enemy and by assessing the evidence on the field available to us, it
leaves us to believe that the Chinese socialist system has been -- with all its virtues and
flaws -- a monumental success: so far, it's the only Third World country to ascend to
superpower status; it's also the first really big country (1.4 billion people) to have found
a way to material prosperity (mutatis mutandis) to the totality of its population (which
breaks with the post-war Western European social-democrat myth that states only small
countries can be prosperous).
And we have corruption here in the (capitalist) Third World too. Corruption is not an
invention of socialism. If I could, I would choose the Chinese system for my country in a
heartbeat.
First : Good articles from B always get responded by astroturfers / paid trolls in the first
few comments , that mean B's MoA already in priority watch list of TPTB drones
Second : Rather surprised by people that got surprised of the decoupling plan , as it been
the goal all along and any china watcher knew this right from the start. Trump is not the
instigator of this , he acted like moron on twitter but the machination for the decoupling
have been ongoing even during obama years (TPP anyone ?) The whole trump trade deal promise
with china are not about trade deals , it is a list of demand from US to make china bow to US
or face decoupling. China of course refused and here we are today. US overplayed their hands
as china better prepared for the decoupling.
Third : HK violent protests are in fact designed to make china over react and send in
security forces into HK , the debacle then will be used as US and push EU allies to support
decoupling with china. But the awaited china HK crackdown never happened and the western plan
go ahead anyway with the choreographed western leader's comments on china action toward HK
even when theres no action.
To the trolls like Nemesis Calling and his sock puppet accounts , it would be wiser if you
notice the people coming to MoA are not random ignorant citizen of USA or EU. Such blatant
pro US narrarive from you instantly got recognized and laughed at.
SHC idea is BS. I don't want to even think about all the hidden tricks the City is planning
to build into it. There's no need to because there's no need for SHC itself.
It used to be hard to maintain accounts in multiple currencies, as well as settle such
accounts when trading internationally, so the trade (and, therefore, insurance, short-term
credit, and trade reserves) inevitably coalesced around a few main currencies. With the
computation capabilities available today, there's nothing preventing banks and companies from
having accounts in dozens of currencies. There's nothing preventing all kinds of currency
pairs (thousands, even tens of thousands of combinations) to be traded automatically by
market-making algorithms, thus providing the necessary liquidity.
This is what the non-Empire countries should be working towards: a decentralized system of
currency exchanges and settling systems built upon a common standard for maximum
interoperability. No blockchain currencies are necessary: simple correspondent accounts at
the central banks will do. The trick is to adopt a common tech standard and simplify legal
procedures, so that a bank can easily open accounts in the currencies of dozens of countries
and easily exchange these currencies on a currency exchange of its choosing.
Trump singled out China in a memo to U.S. Trade Representative Robert Lighthizer, saying
that "the United States has never accepted China's claim to developing-country status, and
virtually every current economic indicator belies China's claim." In response, China said
that it's still a developing nation and needs flexibility and policy room, according to
state broadcaster CCTV.
That's because you look at the empty cities from a western (particularly Hayek economics)
perspective. There are at least the following factors that you have ignored:
1. That the US/West requested China to support the world economy post 2008 by
spending.
2. That the West has wasted far greater resources with quantitative easing &
non-performing investments.
3. That China adopted a Keynesian approach to keep their economy moving.
4. That the cities were all planned anyway and build was just brought forward to support
the world and Chinese economy.
5. That most of these cities are still not complete and not ready yet for mass
residence.
I can see the argument that these cities might turn out to be a waste but so was the
western approach to the 2008 crash and what we are left with is continuing austerity, huge
amounts of money that has been wasted by pouring it straight into the pockets of the ultra
rich, and another pending crash. What China is left with is money that went to the workers,
an economy that continued to develop and assets (cities) that may well be very useful in the
future.
After the Global Financial Crisis Zhou Xiaochuan, Governor of the Bank of China announced,
"The world needs an international reserve currency that is disconnected from individual
nations and able to remain stable in the long run, removing the inherent deficiencies caused
by using credit-based national currencies."
He proposed Special Drawing Rights, SDRs, that derive their value from a basket of world
currencies. Nobelists C. Fred Bergsten, Robert Mundell and Joseph Stieglitz, were supportive,
"The creation of a global currency would restore a needed coherence to the international
monetary system, give the IMF a function that would help it to promote stability and be a
catalyst for international harmony."
To demonstrate the scheme's stability China began valuing its own currency, the RMB,
against a basket of dollars, euros, yen and pounds sterling and, almost immediately
complaints about RMB valuation ceased. The IMF made its first SDR loan in 2014, the World
Bank issued the first SDR bond in 2016, Standard Chartered Bank issued the first commercial
SDR notes in 2017 and the world's central banks began stating reserves in SDRs in 2019.
While few noticed the advent of SDRs, the creation of the Asian Infrastructure Investment
Bank, AIIB, in 2015 was a sensation. Former US Treasury Secretary Larry Summers called it,
"The moment the United States lost its role as the underwriter of the global economic system.
I can think of no event since Bretton Woods comparable to the combination of China's
effort to establish a major new institution–and the failure of the US to persuade
dozens of its traditional allies, starting with Britain–to stay out of it."
The AIIB's one hundred member countries account for eighty percent of the world's total
population and two-thirds of global GDP. It guarantees a trillion dollars annually in long
term, low interest loans for regional infrastructure, poverty reduction, growth and climate
change mitigation and allows Eurasia's four billion savers to mobilize local savings that
previously had few safe or creative outlets.
U.S. Decoupling From China Forces Others To Decouple From
U.S.
The U.S. is decoupling itself from China. The effects of that process hurt all global
economies. To avoid damage other countries have no choice but to decouple themselves from the
U.S.
Today's Washington Post front page leads with a highly misleading headline:
It was China, not Trump, which retaliated. Trump reacted to that with a tweet-storm and by
intensifying
the trade war he started . The piece under the misleading headline
even says that :
President Trump demanded U.S. companies stop doing business with China and announced he would
raise the rate of tariffs on Beijing Friday, capping one of the most extraordinary days in
the long-running U.S.-China trade war.
...
The day began with Beijing's announcement that it would impose new tariffs on $75 billion in
goods, including reinstated levies on auto products, starting this fall. It came to a close
Friday afternoon with Trump tweeting that he would raise the rate of existing and planned
tariffs on China by 5 percentage points.
Beijing's tariff retaliation was delivered with strategic timing, hours before an
important address by Powell, and as Trump prepared to depart for the G-7 meeting in
Biarritz.
After Trump's move the stock markets had a sad. Trade wars are, at least in the short term,
bad for commerce. The U.S. and the global economy are still teetering along, but will soon be
in recession.
The Trump administration is fine with that. (As is Dilbert creator Scott Adams
(vid).)
U.S. grand strategy is to prevent other powers from becoming equals to itself or to even
surpass it. China, with with a population four times larger than the U.S., is the country ready
to do just that. It already built itself into an economic powerhouse and it is also steadily
increasing its military might.
China is thus a U.S. 'enemy' even though Trump avoided, until yesterday, to use that
term.
Over the last 20+ years the U.S. imported more and more goods from China and elsewhere
and diminishes its own manufacturing capabilities. It is difficult to wage war against another
country when one depends on that country's production capacities . The U.S. must first
decouple itself from China before it can launch the real war. Trump's trade war with China is
intended to achieve that. As Peter Lee wrote
when the trade negotiations with China failed:
The decoupling strategy of the US China hawks is proceeding as planned. And economic pain is
a feature, not a bug.
...
Failure of trade negotiations was pretty much baked in, thanks to [Trump's trade negotiator]
Lightizer's maximalist demands.
And that was fine with the China hawks.
Because their ultimate goal was to decouple the US & PRC economies, weaken the PRC,
and make it more vulnerable to domestic destabilization and global rollback.
If decoupling shaved a few points off global GDP, hurt American businesses, or pushed the
world into recession, well that's the price o' freedom.
Or at least the cost of IndoPACOM being able to win the d*ck measuring contest in East
Asia, which is what this is really all about.
Trump does not want a new trade deal with China. He wants to decouple the U.S. economy
from the future enemy. Trade wars tend to hurt all involved economies. While the decoupling
process is ongoing the U.S. will likely suffer a recession.
Trump is afraid that a downturn in the U.S. could lower his re-election chances. That is
why he wants to use the Federal Reserve Bank to douse the economy with more money without
regard for the long term consequences. That is the reason why the first part of his tweet storm
yesterday was
directed at Fed chief Jay Powell:
In his order for U.S. companies to withdraw from China, some close to the administration saw
the president embracing the calls for an economic decoupling made by the hawks inside his
administration.
The evidence of the shift may have been most apparent in a 14-word tweet in which Trump
appeared to call Xi an "enemy."
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" he said in a
Tweet posted after Powell gave a speech in Jackson Hole that contained implicit criticism of
Trump's trade policies and their impact on the U.S. and global economies.
Jay Powell does not want to lower the Fed interest rate. He does not want to increase bond
buying, i.e. quantitative easing. Interest rates are already too low and to further decrease
them has its own danger. The last time the Fed ran a too-low interest rate policy it caused the
2008 crash and a global depression.
Expect Trump to fire Powell should he not be willing to follow his command. The U.S. will
push up its markets no matter what.
From Powell's perspective there is an additional danger in lowering U.S. interest rates.
When the U.S. runs insane economic and monetary policies U.S. allies will also want decouple
themselves - not from China but from the U.S. The 2008 experience demonstrated that the U.S.
dollar as the global reserve and main trade currency is dangerous for all who use it. Currently
any hickup in the U.S. economy leads to large scale recessions elsewhere.
That is why even long term U.S. ally Britain warns of such danger and looks for a way
out :
Bank of England Governor Mark Carney took aim at the U.S. dollar's "destabilising" role in
the world economy on Friday and said central banks might need to join together to create
their own replacement reserve currency.
The dollar's dominance of the global financial system increased the risks of a liquidity
trap of ultra-low interest rates and weak growth, Carney told central bankers from around the
world gathered in Jackson Hole, Wyoming, in the United States.
...
Carney warned that very low equilibrium interest rates had in the past coincided with wars,
financial crises and abrupt changes in the banking system.
...
China's yuan represented the most likely candidate to become a reserve currency to match the
dollar, but it still had a long way to go before it was ready.
The best solution would be a diversified multi-polar financial system, something that
could be provided by technology, Carney said.
Carney speaks of a "new Synthetic Hegemonic Currency (SHC)" which, in a purely electronic
form, could be created by a contract between the central banks of most or all countries. It
would replace the dollar as the main trade currency and lower the risk for other economies to
get infected by U.S. sicknesses (and manipulations).
Carney did not elaborate further but is an interesting concept. The devil will be, as
always, in the details. Will one be able to pay ones taxes in that currency? How will the value
of each sovereign currency in relation to SHC be determined?
That the U.S. dollar is used as a global reserve currency under the Bretton Woods system
is, in the words of the former French Minister of Finance Valéry Giscard d'Estaing, an
"exorbitant privilege". It if wants to keep that privilege it will have to go back to sane
economic and monetary policies. Otherwise the global economy will have no choice but to
decouple from it.
Posted by b on August 24, 2019 at 19:22 UTC |
Permalink
It's just too bad being elected President doesn't come with a 90-day probationary
period that many employers use, because if they did Mike Pence would be considering a 2nd
Term run right now.........
During election campaign of 2016 many people though that Trump is shrewd real estate
developer who can quickly learn statecraft. He proved to be a primitive emotionally unstably
narcissist, a bully who spoil any negotiation he enters. And has only one tool in his arsenal --
direct threats. Looks like the highest position he is suitable for is a boss of a small NYC
gang.
Notable quotes:
"... Conversely, is the goal to disrupt supply chains and re-domicile them back to the U.S.? If so, then where is his administration's support for R&D, education, and other industrial policies that could enhance national development, thereby making the U.S. a more attractive place to reclaim high valued-added supply chains? ..."
"... In fact, his secretary of education is viscerally hostile to the very concept of publicly funded education (of any kind), as well as being a shill for charter schools and privatized voucher programs (in which her family has vested economic interests ). ..."
"... As Robert Atkinson and Michael Lind argue in a recent American Affairs article, "Trump proudly touts his tax cutting and deregulation prowess, while his budgets slash support for key national investments in building blocks like research and development, manufacturing support programs, infrastructure, and education and training." This comes at a time when America's infrastructure is already one of the worst in the developed world . ..."
"... Furthermore, as recent events have illustrated, there is little Trump can do if and when China devalues its currency to offset the impact of the increased tariff charges he has introduced (or threatened to revive). ..."
"... Berle, Galbraith and others were advocates for local content requirements so as to sustain America's industrial ecosystem. And they favored buffer stocks to reduce global booms and busts. ..."
"... Enough with the "tariff tantrums." Or the silly idea that a modern economy can forfeit manufacturing to its rivals and specialize in finance, entertainment, tourism, and natural resource industries like farming, while making empty pledges about retraining and relocation to help the "losers" of global integration (promises seldom kept). ..."
"... We have a domestic crisis, and must do better than simply retreat to the delusions of neoliberalism or mindless protectionism if the American people are to come out as winners in a viable future trade framework with Beijing and the rest of the world. ..."
"... “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” ..."
"... US elites have had their snouts in the trough, and have been so busy gorging themselves they didn’t notice a new superpower rising. ..."
"... “The family which takes its mauve an cerise, air-conditioned, power-steered and power-braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, lighted buildings, billboards and posts for wires that should long since have been put underground. They pass on into countryside that has been rendered largely invisible by commercial art. (The goods which the latter advertise have an absolute priority in our value system. Such aesthetic considerations as a view of the countryside accordingly come second. On such matters we are consistent.) They picnic on exquisitely packaged food from a portable icebox by a polluted stream and go on to spend the night at a park which is a menace to public health and morals. Just before dozing off on an air mattress, beneath a nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious unevenness of their blessings. Is this, indeed, the American genius?” ..."
"... Yes. This is one of the better articles written about the absolutely insane and almost suicidal trade policy our elites have pursued and what goals we should pursue. These are key points made: ..."
"... Could be wrong, but when considering the success or failure of the China tariff initiative under some “Grand Strategy” that has been implemented to reorder US relations with China and restore a US manufacturing base, I think it might be useful to move upstream a bit and consider whether it aligns with this administration’s overall “Grand Strategy”. To distill it down to its essence, it’s “Move Fast and Break Things”. ..."
"... Trump is a shameless opportunist with a standard set of tactics, used solely for his own benefit. His only policy goal is more personal power. ..."
"... These pieces that characterize China as some sort of “evil empire” undermine their authors’ credibility. Before complaining in a self-righteous and aggrieved tone over another country’s unfair trade and “national security” practices American commentators might want to take a closer look at this country’s conduct vis a vis its international partners and competitors. (They could also benefit from reading what Michael Hudson has to say about China’s economic practices.) ..."
"... Trump Never Had a Grand Strategy for any action, Including China ..."
Many rationales have been deployed by the president to explain his ongoing embrace of the
tariff weapon. None, however, fully stack up.
Trump has been compared to previous
"tariff men," such as former Republican President William McKinley , who explicitly
campaigned in the 1896 election on a protectionist platform. Like McKinley, Trump has expressed
his support for tariffs in nationalistic terms. He sees them less as a tax on the domestic
consumer, more a key tool to make American business great again, as well as claiming that
tariffs represent a valuable source of
government revenue . This appeal to historical precedent is another worn-out lie to justify
a stupid policy. As the Washington Post
points out , "tariffs haven't been a major source of U.S. revenue in 100 years," and Trump
himself explicitly exempted certain products from tariff increases until December 15 because of
his concern about
the costs that they would impose on U.S. consumers as we head into the Christmas shopping
season. The revenue generation argument is particularly laughable, coming from a man whose
entire working life, both in the public and private sector, has been marked by a complete
indifference to debt buildup, let alone fretting about
paying it back . It's a true perversion of history to connect Trump's tariff legacy in any
way to that of McKinley.
Conversely, is the goal to disrupt supply chains and re-domicile them back to the U.S.?
If so, then where is his administration's support for R&D, education, and other industrial
policies that could enhance national development, thereby making the U.S. a more attractive
place to reclaim high valued-added supply chains? For example, Apple CEO Tim Cook,
justifying his company's decision to manufacture iPhones in China,
pointed to the abundance of skilled manufacturing labor in that country, along with
Beijing's decision to emphasize vocational training at a time when the idea has been virtually
abandoned in the U.S. This a problem that predates Trump, but the president has done nothing to
rectify the deficiency. In fact, his secretary of education is viscerally hostile to the very concept of
publicly funded education (of any kind), as well as being
a shill for charter schools and privatized voucher programs (in which her family
has vested economic interests ).
As
Robert Atkinson and Michael Lind argue in a recent American Affairs article, "Trump proudly
touts his tax cutting and deregulation prowess, while his budgets slash support for key
national investments in building blocks like research and development, manufacturing support
programs, infrastructure, and education and training." This comes at a time when America's
infrastructure is already one of the worst in the developed world
.
Does the president just want to offer American businesses a temporary respite from hostile
Chinese mercantilism via tariffs? If so, his tariffs have hitherto been singularly unsuccessful
in stopping Beijing's mercantilist efforts to try to maximize global market share by dumping
below cost until its foreign rivals are driven out of their home markets. Furthermore, as
recent events have illustrated, there is little Trump can do if and when China devalues its
currency to offset the impact of the increased tariff charges he has introduced (or threatened
to revive).
Is Trump concerned about national security? U.S. lawmakers and intelligence officials have
claimed, for example, that both Huawei and ZTE could be exploited by the Chinese government for
espionage and
sanctions-busting respectively, presenting
a potentially grave national security risk. Yet the president has often appeared prepared
to ignore these concerns, in the interests of using these companies as trade bargaining
chips , designed to secure some additional purchases of American soybeans or, more
generally, as part of a bigger trade deal.
To be sure, some of the president's criticism of the historic status quo in trade is valid,
as the post-industrial wastelands strewn across the country illustrate. China's entry into the
World Trade Organization had
a profoundly negative impact on U.S. manufacturing jobs . We therefore need a national
development strategy that breaks with many of the shibboleths of the so-called " Washington
Consensus ." As I've written
before , the policy goal should be to "change the labor share of the production equation,
so that production vastly increases general welfare and living standards for the largest
possible majority of people. By conducting policy with a view toward favoring labor over
capital, the aim is to produce a larger economy, and more stable (albeit restrained)
profits."
Historically, America has not always approached things simplistically through the lens of
the free market/market fundamentalist paradigm. After World War II, figures such as A.A. Berle
and John Kenneth Galbraith advocated global cartels in commodities to raise incomes in
developing countries, and thereby become additional sources of demand for American
manufacturers. They also looked benignly on transnational industrial cartels at home in the
U.S. Berle, Galbraith and others were advocates for local content requirements so as to
sustain America's industrial ecosystem. And they favored buffer stocks to reduce global booms
and busts.
If Elizabeth Warren and her team better appreciated this history (and Warren is the leading
Democrat offering a
significant reassessment on American trade policy today), they would see that there is a
rich counter-tradition that goes beyond a mindless resort to tariffs or simply breaking up
successful multinational companies that are among America's most profitable. Warren and others
might reassess the virtues of selective cartelization and cooperation. She and other Democratic
presidential candidates could give consideration to constructing a size-neutral regulatory
framework to ensure that such companies operate in the interest of national economic strategy
consistent with military security and widespread prosperity in order to obtain maximum benefits
for American workers and regions. As venture capitalist Peter Thiel has recently argued ,
it is perverse for Google to refuse to do business with the U.S. Pentagon, while conducting
artificial intelligence work in China, which uses AI to sustain its own authoritarianism and
mass surveillance.
Likewise, Big Three tripartism -- a form of economic collaboration amongst businesses, trade
unions, and national governments -- should be further embraced to enhance economic prosperity
and cope with the challenges of state-sponsored Chinese mercantilism. Both market
fundamentalists and pro-business oligarchs like Trump may dismiss collective bargaining as
another kind of labor cartel (the Clayton Antitrust Act, however, exempted unions from
antitrust). One can be both pro-business and pro-labor (i.e., pro-"
national developmentalism "), as Warren appears to be. There is nothing inherently
contradictory in terms of favoring limited pooling in employer federations that can bargain
with unions, R&D consortiums, export consortiums, etc., while allowing these entities to
retain their identity even as they compete with one other. Policies can also be designed to
compensate for the higher cost of labor in SMEs via
Fraunhofer industrial extension services that enable small producers to compete on the
basis of technology, not low wages.
Enough with the "tariff tantrums." Or the silly idea that a modern economy can forfeit
manufacturing to its rivals and specialize in finance, entertainment, tourism, and natural
resource industries like farming, while making empty pledges about retraining and relocation to
help the "losers" of global integration (promises seldom kept).
We have a domestic crisis, and must do better than simply retreat to the delusions of
neoliberalism or mindless protectionism if the American people are to come out as winners in a
viable future trade framework with Beijing and the rest of the world.
A multi-polar world became a uni-polar world with the fall of the Berlin Wall and Francis
Fukuyama said it was the end of history. It didn’t take the US long to lose that advantage. The US was immersed in the cult of individualism and didn’t think about the bigger
picture.
“There’s class warfare, all right, but it’s my class, the rich
class, that’s making war, and we’re winning.” Warren Buffett, 25 May
2005
That’s all very well Warren, but how is the US doing against China?
Who cares, I’m making loads of money. Oh dear.
US elites have had their snouts in the trough, and have been so busy gorging themselves
they didn’t notice a new superpower rising.
The 1950s American Dream was captured by John Kenneth Galbraith in “The Affluent
Society”.
“The family which takes its mauve an cerise, air-conditioned, power-steered and
power-braked automobile out for a tour passes through cities that are badly paved, made
hideous by litter, lighted buildings, billboards and posts for wires that should long since
have been put underground. They pass on into countryside that has been rendered largely
invisible by commercial art. (The goods which the latter advertise have an absolute priority
in our value system. Such aesthetic considerations as a view of the countryside accordingly
come second. On such matters we are consistent.) They picnic on exquisitely packaged food
from a portable icebox by a polluted stream and go on to spend the night at a park which is a
menace to public health and morals. Just before dozing off on an air mattress, beneath a
nylon tent, amid the stench of decaying refuse, they may reflect vaguely on the curious
unevenness of their blessings. Is this, indeed, the American genius?”
Private luxury, public squalor
In those days his book made quite a stir and made policymakers rethink their priorities. I
don’t think it would have the same impact now.
It’s a very good book and as relevant today as it was then.
Did you know capitalism works best with low housing costs and a low cost of living?
It’s obvious really.
Employees get their money from wages and the employers pay high housing costs through
wages, reducing profit and driving off-shoring.
This is how Asia did so well at the expense of the West during globalisation. You just
can’t pay those wages in the West, workers can’t afford to live. Multi-national
corporations could make higher profits in Asia due to the low cost of living that they had to
cover in wages.
It’s easier to see with this little equation.
Disposable income = wages – (taxes + the cost of living)
(Michael Hudson condensed)
There is another term in the brackets with taxes.
Current ideas of capitalism comes from neoclassical economics, which is very different to
classical economics.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
We think small state, unregulated capitalism is something that it never was, which is
leading to all sorts of problems.
The West never realised that in an open globalised world, the West would be at a severe
disadvantage due to its high cost of living. The West set the rules in a game where China was
guaranteed to win, and it went from almost nothing to become a global superpower.
Observing the world of small state, unregulated capitalism in the 19th century
“The interest of the landlords is always opposed to the interest of every other
class in the community” Ricardo 1815 / Classical Economist
“But the rate of profit does not, like rent and wages, rise with the prosperity and
fall with the declension of the society. On the contrary, it is naturally low in rich and
high in poor countries, and it is always highest in the countries which are going fastest to
ruin.” Adam Smith / Classical Economist
I suspect ‘they’ notice. Just a shift of their assets. ‘US Elites’
can leave anytime they want as they have multiple nice homes around the world. No real
allegiance to anything except money.
This article touches on it but really should dwell on it more—-the big picture is
that China policy is a bipartisan failure since before China entered the WTO, apart from the
transfer of wealth from the American middle class to the 1% and China and turning America
into an addict of low(er)-cost, disposable consumer goods.
Feature, not a bug. Trump is a reaction to the disease, not the cause.
Many years ago I read a book about the Japanese exporting machine and how it worked in
practice. What would happen was that every time a Japanese-built car left the docks on a boat
to an overseas country, the Japanese government would write out a cheque to the car
manufacturer for I think about for $600 for every car. That way, when those cars hit the
docks wherever they were being delivered to, that car could be sold for $600 cheaper than the
locally made cars which was designed to send them out of business. France got wind of this
scheme so what they did was to impose a $600 tariff on those very same Japanese cars when
they hit their docks which brought them up to their real cost. Smart move that though
probably illegal these days.
At the time I read that book I thought perhaps a tariff system might work where for any
import that had a local competitor, a tariff could be imposed so that the imported and the
local product were equally priced. Then it would be up to the customer to choose on the basis
of quality. Well it is far too late for that idea as globalization has hollowed out western
manufacturing ability. As Auerback has pointed out, tariffs make no sense unless you are
willing to put in the money to develop R & D, education and industrial policies. I
thought that a core of technical and industrial expertise would be fenced off around the
US’s military production abilities but from an article that appeared on NC recently,
the horse has long bolted here too. I think that real change will only take place when our
just-in-time global supply chains are broken down either through trade conflict or through
the effects of climate change. There is too much money being made in the present set up to
have it change.
Yes. This is one of the better articles written about the absolutely insane and almost
suicidal trade policy our elites have pursued and what goals we should pursue. These are key
points made:
“where is his administration’s support for R&D, education, and other
industrial policies that could enhance national development, thereby making the U.S. a more
attractive place to reclaim high valued-added supply chains? ”
“the policy goal should be to “change the labor share of the production
equation, so that production vastly increases general welfare and living standards for the
largest possible majority of people. By conducting policy with a view toward favoring labor
over capital, the aim is to produce a larger economy, and more stable (albeit restrained)
profits.”
“presidential candidates could give consideration to constructing a size-neutral
regulatory framework to ensure that such companies operate in the interest of national
economic strategy consistent with military security and widespread prosperity in order to
obtain maximum benefits for American workers and regions. ”
I would say that these may imply lowering total factor costs in the economy through
efficient universal healthcare (10% of GDP), massive investment in infrastructure, increases
in educational attainment in trades and sciences and engineering, plus research and
development investments. We should also improve our defense structure to build strategic
depth and resiliency.
Granted, there may be many better strategies for optimizing trade to favor the US. Still,
if tariffs alone are so bad, why does virtually every other country use them? And maintain
them, often at stratospheric levels, for decades?
And decades happens to describe how long Democrats have done precisely nothing at all to
better US trade. In fact, they’ve advocated just the opposite.
So Trump can legitimately make a powerful and irrefutable argument that he has at least
taken concrete steps of some sort to fix the problem. And he can simply cite the
Democrats’ very plain record as proof they cannot be trusted on this score, no matter
what any of them say in primary season.
Could be wrong, but when considering the success or failure of the China tariff initiative
under some “Grand Strategy” that has been implemented to reorder US relations
with China and restore a US manufacturing base, I think it might be useful to move upstream a
bit and consider whether it aligns with this administration’s overall “Grand
Strategy”. To distill it down to its essence, it’s “Move Fast and Break
Things”.
IMO the objectives are to keep opponents off balance, maintain momentum toward further
concentration of power in the executive branch, enrich and politically empower the donor base
(and oneself), divert and redirect the public conversation into social issues, and assure
influential elements in media that resonate with the voter base remain supportive. Chaos,
fostering a perception of unpredictability, state erosion of civil liberties, active use of
markets as a policy tool, foreign military actions that are aligned with the objectives of
influential members of the base, killing congressional legislation in the Senate or
regulations that might disrupt neoliberal policies, and state subsides of favored
constituencies are viewed as positives under this overall strategic framework.
We see this overall strategy repeated in department and agency staffing decisions and in
executive orders on policies ranging from China and trade to the environment, climate change,
public lands and resources, deregulation and public subsidies for Wall Street, military
initiatives, immigration policy, government shutdowns over the budget, etc. In the eyes of
his “true base”, as one of his predecessors called them, I suspect this guy is
considered to be doing a great job. “[S]upport for R&D, education, and other
industrial policies that could enhance national development” isn’t really even on
the table.
Thank you. Exactly. Trump is a shameless opportunist with a standard set of tactics, used
solely for his own benefit. His only policy goal is more personal power.
These pieces that characterize China as some sort of “evil empire” undermine
their authors’ credibility. Before complaining in a self-righteous and aggrieved tone
over another country’s unfair trade and “national security” practices
American commentators might want to take a closer look at this country’s conduct vis a
vis its international partners and competitors. (They could also benefit from reading what
Michael Hudson has to say about China’s economic practices.)
At the end of the day the the west made its own bed and now it has to lie in it. Trying to
pin the blame on China and Russia and roping them into a new nuclear arms race or terrorizing
much weaker countries like Iran and Venezuela will not change the fundamental fact that the
system we created is broken and unsustainable.
We broke it and only we can fix it.
The US moved West. Competition in the US was between the East & the West too. US had
cheap portable energy & people could pay their rent and have some money left over.
Obviously those who are collecting money from houses others move in and out of have the
opportunity to raise more money than those hoping the boss will give them a raise.
It seems that most of the land close to work has been purchased.
Michael Hudson has this situation figured out.
Does anyone force US businesses to buy foreign? Or is the US part of the Chinese empire
and therefore forced to buy its goods? I wonder whether the US military will wake up to the
lack of love of country in the US business sector and close the current forex driven version
of the racket down.
"... Few realize that neoliberalism (which relies on the capture of government and media) has allowed capitalist exploitation in ways that never dreamed of: strip-mining future generations via debt-funded government deficits, fracking society with identity politics, socializing corporate losses via bailouts and environmental destruction, and misallocation of resources via militarism/NWO adventurism. ..."
Brandon Smith - whose political and philosophical views I'm not clear on and thus do not
champion here - nonetheless has a nice deconstruction of the media and the typical lead times
involved when MSM is ordered to foreshadow economic collapse. He suggests six months for this
one, therefore early in 2020, with Trump as the obvious fall guy. Thus, a time for
carpetbaggers to strip more assets, for fascists to tighten controls on the general populace,
and for a new president for the US.
I often cite Shadowstats , but
almost never direct people to read the news it announces on its main page. In response to
Grieved @4, I suggest clicking above and reading the Daily Update and Alert sections followed
by whatever else is fancied to see that indeed a recession is more than forecast:
" ShadowStats' Recession Forecast Remains in Place, With U.S. Economic Activity Still
Sinking; Watch for Continued Flight from the Dollar and Stocks into Gold. Beyond
intensified near-term market risks, the ShadowStats broad outlook in the weeks and months
ahead remains for: (1) a rapidly intensifying U.S. economic downturn, reflected in (2)
mounting selling pressure on the U.S. dollar, (3) continued flight to safety in precious
metals, with upside pressures on gold and silver prices, and (4) increasingly high risk of
extraordinarily heavy stock-market selling. " [Emphasis Original]
The main things I point to using Shadowstats are Unemployment and GDP which are located at
the dropdown Alternative Data menu. Take a look at each, then read the forecasts on the main
page to make your own conclusions. On the older HK protest thread, I linked to this
essay since it tells us how we were maneuvered into our current mess. Most have heard the
term Enron Accounting. Well, that was happening long before Enron became incorporated But we
need to have a Critical Mass of the citizenry understand that fact before we can enter into
the Political Fight required to rescue ourselves.
reply to
"The key wasn't the type of class [for a successful revolution]; rather, the key is the
solidarity of whatever the class consists of--it could even be multi-classed as in poor plus
poor-middle, which is currently the largest within the Outlaw US Empire."
Posted by: karlof1 | Aug 22 2019 18:15 utc | 5
And the ruling class answer to that? Is to fragment the proletariat into ideological
factions fighting on the basis of: races, religions, gun rights, education levels, cultures
along with a massive dose of medically induced addictions.
The fact that the Democratic Party has made these issues its platform may indicate that
"they" fear a coming awakening before they have managed to secure complete control. Here's
hoping:)
karlof1 @5 said: "Marx's biggest erroneous assumption dawned on me..."
I may be wrong, but I thing you might be confusing Marx's definition of "working
class" with the vulgar and unscientific contemporary definition.
"Working class" does not mean "simple and uneducated laborers with dirt under
their fingernails". For Marx, "working class" has a very specific and scientific
definition, which is the individuals in society who do not own the capital resources
necessary for them to be productive.
In common usage, "working class" is used to refer to people whose salaries are
below some certain level, or who work in manufacturing, or something equally arbitrary. In
the scientific sense, though, the better rough test if someone is a member of the "working
class" is whether or not their income comes from a paycheck with someone else's signature
at the bottom. Do you live off a paycheck? If so, it doesn't matter how big that paycheck is,
within Marxist analysis you are working class. If you do not see yourself as working class it
is because you lack class consciousness, not because you are not working class. A pilot
making $100k/year, assuming he does not own the airliner he is flying, is working class. A
doctor making $200k/year, assuming she does not own the hospital where she works, is working
class. If you make your living by selling your labor to someone who owns capital, then it
doesn't matter how valuable, highly trained, or esoteric your labor is, or whether it is
mental or manual labor, you are working class.
A few percent of Americans are big capitalists who live off their ownership of capital.
Roughly 10% of Americans are little capitalists who own the tools of their trade and are
self-employed. The rest of Americans are either working class, or unemployable sub-working
class.
I'd say using such scientific definitions that pretty close to 80% of Americans are
working class, and that this is fairly similar to the distribution in most developed
countries.
By the way, solidarity is a side effect of class consciousness.
Yes, Divide and Rule ought to be the motto on the USA's money for that's what it's done
over most of its history, particularly since the rise of modern political parties just prior
to the US Civil War. Indeed, being able to arrive at a high degree of solidarity almost
allowed the People's Populist Party to gain the presidency, but it made the strategic mistake
of diluting its solidarity when it fused with that age's D-Party. The primary factors of
division then--sectionalism and racism--were deliberately escalated to include all the facets
of what's now known as the Culture Wars. It would be quite the coup if the situation could be
reversed and the Current Oligarchy's solidarity could be shaken and destabilized to a similar
degree.
Thanks for your reply! The 80% figure came from Marx's writings, although which I'd be
hard pressed to cite at the moment. I agree with your comment on the semantics that drive the
categorization, which is why I linked to The Imperial Middle in my comment since its
class consciousness was directed at trying to become upper-middle then upper class rather
than combining common cause with the lower-middle and lower classes. Indeed, the concerted
effort to eliminate Class as a classifier has succeeded to a great degree within the Outlaw
US Empire such that class consciousness is more often discussed in academia than within the
wide variety of work spaces. An example, my partner and her son were both raised in the
rabidly anti-union South--Georgia specifically--but both now find themselves union members at
their jobs here in Oregon and have needed to be educated about the nature of unions and their
advantages, part of which is becoming cognizant of the class within which you reside. And
yes, it's been a struggle since they were so well indoctrinated by anti-union
propaganda--it's not enough to point to Georgia's adherence to the federal minimum wage while
Oregon is well above it and rising further as one of the main indicator's of unionization's
importance.
Anyway, when Occupy Wall Street began, I was impressed by their use of 1% versus the 99%
to try and promote solidarity and class consciousness. Sanders and others use the term but it
has yet to be absorbed by the mass body politic. How do we get that message through
the massive number of distractions deliberately emplaced to ensure that doesn't occur? How
can you hear the voice of the carnival barker over the noise of the rides?
I know that I am scared. If the American Empire collapses, there goes my pension just like
the Soviet Union. My family needs it to stay alive. Capitalists who avoided being involved
with Maria Butina or imprisoned in Metropolitan Correctional Center have enough sense to
realize a crazy** plutocrat President, Negative Interest Rates, and the continued grounding
of the unsafe 737 Max(s) are going to play hell with their portfolios. NY Times stated the
obvious, "C.E.O.s Should Fear a Recession. It Could Mean Revolution."
**Only a nutty insular Ugly American who never watched the Danish TV show "BORGEN" would
cancel the meeting their PM because she said selling Greenland to the USA is
"absurd".
This point is so huge, it's the mammoth in the small and ever-contracting room that
comprises what remains of Marxist thought. So sadly extinct, perhaps, and it reveals quite
how far the fake left have gone from the theoretical, and in my view practical, roots of
Marxism.
To me, historical materialism and the division of society based on an individual's
relationship to the ownership of the means of production was self-evident from my first weeks
of working in a warehouse in a summer job as a teenager. Of course, I didn't associate it
with such vocabulary at the time, as my exposure to the economic theory which explained what
I experienced lay ahead of me in the years to come.
What I would also come to understand, and would have to accept, is that most people didn't
see it like that.
The idea of a 1% ruling class is a metaphor, but it's a working model to envisage a small
tip of a pyramid ruling over the 99%. Such an imbalance shoud clearly be incapable of
maintaining its dominance, and it does so by drawing a sufficient volume of the rest into its
orbit, and sharing some power (or creating an illusion of doing so) to create a middle class
in alliance with the
ruling class over the proles. Many/most of the 'proles' wouldn't consider themselves as such,
as they are educated and working in an office that doesn't resemble a coal mine or production
line, despite having very little money left after, for example,substantial housing and
education costs. (What that ruling-middle-class alliance consists of is beyond the scope of
this post.)
Were there a genuine class-consciousness based, not on perhaps archaic notions of cultural
class (flat caps and strong regional accents for example), but on whether you depended on
your wage or whether you enjoyed substantial returns on capital ownership, then there might
be a genuine collective sense of political agency among the actual masses, where solidarity
and the threat of mass withdrawal of labour would make them a social force, or class, to be
reckoned with - were there to be a shared political direction.
I suspect that the jewel in the crown of the elite is identity politics. If the fake left
hadn't invented this disaster for genuine working-class (in the widest sense) solidarity,
then the capitalists would have had to invented it themselves. Maybe they did? Divide and
Rule. The oldest imperialist and ruling class trick in the book. Get women versus men,
religions v each other and them all against secularists, LBGTQ+ v 'normies' etc, and bingo!
No chance of a wider working-class unity, especially when the very notion of traditional
'working class' can be demonised as backward, xenophobic and brutal.
And of course it is the fake left that marches to the banner of identity politics, where
it seems the only groups excluded are the traditional working class - and if they were
included would it help? No - if they are just another self interest group fighting for their
place in a new, divisive pecking order of grievance and hopefully privilege, if they can get
to be recognised. So class consciousness in the framework of identity politics would lack the
universalism needed to pose a challenge to the elite. A new understanding of class would need
to shatter the barriers that the fake left have erected, and get ordinary, working people, on
a wage, to see what they have in common, and not what makes them different.
I'd finally add that this analysis, which although I consider Marxist, doesn't implicitly
endorse any specific model or road map of socialism, (if at all) as that's another question
really. Rather it is to illustrate how a potential opposition to the current ruling class
could unite to propose an agency for change, which when faced with the forever endless war of
the ruling class, should at least be a consideration.
reply to
"What gives me hope, though, is how frightened the elites are acting. In some respects they
have a better perspective on things... the higher your point of view the further you can see
and all of that."
Posted by: William Gruff | Aug 22 2019 20:48 utc | 3
Yes, they do appear to be frightened it is very visible in the way they have taken the
rants against Trump to a level that is manic.But their grip seems to have slipped.
A Rasmussen poll found that more than fifty percent do not believe the media when it comes to
Trump and see ongoing and consistent MSM bias.
In addition, the ruling elite appear to be planning yet another recession to knock everyone
down a few pegs as they seem to do every ten years or so. This time they seem to be rushing
into it, possibly trying to launch it before the elections.
What is also interesting is the reaction of people to Epstein's supposed demise. No one is
buying Barr's diagnosis of "suicide." Was it Zappa who said something about the drapes coming
down and you see the brick wall?
Is there hope of real change?
I have been reading up on 5G and given the control mechanisms already in place, if 5G has the
control capabilities it is purported to have, once they roll that baby out it is game over.
So is there hope? I suspect not.
Thanks for providing that Merkley newsletter. I probably have one too, but haven't opened
my email today. As you saw, I culled through lots of Hudson to provide some views. You and
others have asked what solutions does Hudson suggest. What follows is his most direct,
succinct formulation for What
Must Be Done :
" The only way to control banks and their allied rentier sectors is outright
socialization. The past century has shown that if society does not control the banks and
financial sector, they will control society . Their strategy is to block government money
creation so that economies will be forced to rely on banks and bondholders. Regulatory
authority to limit such financial aggression and the monopoly pricing and rent extraction it
supports has been crippled in the West by 'regulatory capture' by the rentier oligarchy.
Attempts to tax away rental income (the liberal alternative to taking real estate and
natural resources directly into the public domain) is prone to lobbying for loopholes and
evasion, most notoriously via offshore banking centers in tax-avoidance enclaves and the
"flags of convenience" sponsored by the global oil and mining companies. This leaves the
only way to save society from the financial power to convert rent into interest to be a
policy of nationalizing natural resources, fully taxing land rent (where land and minerals
are not taken directly into the public domain), and de-privatizing infrastructure and other
key sectors ." [My Emphasis]
So, your "one note samba" is 100% on the mark. But as I asked earlier regarding a related
issue, how do we implement the medicine? How do we overcome the forces of reaction
that have so many levers of control without physically eliminating them? Or, is that the only
open road? Somewhat relatedly,
Sanders has unveiled another major portion of his electoral campaign platform.
IMO, Trump can't be allowed another term, nor can any version of Trump-lite such as Biden.
It certainly appears as I anticipated that Sanders is adding every additional Progressive
policy proposal to his campaign's platform, which is resulting in the gathering of diverse
factions under his tent. The BIG question: Will Sanders stick to his proposals or prove to be
another Obama and sell out as it appeared to many in 2016? That's THE question I want to ask
to his face up close and personal. And I bet a few million more folks want to do the
same.
Marx was concerned with the struggle between the owners of productive assets and those who
utilized those assets to create valuable products.
Few realize that neoliberalism (which relies on the capture of government and media)
has allowed capitalist exploitation in ways that never dreamed of: strip-mining future
generations via debt-funded government deficits, fracking society with identity politics,
socializing corporate losses via bailouts and environmental destruction, and misallocation of
resources via militarism/NWO adventurism.
Capitalist-friendly propaganda claim that the will of the market = the will of the people.
As usual, they don't tell you the whole truth: the market is not 'complete' and therefore the
price of extraction seems much less than it is.
Once the true costs of neoliberalism become apparent, the revolution begins.
"... Being the economy less vivid than in the past, business cycles are no longer the same. I believe the saddest part of it is the increasing numbers of individuals that only marginally play a role in the economy ..."
"... The longer this trend persists the less stable will be the system. After these come the vast majority of people stuck in a more or less unstable position of which many fear the possibility of joining the marginal crowd. ..."
"... The Fed not only bailed out the Banksters but lowered interest rate down to a very low level. This grossly inflated real estate prices. Big corporations floated bond issues to use the proceeds to buy their own stock. Big money bought homes and apartments for rent revenue and inflated rents in all large cities. People with income less than $80 K cannot buy homes. ..."
"... I think the time has come for the Fed to raise not lower rates, to clear out the Zombie companies like the zero value hedge funds managers to wipe out Sears ahead of it's time and default on their workers retirements so they give themselves huge bonuses and dividends, leaving us taxpayers to stuck with the bill. If the price of that is a minor recession, it would be well worth IMO. ..."
"... People who don't have money don't spend money. Years of declining wages and spiraling costs of necessities (shelter, health insurance, college tuition) have created this increasingly precarious existence for most people overall. This isn't rocket science, or shouldn't be. ..."
"... Another person who worked at the store while going to the local college just graduated with a Business and Communications major and minor. A sharp person, he told me two weeks ago before he went home to Gulfport to live with his parents again, he will be taking his little brother's room since the little brother just joined the military, that all he has received in the way of job offers in six months of searching are "bulls–t job" offers, and one decent possibility over in Dallas. Even that job offer was on a recurring one year contract schedule. He would be a 'job shopper.' ..."
"... Fricking BS neoliberal greed masquerading as public policy. ..."
"... The bigger problem is the multi dimensional conflict with China. If its rate of acceleration is not brought down a lot, it will do some real damage to businesses who clean up by exploiting cheap and efficient Chinese industry while selling widgets into wealthy western markets. All such businesses, could get hurt, real bad (and their Chinese counterparts too). Will this happen? I think there will be warning shots. Huawei being the elephant in the room. ..."
"... Economists this time around seem to be oblivious to the "everything" bubble, be it the stock market, fracking, those darling tech companies worth billions having never made a profit, housing, student debt, debt generally They seem mostly oblivious to structural pathologies, like the unchecked growth of monopoly, gross income inequality, unchecked automation, unchecked AI, resource constraints, ecological blowback, systemic pollution, eternal privatized warprofiteering. ..."
"... I believe being oblivious is the main qualification for being a successful mainstream economist. ..."
"... As others have said, define good and define economy. We continue to stress "capital" doing well and ignore "labor". By that definition all is hunky dory until the pitchforks come out. ..."
"... I thought the quote from Business Insider that dole queues have been replaced by low paid part-time work was insightful. In a few words it explains why poor life conditions for many people are invisible. They are working somewhere not hanging around at street corners. It also explains how the situation may be just bearable for those with the low paid jobs since they do earn some income. It also explains why they don't turn their difficult conditions into political demands for a better life. They don't have the time as they are too busy and tired just surviving. ..."
"... The low interest rates are needed for bigger stock buybacks to prop up the overinflated housing and stock markets. Float those fantasies of fake wealth. It's alll that's left of their dystopian dream ..."
"... One thing has been proven beyond denial and that is that neoliberalism doesn't work. Infusions of money are still going to the rich, connected people mostly for frivolous justifications. Recession and ecological devastation plague the rest of us. ..."
not as if everything on the domestic front is rosy. CNBC reported on Thursday that Markit's
Purchasing Manager Index (PMI) was in a contraction for the first time since September 2009.
Admittedly, it was just barely in a contraction, at 49.9 when 50 is neutral.
More detail from the story :
New orders received by manufacturers dropped the most in 10 years, while the data also
showed export sales tanked to the lowest level since August 2009, the data shows .
Investors track PMI readings to get early indicators as to where the economy is headed.
After the Markit reading, stocks fell and the yield curve inverted.
"The most concerning aspect of the latest data is a slowdown in new business growth to its
weakest in a decade, driven by a sharp loss of momentum across the service sector," Moore
said. "Survey respondents commented on a headwind from subdued corporate spending as softer
growth expectations at home and internationally encouraged tighter budget setting."
Contrary to Daly's view, the contraction wasn't due just to softening exports but to slacker
domestic demand as well.
As we've pointed out for some time, this recovery has been weak by historical standards and
has also been significantly a two-tier affair, with higher income households getting more of
the benefit of growth, particularly because the profit share of GDP has nearly doubled since
2002, when Warren Buffett deemed it to be unsustainably high. And the touted low unemployment
rate also doesn't tell the full story.
"During early 2018, involuntary part-time work was running nearly a percentage point
higher than its level the last time the unemployment rate was 4.1%, in August 2000,"
according to Rob Valletta, a vice president in the Economic Research Department of the
Federal Reserve Bank of San Francisco. "This represents about 1.4 million additional
individuals who are stuck in part-time jobs. These numbers imply that the level of IPT work
is about 40% higher than would normally be expected at this point in the economic
expansion."
Mass unemployment -- the historic kind, with dole queues, unemployment benefits, and idle
workers on street corners -- has been replaced by low-paid, part-time, "gig economy" or
"zero-hours" contract work.
Finally, reader Scott has been lamenting for years that for the economic data he reviews (a
lot!) the indicators that are based on measurements of activity have consistently been weaker
than the ones that are significantly or entirely imputed.
So over to you, readers. What indicators do you use to measure the health of the parts of
the economy you see? And what do they say to you?
Fundamental problem. Global groupthink where all policymakers worked with the same false assumption. Global policymakers thought banks were financial intermediaries and didn't realise bank
credit impoverished the future. This is not how banks work.
We are in the impoverished future, past prosperity came from. Our knowledge of privately created money has been going backwards since 1856. Credit creation theory -> fractional reserve theory -> financial intermediation
theory. "A lost century in economics: Three theories of banking and the conclusive evidence"
Richard A. Werner http://www.sciencedirect.com/science/article/pii/S1057521915001477
The central banks have put us right 35 years too late. Ben Bernanke gives a good illustration of how you see the world when you think banks are
financial intermediaries. Ben Bernanke is famous for his study of the Great Depression and here it is discussed in
the Wall Street Journal.
"Theoretically, neither deflation nor inflation ought to affect long-run growth or
employment. After a while, people and businesses get used to changing prices. If prices fall,
eventually so will wages, and the impact on profits, employment and purchasing power will be
neutral. Borrowers suffer during deflation because their debts are fixed in value, but
creditors benefit because the dollars they get back will buy more. For the economy as a
whole, deflation ought to be a wash."
What has Ben Bernanke got wrong?
He thinks banks are financial intermediaries. The creditors are the banks and the repayments go into the banks destroying money. It
doesn't go to creditors who then get the money to spend.
Like Krugman. You have a detailed, complex model (e.g DGSE) built on seemingly logical
axioms, and then empiry shows one of your axioms are, in fact, not true. A normal person
would discard the model, but economists seem to insist that they are still "useful". Whatever
that means.
Define the "Economy" and what its currant social imperative is least we [royal] all are
just lint in the canister swirling around some Veblen social status multiplier [cleans floors
too] so insecurity is a distant dream to the afflicted – "I" need to be better than
others and receive the creators gifts so I know I did it right
Being the economy less vivid than in the past, business cycles are no longer the same. I
believe the saddest part of it is the increasing numbers of individuals that only marginally
play a role in the economy. This occurs in the US and in other advanced economies.
The longer
this trend persists the less stable will be the system. After these come the vast majority of
people stuck in a more or less unstable position of which many fear the possibility of
joining the marginal crowd. I personally feel this risk, as my business has gone to zero
during the last few months (Spain, not the US) even when the normative should be favoring my
business (energy efficiency & renewables).
Do Fed minutes ever say anything about participation rates or do they turn a blind eye to
one of the most remarkable economic developments of the XXI century? Do they live in the
past?
On my annual trek to western Maine, I take note of the number of houses that look
abandoned or on the verge of being so. There has been a notable uptick in the past 3 years.
Also dollar stores cropping up like weeds. Meanwhile the houses near my office in my fancy college town are selling briskly for 1.5
– 2 million and each new owner seems to embark on extensive renovations.
I think the economy is solid for a very select few.
The Fed not only bailed out the Banksters but lowered interest rate down to a very low
level. This grossly inflated real estate prices. Big corporations floated bond issues to use
the proceeds to buy their own stock. Big money bought homes and apartments for rent revenue
and inflated rents in all large cities. People with income less than $80 K cannot buy homes.
Students are saddled with huge loans that they cannot pay back. Seniors are unable to get a
regular income from savings accounts but have to turn to riskier investment.
Other than the above the economy is really doing well.
In Northeast Coastal Massachusetts, we're setting another YoY year record in real estate.
The wealthy have plenty of money and can pay cash for a $750K home. The market to the West of
Cape Ann, The Merrimack Valley, is just as hot for homes under $400K. The Volume is $200
million MORE in one inner city community than the affluent coastal town. So it's all relative
on your local economy.
I teach in a private school and rent an apartment near the the school, but live in an wealthy
gated community. Sounds cool doesn't it. I am not uncomfortable,as long as Social Security
and Medicare are intact, for someone in their 80s and still working.
But go outside the gate
and look at the ever growing needs of the local food pantry and at the increasing number of
children who have subsidized meals at the public school and the local small businesses that
are in trouble. The economy is 'just great' as long as one has a narrow focus.
I am seeing A LOT more fancy cars around here [Niagara Peninsula, Ontario], Maserattis,
Lotus, Range Rover, Tesla, etc.I think this [and other examples of frivolous spending] are way over the top, and could
indicate that the bubble is getting ready to burst.
Not being in fly over country, but in the Northeast, here's my thoughts. The folks I know in healthcare, seem to be doing fine, living the stereotypical American
Dream. And there is a lot of that in Massachusetts.
IMO, a decade or more of ultra low interest rates has changed things. Trade that benefits
from almost free borrowing, has benefited and expanded. Those trades tend to have access to
capital, like the financial industry and all that benefit from it. Not just higher stock
indices, but hedge funds that buy Sears for example, and borrow money against Sear's assets
to the hilt so they cam pay themselves a huge payment and then declare bankruptcy. For
basically doing nothing but adding harm to society.
There is no value in that, and it is make possible/easier with near 0% interest rates.
There used to be a poster at NC that was always giving stock index results, and advocating
lower Fed rates. I disagreed with his assumption that lowering rates would "stimulate" the
economy. We've had low rates for a very long time now, and the economy has performed well
below normal. So low rates are not "working" in the sense the economy is not good from a
historical view.
I think the time has come for the Fed to raise not lower rates, to clear out the Zombie
companies like the zero value hedge funds managers to wipe out Sears ahead of it's time and
default on their workers retirements so they give themselves huge bonuses and dividends,
leaving us taxpayers to stuck with the bill. If the price of that is a minor recession, it
would be well worth IMO.
People who don't have money don't spend money. Years of declining wages and spiraling
costs of necessities (shelter, health insurance, college tuition) have created this
increasingly precarious existence for most people overall. This isn't rocket science, or
shouldn't be.
The US economy is not fine.
The waste of fresh water, the diminishing sources for raw materials, the lack of housing for
a population that has doubled in my lifetime are facets of our economic existence unaccounted
for by any metric published.
Life in my rapidly gentrifying city is already too difficult to endure for the poor. Climate
change and environmental degradation will soon have the rest of us sharing in the misery.
I think much is just stuff that was ever thus and not new, there has always been a lot of
poverty in the U.S.. Now that poverty may be creeping more into the middle class more and so
becomes more noticeable, and homelessness has grown some places, but there was always much
poverty.
This economic system especially without even a measly safety net, will not ever eliminate
poverty and share the wealth. And of course it's going to destroy life on earth pretty soon
if it keeps going.
Local experience: people who have not had an easy time getting stable jobs or sometimes
work at all even recently are getting some now. But there are still perfectly decent people
that can't find work.
Here in the North American Deep South, "things" are sliding slowly down that slippery
slope.
The "Street Signs" I see about me are signaling a growth in the population of the truly
impoverished. People with their belongings carried about in backpacks are now a regular sight
on our streets. Panhandlers abound on the street corners. So much so that the local City
Council has just passed an ordinance practically outlawing the practice. One of the local
salvage store outlets, of which we have four in this town now, representing three
corporations, now has some regular parking lot and front door panhandlers. A store assistant
manager told me that it was "too much of a hassle" to run the panhandlers off, so the store
tolerates their presence.
One of these panhandlers has a shtick of opening the front door to
the store for customers with his hand out, as if he was a legitimate doorman. Five years ago,
such now common sights were unknown around here.
On the small business front, today is the last day for our friendly local small vitamin and
health food shop. She has given up after thirteen years. She has said that the internet
killed her business off. For the last two months she has been looking for work. With her
business background, she has had no "legitimate" offers of employment to date.
Another person who worked at the store while going to the local college just graduated with a
Business and Communications major and minor. A sharp person, he told me two weeks ago before
he went home to Gulfport to live with his parents again, he will be taking his little
brother's room since the little brother just joined the military, that all he has received in
the way of job offers in six months of searching are "bulls–t job" offers, and one
decent possibility over in Dallas. Even that job offer was on a recurring one year contract
schedule. He would be a 'job shopper.'
I generally look at the faces of the people I pass by in shops and on the street to judge the
tenor of the times. I have seen precious few smiling faces recently. Even the retail food
workers are now surly and brusque.
I actually walked out of a Popeyes chicken place last
month over the treatment I received. I am usually extremely laid back concerning service,
having done a lot of it over the years. Recently though, the service workers have become
actively hostile, in several places. This low wage economy is finally having some deleterious
effects on the society at large.
What in the World is a "business improvement district?" And why does any California cities
especially the large ones like L.A., San Diego, San Jose, or San Francisco? The smaller towns
especially out in the peripheral Red areas could certainly use some economic help, but really
housing is the single biggest problem state-wide with the possible exception of water, but
that's only in long drought.
If people had dependable affordable housing, business would pick up.
Fricking BS neoliberal greed masquerading as public policy.
As another commenter said above, "fine" is a relative term. But I suppose this is in reference to this week's news-media theme of discussing recession
fears. Thus the "fine" we are talking about means a combination of prices in stocks and real
estate, and annual performance of big firms.
By that definition, the fears are a possibility, but just that. I mean the stock market is
probably overvalued, but that isn't a crisis, and with the FED easing, what the heck they'll
be overvalued more.
The bigger problem is the multi dimensional conflict with China. If its rate of
acceleration is not brought down a lot, it will do some real damage to businesses who clean
up by exploiting cheap and efficient Chinese industry while selling widgets into wealthy
western markets. All such businesses, could get hurt, real bad (and their Chinese
counterparts too). Will this happen? I think there will be warning shots. Huawei being the
elephant in the room.
An even worse scenario for the rest of the world (but not the US) is if efforts to contain
China succeed, and growth of Chinese industry is halted. The non-US world will have to pay
significantly more for pretty much everything, and therefore economy will grow slower. Will
this happen? I don't think so.
As far as locally in this reader's neck of the woods? I live in a locally wealthy college
town, so kindof impossible to say from this vantage point, but I think things are actually
going well. The place I work, a tiny scientific-industrial equipment maker in a very
specialized niche, is looking at some of the bigger contracts we've had yet. My biggest fear
in terms of external events is that we have an absolutely vital component supplier who is
US-branded-made-in-China and a "dual-use" technology (we are the civilian use). That's a
risk. There are Japanese-branded-Chinese alternatives but the US-branded-Chinese one is more
advanced, I suspect due to patent protection, which should fortunately expire in a few years
(reckoning based on how long it's been on the market).
I am also in the Deep South, but just barely. Our area is booming if you judge from the
amount of construction taking place. However, there are loads more homeless people than there
used to be, in a county that is hostile to them. It's easy to wind up doing thirty days in
jail if you show up in the wrong place, at the wrong time, with no money. I employ a homeless
guy to do yard work. He has plenty of skills and works for others too, so money isn't a
problem, theoretically.
However, he has found there are few rooms available where the
homeowners do not have substance abuse problems. He's been through four since I've been
employing him–about nine months. He used to have a drinking problem, but no longer
does, as far as I can tell. Life sobered him up. He has pointed out to me how many homes are
unoccupied and falling down, and could be used to house people.
We have a similar problem with "abandoned/unsafe buildings." The local response to this is
to tear the buildings down. Salvable housing stock becomes empty lots, with the demolition
bill sent to the last owner of record.
Rentals for the really poor are difficult at best. Very few rooming houses here. Most house
rental contracts around here prohibit co-renters. The main exceptions are the college student
rentals, and many of them have premium rents, essentially, gouging the out of towners.
Criminalizing poverty is an old and much honoured tradition.
The entire country sorely needs more rooming houses -- impossible nowadays, even in
"liberal" towns, either because of land-construction prices or zoning or both.
Economists this time around seem to be oblivious to the "everything" bubble, be it the
stock market, fracking, those darling tech companies worth billions having never made a
profit, housing, student debt, debt generally They seem mostly oblivious to structural pathologies, like the unchecked growth of
monopoly, gross income inequality, unchecked automation, unchecked AI, resource constraints,
ecological blowback, systemic pollution, eternal privatized warprofiteering.
This economy seems to me an epic disaster in the making. But I am a lowly manual laborer,
so never mind me .
Another structural pathology I would add is the lack of low income housing for the working
poor: In Seattle, and I'm sure this problem is replicated in other medium sized and bigger
cities across the country, e.g., NYC, LA., A lot of SRO's and cheap apartments have been
destroyed or bought up by developers and turned into expensive luxury apartments for high
earning professionals. Much of the working poor ends up being stuck living in RV's and tents
in business districts and residential neighborhoods, and under bridges, as well as shelters
all over the city. The pathology extends to our citizens as well – many believe they
are nothing more than losers who didn't prepare themselves for better careers, takers, drug
addicts, alcoholics, and criminals. Much of that fed by 40 years of corporate elite and media
brainwashing: If you are poor in America, you deserve to die in the gutter; It's your
fault.
As others have said, define good and define economy. We continue to stress "capital" doing
well and ignore "labor". By that definition all is hunky dory until the pitchforks come
out.
In southern New Brunswick, Canada the number of homeless has become a problem that
municipal officials have not been able to ignore because of the attention that the public and
advocates have brought to it especially during the past winter. In one municipality, a
current news item suggests that the number of homeless has doubled during the past year.
Aside from homelessness, it is difficult to measure the local economy because people who
don't have money to spend are not visible.
I thought the quote from Business Insider that dole queues have been replaced by low paid
part-time work was insightful. In a few words it explains why poor life conditions for many
people are invisible. They are working somewhere not hanging around at street corners. It
also explains how the situation may be just bearable for those with the low paid jobs since
they do earn some income. It also explains why they don't turn their difficult conditions
into political demands for a better life. They don't have the time as they are too busy and
tired just surviving.
Food inflation hidden by reduced packaging size. Sugar, flour, coffee, ice cream all used
to be sold by the pound. No more. 1% interest on savings accounts. Fed reducing interest rates.
Pennsylvania checking in. The growing divide in economic well-being is not as obvious in certain neighborhoods.
While wealthy area of the state SEEM to be smiling, underneath is a growing debt to support
such "lifestyle". Meanwhile, a household-by-household survey may be able to turn up factual
evidence for this if only embarrassment could be avoided (snark, a little).
Poverty rates in formerly industrial areas are much higher, with depopulation occurring in
central PA and those industrial suburbs of Philadelphia and Pittsburgh as well as cities like
Erie, Harrisburg, Scranton, Wilkes-Barre, etc. (most of these small towns live by pension
money from retirees, as young move away). Cannot forget the central issue of a "commonwealth"
budgetary system that has not led to any such "commonwealth" since the dawn of the Industrial
Age. You see many trucks and service vehicles not owned or leased by major businesses, but
rather operated by individuals with craft ability working as day laborers and contracted
whenever they can beat out the competition, which is fierce. Trucks, of course, are loaded
with loan indebtedness, mouths at the nest are upturned and open
Banks are doing well -- of course, they loan and do business with pharmaceuticals, health
providers, and out-of-state big actors with plenty of collateral or connections.
Infrastructure erodes, public transportation is on its own and those few improvements where
progressives have any influence are not income-related, thus leaving most with belief that
Trump & cronies are fighting the fight against all this immiseration.
What a world. Pretty much as it is elsewhere, I reckon.
NY's Southern Tier along the PA Border is just as bad. Cities like Binghamton and Elmira
are falling apart at the seams, and every year is a little worse than the previous year.
There has been no "recovery".
a lot of fields around here didn't get planted because of the wet May/June. on the other hand, my trip to Middlefield (OH) revealed more than a dozen help wanted /
'now hiring' signs on a 2 mile stretch of RT 87 heading into town
Personally as a retiree I'm OK with the economy. Low inflation is great. Wish the stock
market was more stable, but with a slow down on it's way, not to mention an election, I can
deal with it.
Core inflation doesn't include food or energy to eliminate seasonal changes. Overall
inflation does include them. Often the press reports "inflation rate" without specifying. But
you are right, my house is paid off, so I don't care that much about housing prices for now,
it's mostly gas, food, utilities etc.
The Fed's been looking out for you by controlling inflation. Yeah, right! The key
components of inflation have been fiddled with to show little or no inflation.
The Fed thinks the economy is fine? No way they can really think the economy is fine when there is so much begging for more
low interest rates. The low interest rates are needed for bigger stock buybacks to prop up the overinflated
housing and stock markets.
Float those fantasies of fake wealth. It's alll that's left of their dystopian dream
The Fed is functioning from an 1800s-liberal playbook in a 2019 post-neoliberal world. One
thing has been proven beyond denial and that is that neoliberalism doesn't work. Infusions of
money are still going to the rich, connected people mostly for frivolous justifications.
Recession and ecological devastation plague the rest of us.
We have become complacent about
homelessness. Hard to imagine being so oblivious. How quickly we regress to a less informed
century without even a twitch of guilt on our part. When Putin blamed the world's dysfunction
on liberal politics he wasn't far off. My how times don't change. If there is one thing we
can look at and say, gee we really aren't a very good society after all, it is homelessness.
In every big city in America. And congress? It is almost completely incapable of governing.
We might as well be a feudal state again.
"... I actually walked out of a Popeyes chicken place last month over the treatment I received. I am usually extremely laid back concerning service, having done a lot of it over the years. Recently though, the service workers have become actively hostile, in several places. This low wage economy is finally having some deleterious effects on the society at large. ..."
"... Fricking BS neoliberal greed masquerading as public policy. ..."
"... The bigger problem is the multi dimensional conflict with China. If its rate of acceleration is not brought down a lot, it will do some real damage to businesses who clean up by exploiting cheap and efficient Chinese industry while selling widgets into wealthy western markets. All such businesses, could get hurt, real bad (and their Chinese counterparts too). Will this happen? I think there will be warning shots. Huawei being the elephant in the room. ..."
"... I thought the quote from Business Insider that dole queues have been replaced by low paid part-time work was insightful. In a few words it explains why poor life conditions for many people are invisible. They are working somewhere not hanging around at street corners. It also explains how the situation may be just bearable for those with the low paid jobs since they do earn some income. It also explains why they don't turn their difficult conditions into political demands for a better life. They don't have the time as they are too busy and tired just surviving. ..."
"... The low interest rates are needed for bigger stock buybacks to prop up the overinflated housing and stock markets. Float those fantasies of fake wealth. It's alll that's left of their dystopian dream ..."
"... One thing has been proven beyond denial and that is that neoliberalism doesn't work. Infusions of money are still going to the rich, connected people mostly for frivolous justifications. Recession and ecological devastation plague the rest of us. ..."
"... IMO the US economy is a house of cards. What is the US economy currently? In my view it is the FIRE (Finance, IT, Real Estate, and Energy) sector, Education, and Health Care. ..."
"... Many people are living large at the expense of education and healthcare and have a vested interest in maintaining the status quo. What happens when the bubble bursts?? Many small cities are going to be ghost towns. ..."
"... Anecdotally, where I live in central WA I know quite a few young people in their 30s and 20s who patch together various crummy jobs to make ends meet. None of them can afford a house and it's hard to see much of a future for them other than endless part-time, low paying jobs ..."
"... The county I live in has an official poverty rate of 14%, about 1 out of every 7 people, but I think the actual amount is higher. We have a lot of Mexican immigrant workers here who likely are not counted, and in any case the federal definition of poverty is not very realistic. Same applies to official inflation stats. I would say that things are mixed, but for many under 40 the future isn't bright. ..."
I think much is just stuff that was ever thus and not new, there has always been a lot of poverty in the U.S.. Now that poverty
may be creeping more into the middle class more and so becomes more noticeable, and homelessness has grown some places, but there
was always much poverty.
This economic system especially without even a measly safety net, will not ever eliminate poverty and share the wealth. And
of course it's going to destroy life on earth pretty soon if it keeps going.
Local experience: people who have not had an easy time getting stable jobs or sometimes work at all even recently are getting
some now. But there are still perfectly decent people that can't find work.
Here in the North American Deep South, "things" are sliding slowly down that slippery slope. The "Street Signs" I see about
me are signaling a growth in the population of the truly impoverished. People with their belongings carried about in backpacks
are now a regular sight on our streets. Panhandlers abound on the street corners. So much so that the local City Council has just
passed an ordinance practically outlawing the practice. One of the local salvage store outlets, of which we have four in this
town now, representing three corporations, now has some regular parking lot and front door panhandlers. A store assistant manager
told me that it was "too much of a hassle" to run the panhandlers off, so the store tolerates their presence.
One of these panhandlers has a shtick of opening the front door to the store for customers with his hand out, as if he was
a legitimate doorman. Five years ago, such now common sights were unknown around here.
On the small business front, today is the last day for our friendly local small vitamin and health food shop. She has given
up after thirteen years. She has said that the internet killed her business off. For the last two months she has been looking
for work. With her business background, she has had no "legitimate" offers of employment to date.
Another person who worked at the store while going to the local college just graduated with a Business and Communications major
and minor. A sharp person, he told me two weeks ago before he went home to Gulfport to live with his parents again, he will be
taking his little brother's room since the little brother just joined the military, that all he has received in the way of job
offers in six months of searching are "bulls -- t job" offers, and one decent possibility over in Dallas. Even that job offer
was on a recurring one year contract schedule. He would be a 'job shopper.'
I generally look at the faces of the people I pass by in shops and on the street to judge the tenor of the times. I have seen
precious few smiling faces recently. Even the retail food workers are now surly and brusque.
I actually walked out of a Popeyes chicken place last month over the treatment I received. I am usually extremely laid
back concerning service, having done a lot of it over the years. Recently though, the service workers have become actively hostile,
in several places. This low wage economy is finally having some deleterious effects on the society at large.
What in the World is a "business improvement district?" And why does any California cities especially the large ones like L.A.,
San Diego, San Jose, or San Francisco? The smaller towns especially out in the peripheral Red areas could certainly use some economic
help, but really housing is the single biggest problem state-wide with the possible exception of water, but that's only in long
drought.
If people had dependable affordable housing, business would pick up.
Fricking BS neoliberal greed masquerading as public policy.
As another commenter said above, "fine" is a relative term. But I suppose this is in reference to this week's news-media theme
of discussing recession fears. Thus the "fine" we are talking about means a combination of prices in stocks and real estate, and
annual performance of big firms.
By that definition, the fears are a possibility, but just that. I mean the stock market is probably overvalued, but that isn't
a crisis, and with the FED easing, what the heck they'll be overvalued more.
The bigger problem is the multi dimensional conflict with China. If its rate of acceleration is not brought down a lot,
it will do some real damage to businesses who clean up by exploiting cheap and efficient Chinese industry while selling widgets
into wealthy western markets. All such businesses, could get hurt, real bad (and their Chinese counterparts too). Will this happen?
I think there will be warning shots. Huawei being the elephant in the room.
An even worse scenario for the rest of the world (but not the US) is if efforts to contain China succeed, and growth of Chinese
industry is halted. The non-US world will have to pay significantly more for pretty much everything, and therefore economy will
grow slower. Will this happen? I don't think so.
As far as locally in this reader's neck of the woods? I live in a locally wealthy college town, so kindof impossible to say
from this vantage point, but I think things are actually going well. The place I work, a tiny scientific-industrial equipment
maker in a very specialized niche, is looking at some of the bigger contracts we've had yet. My biggest fear in terms of external
events is that we have an absolutely vital component supplier who is US-branded-made-in-China and a "dual-use" technology (we
are the civilian use). That's a risk. There are Japanese-branded-Chinese alternatives but the US-branded-Chinese one is more advanced,
I suspect due to patent protection, which should fortunately expire in a few years (reckoning based on how long it's been on the
market).
Well duh. Your college has been suctioning money out of the pockets of kids for the last couple decades or so at a rate that
is multiples of the general growth rate. Which means most (probably all) of the wealth you see around you is a shift from elsewhere,
not a creation of such.
At best it is maybe repatriating some of the money going to Asia.
I am also in the Deep South, but just barely. Our area is booming if you judge from the amount of construction taking place.
However, there are loads more homeless people than there used to be, in a county that is hostile to them. It's easy to wind up
doing thirty days in jail if you show up in the wrong place, at the wrong time, with no money. I employ a homeless guy to do yard
work. He has plenty of skills and works for others too, so money isn't a problem, theoretically. However, he has found there are
few rooms available where the homeowners do not have substance abuse problems. He's been through four since I've been employing
him -- about nine months. He used to have a drinking problem, but no longer does, as far as I can tell. Life sobered him up. He
has pointed out to me how many homes are unoccupied and falling down, and could be used to house people.
We have a similar problem with "abandoned/unsafe buildings." The local response to this is to tear the buildings down. Salvable
housing stock becomes empty lots, with the demolition bill sent to the last owner of record.
Rentals for the really poor are difficult at best. Very few rooming houses here. Most house rental contracts around here prohibit
co-renters. The main exceptions are the college student rentals, and many of them have premium rents, essentially, gouging the
out of towners.
Criminalizing poverty is an old and much honoured tradition.
The entire country sorely needs more rooming houses -- impossible nowadays, even in "liberal" towns, either because of land-construction
prices or zoning or both.
Economists this time around seem to be oblivious to the "everything" bubble, be it the stock market, fracking, those darling
tech companies worth billions having never made a profit, housing, student debt, debt generally
They seem mostly oblivious to structural pathologies, like the unchecked growth of monopoly, gross income inequality, unchecked
automation, unchecked AI, resource constraints, ecological blowback, systemic pollution, eternal privatized warprofiteering.
This economy seems to me an epic disaster in the making. But I am a lowly manual laborer, so never mind me .
Another structural pathology I would add is the lack of low income housing for the working poor: In Seattle, and I'm sure this
problem is replicated in other medium sized and bigger cities across the country, e.g., NYC, LA., A lot of SRO's and cheap apartments
have been destroyed or bought up by developers and turned into expensive luxury apartments for high earning professionals. Much
of the working poor ends up being stuck living in RV's and tents in business districts and residential neighborhoods, and under
bridges, as well as shelters all over the city. The pathology extends to our citizens as well -- many believe they are nothing
more than losers who didn't prepare themselves for better careers, takers, drug addicts, alcoholics, and criminals. Much of that
fed by 40 years of corporate elite and media brainwashing: If you are poor in America, you deserve to die in the gutter; It's
your fault.
As others have said, define good and define economy. We continue to stress "capital" doing well and ignore "labor". By that
definition all is hunky dory until the pitchforks come out.
In southern New Brunswick, Canada the number of homeless has become a problem that municipal officials have not been able to
ignore because of the attention that the public and advocates have brought to it especially during the past winter. In one municipality,
a current news item suggests that the number of homeless has doubled during the past year. Aside from homelessness, it is difficult
to measure the local economy because people who don't have money to spend are not visible.
I thought the quote from Business Insider that dole queues have been replaced by low paid part-time work was insightful.
In a few words it explains why poor life conditions for many people are invisible. They are working somewhere not hanging around
at street corners. It also explains how the situation may be just bearable for those with the low paid jobs since they do earn
some income. It also explains why they don't turn their difficult conditions into political demands for a better life. They don't
have the time as they are too busy and tired just surviving.
Food inflation hidden by reduced packaging size. Sugar, flour, coffee, ice cream all used to be sold by the pound. No more.
1% interest on savings accounts. Fed reducing interest rates.
Pennsylvania checking in. The growing divide in economic well-being is not as obvious in certain neighborhoods. While wealthy
area of the state SEEM to be smiling, underneath is a growing debt to support such "lifestyle". Meanwhile, a household-by-household
survey may be able to turn up factual evidence for this if only embarrassment could be avoided (snark, a little).
Poverty rates in formerly industrial areas are much higher, with depopulation occurring in central PA and those industrial
suburbs of Philadelphia and Pittsburgh as well as cities like Erie, Harrisburg, Scranton, Wilkes-Barre, etc. (most of these small
towns live by pension money from retirees, as young move away). Cannot forget the central issue of a "commonwealth" budgetary
system that has not led to any such "commonwealth" since the dawn of the Industrial Age. You see many trucks and service vehicles
not owned or leased by major businesses, but rather operated by individuals with craft ability working as day laborers and contracted
whenever they can beat out the competition, which is fierce. Trucks, of course, are loaded with loan indebtedness, mouths at the
nest are upturned and open
Banks are doing well -- of course, they loan and do business with pharmaceuticals, health providers, and out-of-state big actors
with plenty of collateral or connections. Infrastructure erodes, public transportation is on its own and those few improvements
where progressives have any influence are not income-related, thus leaving most with belief that Trump & cronies are fighting
the fight against all this immiseration.
What a world. Pretty much as it is elsewhere, I reckon.
NY's Southern Tier along the PA Border is just as bad. Cities like Binghamton and Elmira are falling apart at the seams, and
every year is a little worse than the previous year. There has been no "recovery".
a lot of fields around here didn't get planted because of the wet May/June. on the other hand, my trip to Middlefield (OH)
revealed more than a dozen help wanted / 'now hiring' signs on a 2 mile stretch of RT 87 heading into town
Here in Western New York, in beautiful Chautauqua County, stretching from the shores of Lake Erie to the Pennsylvania border,
the statistics are woeful. Population is declining, both median age and median income are in the low 40's, and almost 20% of the
population is under the poverty level. Unsurprisingly, the county ranks 59 (out of 62) in total 'health outcomes.' We have a lot
of obesity, metabolic diseases, drug addiction and 'early deaths.'
At a meeting we attended this week, planning for an annual summer festival, the big 'problem' was diagnosed as the aging volunteer
base. We have to hire people to do the heavy lifting of setting up, dismantling, etc., whereas 20 years ago the volunteers were
young and hale enough to do it all. That, and only old people tend to come out for the festival.
However, the countryside is beautiful, at least in spring, summer and fall, with rolling hills, hundreds of acres of abandoned
farmland that is 'reforesting,' and no traffic problems. No traffic, actually. You have to watch for deer and Amish buggies.
In the last few years, people have started 'fixing up' their houses. This spring I noticed a rash of new, big garages and outbuildings,
for storing 'toys' such as ATV's, second and third trucks, monstrous riding lawn mowers. Others are adding on porches; front porches
facing the street have become newly fashionable. Compared to 10 years ago, houses for sale seem to be selling. Or at least, the
"For Sale" signs are coming down. Some wooded house lots, of several acres each, sold. They had been for sale for at least 5 years.
Downtown in the county's biggest city, Jamestown, the old brick buildings are still crumbling and boarded up. SRO's, better
than tents, for sure, have filled the old hotels, and house people who would be homeless in Seattle. News releases touting the
amazing success of the new National Comedy Center (heavily subsidized by State and local funds) are constant. There are more people
about on Friday and Saturday evenings in downtown. And a new brewery just opened up.
Shopping at the area's three chain food markets, Wegman's, Aldi's and Top's, one notices the sharp class divide. Summer people
from the Chautauqua Institute or those who have second homes on the lakes, hang out at Wegman's olive bar and extensive cheese
counters. (But because this is a county with really really poor health outcomes, Wegman's bulk food section is almost all candy.)
The Amish frequent Aldi's and the locals who are either carless or don't drive far, go to Top's.
We have water lots of water. We have natural gas wells, everywhere. Neighbors still get free gas, under decades old agreements
with the producers. We have clean air (well, except when the gas pipelines spring a leak.) We have lots of land and timber (second
or third growth.) We have old people who have inherited their grandfather's old diary farm, 100, 200, 300 acres, and are still
sitting on the land. Our 95 year old neighbor, for instance. He still mows all the pastures regularly. Shhhh!
Personally as a retiree I'm OK with the economy. Low inflation is great. Wish the stock market was more stable, but with a
slow down on it's way, not to mention an election, I can deal with it.
Core inflation doesn't include food or energy to eliminate seasonal changes. Overall inflation does include them. Often the
press reports "inflation rate" without specifying. But you are right, my house is paid off, so I don't care that much about housing
prices for now, it's mostly gas, food, utilities etc.
The Fed's been looking out for you by controlling inflation. Yeah, right! The key components of inflation have been fiddled
with to show little or no inflation.
The Fed thinks the economy is fine? No way they can really think the economy is fine when there is so much begging for more
low interest rates. The low interest rates are needed for bigger stock buybacks to prop up the overinflated housing and stock
markets. Float those fantasies of fake wealth. It's alll that's left of their dystopian dream
The Fed is functioning from an 1800s-liberal playbook in a 2019 post-neoliberal world. One thing has been proven beyond
denial and that is that neoliberalism doesn't work. Infusions of money are still going to the rich, connected people mostly for
frivolous justifications. Recession and ecological devastation plague the rest of us.
We have become complacent about homelessness. Hard to imagine being so oblivious. How quickly we regress to a less informed
century without even a twitch of guilt on our part. When Putin blamed the world's dysfunction on liberal politics he wasn't far
off. My how times don't change. If there is one thing we can look at and say, gee we really aren't a very good society after all,
it is homelessness. In every big city in America. And congress? It is almost completely incapable of governing. We might as well
be a feudal state again.
Glancing at Powell comments today, it appears he and the Fed spend more time thinking and talking about the economic problems
in China and Germany than he does here in America. That may explain a lot.
Have been helping an in-law over the last 6 months find a house to move up here and got an interesting peek into the real estate
market. Researched 80-100 different houses (3-4 BRs within 20 miles of Portland) and went to probably 30 open houses and personal
showings.
General takeaways:
-- The market has been weirdly hot, with three separate all-cash offers at full list price rejected for other offers that were
over ask.
-- People have noticed and a lot of houses have come on the market with elevated list prices as people try to cash in
-- Our own home's Zestimate on Zillow (no promise on how accurate this measure is) has increased almost 20% over the last year.
-- Tons of new houses built in last 2 years, typically of lower quality and on poor lots with houses close to each other and all
trees removed
-- Quality of non-luxury or non-custom houses built from 1980's to now is generally poor; good example of crapification. Houses
built in large numbers in sub-divisions in particular seem to have bad trim and obviously deteriorating siding/roofs/general conditions.
-- While the in-law isn't interested in a project, generally feel that solid older homes which can be relatively easily renovated
would be the better long-term play.
-- Portland's real estate market, after the litany of "best City" and "Best restaurants" awards over the last few years and the
advent of AirBnB, is out of the reach of most people. This has driven up the demand and prices in outlying towns as people look
for housing close to the job center
Personally feel that the focus on dropping interest rates/protecting real estate values post the GFC has really hurt the country.
Above and beyond favoring home-owners over younger people, the rising home prices increase property taxes that have to be paid
and are hard to realize given selling your house requires buying a diff overpriced house. This is just leading to more and more
debt being taken on to simply have a decent house.
One of the reliable signs that you're approaching the West Coast is the increasing number of homeless. They really start to
appear around Spokane, and by the time you reach the Liberal strip along the Seattle-Portland-San Francisco line the tents are
everywhere. And it's been this way for more than a decade. The real economy never recovered to begin with. Hard to be afraid of
a new recession when you never left the old one.
IMO the US economy is a house of cards. What is the US economy currently? In my view it is the FIRE (Finance, IT, Real
Estate, and Energy) sector, Education, and Health Care.
My memory is failing me as to how Yves and Lambert described the Finance sector's contribution to the overall economy but to
me it is not really "productive" and mostly casino capitalism.
The medium to large cities are living off of the FIRE sectors. If you travel to small cities and towns it seems that Rural
America is surviving on Education(Universities) and Healthcare. Let's tease that out a bit:
Full disclosure: For the accuracy/facts police, I am trying to paint a picture in broad strokes here of how I see the US economy.
Education (i.e. universities) and their employees are living off of the government (Pell Grants etc.), student loans, and the
wealthy. Let's pretend the government ends any educational assistance for college students and that student loans are no longer
available. What happens to the University Industrial Complex? It seems that many universities would close or as they are doing
now start marketing to foreign students.
Healthcare seems heavily subsidized by the government i.e. Medicaid, Medicare, and ObamaCare and the wealthy. Yes many people
have health insurance through their employer. And the US population is getting older and needing more healthcare. But when I look
around what I see is an over expansion and oversupply of healthcare facilities. And hospitals do not look like hospitals anymore.
They look like massive hotels. It seems the healthcare industrial complex and the university industrial complex are both bubbles
that at some point will burst.
What will happen to the healthcare industry when Single Payer/Medicare for All is started and there is significant cost controls??
I think the gravy train is going to end for many health systems.
And what about college tuition? Sanders is talking about free college. I hope by that he means that the government will not
be an open checkbook for universities and there will be cost controls as well?
Lambert has talked about the US needing an industrial policy. In my view it can't happen soon enough because relying on education,
health care, and finance to sustain an economy is asking for trouble.
Lastly the grift of the healthcare sector and education sector seem related to the Predatory Precarity excerpt from Water Cooler
a couple of days ago.
Many people are living large at the expense of education and healthcare and have a vested interest in maintaining the status
quo. What happens when the bubble bursts?? Many small cities are going to be ghost towns.
The US economy is like a human body with no bones or decaying bones.
The biggest city in our state (Seattle), is booming, so property values within a 75-100 mile radius have been increasing steadily
for years. However Seattle also has thousands of homeless people, and things are definitely not booming for them.
Anecdotally, where I live in central WA I know quite a few young people in their 30s and 20s who patch together various
crummy jobs to make ends meet. None of them can afford a house and it's hard to see much of a future for them other than endless
part-time, low paying jobs . I know some others that are doing OK but most are just getting buy and I doubt they can amass
any savings. The country kids around here with little education work agricultural jobs and deal drugs. A new thing around these
parts is heroin, which 15 years ago was unheard of. The biggest employers in the area are local government and the university,
and the student population helps some local businesses thrive.
The county I live in has an official poverty rate of 14%, about 1 out of every 7 people, but I think the actual amount
is higher. We have a lot of Mexican immigrant workers here who likely are not counted, and in any case the federal definition
of poverty is not very realistic. Same applies to official inflation stats. I would say that things are mixed, but for many under
40 the future isn't bright.
The view from a self-employed craftsman in the Bay Area: Local real estate is not dropping but there is a slight smell of realization
that this might be the top o' the bubble so sellers are sweating to get on the market. Less readily agreeable to spending money
on custom work..say 3 months delaying/hemming and hawing vs. "yes, let's do it."
My girl (who works in dental) her office has lost 3 people in the last year and are struggling to replaced them. The 3 Drs
make $400,000 + each and just gave remaining staff a $1/hour raise to $24/per hour in an attempt to keep them. Full bennies and
401k contributions keep her there.
Future sis-in-law: works at a wholesale nursery up in Santa Rosa. Last couple of years they were working 6 days a week to keep
up. This year? No longer working Saturdays and now Fridays have been cut. That's a 30% reduction in hours she's now on the brink.
So, how's the economy? Depends who you are.
"Government set to inject more than $1 Trillion into US economy this year, but poorly
targeted and still isn't enough to improve the lives of most people".
Spot-on . Whenever I read this nonsense in the NYT or elsewhere I always ask myself the
same question ' Is this deliberate or are they really ignorant ? ' . I suspect the latter,
but I could be wrong.
Excuse me, how can the deficit be increasing [with Trump tax cuts]?
I was told that a simple bell curve graph called the 'Laffer Curve' indicates that cutting
taxes increases growth which increases revenue. Its simply mathematics.
Well, Lawrence H. Summers is right to worry when he says "Can central banking as we know
it be the primary tool of macroeconomic stabilization in the industrial world over the next
decade?"
I remember when Qaddafi was murdered and Libya fell. Within the first day or two a central
bank was set up in Libya. And look how well that is working out for them.
"It sure is weird that the labor market is the only place where the magic of the
marketplace -- price! -- doesn't work."
I also hear weirdness about price considerations when I read investment advice for workers
and their 401ks.
"Don't worry about the price. Invest now as much as you can. You can't predict the market
"
(Looks down at Twitter feed).
Haha so right and we mistakenly claim that economists don't know how the real economy
works. They know, and part of that knowledge is that you need to shill the BS for those with
the money if you wanna get your own piece of said pie.
Bizarre reasons for resignation of Patrick Byrne as CEO of Overstock, an internet retailing
company as per zerohedge today. I can't really understand what he is on about re the Clintons
and Russia, and he was closely connected to to Maria Butina.
What is interesting about Byrne is how he reacted to a vicious attack on his company by
naked short sellers a few years ago. Naked short selling is mass selling of shares that you
do not own. It is officially known as Failure to Deliver and has been in use for decades. It
is illegal but people get away with it and the SEC rarely prosecutes. Byrne was so infuriated
he set up a website called Deep Capture where, joined by some good investigative journalists,
he started exposing the naked short selling scam that came to a head when Lehman CEO Fuld
told Congress that naked short selling played a major role in undermining his company and
setting off the 2008 crisis. It coincided with research I was doing into the naked short
selling of a Spanish company with a subsidiary in the US and Deep Capture helped point in the
direction of probable culprits.
Byrne's stuff went on to became rather hysterical and overly conspiratorial. Pity
that.
Well duh. Your college has been suctioning money out of the pockets of kids for the
last couple decades or so at a rate that is multiples of the general growth rate. Which means
most (probably all) of the wealth you see around you is a shift from elsewhere, not a
creation of such.
At best it is maybe repatriating some of the money going to Asia.
Neoliberalism and Education
(To borrow a term often seen here at NC term – more evidence of "crapification")
In the new issue of the American Affairs Journal, the following article may be of interest
to those who tune into scholastic matters. Two quotes are posted here in case the paywall
obstructs.
1. "But the technology pushed into schools today is a threat to child development and an
unredeemable waste. In the first place, technology exacerbates the greatest problem of all in
schools: confusion about their purpose. Education is the cultivation of a person, not the
manufacture of a worker. But in many public school districts we have already traded our
collective birthright, the promise of human flourishing, for a mess of utilitarian pottage
called 'job skills.' The more recent, panicked, money-lobbing fetish for STEM is a late
realization that even those dim promises will go unmet [E]ducational technology is a
regressive political weapon, never just a neutral tool: it increases economic inequality,
decreases school accountability, takes control away from teachers, and makes poorer students
more vulnerable to threats from automation and globalization."
2. "Dumping gadgets on children is a win-win proposition in poor school districts. It's a
win for tech billionaires looking to buy progressive indulgences (e.g., Mark Zuckerberg
in Newark), and it's a win for local mayors wanting to gesture toward needy schools
without changing the underlying economic reality (e.g., Cory Booker in Newark, Pete
Buttigieg in South Bend) The meanest trick of all is when funds allocated to bring struggling
students "into the future" are used instead to banish them into the realm of for-profit
programs called "online charter schools," which consist mostly of children watching lecture
videos all day instead of being taught by a teacher. Online charter schools are a worsening
catastrophe. Compared to the performance of peers in traditional public schools with similar
income, race, gender, and first-language characteristics, the impact of online charter
attendance on student reading is so bad, it's like missing 72 days of school each year.
In math, being afflicted by an online charter school is like being absent for 180 days!"
This is a clear lack of up mobility. In other words American Dream is now a fake for all but
extremely talented or extremely lucky. .
Class Warfare
"6 findings that show the dire state of America's middle class" [
Business Insider ] (From May, still germane). "Nearly 60% of those who said they grew up
affluent now consider themselves to be in a lower class -- about half of this group said
they're middle-class or upper-middle-class, while the other half said they're poor or
working-class. Nearly 60% of those who said they had an upper-middle-class upbringing
identified with a lower class -- half of this group said they're middle-class, while the
remaining half said they're poor or working-class. And while half of those who said they grew
up in the middle class said they're still in it today, more than one-third identified with a
lower class. Only about 12% said they're now part of a higher class." • Lover
"A reason to go long on NG? US consumption rate is mind-boggling. NG is now banned for new
construction in some regions."
Should get interesting when NG prices start rising considering that Power companies have
been shutting down lots of coal and nuclear plants & replacing then with NG plants. It
would not surprise me to see power prices soaring to 35 to 50 cents per kwh in the US. I
would imagine lots of people that use NG or Propane for heating also find it difficult to
heat their homes in the winter.
My advice is to relocate someplace with moderate weather: Not too cold (heating) or not
too hot (air conditioning) as energy prices rise. Either build new or retrofit your home to
be extremely energy efficient. My guess is that probably 50% of US home are not going to be
livable without affordable heating & cooling. During the bubble years lots of poor
quality homes need cheap energy. Not sure if many of them could be retrofitted because of
poor layouts & construction.
Also a good idea not to relocate near any major urban regions. I would imagine high
unemployment, uncomfortable living conditions is going to make a lot of unhappy &
desperate campers: ie lots of violence, riots, general despair.
Unless you have 25,000 gal Buried Propane tank to last you a Lifetime, I'd consider lightly
populated areas of the Ozarks, IMO Need to be above 1500 feet elevation and have ancient
water. I've been buying remote land with and without grid access for decades. If anyone wants
to share strategies email me at my handle at gmail. Texas Energy much too Fragile and
Centralized. Solar 2.0 will allow abundant battery-optional energy. You can light a mansion
with a handful of 18650's, so you really don't need much in that way of eChem Storage. Note
that Li Batteries are on the Sept 1st Tariff List. So if you been thinking of a BattleBorn
LFP (Lithium Phosphate) Battery for your RV or UPS, now may be the best time for a while.
"It would not surprise me to see power prices soaring to 35 to 50 cents per kwh in the
US."
Over what sort of time frame? Maybe for short periods in the short term but, prices like
that would result in massive surges of capacity growth for wind and solar. LCOE for solar and
wind are now under 2c per kWh in some locations and I suspect at some point in the next
decade they will both have an LCOE of under a cent per kWh. 35 to 50 cents? Please!
IslandBoy Wrote:
"Maybe for short periods in the short term but, prices like that would result in massive
surges of capacity growth for wind and solar."
I doubt it. Electric prices in Germany are about 35 to 40 cents per kwh, and they have a
lot of solar & wind which is backed by cheap Polish Coal fired power plants. Issue with
both Solar & wind is intermittent generation. Every watt produced by solar & wind in
the US is backed by NG fired plants. There is no massive storage system to back Solar &
wind production. The only reason why Solar & Wind works is due to the very low cost of NG
prices & the fast ramp up/ramp down of NG fired turbines which can change output in just
a minute or two.
US power companies are borrowing billions to replace old coal fired & nuclear plants
with new NG plants. That debt isn't going disappear even if NG prices go through the roof.
The US also has an grid that is showing its age likely needing $300B to $500B in investment
for updates and to replace worn out equipment and distribution lines over the next 25 years.
We also have to pay a huge cost in decommission shutdown Nuclear power plants (currently
shutting down between 2 & 4 Nuke plants per year).
The USA is dead broke with $23T in national debt, and about $70T in unfunded pensions
& entitlements. Currently the only way the US economy can function is with ultra low
interest rates so it can continue to borrow trillions to keep its doors open. Sooner or later
the USA is going to run out road to kick the can, and my guess is that all comes apart in the
2020s.
The US lacks a skilled workforce for the electrical grid as there are few young workers in
the industry. Most of the US power companies are in panic mode because their boomer workers
are retiring & they cannot find replacements:
Plus NG is the #1 resource in the US for home heating and Domestic hot water. So even if
somehow NG is completely eliminated (very improbable) from power generation it does nothing
to solve heating needs.
I can only respond by saying I think Watcher is on to something with regards to money. US
Politicians are unlikely to let a lack of money get between their voters and the voters'
energy needs. If money is what is needed, it will be borrowed or "quantitatively eased" or
whatever (created out of thin air!). That applies to tight oil now and will probably apply to
renewables any time they are seen as a viable substitute for FF. I follow developments in the
solar PV, EV and battery space very closely. You might be surprised at some of the stuff that
is coming down the pike!
The only production preventing Oil from peaking as far back as 2013-2014 was US Shale,
which can only function by borrowing Billions from gullible investors that will never be paid
back. If investors were not so gullible, US production would have peaked years ago. Global
Peak Oil is controlled by cheap & easy credit. Take away the credit punch bowl and US
Shale production collapses, and global production peaks. PO is no longer dependent of
geology, but credit.
FWIW: I suspect Shale drillers are going to have a hard time finding more investors
willing to part with their capital, especially when Oil prices are very low. That said its
possible that the Federal gov't (via Fed) will step in and start buying billions of shale
debt (via QE or some other financial bailout mechanism) so Shale drilling can continue on. It
appears that the US is running into liquidity problems again as Bond markets are showing
signs that they are freezing up again.
Banks and investors took away the punch bowl, and second quarter losses reflect that. Third
is going to be the same, and too late for any price increases to reflect anything but losses
for this year. No positives going into 2020. Their best option is to find adoption. And being
a bunch of spoiled brats, that's going to be somewhat difficult.
I agree that shale has been the biggest contributor to increase in global oil supply.
However it has also distorted the entire industry.
If the shale companies had to make a profit each year, global supply would have been a
less and prices much higher.
This in turn would have supported e&p investment around the world. The fall in
investment has been due entirely to shale companies that have been allowed to run at a loss
for so many years.
I don't think we would see a massive rebound in E&P if US shale was eliminated. Shell,
Exxon, BP and other started pulling back on Megaprojects back in 2012-2013, since it was
doubtful that it would be economical. Basically megaprojects (deepwater & arctic)
required $120 to $150 (in 2013 dollars) per bbl to be economically. I don't believe those
prices would be sustainable as it would result in demand destruction as consumers would cut
back on consumption. The fact that Oil majors were looking at Arctic and deepwater back in
2010-2013 indicates they are reaching the bottom of the barrel for production. There was a
long term trend of declining exploration finds even when exploration budgets increased.
At this point any major rebound isn't going to make a difference, if a Oil major started
on a new megaproject it would be between 5 and 7 years before new oil reaches the market, and
very unlikely to offset declines from existing production (5% to 7% annual declines). We are
already behind the curve on gains from any new projects to offset ongoing declines with out
shale growth). Perhaps a some of the declines in existing fields could be offset some with
higher oil prices. Still reaching to scrap the bottom by trying to extract trapped oil in
fields in terminal decline. With all of the supergiants in terminal decline (with the
exception of Kazakhstan), its going to be very difficult to expand production further.
Personally I am guessing that global production has already peaked or within the next 18
months if we are lucky). Its difficult to pinpoint an exact period since their are way to
many variables to gage effectively. That said I cannot say my record for guessing peak
production is any better than winning a lottery, but as the window narrows due to depletion
and a shrinking supply of future projects the guessing gets a lot easier.
Shale had already taken off by then and predictions of possible productions were being
made and importantly have come true.
The majors would have realised there would be too much oil in the short to medium term, so
they sensibly postponed more expensive drilling.
How this mess with heavy indebted shale companies and years of under investment plays out
I am not sure.
Probably a lower and sooner peak oil than would otherwise have been.
Not sure anyone has said US has peaked, the point is that US tight oil growth will slow
and it is not apparent that any other nations are increasing output in 2019, so far the drop
by OPEC/NOPEC has been greater than any US increase in 2019 and it is looking like 2019
output will be lower than 2018 if current trends continue. When we get to the point that oil
prices rise to $80/b, I expect OPEC/NOPEC will increase output, but we do not know when that
will be and it is certainly possible that US output might be falling at a faster rate than
the rest of the World's rise in output so the net might be a plateau or decline.
Note also that my "medium URR" estimates might be too optimistic, if my "low URR
scenarios" prove correct, the peak is likely to be earlier (2022/2023), and if there is a
fast transition to EVs, more public transport, etc perhaps the peak in World C+C output could
be earlier still. I doubt this will be the case, but in the past I doubted that World C+C
output would exceed 80 Mb/d, I was wrong then and I may be wrong now.
Hugo, something peaked in 2011, so I'd say the peak oil gang is onto something worth
listening to. Perhaps you disagree. The graph is a bit dated, but you get the point I'm
sure.
I'd say calling peak oil to be in 2018/2019, vs to be within 2022 to 2026 time frame, is
pretty much splitting hairs. Perhaps you're just smarter than everyone else here and don't
tolerate such loose parameters?
How did you come to your prediction, riding on Dennis' coattails, or do you have any original
ideas of your own to contribute?
The assumptions make all the difference. And no one can accurately predict what will happen
the rest of the day, much less tomorrow.
The key to the future, so far, is how the majority of independents will fare. Dennis sees
prices improving so that many of them heal up, and production is restored to a norm. Ron sees
them as totally messed up, which is more my take.
And I am also betting on the majors. They don't lay out hundreds of billions of dollars
for downstream without a big plan in mind. And, that plan could not call for those
investments to be totally useless in ten years. It wouldn't surprise me to see the skies over
the shale areas filled with golden parachutes.
Ten years, or less, based on EOGs quarterly tell sheet. Do you opt for the golden
parachute soon, or use your own just before the plane crashes?
This attack was 750 miles from Houthi territory.
Round trip would be 1,500 miles.
A Predator has a published range of 1,150 miles.
My guess is they are infiltrating Saudi Arabia, attacking from much closer than 750 miles out
and maybe sacrificing the drone. Sort of like the Jimmy Doolittle raid on Tokyo in WWII, for
similar purpose. With a similar result. Message sent, message received.
It's a one way trip. The drones used by houthis don't fire a missile and then fly home, they
are the missile. The drone is mounted with a 30kg warhead and it is flown into the target,
usually in a swarm attack.
It appears that the US (25% of global oil consumption/waste?) has but 3 choices. 1. Become
Trading partners with Russia and Iran. 2. Get serious on Energy Transition execution. 3. War,
Terror and more regime change 4. Deploy the Alan Parsons Project. https://youtu.be/Ei_GZnrr1nw?t=23
What say You?
Usually 1 and 3 are combined in the resource rich country aren't they? Then it goes wrong
some way down the road when the new regime 'turn', and things get worse than before
Here you go, chew on this. The day there are the initial 2 mile long lines at gasoline
stations, not just in the US but all over the world . . . that day we will still see
announcements of record oil production globally.
This is species killing stuff. Wall Street popular saying . . . no one rings a bell at the
top. Well, no one is going to give you any warning whatsoever that oil scarcity deaths start
that month. You will know nothing of it. You will be told it is all from some temporary
factor that will soon be fixed.
So if you see something now that looks like a warning sign, it's probably not legit.
Perhaps. OPEC is producing at 2011 levels. The world is kept at bay from peak oil only by US
shale production. And US shale production is on shaky legs, just trying to stay ahead of the
red queen.
I just don't see this blind optimism that US shale will continue upward for the next 5 to
6 years.
I well remember when it was said that: "When Saudi Arabia peaks, the world peaks". That
was just not correct. But now it is obvious that when the US of A peaks, the world peaks.
Sanctions are not affecting Venezuela's oil production. It is collapsing for another
reason. And it will take them a decade or more to recover when they finally settle their
economic problems.
But there will always be political problems. They are likely to get worse, not better.
Peak oil will be when the most oil is produced, not what could be produced if there were
no political problems anywhere in the world.
Opec will not save the world and neither will USA . The problem is that all the increase in
the last few years is from shale or LTO ,call it what you will . Problem is that this is
mostly + 45 API so poor in middle distillates . In reality peak oil is when the^ black goo^
peaks . NGL's ,NGPL,s ,bio fuels, LTO and the term ^all liquids^ are used as a fig leaf to
hide the real peak of the ^black goo ^ . We are past peak as far as the ^black goo^ is
concerned .
"The problem is that all the increase in the last few years is from shale or LTO ,call it
what you will . Problem is that this is mostly + 45 API so poor in middle distillates . "
In 2005 (!) on Bloomberg tv channel someone said, in other words, that the most valuable
oil to make kerosene of is increasingly difficult to get. I guess that kerosene is a middle
distillate.
The shale oil boom might last for many decades, for what it is worth
The shale oil boom might last for many decades, for what it is worth.
Shale production may continue for a decade, or a bit longer, but not decades. However,
that is not the point. The point is, how long can shale continue to increase
production.
The legacy decline for shale varies between 5% and 6% per month! The EIA's Drilling
Productivity Report says US Shale production will increase by 85,000 barrels per day in
September. Probably not, but that is not the point. To get an increase of 85,000 barrels per
day, they had to have new well production of 649,000 barrels per day. That is because they
had 564,000 barrels per day of legacy decline. For every one barrel per day of increased
production, they had to produce 7.64 barrels per day of new oil because they had 6.64
barrels per day of legacy decline.
The more they produce the more they have to produce just to stay even.
For every one barrel per day of increased production, they had to produce 7.64 barrels per
day of new oil.
This is the key point regarding shale oil production. The higher the production, the more
new production is needed to increase production. It's essentially an exponential function.
Shale oil production will not increase for much longer because it's not physically possible
to drill/frack at a sustained exponential rate.
Shale production is not oil production, it's mining.
You need 3 drilling teams, 4 fracking teams and get over long time a constant production.
When you want to increase (say you have enough acres, as enough ore in a iron mine) you hire
2 new teams, as in mining employing a new excavator and conveyor belts.
So, like in a mine, when you fire a team production drops almost immediately.
The big ones (XON) in the Permian do Shale oil mining exactly like this – they have
own drilling and fracking team, working constantly.
The same thing as mining is when you have to drill your b-class acres. As in a mine when
the ore veins run out in thickness.
So either close your mine, hire more teams to maintain production or life with decreasing
production at constant costs when the qulity is declining.
I've left out technical progress. This is just a cost reducer (need less drilling /
fracking teams to do the same output).
Eulenspiegel, your mining example is not a good comparison at all. That is because new mines
don't decline in production by 6% per month.
Here is the exponential function of shale oil. They must produce new oil at the decline
rate just to stay even. Growth in production is only accomplished if they produce more oil
than declined that month.
But if they do produce more oil than the decline rate, then the decline will be even
higher the next month. That is, if they had to produce 649,000 barrels of new oil in
September to grow production by 85,000 barrels, then to grow oil by a like amount in October,
they will have to produce more than 649,000 barrels. The more they increase production each
month, then the more they will have to produce the next month just to stay even.
When production increases, the monthly loss through legacy decline also increases.
Therefore just producing the same increase as they did last month will not do. They must
always continue to increase by more than they did last month just to stay even.
Ron, in my opinion it is a better model than conventional oil.
In conventional oil, you can pump 20 years after drilling. For 50 you'll have to do more
things like water flooding etc. So increasing production is just drilling a few more holes
(and install the additional infrastructure).
In mining, you have a decline rate of 100% / day.
You send a team in, they mine 100 tons of ore in their shift, move out and production after
their shift is 0.
When you want more ore, you have to send in a team next day again.
Having 1 minint team gives you constant ore / day. Firing them gives you sudden production
of 0.
So with LTO you send a fracking team in to create 1 well, produce oil for a few months
(I'm exaggerating) and then you have 0 production again.
So you have to send in the team again. And again.
If you use 1 team drillling constantly new holes. you'll have nearly constant production
(after the first ramp up time of overlaying declining productions, in reality a few
years).
Increasing production means more teams constantly drilling new holes (as in mining: drill
hole, fill with explosives, boom, carry away ore, repeat).
The big question for the peak shale oil is here: How many drilling/fracking teams can be
payed and supplied with anything they need for working efficient. It's not just hiring
teams.
To employ more teams they need more road capacity, sand capacity, water transport, take
away pipelines, more stuff you know better than me.
As in deep mining: The elevator capacity / tunnel train capacity limits the maximum
possible production. For increasing production, you have to increase everything, and then
hire new teams.
So the question is: How much money do they invest to stretch all these capacities.
Well the world's conventional oil production certainly peaked a while ago. Even if one treats
Venezuela and Canada as conventional because their production was usually in forecasts, the
USA fracking has to be considered a separate thing. The industry cycle is different, the
grade produced is different, the economics are "different." The tail is *very* different as
without new drilling the entire patch would disappear in less than three years. Blap, gone to
stripper wells.
This is the age of Trump. I know for us simpletons it makes sense the average would be
production. I'm not sure how Trump would do it, but I'll bet the tangerine could make 2019
peak the best ever. A world depression followed by war.
No, but OPEC + Russia + Canada, about 58% of world oil production, is down 667,000 barrels
per day, April to July. I doubt that the other 42% of world oil production is up anywhere
near that amount.
The 2019 7 month average for OPEC + Russia + Canada is 1,629,000 barrels per day below
their 2018 average.
I have posted that chart up top, just below OPEC+ Russia.
Thanks for valuable informstion Guy, in my mind from what I have read the shail oil have
change some caracter espesialy in 2019. It have become more light that means lower quality.
If quality goes down this will mean less profit if any at all to drill new wells after all
exspensives, loan balones are payed. The good thing is it seems now low sulfur diesel demand
increase because new IMO rules and prices, refinery margins in Asia increases. But it might
be this will have minor Impact for WTI price as they demand more heavey oil , brent i.e for
their marine diesel..
The US economy has not been working for most Americans, whose incomes have been
stagnating – or worse – for decades. These adverse trends are reflected in
declining life expectancy. The Trump tax bill made matters worse by compounding the problem
of decaying infrastructure, weakening the ability of the more progressive states to support
education, depriving millions more people of health insurance, and, when fully implemented,
leading to an increase in taxes for middle-income Americans, worsening their plight.
Notable quotes:
"... Long ago, John Maynard Keynes recognized that while a sudden tightening of monetary policy, restricting the availability of credit, could slow the economy, the effects of loosening policy when the economy is weak can be minimal. Even employing new instruments such as quantitative easing can have little effect, as Europe has learned. In fact, the negative interest rates being tried by several countries may, perversely, weaken the economy as a result of unfavorable effects on bank balance sheets and thus lending. ..."
"... The lower interest rates do lead to a lower exchange rate. Indeed, this may be the principal channel through which Fed policy works today. But isn't that nothing more than "competitive devaluation," for which the Trump administration roundly criticizes China? ..."
"... But, at another level, the Fed action spoke volumes. The US economy was supposed to be "great." Its 3.7% unemployment rate and first-quarter growth of 3.1% should have been the envy of the advanced countries. But scratch a little bit beneath the surface, and there was plenty to worry about. Second-quarter growth plummeted to 2.1%. Average hours worked in manufacturing in July sank to the lowest level since 2011. Real wages are only slightly above their level a decade ago, before the Great Recession. Real investment as a percentage of GDP is well below levels in the late 1990s, despite a tax cut allegedly intended to spur business spending, but which was used mainly to finance share buybacks instead. ..."
"... America should be in a boom, with three enormous fiscal-stimulus measures in the past three years. The 2017 tax cut, which mainly benefited billionaires and corporations, added some $1.5-2 trillion to the ten-year deficit. An almost $300 billion increase in expenditures over two years averted a government shutdown in 2018. And at the end of July, a new agreement to avoid another shutdown added another $320 billion of spending. If it takes trillion-dollar annual deficits to keep the US economy going in good times, what will it take when things are not so rosy? ..."
"... Redistribution from the bottom to the top – the hallmark not only of Trump's presidency, but also of preceding Republican administrations – reduces aggregate demand, because those at the top spend a smaller fraction of their income than those below. This weakens the economy in a way that cannot be offset even by a massive giveaway to corporations and billionaires. And the enormous Trump fiscal deficits have led to huge trade deficits, far larger than under Obama, as the US has had to import capital to finance the gap between domestic savings and investment. ..."
"... Trump promised to get the trade deficit down, but his profound lack of understanding of economics has led to it increasing, just as most economists predicted it would. Despite Trump's bad economic management and his attempt to talk the dollar down, and the Fed's lowering of interest rates, his policies have resulted in the US dollar remaining strong, thereby discouraging exports and encouraging imports ..."
Economists have repeatedly tried to explain to Donald Trump that trade agreements may affect
which countries the US buys from and sells to, but not the magnitude of the overall deficit.
But, as usual, Trump believes what he wants to believes, leaving those who can least afford
it to pay the price.
By JOSEPH E. STIGLITZ
NEW YORK – In the new world wrought by US President Donald Trump, where one shock
follows another, there is never time to think through fully the implications of the events
with which we are bombarded. In late July, the Federal Reserve Board reversed its policy of
returning interest rates to more normal levels, after a decade of ultra-low rates in the wake
of the Great Recession. Then, the United States had another two mass gun killings in under 24
hours, bringing the total for the year to 255 – more than one a day. And a trade war
with China, which Trump had tweeted would be "good, and easy to win," entered a new, more
dangerous phase, rattling markets and posing the threat of a new cold war.
At one level, the Fed move was of little import: a 25-basis-point change will have little
consequence. The idea that the Fed could fine-tune the economy by carefully timed changes in
interest rates should by now have long been discredited – even if it provides
entertainment for Fed watchers and employment for financial journalists. If lowering the
interest rate from 5.25% to essentially zero had little impact on the economy in 2008-09, why
should we think that lowering rates by 0.25% will have any observable effect? Large
corporations are still sitting on hoards of cash: it's not a lack of liquidity that's
stopping them from investing.
Long ago, John Maynard Keynes recognized that while a sudden tightening of monetary
policy, restricting the availability of credit, could slow the economy, the effects of
loosening policy when the economy is weak can be minimal. Even employing new instruments such
as quantitative easing can have little effect, as Europe has learned. In fact, the negative
interest rates being tried by several countries may, perversely, weaken the economy as a
result of unfavorable effects on bank balance sheets and thus lending.
The lower interest rates do lead to a lower exchange rate. Indeed, this may be the
principal channel through which Fed policy works today. But isn't that nothing more than
"competitive devaluation," for which the Trump administration roundly criticizes China? And
that, predictably, has been followed by other countries lowering their exchange rate,
implying that any benefit to the US economy through the exchange-rate effect will be
short-lived. More ironic is the fact that the recent decline in China's exchange rate came
about because of the new round of American protectionism and because China stopped
interfering with the exchange rate – that is, stopped supporting it.
But, at another level, the Fed action spoke volumes. The US economy was supposed to be
"great." Its 3.7% unemployment rate and first-quarter growth of 3.1% should have been the
envy of the advanced countries. But scratch a little bit beneath the surface, and there was
plenty to worry about. Second-quarter growth plummeted to 2.1%. Average hours worked in
manufacturing in July sank to the lowest level since 2011. Real wages are only slightly above
their level a decade ago, before the Great Recession. Real investment as a percentage of GDP
is well below levels in the late 1990s, despite a tax cut allegedly intended to spur business
spending, but which was used mainly to finance share buybacks instead.
America should be in a boom, with three enormous fiscal-stimulus measures in the past
three years. The 2017 tax cut, which mainly benefited billionaires and corporations, added
some $1.5-2 trillion to the ten-year deficit. An almost $300 billion increase in expenditures
over two years averted a government shutdown in 2018. And at the end of July, a new agreement
to avoid another shutdown added another $320 billion of spending. If it takes trillion-dollar
annual deficits to keep the US economy going in good times, what will it take when things are
not so rosy?
The US economy has not been working for most Americans, whose incomes have been
stagnating – or worse – for decades. These adverse trends are reflected in
declining life expectancy. The Trump tax bill made matters worse by compounding the problem
of decaying infrastructure, weakening the ability of the more progressive states to support
education, depriving millions more people of health insurance, and, when fully implemented,
leading to an increase in taxes for middle-income Americans, worsening their plight.
Redistribution from the bottom to the top – the hallmark not only of Trump's
presidency, but also of preceding Republican administrations – reduces aggregate
demand, because those at the top spend a smaller fraction of their income than those below.
This weakens the economy in a way that cannot be offset even by a massive giveaway to
corporations and billionaires. And the enormous Trump fiscal deficits have led to huge trade
deficits, far larger than under Obama, as the US has had to import capital to finance the gap
between domestic savings and investment.
Trump promised to get the trade deficit down, but his profound lack of understanding of
economics has led to it increasing, just as most economists predicted it would. Despite
Trump's bad economic management and his attempt to talk the dollar down, and the Fed's
lowering of interest rates, his policies have resulted in the US dollar remaining strong,
thereby discouraging exports and encouraging imports. Economists have repeatedly tried to
explain to him that trade agreements may affect which countries the US buys from and sells
to, but not the magnitude of the overall deficit.
In this as in so many other areas, from exchange rates to gun control, Trump believes what
he wants to believe, leaving those who can least afford it to pay the price.
Joseph E. Stiglitz, a Nobel laureate in economics, is University Professor at Columbia
University.
Unemployment benefits currently are usually is just six month or so; this is the time when you can plan you "downsizing". You do
not need to rush but at the same time do not expect that you will get job offers quickly, if at all. Usually it does not happen.
many advertised positions are fakes, another substantial percentage is already reserved for H1B candidates and posting them is the
necessary legal formality.
Often losing job logically requires selling your home and moving to a modest apartment, especially if no children are living with
you. At 50 it is abut time... You need to do it later anyway, so why not now. But that's a very tough decision to make... Still, if the current housing market is close to the top
(as it is in 2019), this is one of the best moves
you can make. Getting from your house several hundred thousand dollars allows you to create kind of private pension to compensate for
losses in income till you hit your Social Security check, which currently means 66.
$300K investment in A quality bonds that returns 3% per year is enough to provides you with $24K per year "private pension" from 50 to
age of 66 when social security kicks in. That allows you to pay for the apartment and amenities. The food is extra but with this
level of income you qualify for food assistance.
This way you can take lower paid job, of much lower paid job (which mean $15 per hour), of temp job and survive.
And if this are many form you house sell your 401k remains intact and can supplement your SS income later on. Simple Excel spreadsheet can provide you with
a complete picture of what you can afford and what not. Actually the ability to walk of fresh air for 3 or more hours each day worth a lot
of money ;-)
Notable quotes:
"... Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives. ..."
"... The first thing you should do is identify the exact day your job income stops arriving ..."
"... Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. ..."
"... Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom. ..."
Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility.
As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health
condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives.
Assuming you can clear the mental challenges, the financial and administrative obstacles can leave you feeling like a Rube Goldberg
machine.
Income, health insurance, life insurance, disability insurance, bills, expenses, short-term savings and retirement savings are
all immediately important in the face of a job loss. Never mind your Parent PLUS loans, financially-dependent aging parents, and
boomerang children (adult kids who live at home), which might all be lurking as well.
When does your income stop?
From the shocking moment a person learns their job is no longer their job, the word "triage" must flash in bright lights like
an obnoxiously large sign in Times Square. This is more challenging than you might think. Like a pickpocket bumping into you right
before he grabs your wallet, the distraction is the problem that takes your focus away from the real problem.
This is hard to do because of the emotion that arrives with the dirty deed. The mind immediately begins to race to sources of
money and relief. And unfortunately that relief is often found in the wrong place.
The first thing you should do is identify the exact day your job income stops arriving . That's how much time you have
to defuse the bomb. Your fuse may come in the form of a severance package, or work you've performed but haven't been paid for yet.
When do benefits kick in?
Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if
you're able. However, in some states severance pay affects your immediate eligibility for unemployment benefits. In other words,
you can't file for unemployment until your severance payments go away.
Assuming you can't just retire at this moment, which you likely can't, you must secure fresh employment income quickly. But quickly
is relative to the length of your fuse. I've witnessed way too many people miscalculate the length and importance of their fuse.
If you're able to get back to work quickly, the initial job loss plus severance ends up enhancing your financial life. If you take
too much time, by your choice or that of the cosmos, boom.
The next move is much more hands-on, and must also be performed the day you find yourself without a job.
What nonessentials do I cut?
Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't.
Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time
being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom.
The idea of diving into your spending habits on the day you lose your job is no fun. But when else will you have such a powerful
reason to do so? You won't. It's better than dipping into your assets to fund your current lifestyle. And that's where we'll pick
it up the next time.
We've covered day one. In my next column we will tackle day two and beyond.
Peter Dunn is an author, speaker and radio host, and he has a free podcast: "Million Dollar Plan." Have a question for Pete
the Planner? Email him at [email protected]. The views and opinions expressed in this column are the author's and do not
necessarily reflect those of USA TODAY.
Inventory draws should begin to pick up for the US soon. 1 million in pipeline from the
Permian to the coast. Exports to increase, Cushing to decrease, and production mostly flat. A
lot of the Permian production has been going to Cushing as an outlet. Depends on how much can
be loaded on to ships, now, and how much lite oil can be sold. Pipelines are going to be
losers for awhile. Additional pipelines need to take note.
There are two, sure fire, statistics and reports that will define where we are going. You can
argue them, but you will lose. One is the EIA monthly 914 report, the other is the Texas RRC
permits. There's some DUCs, but by this time, I consider them as normal DUCs between drilling
and completion as is norm. And the 914 May show it up a little for June, but I don't see it
going up further. Or, much more.
Attached is the latest LTO data from the monthly EIA 914 page. The main difference that I
can see is the drop in the monthly production growth from 2018 to 2019. 2018 production
growth averaged 153 kb/d/mth. 2019 production growth over the first seven months has dropped
to an average of 97 kb/d/mth. The total July increase over June was 107 kb/d/mth. The biggest
increases for July came from Sprayberry (33 kb/d) and Wolfcamp (46 kb/d).
China slammed Taiwan Monday for offering asylum to Hong Kong people facing prosecution for
involvement in anti-government protests, telling the island's leaders to "stop meddling" in the
territory's affairs.
Taiwan's President Tsai Ing-wen voiced support last month for granting asylum to some Hong
Kong protesters, with the semi-autonomous financial hub in the midst of an unprecedented
political crisis.
Ma Xiaoguang, a spokesperson for the Chinese cabinet's Taiwan Affairs Office, warned
Taiwan's ruling Democratic Progressive Party to "stop undermining the rule of law in the Hong
Kong Special Administrative Region, stop meddling in Hong Kong affairs, and stop indulging
criminals in any way".
Taiwanese authorities "ignore the facts and reverse black and white, not only masking the
crimes of a small number of Hong Kong militants, but also fuelling their arrogance for
destroying Hong Kong", said Ma.
Last month after dozens of Hong Kong activists reportedly involved in an unprecedented
storming of the city's parliament fled to Taiwan, the Taipei said it would provide assistance
to those seeking sanctuary.
"They openly claim to provide (protesters) asylum, making Taiwan into a 'haven sheltering
criminals', where does this put the safety and welfare of the Taiwan people?" asked Ma.
Beijing regards Taiwan as a part of China awaiting reunification, but the island is a
self-ruled democracy.
The protest movement in Hong Kong was sparked by widespread opposition to a plan for
allowing extraditions to the Chinese mainland, but has since morphed into a broader call for
democratic rights.
Taiwan's history of providing sanctuary to Chinese dissidents has been mixed.
The island still does not recognise the legal concept of asylum but has, on occasions,
allowed dissidents to stay on long-term visas.
Ties with Beijing have soured since Tsai came to power in 2016 because her party refuses to
recognise the idea that Taiwan is part of "one China". lawrence
2 days ago
Taiwan is an independent country. Of cause it has the right and authority to grant any asylum
to the eligible asylum seeker. Respect Taiwan as an respected country ,equal to china, and
the world will put china in a better place. Loving freedom and democracy is a human basic
right realty and could not be altered by force...wake up china..
Without suppression of Wall Street speculators the renaissance on manufacturing is impossible...
Notable quotes:
"... A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back? ..."
If I lived in the past, I might assume that re-industrialization would be as easy as building a new plant and plopping it down
in my model town; "build it and they will come." But this America is not that America. Things aren't that frictionless. They are
not, because of a concept that comes with the seventy five-cent word hysteresis attached,
covered here in 2015. Martin Wolf wrote :
"Hysteresis" -- the impact of past experience on subsequent performance -- is very powerful. Possible causes of hysteresis
include: the effect of prolonged joblessness on employability; slowdowns in investment; declines in the capacity of the financial
sector to support innovation; and a pervasive loss of animal spirits.
(To "loss of animal spirits" in the entrepreneurial classes we might add "deaths of despair" in the working class.) And if there
were a lot of people like me, living in the past -- in a world of illusion -- that too would would cause hysteresis, because we would
make good choices, whether for individual careers, at the investment level, or at the policy level, only at random.
Our current discourse on a manufacturing renaissance is marked by a failure to take hysteresis into account. First, I'm select
some representative voices from the discourse. Then, I will present a bracing article from Industry Week, "
Is US Manufacturing Losing Its Toolbox? " I'll conclude by merely alluding to some remedies. (I'm sure there's a post to be written
comparing the policy positions of all the candidate on manufacturing in detail, but this is not that post.)
"We're in the midst of a manufacturing renaissance -- something which nobody thought you'd hear," Trump said. "We're
finally rebuilding our country, and we are doing it with American aluminum, American steel and with our great electrical contractors,"
said Trump, adding that the original NAFTA deal "stole our dignity as a country."
Despite Trump's promises of a manufacturing "renaissance," the country is now in a manufacturing
recession
. The Federal Reserve just reported that the manufacturing sector had a second straight quarter of decline, falling below Wall
Street's expectations. And
for the first
time ever , the average hourly wage for manufacturing workers has dropped below the national average.
Amazingly, under Trump, America has experienced a 2½-year manufacturing jobs boom. More Americans are now employed in well-paying
manufacturing positions than before the Great Recession. The miracle hasn't slowed. The latest jobs report continues to show robust
manufacturing growth, with manufacturing job creation beating economists' expectations, adding the most jobs since January.
Obviously, the rebound in American manufacturing didn't happen magically; it came from Trump following through on his campaign
promises -- paring back job-killing regulations, cutting taxes on businesses and middle-class taxpayers, and implementing trade
policies that protect American workers from foreign trade cheaters.
But nothing has reversed the decline of the county's manufacturing base. From January 2017 to December 2018, it lost nearly
9 percent of its manufacturing jobs, and 17 other counties in Michigan that Mr. Trump carried have experienced similar losses,
according to a newly updated analysis of employment data by the Brookings Institution.
Perhaps the best reality check -- beyond looking at our operational capacity, as we are about to do -- is to check what the people
who will be called upon to do the work might think. From Industry Week, "
Many Parents
Undervalue Manufacturing as a Career for Their Children " (2018):
A mere 20% of parents associate desirable pay with a career in manufacturing, while research shows manufacturing workers actually
earn 13%more than comparable workers in other industries.
If there were a manufacturing renaissance, then parents' expectations salaries would be more in line with reality (in other
words, they exhibit hysteresis).
Another good reality check is what we can actually do (our operational capacity). Here is Tim Cook explaining why Apple ended
up not manufacturing in the United States (
from J-LS's post ).
From Inc. :
[TIM COOK;] "The products we do require really advanced tooling, and the precision that you have to have, the tooling and working
with the materials that we do are state of the art. And the tooling skill is very deep here. In the US you could have a meeting
of tooling engineers and I'm not sure we could fill the room. In China you could fill multiple football fields.
"The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on
that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a
key thing and we've got to correct that. China called that right from the beginning."
With Cook's views in mind, let's turn to the slap of cold water administered by Michael Collins in Industry Week, "
Is US Manufacturing Losing
Its Toolbox? ":
So are we really in the long-hoped-for manufacturing renaissance? The agency with the most accurate predictions on the future
of jobs is the Bureau of Labor Statistics.
Their projection to 2026
shows that US manufacturing sector will lose 736,000 manufacturing jobs. I spoke with BLS economists James Franklin and Kathleen
Greene, who made the projections, and they were unwavering in their conclusion for a decline of manufacturing jobs.
This prompted me to look deeper into the renaissance idea, so I investigated the changes in employment and establishments in
38 manufacturing North American Industry Classification System (NAICS) industries from 2002 to 2018. I really hoped that the optimists
were right about the manufacturing renaissance, but
the data I collected in Table 1 (see link) shows some inconvenient truths -- that 37 out of the 38 manufacturing industries
are declining in terms of both number of plants and employees.
So, yeah. Mirage.
... ... ...
A tooling firm closes, and a complex organism withers. The machinery is sold, sent to the scrapyard, or rusts in place. The
manuals are tossed. The managers retire and the workers disperse, taking their skills and knowledge with them. The bowling alley
closes. The houses sell at a loss, or won’t see at all. Others, no doubt offshore, get the contracts, the customers, and the knowledge
flow that goes with all that. All this causes hysteresis. “The impact of past experience on subsequent performance” cannot be undone
simply by helicoptering a new plant in place and offering some tax incentives! To begin with, why would the workers come back?
So, when I see no doubt well-meant plans like Warren’s “Economic Patriotism” — and not to pick on Warren — I’m skeptical. I’m
not sure it’s enough.
Here are her
bullet points:
More actively managing our currency value to promote exports and domestic manufacturing.
Leveraging federal R&D to create domestic jobs and sustainable investments in the future.
Production stemming from federally funded research should take place in the United States
Taxpayers should be able to capture the upside of their research investments if they result in profitable enterprises.
R&D investments must be spread across every region of the country, not focused on only a few coastal cities.
Increasing export promotion to match the efforts of our competitors.
Deploying the massive purchasing power of the federal government to create markets for American-made products.
Restructuring worker training programs to deliver real results for American workers and American companies.
Dramatically scale up apprenticeship programs.
Institute new sectoral training programs.
There’s a lot to like here, but will these efforts really solve the hysteresis that’s causing our tooling problem? Just spit-balling
here, but I’d think about doing more. Start with the perspective that our tooling must be, as much as possible, domestic. (“If your
business depends on a platform, you don’t have a business.” Similarly, if your industrial base depends on the tooling of others,
it’s not an industrial base.)
As tooling ramps up, our costs will be higher. Therefore, consider tariff walls, as used by other developing nations when they
industrialized. Apprenticeships and training are good, but why not consider skills-based immigration that brings in the worker we’d
otherwise have to wait to train?
Further, simply “training” workers and then having MBAs run the firms is a recipe for disaster; management needs to be provided,
too.
Finally, something needs to be done to bring the best and brightest into manufacturing, as opposed to having them work on Wall
Street, or devise software that
cheats
customers with dark patterns. It’s simply not clear to me that a market-based solution — again, not to pick on her — like Warren’s
(“sustainable investments,” “research investments,” “R&D investments,” “export promotion,” and “purchasing power”) meets the case.
It is true that Warren also advocates a Department of Economic Development “that will have a single goal: creating and defending
good American jobs.” I’m not sure that’s meaningful absent an actual industrial policy, democratically arrived at, and a mobilized
population (which is what the Green New Deal ought to do).
"... Trump Panicked As Stocks Fell, Called Top 3 Bank CEOs ..."
"... As The Dow dropped 800 points, the 4th largest point drop in history, Bloomberg reports that Trump held a conference call with three of Wall Street's top executives - JPMorgan Chase & Co.'s Jamie Dimon, Bank of America Corp.'s Brian Moynihanand Citigroup Inc.'s Michael Corbat. ..."
"... No draining of the swamp..has actually added with lunatic Bolton and Pompous. His winning BIGLY on his trade wars have done nothing but destroy American farmer and retail closings in record numbe ..."
"... What he called a big fat bubble in the fraud market when a candidate is now his bubble of hope to a second term. We won't even get into his Israeli foreign policy which are in violation of international law not to mention war crimes. ..."
"... Trump is making a HUGE mistake! His equating Wall Street profits with Main Street health will sink his chances for 2020. ..."
"... The American people are not stupid - they see that all the cheap money is flowing directly into the CEOs' pockets of all the major corporations with a stream of never-ending buy-back opportunities. ..."
"... I don't care for anybody in our current political establishment, Republican or Democrat, so I don't give an iota if Trump is re-elected. ..."
"... The man was born and raised in The Great Swamp, somewhere near Pennsylvania Avenue, if you know what I mean. ..."
"... So???? Why bankers? Why not tractor supply companies or steel makers? Bankers, markets, Trump, what is the connection, what can bankers do? ..."
"... Like calling the foxes to fix a missing chicken problem? Or telling the foxes to lay off the chickens? ..."
"... Back in 2008, the word was that money laundering from drug kingpins was what avoided an even worse monetary collapse. So, are they making sure everything is in place should economic turmoil necessitate a repeat performance? https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims ..."
"... The "plunge protection team" was used by Obama too after the markets got volatile, and last December by Trump. https://www.zerohedge.com/news/2018-02-07/paul-craig-roberts-exposes-plunge-protection-teams-fraud ..."
Trump Panicked As Stocks Fell, Called Top 3 Bank CEOs
"When it's serious, you have to lie... or call the CEOs of the nation's biggest banks."
Amid the drop in US equity markets on Wednesday - culminating in a 'Markets In Turmoil' special on CNBC - President Trump appears
to have hit the panic button and grabbed the big red Plunge Protection Team bat-phone.
As The Dow dropped 800 points, the 4th largest point drop in history, Bloomberg reports that Trump held a conference call with
three of Wall Street's top executives - JPMorgan Chase & Co.'s Jamie Dimon, Bank of America Corp.'s Brian Moynihanand Citigroup Inc.'s
Michael Corbat.
The three chief executives were in Washington for a previously scheduled meeting with Treasury Secretary Steven Mnuchin on banking
secrecy and money laundering, according to people familiar with the matter. On a conference call, they briefed the president, who
was at his resort in Bedminster, New Jersey.
So Trump panicked with stocks a mere 5% below all-time-highs? What happens when we enter a bear market?
All you always Trumper's are just as bad as the lunatic left never Trumper's..refusing to see what's directly in front of you....a
loud mouth Orange *** puppet who in the big picture has accomplished very little of the promises he had made as a candidate.
No
draining of the swamp..has actually added with lunatic Bolton and Pompous. His winning BIGLY on his trade wars have done nothing
but destroy American farmer and retail closings in record number.
What he called a big fat bubble in the fraud market when a candidate
is now his bubble of hope to a second term. We won't even get into his Israeli foreign policy which are in violation of international
law not to mention war crimes.
Face it always Trumper's...the Orange *** is a failed President and his name will be mentioned with the likes the Clinton's
and Bushes ..fitting since none of those went to jail...another failed promise
Trump is making a HUGE mistake! His equating Wall Street profits with Main Street health will sink his chances for 2020.
The
American people are not stupid - they see that all the cheap money is flowing directly into the CEOs' pockets of all the major
corporations with a stream of never-ending buy-back opportunities.
Bloomberg wouldn't know that Trump called the three banking CEOs on a conference all unless Trump's handlers wanted Bloomberg
to know. This is a propaganda event intended to assure the "investing community" that Trump really does care about the stock market,
that he is fixated on it and will do "whatever it takes" to keep the stock market from falling... too far.
In this time of great
economic turmoil and with grim reality creeping ever closer through the fog of lies and propaganda that keep people thinking "all
is well", the elites who really run things need to keep "investors" reassured, all in, and OUT of precious metals.
Why would he want to end the Fed when he is one of its primary beneficiaries???? I don't care for anybody in our current political
establishment, Republican or Democrat, so I don't give an iota if Trump is re-elected.
But to believe that he will do anything
to benefit the American citizenry at large by doing something such as ending the Fed is the epitome of naďveté. He couldn't care
a rat's *** about you or I. The man was born and raised in The Great Swamp, somewhere near Pennsylvania Avenue, if you know what
I mean.
Like calling the foxes to fix a missing chicken problem? Or telling the foxes to lay off the chickens?
Hmmm hard to say but time will tell although it's hard to see time as an ally here.
In the fullness of time God is on the job so it's all good, it's all for the edification of souls everywhere some just take
to learning quicker than others.
"The three chief executives were in Washington for a previously scheduled meeting with Treasury Secretary Steven Mnuchin
on banking secrecy and money laundering ..."
"... So far, that wager has netted Americans nothing. No money. No deal. No bridges, roads or leadless water pipes. And there's nothing on the horizon since Trump stormed out of the most recent meeting. That was a three-minute session in May with Democratic leaders at which Trump was supposed to discuss the $2 trillion he had proposed earlier to spend on infrastructure. In a press conference immediately afterward, Trump said if the Democrats continued to investigate him, he would refuse to keep his promises to the American people to repair the nation's infrastructure. ..."
"... Candidate Donald Trump knew it was no joke. On the campaign trail, he said U.S. infrastructure was "a mess" and no better than that of a "third-world country. " When an Amtrak train derailed in Philadelphia in 2015, killing eight and injuring about 200 , he tweeted , "Our roads, airports, tunnels, bridges, electric grid -- all falling apart." Later, he tweeted , "The only one to fix the infrastructure of our country is me." ..."
"... Donald Trump promised to make America great again. And that wouldn't be possible if America's rail system, locks, dams and pipelines -- that is, its vital organs -- were "a mess." Trump signed what he described as a contract with American voters to deliver an infrastructure plan within the first 100 days of his administration. ..."
"... He mocked his Democratic opponent Hillary Clinton's proposal to spend $275 billion. "Her number is a fraction of what we're talking about. We need much more money to rebuild our infrastructure," he told Fox News in 2016 . "I would say at least double her numbers, and you're going to really need a lot more than that." ..."
"... In August of 2016, he promised , "We will build the next generation of roads, bridges, railways, tunnels, seaports and airports that our country deserves. American cars will travel the roads, American planes will connect our cities, and American ships will patrol the seas. American steel will send new skyscrapers soaring. We will put new American metal into the spine of this nation." ..."
"... That contract Trump signed with American voters to produce an infrastructure plan in the first 100 days: worthless. It never happened. He gave Americans an Infrastructure Week in June of 2017, though, and at just about the 100-day mark, predicted infrastructure spending would "take off like a rocket ship." Two more Infrastructure Weeks followed in the next two years, but no money. ..."
"... This year, by which time the words Infrastructure Week had become a synonym for promises not kept, Trump met on April 30 with top Democratic leaders and recommended a $2 trillion infrastructure investment. Democrats praised Trump afterward for taking the challenge seriously and for agreeing to find the money. ..."
"... Almost immediately, Trump began complaining that Democrats were trying to hoodwink him into raising taxes to pay for the $2 trillion he had offered to spend. ..."
"... Trump and the Republicans relinquished one way to pay for infrastructure when they passed a tax cut for the rich and corporations in December of 2017. As a result, the rich and corporations pocketed hundreds of billions -- $1 trillion over 10 years -- and Trump doesn't have that money to invest in infrastructure. Corporations spent their tax break money on stock buybacks, further enriching the already rich. They didn't invest in American manufacturing or worker training or wage increases. ..."
"... I have seen this movie before. A State builds a highway, it then leases that highway to a corporation for a bucket of cash which it uses to bribe the electorate to win the next election or two. The corporation shoves brand new toll booths on the highway charging sky high rates which puts a crimp in local economic activity. After the lease is up after twenty years, the State gets to take over the highway again to find that the corporation cut back on maintenance so that the whole highway has to be rebuilt again. Rinse and repeat. ..."
"... Promises by any narcissist mean nothing. You cannot hang your hat on any word that Trump speaks, because it's not about you or anyone else, but about him and only him. ..."
"... Here is a heads up. If any infrastructure is done it will be airports. The elite fly and couldn't give a crap about the suspension and wheel destroying potholes we have to slalom around every day. They also don't care that the great unwashed waste thousands of hours stuck in traffic when a bridge is closed or collapses. ..."
Yves here. In a bit of synchronicity, when a reader was graciously driving me to the Department of Motor Vehicles (a schlepp in
the wilds of Shelby County), she mentioned she'd heard local media reports that trucks had had their weight limits lowered due to
concern that some overpasses might not be able to handle the loads. Of course, a big reason infrastructure spending has plunged in
the US is that it's become an excuse for "public-private partnerships," aka looting, when those deals take longer to get done and
produce bad results so often that locals can sometimes block them.
No problem, though. President Donald Trump promised to fix all this. The great dealmaker, the builder of eponymous buildings,
the star of "The Apprentice," Donald Trump, during his campaign, urged Americans to bet on him because he'd double what his opponent
would spend on infrastructure. Double, he pledged!
So far, that wager has netted Americans nothing. No money. No deal. No bridges, roads or leadless water pipes. And there's
nothing on the horizon since Trump stormed out of the most recent meeting. That was a three-minute session in May with Democratic
leaders at which Trump was supposed to discuss the $2 trillion he had proposed earlier to spend on infrastructure. In a press conference
immediately afterward, Trump said if the Democrats continued to investigate him, he would refuse to keep his promises to the American
people to repair the nation's infrastructure.
The comedian Stephen Colbert described the situation best, saying Trump told the Democrats: "It's my way or no highways."
The situation, however, is no joke. Just ask the New York rail commuters held up for more than 2,000 hours over the past four
years by bridge and tunnel breakdowns. Just ask the
American Society of Civil Engineers , which gave the nation a D+ grade for infrastructure and estimated that if more than $1
trillion is not added to currently anticipated spending on infrastructure, "the economy is expected to lose almost
$4 trillion in GDP , resulting in a loss of 2.5 million jobs in 2025."
Donald Trump promised to make America great again. And that wouldn't be possible if America's rail system, locks, dams and
pipelines -- that is, its vital organs -- were "a mess." Trump signed
what he described as a
contract with American voters to deliver an infrastructure plan within the first 100 days of his administration.
He mocked his Democratic opponent Hillary Clinton's proposal to spend $275 billion. "Her number is a fraction of what we're
talking about. We need much more money to rebuild our infrastructure,"
he told Fox News in 2016 . "I would say at least double her numbers, and you're going to really need a lot more than that."
In August of 2016, he promised
, "We will build the next generation of roads, bridges, railways, tunnels, seaports and airports that our country deserves. American
cars will travel the roads, American planes will connect our cities, and American ships will patrol the seas. American steel will
send new skyscrapers soaring. We will put new American metal into the spine of this nation."
In his victory speech and both of his State of the Union addresses, he pledged again to be the master of infrastructure. "We are
going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, school, hospitals. And we will put millions of
our people to work," he said the night he won.
That sounds excellent. That's exactly what
75 percent of respondents
to a Gallup poll said they wanted. That would create millions of family-supporting jobs making the steel, aluminum, concrete, pipes
and construction vehicles necessary to accomplish infrastructure repair. That would stimulate the economy in ways that benefit the
middle class and those who are struggling.
That contract Trump signed with American voters to produce an infrastructure plan in the first 100 days: worthless. It never
happened. He gave Americans
an Infrastructure Week
in June of 2017, though, and
at just about the 100-day mark, predicted infrastructure spending would "take off like a rocket ship." Two more Infrastructure
Weeks followed in the next two years, but no money.
Trump finally announced
a plan in February of 2018, at a little over the 365-day mark, to spend $1.5 trillion on infrastructure. It went nowhere
because it managed to annoy both Democrats and Republicans.
It was to be funded by only $200 billion in federal dollars -- less than what Hillary Clinton proposed. The rest was to come from
state and local governments and from foreign money interests and the private sector. Basically, the idea was to hand over to hedge
fund managers the roads and bridges and pipelines originally built, owned and maintained by Americans. The fat cats at the hedge
funds would pay for repairs but then toll the assets in perpetuity. Nobody liked it.
That was last year. This year, by which time the words
Infrastructure Week had
become a synonym for promises not kept,
Trump met on April 30 with top Democratic leaders and recommended a $2 trillion infrastructure investment. Democrats praised
Trump afterward for taking the challenge seriously and for agreeing to find the money.
Almost immediately, Trump
began complaining that Democrats were trying to hoodwink him into raising taxes to pay for the $2 trillion he had offered to
spend.
Trump and the Republicans relinquished one way to pay for infrastructure when they passed a tax cut for the rich and corporations
in December of 2017. As a result, the rich and corporations pocketed hundreds of billions --
$1 trillion over 10 years -- and Trump doesn't
have that money to invest in infrastructure. Corporations spent their tax break money on stock buybacks, further enriching the already
rich. They didn't invest in American manufacturing or worker training or wage increases.
Three weeks after the April 30 meeting, Trump snubbed Democrats who returned to the White House hoping the president had found
a way to keep his promise to raise $2 trillion for infrastructure. Trump dismissed them like naughty schoolchildren. He told them
he wouldn't countenance Democrats simultaneously investigating him and bargaining with him -- even though Democrats were investigating
him at the time of the April meeting and one of the investigators -- Neal -- had attended.
Promise not kept again.
Trump's reelection motto, Keep America Great, doesn't work for infrastructure. It's still a mess. It's the third year of his presidency,
and he has done nothing about it. Apparently, he's saving this pledge for his next term.
In May, he promised Louisianans
a new bridge over
Interstate 10 -- only if he is reelected. He said the administration would have it ready to go on "day one, right after the election."
Just like he said he'd produce an infrastructure plan within the first 100 days of his first term.
He's doubling down on the infrastructure promises. His win would mean Americans get nothing again.
The whole thing seems so stupid. The desperate need is there, the people are there to do the work, the money spent into the
infrastructure would give a major boost to the real economy, the completed infrastructure would give the real economy a boost
for years & decades to come – it is win-win right across the board. But the whole thing is stalled because the whole deal can't
be rigged to give a bunch of hedge fund managers control of that infrastructure afterwards. If it did, the constant rents that
Americans would have to pay to use this infrastructure would bleed the economy for decades to come.
I have seen this movie before. A State builds a highway, it then leases that highway to a corporation for a bucket of cash
which it uses to bribe the electorate to win the next election or two. The corporation shoves brand new toll booths on the highway
charging sky high rates which puts a crimp in local economic activity. After the lease is up after twenty years, the State gets
to take over the highway again to find that the corporation cut back on maintenance so that the whole highway has to be rebuilt
again. Rinse and repeat.
When President Dwight D. Eisenhower signed the Federal Aid Highway Act in 1956, can you imagine how history would have gone
if they had been handed over to a bunch of corporations who would have built toll booths over the whole network? Would have done
wonders for the American economy I bet.
One of the things discussed at our town hall meeting the other night, was a much needed $481k public bathroom, and that was
the low bid.
It has to be ADA compliant with ramps, etc.
$48,100 seems like it'd be plenty to get 'r done, as you can build a house with a couple of bathrooms, and a few bedrooms,
a kitchen and living room for maybe $200k.
And if toll revenues don't come as high as expected, mother state will come to the rescue of those poor fund managers. I find
it amazing that Trump uses the stupid Russia, Russia, Russia! fixation of democrats as an excuse to do nothing about infrastructure.
Does this work with his electorate?
Promises by any narcissist mean nothing. You cannot hang your hat on any word that Trump speaks, because it's not about
you or anyone else, but about him and only him.
Here is a heads up. If any infrastructure is done it will be airports. The elite fly and couldn't give a crap about the
suspension and wheel destroying potholes we have to slalom around every day. They also don't care that the great unwashed waste
thousands of hours stuck in traffic when a bridge is closed or collapses.
Well, fix the airports and you've still got Boeing, self-destructing as fast as it can. And Airbus can't fill all the orders
no matter how hard it tries. Guess everybody will just have to . stay home.
Are all the coal jobs back? How about the manufacturing? NAFTA been repealed and replaced with something better yet? How's
the wall coming and has Mexico sent the check yet? Soldiers back from Afghanistan/Iraq/Syria yet?
Got that tax cut for rich people and a ton of conservative judges through though, didn't he?
"It couldn't have gone any better," Ways and Means Committee Chairman Richard E. Neal, D-Mass., told the Washington Post,
even though Neal was investigating Trump for possible tax fraud.
What a surprise. It's simply "amazing" that the insane status quo jihad that has been waged against Trump since he announced
his candidacy had real consequences for the country. Who would have thought that calling ANY president ignorant, ugly, fat, a
liar, a traitor, a cheater, an agent of Putin, a racist, a misogynist, a xenophobe, a bigot, an isolationist and an illegitimate
occupant of the White House 24/7 since he or she won the election would make actual accomplishment nearly impossible.
The mere mention of his name on college campuses has even been legitimized as a fear-inducing, "safety"-threatening "microagression."
It's just so rich that having determined to prevent Trump from doing absolutely anything he promised during the campaign by
any and all means, regardless of what the promise was or how beneficial it may have been, his numerous, bilious "critics" now
have the gonads to accuse him of not getting anything done.
With all due respect to the author of this piece, the result he laments was exactly the point of this relentless nightmare
of Trump derangement to which the nation has been subjected for three years. I tend to think that the specific promise most targeted
for destruction was his criticism of NATO and "infrastructure" was collateral damage, but that's neither here nor there.
The washington status quo has succeeded in its mission to cripple a president it could not defeat electorally, and now tries
to blame him for their success. Cutting off your nose to spite your face has always been a counterproductive strategy.
By Marshall Auerback, a
market analyst and commentator. Produced by Economy for All , a project of
the Independent Media Institute
The most commonly heard refrain when Donald Trump and the GOP were seeking to pass some
version of corporate tax reform went something
like this : There are literally trillions of dollars trapped in offshore dollar
deposits which, because of America's uncompetitive tax rates, cannot be brought back home. Cut
the corporate tax rate and get those dollars repatriated, thereby unleashing a flood of new
job-creating investment in the process. Or so the pitch went.
It's not new and has never really stood up to scrutiny. Yet virtually every single figure
who lobbied for corporate tax reform has made a version of this argument. In the past, Congress
couldn't or wouldn't take up the cause, but, desperate for a political win after the loss on
health care, Trump and the GOP leadership ran with a recycled version of this argument, and
Congress finally passed the Tax Cuts and Jobs Act on December 22, 2017. The headline feature
was a cut in the official corporate tax rate from 35 percent to 21 percent.
So did reality correspond to the theoretical case made for the tax reform bill? We now have
enough information to make a reasonably informed assessment. Unless you think that tax havens
like Ireland, Bermuda or the Cayman Islands, all of which continue to feature as major foreign holders of U.S.
Treasuries , have suddenly emerged as economic superpowers, the more realistic
interpretation of the data shows the president's much-vaunted claims about the tax reform to be
bogus on a number of levels. Even though some dollars have been "brought home," there remain
trillions of dollars domiciled in these countries (at least in an accounting sense, which I'll
discuss in a moment). If anything, the key provisions of the new legislation have given even
greater incentives for U.S. corporations to shift production abroad, engage in yet more tax
avoidance activities and thereby exacerbate prevailing economic inequality. Which, knowing
Donald Trump, was probably the whole point in the first place.
This tax bill was constructed on a foundation of lies. To cite one obvious example, the real
U.S. corporate tax rate has never been near the oft-cited 35 percent level. As recently as
2014, the Congressional Research Service estimated that the effective rate (the
net rate paid after deductions and credits) was around 27.1 percent, which was well in line
with America's international competitors.
But even the new and supposedly more competitive 21 percent rate has not been as advertised.
As Brad Setser (a senior fellow at the Council on Foreign Relations)
has illustrated , the new tax bill also included a provision that enabled "companies
that shift their profits abroad to pay tax at a rate well below the already-reduced corporate
income tax Why would any multinational corporation pay America's 21 percent tax rate when it
could pay the new 'global minimum' rate of 10.5 percent on profits shifted to tax havens,
particularly when there are few restrictions on how money can be moved around a company and its
foreign subsidiaries?" The upshot, as Setser
concludes , is that "the global distribution of corporations' offshore profits -- our
best measure of their tax avoidance gymnastics -- hasn't budged from the prevailing trend."
Although this new 10.5 percent rate applies to "global intangibles," such as patents,
trademarks, and copyrights, the legislation still creates incentives for companies (notably
pharmaceuticals and high-tech companies) to shift investment in tangible assets as well (such
as factories) in order to maximize the benefits of this global rate on intangibles.
Many anticipated this
result at the time the new law was enacted. The legislation incentivizes increased
offshore investment in real assets such as factories, because the more companies invest in
these "tangibles" in offshore low tax jurisdictions such as Ireland, the easier it becomes to
incur a "calculated minimum tax on your offshore intangible income (the patents and the like on
a new drug, for example)," according
to Setser . The effect is also to exacerbate the trade deficit. A $20 billion jump in
the pharmaceutical trade deficit last year provides excellent evidence of this trend.
Ironically, this works at variance with Trump's "America First" trade nationalism, and his
concomitant efforts to wield the tariff weapon in order to disrupt global supply chains and get
corporate America to re-domicile investment at home.
Parenthetically, a further political by-product has been to give the deficit hawks more
political ammunition in their goal to cut supposedly "unsustainable" social welfare
expenditures, perpetuating even greater economic inequality, on the grounds of insufficient tax
revenues to "fund" these programs. That is another lie (see this New York Times
op-ed by Stephanie Kelton to understand why).
As for the other bogus arguments used to justify this legislation, it is worth noting that
most of dollars allegedly "trapped" overseas are in fact domiciled in the U.S. They have been
classified as "offshore" purely for tax accounting purposes. Yves Smith of "Naked Capitalism,"
for example, has
pointed out that Apple stored the dollars "related to its Irish sub in banks in the US
and managed it out of an internal hedge fund in Arizona." Similarly, the Brookings Institute
notes that American tax accounting rules do not place geographic restrictions on where
those U.S. dollars are actually held, even if the Treasury data records them as "offshore" for
tax purposes. Quite the contrary: "[T]he financial statements of the companies with large
stocks of overseas earnings, like Apple, Microsoft, Cisco, Google, Oracle, or Merck show most
of it is in U.S. treasuries, U.S. agency securities, U.S. mortgage backed securities, or U.S.
dollar-denominated corporate notes and bonds." In other words, the dollars are "home" and
invested in the U.S. financial system.
So in what ways are the dollars actually "trapped" (i.e., unavailable for domestic use
without severe tax repercussions)? They have never been so in reality. Through financial
engineering, the banks that have held the dollars "offshore" on behalf of these American
multinationals have extended loans against the stockpile so as to "liberate" the capital to be
used as the companies saw fit. It's a form of hypothecated lending . Not
only has the resultant " synthetic cash repatriation
" provided a nice margin for what are effectively risk-free loans, but it also has enabled the
beneficiary companies to deploy the dollars within the U.S. while avoiding tax penalties.
The dollars, in other words, have only been "trapped" to the extent that corporate
management has chosen not to deploy them to foster real economic activity. "Punitive" corporate
tax rates, in other words, have been a fig leaf. But the American worker has derived no real
benefit from this repatriation, which was the political premise used to sell the bill in the
first place.
Since the passage of the tax bill, the data show no significant evidence of corporate
America bringing back jobs or profits from abroad. In fact, there is much to suggest the
opposite: namely, that tax avoidance is accelerating in the wake of the legislation's passage,
rather than decreasing. Consider that the number of companies paying no taxes
has gone from 30 to 60 since the bill's enactment.
"Well over half the profits that American companies report earning abroad are still booked
in only a few low-tax nations -- places that, of course, are not actually home to the
customers, workers and taxpayers facilitating most of their business. A multinational
corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary
and then funnel income to its Bermudian subsidiary -- taking advantage of Bermuda's corporate
tax rate of zero."
Again, the money itself does not make this circuitous voyage. These are all bookkeeping
entries for accounting purposes. In another report, Setser estimates the totals in revenue not
accrued by the U.S. Treasury to be equivalent
to 1.5 percent of GDP , or some $300 billion that is theoretically unavailable for use
on the home front.
Global tax arbitrage, therefore, runs in parallel with global labor arbitrage. That's the
real story behind globalization, which its champions never seem to mention, as they paint a
story of worldwide prosperity pulling millions out of poverty. However, as I've written before , "a big portion of Trump
voters were working-class Americans displaced from their jobs by globalization, automation, and
the shifting balance in manufacturing from the importance of the raw materials that go into
products to that of the engineering expertise that designs them." During the 2016 election and
beyond, Trump has consistently addressed his appeals to these "
forgotten men and women ." Yet the president's signature legislative achievement,
corporate tax reform, suggests that his base continues to receive nothing but a few crumbs off
the table. The tax reform also works at variance with the main thrust of his trade policy or,
indeed, his restrictionist immigration policies (and it's questionable whether these forgotten
voters are actually deriving much benefit from those policies either). Not for the first time,
therefore, the president's left hand is working at cross-purposes with the right. The very base
to whom he continues to direct his re-election appeals get nothing. And the country as a whole
remains far worse off as a result of his policy incoherence and mendacity.
A very nice summary that details how the new boss is the same as the old boss, just more
offensive on Twitter. The only place where Trump's campaign promises seem to hold up at all
are the sound and furry over trade with China and the border wall with Mexico. Nothing will
come of this bluster most likely, but at least it makes it appear that Trump is still working
on behalf of his base.
Spoiler alert: NO. As long as the alternative is giving free healthcare to undocumented
immigrants, learning to code, reparations and a focus on transgender rights.
Is this the actual alternative or, at least in part, a fear mongered version of universal
benefits like M4A or a jobs program; civil rights; and righting some of the wrongs of the
past? It preserves the status quo or promotes it becoming even more inequitable to convince
people to reject any option that also helps someone not like them, or offers relief for a
problem they never had or surmounted on their own. I mean, no viable politician is "focusing
on transgender rights" or doing more than barely (and opportunistically imo) giving lip
service to reparations. Is the rejection of any move toward justice or equity just the result
of propaganda, or are we fundamentally unable to do any better without resentment? I'm very
pessimistic at the moment.
No – have I misjudged? I know at least some have said they'd sign on to a "study" of
reparations, even Sanders eventually, but he's been clear that he doesn't think "writing a
check" is the way to address problems in distressed communities. M4A that included
undocumented immigrants wouldn't bother me from a candidate who supported a path to
citizenship and humane forms of enforcing future immigration restrictions, and I'm not
opposed to transgender rights so maybe some of that wouldn't seem so fearsome to me if I
heard it. Why it should be fearsome enough to disqualify a candidate with a platform of
universal or widely distributed social benefits, economic justice, and criminal justice
reform is inexplicable and sad to me.
It doesn't matter how you understand it. It only matters what contorted misrepresentations
of Democrat's actual policies that 'regular folks' aka greedy, selfish, frightened 'suburban
republicans' (aka a majority of voters in most states) can be led to believe.
The focus on these kind of divisive topics is the gift that keeps giving for the right wing.
What you see as reasonable, they see as a threat to their way of life. So while virtue
signalling to one group, they are simultaneously alienating another and galvanizing their own
opposition against them.
This is why Trump screams about immigrants so loudly. It's all he's got. When the facts
aren't on your side, pound the table. Remember this is the guy who invented birtherism. He
won't lift a finger for his voters but he sure knows how to yell about foreigners. He also
promised not to cut Social Security or Medicare then submitted a budget that makes them look
like Jack the Ripper victims.
Yes, i think it is as simple a that. Progressives should just ignore racist and
antimigrant discourse and focus on Health care, infrastructures, GND, jobs etc.
>Again, the money itself does not make this circuitous voyage.
Haha the one way you gold bugs could get me on board is if you were able to force all
cross-border money flows to be limited to actual, physical gold. Ideally in wooden sailing
ships.
Good article this. Trump must know that the whole thing is just financial shenanigans.
After all, that has been his specialty for the past few decades. But he and Washington went
along with it anyway and now America's financial situation is even worse. Every actor is
trying to make out in their game and hopes that the consequences fall after they have exited
the market. Maybe they think that at that stage they will be able to swoop in and grab up
everything else on the cheap. Having just read some history on France in 1848 and 1871 I
think that the may be playing with fire and not the FIRE that they are used to.
The idiots take over the final days of crumbling civilizations. Idiot generals wage
endless, unwinnable wars that bankrupt the nation. Idiot economists call for reducing taxes
for corporation and the rich and cutting social service programs for the poor. They project
economic growth on the basis of myth. Idiot industrialists poison the water, the soil, and
the air, slash jobs and depress wages. Idiot bankers gamble on self-created financial
bubbles. Idiot journalists and public intellectuals pretend despotism is democracy. Idiot
intelligence operatives orchestrate the overthrow of foreign governments to create lawless
enclaves that give rise to enraged fanatics. Idiot professors, "experts", and "specialists"
busy themselves with unintelligible jargon and arcane theory that buttresses the policies of
rulers. Idiot entertainers and producers create lurid spectacles of sex, gore and fantasy.
There is a familiar checklist for extinction. We are ticking off every item on it.
Maybe we should create a 'national intangibles tax', and levy it specifically on the
patents, trademarks, and copyrights of all U.S. domiciled companies, and on these
'intangibles' for all companies that have the majority of their common equity securities
registered in the U.S.
"... "The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting. ..."
"... The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement. ..."
American farmers are likely to feel the pain first. Soybean exports to China collapsed last year when the trade war began, and
agricultural exports will be hit harder when, or if, the new tariffs are imposed. Farmers are also suffering from extensive flooding
that has delayed planting.
"The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the American Soybean
Association. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these
tariffs is mounting."
The new round of tariffs will hit other parts of the US food industry, with beans, lentils, honey, flour, corn and oats all on
the list of goods that will be taxed.
... ... ...
The Republican senator Chuck Grassley, who represents Iowa, a state heavily reliant on agriculture, has called for a quick
resolution to the dispute. "Americans understand the need to hold China accountable, but they also need to know that the administration
understands the economic pain they would feel in a prolonged trade war," Grassley said in a statement.
"... When Trump was first elected, I tried to calm down friends with advanced TDS, who expected Kristallnacht to be directed at their favorite brunch spots, by saying that "This is what empires in decline look like." ..."
"... In this sordid world, girls/women have absolutely no value ..."
"... Don't forget the young boys who get traded around like fudge recipes. Something quick on the Hollywood angle on bent dicks. It applies almost everywhere in America now: https://news.avclub.com/corey-feldman-made-a-documentary-about-sexual-abuse-he-1834310252 ..."
"... My reinterpretation of your comment would be; In this sordid world, people without power have absolutely no value. ..."
"... Epstein's World was tied in with Hollywood and Wall Street. Both are homoerotic paedophile havens. The world of the Vatican is tied in to Wall Street; it has it's own bank, the Instituto per le Opere de Religioni. ..."
"... As is true with the continued withholding of key documents in the JFK assassination, I believe that if the lousy reporting and official screwups in the Epstein case persist, it will be perfectly fine for the public to conclude and believe the absolute worst and act accordingly. ..."
"... Given the spotiness and inadequacy of reporting on the Epstein affair I wonder if an avenue for exploration might be that of a more direct involvement of media moguls and highly placed media staff in being serviced by Epstein i.e., the decision-makers regarding what gets covered and published are themselves subject to exposure, embarrassment, and other things that befall men caught in such matters. ..."
I can't add much to Yve's excellent post and the follow-up comments, except to say that the events of recent days and weeks
have made Pizzagate (as deranged as it was) into some kind of weird Jungian premonition which is to say, the s&#* is out of control.
When Trump was first elected, I tried to calm down friends with advanced TDS, who expected Kristallnacht to be directed
at their favorite brunch spots, by saying that "This is what empires in decline look like."
In regard to this sordid tale, I'm reminded of Robert Graves' (and the superb BBC TV version of) "I, Claudius."
My reinterpretation of your comment would be; In this sordid world, people without power have absolutely no value.
Otherwise, I'm with you all the way. Abuse is abuse. No other definition is logical.
Epstein's World was tied in with Hollywood and Wall Street. Both are homoerotic paedophile havens. The world of the Vatican
is tied in to Wall Street; it has it's own bank, the Instituto per le Opere de Religioni.
Who knows? Perhaps there will be some Prelates unearthed from the Lolita Express passenger log.
As is true with the continued withholding of key documents in the JFK assassination, I believe that if the lousy reporting
and official screwups in the Epstein case persist, it will be perfectly fine for the public to conclude and believe the absolute
worst and act accordingly.
Given the spotiness and inadequacy of reporting on the Epstein affair I wonder if an avenue for exploration might be that
of a more direct involvement of media moguls and highly placed media staff in being serviced by Epstein i.e., the decision-makers
regarding what gets covered and published are themselves subject to exposure, embarrassment, and other things that befall men
caught in such matters.
Who covers the press and roots out its secret malefactions? Rogue reporters? And who publishes them? Indeed!
Oversized military expenditures (military Keysianism) might still keep the economy afoot for a while.
Notable quotes:
"... For Morgan Stanley Wealth Management's Shalett, the most recent economic reports show "slowing that is far worse than the 2015-2016 minirecession," she writes -- due in large part to "outright contractionary" PMI (an indicator surveying purchasing managers at businesses) data and global new orders. ..."
"... The Fed is criminally unprepared for a recession, after making the fateful decision to rescue the banks and financial markets at the expense of the working class. Washington is criminally unprepared for a recession, after making the fateful decision to invest everything in pointless wars at the expense of infrastructure and the working class. ..."
"... Guess who else is unprepared for a recession? ..."
"... "Warning lights are flashing. Whether it's this year or next year, the odds of another economic downturn are high -- and growing," Warren wrote in a post on the blogging platform Medium. ..."
"... Free market, my ass. End days of run amok capitalism? I sure hope so for the sake of the planet and the people who are at the mercy of this nasty 'world we live in'. ..."
"... Moving from taxing the rich to taxing the proletariat (the poor have no money of their own to buy goods and hence pay tariffs). since the rich invest most of their wealth and workers spend most (or more!) the tax burden shifts downward (by design!) ..."
There is a chance that the recession won't wait until next year to hit, but there is almost no chance that we won't be in a
recession in 2020. A whole list of economic indicators are flashing red, starting with the most accurate recession forecaster
of all -
the yield curve .
The latest eruption in the U.S.-China trade dispute pushed a widely watched Treasury-market recession indicator to the highest
alert since 2007.
Morgan Stanley says Trump's trade war could
cause a recession in 9 month's time, but there is a lot else going on than just a trade war.
The yield curve is just one of four major recession indicators that are
flashing
red .
Since the 1960s, one indicator of a looming recession has been the New York Fed's recession probability index breaking 30%.
The probability of a U.S. recession predicted by the treasury spread hit 32.9% in July -- the highest since 2009, according
to the New York Fed.
... ... ...
Although consumer confidence is still historically high, the most recent June consumer confidence index (released by The
Conference Board every month) dropped to two-year lows, to 121.5.
... ... ...
For Morgan Stanley Wealth Management's Shalett, the most recent economic reports show "slowing that is far worse than
the 2015-2016 minirecession," she writes -- due in large part to "outright contractionary" PMI (an indicator surveying purchasing
managers at businesses) data and global new orders.
...
According to a Reuters report in May, factory activity dropped to near 10-year lows, sparking fresh concern.
The U.S. has seen its
longest
economic expansion in the nation's history - 120 months. The Fed had to know that it would eventually end. Yet the Fed never
came even close to normalizing interest rates and that leaves them with
few options .
The Fed's main recession-fighting tool has long been lowering the benchmark federal funds rate, which governs short-term rates
for things ranging from auto loans to credit card charges. In the past, the average reduction needed to fight a recession was
a whopping 5.5 percentage points. Such a bold step is mathematically impossible now.
The Federal Open Market Committee, or FOMC, its policymaking arm, just decreased the rate a quarter-point to a 2.0% to 2.25%
band, thus not a lot of room exists to cut much more. And if the Fed ends up decreasing the rate another half-point, as many
suspect it will, then the central bank has even less to work with.
"They're out of ammo," said economist Gary Shilling, who owns his own eponymous firm. "Going from 2.25% to zero is not an
awful lot."
... ... ...
What happens if the Fed reverses course and starts purchasing bonds once more? There's a school of thought that this too
will be less effective than in the past. Reason: Banks have so much extra funding these days that they don't know what to do
with all the money. The previous rounds of QE, which finally ended in 2014, stuffed banks with trillions of new dollars, which
they hold in reserve to buffer themselves against economic bad spells and also to make loans. Plus, loan demand is low, even
now in an expansion. Demand will be a lot less in a recession.
The Fed is criminally unprepared for a recession, after making the fateful decision to rescue the banks and financial markets
at the expense of the working class. Washington is criminally unprepared for a recession, after making the fateful decision to
invest everything in pointless wars at the expense of infrastructure and the working class.
Democratic presidential contender Sen. Elizabeth Warren warned on Monday that the next financial crisis is on its way.
"Warning lights are flashing. Whether it's this year or next year, the odds of another economic downturn are high
-- and growing," Warren wrote in a post on the blogging platform Medium.
The Massachusetts Democrat said that increasing household and corporate debt has left the economy on precarious footing.
Citing a top economist, Warren wrote that a failure to raise the debt ceiling in September could be "more catastrophic" than
the 2008 collapse of Lehman Brothers.
She also noted weakness in the manufacturing sector, putting the blame for its recent slowdown on President Donald Trump,
who has tangled with China over trade. Despite Trump's pledge to bring back manufacturing jobs, the sector is now in recession,
she wrote, and wages for the industry lag the national average
A 2020 recession, if it starts no later than summer, would doom Trump's reelection. It would also boost progressives like Bernie
and Liz because people would be less willing to accept incrementalism.
@gjohnsit@gjohnsit in tit for tat
action the moron in chief needs
to win....the currency war ameriKa can't win is upon
us.
Slight summary, tRumpolini put tariffs on China of 10% on what was left to tariff, this happened yesterday. Today China reciprocated
by weakening it's currency causing the stock markit to swan to the tune of 900 points. So thinking me(tRumpolini) lost, he doubles
down by doing this.
I somehow don't buy this. Dodd-Frank? What a joke. Both me and Eric never bought her political shtick. Man she's another ex-Republican.
I just can't believe that this insane global economy will be reformed or resolved by our current, corrupt, fucked up political
electoral system.
There is no way for ordinary people who are not 'invested' to stop this insanity. What are our options when the Demorat's refuse
to clean house or even regulate the disaster global cappies who own and run 'the place'?
Free market, my ass. End days of run amok capitalism? I sure hope so for the sake of the planet and the people who are
at the mercy of this nasty 'world we live in'.
(when we refused to admit that we were actually in a depression) and so far it hasn't happened - officially. Maybe the only
reason capitalism hasn't collapsed is that the rich and powerful refuse to admit that it has and we are all afraid to admit that
they're liars.
@doh1304
but that was nine years ago. Don't you think that after 10 years of record low interest rates things have changed?
Either way, the leading economic indicators are measurable facts.
(when we refused to admit that we were actually in a depression) and so far it hasn't happened - officially. Maybe the only
reason capitalism hasn't collapsed is that the rich and powerful refuse to admit that it has and we are all afraid to admit
that they're liars.
Moving from taxing the rich to taxing the proletariat (the poor have no money of their own to buy goods and hence pay tariffs).
since the rich invest most of their wealth and workers spend most (or more!) the tax burden shifts downward (by design!)
@snoopydawg are so
fake. A deliberate distraction which enables the neoliberal/pigs from both parties to continue with their raping and pillaging
the earth and the humans who live here. For what? Somebody tell me why a fascistic insane demagogue is still in office? Because
he serves their agenda, all of them R's and D's.
Yes they could stop Trump but why would they? He's getting it done and the Dems. can put the blame on Trump and Co. The Demorat's
can then focus on fake social issues and rile up the populace with mayhem and social unrest.
If this is not the case why have they once again taken off the table the legal remedy for lunatics, unfit for office demagogues
of the worst order. What can ordinary people do to prepare for their crashes? Nothing. We're all dependent on this fucked up economy
one way or another.
Yes, a tool all right. Remember when the House Democrats were considering who would be the Speaker of the House, Trump actually
supported her. Some were perplexed by this. I commented at the time that this didn't surprise me in the least, as if Trump didn't
have someone like Pelosi as Speaker, they would have to invent someone identical. They would have, too.
Trump needs a foil in the House, and Pelosi is perfect for the role. It's part of what allows Mega-party team A and
Mega-party team B to achieve the goals their owners have tasked them with.
Our MSM screams and raises hell over it all, but that's part of the act, too. Meanwhile We the People continue to get the shaft.
....that Trump would try to throw the economy into a recession at this time. In fact, he has been dogging the Fed Reserve for
that interest cut just to push the possibility of a recession back and further boost the stock market.
I believe it is common knowledge that the incumbent party almost always wins a second term if the economy does not fail catastrophically.
And Trump is poised to win
according to historian Allan Lichtman, whose system has never failed to accurately predict the outcome of the past nine Presidential
elections. Lichtman tracks the 13 variables that determine the outcomes of Presidential elections going back to the Civil war
-- the health of the short-term and long-term economy being two of them.
Lichtman, a Democrat himself, says there is only one way to trick the situation at this point. Can you guess what it is?
"... China gambit is a huge gamble for Trump. It he plays it right and signd the deal with China later this year while Fed slashed rates he might create an artificial boost for the economy, enough to secure his victory. In this case his demagogy might resonate with voters. ..."
"... While Warren has her weak spots and Trump has several avenue of attack against her, she has a real program for the country and that lessen Trump chances for re-election because Trump is incapable of any serious discussion of economics and problems facing the country. His only forte is demagogy. ..."
"... Also Warren in not entangled into any foreign policy controversy and can attack Trump impulsivity and incompetence in this area with impunity. She also can leverage Russiagate sentiments, which, while pure neo-McCarthyism, will be a factor in 2020 elections. ..."
"... Many people in Mid-West now understand that he betrayed all his 2016 elections promises and just carried water for Mitch McConnell. So the question whether Trump can carry Midwestern states in 2020 is open to review. ..."
"... It is also important to note that Trump lost anti-war right. ..."
The Increasingly Bizarre Interplay Between Trump's
Trade Policy and the Fed https://nyti.ms/331ItNz
NYT - Neil Irwin - August 1
Here's a question for economy watchers: Is American economic policy in 2019 more like
ouroboros, the ancient Egyptian symbol of a snake eating its own tail, or maybe more like an
M.C. Escher painting in which a series of stairs wrap around a room in mind-bending ways?
Both seem like decent approximations of the strange ways in which trade policy, monetary
policy and financial markets are intersecting this year. And never more so than this
week.
On Wednesday, the Federal Reserve cut its main interest rate target, aiming to guard the
American economy against damage from "trade uncertainty" and a slowing world economy, as the
Fed chair, Jerome Powell, said at a news conference. But markets fell, with investors
interpreting his comments to mean that the Fed won't cut rates much more in the months to
come.
Then on Thursday, President Trump announced a new round of 10 percent tariffs on $300
billion worth of China exports, suggesting that a trade war détente from earlier the
summer may be coming to an end. That, in turn, caused a huge swing in bond markets that
implied investors now do expect further interest rate cuts as the Fed tries to contain the
trade-related damage.
Going back a bit further in time, the interplay between different aspects of economic
policy becomes even more convoluted.
In late spring, trade talks between the United States and China broke down, and escalation
of the trade wars seemed inevitable. The stock market fell, as the conflict seemed sure to
hit corporate earnings. And bond yields fell, as investors became confident that the Fed
would need to cut interest rates to contain the damage.
In late June, talks got back on track, but by that time Fed officials had largely made up
their minds that it would be worthwhile to cut interest rates at least once to provide
insurance against the slowing global economy.
Those plans, in turn, fueled a big stock market rally in late June and July, and most
economic data has been solid in that time. Whatever the risks and downsides, the Fed's shift
toward lower interest rates seemed to have accomplished its goal of a financial environment
that will support continued economic growth.
"After simmering early in the year, trade policy tensions nearly boiled over in May and
June, but now appear to have returned to a simmer," as Mr. Powell summarized in his news
conference Wednesday. President Trump turned the metaphorical stove back to high less than 24
hours after those words passed Mr. Powell's lips.
This suggests the president and his trade negotiators believe they have downside
protection against the possibility that trade policies will cause any lasting damage to the
economy or the stock market. After all, the
Fed has very publicly shown that it views it as appropriate to cut interest rates to
combat any slowdown related to trade wars.
There is always interplay between different elements of economic policy set by various
parts of government. For example, the Fed's practice is to take tax and spending decisions by
Congress as a given and plug them into its models -- and adjust its interest rate policies
accordingly.
What's different now is that Mr. Trump's administration seems willing to weaponize that
practice, offering no qualms about openly bullying the Fed while using its presumed reaction
as a source of advantage in international negotiations.
Even as Mr. Trump is comfortable abandoning the norm that the president should not
explicitly pressure the Fed, Mr. Powell appears to be obeying the tradition that the Fed
should not try to use its power over monetary policy to twist the arms of elected
officials.
It has worked out fine for Mr. Trump so far -- the economy continues to grow heading into
an election year, and while the stock market fell Wednesday after the latest trade news, the
S&P 500 was down only 0.9 percent; it would surely have been down more if not for
assumptions that further rate cuts were now more likely.
But it also creates a number of risks for the American economy, in both the short and
longer term.
First, the Fed's interest rate policies are blunt instruments. They seem to be more
effective at generating big swings in asset prices than at fine-tuning the economy, and it
would be easy for Mr. Powell and his colleagues to make a mistake -- either cutting interest
rates by too much, fueling inflation, or too little, allowing a slump.
There's no modern precedent for having the world's two largest economies, major trading
partners, enter a trade war. And already the consequences have been more complex than one
might have guessed.
The slowing Chinese economy has pulled down the price of oil, which has both lowered
inflation in the United States and lowered capital investment by American energy companies.
Even if the Fed is successful at boosting the overall stock market, lower rates probably
won't do much to help the industries and consumers directly damaged by tariffs.
Second, the monetary policy firepower that the Fed is using to try to offset the damage
from trade wars may not be available if an economic slump caused by some other factor were to
emerge. The central bank would have less room to stimulate the economy than it would if it
were not deploying rate cuts now.
Finally, this pattern could do longer-term damage to the Fed's credibility as an
independent, credible central bank. The United States dollar is central to transactions
around the world, a source of long-term geopolitical advantage. Confidence in the Fed is part
of the reason. Global investors generally believe that the central bank will act with a
long-term view, not based on the political needs of the current American president.
This leaves Mr. Powell in a pretty miserable spot. One way he could decisively break the
cycle would be to abandon deeply held principles -- threatening to ignore the potential
damage to the economy from trade wars because he thinks the president's policies will do
damage over the longer term. That's not the role for unelected officials like the Fed chief,
or at least it isn't supposed to be.
In this particular ouroboros, in other words, it sure seems like Mr. Trump is the mouth,
and Mr. Powell is the tail.
China gambit is a huge gamble for Trump. It he plays it right and signd the deal with China
later this year while Fed slashed rates he might create an artificial boost for the economy,
enough to secure his victory. In this case his demagogy might resonate with voters.
If he does not sign the deal with China, he implicitly increases chances for Warren to
become Democratic nominee (Kamala now is weakened; Biden is problematic and not only due to
his semi-senility; Sanders is viewed as an enemy by the Democratic Party elite and proved to
be Hillary sheepdog in 2016).
While Warren has her weak spots and Trump has several avenue of attack against her, she
has a real program for the country and that lessen Trump chances for re-election because
Trump is incapable of any serious discussion of economics and problems facing the country.
His only forte is demagogy.
Also Warren in not entangled into any foreign policy controversy and can attack Trump
impulsivity and incompetence in this area with impunity. She also can leverage Russiagate
sentiments, which, while pure neo-McCarthyism, will be a factor in 2020 elections.
Especially bad Trump chances are in case economics slides into recession in the second
half of 2020 or, God forbid, stock market crashes.
Other then Fed rate cuts Trump does not have any real tools to stimulate the economy and
his tax cut for the rich is not viewed too positively by the majority of the population.
Trumpcare is viewed mostly negatively.
Many people in Mid-West now understand that he betrayed all his 2016 elections promises and just carried water for Mitch McConnell. So the question whether Trump can carry
Midwestern states in 2020 is open to review.
It is also important to note that Trump lost anti-war right.
"... Foreign investment in the United States grew at a slower annual pace in the first two years of Mr. Trump's tenure than during Barack Obama's presidency, according to Commerce Department data released in July. Growth in business investment from all sources, foreign and domestic, accelerated briefly after Mr. Trump signed a $1.5 trillion tax-cut package in late 2017 but then slowed. Investment growth turned negative this spring, providing a drag on economic output. ..."
"... Now manufacturing is struggling amid a global slowdown and fallout from the trade war, which Mr. Trump has escalated by imposing additional tariffs on Chinese goods and by labeling China a "currency manipulator." ... ..."
Trump's Push to Bring Back Jobs to US Shows
Limited Results https://nyti.ms/31y1HsE
NYT - Jim Tankersley - August 13
WASHINGTON -- From tax cuts to relaxed regulations to tariffs, each of President Trump's economic initiatives is based on a
promise: to set off a wave of investment and bring back jobs that the president says the United States has lost to foreign countries.
"We have the greatest companies anywhere in the world," Mr. Trump said at the White House recently. "They're all coming back
now. They're coming back to the United States."
Mr. Trump's tax cuts unquestionably stimulated the American economy in 2018, helping to push economic growth to 2.5 percent
for the year and fueling an increase in manufacturing jobs. But statistics from the government and other sources do not support
Mr. Trump's claim about his policies' effectiveness in drawing investment and jobs from abroad.
Foreign investment in the United States grew at a slower annual pace in the first two years of Mr. Trump's tenure than
during Barack Obama's presidency, according to Commerce Department data released in July. Growth in business investment from all
sources, foreign and domestic, accelerated briefly after Mr. Trump signed a $1.5 trillion tax-cut package in late 2017 but then
slowed. Investment growth turned negative this spring, providing a drag on economic output. ...
... the Reshoring Initiative ( http://www.reshorenow.org/) data show
fewer than 30,000 jobs that companies say they will relocate to the United States because of Mr. Trump's tariffs on imported steel,
aluminum, solar panels, washing machines and a variety of Chinese goods. Researchers at A.T. Kearney (*) said last month that
Mr. Trump's trade policies, including tariffs, had pushed factory activity not to the United States but to low-cost Asian countries
other than China, like Vietnam.
Manufacturers of primary metals, which include steel and aluminum, have added fewer than 15,000 jobs since Mr. Trump took office,
with more than half of those gains coming before Mr. Trump imposed tariffs on foreign-made metals last year.
Now manufacturing is struggling amid a global slowdown and fallout from the trade war, which Mr. Trump has escalated by
imposing additional tariffs on Chinese goods and by labeling China a "currency manipulator." ...
This is the nature of all petty speculators. And Trump is a petty speculator, a huckster by
nature. He has a typical "rag trader mentality".
ZeroHedge comments became very critical to Trump. As they reflect certain demographic which
previously supported Trump this is not a good sign.
What is interesting that in this libertarian paradise almost nobody supports classic
neoliberal liberalization. Most support tariffs. Times definitely changes.
Of course, since President Trump has pegged the success of his Presidency on the rise and
fall of the markets, on Wednesday, as "tweets" about a "trade talks continuing" failed to lift
the markets, he resorted to more direct measures to manipulate the markets:
Via CNBC:
"Trump held the call with J.P. Morgan Chase CEO Jamie Dimon, Bank of America's Brian
Moynihan and Citigroup's Michael Corbat, according to people with knowledge of the
situation."
This, of course, was reminiscent of the call made by Steve Mnuchin, U.S. Treasury Secretary,
during the market rout last December. But most importantly, this is about the upcoming
election:
"Trump has been reaching out to corporate leaders this week amid his concerns that a
slowing U.S. economy could impact his reelection chances, according to a Thursday piece from
the Washington Post."
Hopefully, he will listen to them.
But even if the trade dispute was ended today, the damage is likely already done.
Economic growth has weakened globally
Corporate profit growth has turned negative.
Tax cuts are fully absorbed into the economy
Interest rates are signaling there is something "broken"
Yield curves are negative as "deflationary" pressures are rising
All of which is leading to rising recession risk.
In other words, while investors have hung their portfolios hopes of a "trade deal," it may
well be too little, too late.
Art Of The Deal Versus The Art Of War
This is all assuming Trump can actually succeed in a trade war with China.
Let's step back to the G-20 meeting between President Trump and President Xi Jinping. As I
wrote
then:
"There is a tremendous amount of 'hope' currently built into the market for a 'trade war
truce' this weekend. However, as we suggested previously, the most likely outcome was a truce
but no deal. That is exactly what happened.
While the markets will likely react positively next week to the news that ' talks will
continue,' the impact of existing tariffs from both the U.S. and China continue to weigh on
domestic firms and consumers.
More importantly, while the continued ' jawboning' may keep ' hope alive' for investors
temporarily, these two countries have been ' talking' for over a year with little real
progress to show for it outside of superficial agreements.
Importantly, we have noted that Trump would eventually ' cave' into the pressure from the
impact of the ' trade war' he started.
Trump will always be better than Hillary but he always folds like a house of cards in a
windstorm when he's up against the Democrats or anyone for that matter. He turned out to be a
******* giant orange *****.
I really don't know if he will win in 2020. And a lot of that is based on him screwing his
own base like farmers and gun owners. He didn't lock up Hillary, or build us a wall. He hasnt
stopped the illegals from coming over the border. And he hasnt cut off their benefits. So he
hasn't really done any of the major things he promised.
All the Democrats have to do is cheat in Pennsylvnia, Michigan and Florida and he's
finished. We end up with Pedo Joe as POTUS.
Remember when Sam Walton used to be proud of his "made in America" products...literally
saving companies from their demise by buying truckloads of their products.
Skip the Trade War....do I sound too much like Bernie if I suggest that we go after the
family that makes $100,000,000.00 per DAY off selling Chinese goods....they ARE the
storefront for China. Well, along with few dozen other retailer and etailers (like
Amazon)
...and don't give me the "they pay their taxes" BS...because the billionaire boys club
hire multi-millionaire Tax Attorneys to avoid paying taxes.
When are you people going to realize that the "trade war" isn't about bringing jobs back.
It's about the global corporations getting a better deal in China. It's about Financial
Services and US banks gaining market share in China.
Those corporations won't move jobs back here. They'll just make more in China. Those same
corporations that offshored those American jobs already got their tax cuts. Why would they
bring jobs back now. Talk about putting the cart in front of the horse.
By the way US steel had been and will continue to lay people off.
The US is running Trillion dollar plus yearly deficits with stocks up 50% since Trump took
office. This with all-time low unemployment and no inflation (bwahahahahaha).
Now imagine what the deficits will look like if things turn South.
Lance Roberts just does not get it. I wonder if he actually read the art of war. For it
was the Globalist who created what is China today with the largest transfer of technology,
capital, etc. in the history of the world.
We are now at the point of no return. The western system will either decline or it will
pull itself out of it self destruction. Make no mistake China intends to be a military power
and it is just a matter of time before China challenges USA domination. I see no way this
will be avoided at this time.
As such you will see economic conflict going forward. China will likely win this one
but it will set the stage for the continued decline of the western economic system. For the
current system of western debt and financialization of Western economies cannot sustain
itself. China still depends on this system that cannot last. So in time Globalist system will
have to reset and the relationship between Western Nations and China will change into trade
conflict.
What has been accomplished? Stolen Democrat Marxist Redistribution is all that Trump has
accomplished while getting exposed as the illiterate fraud that he is.
Corp/Fascist, CIA MOSSAD Trump was never in a "trade war". Trumps sole mission has been to
steal and redistribute, at a ongoing DEFICIT , out of the property of American People,
leaving the American People, fked. Same as it ever was!
Corp/Fascist, CIA MOSSAD Trump continues to line up all bonafide working and saving
Americans in front of his deficit debt devaluation firing squad. All he intended to do, he
has accomplished: redistributed stolen plunder and bounties and plundered all bonafide
working and saving white, black, brown, red and yellow Americans.
HK is just a trivial Maidan-like side scenario to support the US position in a trade war
that is meant to force the Chinese into submission. Since the trade war is collapsing, the
Donald Trump has to try to escalate somewhere else - in this case it's Taiwan. That really is
the only option the US culture allows him to consider. Escalation, escalation, escalation.
Very predictable strategy. Problem is, in this way the Trump puts the very existence of the
USA at risk when he tries to win against all odds against an adversary that absolutely
doesn't want to lose.
One of the things I will allow, however, is -- a lot of people are surprised we send
and we sell to Huawei a tremendous amount of product that goes into a lot of the various
things that they make -- and I said that that's OK, that we will keep selling that
product." – President Trump
Before the Great Trade War , and the endless attacks on Huawei by Trumptard and the US
Dark State, in order, to kill Huawei, many people, including myself, have not heard of
Huawei's name before, now, it is a world famous brand, thanks for the massive free publicity,
from the US War State.
Despite the total ban and blacklisting, Huawei not only survived, without a scratch, it's
revenue in 2019, actually grew an astonishing 23% .
WHY IS THE US DARK STATE SO TERRIFIED OF HUAWEI'S 5G WIRELESS TECHNOLOGY?
The US Dark State/War State/Deep State, that is the NSA/CIA/Pentagon/MIC/MSM . . . etc has
forced every western tech companies to install backdoors and malwares on their equipments,
except Huawei. They have tried to force Huawei to install those NSA backdoors and malwares,
in 2014, but the company categorically refused.
"The real issue is that nothing has changed since a 2014 report from The Register that
Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered
intelligence access to the data that crosses their networks.
All our emails, text messages, phone calls, internet searches, web browsing, library
records, . . . etc, are recorded and stored by NSA/CIA's vast servers farms.
Now, Huawei is not only the leading 5G wireless provider, but it is the only one, so far.
The other companies like Nokia and Ericsson are far behind.
5G is going to completely replace 4G and 3G. It is about 200 times faster than 4GLTE, in
download speed.
What this means is that if the world adopts the Huawei equipments and standards, it will
threaten to UNDO the US Dark State's vast global surveillance network.
This is what terrifies the US Dark State. Their vast Global Surveillance Network is the
basis of its power, and tools to enslave mankind.
There is a very good reason, why the American Founding Fathers , enacted every measures,
to protect our rights and privacy, so that we will not be controlled and enslaved by the
tyranny of totalitarian government, which is already upon us, in the form of US Dark
State/War State .
The US Dark State/Deep State/War State does not represent America. It is Un-American. It
is not the American Republic founded by our Founding Fathers, and enshrined in the US
Constitution.
The problem is that this President has no clue has to use tariffs.
If you want the jobs to come back to the USA instead of playing Asian musical chairs, you
have to slap the tariffs on every country that has low wages/benefits and no/low
environmental laws (that are enforced). If you don't, they are just shuffling factories
around.
I'm no fan of China, but tariffs only on China won't bring a single job back to the USA
unless tariffs encompass all the "beggar-my-neighbor" countries, like Mexico, China,
Malaysia, Vietnam, Indonesia, etc.
Rather than invading countries or trying to make countries weaker, we should focus on
fixing our crumbling infrastructure, manufacturing base collapse, declining life expectancy
etc. And don't even start babbling about how Trump's China tariffs help US manufacturing. As
RedBaron correctly pointed out in his post, unless you put tariffs on all the low wage
countries, singling out China does nothing for US workers.
"... But why has Trumponomics failed to deliver much besides trillion-dollar budget deficits? The answer is that both the tax cuts and the trade war were based on false views about how the world works. ..."
"... Republican faith in the magic of tax cuts -- and, correspondingly, belief that tax increases will doom the economy -- is the ultimate policy zombie, a view that should have been killed by evidence decades ago but keeps shambling along, eating G.O.P. brains. ..."
"... What about the trade war? The evidence is overwhelming: Tariffs don't have much effect on the overall trade balance. At most they just shift the deficit around: We're importing less from China, but we're importing more from other places, like Vietnam. ..."
"... And there's a good case to be made that Trump's tariffs have actually hurt U.S. manufacturing. For one thing, many of them have hit "intermediate goods," that is, stuff American companies use in their production processes, so the tariffs have raised costs. ..."
"... Now, none of this has led to economic catastrophe. As Adam Smith once wrote, "There is a great deal of ruin in a nation." Except in times of crisis, presidents matter much less for the economy than most people think, and while Trumponomics has utterly failed to deliver on its promises, it's not bad enough to do enormous damage. ..."
Why Was Trumponomics a Flop? Neither tax cuts nor tariffs are working.
By Paul Krugman
Donald Trump has pursued two main economic policies. On taxes, he has been an orthodox
Republican, pushing through big tax cuts for corporations and the wealthy, which his
administration promised would lead to a huge surge in business investment. On trade, he has
broken with his party's free(ish) trade policies, imposing large tariffs that he promised
would lead to a revival of U.S. manufacturing.
On Wednesday, the Federal Reserve cut interest rates, even though the unemployment rate is
low and overall economic growth remains decent, though not great. According to Jerome Powell,
the Fed's chairman, the goal was to take out some insurance against worrying hints of a
future slowdown -- in particular, weakness in business investment, which fell in the most
recent quarter, and manufacturing, which has been declining since the beginning of the
year.
Obviously Powell couldn't say in so many words that Trumponomics has been a big flop, but
that was the subtext of his remarks. And Trump's frantic efforts to bully the Fed into bigger
cuts are an implicit admission of the same thing.
To be fair, the economy remains pretty strong, which isn't really a surprise given the
G.O.P.'s willingness to run huge budget deficits as long as Democrats don't hold the White
House. As I wrote three days after the 2016 election -- after the shock had worn off -- "It's
at least possible that bigger budget deficits will, if anything, strengthen the economy
briefly." And that's pretty much what happened: There was a bit of a bump in 2018, but at
this point we've basically returned to pre-Trump rates of growth.
But why has Trumponomics failed to deliver much besides trillion-dollar budget
deficits? The answer is that both the tax cuts and the trade war were based on false views
about how the world works.
Republican faith in the magic of tax cuts -- and, correspondingly, belief that tax
increases will doom the economy -- is the ultimate policy zombie, a view that should have
been killed by evidence decades ago but keeps shambling along, eating G.O.P. brains.
The record is actually awesomely consistent. Bill Clinton's tax hike didn't cause a
depression, George W. Bush's tax cuts didn't deliver a boom, Jerry Brown's California tax
increase wasn't "economic suicide," Sam Brownback's Kansas tax-cut "experiment" (his term)
was a failure.
Nevertheless, Republicans persist. This time around, the centerpiece of the tax cut was a
huge break for corporations, which was supposed to induce companies to bring back the money
they've invested overseas and put the money to work here. Instead, they basically used the
tax savings to buy back their own stock.
What went wrong? Business investment depends on many factors, with tax rates way down the
list. While a casual look at the facts might suggest that corporations invest a lot in
countries with low taxes, like Ireland, this is mainly an illusion: Companies use accounting
tricks to report huge profits and hence big investments in tax havens, but these don't
correspond to anything real.
There was never any reason to believe that cutting corporate taxes here would lead to a
surge in capital spending and jobs, and sure enough, it didn't.
What about the trade war? The evidence is overwhelming: Tariffs don't have much effect
on the overall trade balance. At most they just shift the deficit around: We're importing
less from China, but we're importing more from other places, like Vietnam.
And there's a good case to be made that Trump's tariffs have actually hurt U.S.
manufacturing. For one thing, many of them have hit "intermediate goods," that is, stuff
American companies use in their production processes, so the tariffs have raised
costs.
Beyond that, the uncertainty created by Trump's policy by whim -- nobody knows what he'll
hit next -- has surely deterred investment. Why build a manufacturing plant when, for all you
know, next week a tweet will destroy your market, your supply chain, or both?
Now, none of this has led to economic catastrophe. As Adam Smith once wrote, "There is
a great deal of ruin in a nation." Except in times of crisis, presidents matter much less for
the economy than most people think, and while Trumponomics has utterly failed to deliver on
its promises, it's not bad enough to do enormous damage.
On the other hand, think of the missed opportunities. Imagine how much better shape we'd
be in if the hundreds of billions squandered on tax cuts for corporations had been used to
rebuild our crumbling infrastructure. Imagine what we could have done with policies promoting
jobs of the future in things like renewable energy, instead of trade wars that vainly attempt
to recreate the manufacturing economy of the past.
And since everything is political these days, let me say that pundits who think that Trump
will be able to win by touting a strong economy are almost surely wrong. He most likely won't
face a recession (although who knows?), but he definitely hasn't made the economy great
again.
So he's probably going to have to do what he's already doing, and clearly wants to do: run
on racism instead.
Trump's Secret Foreign Aid Program
He's giving away billions to overseas investors.
By Paul Krugman
Donald Trump often complains that the media don't give him credit for his achievements.
And I can think of at least one case where that's true. As far I can tell, almost nobody is
reporting that he has presided over a huge -- but hidden -- increase in foreign aid, the
money America gives to foreigners. In fact, the hidden Trump program, currently running at
around $40 billion a year, is probably the biggest giveaway to other nations since the
Marshall Plan.
Unfortunately, the aid isn't going either to poor countries or to America's allies.
Instead, it's going to wealthy foreign investors.
Before I get there, let's talk for a second about a claim Trump often makes about a highly
visible part of his economic strategy, the tariffs he has imposed on imports from China and
other countries. These tariffs, he has insisted again and again, are being paid by China and
represent billions in gains to the United States.
This claim is, however, demonstrably false. Tariffs are normally paid by consumers in the
importing country, not exporters. And we can confirm that this is what's happening with the
Trump tariffs: Prices of goods subject to those tariffs have risen sharply, roughly in line
with the tariff increases, while prices of goods not subject to the new tariffs haven't gone
up.
So Trump's tariffs aren't a tax on foreigners, whatever he may think. On the other hand,
his other policies have given selective foreigners a huge tax break.
Remember, Trump's only major legislative achievement so far is the 2017 Tax Cut and Jobs
Act. The core of that bill was a sharp reduction in corporate tax rates, which has led to a
drastic fall in tax revenues, on the order of $140 billion over the past year.
Who gains from this tax cut? Supporters of the bill claimed that the benefits would be
passed on to workers in the form of higher wages, and they made a big deal over a flurry of
corporate bonus announcements in early 2018. But those bonuses weren't actually very big, and
they didn't continue.
In fact, at this point it's clear that the bonus surge, such as it was, was all about tax
avoidance: By moving up payments they were going to make anyway, corporations got to deduct
the expense at the old, higher tax rate. Now that this option has expired, bonuses have
dropped back to their normal level, or even a bit lower.
What about the argument that tax cuts would promote a huge swell in business investment,
which would push up wages? Well, that isn't happening, either; when it comes to business
spending, the tax cut has been a big fizzle.
So who is benefiting from the tax cut? Basically, shareholders, who have received
increased dividends and seen a lot of capital gains as corporations use their windfall not to
invest, but to buy back their own stocks.
And a big share of these gains to shareholders has gone to foreigners.
We live, after all, in an era of globalized finance, in which wealthy investors normally
own assets in many countries. Americans own trillions in foreign equity, both directly in the
form of foreign stocks and indirectly in the form of stocks of U.S. corporations with foreign
subsidiaries. Foreigners, correspondingly, have a big stake here, again both through direct
stock ownership and via operation of their corporate subsidiaries.
Over all, foreigners own about 35 percent of the equity in corporations subject to U.S.
taxes. And as a result, foreign investors have received around 35 percent of the benefits of
the tax cut. As I said, that's more than $40 billion a year.
To put this in perspective, Trump's tariffs on China have raised $20 billion so far. Even
if China were paying those tariffs -- which it isn't -- that would fall well short of the
gift he's made to foreign investors.
Alternatively, we can compare Trump's gift to foreign investors with our actual spending
on foreign aid (which is much smaller than most people imagine). In 2017, the U.S. spent $51
billion on "international affairs," but much of that was either the cost of operating
embassies or military assistance. The Trump tax break for overseas investors is considerably
bigger than the total amount we spend on foreign aid proper.
Now, the U.S. economy is almost inconceivably huge, producing more than $20 trillion worth
of goods and services every year. We're also a country that investors trust to honor its
debts, so the tax cut, irresponsible as it is, isn't causing any immediate fiscal stress.
So Trump's giveaway to foreign investors isn't going to make or break us, although it's
probably enough to ensure that the tax cut will be, over all, a net drain on economic growth:
Even if the tax cut has some positive effect on the total income generated here (which is
doubtful), this will probably be more than offset by the increased share of that income
accruing to foreigners rather than U.S. citizens.
Still, even in America, $40 billion here, $40 billion there, and eventually you're talking
about real money. Furthermore, it does seem worth pointing out that even as Trump boasts
about taking money away from foreigners, his actual policies are doing exactly the
opposite.
"... Consumers figuring out that it is they who pay the tariffs could backfire on the Trump administration. ..."
"... According to our reporting last month , a 25% tariff on $200 billion in Chinese goods would cost the average American household $831 per year, something that could anger many families as the overall economy is cycling down through summer. ..."
"... ...Farmers get hurt most. They still steadfastly support Trump. ..."
Consumers figuring out that it is they who pay the tariffs could backfire on the Trump administration.
While the President continues to insist that China pays the tariffs, Americans are starting to
become more spectacle that he could be deceiving them.
Of all respondents, 46% said the economy is set to deteriorate if a near-term deal isn't
reached, while 44% are convinced that China will be the biggest loser.
The poll found that
45% believe tariffs on Chinese goods is slowing the economy,
while only 26% believe they help.
A National Bureau of Economic Research report shows that American consumers fully pay tariffs - and
it's one of the main reasons why respondents are becoming increasingly pessimistic about the trade
war. The 2018 report noted, "The U.S. experienced substantial increases in the prices of
intermediates and final goods, dramatic changes to its supply-chain network" and reduced
availability of imports.
According to
our reporting last month
, a 25% tariff on $200 billion in Chinese goods would cost the average
American household $831 per year, something that could anger many families as the overall economy
is cycling down through summer.
Most Americans, yes, even conservatives are to selfish, tech
blinded, media watching sheep, to realize how unbalanced trade has
been {against the US} for decades now.
Not to mention they are
totally clueless that this was set up this way on purpose..
To transfer wealth, and jobs out of this country to the east...
Sadly, many steel workers, auto workers, die makers and setters
are more than aware of this "fair trade" fiasco that has
eliminated their jobs.
We went from being a producing based country, to a consumer
based country during my life time.
Granted, I was born{1965} already at the end of our producing
cycle. People just wont care, and will believe ANYTHING the
establishment feeds them until its to late.
Sunday, July 15, 2018The end of world
revolution This is a particularly interesting article on the end of the Bilderberg era
in light of some of the rumors that are supposedly coming out of the most recent Bilderberg
meeting. And notice how it all just keeps going back to Leon Trotsky:
The beginning of the end of the Bilderberg/Soros vision is in sight. The Old Order will cling
on, even to the last of its fingernails. The Bilderberg vision is the notion of
multi-cultural, international cosmopolitanism that surpasses old-time nationalism; heralding
the end of frontiers; and leading toward a US-led, 'technocratic', global economic and
political governance. Its roots lie with figures such as James Burnham, an anti-Stalin,
former Trotskyite, who, writing as early as 1941, advocated for the levers of financial and
economic power being placedin the hands of a management class: an élite – which
alone would be capable of running the contemporary state – thanks to this
élite's market and financial technical nous. It was, bluntly, a call for an expert,
technocratic oligarchy.
Burnham renounced his allegiance to Trotsky and Marxism, in all its forms in 1940, but he
would take the tactics and strategies for infiltration and subversion, (learned as a member
of Leon Trotsky's inner circle) with him, and would elevate the Trotskyist management of
'identity politics' to become the fragmentation 'device' primed to explode national culture
onto a new stage, in the Western sphere. His 1941 book, "The Managerial Revolution," caught
the attention of Frank Wisner, subsequently, a legendary CIA figure, who saw in the works of
Burnham and his colleague a fellow Trotskyite, Sidney Hook, the prospect of mounting an
effective alliance of former Trotskyites against Stalinism.
But, additionally, Wisner perceived its merits as the blueprint for a CIA-led,
pseudo-liberal, US-led global order. ('Pseudo', because, as Burnham articulated clearly, in
The Machiavellians, Defenders of Freedom, his version of freedom meant anything but
intellectual freedom or those freedoms defined by America's Constitution. "What it really
meant was conformity and submission").
In short, (as Paul Fitzgerald and Elizabeth Gould have noted), "by 1947, James Burnham's
transformation from Communist radical, to New World Order American conservative was complete.
His Struggle for the World, [converted into a memo for the US Office of Strategic Services
(OSS, the forerunner of CIA)], had done a 'French Turn' on Trotsky's permanent Communist
revolution, and turned it into a permanent battle plan for a global American empire. All that
was needed to complete Burnham's dialectic was a permanent enemy, and that would require a
sophisticated psychological campaign to keep the hatred of Russia alive, "for
generations".
What has this to do with us today? A 'Burnham Landscape' of apparently, 'centrist'
European political parties, apparently independent think-tanks, institutions, and NATO
structures, was seeded by CIA – in the post war era of anti-Sovietism – across
Europe, and the Middle East – as part of Burnham's 'battle plan' for a US-led, global
'order'. It is precisely this élite: i.e. Burnham's oligarchic technocracy, that is
facing political push-back today to the point at which the Liberal Order feels that it is
struggling for its very survival against "the enemy in the White House", as the editor of
Spiegel Online has termed President Trump.
"Burnham renounced his allegiance to Trotsky and Marxism, in all its forms in
1940."
Sure he did. The Scarlet Pill, redder than red, is to grasp the fact that the Trotskyite
communists, the World Revolutionaries, the Neoliberal world order, the New World Order,
Bilderberg, the neoconservatives, the Never Trumpers, NATO, the European Unionists, and the
Silicon Valley technocracy are all different aspects of the same thing. And their latest vision
for global empire has observably failed, and failed faster and more conclusively than anyone
would have imagined.
It will be very interesting to learn if the elite can learn from its failures or not. There
have been rumors floating around that the European migration is to be reversed for fear that
the whole thing will come crashing down amidst a series of large-scale civil wars. Maybe saner
minds have prevailed, maybe the God-Emperor is behind it, or maybe it's just fake news.
To Michels organizations are the only means for the creation of a collective will and they
work under the Iron Law of Oligarchy. He explicitly points out the indispensability of
oligarchy from the organizations by saying that "It is organization which gives birth to the
domination of the elected over electors, of the mandatanes over the mandators, of the delegates
over delegators, who says organization, says oligarchy" (Michels 1966, p.365).
Oligarchical tendencies in organizations is not related to ideology or ends of the
organizations. Of course, it is evident that any organization which is set up for autocratic
aims , it is oligarchic by nature. To Michels, regardless of any ideological concerns, all
types of organizations have oligarchic tendencies. It was his major question in political
parties that "how can oligarchic tendencies be explained in socialist and democratic parties,
which they declared war against it?"( Michels 1966, pp. 50-51).
When he examines this question throughout in his book: Political Parties, he sees
organization itself particularly bureaucracy, nature of human being and the phenomenon of
leadership as major factors for oligarchical tendencies in organizations. According to Michels'
assessments, the crowd is always subject to suggestion and the masses have an apathy for
guidance of their need. In contrast the leaders have a natural greed of power ( Michels 1966,
pp. 64, 205). To Michels, leadership itself is not compatible with the most essential
postulates of democracy, but leadership is a necessary phenomenon in every form of society. He
says "At the outset, leaders arise spontaneously, their functions are ACCESSORY and GRATUITOUS.
Soon however, they become professional leaders, and in this second stage of development they
are stable and irremovable"(
Michels 1966, p. 364).
Leaders also have personal qualities that make them successful as a ruling class. These
qualities are , the force of will, knowledge, strength of conviction, self sufficiency,
goodness of heart and disinterestedness ( Michels 1966, p. 100 ). Furthermore there is a
reciprocal relationship between leadership functions and the organizational structure. Majority
of leaders abuse organizational opportunities for their personal aims by using their personal
qualities and by creating means, organizational process or principles like party
discipline.
As for as organization itself is considered as a source of oligarchy, Michels says that it
is generally because of "PSYCHOLOGY OF ORGANIZATION ITSELF, that is to say, upon the tactical
and technical necessities which result from the consolidation of every disciplined political
aggregate."( Michels 1966, p. 365). Further as a particular type of organization bureaucracy
and its features require an oligarchic structure.
At the societal level, although development in the democracy, oligarchy still exists. First
of all he says by looking at the state as an organization, which needs a bureaucracy that is
the source of enemy of individual freedom, the state represents a single gigantic oligarchy. An
attempt to destroy this gigantic* oligarchy in fact brings a number of smaller oligarchies in
society but does not eliminate it ( Michels 1966, p. 188,191,202). Secondly he agrees with Jean
Jack Rousseau on the idea that "it is always against the natural order of things that the
majority rule and the minority ruled." (Michels 1965, p. 106). Along with this idea
professional leadership is seen by Michels as an incompatible phenomenon with
democracy, because , although the leaders at once are not more than executive agents off
collective will, as soon as they gain the technical specialization, they emancipate themselves
form the masses and start to use their power against the majority. ( Michels 1966, p.70). In
addition to this, representative political system is not compatible with the ideal democracy,
because to Michels, "a mass which delegates its sovereignty, that is to say transfer its
sovereignty to the hands of the few individuals, abdicates its sovereign function ( Michels
1966, p. 73).
The third factor is related to level of socio-economic development of societies and
experience of democracy in history. To him in this time ideal democracy is impossible due to
socio-economic conditions, that further more he says that," The democracy has an inherent
preference for the authoritarian solution of the important questions" (Michels 1966, p. 51,
342).
As a logical result of his iron law of oligarchy, he admits there are elites in society but
not elite circulation in terms of replacing one another. He does not redefine the concept of
elite, he took Pareto's theory of circulation of elites and modified it. To Michels, there is a
battle between the old and new elites, leaders.
The end of this war is not an absolute replacement of the old elites by the new elites, but
a reunion of elites, a perennial amalgamation. Complete replacement of elites is rare in
history. The old elites attract, absorb and assimilate the new ones, and it is a continuous
process (Michels 1966, p. 182, 343; Michels 1949, p. 63). Because for Michels, first " old
aristocracy does not disappear, does not become proletarian or impoverished ( at least in
absolute sense ), does not make way for new group of rulers , but that always remains at the
head of nations, which it led over the course of centuries...[and second]...the old aristocracy
be it very old rejuvenated, does not exercise the rule alone but is forced to shave it with
some kind of new ruler" (Michels 1965, p. 75-76).
Aristocracy for Michels is not homogenous stratum, and consists of nobility and ruling
class. Nobility represents a small but strong part of aristocracy. In this sense it seems that
nobility represents real oligarchical power in the society. To Michels nobility holds itself at
the helm and does not even dream of disappearing from the stage of history. Though not
coinciding with aristocracy,
To Michels nobility holds itself at the helm and does not even dream of disappearing from
the stage of history. Though not coinciding with aristocracy, and not constituting more than a
part of it, nobility generally takes hold of it and makes itself its master. It pervades,
conquers, and molds, the high middle class according to its own moral and social essence" (
Michels 1949,p. 77, 80 ). In contrast to nobility aristocracy is heterogeneous and a place
where lower classes' members can easily rise and members of aristocracy can be subject to
downward social mobility. For his time, he describes elements of aristocracy (1) aristocrats by
birth (2) aristocracy of government clerks, (3) aristocracy of money (4) aristocracy of
knowledge . All this groups also represent ruling class (Michels 1965, p. 76 ).
Michels does not get in too much special analysis of the relationships between aristocracy,
ruling class and majority. I think he doesn't see that there are much differences in oligarchy
in organization and oligarchy in society at large.
To me these two must be separated because (1) for individuals society in a sense an
unavoidable place to be in contrast to organizations, particularly voluntary organization , (2)
while society represent a more natural entity, organizations are more artificial entities and
(3) organizations are set to realize certain targets in a certain period of time, in contrast
society's targets are relatively unstable, and subject to reconstruction by people. To think of
these questions, does not necessarily reject the existence of oligarchical tendencies in
societies. In fact as Michels pointed out democracy has a legacy to solve important questions
of society, by using oligarchic methods. Furthermore he also points out that at any social
organization there is an intermixture of oligarchic and democratic tendencies. He says that"...
In modem party life, aristocracy gladly present itself in democratic guise, while the substance
of democracy is permeated with aristocratic elements. On the one side we have aristocracy is a
democratic form, and on the other hand democracy with an aristocratic context" (Michels 1966,
p.50).
... ... ...
In terms of replacement of old elites by new ones, there is a distinction between Pareto and
Michels. Michels does not admit replacement of elites, but admits, amalgamation of new and old
elites. In fact historically we can see both of them happened. In short term amalgamation of
old and new elites, and in long terms replacement of old elites by new ones. This time period
depends on changes in society at large. For example, consider socialist revolutions and
aftermath of independent movement in developing countries where these two movements took place,
old elites were wiped out. This type of changes are rarely in history. In short term,
amalgamation of elites takes place and new elites gradually increases its proportion in the
elite strata and ruling class. For example as a result of
industrialization in burope, Hughes observes that at the beginning ...upper class oligarchy
shared power with the old aristocracy-but with each year that passed the balance seemed to
incline more heavily in favor of the former" (Hughes 1965, pp.149-150). It can be concluded
that new elites are bom as a result of socio- economic , political, and historical changes in
society, and then these new elites via upward mobility, and that in the end the new elites take
place the highest position in the society. In this process the adaptation ability of old elites
determine their fates.
On democracy, Pareto always separate ideal democracy and democracy applied, and prefers to
talk about the subjects of democracy rather than democracy itself. Michels is clearly in favor
of democracy, Mosca was previously against democracy but after the experience of Fascism in
Italy, he changed his mind.
How elitist theories affected democracy ? Two answers have given for this question. On the
negative side, it has been said that these anti-democratic theories helped European ruling
classes by restoring their self confidence and by increasing their consciousness about their
privileges; therefore, elite theories become a vehicle for ruling classes (Hughes 1965 (b), p.
149), On the positive side, it has said that elitist theories have helped to enhance democratic
theories, Michels himself believed that research on oligarchies necessary for development of
democracy by saying that "...a serene and frank examination of oligarchical dangers of
democracy will enable us to minimize these dangers,...(Michels 1966, p.370).
It can be said that elitist theories extended and increased awareness of masses and
scientist against governments and ruling classes. As a result, many researches have been
conducted on application of democracy in organizations.
Researches have shown that oligarchical tendencies are dominant in organizations and can not
be eliminated totally. Further more, attempts to reduce oligarchic contrgl in organizations
with very few exception have failed. In general, in voluntary organizations, the functional
requirements of democracy con not be met most of the time (Lipset, Trow, and Coleman 1956,
p.4,6,452).
Is democracy still compatible with elite theories? That has been the question that lead to
redefine, reconceptualize the democracy. Here we must pay attention that Pareto, Mosca, and
Michels worked J.J. Rousseau's definition of democracy: government by the people, but not
government for the people (Burnham 1943, pp.156-7).
New democratic theories like political pluralism, theory of the mass society are compatible
with elitist theories. Schumpeter was one of the earliest thinker that he redefined democracy
considering elitists 1 arguments. To him democracy defined as "...institutional
arrangement for arriving the power to decide by means of competitive struggle for the people's
vote" (Bottomore 1964, p.10).
In contrast to compatibility of elitist theories with democracy, it can not be compatible
with Marxism. Michels pointed out that M [t]he law of circulation of elites destroy
the thesis of the possibility of a society without social levels...[and]... destroy equally the
supposition of a ruling class that remains closed and inaccessible" (Michels 1965, p. 106). In
terms of preference of political systems he clearly says that "the defects inherent in
democracy are obvious. It is none the less true that as a form of social life we must choose
democracy as the least of evils" (Michels 1966, p.370).
VI- CONCLUSIONS
Elitist theorists not only introduced elites but also contributed on better understanding of
social and political life of societies. The key concept is "power" and who has the power she/he
is the leader of society. Heredity, wealth, intellect, organizations are the means to get
power.
Decline of neoliberalism in not a pretty picture. Whom the gods would destroy they first make mad. Greek version of this saying
which appers in Sophocles’ play Antigoneis more
precise: "evil appears as good in the minds of those whom god leads to destruction". Oscar Wilde — 'When the Gods wish to
punish us, they answer our prayers.'
The United States witnessed three mass shootings in one week recently in California, Texas, and Ohio. There have been more than 250
mass shootings so far in 2019, more than one a day. This year in America,
more than 33,000 shooting incidents have killed more than 8,700 people.
America is the richest country in the world, but it has more than half a million homeless and 28 million people without health
insurance – out of a population of around 325 million. The U.S. infant mortality rate places it 33rd out of wealthiest 36 nations.
... ... ...
People from other industrialized countries must think that the United States has simply gone insane. It is a nation of terrible extremes:
grotesque wealth and horrific poverty, brilliant minds and widespread ignorance, high rates of volunteerism and endemic violence.
America seems to be suffering from some kind of bipolar disorder with pockets of manic energy and large areas of deep depression.
It would be tempting to argue that America is only suffering from a bout of temporary insanity. But mass shootings, gross economic
inequality, and corruption didn't begin when Donald Trump became president. He has made matters worse, to be sure. But these trends
are longstanding.
So, why do Americans put up with such violence, economic inequality, and political nonsense?
... ... ...
Moreover, more than half of Americans
have never traveled to another country. One in ten hasn't even
gone outside the state in which he or she was born. Since most of the news about other countries is negative, Americans naturally
believe that life is more dangerous outside their borders. They haven't actually seen what it's like in other countries, so there's
no way for them to compare the craziness of life in America with life anywhere else.
Of course, plenty of countries experience considerable violence, economic inequality, and political corruption. But they are usually
not powerful industrialized nations.
In the 2019 Global Peace Index
, for instance, the United States ranks 128 th in the world, between South Africa and Saudi Arabia. Kosovo, Haiti, and
Bangladesh all rank higher than America. Part of the reason that the United States ranks so poorly is the amount of military violence
that the country inflicts around the world – through war, arms sales, and military bases. But the high homicide rate in the United
States also dragged its score down.
The GINI index measures a country's economic inequality. The United States,
according to OECD figures , is fourth
from the bottom of the wealthiest countries in the world. Only Chile, Turkey, and Mexico have greater income inequality after taxes
and transfers.
On corruption issues, the United States has generally been in the top twenty in terms of transparency. But in 2018, it
dropped six places to number 22 in the Transparency International
rankings. Here, the influence of the Trump administration has been significant. The problem is not ordinary corruption like bribery.
Rather, Trump is challenging the very foundations of the rule of law. He promised to "drain the swamp" of political influence-peddling
in Washington, DC. But he has only made the nation's capital swampier.
Individuals with mental disorders can seek professional help. They can take medications and enter psychotherapy. They can check
themselves into a hospital.
"Bankruptcy-related job losses are rising at rates not seen since 2009, invoking grim
reminders of the Great Recession"
By Quentin Fottrell, Personal Finance Editor...Aug 7, 2019...8:24 p.m. ET
"The recent spate of bankruptcies in corporate America is taking its toll.
In the first seven months of the year, U.S.-based companies announced 42,937 job cuts due
to bankruptcy, up 40% on the same period last year and nearly 20% higher than all
bankruptcy-related job losses last year, a report released Tuesday concluded. Despite
record-low unemployment, bankruptcy filings have not claimed this many jobs since the Great
Recession.
"It is the highest seven-month total since 2009 when 50,258 cuts due to bankruptcy were
announced," according to the report by outplacement and business coaching firm Challenger,
Gray & Christmas. "In fact, it is higher than the annual totals for bankruptcy cuts every
year since 2009."...
A Weak Dollar Could Help the US. Getting One
Isn't So Easy. https://nyti.ms/33j7eFe
NYT - Matt Phillips - August 6
President Trump has made no secret of his
frustration that the United States dollar
has strengthened against other currencies.
The trade war between Washington and Beijing took an unexpected turn this week as China
let its currency drop sharply and the United States responded by officially designating the
country a currency manipulator.
The confrontation underscored the Trump administration's focus on weakness in foreign
currencies -- and the corresponding strength of the dollar -- as a drag on the American
economy.
Now, investors are gaming out the prospect that the United States could actively intervene
in the financial markets, in a significant break from a decades-long commitment to
free-floating currencies.
"It's a big deal because I think it would mark a new sort of phase in how the U.S.
approaches the international economy," said Michael Feroli, chief United States economist
with JPMorgan Chase.
But while the president might want a weaker dollar, engineering one is complicated. Here's
the context you need to understand the United States' changing approach to the dollar.
Why would the U.S. benefit from a weaker dollar?
A weaker currency makes a country's exports cheaper for buyers overseas, giving a country
a competitive advantage. For years, an artificially weak renminbi underpinned China's growth
as a manufacturing base for the rest of the world.
The Trump administration's tariffs on imports of Chinese-made goods are meant to raise the
price of those products once they land in the United States, discouraging Americans from
buying them.
But one way for China to respond is to weaken the renminbi and undermine the impact of
those tariffs by making those products cheaper.
That's why when China allowed its closely controlled renminbi to depreciate sharply
against the dollar on Monday, it was taken as a sign that the trade war between the United
States and China was getting worse.
The currency has since strengthened, easing this tension somewhat, but China isn't the
only trading partner the president has a problem with.
For instance, in June, after the European Central Bank said it might restart stimulus
programs to bolster the economy, Mr. Trump accused it of pushing down the value of the euro,
"making it unfairly easier for them to compete against the USA."
"They have been getting away with this for years, along with China and others," he said on
Twitter.
A weaker dollar has other benefits. For instance, it could also bolster corporate
earnings. Roughly 40 percent of the revenue of the biggest American companies now comes from
overseas, and a weaker dollar means those foreign sales make a bigger contribution to the
bottom line. Those higher earnings can help give the stock market a lift.
None of this is a secret. But in the past, governments have shied away from weakening
their currencies, in part because they were afraid it would also lead to an ugly bout of
inflation, which was traditionally viewed as the big risk of a weak currency. These days,
inflation around the world is incredibly low and shows little sign of rising.
"You have almost the perfect macro backdrop for policymakers to encourage currency
weakness," said Alan Ruskin, chief international strategist at Deutsche Bank in New York.
How did this become a political issue?
Foreign exchange markets are a zero-sum game: If China's currency weakens against the
dollar, the dollar, by definition, strengthens.
So whether China is deliberately lowering the value of the renminbi, or the euro is
tumbling because currency traders are worried about the region's growth, the ultimate impact
is that the dollar is stronger.
Strong currencies tend to weaken a country's exports and bolster the consumption of
foreign products. That can lead to larger trade deficits.
President Trump has made reducing the trade deficit with China a crucial focus of his
administration and a crucial goal of the tariff war that began in 2018.
But that effort has had mixed results. The United States' goods deficit with China
initially widened to a record $43 billion in October before shrinking significantly since
then. It is now hovering around $30 billion a month.
In theory, if the dollar weakened against the Chinese currency, it could do more to cut
that trade deficit than a tariff battle, potentially offering the president a chance for a
political victory going into the 2020 election.
If other countries can weaken their currency, why doesn't the United States do the
same?
In theory, it can. But in practice it isn't easy.
In part, that's just because the currency markets are so big. Every day, more than $5
trillion changes hands in those markets, and more than $4 trillion of those trades involve
the dollar.
China controls the renminbi because it can use the bottomless buying power of its central
bank, which publishes an official price for the currency every day around which it allows a
certain amount of trading.
The People's Bank of China has the ability to print renminbi to weaken the currency if the
exchange rate gets too high. On the flip side, Beijing has $3 trillion in reserves it can
deploy to keep the currency from getting too weak.
Right now, the United States doesn't operate that way.
It has some capacity to intervene in financial markets by using the Exchange Stabilization
Fund, a vehicle under the control of the Treasury secretary, with about $100 billion of
buying power.
"Unless Congress gives Treasury authority to beef up the Exchange Stabilization Fund, it
just doesn't have enough firepower," said Joseph Gagnon, senior fellow at the Peterson
Institute for International Economics.
Last month, Larry Kudlow, director of the National Economic Council, said the White House
had considered an intervention to weaken the dollar before deciding against it. The same day,
however, Mr. Trump contradicted Mr. Kudlow, telling reporters that all options were on the
table.
"I could do that in two seconds if I wanted," Mr. Trump said. "I didn't say that I'm not
going to do something."
So in the past, when American politicians wanted to change the value of the dollar, they
had to coordinate efforts involving a number of countries. That's what happened in 1985, when
the United States engineered an agreement to weaken the dollar as part of an agreement known
as the Plaza Accord.
Of course, those countries were all strategic allies of the United States. Persuading
China to let its currency strengthen to help the United States is a different situation all
together.
"... The real concern is about the primacy of the dollar and US hegemony. When Krugman trumpeted 'free' trade with China back in 2000, falsely claiming that US labor would benefit, his main point was that it was good policy strategically. Krugman was woefully wrong, as China grew to be a geopolitical rival, not a US client state like Japan or Germany as the Clintonistas and the foreign policy borg had hoped. ..."
"... Folks, it ain't about US jobs and consumer prices, which will be affected at worst only marginally. What it's really about is the dominance of the empire and its enormous, tax-free profits overseas. ..."
What's at Risk if US Stumbles Into
a Currency War https://nyti.ms/2yKGPC1
NYT - Neil Irwin - August 7
... ... .. ...
The Trump administration has introduced a zero-sum approach to global currency policy --
envisioning a loser for every winner -- that violates the spirit of those rules.
In that sense, the latest moves risk upsetting a relatively stable order, creating
unpredictable ripple effects. When currencies swing wildly, they can pull along the economies
of some of the most powerful nations, such as by crushing entire sectors of the economy that
find themselves uncompetitive after a swing in global exchange rates.
And it could undermine the central role the United States has played in the international
financial system, especially if the accusations of manipulation are followed up with concrete
retaliation to try to artificially depress the value of the dollar.
"The dollar being the primary global currency has enormous benefits for the U.S., but with
the side effect that when the U.S. tries to depreciate, there are limits on how much it can
do that," said Adam Posen, president of the Peterson Institute for International Economics.
"But if the U.S. abuses its privilege too much by bullying, there will eventually be a
switch."
The decision to name China a currency manipulator does not, in and of itself, do much. But
it could be followed up with pressure on the International Monetary Fund and other nations to
make similar findings and lean on the Chinese to adjust their policies. Or it could lead to
direct intervention in foreign exchange markets by the United States Treasury.
This is not the first time President Trump has accused a major trading partner of using
currency policy to mistreat the United States.
... ... ...
A habit of the Trump administration has been to link seemingly unrelated items in its
dealings with other countries -- using tariff threats to try to influence Mexican immigration
policy, for example.
If the Trump administration continues down the path of using currency policy to try to
bludgeon China over trade, technology and national security issues, it will signal a
remarkable expansion into a policy area that has been a source of stability in recent
decades.
"It's dangerous to start a currency war because you don't know where it will end," said
Eric Winograd, chief U.S. economist at AllianceBernstein. "We've seen with the trade war that
it started in one place, and ended up much broader. There's every risk a currency war will do
the same."
"It could undermine the central role the United States has played in the
international financial system."
All the talk about hurting consumers and jobs is just noise that policy elites emit to win
support on false pretenses.
The real concern is about the primacy of the dollar and US hegemony. When Krugman
trumpeted 'free' trade with China back in 2000, falsely claiming that US labor would benefit,
his main point was that it was good policy strategically. Krugman was woefully wrong, as
China grew to be a geopolitical rival, not a US client state like Japan or Germany as the
Clintonistas and the foreign policy borg had hoped.
Now there is a real debate about global strategy going on. Trump wants to whack China back
into place, reduce it as a geopolitical threat. The other side is still wedded to the 2000
notion having China follow US global leadership and defending the exorbitant privileges of US
corporations, their banksters, and their profits. Their latest gambit is to raise a
potentially real issue--the primacy of the US dollar.
Folks, it ain't about US jobs and consumer prices, which will be affected at worst
only marginally. What it's really about is the dominance of the empire and its enormous,
tax-free profits overseas.
It seems like barely a quarter goes by without Wells Fargo being exposed for some abusive
practices, like opening millions of fake credit card accounts, or selling customers of its auto
loans insurance that they didn't really need (but that the company insisted they did).
In the
latest violation,
the New York
Times
reports that Wells Fargo continued to charge overdraft and other charges to customers
even after closing their accounts for one of a myriad reasons.
The paper used Xavier Einaudi, a small business owner who banked with Wells, as its primary
example.
A few months back, the bank informed Einaudi that it would be closing all 13 of
the checking accounts he had with the bank related to his roofing company, CRV Construction.
When asked why it was closing the accounts, it replied that the issue was "confidential".
Anyway, Einaudi went to his local Wells branch and picked up a check compensating him for the
contents of the accounts. One June 27, the bank said, the accounts would go defunct, and no more
transactions would be allowed.
As it turns out, that wasn't exactly the case.
Shortly after the closure date, Einaudi realized that Wells had kept some of the accounts active
with a zero balance. Meaning that some of Einaudi's payments to vendors like his insurer and his
Google advertising accounts continued from the empty accounts. But this time, each transaction was
accompanied by a $35 overdraft fee.
By the time Einaudi realized what was going on, he had wracked up thousands of dollars
in overdraft fees.
Payments to his insurer, to Google for online advertising and to a provider of project
management software were paid out of the empty accounts in July. Each time, the bank charged Mr.
Einaudi a $35 overdraft fee
Mr. Einaudi called the bank's customer service line. He went to his local branch. Nobody
could help him. "They told me, 'The accounts are closed out - we cannot do anything.'"
This left Einaudi in an untenable position: The accounts were technically closed, but he was
still being hit with overdraft fees that nobody at the bank could make stop.
By the middle
of July, he owed the bank nearly $1,500.
Fortunately for him, Einaudi wasn't alone with this problem.
Xavier Einaudi
As it turns out, Wells has failed to address these complaints from customers and
employees, including one in the bank's debt-collection department who grew concerned
after being
hit by an estimated $100,000 in overdraft fees
over eight months.
Customers say the
bank should wipe these fees, since they were unfairly and arbitrarily charged on accounts that the
bank had deliberately closed without its customers requests.
It's not clear, exactly, how many customers have been affected by this glitch. But many angry
customers have filed complaints with the Consumer Financial Protection Bureau.
Robust discussions about the issue have continued on websites like Reddit and Quora, while some
have expressed their misgivings with Wells.
"I don't even know what happened,"
he said.
According to the NYT,
Einaudi's problem stems from the way Wells' computer system
processes closed accounts:
Accounts that customers believe to be closed can, in fact, stay
open for months past their closure date if there's a balance, even if the balance is negative (from
fees charged by the bank).
And each time a transaction involving these accounts happens, the banks tacks on a fee.
Since the financial crisis, Wells has paid more than $15 billion in settlements to resolve
investigations into its misdeeds, including the ones described above.
With more of these
scandals surfacing, who is going to step up and take the top job at Wells, particularly when you'd
be liable to be blindsided by scandals like these, that hurt ordinary Americans.
Let them bill you after you close your account. If they pressure
you to pay, or threaten your credit rating, then
sue Wells
Fargo in your local small claims court for the maximum amount
.
If you get a judgement, bill them. If they don't pay, take your
judgement to your local sheriff and have them do a "Till tap" on
them. That means the sheriff goes in and takes the money out of a
teller's drawer to satisfy the judgement.
If thousands of people do this...well, you can just imagine.
Whatever you do Brer' Rabbit,
never stick the little red
straw of a can of insulating foam into an ATM card slot!
Good advice. But with all that digitizations come so many
events that require these actions and they rely on the fact
that some people cannot spend unlimited amounts of time on
these things.
A banking ombudsman would not go astray. As
people register their stuff, patterns emerge a lot earlier and
maybe can be addressed.
Fck I hate banks, the only thing they do is move ones and zeros
around, and the can't even do that without ripping people off.
But wait till the globalists have their way and society becomes
cashless , stuff like this going to be nothing compared to what
the banksters and government is going to be able to do to your
life.
Wells Fargo can be force merged with Bank of America and dissolved
over a number of years out of public view and under Fed oversight.
There is vat over employment in the banking sector and an overall
staffing cut of 30% is long overdue.
It is the same with Commerz
and Deutsche Banks. Given the power of technology politicians are
trying to force banks to carry far more employees than can
economically be employed.
Online and robo banking will eventually lead to most branches
being closed and most employees released.
Stone walling this simply makes the crime, pain, and inevitable
dislocation ever worse.
I, too, got my money away from these thieves this year. My
annuity with my employer locked me into not being able to rollover
any of my money unless I had a break in service for and entire
year. Now that I am of a certain age, I was able to to rollover
after only eight weeks which I was able to do during recovery
after a job related surgery.
I have been waiting to do this
for four years since I found a rap sheet on these guys. If I
counted correctly, since 2000, the banks that were the
predecessors and Wells as we know it today have stolen, or been
fined and had to pay back $43bn!!!! That is 43,000 million for
****'s sake. What is it going to task to get rid of these
thieves?
I have a friend that works at Wells Fargo. She said since Warren
Buffet took control the whole place is going to hell. Buffet keeps
screaming the employees have to do better. Make more profits or
hit the door. So the management has to skin the sheeple in order
to keep their jobs.
I had a neighbor a while ago who worked in Wells' mortgage
division. I don't know what his job was called, but he was the
guy people called when they first got a foreclosure notice and
wanted to work out a way to keep their homes.
He told me
Wells kept track of who paid right at the deadline, usually the
15th of the month, rather than on or by the 1st like people do
when they aren't strapped for cash. He said when they got
payments on the 14th, say, they'd "drawer" them, or put them in
a drawer until the 16th. Then they'd enter the payments as
late, assess a late payment fee, and deduct that from the
payment. So the borrower hadn't actually made a full payment
that month; they were $35 short, or whatever the fee was.
Oh, no, they didn't tell the borrower.
So after a few years of that, the borrower would be a full
payment or two behind. And then the foreclosure would kick in,
and then these confused people would call my former neighbor.
He asked me to guess how many months, on average, the people
who called him were behind on their mortgage. I thought,
"Well, they're getting their first notice of looming
foreclosure, I'm kind of naive, uh...6 months?"
He laughed at me. "Try, 30 months," he said. I was
gobsmacked. Wells found it to their advantage to have these
people 2-1/2 years behind on their mortgage payments before
getting around to foreclosing? He said yes, it was worth it to
them to have them living in the property and taking care of it
for Wells Fargo.
Oh, I had this conversation with him while I was refinancing
my little starter home at the time.
It was 2002.
They were pulling this **** in
2002 and it wasn't new
then.
It only took what, 5 more years for the Finance
Sector to almost destroy itself and the rest of us?
If they jailed the people at Wells for this, it'd stop.
However, the fully criminalized DOJ, speaking through AG Eric
Holder, declared these people too critical to the banking system
to work under threat of arrest.
After a decade of aggressive market manipulation by the Federal Reserve's Federal Open Market Committee
, most of the indicators we use to assess economic growth and job creation have been distorted
beyond recognition. The good news is that the economy has recovered from the depression of 2008
despite the actions taken by the Fed, Congress, and Washington agencies. The bad news is that
it may not survive the after-effects of some of these actions.
First and foremost, investors point to the fact that the Treasury yield curve is inverted --
short-term interest rates are higher than longer-term bond yields -- as evidence of an
approaching recession. The investment firm Sandler O'Neill sets the stage:
Over the past week, fresh salvos in the U.S.-China trade war have renewed concerns about
slowing global growth and triggered a flight to safe haven assets. The S&P 500 has fallen
4.4% over the past week while the 10-year U.S. Treasury has rallied to yield 1.63%, its
lowest level in nearly three years. The 3-month/10-year Treasury yield spread, a
closely-watched recession indicator, has become even more inverted, which, in turn, has
rekindled speculation about an imminent slowdown.
So is the yield curve being inverted a sign that America is sliding into recession? No.
In fact, the U.S. economy is actually the strongest part of the global economy. Europe and Asia
are far weaker, even leaving aside the question of trade tensions. That's why nearly $14
trillion in debt around the world is trading at negative rates of return: investors in Japan,
India, and Europe are desperate to buy safe long-term assets such as Treasury securities. The
increased global demand for Treasury debt, combined with the large stock of Treasury and agency
mortgage-backed securities siphoned off the private market by the Fed during "quantitative
easing," may also be forcing the yield curve negative.
A second, related reason why the yield curve is negative is the dollar. Global investors
have been hesitant to purchase Treasury securities, private bonds, and other assets in the U.S.
out of fear that a strong dollar would wipe out their returns. Now with the dollar starting
to weaken, large investors such as central banks and giant institutions such as Japan's
Norinchukin are back into the market, buying U.S. securities and driving down yields on
Treasury bonds, and then selling the dollar foreign exchange risk to lock in safe returns.
So the two chief reasons for an inverted yield curve -- low or negative interest rates and a
huge demand for safe assets -- have nothing to do with the direction of the U.S. economy.
Indeed, the economy continues to grow strongly, albeit at slower rates than from 2016 to 2018.
Brian Wesbury, chief economist at First Trust Advisors, argues that we're doing just fine:
The rate of growth in the service sector continued to decelerate in July, with the
headline index falling to the lowest level in nearly three years. However, it still showed
growth and we anticipate a re-acceleration in the service side of the economy in the second
half of the year. It's important to recognize that thirteen of eighteen service sub-sectors
reported growth in July, while only five reported contraction. And, if survey respondent
comments are any indication, direct impacts from the China tariff dispute remain minor, with
only the construction and management/support services sectors claiming increased costs.
The third reason for the inverted yield curve has nothing to do with the performance of the
economy and everything to do with the dismal job that the FOMC has done managing monetary
policy. Since 2008, the Fed has managed to inflate asset prices for stocks, bonds, and real
estate, but has created serious problems along the way.
The FOMC's attempt to artificially raise short-term interest rates when there was no
compelling reason to do so gave us the inverted yield curve. Now, under Jerome Powell, the FOMC
must figure out a way to back out of this mistake without completely destroying what remains of
the Fed's credibility. In fact, the FOMC is probably the single biggest threat to the U.S.
economy.
For literally years now, the FOMC has stated repeatedly that getting inflation up to a 2
percent level is the target of U.S. monetary policy, including quantitative easing and low
rates. Yet none of the Ph.D. economists that populate the committee have taken notice of the
fact that the apparent link between interest rates and inflation expectations has been broken
for nearly half a century.
After the FOMC failed to reach its inflation target, the committee decided that it needed to
raise short-term interest rates in order to have "dry powder" to use in the event of a
recession. If you follow the tortured logic of the Fed, the central bank wanted to raise
short-term interest rates so as to be able to lower them in the event of a recession. The
result of this bizarre thinking has been the extreme market volatility seen since the end of
June.
The good news is that the U.S. economy is actually doing just fine and, if left to its own
devices, will continue to outperform the rest of the world despite the threat of trade wars and
other maladies. The one note of caution, however, is that the FOMC is truly lost when it comes
to forming monetary policy and the narrative the markets desperately need in order to make
decisions about investments and risk. Were it possible to address the members of the FOMC, the
message would be: "stand down, do nothing." The economy will thank
The good news is that the U.S. economy is actually doing just fine and, if left to its own
devices, will continue to outperform the rest of the world despite the threat of trade wars and
other maladies. The one note of caution, however, is that the FOMC is truly lost when it comes
to forming monetary policy and the narrative the markets desperately need in order to make
decisions about investments and risk. Were it possible to address the members of the FOMC, the
message would be: "stand down, do nothing." The economy will thank you.
Tariff Tantrums and Recession Risks
Why trade war scares the market so much
By Paul Krugman
If the bond market is any indication, Donald Trump's escalating belligerence on trade is
creating seriously increased risks of recession. But I haven't seen many clear explanations
of why that might be so. The problem isn't just, or even mainly, that he really does seem to
be a Tariff Man. What's more important is that he's a capricious, unpredictable Tariff Man.
And that capriciousness is really bad for business investment.
First things first: why do I emphasize the bond market, not the stock market? Not because
bond investors are cooler and more rational than stock investors, although that may be true.
No, the point is that expected economic growth has a much clearer effect on bonds than on
stocks.
Suppose the market becomes pessimistic about growth over the next year, or even beyond. In
that case, it will expect the Fed to respond by cutting short-term interest rates, and these
expectations will be reflected in falling long-term rates. That's why the inversion of the
yield curve -- the spread between long-term and short-term rates -- is so troubling. In the
past, this has always signaled an imminent recession:
[That scary yield curve]
And the market seems in effect to be predicting that it will happen again.
But what about stocks? Lower growth means lower profits, which is bad for stocks. But it
also, as we've just seen, means lower interest rates, which are good for stocks. In fact,
sometimes bad news is good news: a bad economic number causes stocks to rise, because
investors think it will induce the Fed to cut. So stock prices aren't a good indicator of
growth expectations.
O.K., preliminaries out of the way. Now let's talk about tariffs and recession.
You often see assertions that protectionism causes recessions -- Smoot-Hawley caused the
Great Depression, and all that. But this is far from clear, and often represents a category
error.
Yes, Econ 101 says that protectionism hurts the economy. But it does its damage via the
supply side, making the world economy less efficient. Recessions, however, are usually caused
by inadequate demand, and it's not at all clear that protectionism necessarily has a negative
effect on demand.
Put it this way: a global trade war would induce everyone to switch spending away from
imports toward domestically produced goods and services. This will reduce everyone's exports,
causing job losses in export sectors; but it will simultaneously increase spending on and
employment in import-competing industries. It's not at all obvious which way the net effect
would go.
To give a concrete example, think about the world economy in the 1950s, before the
creation of the Common Market and long before the creation of the World Trade Organization.
There was a lot more protectionism and vastly less international trade then than there would
be later (the containerization revolution was still decades in the future.) But Western
Europe and North America generally had more or less full employment.
So why do Trump's tariff tantrums seem to be having a pronounced negative effect on
near-term economic prospects? The answer, I'd submit, is that he isn't just raising tariffs,
he's doing so in an unpredictable fashion.
People are often sloppy when they talk about the adverse effects of economic uncertainty,
frequently using "uncertainty" to mean "an increased probability of something bad happening."
That's not really about uncertainty: it means that average expectations of what's going to
happen are worse, so it's a fall in the mean, not a rise in the variance.
But uncertainty properly understood can have serious adverse effects, especially on
investment.
Let me offer a hypothetical example. Suppose there are two companies, Cronycorp and
Globalshmobal, that would be affected in opposite ways if Trump imposes a new set of tariffs.
Cronycorp would like to sell stuff we're currently importing, and would build a new factory
to make that stuff if assured that it would be protected by high tariffs. Globalshmobal has
already been considering whether to build a new factory, but it relies heavily on imported
inputs, and wouldn't build that factory if those imports will face high tariffs.
Suppose Trump went ahead and did the deed, imposing high tariffs and making them
permanent. In that case Cronycorp would go ahead, while Globalshmobal would call off its
investment. The overall effect on spending would be more or less a wash.
On the other hand, suppose that Trump were to announce that we've reached a trade deal:
all tariffs on China are called off, permanently, in return for Beijing's purchase of 100
million memberships at Mar-a-Lago. In that case Cronycorp will cancel its investment plans,
but Globalshmobal will go ahead. Again, the overall effect on spending is a wash.
But now introduce a third possibility, in which nobody knows what Trump will do --
probably not even Trump himself, since it will depend on what he sees on Fox News on any
given night. In that case both Cronycorp and Globalshmobal will put their investments on
hold: Cronycorp because it's not sure that Trump will make good on his tariff threats,
Globalshmobal because it's not sure that he won't.
Technically speaking, both companies will see an option value to delaying their
investments until the situation is clearer. That option value is basically a cost to
investment, and the more unpredictable Trump's policy, the higher that cost. And that's why
trade tantrums are exerting a depressing effect on demand.
Furthermore, it's hard to see what can reduce this uncertainty. U.S. trade law gives the
president huge discretionary authority to impose tariffs; the law was never designed to deal
with a chief executive who has poor impulse control. A couple of years ago many analysts
expected Trump to be restrained by his advisers, but he's driven many of the cooler heads
out, many of those who remain are idiots, and in any case he's reportedly paying ever less
attention to other people's advice.
None of this guarantees a recession. The U.S. economy is huge, there are a lot of other
things going on besides trade policy, and other policy areas don't offer as much scope for
presidential capriciousness. But now you understand why Trump's tariff tantrums are having
such a negative effect.
https://acdn.adnxs.com/ib/static/usersync/v3/async_usersync.html <img
src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" /> By
Natalia Abrams, the Executive Director of Student Debt Crisis, and Cody Hounanian, the Program
Director of Student Debt Crisis. Originally published at
openDemocracy
Student debt has been solely responsible for the majority of my decision-making as an
adult
(Erin – Portland, Maine)
The student debt crisis is not the burden of a single generation. It impacts Baby Boomers in
their 60s and 70s; Gen Xers in their 40s and 50s; Millennials in their 20s and 30s – as
well as Gen Z high school students still planning for college. Thus it's a grave mistake to
frame student loan debt as exclusively or even primarily a "Millennial problem." At the same
time, Millennials have borne the brunt of the astounding rise in college costs. They are the
first generation to experience a life shaped by the near-certainty of student debt.
Weighted for inflation, college costs (including tuition and fees) rose 81% between 2001 and
2009 – the decade when well over half of Millennials graduated high school.
Traditionally, when the price of a commodity rises rapidly, demand for that commodity drops.
Necessities like food and shelter are usually exempt from that general rule. However, college
has become one of those essentials, with the perceived cost of not attending growing at
least as fast as the actual costs themselves. As a result, student loans make the essential,
attainable.
Not everyone saddled with a tremendous debt burden ends up with a degree. Whether a borrower
receives a degree or not, few are in a position to rapidly repay their student loans. While a
college degree may or may not expand opportunities; as we're finding, student loan debt
absolutely shuts doors that might have otherwise remained open.
Lower Homeownership rates
Growing up I was told by my parents, teachers, and guidance counselors to go to college
because it would give me a better life. I graduated in 2013 with a Master's Degree in English
with the hopes of being a teacher myself. There are no teaching jobs in high schools or
colleges and I owe over $100,000 in student debt. I now work a job that doesn't even require
a degree, and was turned down for a mortgage because my debt to income ratio was too high.
Not a day goes by where I don't think about my debt
(Danielle – Roseville, California)
If homeownership is fundamental to the 'American dream', then student loan debt puts that
dream out of reach for millions of Americans. After years of growth, homeownership rates
noticeably declined in 2017. While partly due to factors unrelated to student debt (such as
rising housing prices , particularly in urban areas), the rate of Millennial homeownership
has fallen faster than that of the general population.
In a January 2019 study, the
Federal Reserve revealed the connection between lower homeownership rates and the
Millennial generation most burdened by student debt: "our estimates suggest that increases in
student loan debt are an important factor in explaining (young people's) lowered homeownership
rates." The study went on to conclude that "a little over 20 percent of the overall decline in
homeownership among the young can be attributed to the rise in student loan debt. This
represents over 400,000 young individuals who would have owned a home in 2014 had it not been
for the rise in debt."
While the Federal Reserve study focused on the decade between 2005-2014, a 2019 survey by
Bankrate
of nearly 4,000 American borrowers found that 31% of Millennial respondents postponed buying a
home because of student loan debt. By comparison, when the Baby Boomers were entering the
housing market 40 years ago, only 15% delayed a purchase because of student loan debt.
It's also worth noting that the real number of Millennials unable to purchase a home because
of student debt is likely much higher. While 31% of Millennial respondents reported that
student debt directly delayed homeownership, this figure only accounts for potential buyers who
still consider future homeownership a real possibility. Thus it does not reflect the unknown
number of those whose debt to income ratio is so high that they don't expect to ever afford a
home. As Forbes
noted in 2019, "no matter how many possible solutions are tossed around Washington and
beyond on reducing the crushing burden of student loan debt, it remains one of the top reasons
millennials are putting off buying a home."
Historically, home mortgages defined middle-class debt. Yet due to pre-existing debt,
student loan borrowers face difficulty qualifying for a mortgage. In tandem with rising housing
prices, and stringent mortgage qualification requirements adopted in the wake of the 2008
economic crisis, those with already exorbitant levels of student debt face a near-perfect storm
for obtaining a mortgage: placing a key component of the 'American dream' out of reach for
millions of young Americans.
A
2018 study by Summer and Student Debt Crisis found that 56% of respondents reported that
student loan debt made it more difficult to buy a home. That figure excludes those who consider
homeownership so unattainable that they have preemptively "given up." The same study notes that
58% of those surveyed experienced a decline in their credit score as a direct result of their
student debt. Credit scores, based on past payment habits as well as debt-to-income ratios, are
pivotal to mortgage qualification. Even borrowers who haven't yet considered buying a home are
keenly aware that their student-debt-burdened credit scores have put a mortgage out of
reach.
Fewer Marriages
I have put off having children, marrying, or purchasing a home due to the high costs of
student debt repayment. Regularly, I contemplate selling everything and living in my car to
help free up money to pay off the debt sooner.
(Melissa – Granbury, Texas)
Homeownership is not the only dream deferred, or abandoned altogether, because of crushing
student loan debt.
One theme in the stories we've collected – and in our studies – is that student
debt is an overwhelming factor in declining marriage and birth rates. Millennial borrowers like
Melissa, regularly told us that there were three central dreams that debt had put out of reach:
buying a home, getting married, and having children.
In 1990, 26% of adults under 65 were never married – by 2018, that number rose to 36%.
Today, only one in five adults are married before the age of 30 – and the average age of
first marriage has risen by more than six years since 1960. There are a host of factors that
have driven the marriage rate to record lows – and we do not suggest that student debt is
the sole (or even primary) driver of delayed marriage. Evolving and elevated expectations for
romantic partnership, economic shifts, greater equality for women and increased acceptance of
premarital sex all play critical roles in changing marriage habits. One cause of social
transformation however, doesn't negate the impact of another.
Student loan debt delays marriage in several ways. One way is through a sheer
misunderstanding of the law regarding debt. Several borrowers told us they were reluctant to
marry and "make my spouse responsible for my debt." Though the laws concerning spousal
responsibility vary by state, the fears of saddling a partner with one's debts are not
unfounded. Similarly, if a spouse with pre-existing debt returns to school after marriage, both
the debt incurred before and during marriage gets lumped together as a shared liability.
Practically, the legal responsibility for the liability is a nominal matter. Most couples
cannot simply isolate one partner's debt. The money spent each month on student loans could be
collectively used for other essentials, like rent, car repairs, or childcare.
A study
released in June 2019 by the think-tank Demos showed that those who start college after age
twenty (or go back to college following a break) have a particularly hard time paying off
loans. Twelve years after leaving school, the average borrower (who started college after the
age of twenty) will have paid off only 5% of their student debt. If a borrower is
determined not to bring their student debt into a marriage, research suggest that they will
have to wait a very long before they wed.
Media coverage tends to ignore that finances, rather than changing social mores, are the
primary driver of diminishing marriage rates. For every young person who "never wants to
marry", statistics suggest there are far more who would like to wed someday but can't imagine
ever being able to afford to do so. A
Pew Organization study in 2017 found that nearly six out of ten unmarried American adults
hope to marry someday. That same report noted that unmarried Millennials cited "not being
financially stable" as one of the chief reasons why they haven't yet wed. 41% of those
unmarried cited financial instability as a primary reason for remaining single, while 28%
described it as a "secondary" reason. (By comparison, only 24% of young adults named "not being
ready to settle down" as the primary explanation for not being married.)
The research is clear: the primary reason why Americans delay wedlock, or forego it
altogether, is financial insecurity. Debt is reshaping our most intimate relationships, putting
a profound source of happiness further and further out of reach.
Falling Birthrates
My wife and I have been married 3 years and she desperately wants kids. But paying out
$350 a month to pay off my 45k in loans has shattered our dreams of family. We both work but
it's not enough. I've paid my loans since 2004 and I'm not getting ahead.
(James – Kansas City, Missouri)
With less homeownership, along with fewer marriages – it's hardly surprising that the
most debt-laden generation in history is also having far fewer babies than their parents and
grandparents. Millennials are on track to have a lower birth rate than any generation in
American history. In 2018, the overall birth rate in the United States fell to 59 births per
1000 women, the lowest on record and a 2% drop from the previous year.
The birth rate has fallen steadily since the start of the Great Recession in 2008. Yet even
after the recovery, the birth-rate continued to decline.
There's a disagreement as to whether the birthrate decline can be attributed to women
wanting fewer babies (or wanting them later), versus women being unable to afford children. Yet
the survey data is fairly compelling: most young people have had (or expect to have) fewer
children than they consider ideal. In a
2018 New York Times/Morning Consult survey , four of the top five reasons respondents cited
for not having as many children as they wanted focused on financial concerns:
Child care
is too expensive (64% of respondents)Want more time for the children I have (54%)Worried about the economy (49%)Can't afford more children (44%)Waited
because of financial instability (43%)
Furthermore, a 2015 study by the National Institutes of
Health examined the impact of debt on the decision to have children. The results were
stunning. While mortgage holders were more likely than renters to have children, and
credit-card debt had no impact among debtors, the study found that "holding student loans more
significantly affects fertility at higher levels of indebtedness." Low levels of student loan
debt reduced fertility only slightly; high levels of student debt sharply reduced the chances
of having a baby.
Every generation reassesses priorities. Some pundits look at the lives of Millennials and
conclude that they're simply less interested in homeownership, simply more suspicious of
enduring monogamy, simply less interested in having children. The evidence shows that's a false
narrative.
The research in fact reveals that a high percentage of Millennials want homeownership,
marriage, and children. The chief obstacle is not the timeless problem of finding the right
person, but financial insecurity. Student loan debt is a central driver behind this precarity
– affecting the fundamental milestones of our lives.
I hear the phrase "student loan forgiveness " quite often these days. "Forgiveness" for
being a victim of financial predators and a failed leadership class? No, that's not
forgiveness. That's justice. Forgiveness comes from the victims, not the perpetrators.
Personally, I'm not forgiving anybody involved. Politicians, schools, the "financial
industry", etc. These are the folks that should be begging for forgiveness from the
borrowers, not the other way around. These policies have destroyed lives. They then try to
frame any corrective action as doing the victims a favor, "forgiveness", rescuing the
borrowers from their own failures and poor choices. Right. This is basically a war on the
poor. I wonder if it isn't a way to curb greenhouse emissions without inconveniencing the
wealthy.
Excellent comment -- thank you! Let us never let our fellow Americans forget Joe Biden's
central role in killing bankruptcy protection for student debtors.
I also think your final point is very important, as I am increasingly convinced that
"environmental footprint reduction" is likely to be used as a pretext for further austerity
for the working class. Environmentalism has always been a mostly elite and middle class
phenomena, and working class interests are often unmindfully ignored or disregarded. In fact,
I don't think it's unduly paranoid to anticipate ostensibly radical environmentalists
(Extinction Rebellion and the like) being used as cat's paws to extend Overclass policies of
extraction and control.
It's already happened in France – the Gilets Jaunes movement was a direct result of
the radical neoliberal Macron government putting higher taxes on diesel – a regressive
tax on the poor and rural working class.
No, penury and exploitation as a result of educational debt is not a way to cut greenhouse
gas emissions without inconveniencing the wealthy. It's just another example of Americans
being suckered by their own delusions and ignorance, just another example of wealthy
Americans, many of whom are rich without being educated, ripping off poorer Americans, many
of whom ernestly believe that going into long-term crippling debt in order to pay for a
college degree is a good way to get up and out of living from week to week with maxed out
credit cards.
The typical American university/college student has drunk the kool-aid. She believes that
higher education is a personal choice, freely made, to invest in earning potential. The
possibility that this is not necessarily the case apparently does not occur to her. She
genuinely believes, or sometimes she is compelled to believe, that it makes sense to take on
for example 100k in educational debt because the degree that should follow will allow her to
earn a hopefully large multiple of that number. Such students and their parents are
apparently blind to the fact that a country that struggles to defend a primitive form of
democracy is doomed to dystopic horrors without an educated population. Education, including
higher education, is not a personal choice alone – much more it is a national mission
that compels the government to provide instruction to qualified candidates at a minimal cost
to candidates. This is a not a utopian vision – this is reality in democracies that are
not as primitive as the American.
The attempt to associate the diesel tax with French educational policy needs
clarification: The French have free public higher education. Their free public higher
education consists of institutions that are selective, some highly selective, as well as
institutions that are not selective. The selective institutions are intended to provide a
nominally meritocratic elite-building function at the service of both public and private
beneficieries. Public transport infrasturcture is weak in the country, and the Gilets Jaunes
(GJ) argue that that's becasue administrators and mangers, many of whom are graduates of
tuition-free elite universities, have not only failed to improve it: they threw salt in GJ
wounds by attempting to impose a diesel tax. Though for many the tax is a tax-deductable
expense, there are enough economically non-rural residents of rural areas in France to make
the salt really sting. The GJ should more aggressively criticize the meritocratic fallacy of
(highly) selective public institutions and bring attention to the phenomenon of economically
non-rural residents of rural areas. They are relatively heavy polluters (lots of driving,
single-family homes). I wonder if public transport infrastructure in rural areas could be
expanded or if economically non-rural residents of rural areas could be compelled to live in
less isolation.
The most repressive and draconian indebtedness has been thrust upon the youth of America
by its government. I say 'youth' because many of those suffering under this burden were young
once but have struggled long enough to be middle aged and even beyond in the search for a
quality education, not only so they could have a good job but also in order to develop their
minds. This was not a foolish pursuit – – until it was.
Something has to be done about this. And if it has to be done, it will be done, to
paraphrase what Professor Hudson has said: if a debt can't be paid it won't be paid. And also
lest we forget, these neoliberal shenanigans came about as financiers figured they could
layer everything into juicy offerings for the players on Wall Street. Tranches or trenches as
with mortgages – you know, like layers of filo dough with yummy stuff sandwiched in
between. (Hah, my spellcheck doesn't like the word 'neoliberal'. Phooey on you, spellcheck;
it's a word!)
Hasn't been thrust upon the youth of America by its government – the student debt
crisis is a result of predatory financial interests consorting with ignorant, anti-government
ideologues to corrupt the wise support of state and federal governments for public education.
Private non-profit as well as private for-profit "educators" have lobbied lobbied lobbied for
example to expand government lending facilities for students while doing little to regulate
the "institutions" that were convincing candidates to use the facilities to borrow funds to
pay for the questionable degrees that the "institutions" were awarding. There should have
been a major cultural effort to convince Americans that we need public education including
virtually free higher education and to contradict the delusion that an investment in higher
education was essentially an investment in earning potential. Free public education including
effectively free public higher education is essential for the success of democracy. Sadly
many Americans have forgotten a fundamental aspect of the American Way of Life.
Brother in law couldn't make the payments, went underground and worked for cash, then
ultimately committed suicide in his 50's. Not saying he wasn't unstable to begin with, but
will say that having a mountain of debt he was never going to be able to get out from under
certainly was a major factor.
With an 81% increase adjusted for inflation in under a decade, why aren't schools being
penalized? Why not stop writing any and all loans for those schools?
That's an excellent point. I had burdensome student loans and eventually paid them off,
but I support student loan forgiveness. However, from a political standpoint, I understand
why some people are angry about the concept. They think they were smart and chose not to go
to college because of the financial danger, and if loans are forgiven, they're being
"punished" in the housing and job market for being "responsible."
Your "justice" framing could address both of these interest groups. Instead of just
looking at the student loans alone, we'd consider all the ways in which the loans and the
degrees have influenced people's lives. Maybe everyone could have access to "educational
credit," which could be used to directly pay off existing loans, allow people to enroll in a
degree program now, or be credited towards a new or existing mortgage. The program becomes a
universal benefit, and depending upon one's situation, the money could be used in different,
socially beneficial ways.
The main point is I like the "justice" framing, and it should be used to create a program
that benefits everyone. Then the messaging is more about rectifying a dysfunctional system,
then bailing out irresponsible spendthrifts (I don't believe this is true, but that is how
loan forgiveness is framed).
How about the government takes over all consumer debt and charges only the Fed rate in
interest? And writes down any amount considered unpayable? Would anyone not connected to the
financial industry be opposed?
The arguments against student loan forgiveness on the basis of "I paid mine off, why can't
you?" are short-sighted and ultimately injure the person making them.
Everyone is harmed by the toxic environment of debt that we're living in -- even those of
us who never had student loans and those of you who paid them off. We are all suffering under
a regime that has paralyzed people economically. The act of debt cancellation, as those whose
incomes were locked up now get a little piece of it back to spend on other things, would have
a stimulative effect on the economy.
I work with a lady who's only child entered college last year, and was exposed at work to
her discussions with her daughter over the phone and with co workers what is on the list she
choose for her student loans. Things like room and board/rent, etc. This lady has a killer
personality that works smashingly well in corporate offices – only positive things may
be talked about and she juggles her aging, ailing mom, her daughter off to college, and work
quite well.
It wasn't my place to offer advice, but I got a bad feeling listening to the load up of
student loan debt. Then I overhead her advice to her mother regarding what package from
Comcast to get. She recommended the package for seniors with insurance that protects seniors
from phishing and that sort of thing. I don't recall the fee, but she also has insurance for
her smart phone screen.
The $$$ signs of how I could manager their budget and save them some money where dancing
in my head.
I guess they call that being a Financial Advisor today. It used to be called common
sense.
When I was with my former, much younger partner, I told him he would live free with me on
condition he cut back his 60+hrs/week working at multiple Dunkin Donuts and go to school,
take NO school debt and pay everything with his paycheck. He did, and got tax credits on top
of that. He choose medical billing and coding at a school that has since gone bankrupt. But
it got him in the door. He is now supervisor in the billing department at Boston Children's
Hospital and they told him they are sending him to management training at their expense.
He too has a killer personality. Perfect for Facebook where only positive things are said.
He will do well but I worry he will later be not so well off because he doesn't save, he
spends everything he has.
My first year at University of Chicago undergrad was $4,000. Second year $5,000. Then I
moved to Boston and my employer paid most of my school expense while I finished up at
Northeastern University. Peanuts compared to today.
I would never pay for College education at todays prices. I'd take that same money and buy
a house.
And I say that as someone who just dropped a smartphone face-down on a hardwood floor.
I'm here to say that my screen protector, which cost something like 30 bucks, did its job.
It took one for the Arizona Slim team and cracked in several places. The screen was intact.
Hooray!
However, the replacement protector doesn't stick, so back to the phone repair shop I go.
While I'm there, I think I'll strike up a conversation about the right to repair. Hey, I
might just be able to turn another person on to Naked Capitalism.
I'd say that a robust course in home economics would be valuable in public schools. But
I'm guessing our owners would heavily attack that effort.
Fact is, if you want to have any professional career, an education is mandatory. I don't
want my nurse practitioner or doctor to be the likes of the Trump children simply because
they're the only ones who will be able to afford the education, same as all economics,
political science, law etc. workers to only be the ones who can afford it. Sort of insures
that our future leaders won't have any clue whatsoever about the lives of the 90% they'll be
claiming to support. A crappy situation made even worse.
The author claims that college costs (that term is not defined) rose 80% from 2001 to
2009. That is far higher than any figure I have seen. According to National Center for Education
Satistics, the figure for tuition+fees is closer to 30% which is still outrageous. If the
descrepancy means that aid is being cut back more or non-tuition/fee costs are increasing
faster, that would be good to know. Defenders of high prices claim that aid is increasing (I
doubt that but do not have figures).
Good discussion topic. Permit me to share a little tale from the Arizona Slim file:
As mentioned here before, I am learning the Russian language. After completing all 30
lessons in Mark Thompson's "Russian Made Easy" video series on YouTube, I decided that it was
time for some classroom training.
So, off to look at the University of Arizona website. I couldn't easily find any
information about enrolling as a non-degree student, so I sent an email to the department
where I'd be taking an intro Russian class.
Reply: In order to become a UA non-degree student, I would have to complete an online
application. And pay a $45 application fee.
Nyet.
Instead of paying the UA 45 bucks just to apply, I could spend that same money on a
vocabulary builder course, which is taught by a native Russian speaker. From her home in
Moscow, she has built a global business as a language teacher. So, look out, Real Russian
Club, here I come. Link:
Arizona Slim, take a look at the free Russian language courses on Coursera.org. I've taken
excellent Italian courses on EdX, but Coursera looks better now for conversational Russian.
(EdX has a couple of classes on Russian for scientific work.) With foreign languages, the
more practice and exposure, the better, so maybe Coursera could be useful in addition to your
vocabulary builder course.
I was wondering about the kids and parents who pay full freight for college. Can that cost
ever be recouped? Even for top colleges? For instance, financial aid at Harvard maxes out at
$110K in household income. So a high income family will have to pay full sticker price every
year. Tuition and living expenses could be $70K per year or more. So a four year education
could cost $280K to $350K. It's like buying a house in many parts of the country without
buying a house. Yet the median salary for a Harvard graduate is $90K ten years after entering
school (six years after graduation). If college costs are paid back in ten years, the college
graduate will have to pay back $30K every year, on top of everything else. Not much left for
savings, retirement, or a house. Even for Harvard College graduates.
I love these articles. At no point is it ever questioned or addressed why cost of college
has gone exponential relative to the real economy (taking out real estate and healthcare)
since the late 1970s,
It is because "financial aid", especially loans, spends the same as cash. The colleges
will charge what the market will bear, Econ 101,taking account the new money those loans
bring into the picture, driving up the price. Colleges have no skin in the game for repayment
/ default of loans.
Sorry, but I am cool with the whole system collapsing into itself and my bank account
sitting this one out.
Please spare me the club med, lazy river, climbing wall stories. FULL DISCLOSURE: I went
to Illinois Institute of Technology in Chicago, a garden spot of the city between 31st and
35th and State Street off the Dan Ryan Expressway in the late 70s. The place is a bigger dump
now when I went there, full salute to the Mies Van Der Rohe flat roof glass shoe boxes and
the post WWII housing project-like dorms.
A friend invited me to lunch at the cafeteria in the university dorm building. Lunch was
$11 50, but all-you-can-eat with a gourmet style, nice China tableware. I had pizza,
hamburger , pasta al fredo, pudding, cookies, salad, soft drinks. Great opportunity to gain
weight & spend $$$!
well also probably due to both the decimation of the non-college job market, and
credential inflation (a degree now being required for jobs it didn't use to be). of course
college grads are now overproduced relative to demand as well.
Here's an educational experiance one can endeavor : Enter your local thrift/antique
establishment/yard sale/dump, etc. and pick an item – any item .. and figure out how to
rebuild/repair/make serviceable said item. Presto ! THERE'S your future, waiting in the wings
of regression !
Not a bad place to be actually .. beats high penury, no ?
My paleo-conservative dad likes to point out that student loans existed before the
government started backing them. He took out a very large loan in 1950 to attend MIT in got
his Masters there, PhD at SUNY Buffalo in 1970. He paid it off in 1985. Back then lending
standards were based on reality and job market projections. When I went to school, all you
had to do was fog a mirror Then in the 1990s prices started doubling and tripling, etcetc .
Answer is to ban the government from backing loans, full stop.
I have a bunch of hoops to jump through for that!
Here's what my hoops look like:
One of them cancels $50,000 in student loan debt for every person with household income under
$100,000.
Another hoop provides substantial debt cancellation for every person with household income
between $100,000 and $250,000. The $50,000 cancellation amount phases out by $1 for every $3
in income above $100,000, so, for example, a person with household income of $130,000 gets
$40,000 in cancellation, while a person with household income of $160,000 gets $30,000 in
cancellation. Pick you hoop!
I also have a non-hoop, hoop that offers no debt cancellation to people with household income
above $250,000 (the top 5%).
For most Americans, cancellation will take place automatically using data already available
to the federal government about income and outstanding student loan debt.
We also have a moving hoop private student loan debt is also eligible for cancellation, and
the federal government will work with borrowers and the holders of this debt to provide
relief.
And our final hoop. Canceled debt will not be taxed as income.
E. Warren (the Hoop Queen)
Well unless full room and board is paid for, that's how it ends up being though? I mean
free tuition is simply not going to solve this, because how to pay for a roof over one's head
while going to school?
1) live at the parents home and go to a nearby school, sure a bit infantalizing 2) get the
bank of mom and dad to foot the dorm costs again mom and dad paying 3) take out debt for
living expenses.
Haha, no you usually can't afford housing on or off campus (renting a room) with some low
wage job!!! And if you had the capacity to get a well paying job without a degree (or other
training) you might not be pursuing one anyway. Since a large number of students are homeless
(actually true here, shocking numbers), I guess that's also an option.
I'm surprised, this being NC, that no one has mentioned this yet – student debt is a
modern form of indentured servitude.
While it does not directly tie the indebted (former) student to a single employer, it
provides potential employers with leverage in regard to wages & working conditions. Quite
simply, someone with a large debt hanging over their head is more likely to accept a job with
lower pay, fewer raises and/or benefits than some someone who is debt-free and therefore can
afford to be more picky, more demanding to be paid & treated decently.
Get 'em in more debt at an earlier age so they will be more docile and accepting of
neoliberal crapification.
At the same time it has become vastly more expensive a college degree has also become
watered down and of less value. That is the true injustice. Many jobs that once required only
a high school education now require a college degree. This is not because the job
requirements have changed. This is due to the simple fact that many more people possess
college diplomas, so employers now demand them for a greater number of occupations. However,
the pay for these occupations has not risen to be commensurate with the additional costs
incurred to gain the newly required credentials. Now these holders of costly credentials find
themselves in a real bind. The author of this article offered no solutions.
https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F08%2Fa-new-assessment-of-the-role-of-offshoring-in-the-decline-in-us-manufacturing-employment.html
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By Christoph Boehm, Assistant Professor of Economics, University of Texas at Austin, Aaron
Flaaen, Senior Economist, Research and Statistics Division, Federal Reserve Board, and Nitya
Pandalai-Nayar, Assistant Professor of Economics, University of Texas at Austin. Originally
published at VoxEU
What has caused the rapid decline in US manufacturing employment in recent decades? This
column uses novel data to investigate the role of US multinationals and finds that they were a
key driver behind the job losses. Insights from a theoretical framework imply that a reduction
in the costs of foreign sourcing led firms to increase offshoring, and to shed labour.
One of the most contentious aspects of globalisation is its impact on national labour
markets. This is particularly true for advanced economies facing the emergence and integration
of large, low-wage, and export-driven countries into the global trading system. Contributing to
this controversy, between 1990 and 2011 the US manufacturing sector lost one out of every three
jobs. A body of research, including recent work by Bloom et al. (2019), Fort et al. (2018) and
Autor et al. (2013), has attempted to understand this decline in manufacturing employment. The
focus of this research has been on two broad explanations. First, this period could have
coincided with intensive investments in labour-saving technology by US firms, thereby resulting
in reduced demand for domestic manufacturing labour. Second, the production of manufacturing
goods may have increasingly occurred abroad, also leading to less demand for domestic
labour.
New Facts on Manufacturing Employment, Trade, and Multinational Activity
On the surface, the second explanation appears particularly promising. Manufacturing
employment declined from nearly 16 million workers in 1993 to just over 10 million in 2011,
shown by the black line in Figure 1. This large decline in manufacturing employment coincided
with a surge in outward foreign direct investment (FDI) by US firms (the blue line in Figure
1). Nevertheless, existing theories of trade and multinational production make ambiguous
predictions regarding the link between foreign production and US employment. Further, due to a
lack of suitable firm-level data on US multinationals, there has been limited research on their
role in the manufacturing employment decline (see Kovak et al. 2018 for a recent
exception).
Figure 1 US manufacturing employment and US outward FDI
Source : BEA for FDI; Longitudinal Business Database (LBD) and authors'
calculations for employment.
In a recent paper, we address the question of whether foreign input sourcing of US
multinationals has contributed to a decline in US manufacturing employment (Boehm et al. 2019).
We construct a novel dataset, which we combine with a structural model to show that US
multinationals played a leading role in the decline in US manufacturing employment. Our data
from the US Census Bureau cover the universe of manufacturing establishments linked to
transaction-level trade data for the period 1993-2011. Using two directories of international
corporate structure, we augment the Census data to include, for the first time, longitudinal
information on the direction and extent of firms' multinational operations. To the best of our
knowledge, our dataset is the first to permit a comprehensive analysis of the role of US
multinationals in the aggregate manufacturing decline in the US. With these data, we establish
three new stylised facts.
Fact 1: US-owned multinationals were responsible for a large share of the aggregate
manufacturing employment decline
Our first finding is that US multinational firms, defined as those US-headquartered firms with
foreign-owned plants, contributed disproportionally to the decline in US manufacturing
employment. While 33.3% of 1993 employment was in multinational-owned establishments, this
group directly accounted for 41% of the subsequent decline.
Fact 2: US-owned multinationals had lower employment growth rates than similar
non-multinationals
In Figure 2, we show that multinationals exhibited consistently lower net job creation rates in
the manufacturing sector, relative to other types of firms. Compared to purely domestic firms
and non-multinational exporting firms, multinationals created fewer jobs or shed more jobs in
almost every year in our sample. Of course, these patterns may not be causal, and other
characteristics of multinationals could be driving the low job creation rates. To address this
concern, we control for all observable plant characteristics, and find that multinational
plants experienced lower employment growth than non-multinational owned plants in the same
industry, even when the size and age of the plants are held constant.
Figure 2 Net US manufacturing job creation rates by type of US firm
Source : Authors' calculations based on the LBD, Directory of Corporation
Affiliations (DCA), and Longitudinal Foreign Trade Transactions Dataset (LFTTD)
Fact 3: Newly multinational establishments experienced job losses, while the parent
multinational firm expanded imports of intermediate inputs
An alternative way to assess the role of multinational activity on US employment with our data
is to use an 'event study' framework. We compare the employment growth trajectories of newly
multinational-owned plants to otherwise similar plants in terms of industry, firm age, and
plant size. As can be seen in Figure 3a, prior to the plants becoming part of a multinational,
their growth patterns are not different from the control group. However, in the years following
the multinational expansion, there is a brief positive but then sustained negative trajectory
of employment at these manufacturing plants. Ten years after the transition, these newly
multinational-owned plants have manufacturing employment that is about 20% smaller than an
otherwise similar plant.
Figure 3 US employment and import dynamics at new multinational plants
a) Relative imports
b) Cumulative relative employment (Index)
Source : Authors' calculations based on LBD, DCA, and LFTTD.
Further, these newly multinational firms increase imports following the expansion abroad. As
Figure 3b demonstrates, these firms substantially increase imports both from related parties
and other firms (at arms-length), relative to their control group. Taken together, Figures 3a
and 3b suggest that offshoring might explain the observed negative relationship between trade
and employment.
Structural Analysis: Did the Offshoring of Intermediate Input Production Result in a Net
Employment Decline in the US at the Firm Level?
While the patterns we identify above are suggesting that increased foreign input sourcing by
multinational firms led to a decrease in US manufacturing employment, they are not necessarily
causal. Standard models of importing, such as Halpern et al. (2015), Antras et al. (2017) or
Blaum et al. (2018), make ambiguous predictions as to whether foreign sourcing is associated
with increases or decreases in domestic employment. At the heart of this ambiguity are two
competing forces. First, a reduction in the costs of foreign sourcing leads firms to have
access to cheaper intermediate inputs. As a result, their unit costs fall and their optimal
scale increases. This 'scale effect' raises their US employment. On the other hand, firms
respond by optimally reallocating some intermediate input production towards the location with
lower costs. This 'reallocation effect' reduces US employment. Theoretically, the scale effect
could dominate the reallocation effect and lead to positive employment effects of offshoring,
or vice versa.
We use our microdata to estimate the relative strengths of these two competing forces. We
show that in a conventional class of models and in partial equilibrium, the value of a single
structural constant – the elasticity of firm size with respect to firm production
efficiency – completely determines which of the two forces dominates. Our estimation
approach is to develop a method to structurally estimate an upper bound on this constant using
our data on the universe of US manufacturing firms. While a high value of the upper bound
leaves open the possibility that foreign sourcing and domestic employment are complements, a
low value of the bound unambiguously implies that the two are substitutes.
Our estimates of the bound are small, indicating that during the period 1993-2011, the
reallocation effect was much larger than the scale effect. In other words, during this period
of aggregate manufacturing employment decline, multinationals' foreign input sourcing was
leading to a net decline of manufacturing employment within these firms.
Aggregate Implications for US Manufacturing Employment
It is important to point out that the model we use only speaks to employment changes within
existing firms and does not take into account general equilibrium forces that can also affect
employment. Since such general equilibrium effects are inherently difficult to assess,
estimates of how much of the observed aggregate decline can be attributed to offshoring of
multinational firms are uncertain and often require strong assumptions. We thus proceed under
two alternative sets of assumptions. In the first, we conduct a simple partial equilibrium
aggregation exercise, which uses observed changes in firm cost shares of domestic inputs
together with our estimated parameter bounds to obtain model-implied predictions of the
employment loss due to foreign sourcing. This approach captures both the direct impact of
foreign sourcing by existing firms as well as the first-order impact on domestic suppliers,
holding all else equal. Under the second, we model these indirect, general equilibrium effects,
such as firm entry and exit, explicitly. In both of these scenarios, we find that the
offshoring activities of multinationals explains about one-fifth to one-third of the aggregate
US manufacturing employment decline.
Policy Implications
Our research shows that the global sourcing behaviour of US multinational firms was an
important component of the manufacturing decline observed in the past few decades. These firms
set up production facilities abroad and imported intermediate goods back to the US, with the
consequence of reduced demand for domestic manufacturing workers. While our research suggests
that offshoring had a negative impact on employment, we caution that it does not support the
view that offshoring and trade should be contained with tariffs or other policy interventions.
Previous research has shown that both trade and offshoring are critical for consumers' access
to affordable goods in the US. Instead, our research implies that government assistance for
displaced manufacturing workers could facilitate their transition to new jobs in other
sectors.
Authors' note: Any opinions or conclusions expressed herein are those of the authors and
do not necessarily represent the view of the US Census Bureau or the Board of Governors or its
research staff.
It's not just big-ticket manufacturing (appliances, etc) .little stuff that a nation uses
on a daily basis has been off-shored as well -- electrical wiring, capacitors, even
foodstuffs like cookies and candy.
I think an overlooked aspect is environmental protection and labor working conditions as
well as wages.
We are offshoring our pollution by moving manufacturing to other countries with much less
stringent environmental regulation. Similarly, labor rules in those countries don't require
as much worker safety, so we are offshoring injuries as well.
As the other countries become wealthier and more educated, they are starting to push for
more of these protections as well as higher wages which is forcing the companies to move
their production again to keep their costs low.
An interesting recent trend is the rejection of our "recycling" from countries that used
to receive it, so the feel-good greenwashing of filling the recycling bins is started to
boomerang back to North America as countries ship back the trash parts of the recycling. This
will likely require a second recycling revolution with more domestic processing of recycling
or an admission that it simply isn't going to happen in which case the righteousness quotient
of many suburbanites is going to plummet.
This is such an easy problem to solve from a policy standpoint- and it has been solved by
countries as small as the Netherlands.
Legally mandate a small list of fully recyclable materials for manufacturers to use in
production and packaging, and enforce it with punitive tariffs on non conforming goods. This
can take many forms, one logical option being that of holding companies responsible for the
costs of recycling their products.
This is as applicable to soda bottles as it is to large and complex products like
automobiles; BMW is a world leader in lifecycle waste reduction and recycling of
vehicles.
As usual, the impediment isn't technology or consumerism, it's corporate profitability and
one time costs of adjusting the supply chain.
So the writer says "that government assistance for displaced manufacturing workers could
facilitate their transition to new jobs in other sectors." I take it to mean that a policy
such as "free college" as advocated by Sanders which would involve government funded
vocational training in other sectors would go a long away toward helping those displaced by
outsourcing?
I remember all that BS back in the 80's and 90's everybody was on the bandwagon about
careers in computers, or any other hi-tech. I was one of those who had *some* training at
least .. right before they offshored all those jobs to India. It was a double kick in the
nuts.So, manufacturing went to China, computing went to India. And people wonder why I'm so
bitter and cranky sometimes.
Napoleon: "Money has no Fatherland. Financiers are without patriotism and without shame.
Their sole object is gain." IMHO US manufacturing is the reason why we're not all speaking
German today. And we gave all that capacity away like a bunch of lemmings over the
cliff
"that government assistance for displaced manufacturing workers could facilitate their
transition to new jobs in other sectors."
This "implies" that there are "jobs in other sectors" that create as much economic value,
expertise and "innovation" as manufacturing jobs do. What are they–"service" jobs?
Taking in each other's laundry? Delivering McDonald's to your door? Netflix?
Manufacturing is not just a job category that can be changed out for something shiny and
new, it's vital infrastructure that represents a nation's ability to provide for itself, and
to create a standard of living that reflects that capability. Those "affordable goods" so
important to american "consumers" are manufactured goods. It's not just the price to
buy them, it's the ability to make them that's important.
Like it or not, the once mighty american economy was built on the mightiest manufacturing
capacity that the world had ever known. Trivializing it as being only about cheap stuff is a
colossal mistake. We used to know that, and we've only begun to pay the price for
forgetting.
We* might very well learn to make lasting things of value again .. on a lesser scale,
after half the population is dead from despair, war, and disease ..
Outsourcing of manufacturing jobs by multi-nationals contributed to job losses ..
Really! LOL!
30 years too late for this info.
Wasn't hard to see even way back in the 1980's how multi-nationals were working very hard to
export jobs and import their "anti-labor" behaviour they were excising outside the laws and
borders of the US.
Tariffs were historically used to protect domestic manufacturers. Both the fees and
increased price were use to boot domestic manufacturing, and hence domestic employment.
Yes, during the wave of industrialization. But they don't work so well once consolidation
starts. 1875-1925(roughly) was the golden age of US manufacturing, even the WWII bounce was
government DoD driven. Private ex-DoD manufacturing peaked in 1924 and was flat since then.
Then we have the 97-05 downwave which then has boosted us about back to 1925's ex-DoD high.
Just like the tech wave, it ended.
I mean, by 1925 Portsmouth Ohio was done by 1925, by 1950 they just bled manufacturing
while it consolidated around bigger cities after WWII.
We need self-efficiency not capitalists growth. It ain't happening people. Its over. We
need 10% contraction of GDP just to get manufacturing growing again from a much lower base.
Tariffs are dead in the water for growth now, and act like the opposite. They are also
creating a bubble in "base" consumption while killing domestic production and yes, eventually
overcapacity will kill base consumption and it crash again like last years 4th quarter
driving down domestic manufacturing further.
Anecdotally, in a field I worked in for a while, middle management in a small privately
owned "needle trades" firm, the "growth" among our competitors was in firms that (we assumed)
did their design work in US but manufactured overseas. Domestic manufacturers either adapted
to this, or closed down.
At least in this field, automation had next to nothing to do with it.
Instead, our research implies that government assistance for displaced manufacturing
workers could facilitate their transition to new jobs in other sectors.
Ah yes, the subsidised retraining for manufacturing jobs that, in fact, do not exist.
Louis Uchitelle covered this policy failure in his 2006 book "The Disposable American:
Layoffs and their consequences". Is the phrase "got the T-shirt" relevant here?
For the government to re-employ workers who have lost their factories would be a form of
industrial policy. Ours is never clearly stated, if there is one. But one thing is clear and
that is the government gave the internationals every opportunity to offshore our national
productivity without any safety net for labor except unemployment insurance. Which runs out.
Michael Pettis has just backed a proposal to tax foreign capital saving and investment here
in this country. Because most of it is just financial "investments". Foreign investment for
long term capital projects would be virtually unaffected. It is claimed that this tax on
money parking would reduce out trade deficit and make it fluctuate within an acceptable
balance. By doing something that sounds like real-time exchange rate adjustments for every
transacted trade, now to include foreign investment and savings. So why didn't the
government, after offshoring all those jobs, re-employ all the laid-off workers as banking
and investment managers? So all this unproductive foreign money is skewing our trade balance.
Making our unemployment deeply structural. It is so bizarre that we are "trading" in money at
all. We are trading in the medium of exchange, which is fiat, which itself is susceptible to
exchange rate adjustments with other money and all of it supposedly backed by the
productivity of that country. That foreign productivity is frequently nothing more than IMF
money, stolen and taken out of the country. The P word. Because the world has reached
manufacturing overcapacity, I assume, all this money is totally skewing the ledgers. It's
laughable except for the fact that the bean counters take it seriously. The mess we are in is
something more fundamental than balanced exchange rates. It's more like hoarding at its most
irrational. Way over my head. And for us to fix unemployment here in the US will take far
more than a tax on all this loose international money.
Yeah it's nice to have it "officially" credentialed etc its not like I haven't been saying
this since they passed NAFTA, but then I wasn't "credentialed" so nobody listened . its like,
"No $#!t sherlock ???" pretty much *everyone* who has spent some time in the industrial
sectors knows this by heart without even needing to be told. Of course maybe now its OK to
say it out loud or something . smh.
===the Role of Offshoring in the Decline in US Manufacturing Employment===
It is not just the role of offshoring in the decline of US manufacturing employment, BUT
the effect the offshoring, and the competing with foreign manufacturers, had on the existing
US manufacturing workforce. The manufacturers and manufacturing workers that remain in the US
have to compete with their cheaper foreign competition for work.
I spent most of the last 25 years working in plastics injection molding. After spending
the first six years of my career in plastics/ polymer research and development, I
transitioned to injection molding. In the mid 90's when I started in injection molding,
globalization had already begun especially in the automotive sector. The car manufacturers
were already setting up global and domestic supply chains. But even then the Chicago area
(and the US in general) was heavy in mold making and injection molding businesses.
Then China became a major player in the world economy, NAFTA started, etc. and in the
early 2000's it was like the last manufacturer who gets stuck in the US gets to turn out the
lights!
There were a lot of small to medium size mold maker shops and plastic injection molders in
the Chicago area that went under because they could not compete with the cheaper foreign
competition. It was very sad as I knew many small mom and pop mold makers and injection
molders in the Chicago area who were in business for 20 – 30+ years that closed.
The fact that many businesses/corporations in the US, due to offshoring and globalization,
are forced to compete with foreign competitors that have cheaper labor, less regulation,
cheaper land costs, etc. etc. is beyond reason.
And to this day you can see the effects of neoliberal globalization in any manufacturing
or other business you visit as they are dealing with consequences of having to compete
directly with cheaper foreign competitors through cost cutting, low wages, and running the
employees into the ground.
The tables were tilted against manufacturers and manufacturing employees in the US. It is
like the US manufacturing (and other sectors) are trying to fight a battle with one hand tied
behind our backs.
There is a good book that relates to this post. The book is called Failure to Adjust: How
Americans Got Left Behind in the Global Economy by Edward Alden.
NAFTA killed a bunch of material extraction jobs, but boosted a bunch of auto production
jobs down the supply chain. You can see that on the data. Granted, auto sales have been flat
for 20 year which has led to a flattening of employment growth since 2005 after the material
extraction driven drop.
That is why the Trump Administration just basically rebooted it.
lol, but it created a bunch of debt finance jobs throughout the economy as well, that
boosted existing manufacturing. Offshoring accounts for .1% of the job loss. Most of it is
consolidation and technology. My great grandfather lost his job in 1925 during the first wave
of consolidation. What about that?
As someone working in manufacturing, while I am glad that there is some acknowledgement
that outsourcing is responsible, I strongly disagree about not implementing tariffs.
Effectively workers are competing for a race to the bottom in wages, working conditions, and
other factors like environmental laws.
Guess what if there are tariffs? Things will cost more, but there will also be more jobs
for the working class. Actually there will also be quite a few white collar jobs too.
Engineering, HR, Finance, Sales, etc, are all needed in any manufacturing industry.
I suspect that net, most workers would be better off even if prices were higher due to the
jobs. The thing is, the top 10 percent would not be and the 1 percent would not be. That's
the main reason for this outsourcing. To distribute income upwards so the rich can
parasitically take it.
While our research suggests that offshoring had a negative impact on employment, we
caution that it does not support the view that offshoring and trade should be contained
with tariffs or other policy interventions. Previous research has shown that both trade and
offshoring are critical for consumers' access to affordable goods in the US. Instead, our
research implies that government assistance for displaced manufacturing workers could
facilitate their transition to new jobs in other sectors.
This is where I strongly disagree. As discussed above, I think that the net effect might
be beneficial for the majority of society.
The other is the old retraining claims, which never pan out. What jobs are there? Visit
the communities in the Midwestern US and Southern Ontario. Retraining for what? For jobs that
are part time, minimum wage, with few or no benefits?!
Manufacturing may not have been perfect, but at least there were benefits, it was often
full time, and the salaries allowed a middle class existence.
When I read things like this, as much as I dislike Trump, I can understand why people
would support him.
For the life of me I don't see how any other outcome could have happened. With the
economic system we have embraced at least in my long lifetime, it was inevitable that
"capital" would seek the lowest level playing field in the long term. Nation's boundaries
kept that flow "fenced" to a certain limit for as long as there have been physical borders
between countries. Once the cat was let out of the bag of competing countries after WW2, for
example the Japanese with computer driven machinery (lathes) that crushed American companies
that in too many cases refused to invest and welcomed the slow destruction of organized labor
here in the US, it was inevitable that that condition would be the future of manufacturing
here. The advent of the Mexican maquiladoras gave a great push to the exporting of jobs.
NAFTA put the nails in the coffin so many more of those good paying jobs. "Labor" was never
invited to those global meetings that proved to be so destructive to so many countries.
But, again. The system we embrace can have no other outcome. "Tariffs" will eventually lead
to wars. So in the words of that famous Russian: "What is to be done?"
Anybody have a solution? You will be saving civilization from itself. We need a complete
rethinking of how we live on this planet. That will take better humans that we have now that
lead nations. In the meantime it's, "kill them all and let God sort them out!" The weak will
succumb; the strong will continue to battle for territory, in this case jobs, jobs, jobs.
This article contains content that some may find distressing.
Jeffrey Epstein "was" apparently a serial molester of children. He had manipulation down to an art form, as many molesters do.
He seemed to be an expert at figuring out a girl's weak point, whether it was poverty, a deceased family member, or feeling alienated
from her peers.
This is a common ploy. Many molesters seek out children or teens who have lost a parent and use this as a way to build a friendship.
Then, because children don't think like adults, they are manipulated, coerced, or threatened into sexual activity.
The story below could be told a hundred thousand times with only tiny changes. The names and the faces would be different. The
settings might not be a mansion in Manhattan or in Palm Beach but rather a quiet part of a church, a school, or some kind of activity
for teens. The setting could be in the house next door to you, where someone with evil intent befriends a vulnerable young person
with the stated goal of helping them, but an end result that couldn't be further from reality.
How 14-year-old Jennifer Araoz met Jeffrey Epstein
Jennifer Araoz was 14 years old when she first met her future rapist, Jeffrey Epstein. She wrote about how she was manipulated,
first by his recruiter, then by Epstein himself. There are many powerful lessons that we as parents can learn from her story.
During my freshman year, one of Epstein's recruiters, a stranger, approached me on the sidewalk outside my high school. Epstein
never operated alone. He had a ring of enablers and surrounded himself with influential people. I was attending a performing arts
school on the Upper East Side, studying musical theater. I wanted to be an actress and a singer. (
source )
Another
report based on court documents says that the recruiter befriended Jennifer, took her out to eat after school a few times, and
learned more about her, such as the fact that Jennifer's father had died from an AIDs-related illness and her family could barely
scrape by financially.
The recruiter told me about a wealthy man she knew named Jeffrey Epstein. Meeting him would be beneficial, and he could introduce
me to the right people for my career, she said. When I confided that I had recently lost my father and that my family was living
on food stamps, she told me he was very caring and wanted to help us financially. (
source )
The recruiter finally got Jennifer to go with her to meet Epstein. Court documents say that they all three met together for the
first month or so.
The visits during the first month felt benign, at least at the time. On my second visit, Epstein also gave me a digital camera
as a gift. The visits were about one to two hours long and we would spend the time talking. After each visit, he or his secretary
would hand me $300 in cash, supposedly to help my family. (
source )
Epstein claimed he was 'a big AIDS activist' which you can imagine would mean a lot to a 14-year-old whose father died of the
disease.
Soon the visits would take a dark turn.
By the second month of Jennifer's visits to the mansion, the recruiter no longer attended the visits., the manipulation began
in earnest.
But within about a month, he started asking me for massages and instructed me to take my top off. He said he would need to
see my body if he was going to help me break into modeling. I felt uncomfortable and intimidated, but I did as he said. The assault
escalated when, during these massages, he would flip over and sexually gratify himself and touch me inappropriately. For a little
over a year, I went to Epstein's home once or twice a week.
After that day, I never went back. I also quit the performing arts school -- the one I had auditioned for and had wanted so
badly to attend. It was too close to his house, the scene of so many crimes. I was too scared I would see him or his recruiter.
So I transferred to another school in Queens close to my home. Since I was no longer able to pursue my dream of performing arts
I eventually lost interest and dropped out. (
source )
Sure, we can say that she knew things weren't right when he asked her to take her top off. By this point, she was 15 years old.
Old enough to know right from wrong. But if she was getting $300 twice a week and helping her family with it, it's pretty easy to
see how she would want to continue helping her family despite her discomfort. Epstein knew exactly what he was doing.
Epstein's wealth, power, and connections would have made going against him seem like an insurmountable feat for a vulnerable 15-year-old
girl who had recently lost her father. Who would have believed her word against that of this presumed philanthropist?
A few days ago, Jennifer, now 32, filed a massive lawsuit against Epstein's estate, Ghislaine Maxwell, and 3 members of Epstein's
household staff. The complaint alleges that Maxwell and the staff "conspired with each other to make possible and otherwise facilitate
the sexual abuse and rape of Plaintiff."
Some of Epstein's victims recruited new girls for him.
Epstein's indictment explains how he manipulated some of the girls he sexually abused to bring other girls to him.
Prosecutors say he lured underage girls, some as young as 14, to his residences, promising them a cash payment in exchange
for giving him a massage. Instead, he would sexually abuse them -- groping them, making them touch him while he masturbated, and
using sex toys on the minors. Then, he would allegedly ask them to recruit other girls. (
source )
A detailed report in the Miami Herald referred to it as a "sexual pyramid scheme." One of Epstein's accusers, Courtney Wild, reiterates
the theme of the story told by Jennifer Boaz.
"Jeffrey preyed on girls who were in a bad way, girls who were basically homeless. He went after girls who he thought no one
would listen to and he was right,'' said Courtney Wild, who was 14 when she met Epstein. (
source )
Courtney's time spent with Epstein nearly destroyed her.
Before she met Epstein, Courtney Wild was captain of the cheerleading squad, first trumpet in the band and an A-student at
Lake Worth Middle School.
After she met Epstein, she was a stripper, a drug addict and an inmate at Gadsden Correctional Institution in Florida's Panhandle.
Wild still had braces on her teeth when she was introduced to him in 2002 at the age of 14.
She was fair, petite and slender, blonde and blue-eyed. (
source )
She began to recruit other girls for him in Palm Beach.
Wild said Epstein preferred girls who were white, appeared prepubescent and those who were easy to manipulate into going further
each time
"By the time I was 16, I had probably brought him 70 to 80 girls who were all 14 and 15 years old. He was involved in my life
for years," said Wild, who was released from prison in October after serving three years on drug charges.
The girls -- mostly 13 to 16 -- were lured to his pink waterfront mansion by Wild and other girls, who went to malls, house
parties and other places where girls congregated, and told recruits that they could earn $200 to $300 to give a man -- Epstein
-- a massage, according to an unredacted copy of the Palm Beach police investigation obtained by the Herald. (
source )
Epstein had it down to an art form.
Palm Beach police detective Joseph Recarey explains how Epstein insinuated himself into the girls' lives.
"The common interview with a girl went like this: 'I was brought there by so and so. I didn't feel comfortable with what happened,
but I got paid well, so I was told if I didn't feel comfortable, I could bring someone else and still get paid,' '' Recarey said.
During the massage sessions, Recarey said Epstein would molest the girls, paying them premiums for engaging in oral sex and
intercourse, and offering them a further bounty to find him more girls
Epstein could be a generous benefactor, Recarey said, buying his favored girls gifts. He might rent a car for a young girl
to make it more convenient for her to stop by and cater to him. Once, he sent a bucket of roses to the local high school after
one of his girls starred in a stage production. The floral-delivery instructions and a report card for one of the girls were discovered
in a search of his mansion and trash. Police also obtained receipts for the rental cars and gifts, Recarey said.
Epstein counseled the girls about their schooling, and told them he would help them get into college, modeling school, fashion
design or acting. At least two of Epstein's victims told police that they were in love with him, according to the police report.
( source )
You may look at these stories and scorn the victims. After all, they kept going back, didn't they? They liked the money, didn't
they?
But they were children. Many of them were isolated, vulnerable, and without support systems. Many of them felt ashamed but didn't
know how to extricate themselves. They were confused and scared, and Epstein was a pro at taking advantage of these emotions and
doubts.
The girls are not to blame here. The adults are.
Epstein is not the only predator out there.
While this article focuses on how Epstein was able to lure so many victims,
as Dagny Taggert recently wrote , there are
many more people in power out there preying on children. Clergy, priests, teachers, neighbors, musicians, and random people on the
internet are out there preying on and trafficking children.
Dagny wrote:
According to
The National
Center for Victims of Crime , the prevalence of child sexual abuse (CSA) is difficult to determine because it is often not
reported. Experts agree that the incidence is far greater than what is reported to authorities.
Statistics below represent some of the research done on child sexual abuse.
The U.S. Department of Health and Human Services' Children's Bureau report Child Maltreatment 2010 found that
9.2% of victimized children were sexually
assaulted (page 24).
1 in 5 girls and 1 in 20 boys is a victim of child sexual abuse;
Self-report studies show that 20% of adult females and 5-10% of adult males recall a childhood sexual assault or sexual
abuse incident;
During a one-year period in the U.S., 16% of youth ages 14 to 17 had been sexually victimized;
Over the course of their lifetime, 28% of U.S. youth ages 14 to 17 had been sexually victimized;
Children are most vulnerable to CSA between the ages of 7 and 13.
According to Darkness to Light , a non-profit committed to empowering adults
to prevent child sexual abuse, only about one-third of child sexual abuse incidents are identified, and even
fewer are reported .
When my children's father passed away, it wasn't too long afterward that I left my corporate job. I volunteered when the company
began layoffs and took a small payment and my retirement fund to start a new life writing freelance. It wasn't long after that when
I started this website.
I wanted to be home when they got back from school every day. I didn't want them to seem like prey to those looking for children
with weak support systems. My own daughters could so easily have had a story like the one Jennifer has told.
I know that what I did is not possible for every family that suffers a loss. I was pretty fortunate to be able to find work from
home that paid enough to allow me to be there.
What you, as a parent, must understand are the things that make your child seem vulnerable.
Loneliness
Social isolation and few, if any, friends
Lack of a support system from parents and caregivers
Spending too much time on their own
Alienation from parents
Some signs that your child could be getting abused or groomed.
Sudden secretiveness regarding their phone or computer (a lot of grooming happens online
Spending a great deal of time alone with another adult
Signs of increased anger or fear
Lack of participation in things that used to bring them happiness
Withdrawal from family and friends
Obviously, these lists are not comprehensive, nor are they sure signs of abuse. What teenager doesn't seem angry and withdrawn
from time to time? But it's vital, no matter how hard they push you away, to stay involved, particularly after a traumatic event.
Teach your kids that some secrets should not be kept.
Predators manipulate children in all sorts of ways. One of the biggest ways is warning them to keep their "relationship" a secret
or else.
Or else what?
They'll hurt Mom or Dad
They'll hurt the child's pet
They'll hurt the child's siblings
They'll cause extreme financial problems for the family
Predators often put a burden on a child where they feel as though they must stay silent to protect the people they love.
Kids need to know that if anyone threatens them if they tell a secret, then they absolutely must tell that secret. Mom and Dad
will be safe and will protect them. People who ask children to keep their presence in their lives a secret are never to be trusted.
And finally, make sure your children know that whatever they tell you, you will believe them and you know it's not their fault.
"... on the Lolita Express; was it really beyond him to order a hit? ..."
"... New York Times ..."
"... Are the Elites the arch villains from the comic books, probably not, but then again many of them operate corporations that cause suffering to economically deprived populations all over the world. ..."
"... Why is this surprising? Aristocrats have always behaved this way. ..."
"... The sexual abuse of children and kids in their early teens is a very democratic crime. While physical abuse and neglect are linked to lower-income parents, sexual abuse occurs in all strata of society. It is not confined to the elites or to money changers. Nor to Jews, if that is what you are implying. ..."
"... Unconcerned about negative consequences, these people have become increasingly brazen. They certainly know that the laws that apply to you and me do not apply to them. ..."
"... In the words of George Carlin, "it's a big club, and you ain't in it." I stopped reading after the first two para's on this, tone is exactly the same as the sneering disdain from the empire's various MSM propaganda arms aimed at those "not in the club." ..."
"... 1) Either our intelligence agencies knew what was going on with Epstein and did nothing to stop him. Or... ..."
"... 2) They had no clue .. ..."
"... Occam's Razor says Possibility No. 1 is more likely to be the truth. But what would such a truth tell us? ..."
"... "What I am saying is that Epstein's direct testimony – AND ONLY EPSTEIN'S DIRECT TESTIMONY – had the potential to create a Common Knowledge moment that could bring down – not just specific sociopathic oligarchs like Mob Boss Donald or Mob Boss Bill or Mob Boss Andrew if they were the specific targets of that testimony – but the entire Mob system of sociopathic oligarchy. ..."
"... One strongly suspects that Ghislaine Maxwell knows just as much as Epstein did. Her participation was just as important to the operation of this "trafficking" ring. She was the lead recruiter, handled logistics, "grooming" and also was Epstein's "in" to many of his VIP associates (who were really clients). If witness accounts are accurate, she was also a participant in a good number of these depraved, criminal acts. ..."
"... The fact she has not been charged is quite the tell about our system of "justice." ..."
"... This is a dangerous slope. People once bowed to the elites because there was a principle of enforcement called nobless oblige. Society felt that elites had to be held to a higher standard because they carried greater responsibilities and burdens for society and the welfare of the national good. ..."
"... Since the 1960s nobless oblige has been downgraded to sound bites and photo ops for publicity and marketing. The elites have all but abandoned their responsibilities to support religion, to support education (except to indocrinate), to support tradition and society and the national good. The elites have become inward looking, inbred and narcissistic with little to no outward focus except in a marxist totalitarian vein of thought which serves their interest, indulges their hungers, preserves their wealth and power. ..."
"... My point was that as popolo minuti transform into popolo grossi in terms of access to power, they tend to start to transform into them in terms of moral character as well. (Inequality of) power corrupts, and absolute (inequality of) power corrupts absolutely. Thus, it seems that the over-representation of psychopaths in positions of power is because the psychopathy is acquired (and plenty of studies show drastic declines in empathy with even a little priming for power), rather than because it is easier for psychopaths to rise to the top. The worst of the popolo grossi tend to be hereditary. ..."
"... I think we're a lot closer to 1789 France than we want to believe. Read some Chris Hedges to see how the socialists see the current situation. Here's an example. https://www.commondreams.or... ..."
"... "given that all available evidence points to gross negligence on the part of the jail." How is gross negligence different from deliberate negligence? ..."
In our tense populist moment, Jeffrey Epstein's crimes land like a grenade. •
August 15, 2019
Billionaire Jeffrey Epstein in Cambridge, MA on 9/8/04. (Photo by Rick Friedman/Corbis via Getty Images) Hands up, those of you who
made a Fort Marcy Park joke last Saturday. Anyone? Surely there were a few. Fort Marcy Park was the Washington, D.C. woodland where
White House attorney Vince Foster was found dead in 1993, and while his demise was repeatedly ruled a suicide, certain conservatives
spent years afterwards hallucinating that the Clintons had him killed. Now, a quarter century later, both right and left are back
in conspiracy mode. Mere hours after pedo-to-the-stars Jeffrey Epstein was reported to have killed himself, the hash tag #ClintonBodyCount
began circulating on Twitter, followed closely by #TrumpBodyCount. Both Bill Clinton and Donald Trump had been associates of Epstein's;
both, the thinking went, might have been desperate for him not to take the stand.
It is wrong, of course, to publicly speculate that Epstein was whacked, given that all available evidence points to gross negligence
on the part of the jail. But can you really blame people? Twenty-five years ago, if you'd said that a roll call of America's elites,
everyone from a former president to the most famous lawyer in the country, would be implicated in a sex trafficking ring masterminded
by an enigmatic Wall Street financier who was also a member
of the Trilateral Commission , you would have been laughed into the darkest corner of the local subway platform (next to the
guy holding the "Vatican Hides Pedophiles" sign, presumably). Today, you'd be reading AP copy. Validate an improbable conspiracy
theory, and you grant license to all the related improbable conspiracy theories: Bill Clinton flew dozens of times on the Lolita Express; was it really beyond him to order a hit?
And if we know one thing about the Epstein story, it's that everything about it is utterly improbable. Epstein stands credibly
accused of assembling a
veritable underage harem . One of his victims, Virginia Guiffre, has already
implicated Prince Andrew
, the third-born of Queen Elizabeth II, and a picture has since emerged showing the royal with his arm around the then-teenager's
waist. Guiffre says she was also
ordered
to have sex with , among others, a "foreign president," a "well-known prime minister," and a "large hotel chain owner." Such
an open secret was all this perversion that the current president of the United States
made cheeky reference to it back in 2002. So invincible
did Epstein think himself that he discussed underage sex openly, telling a New York Times reporter that laws against pedophilia
were a
"cultural aberration."
That Epstein looked to other cultures to rationalize his behavior is nothing new -- Oscar Wilde wrapped his similar predilections
in lofty talk about the Greek ideal. What is different is that rather than being hunted and exposed by the powerful, as Wilde was,
Epstein was protected by them for decades. Even after he was convicted of soliciting an underage prostitute in 2008, he was sentenced
to only 18 months in prison, held in a
private
wing of the Palm Beach County stockade, and let out on generous "work release."
Study the Epstein case long enough and you end up at Alex Jones's favorite conclusion: they're all sons of bitches. Everyone who
was anyone seemed to be in on this, or at least acting at the behest of someone who was. The essence of the conspiratorial mindset
is that powerful shadowy forces are, first, capable of and engaged in the most dastardly skullduggery imaginable, and, second, in
cabal-like cooperation with each other across all levels of power. The Epstein case seems to affirm both planks. It makes our elites
seem like aliens, of a different culture, a different moral code, a different species -- how else could they have let slide what
none of us ever would? Mary Colum's remark to Ernest Hemingway, "The only difference between the rich and other people is that the
rich have more money," has rarely rang less true.
There's been for some time now a sense of drift between most Americans and their elites, driven by factors like income inequality,
geographic enclaving, and cultural differences. We are living in a populist moment, to be sure, an era when the usual purveyors of
class warfare sound more apt than they otherwise would. In such a fraught environment, the Epstein revelation lands like a grenade.
Not only are America's gentry hitching rides on the Acela while mumbling about deplorables -- so the feeling goes -- they're also
running cover for a Caligula who's preying on little Susie down the street. Suddenly the populist divide doesn't just run between
classes or races or regular toast versus avocado, but between ethical extremes, good and literal evil.
This is, of course, what most populists profess: the people as a group are wholesome, the elites as a group are venal, and the
former has to be vaulted over the latter in order for society to be made whole again. Yet Epstein's crimes are so wicked as to potentially
set this moral chasm ablaze like never before. That's why, though Trump may have associated with Epstein, he's unlikely to be damaged
by him: everything that's happened only confirms what he's been saying for years. In fact, you might view the Epstein fracas as a
dialectic between two of his former associates, Trump's throw-them-out populism versus Clinton's benevolent stewardship of society
by the smart set. And Trump won out.
Just as populisms aren't driven entirely by economic causes, so too are revolutions often about more than bread. Consider the
Russian Revolution, sparked at least in small part by the people's perception of Rasputin as a sexual deviant. Consider, too, the
French Revolution's rage against the profligate "Madame Déficit" Marie Antoinette. In such cases, the moral tends to get intertwined
with the economic; license is seen as enabling decadence while the people pray and starve. This can be a blind spot in traditional
conservative thinking. We rightly detest (most) revolutions and the tremors they cause, but we sometimes fail to notice that the
Jacobins have good reason to be angry and that the ruling classes they overthrow really are that loathsome.
America is nowhere near 1789 France, or armed revolution in general. But we are anxious, restive, hungry for justice. A republic
likes ours depends on the harmonious coexistence of its people and its elites, a matter that our Founders spent a good deal of time
worrying about. Now we have a hideous face f0r elite corruption, one that's enabled fever in the national mind and dehumanized those
around him. For those of us who prize stability and liberty in a polity, who think populism is always best in modest doses, the weeks
ahead may be reason for worry.
Because it seems there's only more to come. On Wednesday, another victim
came forward , alleging
that Epstein raped her when she was 14 after she turned down sex with him. That this carnal omega, this pathetic loser, this finger-sniffing
pervert from every teen comedy lurking outside the pretty girl's home longing for a piece of discarded lingerie was somehow elevated
into a Teflon-coated Wall Street sun god is beyond comprehension. My friend Michael Davis calls Epstein and company the
Hellfire Club , but
just how much will they torch on their way down?
When I started to see what was going on in this country, which was my journey, I was amazed to find out that there is sex trafficking
8 blocks from the White House and I learned of this in 2011. Lisa Ling did a great documentary on it. "Night time traffic greater
than the day time." Pimps attempting to recruit girls walking home from school. If you pay attention it is also a journey of
the food chain of Corporate America that supports this.
This is a Money Changer issue, that is about the closing of eyes from both parties. and please don't tell me this is not so.
I know better than that.
To be absolutely, clear there was speculation that Epstein was going to be assassinated weeks before it happened. For the most
part citizens aren't so much surprised, as disappointed that Justice is once again foiled.
Are the Elites the arch villains from the comic books, probably not, but then again many of them operate corporations that
cause suffering to economically deprived populations all over the world.
When the World's 26 richest people own as much as
poorest 50%, just how close do they seem to achieve a god like status when looking up from the bottom? Maybe that's one reason
that people are so angry when it seems that the most vulnerable among us, our children, are the victims of a limited number
of the Elites and their twisted and horrific appetites.
I personally doubt much will come of the Epstein affair it will most likely be just one more myth added to the tally of
injustice, and the people will have to bitterly swallow it whole. It will probably take many more cases like this being exposed
before the people actually have their fill, and decide to do something about it. In the meantime, prepare to see more of the
same by the laughing and mocking Elites
In this day and age, I doubt a reporter will touch this story, and if they did, the real story would never make it into
the Main Stream Media. And, most likely the reporter would be permanently black balled, and never work in Journalism again.
It's happened many times before, because it doesn't fit within the approved propaganda message.
Give the story a couple decades or more, and it may come out, but otherwise it will be handled as a whack-job Conspiracy
Theory.
The Fourth Estate is the only business that is protected by the Constitution, and yet it has been neutered, and those in
the Press, who were supposed to be the Watchdogs for the people, have become the Lapdogs of the Elites.
What passes as News today is formulaic programming, passed on from the Propagandist to the Media, both nationally
and locally.
Two Republican state senators and two New York City Policemen died violently within 72 hours ....
1. On June 4, former Arkansas Senator Linda Collins-Smith, 57, was found dead outside her home, her body unrecognizable
on discovery. Police are now investigating her death as a homicide. On June 5, the county prosecutor announced that the circuit
judge sealed the documents and statements obtained by police.
2. On June 5, Deputy Chief Steven Silks, 62, weeks away from retirement, was found in an unmarked police car with a gunshot
wound to the head. News reports reported indicate it seemed self-inflicted.
3. On June 5, former Oklahoma Sen. Jonathan Nichols, 53, was found shot dead in his home. Police have not announced whether
they are investigating a suicide or homicide..
4. On June 6, Detective Joseph Calabrese, 58, was found near his police car on a Brooklyn, NY beach, dead of a gunshot wound
in what one report called an apparent suicide.
RIP.
Many other Americans died violently this past week. Why link these four together?
The answer comes down to a dark suspicion and a few hard facts which suggest that one or more of these four deaths might
have had something to do with these individuals' work against pedophiles and human trafficking, or the official corruption
so often surrounding both.
The sexual abuse of children and kids in their early teens is a very democratic crime. While physical abuse and neglect are
linked to lower-income parents, sexual abuse occurs in all strata of society. It is not confined to the elites or to money
changers. Nor to Jews, if that is what you are implying.
Just about everyone in America has a family member who was sexually abused by someone who was usually not elite. Therefore,
I cannot get worked up about class issues because of Jeffrey Epstein.
What I can get worked up about are the way elites start wars for poor people to die in and the way poor people get cruel
sentences while the elite either walk or get the Epstein treatment--private wing, generous work release.
I agree. Young girls are trafficked in more circles than the elite. I don't understand the connection to any particular social
class. But better connected people do have better lawyers and can get away with more. Until like Mr. Epstein , they don't.
The true character of these people is starting to be revealed. This (lack of) character is not only displayed when these men
travel to Pedo Island, it's on display everywhere they go, in everything they do. Every organization they lead, or have anything
to do with, is likely rotten to the core.
Unconcerned about negative consequences, these people have become increasingly brazen. They certainly know that the laws
that apply to you and me do not apply to them.
If the system is so corrupt to have protected Epstein for decades, who else is being protected? Who else is getting away
with figurative rape in every department of government, or house of finance?
The sooner the public recognizes the "true face" of our elites and rulers the better. Left to their own devices,
these people - who think they have class but in reality are the worst kind of trash - can bring down a nation.
Literally no one I know thought this guy would make it to trial alive with the exception of me, as I still had some hope in
the system, and I was proven wrong. I've lost whatever remaining faith I had in the system.
In the words of George Carlin, "it's a big club, and you ain't in it." I stopped reading after the first two para's on this,
tone is exactly the same as the sneering disdain from the empire's various MSM propaganda arms aimed at those "not in the club."
1) Either our intelligence agencies knew what was going on with Epstein and did nothing to stop him. Or...
2) They had no clue ... which would mean our much vaunted intelligence community knew nothing about the travel habits of
the "ruling class" of the world, about Jeff Epstein's real activities, had received no tips, had no insiders, and were incapable
of "putting two and two together," etc. In short, Big Brother - with all its resources and intelligence and sources - with
capabilities that put the Gestapo or the KGB to shame - had no idea.
Occam's Razor says Possibility No. 1 is more likely to be the truth. But what would such a truth tell us?
The third possibility is that BigBrother was in on it and didn't object to sacrificing teenage girls to get compromising information
on people they wanted tp blackmail.
"What I am saying is that Epstein's direct testimony – AND ONLY EPSTEIN'S DIRECT TESTIMONY – had the potential to create a
Common Knowledge moment that could bring down – not just specific sociopathic oligarchs like Mob Boss Donald or Mob Boss Bill
or Mob Boss Andrew if they were the specific targets of that testimony – but the entire Mob system of sociopathic oligarchy.
Jeffrey Epstein was the Missionary to bring down the monsters behind the monster, to bring down the SYSTEM of monsters.
Jeffrey Epstein's books and records are not. The individual voices of Jeffrey Epstein's victims are not.
And that's what makes me angriest of all.
That while the individual victims of Jeffrey Epstein's crimes will maybe (maybe!) get some smattering of "justice" and recompense
from the show trial of a monster's estate, there will be no Justice served against the monsters behind the monster, that the
Mob system of sociopathic oligarchy that CREATED this Jeffrey Epstein and the next Jeffrey Epstein and the next and the next
will continue unabated. Untouched. Golden."
One strongly suspects that Ghislaine Maxwell knows just as much as Epstein did. Her participation was just as important to
the operation of this "trafficking" ring. She was the lead recruiter, handled logistics, "grooming" and also was Epstein's
"in" to many of his VIP associates (who were really clients). If witness accounts are accurate, she was also a participant
in a good number of these depraved, criminal acts.
The fact she has not been charged is quite the tell about our system of "justice."
Whether Epstein was killed or committed suicide I don't know. I would however like to know who these elites were who participated
in the rapes of these young girls. They are just as guilty as Epstein whether they knew the ages of these girls or not, it
was there responsibility to find out.
This is a dangerous slope. People once bowed to the elites because there was a principle of enforcement called nobless oblige.
Society felt that elites had to be held to a higher standard because they carried greater responsibilities and burdens for
society and the welfare of the national good.
Since the 1960s nobless oblige has been downgraded to sound bites and photo ops for publicity and marketing. The elites have
all but abandoned their responsibilities to support religion, to support education (except to indocrinate), to support tradition
and society and the national good. The elites have become inward looking, inbred and narcissistic with little to no outward
focus except in a marxist totalitarian vein of thought which serves their interest, indulges their hungers, preserves their
wealth and power.
What you are have been seeing since the 1960s is the veneer being pulled off the rich and powerful. I would say Nixon and
Princess Diana and Ted Kennedy did the most to pull down the veneer from the rich and powerful but it could be argued that
Nixon and Princess Diana and Ted Kennedy were accidental victims of circumstance. However Epstein's human trafficking of children
for sex and blackmail .... breaks the most because his crimes were no accident nor was he a victim of circumstance. Epstein
planned this and created an organization around it elevating his elitist crimes to a level no that I dont think anyone in modern
history can match.
I doubt that history's elites were ever any better. It's just that with far less transparency and access, it was much easier
for them to hide how awful they were. The 1960s was the start of mass media, and so the veneer started to crack.
I do think this COULD qualify as "the story of the century." That is, If the story was told in its entirety - all "names"
exposed.
If fully told, the swamp might, in fact, be "drained."
Now the people in said swamp have a strong incentive to protect their domain. Which is why so many of us are skeptical the
true story will ever be told.
If there was ever a time where brave and patriotic whistleblowers were needed ...
"This is, of course, what most populists profess: the people as a group are wholesome, the elites as a group are venal, and
the former has to be vaulted over the latter in order for society to be made whole again."
Sorry, but take a look at the average American. The so-called "people" are for the most part just as morally obtuse as the
"elites" but they carry the additional burden of being not only ignorant but also stupid. Just look around. Best recent example
of the utter stupidity of the American people: a recent survey shows they think 23% of the population is gay. Really.
But isn't the issue exactly that the "only difference between the rich and other people is that the rich have more money" comment
is perfectly true?
The rich and powerful are us, but corrupted by riches and power. Many of them behave the way many of us would quickly start
to behave if we found ourselves in their shoes. If the gap in power between you and most other people is so huge that you can
do anything to them and get away with it, your morals stop applying to them because you start to view them as somewhat subhuman.
In this sense, I'm sure Epstein never even thought of raping the underage daughters of other elites.
Thus, the issue is stratospheric inequality of power (by whatever fungible measure you choose - money, political, religious,
social, etc). And we see it happen ALL the time throughout history and across geographies - as soon as the power gap is in
excess of social boundaries, as soon as there is a group of people you can do pretty much anything you want to and get away
with it, you start going a little crazy. Exploitation, rape, torture, murder, slavery - everything starts looking justified.
Then it's just a matter of degree, with tin-pot dictators on one end and Epstein somewhere in the middle.
Read Machiavelli. He observed that the popolo minuti (regular folks) just wished to be left alone by authorities whereas popolo
grossi (fat cats) were of a different psychological composition: they delighted in deception, were vain, greedy and hungry
for power.
Centuries later, studies of psychopaths reveal these creatures are different from regular humans at the brain level. The elites
are psychopathic (the key ones are) and no, they ain't like regular people. They are literally a different kind.
My point was that as popolo minuti transform into popolo grossi in terms of access to power, they tend to start to transform
into them in terms of moral character as well. (Inequality of) power corrupts, and absolute (inequality of) power corrupts
absolutely. Thus, it seems that the over-representation of psychopaths in positions of power is because the psychopathy is
acquired (and plenty of studies show drastic declines in empathy with even a little priming for power), rather than because
it is easier for psychopaths to rise to the top. The worst of the popolo grossi tend to be hereditary.
In my opinion, there is nothing so dangerous as to believe that evil people are a different breed from the rest of us. Instead,
they tend to simply be us, but in different circumstances. History tends to show that revolutions aimed at replacing the evil
people with better people end up with corrupted revolutionaries, rather than a fundamentally less abusive system.
"It reminds me of a well known speech by a defense counsel, who pleaded his client's poverty as an excuse of robbing and murdering
six of his victims, on the lines that "My client's poverty drove him to murder six people, everybody else would have done the
same!"
Outstanding article. However, I think we're a lot closer to 1789 France than we want to believe. Read some Chris Hedges to
see how the socialists see the current situation. Here's an example.
https://www.commondreams.or...
Elites, that is those with more wealth and/or power than the rest of the masses have always been this way. Remember how decadent
the European aristocracy was with their sport of "wenching"? that is going around in groups raping young peasant girls. Also,
there was the Hellfire Club which you can research if you want details. This scandal will get less and less coverage in the
MSM until it fades away like all the others involving the rich and powerful.
The Global "Elite" control our Ruling Class by means of blackmail. A person does not get raised to high truly influential positions
of power(Politicians, Judges, Hollywood, etc.) unless they have enough dirt on you to know that they can control you without
question. The most powerful form of blackmail that they have is ped0filia because it is THE most abhorrent crime that someone
can commit, so much so that even criminals in prison refuse to allow ped0 scumbags to be housed near them.
Trump has an obvious penchant for beautiful WOMEN not kids. He was helping and somewhat part of the "Elite" in that he was
joining in with them to buy politicians for influence but Trump neutralized that being over his head by openly admitting to
buying politicians. They thought it was safe to allow him to run because they thought it was a joke and he would never get
elected. They were wrong. In my opinion, they don't have enough dirt on him to get him to go along with their agenda of selling
out the USA to the highest bidder hence the all-out attacks on him.
The key to understanding the "Elite"/Ruling Class dynamic is not conflating the two and realizing that blackmail is the
main tool used by the one to keep the other under their control.
*Sorry about the Trump tangent above but it's absolutely ridiculous that people are trying to tie Trump to Epstein even
though Trump has been trying to bring national attention to the Epstein case FOR YEARS.
"given that all available evidence points to gross negligence on the part of the jail."
How is gross negligence different from deliberate negligence?
You can tell? And btw the WaPo just came out with news that broken
bones in Epstein's neck are more usual in cases of homicide.
I generally see anyone who belittles
'Conspiracy theorists' as part of an Establishment that uses 'incompetence' as the perennial excuse for everything that goes
wrong.
The old accusation, that you are a 'conspiracy theorist' (a term invented by the CIA after the Kennedy assassination) is holding
less and less weight. The irrational kooks now seem to be the people who think Epstein committed suicide. Jokes were everywhere
about how 'we were shocked to hear about the suicide of Jeffrey Epstein, next Tuesday' when a day later we hear, 'Jeffrey Epstein
committed suicide'.
By the way, this equivalence between Trump and Clinton is bogus, I believe. There isn't much evidence of any involvement
of Trump (some evidence to the contrary in fact), but there is a load of evidence suggesting 'Wild Bill' was availing himself.
Remember when Maxine Waters was labelled a kook for saying the CIA was bringing cocaine into her LA district? She was mocked
and ridiculed. Now we know she was right. You can't make this stuff up.
I'm sorry, but this case stinks to high heaven, and if you're ready to accept "gross negligence" as the explanation you're
likely to believe ANYTHING the authorities tell you. Epstein was either murdered, as the autopsy and reports of shrieking from
his cell indicate, or subbed out by intelligence services and replaced by a murdered homeless person who received plastic surgery.
Study the history of modern intelligence services: appearances are deceiving, and systemic disinformation is endemic to politics.
Careful public speculation, acknowledging where we're uncertain, is very much the responsible thing to do; otherwise there
is no hope of democratic accountability. The investigation we're being promised will be conducted by the exact same institution
-- the US Department of Justice -- that was responsible for keeping Epstein safe and securing his public testimony about his
criminal network. These are the people you want us to trust? Come on, a little critical reasoning, please!
The most ridiculous part is the idea that being rich and powerful gives you a predilection to turn a blind eye. My wife's family
turned a blind eye to a perverted uncle that molested multiple family members over decades. No one stood up, it would've been
a shame to them to admit it. How is this any different?
"... The reason the ruler's have decreed 'anybody but Bernie' is that Sanders' (and to a lesser perceived degree, Warren's) campaign proposals challenge the austerity regime that has been relentlessly erected since the 1970s precisely to set American workers and the whole capitalist world on a Race to the Bottom, in which each year brings lower living standards and more insecurity to the population at large. ..."
"... The obscene increases in wealth inequality are the desired result and true essence of austerity. ..."
"... "the top one-tenth of one percent (.1%) of the population -- households making $2.757 million a year -- now number almost 200,000 families, a cohort big enough to create and inhabit a large and coherent social world of its own. ..."
Sanders (D)(1): "Why the Rich Want to Bury Bernie, the Not-Really-Socialist" [Glen Ford,
Black Agenda
Report (CI)]. Really excellent.
Here's "why":
"The reason the ruler's have decreed 'anybody
but Bernie' is that Sanders' (and to a lesser perceived degree, Warren's) campaign proposals
challenge the austerity regime that has been relentlessly erected since the 1970s precisely to
set American workers and the whole capitalist world on a Race to the Bottom, in which each year
brings lower living standards and more insecurity to the population at large.
The obscene
increases in wealth inequality are the desired result and true essence of austerity."
There's
much more, but this on local oligarchies is important: "the top one-tenth of one percent (.1%)
of the population -- households making $2.757 million a year -- now number almost 200,000
families, a cohort big enough to create and inhabit a large and coherent social world of its
own.
From their rich enclaves in every state of the country, this formidable "base" of truly
wealthy folks effectively dictate the politics of their regions for the benefit of themselves
and the oligarchs at the top of the pyramid. "
The Classical Economists soon noticed those at the top don't do anything economically
productive, but maintained themselves in luxury and leisure through the hard work of everyone
else.
They couldn't miss it as the European aristocracy never did a stroke of real work.
"The labour and time of the poor is in civilised countries sacrificed to the
maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury
by the labour of his tenants. The moneyed man is supported by his extractions from the
industrious merchant and the needy who are obliged to support him in ease by a return for the
use of his money. But every savage has the full fruits of his own labours; there are no
landlords, no usurers and no tax gatherers." Adam Smith
Economics was a big problem for the powerful vested interests of the 19th century and it
was always far too dangerous to be allowed to reveal the truth about the economy.
How can we protect those powerful vested interests at the top of society?
The early neoclassical economists hid the problems of rentier activity in the economy by
removing the difference between "earned" and "unearned" income and they conflated "land" with
"capital".
They took the focus off the cost of living that had been so important to the Classical
Economists to hide the effects of rentier activity in the economy.
The landowners, landlords and usurers were now just productive members of society
again.
William White (BIS, OECD) talks about how economics really changed over one hundred years
ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
This was the old switcheroo.
Economics, the time line:
Classical economics – observations and deductions from the world of small state,
unregulated capitalism around them
Neoclassical economics – Where did that come from?
Keynesian economics – observations, deductions and fixes for the problems of
neoclassical economics
Neoclassical economics – Why is that back?
We thought small state, unregulated capitalism was something that it wasn't as our ideas
came from neoclassical economics, which has little connection with classical economics.
On bringing it back again, we had lost everything that had been learned in the 1930s and
1940s, by which time it had already demonstrated its flaws.
In the second half of the 20th century, the Mont Pelerin society developed the neoliberal
ideology from neoclassical economics, under the impression that capitalism was a
self-stabilising system that doesn't need regulation.
Their expectations were rather different from the small state, unregulated capitalism that
had been observed and documented by the Classical Economists in the 19th Century.
"The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
"But the rate of profit does not, like rent and wages, rise with the prosperity and
fall with the declension of the society. On the contrary, it is naturally low in rich and
high in poor countries, and it is always highest in the countries which are going fastest to
ruin." Adam Smith / Classical Economist
Their belief in the markets came from neoclassical economics, which doesn't consider the
elements that ensures markets don't reach stable equilibriums; debt and the money creation of
bank loans.
Richard Vague has studied many of those 19th century financial crises in his book "A Brief
History of Doom" and charts the rollercoaster progress of 19th century small state,
unregulated capitalism.
"Theoretically, neither deflation nor inflation ought to affect long-run growth or
employment. After a while, people and businesses get used to changing prices. If prices fall,
eventually so will wages, and the impact on profits, employment and purchasing power will be
neutral. Borrowers suffer during deflation because their debts are fixed in value, but
creditors benefit because the dollars they get back will buy more. For the economy as a
whole, deflation ought to be a wash."
What has Ben Bernanke got wrong?
He thinks banks are financial intermediaries.
Our knowledge of privately created money has been going backwards since 1856.
Credit creation theory -> fractional reserve theory -> financial intermediation
theory
I like the title. Also, this is one of those cases where the interviewer brings quite a
lot to the table as well as the author. An excellent introduction and a well
carried/developed near metaphor as in, nail on the is a head.
That was a logical thesis to investigate. It seems strange that it has remained out of
sight for so long until Mr. Vague's research and analysis.
The student debt in the USA is currently at $1.5 trillion. That is about 7% of GDP –
and growing. I wonder how this may affect the economy in the US going forward.
As Yogi Berra reminds us, "You can observe a lot by watching."
I don't think it has been "out of sight" so much as "in sight, but ignored". The relation
of private debt to economic downturns has been noticed by others. Irving Fisher in the 20th
Century, Steve Keen today come to mind.
The connection between "over-capacity" and "inability to service" may be new.
I would like to see analysis like this subjected to peer review; I think that there must
be at least a few journals sympathetic to heterodox approaches to economics that would give a
new synthesis like this a fair review process. Going "directly to the people" via popular
writing raises a small concern in my mind.
Steve Keen mathematized the Minsky Hypothesis. The results could be displayed in three
dimensions. The graphs showed that when private debt was included in the calculations, the
recession in 2007 was accurately predicted. Interestingly, there is a period of moderation
which is followed by a rapid crash. During this period of moderation Bernanke was saying that
all the indicators showed that the economy was in good shape. Of course he didn't consider
private debt.
Some points of discussion, I'm not mad if disproven:
: Is the 2.5 Quadrillion dollars in derivatives considered debt? Or is the ability to
create derivatives what drives the excess lending?
: Is the ability to generate excess debt a function of the fractional reserve system, and
thus mostly a benefit for robbers who own banks? The Templars couldn't generate excess debt,
they needed gold on hand to pay the notes, but wasn't there increased trade from their
system, and thus general benefit?
No.
The stupid sums on derivatives are notional principals, and usually grossed up. If I have a
swap with 10m notional with you, it could be worth anything (and most likely the only debt
exposure is any margin-call amount, which would be on 10m swap trivial), but would add 20m to
that dumb number.
I can easily enough generate almost any number for the notional principal w/o increasing
the risk to the system (for example by creating any number of equal-but-opposite trades
between two parties which have a netting agreement)
I can equally (a bit harder, as it requires some thinking) do a few "well placed"
derivatives with notionals in say few billions (but nicely levered) that can sink the whole
system.
No.
In a full reserve system there's no debt, hence no question of "excess debt". As an aside,
"fractional reserve system is a myth". Bank lending is constrained only by capital, not by
any reserves (cf number of banking systems that don't even have any rules on reserves).
I have not read Mr. Vague's book. However, I am curious as to whether he adds anything to
the work of Steve Keen, who predicted the 2007-09 financial crisis, and Hyman Minsky. See,
for example, Keen's "Can We Avoid Another Financial Crisis?" (2017).
Looks like a nice validation of Keen's (and Michael Hudson's) work. That's fine with me,
although a nod in their direction certainly looks warranted since private debt was what led
Keen to predict the Great Recession (and win the Revere Prize for doing so).
Hudson's work on ancient debt jubilees exactly parallels Vague's.
Debt is the only working time machine mankind invented. But the conservation-over-time
still holds.
Technically, for any individual, over their lifetime integral of (income + debt
destruction) >= integral(expenses+ debt creation) [I'm ignoring cases where debt can be
inherited]
So are we heading for a crisis? Right now I(income + debt destruction) < I(expenses +
debt creation) for a large number of indivduals over their lifetime. So unless their income
raises dramatically (expenses for them are often way less discretionary), yes we are, as the
debt destruction will have to compensate.
But to guess the timing – well, that very much depends on the aggregate of those
individuals.A trigger that would further reduce income or increase expense (across the
population) would make it more probable. A small but not sufficient increase in income
(across the population) would postpone it.
"The student debt in the USA is currently at $1.5 trillion."
Thanks to some skillful intervention with the somnolent Congress this debt cannot be
discharged in bankruptcy. That seems to fly in the face of Mr. Vague's conclusions while
redounding to the benefit of the rentier financial class.
@ John -- Please make everyone you know aware that Democrat candidate for president Joe
Biden holds a great deal of responsibility for student debt not being dischargeable in
bankruptcy. This is only one of his high crimes and misdemeanors. Don't let anyone
forget!
That's only one of many reasons that Biden should be defeated. Here's a really good
explanation of how he helped remove educational loans (nearly all of them, not only student
loans) from discharge in bankruptcy.
Biden also strongly supported the Iraq War preventing any opposition views to testify in
his committee. Also a strong supporter of NAFTA anf the TTTP. ( Trump will hammer on this if
he runs against Biden.) His cooperation with southern segregationists resulted in the unequal
drug penalties that fed the prison industrial complex he supported. He had mutiple committee
meeting to rail against black crime when it was expedient. He threw Anita Hill under the bus
and thus aided in putting Clarence Thomas on the Supreme Court. He says he's a union man as
he goes to Comcast, a union buster, for financial aid. He is known as a representative
working for the credit card companies. etc. What's not to like if you're a corporate
democrat?
Duh. That was exactly the purpose. That bankruptcy exempt law for student loans was passed
based upon falsehoods. Its actual purpose was to enslave the college educated youth (make
them debt slaves) so that they don't go on a rampage like they did in the 1960's and 70's
vis-a-vis the Vietnam War.
I think part of the problem is that we treat money as a store of value, as well as a
medium of exchange.
As a medium, it is a contract, with one side an asset and the other a debt, so in order to
store the asset, similar amounts of debt have to be created.
This results in a centripedial effect, as positive feedback draws the asset to the center of
the system, while negative feedback pushes the debt to the edges.
Since money and finance serve as the value circulation mechanism, this is like the heart
telling the hands and feet to go suck dirt, because they don't get any blood.
A medium and a store are distinct functions. Blood is a medium, fat is a store. Roads are a
medium, parking lots are a store.
As a medium, we own money like we own the section of road we are using, or the beer passing
through our bodies. It's functionality is in its fungibility.
If we store value in healthy communities, we wouldn't need banks to mediate every
relationship.
The irony of our individualistic culture, is it leaves us in our atomized cocoons, allowing
more effective top down control and a parasitic feedback mechanism. Sort of like The
Matrix.
good description of the way an ME and a SoV work against each other; I can never think
through what I'm sure is this very contradiction in terms. thanks.
Appears to build on the work of economists Hyman Minsky and Steve Keen. Not as concerned
with developments in "Asia" (China), as there seems to be a policy willingness there to
substitute state money for private sector debt, and to allow currency depreciation as an
adjustment mechanism for the implicit debt writedowns. The policy also plays into China's
exports-driven macro model. Similar to the US government and central bank "foaming the
runway" for the banks and large corporations in the aftermath of the 2008 financial
crisis.
Contemplating the role of compound interest in private sector debt growth in a period of
low economic growth. Recent rapid growth of leveraged loans and junk bonds to fund corporate
stock buybacks, negative real interest rates to push up financial asset and real estate
prices/collateral values, and a lax regulatory environment appear to support an intentional
policy of excessive growth in private sector debt. Whether the GFC is entirely in the
rearview mirror or is till unfolding in terms of ultimately leading to systemic change also
remains open IMO, although neoliberal policies remain firmly entrenched at this time.
The part about the financial sector, including housing, being the main components of US
"industrial policy" shows the country as whole isn't taking the first advice financial
advisors usually give for stability: DIVERSIFY ..
And yet again here is another book/article on the US economy that says nothing about
defense spending.
US Defense spending is not debt. The MMT discussions state that clearly.
One test for "debt" is a simple question: Who can demand the debt be paid?
In the case of USG spending, the only party who could "call the debt" is the USG, and a
single party cannot be both debtor and creditor on a debt, that is: cannot owe oneself
money.
Well all government spending is debt if it spends currency. The dollars are debt. Your
checking account is debt too to the bank. When you write a check, you're assigning a portion
of the bank's debt to the payee. Dollars are just checks made out to "cash" in fixed amounts.
They appear in the Fed's books a liability, too.
What are we owed for a dollar? Answer: relief from a dollar's worth of (inevitable) tax
liability.
Back to the original post: It's even ambiguous whether defense spending is consumption.
After all, the internet is a product of DARPA (the "D" is for "Defense"). Marianna Mazzucato
has a nice TED talk about government as innovator.
" In both cases, the result is about 16% growth to GDP over 15 years. But in the second
case, you don't have a financial crisis."
also in the second case there are not foreclosures and repossessions whereby concentrated
financial power confiscates what they sold so they can sell it again by the way where does
that activity (repos and foreclosures) go in the calculation of GDP
Gosh. Where has Mr. Vague been? If this isn't the understatement of the century, I don't
know what is. Even dear old Ordoliberal Wolfgang Schaeuble said right up front: "We are
overbanked." Steve Keen is still fighting with Krugman about the significance of private
debt. And to imply that we have an unspoken "industrial policy" that uses real estate to get
us out of a slow patch begs the question. It is not industrial policy, it is the blatant
chickenshit avoidance of industrial policy. But never mind all that, the sea change Mr. Vague
is avoiding is that industrial manufacturing is being drastically trimmed back, limited,
maybe even rationed by country for all we know. To forgive debts won't really cut it. Not
that we shouldn't do it. We should simply because debt service is nearly impossible these
days. We need to have massive fiscal infusions; money spent wisely to improve civilization
and save the environment. Please Mr. Vague. You're more like Mr. Vacuous.
" .industrial policy, even though it was largely unstated: namely, support for the
financial and real estate sectors"
I would add the agricultural sector to government supported industry.
The brother needs to have a look a Portland, Oregon. Overcapacity, a housing bubble and a
homeless crisis all at once. It's bound to crash. Yet there're so many boomers retiring from
the first wave of the Tech Era (the folks whose awesome ideas and disruption gave us
Dot-Bomb. So they've run up the price of beer in a town famous for craft brewing to
unaffordability. They never seem to pay the price.
Bush Junior tightened the Bankruptcy laws in his final term before the great recession. I
still don't think that was coincidence.
The smart people with all the money DO know this is how economics works, and execute their
strategies on their behalf accordingly. The rest of us, get the idiot's guide to the galaxy
to work with.
"Debt, the first 5000 years" by David Graeber is on my list of probably-good books that
I'm unlikely to get around to reading. Is that similar to this one?
Yves here. Quelle surprise! Economists engage in groupthink, which sounds a little less bad if you call it
"ideology".
By Mohsen Javdani, Associate Professor of Economics, University of British Columbia –
Okanagan Campus and Ha-Joon Chang, Professor, University of Cambridge. Originally published at the
Institute for New Economic Thinking website
Mainstream (neoclassical) economics has always put a strong emphasis on the positivist conception of the
discipline, characterizing economists and their views as objective, unbiased, and non-ideological. This is
still true today, even after the 2008 economic crisis exposed the discipline to criticisms for lack of open
debate, intolerance for pluralism, and narrow pedagogy.
[1]
Even
mainstream scholars who do not blatantly refuse to acknowledge the profession's shortcomings still resist
identifying ideological bias as one of the main culprits. They often favor other "micro" explanations, such
as individual incentives related to academic power, career advancement, and personal and editorial networks.
Economists of different traditions do not agree with this diagnosis, but their claims have been largely
ignored and the debate suppressed.
Acknowledging that ideology resides quite comfortably in our economics departments would have huge
intellectual implications, both theoretical and practical. In spite (or because?) of that, the matter has
never been directly subjected to empirical scrutiny.
In a
recent study
, we do just that. Using a well-known experimental "deception" technique embedded in an
online survey that involves just over 2400 economists from 19 countries, we fictitiously attribute the
source of 15 quotations to famous economists of different leanings. In other words, all participants
received identical statements to agree or disagree with, but source attribution was randomly changed
without the participants' knowledge
. The experiment provides clear evidence that ideological bias
strongly influences the ideas and judgements of economists. More specifically, we find that changing source
attributions from mainstream to less-/non-mainstream figures significantly reduces the respondents' reported
agreement with statements. Interestingly, this contradicts the image economists have of themselves, with 82%
of participants reporting that in evaluating a statement one should only pay attention to its content and
not to the views of its author.
Moreover, we find that our estimated ideological bias varies significantly by the personal
characteristics of economists in our sample. For example, economists' self-reported political orientation
strongly influences their ideological bias, with estimated bias going up as respondents' political views
move to the right. The estimated bias is also stronger among mainstream than among heterodox economists,
with macroeconomists exhibiting the strongest bias. Men also display more bias than women. Geographical
differences also play a major role, with less bias among economists in Africa, South America, and
Mediterranean countries like Italy, Portugal, and Spain. In addition, economists with undergraduate degrees
in economics or business/management tend to show stronger ideological biases.
We give more details about our methodology and findings in the following sections, but first let us
anticipate some of the conclusions and implications. Theoretically, the implications are upsetting for the
positivist methodology dominating the neoclassical economics. As
Boland (1991)
suggests, "[p]ositive economics is now so pervasive that every competing view has been virtually eclipsed."
Yet, the strong influence of ideological bias on views among economists that is evident in our empirical
results cannot be reconciled with it.
Practically, our results imply that it is crucial to adopt changes in the profession that protect
academic discourse, as well as the consumers of the economic ideas, from the damaging impacts of ideological
bias. In fact, there exists growing evidence that suggests value judgements and political orientation of
economists affect not just research (
Jelveh
et al. 2018
,
Saint-Paul
2018
), but also citation networks (
Önder
and Terviö 2015
), faculty hiring (
Terviö
2011
), as well as economists' positions on positive and normative issues related to public policy (e.g.
Beyer and Pühringer
2019
;
Fuchs, Krueger and
Poterba 1998
;
Mayer
2001
;
van
Dalen 2019
;
Van Gunten, Martin, and Teplitskiy 2016
). It is therefore not a long stretch to imagine that ideological
bias could play an important role in suppressing plurality, narrowing pedagogy, and delineating biased
research parameters in economics.
One important step that helps identify the appropriate changes necessary to minimize the influence of
ideological biases is to understand their roots.
As argued by prominent social scientists (e.g.
Althusser 1976
,
Foucault 1969
,
Popper 1955
,
Thompson 1997
), the main source of ideological bias is knowledge-based, influenced by the institutions
that produce discourses. Mainstream economics, as the dominant and most influential institution in
economics, propagates and shapes ideological views among economists through different channels.
Economics education, through which economic discourses are disseminated to students and future
economists, is one of these important channels. It affects the way students process information, identify
problems, and approach these problems in their research. Not surprisingly, this training may also affect the
policies they favor and the ideologies they adhere to. In fact, there already exists strong evidence that,
compared to various other disciplines, students in economics stand out in terms of views associated with
greed, corruption, selfishness, and willingness to free-ride (e.g.
Frank and Schulze 2000
,
Frank et al.
1993
and
1996
,
Frey et al. 1993
,
Marwell and Ames 1981
,
Rubinstein 2006
,
Want et al. 2012
).
[2]
Another important channel through which mainstream economics shapes ideological views among economists is
by shaping the social structures and norms in the profession. While social structures and norms exist in all
academic disciplines, economics seems to stand out in at least several respects, resulting in the
centralization of power and the creation of incentive mechanisms for research, which in turn hinder
plurality, encourage conformity, and adherence to the dominant (ideological) views.
Our own exposure to different parts of this social structure while working on this project has in fact
been an unpleasant yet eye-opening experience, and a testament to dominant biases in the discipline that
strongly impede critical thinking, new perspectives, and plurality. We have been threatened, accused, and
insulted for simply asking an important and legitimate question. We have also had first-hand experience with
the Top Five journals in economics and some of their (associate) editors' exertion of their strong
prejudiced views, which is often disguised under the vail of "inevitably subjective nature of editors'
decision-making process," which is supported by the absolute and unaccountable power that is at their
disposal. In some cases, the decision regarding our submission blatantly lacked professionalism and respect
for plurality of views.
Our world today is characterized by critical issues that economics has a lot to say about, such as
inequality, austerity, the future of work, and climate change. However, relying on one dominant discourse
which ignores or isolates alternative views will make the economics profession ill-equipped to engage in
balanced conversations regarding these issues. This also makes the consumers of economic ideas skeptical
about economists and the views and policies they advocate for. We believe that addressing the issue of
ideological bias in economics first requires economists to find out about their own biases. Persistent
denial of these biases is going to be more harmful than being aware of their presence and influence, even if
mainstream economists do not necessarily change their views. Moreover, the economics profession needs to
have an in-depth introspection and a real and open debate about the factors underpinning these biases,
including economics training and social structures within the discipline that centralize power, encourage
group thinking and conformity, dampen innovative thinking and creativity, and hinder plurality.
Experimental Design
Examining issues such as the impact of bias, prejudice, or discrimination on individual views and
decisions is very challenging, given the complex nature of these types of behaviour. This has given rise to
a field experimentation literature in economics that has relied on the use of deception -- for example, through
sending out fictitious resumes and applications, to examine the prevalence and consequences of
discrimination against different groups in the labor market.
[3]
We
take a similar approach, namely using fictitious source attributions, in order to investigate the effect of
ideological bias on economists (See Section 4 in our
online appendix
for a more detailed discussion on the use of deception in economics). More specifically,
we employ a randomized controlled experiment embedded in an online survey. Economists from 19 different
countries were invited to complete an online survey where they were asked to evaluate fifteen statements
from prominent economists on a wide range of topics. We received just over 2,400 responses, with the
majority of responses (around 92%) from academics with a PhD degree in economics. As reported in our
online appendix
, our sample includes a very diverse group of economists from a diverse set of
institutions. While all participants received identical statements in the same order, source attribution for
each statement was randomly changed
without the participants' knowledge
. For each statement,
participants either received the name of a mainstream economist as the source (Control Group), or an
ideologically different less-/non-mainstream economist (Treatment 1), or no source attribution (Treatment
2). See Table A8 in our
online appendix
for a complete list of statements and sources.
The Findings, in Detail
Our analysis of the experimental results reveals several important findings. First, examining the
probability of different agreement levels for each statement as well as their comparative degree of
consensus (using relative entropy index derived from information theory), we find evidence of clear dissent
among economists on the wide variety of topics evaluated (see Figure 1 below). Given that our statements
either deal with different elements of the mainstream economics paradigm -- including its methodology,
assumptions, and the sociology of the profession -- or issues related to economic policy, the significant
disagreement evident in our results highlights the lack of paradigmatic and policy consensus among
economists on evaluated issues.
Figure 1: Probability of different agreement levels – By statement
Note: See Table A8 in our
online appendix
for a complete list of statements and sources.
Second, we find evidence of a strong ideological bias among economists. More specifically, we find that
for a given statement, the agreement level is 7.3% (or 22% of a standard deviation) lower among economists
who were told that the statement was from a less-/non-mainstream source. Examining statements individually
also reveals that in all but three statements, agreement level drops significantly (both quantitatively and
statistically, ranging from 3.6% to 16.6%) when the source is less-/non-mainstream.
For example, when a statement criticizing "symbolic pseudo-mathematical methods of formalizing a system
of economic analysis" is attributed to its real source, John Maynard Keynes, instead of its fictitious
source, Kenneth Arrow, the agreement level among economists drops by 11.6%. Similarly, when a statement
criticizing intellectual monopoly (i.e. patent, copyright) is attributed to Richard Wolff, the American
Marxian economist at the University of Massachusetts, Amherst, instead of its real source, David Levine,
professor of economics at the Washington University in St. Louis, the agreement level drops by 6.6%.
Interestingly, these results stand in sharp contrast with the image economists project of themselves in
our survey. In an accompanying questionnaire that appears at the end of the survey, a strong majority of
participants (around 82%) agreed that in evaluating a statement, one should
only
pay attention to
its content, rather than its author. Only 18% of participants agreed that both the content of the statement
as well as the views of the author matter, and only a tiny minority (around 0.5%) reported the views of the
author should be the sole basis to evaluate a statement.
Third, we find that economists' self-reported political orientation strongly influences their views. More
specifically, our results suggest that
even when we focus on statements with mainstream sources
attributed to them
, there exists a very significant difference in average agreement level among
economists with different political orientations. For example, for a given statement, the average agreement
level among economists self-identified as left is 8.4% lower than those self-identified as far left. This
already large difference widens
consistently
as we move to the far right, reaching a difference of
19.6% between the far right and the far left, which is an increase of 133%. This strong effect of political
orientation on economists' evaluation of our statements, which does not change after controlling for a wide
set of observed characteristics, is another clear manifestation of ideological bias.
The effect of political orientation on economists' views is even more drastic when we examine how changes
in attributed sources affects economists with different political orientations. More specifically, for those
on the far left, altering the sources only reduces the average agreement level by 1.5%, which is less than
one-fourth of the overall effect of 7.3% we discussed before. However, moving from the far left to the far
right of the political orientation
consistently and significantly
increases the effect of changing
the source to a 13.3% reduction in agreement level, which is almost 8 times (780%) larger compared to the
far left. Interestingly, this is despite the fact that relative to the far left, those at the far right are
17.5% more likely to agree that in evaluating a statement one should only pay attention to its content.
Fourth, our results uncover striking differences by gender. More specifically, we find that the estimated
ideological bias is 44% larger among male economists as compared to their female counterparts, even after
controlling for potential gender differences in observed characteristics including political orientation and
political/economic typology. Moreover, our results highlight a startling difference between male and female
economists in their perception of gender problems in the profession. When faced with the statement "
Unlike
most other science and social science disciplines, economics has made little progress in closing its gender
gap over the last several decades. Given the field's prominence in determining public policy, this is a
serious issue. Whether explicit or more subtle, intentional or not, the hurdles that women face in economics
are very real.
", the agreement level was a whopping 26% higher among female economists than among their
male peers.
In addition, when participants were told that the statement was made by the left-wing British feminist
economist Diane Elson (rather than the real source, Carmen Reinhart, a mainstream economist at Harvard),
male economists showed ideological biases -- their agreement level fell by 5.8%. Interestingly, however, it
stayed unchanged for female economists. This seems to suggest that the gender problem in economics is so
severe that female economists, who exhibited ideological biases on many other issues (although less than did
their male colleagues), put aside their biases in this particular case and focused on the content of the
statement.
The discussion around the gender problem in economics has recently taken the center stage. During the
recent 2019 AEA meeting, and in one of the main panel discussions titled "How can economics solve its gender
problem?" several top female economists talked about their own struggles with the gender problem in
economics. In another panel discussion, Ben Bernanke, the current president of the AEA, suggested that the
discipline has "unfortunately, a reputation for hostility toward women ." This is following the appointment
of an Ad Hoc Committee by the Executive Committee of the AEA in April 2018 to explore "issues faced by women
[ ] to improve the professional climate for women and members of underrepresented groups." AEA also
conducted a climate survey recently to "provide more comprehensive information on the extent and nature of
these [gender] issues." It is well-understood that approaching and solving the gender problem in economics
first requires a similar understanding of the problem by both men and women. However, our results suggest
that unfortunately there exists a very significant divide between male and female economists in their
recognition of the problem.
Fifth, we find systematic and significant heterogeneity in our estimated effect of ideological bias by
country, area of research, country where PhD was completed, and undergraduate major, with some groups of
economists exhibiting little or no ideological bias and some others showing very strong bias.
For example, we find that economists with a PhD degree from Asia, Canada, Scandinavia, and the U.S.
exhibit the strongest ideological bias. On the opposite end we find that economists with PhD degrees from
South America, Africa, Italy, Spain, and Portugal exhibit the smallest ideological bias. Similarly, our
results suggest that there is the smallest ideological bias from economists whose main area of research is
history of thought, methodology, heterodox approaches; cultural economics, economic sociology, economic
anthropology, or economic development. On the other hand, we find that economists whose main area of
research is macroeconomics, public economics, international economics, and financial economics are among
those with the largest ideological bias.
We also find that undergraduate training in economics has a strong effect on our estimated effect of
ideological bias. We find that those economists with an undergraduate major in economics, or
business/management, exhibit the strongest bias, while those who studied law; history, language and
literature; or anthropology, sociology, and psychology show no ideological bias. These results are
consistent with the growing evidence that suggests economic training, either directly or indirectly, induces
ideological views in students (e.g.
Allgood
et al. 2012
,
Colander and Klamer 1987
,
Colander 2005
,
Rubinstein 2006
).
Discussion
Scholars hold different views on whether economics can be a "science" in the strict sense and be free
from ideological biases. However, perhaps it is possible to have a a consensus that the type of ideological
bias that could result in endorsing or denouncing an argument on the basis of (one's interpretation of) its
author's views rather than its substance is unhealthy and in conflict with scientific tenor and the
subject's scientific aspiration,
especially when the knowledge regarding rejected views is limited
.
Some economists might object that economists are human beings and therefore these biases are inevitable.
But economists cannot have their cake and eat it too! Once you admit the existence of ideological bias, the
widely-held view that "positive economics is, or can be, an 'objective' science, in precisely the same sense
as any of the physical sciences" (Friedman 1953) must be rejected.
Furthermore, the differences we find in the estimated effects across personal characteristics such as
gender, political orientation, country, and undergraduate major clearly suggest that there are ways to limit
those ideological effects, and ways to reinforce them.
Our finding that those with an undergraduate degree in economics exhibit the strongest ideological bias
highlights the importance of economic training in shaping ideological views. In doing so, our study
contributes to the literature on economic education, suggesting that ideology can be at least limited by
changes in the curricula at earlier stages.
Rubinstein (2006)
argues that "students who come to us to 'study economics' instead become experts in
mathematical manipulation" and that "their views on economic issues are influenced by the way we teach,
perhaps without them even realizing."
Stiglitz (2002)
also argues that "[economics as taught] in America's graduate schools bears testimony
to a triumph of ideology over science."
Economics teaching not only influences students' ideology in terms of academic practice but also in terms
of personal behavior.
Colander and Klamer (1987)
and
Colander (2005)
survey
graduate students at top-ranking graduate economic programs in the U.S. and find that, according to these
students, techniques are the key to success in graduate school, while understanding the economy and
knowledge about economic literature only help a little. This lack of depth in knowledge acquired, not only
in economics but in any discipline or among any group of people, makes individuals lean more easily on
ideology.
Frank et al. (1993)
similarly highlight the importance of economics training in shaping behavior among
students by criticizing the exposure of economics students to the self-interest model in economics where
"motives other than self-interest are peripheral to the main thrust of human endeavor, and we indulge them
at our peril." They also provide evidence that such exposure does have an impact on self-interested
behavior.
But education is not the only problem: social structures and norms within the profession also deeply
influence economists' adherence to dominant ideological views.
For example, in his comprehensive analysis of pluralism in economics,
Wright (2019)
highlights several features of the discipline that make the internal hierarchical system in economics
"steeper and more consequential" compared to most other academic disciplines. These features include: (1)
particular significance of journal ranking, especially the Top Five, in various key aspects of academic life
including receiving tenure (
Heckman
and Moktan 2018)
, securing research grants, invitation to seminars and conferences, and request for
professional advice; (2) dominant role of "stars" in the discipline (
Goyal
et al. 2006
,
Offer and Söderberg 2016
); (3) governance of the discipline by a narrow group of economists (
Fourcade
et al. 2015
); (4) strong dominance of both editorial positions and publications in high-prestige
journals by economists at highly ranked institutions (
Colussi
2018
,
Fourcade et al. 2015
,
Heckman & Moktan 2018
;
Wu
2007
); and the strong effect of the ranking of one's institution, as a student or as an academic, in
career success (
Han
2003
,
Oyer 2006
).
As another example, in a
2013 interview
with the World Economic Association, Dani Rodrik highlights the role of social structure
in economics by suggesting that "there are powerful forces having to do with the sociology of the profession
and the socialization process that tend to push economists to think alike. Most economists start graduate
school not having spent much time thinking about social problems or having studied much else besides math
and economics. The incentive and hierarchy systems tend to reward those with the technical skills rather
than interesting questions or research agendas. An in-group versus out-group mentality develops rather early
on that pits economists against other social scientists." Interestingly, a very similar picture of the
profession was painted in 1973 by Axel Leijonhufvud in his light-hearted yet insightful article titled "
The
life among the Econ
."
It is hard to imagine that the biased reactions we find in our study only emerge in a low-stakes
environment, such as our experiment, without spilling over to other areas of academic life. After all, as we
discussed at the beginning, there already exists growing evidence which suggests that the political leanings
and the personal values of economists influence different aspects of their academic lives. It is also not a
long stretch to imagine that such ideological biases impede economists' engagement with alternative views,
narrow the pedagogy, and delineate biased research parameters. We believe that recognizing their own biases,
especially when there exists evidence suggesting that they could operate through implicit or unconscious
modes, is the first step for economists who strive to be objective and ideology-free. This is also
consistent with the standard to which most economists in our study hold themselves. To echo the words of
Alice Rivlin in her 1987 American Economic Association presidential address, "economists need to be more
careful to sort out, for ourselves and others, what we really know from our ideological biases."
Notes
[1]
Several scholars have highlighted the connection between ideological views and the lack of plurality
in economics and the failure of the profession to predict the 2008 crisis, or to even have an honest and
in-depth retrospective explanation that would help develop accountable counter-measures against future
crises (e.g.
Barry
2017
;
Cassidy 2009
;
Dow 2012
;
Freeman 2010
;
Heise
2016
;
Lawson 2009
;
Stilwell 2019
). There are also those who believe the 2008 crisis was not predictable, but fault the
profession, as
Colander (2010)
puts it, "for failing to develop and analyze models that, at least, had the possibility
of such a failure occurring" (e.g.
Cabalerro
2010
;
Colander et al. 2013
).
[2]
Even if this relationship is not strictly casual, it suggests that there exists something about
economic education that leads to a disproportionate self-selection of such students into economics.
20 years ago Dr Sam Tsemberis conducted a double-blind trial of chronically homeless mentally ill people
in an effort to learn whether being housed first led to better medical outcomes then placing barriers of
compliance before getting housed would produce.
Happily, the common sense proposition that having a secure roof improves people's health or medication
adherence was proven, and the concept of Housing First as a best practice is accepted today.
Economics is always political economy no matter how hard they try to pretend its algebra.
If ideology is dead then good riddance to it. I have seen and read about too many ideologues that have
caused massive damage and deaths over the centuries and economics is no different. Personally I am of the
school of thought of doing things in an empirical way and ignoring labels but just seeing what works. If it
works, adopt it. If it does not, try something else. The economics of today does not do that. It does not
work. It never saw the 2008 crisis coming and it has never proposed and backed reforms so that it will not
happen again. It is used to justify a world economy that is causing climate change as it refuses to include
most factors into their equations. I find it fascinating too how modern economics makes use of labels to
stop discussions of possible paths to explore. Ideological labels has itself proven a huge hindrance. Here
is what I mean.
"We should have health care for all."
"That is socialism that!"
"Well I guess that we can't do that then!
I think that Blair Fix's article "No, Productivity Does Not Explain Income" (
https://www.nakedcapitalism.com/2019/08/no-productivity-does-not-explain-income.html
)
shows you how modern economists work. You juggle around processes like you do mathematical formulas and
expect that it still reflects the real world. In scientific discussion you throw out a theory in a journal.
Ideally it should be reproducible in the real world and should be picked apart for any flaws in data or
reasoning. But like in Blair Fix's article. the outcome is designated first and then you work you way back
to justify it. It fails blind tests like mentioned here which shows it's flawed processes. In Washington DC
there is the Victims of Communism Memorial but I do think that there should also be a Victims of
Neoliberalism Memorial to reflect current economic thought. In the former there is the Goddess of Democracy
statue as a centerpiece. For a statue for the Victims of Neoliberalism I would suggest another statue but
based on the acronym BOHICA.
The more you see yourself as beyond ideology, the more likely it is that you are a victim of ideology.
That's what the post shows: it's the very fields such as business management that see themselves as
non-ideological, "common sense" and empirical which are the most ideological, least common sense and
least empirical.
If you are aware of your bias, you can minimize (but not eliminate) those affects. But if you believe
that you have *perfect* vision, no measurement can show you that you have an astigmatism.
Remember, Obama and Merkel see themselves as pragmatists -- but an objective observer can be assured of
finding deep ideological biases and assumption underlying their thought process.
aye.
the position of Ignorance .Socratic Perplexity is hard.
but i reckon it' the only way to avoid the mental traps this talks about.
I'm the only one i know in meatspace that even attempts to begin an investigation there("I know that i
don't know").
the idea that economics is just like Physics was always suspect, and i think it's pretty amazing that
it's taken this long and this many economic disasters to get to the point that the idea of econ=hard
science is challenged more or less in the open.
I'd add to this that i figure that the break in Philosophy, early in the last century, between
Anglo-American and "Continental" probably precedes and enables this strange phenomena in
economics(logical positivism, etc avoiding all that messy humanity attempting to shoehorn everything
into a neat equation)
there's a similar phenomenon in a lot of the Humanities anthropology, for instance: taking into
account the inherent and largely unconscious bias of the anthropologist embedded with the "savages"
he's studying.
"Orthodoxy is Unconsciousness"-Orwell
A general observation: Economics without ideology or politics is only a rather peculiar way of using
math. Without a reference what positive or negative actually means it is impossible to render jugdement or
make policy. While economic outcomes are at the same time always political outcomes and vice versa. That is
why the discipline used to call itself political economy.
About the experiment: If I understand it correctly all participants receive the questions only once. How
then is it possible to attribute a specific answer towards bias regarding the source? Given that the
questions are not of a clear 2+2=4 varietiy but at least somewhat open. Intuitively it seems far more likely
that the specific answer is determined by the respondents own beliefs than by their bias regarding the
source.
"The willingness to indulge in ideological thinking -- that is, in thinking that by definition is not one's
own, which is blind to experience and to the contradictions that arise when broader fields of knowledge are
consulted -- is a capitulation no one should ever make. It is a betrayal of our magnificent minds and of all
the splendid resources our culture has prepared for their use."
Robinson, Marilynne.
What Are We Doing Here?
(p. 2). Farrar, Straus and Giroux. Kindle Edition.
Towards the end of my final year of econ education I pointed out to a professor that the claim that
economics should be a positive science, as opposed to a normative one, was itself a normative claim and
hence self-contradictory. He looked at me like I was a crazy person and he was one of the 'leftists' in the
department.
Haha are you sure that the source of "crazy person" look was your view itself, or rather was it that
in your young naivete you spoke what anybody who needs to put food on the table as a working economist
would not dare?
I had a similar experience, diptherio. It was at the beginning of semester picnic, and one of the
profs was holding forth on how the mathematical and analytical methodology would allow us to find the
solutions to business questions. Probably because I had drunk too much wine, I piped up, but don't we
first have to define what are the critical questions? Deafening silence.
It is crazy, is it not, that "Life among the Econ" is still locked behind a paywall, despite being
written 46 years ago. Thankfully, there is sci-hub .
Reminds me of my counselor journey when therapist became aware of the blinders and prejudices that one's
theories of behavior imposed (good & bad) on clients. The admonition became, "don't marry your theory" which
another fellow revised that to "it's best only to flirt with your theory."
A friend of mine was an IT Director for a large Insurance company. After the crash in '08, he said in one
meeting an executive said "you know why we employ Economists, to lend credibility to the Astrologers"
The fact that this article has a reason to exist at all shows how poorly educated our highly trained
economists are. It's not just that they reject the better portion of the core concepts and practices of the
humanities and social sciences as being somewhere between useless and harmful. It's also that, as this
article illustrates without quite saying, pretenses aside, most economists are worse than clueless with
regards to the basics of conducting research in the "hard" sciences.
For family blog's sake, they don't even know how to pretend to be scientists. I'm not practicing
researcher, but I know enough about research methods and questions to be pretty sure that robust empirical
positivist economic research should look a lot more like something from the medical sciences than like
something out of a cut rate theoretical physics or math journal. That would have serious epistemological
problems of it's own, but sheesh, at least it might be mildly convincing to people with a modicum of a
liberal arts education who couldn't be bothered to look under the hood.
The only thing that shocks me more than the shoddyness of work from "superstar" economists is their
undying faith that their methods make them experts not just on economics, but on basically anything that you
can slap a mathematical model on.
What economics lacks is an arbiter. In the physical sciences, nature will bitch slap anyone getting out
of line. Economists need to come up with an agreed-upon set of test or natural experiments or something that
constitutes independent feedback on the merit of an idea. There is nothing more important for the future of
the discipline than this.
Well, the historical data refutes the Phillip's Curve but I bet they still teach that. 2008 was a
natural experiment that refuted the Efficient Market Hypothesis, as well as the idea that the Federal
Reserve could stop a major economic catastrophe through monkeying with interest rates but I'm sure those
things are still being taught. Which is to say that economics does not lack an arbiter -- rather, most
economists simply refuse to give it any credence.
Given that theories in economics are not testable, an application of group think would result in
"everybody was predicting that," and the consequent "who could have know" blame avoidance, coupled with the
economist selecting the analytic method that best confirmed the answers the management wanted.
The only thing missing is a display of the set of Chrystal Balls.
Do Economists speak truth to power, or just confirm what power wants?
the rest of the social scientists at least test their theories against these standards (or make an
appearance of doing so). econ seems to get around them by use of "definitions" so specific that in the end
they are describing tautologies.
An interesting study to supplement this one is of funding sources for economics departments and the
extent to which the funding is tied to hiring and model building. Then reanalize the date in this study for
correlations with the influence of funding sources.
" (the) factional struggle evident in the rise of Trump "
Thank you.
One of the many purposes of Russiagate was to misdirect people away from the fact that
Trump's election represents (among other things) a huge split in the ruling class, which can
roughly be described as one between extractive industries (energy, agriculture, mining, etc.)
and finance, media and tech. A map of the 2016 election results strongly supports this
analysis. Thus, Comcast was more than happy to give free reign to Rachel Maddow's two+ years
of disinfotainment
This split in the ruling class would provide an immense opportunity if the US had a real
functioning Left, rather than lumpen bourgeois and childish virtue signalling about open
borders and reparations.
A Smorgasbord Recession? (Wonkish)
The next slump may have multiple causes.
By Paul Krugman
The 2008 financial crisis is (duh) a decade in the past; employment has been growing
steadily since early 2010. Since nothing is forever, and proclamations that the business
cycle is over have always ended in embarrassment, lots of people are looking for the sources
of the next recession. *
The thing is, there's nothing out there as obvious as the housing bubble of the mid-2000s,
or even the tech bubble of the late 1990s. So here's my thought: maybe the next recession
won't be caused by one big shock but instead by the combined impact of several smaller
shocks. There are arguably several mid-sized bubbles out there, from private equity debt to
emerging markets. Stocks are priced as if there's no risk despite omens of trade war,
consumer confidence similarly seems to discount dangers. There's probably other stuff I'm
missing.
The point, anyway, is that we might be looking at a smorgasbord recession, one that
involves a mix of smallish things rather than a single dominant item. And there's a model for
that kind of recession: the slump of the early 1990s.
Most modern recessions have had clear narratives, at least after the fact. The 79-82
double dip was about the Federal Reserve tightening to bring inflation down; 2001 was about
the tech bubble; 2007-2009 about the housing bust and the financial crisis it triggered. But
I've been reading various accounts of 1990-91, and they're kind of amorphous.
One piece was a boom and bust in commercial real estate, partly connected with the
savings-and-loan crisis and aftermath, which led to a sharp drop in nonresidential
construction:
Figure 1
Another piece was a drop in consumer confidence, brought on by oil price hikes and Gulf
War jitters:
Figure 2
Yet another piece was the post-Cold War drawdown in defense spending:
Figure 3
So, no one overarching narrative, but the combination was enough to cause a recession. It
was a fairly brief, shallow recession compared with the big slumps of 79-82 and 2007-9:
Figure 4
But recovery was sluggish and for a long time jobless, with unemployment continuing to
rise long after the official end of the recession:
Figure 5
So here's my hypothesis: the next slump won't be a big bang like 2008, it will be a
smorgasbord recession like 1990-1, the cumulation of a bunch of medium-sized issues.
You might ask why multiple issues should strike at the same time. The answer, in two
words, is Hyman Minsky: after a long period of stable growth, lenders and investors get
complacent, and the private sector overreaches.
If that is what happens, we should expect another sluggish, jobless recovery like that
after the 1990-1 and 2001 recessions, except probably worse. Why? Because monetary policy is
much less effective in reversing recessions brought on by private overreach than it is in
reversing slumps brought on by previous tight money.
And we're likely to have a big problem with the zero lower bound. The Fed cut rates by
around 5 percentage points in the face of the 1990 recession, and still got a jobless
recovery:
Figure 6
This time around the Fed doesn't have 5 percentage points to cut -- it only has 2. And no,
that's not a reason to raise rates faster, to make room for later cuts; it's a reason to not
raise rates until inflation is significantly higher, and hope that we've gotten to 3 or 4
percent before the smorgasbord attacks.
So those are my current thoughts on the next recession. When will it happen? (Looks at
watch.) Actually, I have no idea. But it would be really strange if it doesn't happen within
a few years at most.
I do not understand why Krugman thinks that Trump's trade war with China can't be the
cause/catalyst of the next recession.
It is pretty harsh blow to classic neoliberalism to be frank. Because it repudiates the
classic neoliberalism mode of globalization and as such further undermine neoliberal ideology
and the Imperial power of the USA.
Disillusionment of population in key neoliberal manta that rising tide lifts all the boats
and thus redistribution of wealth up does not matter will only increase, as Trump was unable
to stem slide of the standard of living of lower 80% of population.
The USA economy remains is secular stagnation mode.
The level of hate toward FIRE sector, media and tech giants is clearly visible in
resurgence of hate toward financial oligarchy.
Look at Epstein "revelations" and growing accusations of Wall Street moguls, "tech titans"
(and US neoliberal elite in general) in abuse of narcotics, pedophilia and sexual
perversion.
That's obvious signs of de-legitimization of neoliberal elite.
IMHO trade war with China might well end the dominance of Clinton wing of Democratic Party
("soft-neoliberals") here and Blairites in Labor Party in UK.
Markets Are Shaken by New Signs of Global
Economic Trouble https://nyti.ms/2OSipBB
NYT - Nelson D. Schwartz, Jack Ewing,
Matt Phillips and Stephen Grocer - August 14
The global economy is under increasing stress as growth cools and trade tensions take a
mounting toll. On Wednesday, the tremors were felt worldwide.
Shares on Wall Street were off sharply, only a day after they had rallied as President
Trump narrowed the scope of his next round of tariffs. The S&P 500 was down 2.9 percent.
And bond markets offered an ominous warning on American growth prospects, with yields falling
to levels not seen in years.
The financial jitters, which continued Thursday as markets in Asia were down in early
trading, came after new data showed the German economy hurtling toward a recession and
factory output in China growing at its slowest pace in 17 years.
The trouble in two of the world's manufacturing powerhouses indicated, in part, how hard
both have been hit by Mr. Trump's tariffs. And it increased concern that the United States,
too, is headed for an economic reckoning.
"The global backdrop has slowed more than anticipated," said Kathy Bostjancic, chief
United States financial economist at Oxford Economics. "We're not immune to the
slowdown."
Bank of America Merrill Lynch has put the odds of a recession in the United States in the
coming year at one in three, citing factors like weaker industrial production and auto
sales.
"Economic data have softened and are increasingly sending recession signals, particularly
from the industrial side," said Michelle Meyer, head of United States economics at Bank of
America Merrill Lynch. "Trade is a huge part of it."
The shock waves not only are a measure of the trade war's impact, but also could
complicate Mr. Trump's ability to wage it.
Since the beginning of his trade battle with Beijing, the president has had a powerful
ally: the United States economy. The first tariffs aimed solely at China, in the spring of
2018, coincided with the best economic showing of his presidency, with quarterly growth
running at a 3.5 percent pace.
But growth is slowing, hitting 2.1 percent in the most recent quarter, and estimates for
the current quarter are even lower. The president's decision Tuesday to delay some duties on
Chinese imports was meant to soften the blow to American consumers, easing the economic
headwinds.
The Federal Reserve cut interest rates in July for the first time in more than a decade, a
move that its chair, Jerome H. Powell, said was "intended to ensure against downside risks
from weak global growth and trade tensions." Another rate cut next month looks likely.
Hours after the markets closed Wednesday, Mr. Trump took to Twitter, suggesting there was
room for compromise in the escalating trade war. "Of course China wants to make a deal," he
wrote. "Let them work humanely with Hong Kong first!" In a subsequent tweet, after praising
China's president, Xi Jinping, he wrote "Personal meeting?"
Mr. Trump has pointed to the economy's performance as a benchmark of his success and an
argument for his re-election in 2020. And many indicators remain vibrant. At 3.7 percent,
unemployment is low by historical standards, while consumer confidence is high. Even with
Wall Street's recent volatility, major stock indexes are close to record levels.
The United States is also more cushioned against economic turmoil than other big countries
because exports account for just 12 percent of its gross domestic product. Germany, with its
automaking prowess, and China, with its vast factories for consumer goods, are more dependent
on international trade.
Exports are responsible for nearly half of Germany's economic output and almost a fifth of
China's.
Still, there are nagging warning signs that the resilient American economic expansion that
began a decade ago is running out of steam.
When investors are confident in the economy, they demand higher bond rates, partly to
offset the risk that sustained growth could produce inflation and dilute the bonds' effective
returns. For that reason, rates on long-term bonds are typically higher.
But on Wednesday, for the first time since 2007, yields on two-year Treasury notes briefly
exceeded the interest rate on the benchmark 10-year note. This pattern, called an inverted
yield curve, is frequently cited as a harbinger of recession, although it can take quite
some
time to be proved right.
Earnings growth, which has helped drive Wall Street's remarkable gains in recent years, is
also showing signs of petering out.
Second-quarter profits for companies in the S&P 500 are coming in 0.7 percent lower
than a year ago, according to data from John Butters, the senior earnings analyst at FactSet.
If that figure holds -- and more than 90 percent of the companies in the index have reported
-- it will mark the second straight quarter in which profits have declined, something often
referred to as an earnings recession.
The slide was most pronounced among companies with the greatest exposure to the global
economy and trade. Earnings at American semiconductor manufacturers, which rely on production
networks in China and generate much of their sales there, fell about 25 percent.
More troubling for investors, profits seem likely to remain lackluster for at least the
rest of 2019. Stocks bounced back strongly this year, in part, on optimism that the United
States and China would inch closer to a trade deal and that earnings would rebound in the
second half. That hope has faded as the trade tensions have ratcheted up with no end in
sight.
Although China's economy is growing more quickly than that of many Western competitors, it
has slowed measurably since the start of the trade conflict. Wednesday's reading on Chinese
industrial production was weaker than expected, with July's growth rate at 4.8 percent, the
lowest since 2002.
United States tariffs have mostly been directed at China, but the Trump administration has
also imposed levies on European steel and aluminum. Mr. Trump has often threatened to impose
tariffs on German cars.
There is evidence that the German auto industry is hurting plenty already. The German
carmakers Volkswagen, Daimler and BMW all earn at least a third of their revenue in China,
where auto sales have been slipping after years of explosive growth. One major factor in the
slide is the barrage of trade threats that have unsettled Chinese consumers, discouraging
them from buying big-ticket goods.
On Wednesday, the German statistics agency said the country's economy shrank 0.1 percent
from April through June after treading water for a year. Deutsche Bank analysts predicted
that the contraction would extend to a second straight quarter, meeting the technical
definition of a recession.
Germany's economic performance in the second quarter was the worst among the countries
using the common European currency, the euro, separate data from the European Union
statistics agency indicated. Even Italy, long a weak link, did slightly better than Germany
-- its growth in the quarter was zero.
That is a humbling experience for Germany, which has lectured other countries on how to
manage their economies and scolded them for having too much debt.
Germany was among the first European countries to bounce back from the debt crisis that
struck the region in 2010, and its unemployment rate, at 3.1 percent, is still the lowest in
the eurozone.
When Siemens, the German industrial conglomerate, missed analysts' expectations for
quarterly profits this month, its executives noted that "geopolitical and macroeconomic
risks" -- including the trade war -- had "led to a clear slowdown in the global economic
activity and deteriorating industrial sentiment."
China and Germany have large trade surpluses with the United States, but they are also
important customers for American products. Germany bought goods and services worth $72
billion from the United States last year.
"If this continues, it will eventually mean less demand for U.S. goods," said Carsten
Brzeski, chief economist at ING Germany.
Closely watched surveys of activity among industrial purchasing managers suggest that
manufacturing is declining in China, Japan, Germany and Britain -- the largest economies
after the United States.
And prices for important industrial commodities like aluminum, copper and steel have
fallen, confirming deep weakness in the industrial sector and crimping the profits of the
companies that produce them. ThyssenKrupp, Nippon Steel, and ArcelorMittal -- the world's
largest steel producer -- have all reported losses or shrinking profits in recent weeks.
A decline in manufacturing doesn't necessarily mean the broader economy is doomed to
follow. Manufacturing endured a similar slump in 2016, tied in part to a sharp drop in oil
prices and an investment slowdown in China, after a currency devaluation by Beijing in 2015
spooked global investors.
That industrial downturn weighed on growth, in the United States and around the world. But
a full-blown recession never materialized, in part because oil prices recovered and major
central banks worked to resuscitate growth.
The Dobbs Index took a big hit today,
is now back to where it was on April 1,
but had been at a high for the year as
recently as last week. Still up for
the year, but just barely. This
could change tomorrow.
Stock Markets, Jolted by Economic Worry, Suffer
2nd Worst Drop of 2019 https://nyti.ms/2MiQzwi
NYT - Matt Phillips - August 14
(graph at link)
Trade-war worries hammered financial markets again on Wednesday as data from Germany and
China showed trouble for manufacturing-reliant economies, while the bond market renewed fears
of an American recession.
Stocks and commodities tumbled in Europe, the United States and Asia as risk-averse
investors raced to the safety of government bonds, pushing bond prices sharply higher and
yields -- which move in the opposite direction -- to low levels not seen in years.
On Wall Street, the S&P 500 fell 2.93 percent, led by a steep drop in the energy
sector. Retail shares also fell sharply after Macy's posted lower quarterly results. Shares
of large technology companies, sensitive to the outlook for the trade war, also fell. Stock
benchmarks in Europe also dropped, and on Thursday, markets in Hong Kong, Shanghai and Tokyo
were down between 0.7 and 1.7 percent in early trading.
The drop in the S&P 500 reflected a rapid shift in sentiment just a day after a 1.5
percent gain, which had been driven by the White House decision to narrow the scope of the
next round of tariffs on China to spare American consumers during the holiday shopping
season.
But there is increasing evidence that the fight between the two largest economies over
trade, technology and economic dominance has already done significant damage to the world
economy.
Earlier Wednesday, the German government reported that the country's economy shrank in the
quarter that ended in June. The German economy, the eurozone's largest, has been particularly
vulnerable to the trade war between the United States and China because of Germany's
dependence on manufacturing and exports. A second consecutive quarter of decline would mean
Germany was in a recession.
In China, a variety of macroeconomic indicators published overnight showed that its
economy continues to lose steam as the trade war drags on. Chinese industrial production
slowed more than expected, falling to 4.8 percent in July, the lowest level since 2002.
Investment growth and retail sales also slowed.
The economic updates added to the increasingly ugly conditions in the global industrial
economy. Closely watched surveys of activity among industrial purchasing managers now suggest
that manufacturing economies in China, Japan, Germany and Britain -- the second-, third-,
fourth- and fifth-largest economies in the world -- are all contracting.
And prices for important industrial raw materials such as aluminum, copper and steel have
fallen, confirming deep weakness in the industrial sector and crimping the profits of the
companies that produce them.
Major industrial firms around the world have likewise reported a consistent story of
softening demand, stressed that they are taking a cautious approach to the rest of the
year.
In recent weeks, signs of the global industrial slowdown have also arrived in corporate
earnings reports in the United States. Second-quarter profits for companies in the S&P
500 are set to contract 0.7 percent from a year earlier, according to the data provider
FactSet. If that figure holds -- and more than 90 percent of the companies in the index have
reported -- it will mark the second straight quarter that earnings have declined.
The industrial sector of the S&P fared poorly, with earnings falling 10 percent from
last year. The slide in profits was also most pronounced among those companies with the
greatest exposure to the global economy and trade.
Investors were intensely attuned Wednesday to downbeat economic signals from the bond
market. Yields on long-term United States Treasury securities continue to plumb lows not seen
in recent years. The yield on the benchmark 10-year Treasury note fell to 1.58 percent, a
level it last reached in late 2016. The yield on the 30-year bond fell to 2.03 percent, the
lowest level on record.
Bond yields are typically determined by investors' expectations for economic growth and
inflation, making their recent precipitous drop worrisome in themselves. But the drop in
long-term yields also briefly pushed the yield on the 10-year note below that of the two-year
Treasury note, an unusual situation known as an inversion of the yield curve. Yield-curve
inversions are considered one of the most reliable leading indicators of recession in the
United States, having preceded every economic decline in the past 60 years.
That phenomenon, when yields on long-term bonds fall below those on short-term bonds, had
already occurred with some Treasury securities this year. But the inversion between
two-year and 10-year notes, which last occurred in 2007 as the American economy began to
sputter into a severe recession, seemed to worry investors anew.
Signs of economic weakness hit commodities markets as well. Prices for copper, often
tightly tied to the outlook for Chinese economic growth, fell more than 1 percent in New York
trading. Futures prices for American crude oil fell more than 3 percent.
The tumble in crude oil prices weighed heavily on share prices of American energy
companies, pushing the energy sector down more than 4 percent. Exxon Mobil, Chevron and
ConocoPhillips all fell more than 3.5 percent.
Stocks of large tech firms also weighed on the markets, with Amazon dropping more than 3
percent and Apple and Microsoft more than 2.5 percent.
The recent return of market volatility has cut the gains enjoyed by investors this year.
But those gains are still significant. The S&P 500 remains up more than 13 percent in
2019.
As I wrote in yesterday's newsletter (to which you should subscribe!), amateurs talk about
stocks, but professionals study bond markets. As of this morning the bond market is basically
begging governments to borrow: the US 10-year real rate just 0.02 percent 1/
[Graph]
5:49 AM - 14 Aug 2019
These low, low rates are telling us several things: (a) private investment demand is
really weak despite tax cuts (b) recession risks are pretty high (c) infrastructure! I mean,
with borrowing virtually free, why not fix all those falling-down bridges? 2/
But not going to happen. One of my better takes early on was that the Trump infrastructure
thing was never going to happen; sure enough, "infrastructure week" became a punchline, and
now isn't even that 3/
But why isn't the obvious thing happening? If Trump proposed a serious infrastructure
plan, Democrats would have a hard time saying no even though it would help him politically.
But no such plan has been or will be offered, for a couple of reasons 4/
One is that Mitch McConnell and his wing of the party oppose any kind of government
program, no matter how much good it might do -- actually especially oppose programs that
might work, and make people think better of government 5/
Another is that Trump and co just can't bring themselves to advocate anything that doesn't
include scams on behalf of their cronies; so their vague suggestions for infrastructure
always look more like stealth privatization than public investment 6/
So we're left, as I said, with markets basically begging the government to do some
investment, but this plea falling on deaf ears 7/
"Given prior inversions of other curves . . . the fact that the 2-year note and the 10-year
note has now inverted isn't 'fake news,' wrote Justin Walters, co-head of research and
investments at Bespoke Investment Group, wrote in a Wednesday note to clients. "Inversions are
not a good sign for the economic outlook, having preceded prior recessions with frightening
regularity."
The action in the bond market followed data showing that Chinese industrial production
growth in the world's second-largest economy slowed to 4.8% year-over-year, its lowest level
since 2002, while retail sales growth came in at 7.6%, down from 9.8% the month prior and well
below the 8.6% consensus, according to FactSet."
[ I think so, surely the United Kingdom, France, Italy, Korea and Singapore... but this
growth decline is unclear to me and what fiscal policy will be driving growth from here is
unclear.
China? There is an industrial slowing while domestic consumption and exports are strong.
There will be added government spending as necessary, taxes are being lowered and credit
lines for smaller businesses are increasing. I expect growth will continue above 6% for the
year. ]
I don't doubt that China can react far better than those other countries, but that does not
take away the facts that there is damage being done.
Industry slowed and domestic consumption declined 20%.
Industry slowed and domestic consumption declined 20%.
[ This is incorrect. Domestic consumption is up 8.3% for the years through July and up
7.6% in July. Exports are up 6.7% for the year through July.
Industrial output grew 5.8% for the year through July, while industrial output growth
slowed in July to 4.8%. The July decline in industrial output "growth," should be readily
made up just by increased vehicle sales. Incentives on sales of electric vehicles expired in
June, as had been long planned. *
I always try to be conservative in reading economic performance data, and will be so in days
ahead, but as of now China appears on course for 6.1 to 6.3% growth for the year and the
growth so far this year has been high quality as in the environmental emphasis which is
everywhere...
It attests inventiveness and vicious amorality of neoliberals, who now promote the idea that criticizing neoliberalism and removing
Democratic party in the USA and Labor Party in the UK from clutches of Clintonism//Brairism is inherently Anti-Semitic ;-)
Israel lobby wants to extent the anti-Semitism smear to any critique of Israel. which is of course standard dirty trick in witch
hunts like neo-McCarthyism.
Notable quotes:
"... This, of course, is compounded by the over-amplifying of anti-Semitism by the media and the alacrity with which it has been taken up by Corbyn opponents, including hypocrites who floated "rootless cosmopolitan" criticisms of Ed Miliband when it suited just a few years ago. ..."
"... The resolution of the anti-Semitism crisis then is not a matter of compromise -- for each side the issue will only go away with the complete crushing and driving out of the party of the other. ..."
"... A good analysis. But, it emphasizes the point I made in the previous post, which is that, the right are currently engaged in an all out push to remove Corbyn and crush the left with the same old bureaucratic means. Whatever else Williamson may or may not be guilty of, his point that the leadership have facilitated this situation by their continual appeasement of the right is absolutely valid. Its that he is being attacked for, not anti-Semitism. ..."
"... Coming on the day when the FT have a column seriously positing that criticizing capitalism is inherently anti-Semitic, it seems to me that dancing on the head of a pin ..."
"... As many of the comments on your blog on Williamson attest, the salient feature of this - well, call it witch-hunt for the sake of argument - is the double standards where we have to be whiter than white, whilst no account whatsoever is taken of the most egregious racism elsewhere. ..."
"... The other nonsense that has grown up is that it is only those that suffer any form of discrimination who can define what that discrimination is, i.e. only Jews can define anti-Semitism, only black people can define racism against them, only women can define discrimination against women. ..."
"... That then assumes that the members of each of these groups are themselves homogeneous, and agreed in such definitions. In reality, it means that dominant elements, i.e. those connected to the ruling class and ruling ideas get to make those determinations. ..."
"... If we look at anti-Semitism, for example, it is quite clear that there is no agreement amongst Jews on what constitutes anti-Semitism. The JVL, certainly have a different definition than the JLM. ..."
"... Secker wrote a piece in the Morning Star last year comparing claims of anti-Semitism within Labour to the story of the emperor's new clothes. ..."
"... Given that the actual data, even allowing for all of the spurious and mischievous accusations of anti-Semitism in the party, made by right-wing enemies of the the party, and particularly of Corbyn and his supporters, amounts to only 0.1% of the membership, and given that of these, 40% were straight away found to be accusations against people who were not even LP members, with a further 20%, being found to have absolutely no evidence to back them, its quite possible that individual members of the LP, have never seen any instance of it. ..."
"... Take out all those mischievous and malicious allegations made in order to whip up the hysteria, so as to to damage the party, by its enemies, and you arrive at a figure of only 400 potential cases, out of a membership of 600,000, which is 1 member in 1500. ..."
"... In fact, based upon the actual facts, as opposed to the fiction and factional hysteria that is being whipped up by right-wing opponents of Corbyn and the party, and by supporters of Zionism for their own narrow political reasons, the chances are about 14: that you will never see any even potential instance of anti-Semitism, even on the narrow definition that the party has now imposed upon itself, which comes pretty close if not entirely to identifying anti-Semitism with anti-Zionism, or even just criticism of the current Bonapartist regime of Netanyahu. ..."
"... In the US, Jewish groups that have long been ardent defenders of Israel have more recently come out to criticize the regime of Netanyahu, and the actions of the Israeli state. The main defenders of Zionism, besides the actual Zionists themselves, appear to be people like the AWL, who for whatever reason hitched their wagon to Zionist ideology some time ago, ..."
"... Just because the only case of stabbing I have witnessed was more than 50 years ago, does not, and should not lead me to think that knife crime was worse 50 years ago than it is today. The actual data would seem to suggest that cases of anti-Semitism were greater in the LP in previous times than they are currently, contrary to what the media and those with factional motives would have us believe. ..."
"... The apparent level of anti-semitism in Labour is a modern phenomenon turbo-charged and amplified by social media. People have their views reinforced within their bunkers where anti-Israeli memes become anti-Zionist and then become anti-Semitic. It is much easier to send an anonymous email than a letter. ..."
"... I wouldn't trust Lansman on this issue, any more than on many others. Lansman abolished democracy, to the extent it existed to begin with, by turning it into his personal fiefdom, reminiscent of the activities of Hyndman and the SDF. His position on anti-Semitism, and fighting the witch-hunt, and of appeasing the Blair-right's as they attacked Corbyn, has been appalling throughout. ..."
"... Having abolished any democracy in Momentum, which he now runs as its CEO, he also appears to want Corbyn to do the same thing with the Labour Party, abolishing its internal democratic procedures, and putting himself personally in charge of those disciplinary measures ..."
"... Its notable that, yesterday, when the Welsh Labour Grass Roots organisation came out to call for Williamson's suspension to be reversed, Kinnock and other Blair-rights immediately called for an investigation into them, ..."
"... This truly is reaching into the realms of McCarthyism, where you are found guilty not just of witchcraft, but of consorting with witches, or even having an opinion as to whether an individual charged with witchcraft is guilty, or even the extent to which the number of witches amongst might be exaggerated. ..."
"... It's not a factually accurate description of global political realities, because Israel does not control the US, if that is what the image is intended to imply. But, the message, is thereby anti-Israeli state, not anti-Semitic. It could only be considered anti-Semitic, if in fact you are a Zionist and claim that Israel and Jews are are interchangeable terms, which they are not. ..."
"... If we replace Zionism with Toryism, and Jew with British, the situation becomes fairly clear. If the we show the British state as being controlled by Tories, who implement their ideology of Toryism, in what way would criticism of the British state, under the control of such Tories, or criticism of Tories be the equivalent of British people as a whole? ..."
"... The hope of a Two-State Solution disappeared long ago, and was never credible. It simply allows Zionists to proclaim they are in favour of it, whilst doing everything to make it practically impossible, such as extending West Bank Settlements. The solution must flow from a struggle for democratic rights for Israeli Arabs, and for a right for all Arabs in occupied territories to be extended the same rights as any other Israeli, including the right to vote, and send representatives to the Knesset. As I argued thirty years ago, the longer-term solution is a Federal Republic of Israel and Palestine, guaranteeing democratic rights to all, as part of building a wider Federal Republic of MENA. ..."
"... Jim Denham: imperialist lackey and sycophant turned Witch hunter in chief ..."
"... Let us be very clear about what this witch hunt is about, it is about purging from public life any credible and effective opposition to Israel in particular and more generally opposition to the imperialist barbarians of the imperialist core. It is about driving from universities, social media and intellectual life any form of opposition to the interests of the imperialists. ..."
"... A UN report has concluded that Israel deliberately targeted and killed hundreds of protesting civilians, including children and disabled people and it shot 20,000+ people (yes 20,000+!). The UN says this likely a war crime. Why are the noble defenders of the Palestinian cause in the dock and not notorious Palestinian haters like Jim Denham? ..."
"... These attacks on Corbyn and his supporters, repeated in all of the most aggressive imperialist countries, are simply a proxy attack on the Palestinian people themselves. ..."
"... Jim Denham's comment here illustrates the problem entirely. The picture he has linked to shows an alien symbiote having attached itself to the face of the statue of liberty. The statue of liberty here represents the US. The symbiote has on its back the Israeli Flag, and likewise, thereby represents the state of Israel. The picture therefore, represents the well-worn, and clearly factually wrong meme that Israel controls the US. ..."
"... But, as a Zionist organisation, the AWL and its members cannot distinguish between the state of Israel and Jews, so they cannot distinguish between criticism of the state of Israel, and criticism if Jews. For them, as for the Zionist ideology of the state of Israel, which is most clearly manifest in the ideology of its current political leadership, in the form of the Bonapartist regime of Netanyahu, with the recent introduction of blatantly racist laws that discriminate even more openly against not Jewish Israeli citizens, and with his willingness to try to keep his corrupt regime in office by going into coalition with an avowedly Neo-Nazi party that until recent times was considered beyond the pale, even by most Zionists, the term Zionism is synonymous with the term Jew. So, any criticism of Zionism, or of Israel is for them immediately equated with anti-Semitism. ..."
"... Once again Jim Denham reefuses to engage in rational debate, and again resorts instead to his assumption that Israel = Jews, as well as his crude attempts at a typical Stalinist amalgam, to conflate the views of his opponents with some hate figure. ..."
"... Again Jim Denham makes the conflation of Israel and Jews explicit when he says, "This image also plays on the tired and disgraceful antisemitic 'conspiracy theory' trope of undue Israeli (Jewish) influence on world affairs." ..."
"... The way that the right are using anti-Zionism as the equivalent for anti-Semitism, and the appeasement of that attack has led them to widen the scope of that attack. As Labour List reports , right-wing Labour MP Siobhan McDonagh, is now claiming that to be anti-capitalist is also to be "anti-Semitic". The idea was put forward also by former Blair-right spin doctor, John McTernan, who wrote an article in the FT to that same effect ..."
"... As the right-wing extend their witch-hunt against socialists in the LP to claim that Marxists are necessarily misogynist, as well as anti-Semitic – and the same logic presented by McDonagh, McTernon, and Phillips would presumably mean that the Left must also be xenophobic, homophobic, anti- Green, and many other charges they want to throw into the mix – it will be interesting to see whether and to what extent the AWL, join them in that assault, in the same way they have done in their promotion of Zionism. ..."
The problem, however, is because this is overlaid by factional struggle ...
This, of course, is compounded by the over-amplifying of anti-Semitism by the media and the alacrity with which it has been taken
up by Corbyn opponents, including hypocrites who floated "rootless cosmopolitan" criticisms of Ed Miliband when it suited just a
few years ago.
Here's the thing. Just because your opponents take up an issue, some times cynically and in bad faith. and use it to inflict as
much damage as they can does not mean the problem is fictitious.
Precisely because they can point to Facebook groups full of useful fools, and Twitter accounts with Corbyn-supporting hashtags
acting as if the Israel lobby and "Zionists" are the only active force in British politics, this is the stuff that makes the attacks
effective and trashes the standing of the party in the eyes of many Jews and the community's allies and friends.
The institutional anti-Semitism in the Labour Party is, therefore, somewhat different to the kind you find in other institutions.
It is sustained by the battle for the party, a grim battlefront in a zero sum game of entrenched position vs entrenched position.
As such, whatever the leadership do, whatever new processes the General Secretary introduces for one side it will never be enough
because, as far as many of them concerned, the leadership are politically illegitimate; and for the other it's a sop and capitulation.
The resolution of the anti-Semitism crisis then is not a matter of compromise -- for each side the issue will only go away
with the complete crushing and driving out of the party of the other. A situation that can only poison the well further, and
guarantee anti-Semitism won't honestly and comprehensively be confronted.
A good analysis. But, it emphasizes the point I made in the previous post, which is that, the right are currently engaged
in an all out push to remove Corbyn and crush the left with the same old bureaucratic means. Whatever else Williamson may or may
not be guilty of, his point that the leadership have facilitated this situation by their continual appeasement of the right is
absolutely valid. Its that he is being attacked for, not anti-Semitism.
It is first necessary to close ranks, and defeat the assault of the Right. As Marr said to Blair this morning, had Prescott
announced he was forming a separate group, and was establishing his own witch-hunting bureaucratic apparatus in the party, Blair
would have sacked him immediately - actually not so easy as the Deputy is elected. But the thrust is valid. Unless Corbyn deals
with Watson, the Right will roll over the Left, despite the huge disparity in numbers.
Again it comes down to whether Corbyn is up for that task, or whether we need a leadership of the left with a bit more backbone
to see it through.
I'm afraid this IS due to the "intersectionality" cult, whereby certain groups are always privileged and wrong, and some are always
oppressed and right. Jews are, according to this "analysis", the uber-privileged and uber-white.
We've heard several times that according to "intersectionality" that it's impossible to be racist against white people because
racism requires both prejudice and power, and white people are by definition powerful. Therefore, anti-Semitism is dismissed because
it can't be a thing because Jews are all-powerful and even more oppressive than other whites.
Those who don't subscribe to all of these beliefs are nevertheless tinged with them, which is why people who aren't staunch
antisemites will nevertheless fail to take anti-Semitism seriously.
Coming on the day when the FT have a column seriously positing that criticizing capitalism is inherently anti-Semitic, it
seems to me that dancing on the head of a pin about whether the 'careless' anti-Semitism you've described means the party
is institutionally anti-Semitic is rather missing the point. (OK, the column is by John McTernan, but the FT gave him column inches
to argue that case, and I guess they didn't mean it as the satire it most certainly is.)
As many of the comments on your
blog on Williamson attest, the salient feature of this - well, call it witch-hunt for the sake of argument - is the double standards
where we have to be whiter than white, whilst no account whatsoever is taken of the most egregious racism elsewhere. We live
in society: we can never, ever be that whiter than white - especially when it comes to Israel/Palestine, which is so full of contradictions
and traps for the unwary (e.g. the position of the Israeli state claiming to speak for all Jewry around the world, in the way
that the Board of Deputies position themselves as speaking for all British Jews - neither close to being true, but small wonder
that opponents of what they do and stand for take that universality at face value.)
The fight we need to take up is to compare and contrast just how pro-active the current party is against anti-Semitism in its
constitution and machinery with the glaring absence of such elsewhere, and to present a positive picture of what we are doing,
rather than mumbling apologetically into our beards. We need to take the fight to the rigged system at the same time as being
unstinting in rooting out the troubling stuff.
The other nonsense that has grown up is that it is only those that suffer any form of discrimination who can define what that
discrimination is, i.e. only Jews can define anti-Semitism, only black people can define racism against them, only women can define
discrimination against women.
That then assumes that the members of each of these groups are themselves homogeneous, and agreed in such definitions.
In reality, it means that dominant elements, i.e. those connected to the ruling class and ruling ideas get to make those determinations.
If we look at anti-Semitism, for example, it is quite clear that there is no agreement amongst Jews on what constitutes
anti-Semitism. The JVL, certainly have a different definition than the JLM.
But, just rationally, the concept that only those discriminated against get to define the discrimination is bonkers. Suppose
you come from Somalia or some other country that practices FGM, you could argue that it is part of your cultural heritage, and
that anyone seeking to prevent you from undertaking this barbaric practice was thereby racist, on your self-definition of what
that discrimination against you amounts to. Or Saudis might argue that it is racist to argue against their practice of lopping
off women's heads, or stoning them to death for adultery, including having been raped, etc.
The JVL come pretty close to arguing that there is *no* anti-Semitism in the Labour party (Jenny Manson, for instance, says she's
never witnessed any)and Glyn Secker wrote a piece in the Morning Star last year comparing claims of anti-Semitism within Labour
to the story of the emperor's new clothes.
Given that the actual data, even allowing for all of the spurious and mischievous accusations of anti-Semitism in the party,
made by right-wing enemies of the the party, and particularly of Corbyn and his supporters, amounts to only 0.1% of the membership,
and given that of these, 40% were straight away found to be accusations against people who were not even LP members, with a further
20%, being found to have absolutely no evidence to back them, its quite possible that individual members of the LP, have never
seen any instance of it.
Take out all those mischievous and malicious allegations made in order to whip up the hysteria, so as to to damage the
party, by its enemies, and you arrive at a figure of only 400 potential cases, out of a membership of 600,000, which is 1 member
in 1500. If the average branch size if 100 active members, it means on average there is one potential case of anti-Semitism
in every 15 branches. So, if you are a member in any of the other 14 branches, you would never see that one potential case of
anti-Semitism.
In fact, based upon the actual facts, as opposed to the fiction and factional hysteria that is being whipped up by right-wing
opponents of Corbyn and the party, and by supporters of Zionism for their own narrow political reasons, the chances are about
14: that you will never see any even potential instance of anti-Semitism, even on the narrow definition that the party has now
imposed upon itself, which comes pretty close if not entirely to identifying anti-Semitism with anti-Zionism, or even just criticism
of the current Bonapartist regime of Netanyahu.
In the US, Jewish groups that have long been ardent defenders of Israel have more recently come out to criticize the regime
of Netanyahu, and the actions of the Israeli state. The main defenders of Zionism, besides the actual Zionists themselves, appear
to be people like the AWL, who for whatever reason hitched their wagon to Zionist ideology some time ago, probably in their
usual knee-jerk reaction of putting a plus sign wherever the SWP put a minus. Having done so, and as a result of the bureaucratic
centrist nature of the sect, they find themselves now having to follow through on the position they adopted on the basis of the
"practical politics" - opportunism - as it dictated itself to them at the time.
If, and probably more likely when, they change position, it will come as with all their previous changes of position with the
assertion that "nothing has changed", as when after claiming a few years ago that the LP was a stinking corpse - as they ridiculously
stood their own candidates in elections with the inevitable result - and the next minute proclaimed themselves as its most ardent
militants, as they sought to use their sharp elbows to gain positions on Momentum's leading bodies!
Incidentally, on the question of "observance", the only time I have seen someone get stabbed, is more than 50 years ago, when
I was at school. I've seen plenty of other violent stuff in the intervening period, for example, people getting glassed, people
having wrought iron tables smashed over their heads. My sister, who is several years older than me, and was out bopping during
the days of the Teddy Boys, saw more people getting slashed, in the 1950's, because the flick knife was the Ted's favoured weapon.
But, that doesn't mean that I disbelieve the media when it talks about the current spate of knife crimes. Its just that, however,
terrible such crimes are for those that suffer or witness them, and no matter how much the media that has to sensationalise every
story, for its own commercial purposes, talks about an epidemic or a knife crime crisis, the number of knife crimes per head of
population is extremely small.
The chances that 999 out of 1,000 of us will never be the victim of, or witness knife crime does not mean it doesn't exist.
But, those that then claim that the 999 out of 1,000 of us who say we have not seen it, must be somehow being dishonest, are not
dealing with the facts, and are simply fuelling a moral panic.
When some phenomena is statistically insignificant, which 1 in 1,500 cases, is, and when as with many such phenomena there
is no normal distribution of the occurrence of such cases - for example, knife crime will tend to be concentrated in particular
areas - trying to present any kind of rational analysis based upon personal observation is a mug's game.
Just because the only case of stabbing I have witnessed was more than 50 years ago, does not, and should not lead me to
think that knife crime was worse 50 years ago than it is today. The actual data would seem to suggest that cases of anti-Semitism
were greater in the LP in previous times than they are currently, contrary to what the media and those with factional motives
would have us believe. It is certainly thec ase that anti-Semitism is a bigger problem in the Tory party, and other right-wing
organisations than it is in the LP, again not that you would know that from the reporting of it, or from the attitude of certain
factional sects, such as the AWL.
Labour has 'much larger' group of antisemitic members which Corbyn has failed to deal with, Momentum founder warns
By Rob Merrick Deputy Political Editor The Independent, Monday 25 February 2019 16:10 |
Labour has "a much larger" group of antisemitic members than it recognises which Jeremy Corbyn has failed to "deal with", Momentum
founder Jon Lansman has warned.
The Labour leader's long-standing ally said "conspiracy theorists" had infiltrated the party – a consequence of its huge surge
in membership in recent years.
Mr Lansman stopped short of backing the call from Tom Watson, Labour's deputy leader, for Mr Corbyn to take personal charge
of the antisemitism complaints dogging Labour.
But he said: "I do think we have a major problem and it always seems to me that we underestimate the scale of it. I think it
is a widespread problem.
"I think it is now obvious that we have a much larger number of people with hardcore antisemitic opinions which, unfortunately,
is polluting the atmosphere in a lot of constituency parties and in particular online. We have to deal with these people."
The apparent level of anti-semitism in Labour is a modern phenomenon turbo-charged and amplified by social media. People
have their views reinforced within their bunkers where anti-Israeli memes become anti-Zionist and then become anti-Semitic. It
is much easier to send an anonymous email than a letter.
History is very much the tale of new technology transforming the potential of human behaviour and beliefs, and one of the oldest
beliefs ("the blood libel") is anti-Semitism.
This is how Labour has changed - ie, the rise of Corbyn has coincided with the ubiquity of this technology. In fact, arguably
the rise of Corbyn was aided by it.
Corbyn's nuanced position on Israel/Palestine gives permission to social media extremists.
The rest is history.
Incidentally, this is why you are less likely to confront anti-Semitism in real-life while the internet may be awash with it
- there are the real and virtual identities which only occasionally bleed into each other.
Which is true and which is not? We might wonder if technology has evolved ahead of human adaptation - the "real world" filters
that govern apparently "real" behaviour missing.
I'm sure even certain posters here are less bananas in "real life" than their online comments might suggest!
I wouldn't trust Lansman on this issue, any more than on many others. Lansman abolished democracy, to the extent it existed
to begin with, by turning it into his personal fiefdom, reminiscent of the activities of Hyndman and the SDF. His position on
anti-Semitism, and fighting the witch-hunt, and of appeasing the Blair-right's as they attacked Corbyn, has been appalling throughout.
Having abolished any democracy in Momentum, which he now runs as its CEO, he also appears to want Corbyn to do the same thing
with the Labour Party, abolishing its internal democratic procedures, and putting himself personally in charge of those disciplinary
measures. That truly would be the actions of a Bonapartist. That Tom Watson is prepared to do that, as he sets himself up in a
situation of dual power, to confront Corbyn is no surprise that anyone who even remotely considers themselves a part of the Left
should support should a move is a disgrace. Perhaps no surprise that the AWL supporters of Zionism, and the witch-hunt, appear
to be doing so, then.
Its notable that, yesterday, when the Welsh Labour Grass Roots organisation came out to call for Williamson's suspension to
be reversed, Kinnock and other Blair-rights immediately called for an investigation into them, and for its Secretary who sits
on Labour's NEC to also be suspended, for interfering in an ongoing investigation! So, why did those same Blair-rights not call
for the suspension of Watson, who immediately demanded Williamson's suspension, and withdrawal of the whip, before any investigation,
or indeed of Hodge and others who on a daily basis go to the media to sally forth about cases that are under investigation, or
waiting for investigation.
This truly is reaching into the realms of McCarthyism, where you are found guilty not just of witchcraft, but of consorting
with witches, or even having an opinion as to whether an individual charged with witchcraft is guilty, or even the extent to which
the number of witches amongst might be exaggerated.
Jim Denham's comment is a case in point. How much more "anti-Semitism" exists? What is the factual basis of the statement,
as opposed to click bait headline. Even if the actual extent is 100% more than the data so far presented, that would mean that
potentially 1 in 750 LP members might be guilty of some form of anti-Semitism. Its hardly an epidemic, or institutional anti-Semitism,
and far less than exists in the Tory Party, which is also infected by Islamaphobia, misogyny, homophobia and xenophobia.
In fact, its probably much less than you would find in the BBC, Sky or other establishment institutions. Anti-Semitism exists,
and is a problem, but that does not mean it is not being used by Labour's enemies or the proponents of Zionism for their own political
ends. The real conspiracy theorists are those that try to present anti-Semitism as a conspiracy based upon infiltration of the
LP, the same people who presented the support for Corbyn from 300,000 new members as really just being a case of far left entryism,
by Trots.
This is a meme, taken from Incog Man, a far-right site. It was posted with positive endorsement by a Labour member, Kayla Bibby,
a delegate to conference in fact:
Bibby subsequently received only a formal warning, with Thomas Gardiner of Labour's Governance and Legal Unit (what used to
be the Compliance Unit), saying it was only anti-Israel, and not anti-Semitic.
Not only could a Labour member post something obviously anti-Semitic, it was not deemed to be so by the Compliance Unit. I
bet we all know people who would agree.
It's not a factually accurate description of global political realities, because Israel does not control the US, if that is
what the image is intended to imply. But, the message, is thereby anti-Israeli state, not anti-Semitic. It could only be considered
anti-Semitic, if in fact you are a Zionist and claim that Israel and Jews are are interchangeable terms, which they are not.
In fact, there are probably not an inconsiderable number of Jews, who think that the state of Israel does exercise undue influence
over US policy, and certainly it seems to be the case that, in the US, more liberal Jewish groups, seem to think that one reason
that the Bonapartist regime of Netanyahu, in Israel, was so supportive of Trump, and we see the same support for Trump amongst
Zionists in Britain, is at least in part due to the fact that Obama had been distancing the US from its historical uncritical
support for Israel.
If we replace Zionism with Toryism, and Jew with British, the situation becomes fairly clear. If the we show the British
state as being controlled by Tories, who implement their ideology of Toryism, in what way would criticism of the British state,
under the control of such Tories, or criticism of Tories be the equivalent of British people as a whole?
Clearly it wouldn't, because there are a majority of British people who oppose Toryism, and thereby oppose the actions of the
British state under the control of the Tories. A nationalist, or racist might want to equate the nation state with the whole of
its people, but the people who are doing that here, by interpreting criticism of the Israeli state with anti-Semitism, are the
Zionists themselves, and their apologists, because they seek thereby to delegitimize any criticism of the state of Israel and
Zionism by equating it with anti-Semitism.
That in effect makes the Zionists themselves, and their apologists anti-Semites, because in adopting this equation of Jewishness
with being Zionist, and with Israel, they make all Jews thereby responsible for the actions of Zionism and of the state of Israel!
The problem for the AWL, and its members like Jim Denham, on this issue comes down to this. Until thirty years ago, the organisation,
under its previous names, was an ardent defender of the ideas and traditions of Jim Cannon. Cannon's "The Struggle for a Proletarian
Party" was required reading for all of its members. Then, in an about face, the organisation overnight collapsed into what Trotsky
called "the petit-bourgeois Third Camp", and so became ardent defenders of the enemies of Cannon, the petit-bourgeois Third Camp
of Burnham- Shachtman. That kind of wild zig-zag is typical of bureaucratic-centrist organisations, which is what the AWL is.
As part of this collapse into the petit-bourgeois Third Camp, and the moralistic politics it is based upon, the AWL also adopted
the ideas of Third Campists like Al Glotzer, in relation to Israel and Zionism, as opposed to the position of Mandel, which represented
a continuation of the ideas of Cannon and Trotsky. I set this out in a short blog post 12 years ago
Glotzer and the Jews as Special
, after the AWL had repeatedly censored it appearing on their website in response to an article setting out Glotzer's position.
Having committed themselves to the reactionary Zionist ideology that essentially underpins Glotzer's stance - the same thing
idea of having lost faith in the working-class, and so having to rely on the bourgeois state, or "progressive imperialism" to
accomplish the tasks of the working-class, is behind the AWL's support for NATo's war against Serbia, Iraq, Libya etc., but is
also behind the politics of other Third Campists such as the SWP, that instead look to other larger forces, such as reactionary
"anti-imperialist" states to carry forward its moral agenda - the AWL are left now trying to defend their position of support
for the creation of a racist, expansionist state in Israel, as the inevitable consequences of that venture unfold.
For a Marxist, it is not at all difficult to say that the establishment of the state of Israel is one that we should not have
supported at the time, because it would lead to the kind of consequences we see today, and yet, to say, 75 years on from the creation
of that state, it is an established fact, and trying to unwind history, by calling for the destruction of that state would have
even more calamitous consequences for the global working-class. It is quite easy for a Marx to say that the current nature of
the Israeli state, as a racist Zionist state, based, like almost no other state in the world on a confessional basis, i.e. of
being a Jewish state, a state for Jews in preference to every other ethnic/religious group flows from the ideology, and nature
of its creation. But, then to argue that the answer to that is not a destruction of the state of Israel, which could only be done
on the bones of millions of Israeli citizens, Jews and Arabs alike, but is to wage a working-class based struggle against that
racist foundation upon which the state has been founded, and that struggle is one that must unite Jews and Arabs alike. In fact,
the position of palestinians today is a mirror image of that of the Jews 75 years ago.
The hope of a Two-State Solution disappeared long ago, and was never credible. It simply allows Zionists to proclaim they are
in favour of it, whilst doing everything to make it practically impossible, such as extending West Bank Settlements. The solution
must flow from a struggle for democratic rights for Israeli Arabs, and for a right for all Arabs in occupied territories to be
extended the same rights as any other Israeli, including the right to vote, and send representatives to the Knesset. As I argued
thirty years ago, the longer-term solution is a Federal Republic of Israel and Palestine, guaranteeing democratic rights to all,
as part of building a wider Federal Republic of MENA.
Jim Denham: imperialist lackey and sycophant turned Witch hunter in chief
Let us be very clear about what this witch hunt is about, it is about purging from public life any credible and effective
opposition to Israel in particular and more generally opposition to the imperialist barbarians of the imperialist core. It is
about driving from universities, social media and intellectual life any form of opposition to the interests of the imperialists.
This is nothing but authoritarianism in action, censorship of political opponents and the closing down of any credible definition
of free speech.
In other words this is something any leftist worth half an atom would be fighting against with all their energies.
But what do we find, pathetic pro war pro imperialists leftists and post modern liberals joining the witch hunt.
Meanwhile in the real world:
A UN report has concluded that Israel deliberately targeted and killed hundreds of protesting civilians, including children
and disabled people and it shot 20,000+ people (yes 20,000+!). The UN says this likely a war crime. Why are the noble defenders
of the Palestinian cause in the dock and not notorious Palestinian haters like Jim Denham?
How can anyone on the left get away with supporting and providing ideological cover for Israel How can any leftist allow a
socialist movement to be sabotaged by the Israel state and its army of appalling immoral apologists?
These attacks on Corbyn and his supporters, repeated in all of the most aggressive imperialist countries, are simply a
proxy attack on the Palestinian people themselves.
Jim Denham's comment here illustrates the problem entirely. The picture he has linked to shows an alien symbiote having attached
itself to the face of the statue of liberty. The statue of liberty here represents the US. The symbiote has on its back the Israeli
Flag, and likewise, thereby represents the state of Israel. The picture therefore, represents the well-worn, and clearly factually
wrong meme that Israel controls the US.
But, as a Zionist organisation, the AWL and its members cannot distinguish between the state of Israel and Jews, so they
cannot distinguish between criticism of the state of Israel, and criticism if Jews. For them, as for the Zionist ideology of the
state of Israel, which is most clearly manifest in the ideology of its current political leadership, in the form of the Bonapartist
regime of Netanyahu, with the recent introduction of blatantly racist laws that discriminate even more openly against not Jewish
Israeli citizens, and with his willingness to try to keep his corrupt regime in office by going into coalition with an avowedly
Neo-Nazi party that until recent times was considered beyond the pale, even by most Zionists, the term Zionism is synonymous with
the term Jew. So, any criticism of Zionism, or of Israel is for them immediately equated with anti-Semitism.
It is what leads such Zionists to then also insist on their right to determine who is a Jew or not. The AWL do that with all
those Jews, such as the JVL, who refuse to accept the AWL's definition of anti-Zionism = Anti-Semitism. Its like the old saw that
the definition of a Scot is someone who wears a kilt, and when asked about Jock McTavish, from Arbroath, who does not wear a kilt,
the reply comes back, then he cannot really be a Scot!
The Zionists insists on defining anti-Zionism as anti-Semitism, and thereby closing down debate. Jim Denham does that most
clearly here, in his refusal to debate the actual substantive points. It is typical of the attitude of the AWL, in general which
long since gave up trying to defend its bourgeois liberal, opportunist politics by rational debate, and instead turned to bureaucratic
censorship, and ill-tempered invective.
Once again Jim Denham reefuses to engage in rational debate, and again resorts instead to his assumption that Israel = Jews,
as well as his crude attempts at a typical Stalinist amalgam, to conflate the views of his opponents with some hate figure.
Again Jim Denham makes the conflation of Israel and Jews explicit when he says, "This image also plays on the tired and
disgraceful antisemitic 'conspiracy theory' trope of undue Israeli (Jewish) influence on world affairs."
The conflation of equating Israel with the term Jew flows directly from the Zionist ideology that underpins the Israeli State,
but which also adopted by the AWL, and its members like Jim Denham. It thereby effectively denies statehood to non-Jewish Israeli
citizens, making them non-persons, erasing them from history, in the same way that Jim Denham has sought to do in diminishing
if not entirely denying the genocides against other ethnic groups such as Native North Americans, Australian and New Zealand aboriginals
etc., as a result of his Zionist privileging of the specific genocide against Jews in the Holocaust.
It is the same kind of racism, of course, that is applied by the BNP and other white nationalists, who seek to portray Britain
as being a nation for white Britons, and thereby deny other Britons the right to consider themselves really British. Every socialist,
can understand the racist nature of that ideology when it is applied to Britain, and elsewhere, but the AWL, and its members,
like Jim Denham, deny it when it is applied to Israel, which they want to treat as being different to every other state on the
planet, in defence of their Zionist ideology that privileges Israeli Jews over others, and by extension equates the term Jew with
the term Israel.
Its most extreme version comes with the fascists that Netanyahu has now gone into alliance with, whose ideology states that
God only put gentiels on the Earth to be slaves and serve the needs of Jews, as the chosen people! It means that they see the
place of non-Jewish Israelis in those terms, as being allowed to remain in Israel only on that subservient basis. This is the
ideology that the AWL is now logically tied to, in having adopted Zionism as the answer to the problems of Jewish workers rather
than socialism.
And, of course, the extension of that principle for other Zionists is illustrated in their support for fascists like Orban
in Hungary, who wants to adopt a similar nationalist ideology of keeping Hungary, and other "white" European nations exclusively
for "whites", in the same way that Zionists want to keep Israel exclusively for Jews.
It is a sorry state when socialists have degenerated to such an extent that not only do they fail to distinguish between nationalist
ideology and socialist ideology by adopting nationalist solutions to workers problems such as "nationalisation", by the capitalist
state, but where, in adopting such reactionary nationalist ideology, the logic of their position drives them to supporting the
idea that nation states should be exclusively for particular ethnic groups, such as Israel for the Jews, Hungary for white Christians
and so on.
The way that the right are using anti-Zionism as the equivalent for anti-Semitism, and the appeasement of that attack has
led them to widen the scope of that attack. As
Labour
List reports , right-wing Labour MP Siobhan McDonagh, is now claiming that to be anti-capitalist is also to be "anti-Semitic".
The idea was put forward also by former Blair-right spin doctor, John McTernan,
who wrote an article in the FT to that
same effect
Channelling Jim Denham, McTernan writes,
"As the historian Deborah Lipstadt points out, anti-Semitic tropes share three elements: money or finance is always in the
mix; an acknowledged cleverness that is also seen as conniving; and, power -- particularly a power to manipulate more powerful
entities.
All of these feature in the criticism of Israel and the so-called Israel lobby. They can be easily moulded into a critique
of capitalism, too."
The line of argument was illustrated to me some weeks ago, in a comment I received in relation to an article I wrote about
Marx's analysis of fictitious capital,
as part of my critique of Paul Mason's Postcapitalism . The commenter, argued that Marx's analysis of fictitious capital appeared
to be simply Marx blaming bankers and money lenders, for which read Jews, for the world's ills, and was thereby simply an expression
of the well-known fact that Marx was a self-hating Jew, much as the AWL, describe all those other Jews that do not share their
commitment to |Zionism. The commenter as evidence of this provided a link to a literary critique of Marx's
On The Jewish Question
, which is cited as proving that Marx was an anti-semite.
In fact, I pointed out that in nothing that Marx had written about fictitious capital, or what I had written describing Marx's
analysis of fictitious capital are bankers discussed, let alone Jewish bankers. The anonymous commenter, has, in fact, since deleted
their comments, meaning that my responses to them were also deleted.
But, this is the way this right-wing witch-hunt proceeds, by throwing a net to catch whatever they can trawl in, and at the very
least sowing the seeds of doubt as they require those being attacked to respond to their wild accusations. It means that any statement
can be framed to mean that there is some subtext beneath the actual words and pictures that is somehow anti-Semitic, if only you
know the relevant coda to unlock the true meaning, and anyone who doubts the meaning being placed upon it, is thereby a defender
of the anti-Semitic message. As with the attacks on Momentum, and the initial surge of membership supporting Corbyn, it is always
phrased in dark conspiratorial language, about unseen forces being behind what is seen on the surface. So, we were supposed to
believe that a few hundred Trots in Britain somehow morphed into 300,000 new LP members! But, Momentum now having shown that it
is a tame part of the establishment, is even able to recruit McTernan himself as a member.
The appeasement as with all witch-hunts only provokes the witch-hunters to widen the scope of their activities. The AWL, which
was at the forefront of helping the witch-hunters with their shameful support for the witch-hunting of Jackie Walker, was repaid
by having their own members expelled too, and having right-wing Labour MP's appear on TV, to characterise the AWL themselves as
"anti-Semites", despite their well-known Zionist politics. Yet, oddly, the AWL seem to consider that a price worth paying, as
their advocacy of Zionism seems to trump any other consideration for them in their politics.
It didn't take long for my comment of yesterday to be proved correct. Today we learn that Jess Phillips has claimed that Marxism
is necessarily misogynist, because it places class oppression above all else, and so now claims that as well as the Left in the
party being anti-Semitic, it is also misogynist. The attack of the Right, as I said yesterday will spread ever wider on this irrational
basis, using all of the usual conspiratorial language that such witch-hunts have always adopted. Rather like a Dan Brown novel,
it will imply that there are dark (Marxist) forces at work, of which Corbyn is the head of the coven (or even worse that some
unseen Dark Overlord is really standing behind Corbyn, who is only its representative on Earth (i.e. in the LP).
It will suggest that these dark forces do not speak openly, but only in codes and symbols that have to be unlocked by the forces
of Light, who like Jim Denham, can look into the minds of men and women, and see what is really going inside.
I actually found that despite the anonymous Zionist commenter to my article on Medium having deleted their comments, my replies
to them, were in fact still floating around
here
,
here , and
here .
As the right-wing extend their witch-hunt against socialists in the LP to claim that Marxists are necessarily misogynist,
as well as anti-Semitic – and the same logic presented by McDonagh, McTernon, and Phillips would presumably mean that the Left
must also be xenophobic, homophobic, anti- Green, and many other charges they want to throw into the mix – it will be interesting
to see whether and to what extent the AWL, join them in that assault, in the same way they have done in their promotion of Zionism.
Twitter is a blessing and a curse. Mostly a curse. It enables the rapid networking and
dissemination of information - any information - but simultaneously doubles down and condenses
the pathologies of platform
capitalism and the
attention economy . I'm reminded of this every single moment of scrolling through my
Twitter feed and seeing shared articles and bad tempered polemic mixed in with attention
seeking and mind-bending narcissism. Normally, you just go with the wretched flow. In terms of
a cost/benefit analysis the price of scrying performative stupidity is outweighed by the pay
off of decent opinion and info. But the toxicity does grate, and a lot of what is bad has to do
with the Twitter tribes.
Because I inhabit a very particular online universe, there are two groups who are especially
annoying and sometimes toxic. The Follow Back Pro Europe crowd, grouped by their totemic #FBPE
hashtag overlap with the worst people in the Liberal Democrats, the Labour right, and with
centrism more generally. However, the target of my ire this last weekend - and the subject of
this post - are ostensible allies. People who regularly use #SocialistSunday or
#SocialistAnyDay, and combine this with Chris Williamson fandom, tweet about Israel and Zionism
as if they're the only active forces in British politics, enthusiastically push The
Canary and reckon prominent left wingers, like Owen Jones, have sold their souls because
they write for the bourgeois press. While, as a whole, they don't think Jeremy Corbyn is
a messiah, there is a certain black-and-white moralistic streak running through their group
identity that rules out nuance or perceiving the world as shades of grey. These then, for want
of a better phrase, are the Corbyn stans. So-named after the titular character from the famous
Eminem hit , a stan
(or stans) is a not-terribly flattering term for someone or a group of people who aren't so
much stalkers, but will doggedly and dogmatically push an idea, a movement, or a figure in a
particularly single-minded way. Consider this in the context of the Labour Party. This single
mindedness can and often is pushed to the detriment of the object of their ostensible
support, such as supporting figures who have proven themselves obvious liabilities and touting
obsessions and arguments long disavowed and, in most instances, not ever endorsed by the Labour
leadership. There is a bit more to this. Stanning should also evoke the Bantustans of
apartheid-era South Africa, which were ethnically homogenous constructs set up by the regime to
keep the white minority and black majority apart. That is the typical end point of stanning,
whether willed or not: the constitution of an undifferentiated intentional community,
one that is ghettoised not by repression from without but the pressures of conformity from
within.
Why am I writing about this now? Because this weekend we have seen well-known social media
anti-racism campaigner, @a_leesha1 driven off Twitter (hopefully temporarily) following a
series of exchanges with older activists, nearly all of whom are Corbyn stans. They did not
like how she used her following to point out incidences of racism on the left, sometimes
unconscious, sometimes not, and so turned on her as if she was some kind of apostate. Try
imagining the spectacle of middle aged white people telling a young British Asian woman what is
and isn't racist (which isn't difficult to envisage if you're familiar with Dan Hodges' output)
- and you've got the general gist of what happened. No one likes their deficiencies pointed
out, but for a clutch of self-described leftists and ostensible Corbyn supporters to behave
like this is appalling. In typical social media fashion the crimson mist has descended, and
rather than confront their own deficiencies they have lashed out in a coordinated
excommunication of Aleesha. Whatever she'd done prior to this clash, as far as they were
concerned she wasn't really one of them, isn't worth paying attention to, and politics is
better without her presence.
These dynamics are nothing new, but in the age of social media they have acquired a certain
virulence as well as persistence in what is a dynamic and fluid environment. It's incongruent.
In a medium of proliferating networks and news, it might be reasonable to expect identities to
possess a certain fluidity, and yet groups and sub-groups of stans - Corbyn-centric, FBPE,
Brexit Party/Farageist stans, Tory Twitter generally - reproduce and persist. And what we see
in politics is by no means unique to it. Sports, fandoms, fashion and style, music, and,
unsurprisingly, celebrity, stanning is a fact of digital life This, alas, is more than just a
consequence of Twitter, but rather the alignment of the platform architecture to the
inculcation, interpellation, and invention of identity in advanced capitalist societies.
As we have
seen recently , self-styled traditional Marxists have counterposed identity politics to
class identities and class locations. The former is a matter of lifestyle or oppressions
ascribed to particular embodied characteristics - sex, sexuality, skin tone, presence of
physical/mental impairments, age. Class on the other hand is about our relationship to the
means of production, whether we have to sell our labour power in return for a wage or salary to
physically and culturally reproduce ourselves and our families as human beings, or not. For the
so-called orthodox, while being oppressed as a woman or as a disabled person is awful and these
struggles are important, they are cut across by common class interests around which we
should organise. This implies there is a tension between the two, a tension arising out of
their separate character and rootedness in different and separate structures of exploitation
and oppression, and one that should be resolved in favour of emphasising, with varying degrees
of crudity, class first.
This is wrong. It baldly states your experiences as a disabled person, as a gay person are
inessential, an attitude that encouraged the formation of women's liberation, gay liberation,
and anti-racist movements independently of and separate from labour movements. The truth of the
matter is different identity locations have been nurtured and managed since capitalism began
its path to global dominance in the late mediaeval period. For example, race has a history and
it is inseparable from colonialism, slavery, and "conventional" capitalist exploitation. The
historical experience of surplus
labour and surplus value cannot be told without the brutal enforcement of racial
hierarchies. Likewise, the division of labour in the fields and the factory was not the neat,
disinterested technocratic affair reading too much Weber would have you believe, but is
absolutely premised on sexual divisions of labour. All-women workforces were used to undercut
men in the same way ethnicity and nationalities were used to cultivate competition within the
working class, and as the power of trade unions grew, as disposable incomes grew, the better
off layers of workers imitated the respectable mores of their supervisors, managers, and
employers. The idea of the working man is a result of late 19th century trade union
struggle to keep women out the workplace to increase wages, and it was this absence of economic
independence that was and is the material root of the private patriarchies of the proletarian
household.
Capitalism did not emerge in a vacuum. It was the by-no-means-inevitable outcome of the
class struggles of decaying feudalism, and evolved alongside the development of the modern
state. In the home of capitalism, England, the development of the nation state and capitalism
were coterminous, mutually constitutive, and mutually conditioning. As capitalism evolved, the
state became more than a military apparatus oriented against threats at home and abroad, it had
the job of managing populations, which was fairly pressing considering its administrative
centre tended to be among the most densely populated cities. This management problematic beget
systems of knowledge and classification about its population - often arrived at through the
threat and actual application of violence to human bodies, and the invention of identity
categories through the application
of disciplinary power . For example, the first volume of Foucault's History of
Sexuality was concerned with the 19th century invention of the homosexual as a particular
subject, or type of human being , whereas prior to then and despite the prohibitions
against same-sex intercourse and sexual relationships, so-called sodomites were merely men who
happened to engage in illegal sexual activity. Their behaviour did not define them. The
invention of homosexuality was at the same time the invention of sexuality as such, which in
the Victorian imaginary was bound up with moral rectitude: sex and sexuality started saying a
great deal about who you are, an outlook that persists to this day. To what end? Well, you
can't manage populations if you don't have technologies and prohibitions governing
reproduction.
Class politics and identity politics or, if you prefer, the politics of the body are
integral and integrated. It is nonsensical to oppose the two. However, this doesn't mean their
configurations don't change, and since the 1960s they have. As recounted
many times here, in the post-war period the state expanded even further and touched more
points of social life than previously. Following the Italian autonomists, greater layers of
workers were employed whose object, to all intents and purposes, was the reproduction of
capitalism and the management of its consequences. What are health and social services if not
to mend the people broken physically and spiritually by it so they can be thrown back into the
fray? What this development also represents is the complete subsumption of society as a whole
to the dictates of capital. The needs of accumulation were primary everywhere at all times.
Class struggle is less a point of production thing, it is generalised to all areas of the
social. So teachers, who educate and train the next generation of workers, are confronting
capital when they take industrial action. When women's movements and LGBT movements challenged
gendered and sexual repression, they were taking on capital by contesting its politics of
reproduction, and so on. These collective challenges were fed by and fed into new modes of
individuation.
In
Capital , Marx discusses the individuation of the worker, how the formal,
legal relationship between employer and employee is individual - workers get a certain wage
or salary in return for X hours of labour power under the foremen/manager's direction.
They are addressed and treated as individuals: their relationship to the boss class is not
collective, unless there is strong trade union organisation. In the post-war period, (relative)
economic stability married to rising wages opened the doors to mass consumption and privatised
forms of entertainment. The invention of the teenager, a house with all the mod cons, fashion
and style, these inculcated an
acquisitive individual sensibility and, in a number of crucial ways, eroded the
collectivist cultures underpinning mass semi-active affiliation to Labour ... and the
Conservatives. Identity wasn't something just ascribed and interpellated from above, but could
be cultivated and styled from below, albeit bounded by class, gender, ethnicity, sexuality and
disability. The Teddy Boys, as an early youth movement, were macho, hard-drinking and hard
living, overwhelmingly working class and male. It came and went (though sometimes, you can espy
the odd old Ted) but generated a set of markers and touchstones subsequent movements would take
on: sets of consumptive practices, a more or less coherent group identity and a nascent
solidarity, and an instrumentalist attitude to work: that was something you had to do, the life
outside of the workplace was where you wanted to be.
As mass consumption was normalised, so was marketing. Firms were in the active business of
generating identity locations to capture the minds and the wallets of the (relatively) affluent
mass. The music industry and its rapid churn of fashions, along with the lightning fast
turnover of artists and groups generated youth movements and ecosystems around genres and acts,
deepening the naturalisation of the private, instrumentally-oriented and acquisitive individual
further. Indeed, the keeping up with the Joneses, the habituation of millions of workers to
rising living standards helped ensure trade union organisation and collective bargaining as the
means of raising wages retained its relevance. Collectivism at work supported individualism at
leisure. The whole shebang presented as a coherent, functional whole
even to radical critics .
This individuation and the expansion of the state were never at cross-purposes from one
another. The kinds of work millions of workers were engaged with, with the consequences of
maintaining and reproducing the system, was not productive labour in the view of vulgar
economics. It did not directly produce value, rather they produced the social
infrastructure that made 'conventional' capitalist exploitation possible. They did not make
stuff, their labour was, for want of a better phrase, immaterial
. Its object was the production and reproduction of care, knowledge, moralities, relationships,
and immaterial workers had to (and have to) draw on their own capacities as socialised beings
to undertake this work, mobilising their own subjectivities and identities. In other words,
through the expansion of the state its provision of services were in the business of
conditioning and generating new identities, and accomplished this by exploiting the socialised
selves and identities of its personnel.
Without getting too much into the history of the neoliberal counterrevolution of the 1980s,
it had two chief consequences as far as immaterial labour and the constitution of identities
were concerned. With privatisation of sections of the state, with the shift away from primary
industry and manufacturing to services, the axis of knowledge generation and service provision
moved to the private sector and became direct vectors of capitalist accumulation. Secondly, the
policies of the Thatcher and Reagan governments and later pretty much all the advanced
countries intersected with and directly cultivated the acquisitive individualism welling up
from below. It became a blueprint for social engineering. And so while the programme of
privatisation and marketisation is commonly associated with neoliberalism, in its more
insidious
forms it is a mode of subjection, a means of cultivating human beings of a particular kind.
And for Thatcher and friends, those human beings were mini-entrepreneurs whose acquisitive
nature went beyond the stacking up of consumer durables but were oriented to the accumulation
of capital and property. Throughout her reign, her war against post-war social democracy was
about inculcating these sensibilities - the privatisation programme, the council house sell
offs, conditionalities attached to social security, even the introduction of the Poll Tax had
the object of remaking the souls of millions of people. This process was deepened by Major as
well as, to their eternal discredit, Blair and Brown, and was pushed even further under Cameron
and the recently
departed Theresa May. What this accomplished was a fusion of identity constitution and the
entrepreneurial self. You were free to style your own identity within the conditions imposed by
long standing inequalities and oppression, but the state and its institutions expected you to
orient to them as mini-capitalists with your self as the asset. In the job markets from the 80s
onwards, employers were less interested in what your body could do but what kind of person you
were, and how your personality, intelligence and aptitudes would benefit their organisation.
The language of unlocking potential and aspiration encourages a subjectivity in which the self
is saleable .
This neoliberal self selects for certain personality traits then: it emphasises the showy
over the staid, the confident over the reticent, the sociable over the shy, and the
narcissistic over the modest, the possession of which confers real economic/job market
advantages. And it is exactly these sorts of traits social media, and Twitter in particular,
exaggerate. All social media is based on attention. The more time you spend on a particular
platform, the more data the host gathers about your habits and the better able they are to sell
targeted advertising. For example, this blog is hosted by Blogger, which is owned by Google. It
carries no advertisements. However, Google insists on inserting cookies onto your
computer/device so it can build up a data picture of you. Because you regularly visit this
place, or you click on certain posts while avoiding others, that's all grist for the Google
data mill who will use those choices to sell advertising space targeting you on other platforms
it owns. And, in return for my data and your data, they ever so generously provide this wee
blog and its storage space to me for free.
Other social media platforms ramp up the neoliberal sensibilities. Over its
evolution since 2006, Twitter has been modified multiple times, often by pressure from
Twitter users. Nearly all its features - hashtags, retweets, favourites/likes, threading, extra
characters, image and video hosting - these were not thought out in advance but were added as
users demanded their inclusion, or developed their own workarounds. Twitter (allegedly) gathers
the wisdom of crowds, and exists as is for that self-same reason. But the actual logic of the
platform itself is almost chemical pure neoliberalism. The number of followers one has is a
validation of sorts, especially if the follower-to-follow ratio is high. And from here, the
number of retweets and likes your missives receive suggests you're making your way, that your
messages, whatever they might be, are resonating. And on top of that Twitter have added a load
of metrics so you can see how many page impressions your profile has had, along with tweet
performance and a whole lot of other stuff. The temptation is to keep plugging away, keep
churning out the hot takes and the witty repartee and your influence will grow, all of it
available in handy metric form. In other words, Twitter offers a crude measure of one's social
capital. It puts rocket boosters under the neoliberal self, while mining self-curated
identities for data
What has the evolution of identity under capitalism and its rendering by social media got to
do with Twitter tribes? Well, for one, the emergence of consumerist/subcultural identities have
always attracted and recruited the like-minded. But there is something else: the pathologies
particular to and immanent in the acquisitive and neoliberal self. Contemporary identities can
present themselves as ready made social locations, something you can acquire off-the-peg that
are packaged with cognitive structures, styles, language, and exclusive social spaces. In other
words, we are encouraged to orient toward and appreciate identity as if it's property: a
complete self-contained package. Identity is irresolutely social and only possible because we
are social beings, yet it is sold as an individual attribute, a design for life. Its
appearance, to borrow the old language, is not its essence, which is inseparable from the
abstract relationships underpinning capitalist exploitation. The fusion of class and identity
at the point of (immaterial) production goes unacknowledged, its collective character as the
strategic fulcrum of exploitation and capital accumulation is unremarked. The collective life
of collective identity is talked up solely in terms of consumerist tribes by marketing
language: it very definitely isn't a site of
class struggle with the potential of proliferating networks and combining with other
locations, other identities in an alliance against capital. Rather it is a path to individual
fulfillment, expression, and bliss. Keeping it narrow like this is a way of negating the
potential of identity beyond the neoliberal entrepreneurial self. It is the common sense, a
species of economism not unlike the trade union consciousness Lenin once wrote about, in which
the every day realities of exploitation are consented to and one's eyes are forced down by the
weight of convention and routine.
The Twitter tribes mirror economism in the age of immaterial production. The accumulation
logics married to identity-as-exclusion, of its assertion against what it's not, draw together
the like-minded. Their networks condense as they expand, drawing toward the centre those who
most identify with the identity properties of the tribe while expelling dissenters, the faint
hearted, and those not fully signed up to whatever totalising narrative or politics they're
promulgating. And, as we have seen, this even happens in leftist movements, in movements
ostensibly dedicated to doing away with capitalism . In this particular case Corbyn is
the lynchpin not for a transformative socialist politics, but for the constitution of
identities in which moral purity is defined in terms of one's distance from what is rejected.
This is the new economism in extremis : the radicalism and their in-groupness is
fetishised and the possibility of loosening up, of identifying themselves in terms of
the
actual movement they are nominally part of, warts and all, is foreclosed. There is no
reaching out, no room for collaboration and alliances. It's all a zero sum game: they are the
true. Everyone and anyone who falls short, like taking anti-semitism seriously, challenging
racism when they find incidences of it, or have dared venture criticisms of Corbynism from
within Corbynism, well; they're out, not worth bothering with, and should be chased off if
needs be.
While it is annoying, frustrating, damaging, and dispiriting, we should not find this
behaviour in left wing movements surprising . As we've noted on many occasions, all
political parties and social movements, all of them , are affected and afflicted with
the prejudices and outlooks of the society they are part of. Labour has them all - sexism,
racism, homophobia, transphobia, religious bigotry, national chauvinism, and the rest.
Therefore the economism appropriate to the age has its home too, and is systematically
reproduced by the logics of capital, of class and identity formation, and the (necessary)
participation of political activists on social media. Better political education is only one
way of addressing the problem - drawing more people into active, flesh-and-blood participation,
while attacking neoliberal culture and building our own institutions of cultural production,
all have a role to play. Most crucial of all is the inculcation of a more flexible, more fluid
movement identity that identifies with the objectives we have set ourselves ahead of
luxuriating in the fact of the movement itself. To be fair, we do have that, this is what the
bulk of Corbynism is like: a proper broad church united around a common programme. But for as
long as neoliberal sensibilities reign supreme without challenge, stanning will present a
self-erected barrier we have to persistently and ceaselessly struggle to overcome. Posted by
Phil at
18:03
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"... In the case of Epstein, I was thinking not that he was a principal who had to be offed because he ' knew too much ', but was more like the racehorse whose head winds up in someone's bed. ..."
If you consider social democrat types to be Left -- the 'near Left' -- then they've made
great progress during the reign of Trump. It is true they are nowhere near dominance as yet,
but in any case the stuff the Deep State factions are struggling over, war, empire, funny
money, and other con games, are inherently corrupt and corrupting, and formal dominance could
only mean submission to the rules of the Game. Probably better to lose influentially; victory
is death.
In the case of Epstein, I was thinking not that he was a principal who had to be offed
because he ' knew too much ', but was more like the racehorse whose head winds up in
someone's bed. Or hearing that someone has been given plutonium tea. 'We can do this,
sucker!'
"... The speed with which US political leaders of all stripes have united behind the idea of a 'new cold war' is something that takes my breath away. Eighteen months ago the phrase was dismissed as fringe scaremongering. Today it is consensus. ..."
"... It is clear that there is indeed now a clear bi-partisan consensus in the US on China ..."
"... A US policy boiled down to one overriding component: 'hammering Russia'. "Hammering Russia" (he insisted repeatedly), will continue until President Putin understands there is no military solution in Syria (he said with heightened verbal emphasis). Russia falsely assumes that Assad has 'won' war: "He hasn't", Jeffrey said. And the US is committed to demonstrating this fundamental 'truth'. ..."
"... Recall how little time ago, the talk was of partnership, of the US working with Russia to find a solution in Syria. Now the talk of the US Envoy is the talk of Cold War with Russia as much as were his Aspen colleagues – albeit in respect to China. ..."
"... All this braggadocio is reminiscent of late 2003 when the war in Iraq was just entering its insurgent stage: It was said then that mere "boys go to Baghdad; but real men chose to go to Tehran ". It gained wide circulation in Washington at the time. This type of talk gave rise, as I well recall, to something approaching an hysteric elation. Officials seemed to be walking six inches above the ground, in anticipation of all the dominos expected to fall in succession. ..."
"... The point here is that the tacit coupling of Russia – now termed a major 'foe' of America by US Defense officials – and China, inevitably is being refracted back at the US, in terms of a growing strategic Russo-Chinese partnership, ready to challenge the US and its allies. ..."
"... So, as we look around, the picture seems to be one in which US bellicosity is somehow consolidating as an élite consensus (with but a few individuals courageously pushing-back on the trend). So what is going on? ..."
"... The two FT correspondents effectively were signalling – in their separate articles – that the US is entering on a momentous and hazardous transformation. Further, it would seem that America's élite is being fractured into balkanised enclaves that are not communicating with one another – nor wanting to communicate with each other. Rather, it is another conflict between deadly rivals. ..."
"... One such orientation insists on a renewal of the Cold War to sustain and renew that supersized military-security complex, which accounts for more than half of America's GDP. Another élite demands that US dollar global hegemony be preserved. ..."
"... Another orientation of the Deep State is disgusted at the contagion of sexual decadence and corruption that has wormed its way into American governance – and truly hopes that Trump will 'drain the swamp'. ..."
"... But all these divided Deep State factions believe that belligerence can work. ..."
"... Like any cosseted élite, they have an exaggerated sense of their entitlement – and their impunity. ..."
"... These élite factions – for all their internal rivalry – however seem to have coalesced around a singularity of talking and thinking that allows the dominant classes to substitute for the reality of an America subject to severe stress and strain – the fable of a hegemon which still can elect which non-compliant governments and peoples to bully and remove from the global map. Their rhetoric alone is curdling the atmospherics in the non-West. ..."
"... The leader of any nation is never sovereign. He or she sits atop a pyramid of quarrelling princelings (Deep State princelings, in this instance), who have their own interests and agenda. Trump is not immune to their machinations. ..."
"... One obvious example being Mr Bolton's successful gambit in persuading the Brits to seize the Grace I tanker off Gibraltar. At a stroke, Bolton escalated the conflict with Iran ('increased the pressure' on Iran, as Bolton would probably term it); put the UK at the forefront of America's 'war' with Iran; divided the JCPOA signatories, and embarrassed the EU. He is a canny 'operator' – no doubt about it. ..."
Something is 'up'. When two Financial Times columnists – pillars of the western Establishment – raise a warning flag, we must
take note: Martin Wolf was first off, with a piece dramatically headlined:
The
looming 100-year, US-China Conflict . No 'mere' trade war, he implied, but a full-spectrum struggle. Then his FT colleague
Edward Luce, pointed out that Wolf's "argument is more nuanced than the headline. Having spent part of this week among leading policymakers
and thinkers at the annual Aspen Security Forum in Colorado," Lucetr
writes , "I am inclined to think Martin
was not exaggerating. The speed with which US political leaders of all stripes have united behind the idea of a 'new cold war'
is something that takes my breath away. Eighteen months ago the phrase was dismissed as fringe scaremongering. Today it is consensus."
A significant shift is underway in US policy circles, it seems. Luce's final 'take' is that "it is very hard to see what, or who,
is going to prevent this great power rivalry from dominating the 21st century". It is clear that there is indeed now a clear
bi-partisan consensus in the US on China. Luce is surely right. But that is far from being the end of it. A collective psychology
of belligerence seems to be taking shape, and, as one commentator noted, it has become not just a great-power rivalry, but a rivalry
amongst 'Beltway' policy wonks to show "who has the bigger dick".
And quick to demonstrate his, at Aspen (after
others had unveiled their masculinity on China and Iran), was the US envoy for Syria (and deputy US National Security Adviser), James
Jeffrey: A US policy boiled down to one overriding component: 'hammering Russia'. "Hammering Russia" (he insisted repeatedly),
will continue until President Putin understands there is no military solution in Syria (he said with heightened verbal emphasis).
Russia falsely assumes that Assad has 'won' war: "He hasn't", Jeffrey said. And the US is committed to demonstrating this fundamental
'truth'.
Therefore, the US plans to 'up the pressure'; will escalate the cost to Russia, until a political transition is in place, with
a new Syria emerging as a "normal nation". The US will 'leverage' the costs on Russia across the board: Through military pressure
– ensuring a lack of military progress in Idlib; through Israelis operating freely across Syria's airspace; through 'US partners'
(i.e. the Kurds) consolidating in NE Syria; through economic costs ("our success" in stopping reconstruction aid to Syria); through
extensive US sanctions on Syria (integrated with those on Iran) – "these sanctions are succeeding"; and thirdly, by diplomatic pressure:
i.e. "hammering Russia" in the UN.
Well, the US shift on Syria also takes one's breath away. Recall how little time ago, the talk was of partnership, of the
US working with Russia to find a solution in Syria. Now the talk of the US Envoy is the talk of Cold War with Russia as much as were
his Aspen colleagues – albeit in respect to China. Such 'machismo' is evidenced too coming from the US President: "I could –
if I wanted – end the US war in Afghanistan in a week", (but it would entail the deaths of 10 million Afghans), Trump exclaimed.
And, in the same mode, Trump now suggests that for Iran, he is easy: war or not – either path is fine, for him.
All this braggadocio is reminiscent of late 2003 when the war in Iraq was just entering its insurgent stage: It was said then
that mere "boys go to Baghdad; but
real men chose to go to
Tehran ". It gained wide circulation in Washington at the time. This type of talk gave rise, as I well recall, to something approaching
an hysteric elation. Officials seemed to be walking six inches above the ground, in anticipation of all the dominos expected to fall
in succession.
The point here is that the tacit coupling of Russia – now termed a major 'foe' of America by US Defense officials – and China,
inevitably is being refracted back at the US, in terms of a growing strategic Russo-Chinese partnership, ready to challenge the US
and its allies.
Last Tuesday, a Russian aircraft, flying in a joint air patrol with a Chinese counterpart, deliberately entered South Korean airspace.
And, just earlier,
two Russian Tu-95 bombers and two Chinese H-6 warplanes -- both nuclear capable -- reportedly had entered South Korea's air defense
identification zone.
"This is the
first time I'm aware of that Chinese and Russian fighters have jointly flown through the air defence identification zone of a
major US ally -- in this case two US allies. Clearly it's geopolitical signalling as well as intelligence collection," said Michael
Carpenter, a former Russia specialist with the US Department of Defense. It was a message to the US, Japan, and South Korea: If you
strengthen the US-Japan military alliance, Russia and China have no choice but to react militarily as well.
So, as we look around, the picture seems to be one in which US bellicosity is somehow consolidating as an élite consensus
(with but a few individuals courageously pushing-back on the trend). So what is going on?
The two FT correspondents effectively were signalling – in their separate articles – that the US is entering on a momentous
and hazardous transformation. Further, it would seem that America's élite is being fractured into balkanised enclaves that are not
communicating with one another – nor wanting to communicate with each other. Rather, it is another conflict between deadly rivals.
One such orientation insists on a renewal of the Cold War to sustain and renew that supersized military-security complex,
which accounts for more than half of America's GDP. Another élite demands that US dollar global hegemony be preserved.
Another orientation of the Deep State is disgusted at the contagion of sexual decadence and corruption that has wormed its
way into American governance – and truly hopes that Trump will 'drain the swamp'.
And yet another, which sees DC's now explicit amorality as risking the loss of America's global standing and leadership – wants
to see a return of traditional American mores – a 'moral rearmament', as it were. (And then there are the deplorables, who simply
want that America should attend to its own internal refurbishment.)
But all these divided Deep State factions believe that belligerence can work.
However, the more these fractured, rival US élite factions with their moneyed and comfortable lifestyles, cloister themselves
in their enclaves, certain in their separate views about how America can retain its global supremacy, the less likely it is that
they will understand the very real impact of their collective belligerence on the outside world. Like any cosseted élite, they
have an exaggerated sense of their entitlement – and their impunity.
These élite factions – for all their internal rivalry – however seem to have coalesced around a singularity of talking and
thinking that allows the dominant classes to substitute for the reality of an America subject to severe stress and strain – the fable
of a hegemon which still can elect which non-compliant governments and peoples to bully and remove from the global map. Their rhetoric
alone is curdling the atmospherics in the non-West.
But a further implication of the incoherence within the élites is applicable to Trump. It is widely assumed that because he says
he does not want more wars – and because he is US President – wars will not happen. But that is not how the world works.
The leader of any nation is never sovereign. He or she sits atop a pyramid of quarrelling princelings (Deep State princelings,
in this instance), who have their own interests and agenda. Trump is not immune to their machinations.
One obvious example being Mr Bolton's successful gambit in
persuading the Brits to seize the Grace I tanker off Gibraltar. At a stroke,
Bolton escalated the conflict with Iran ('increased the pressure' on Iran, as Bolton would probably term it); put the UK at the
forefront of America's 'war' with Iran; divided the JCPOA signatories, and embarrassed the EU. He is a canny 'operator' – no doubt
about it.
And this is the point: these princelings can initiate actions (including false flags) that drive events to their agenda; that
can corner a President. And that is presuming that the President is somehow immune to a great 'switch in mood' among his own lieutenants
(even if that consensus is nothing more than a fable that belligerency succeeds). But is it safe to assume Trump is immune to the
general 'mood' amongst the varied élites? Do not his recent glib comments about Afghanistan and Iran suggest that he might leaning
towards the new belligerency? Martin Wolf concluded his FT piece by suggesting the shift in the US suggests we may be witnessing
a stumbling towards a century of conflict. But in the case of Iran, any mis-move could result in something more immediate – and uncontained.
If UK government is an example -- they are already on the same level. Look at Skripal case.
Notable quotes:
"... Now people might say "see the elites succeeded, they crushed the democratic will, got their policies enacted and successfully replaced Democracy with Oligarchism while the sheep did nothing". But this is actually where the elites (Political, Economic and Technical) show their utter incompetency in understanding statecraft and governance. ..."
"... The greatest danger to any state is NOT foreign invasion or even a rebellion by the peasants. Rather it is internal conflict between the elites within the society. ..."
"... If the elites sabotage the legitimacy of the vote by propagandized the masses so that they can't make informed decisions or become to apathetic to vote, then the entire process by which Western Elites resolve internal conflicts in irrevocably tainted and delegitimized, what will happen next time the elites have an major internal dispute? The losing side will simply see the failure of their political position as the result of them not being corrupt and dishonest enough to beat the other side so they will response by trying to subvert the other side's policies through even more corrupt and dishonest actions. ..."
"... Hilary vs Trump is a good example of where the US (and the west in general) is heading, there's scarcely a hair's difference between the policies these two advocated and the terrible consequences that the commoners will be subjected to regardless of who ended up winning the presidency. However, that hair's difference, while having no real impact of the massive majority of the world's population, it still meant tens of BILLIONS of dollars going to one group of elites vs another group of elites. ..."
"... Linking this back to Assange, he campaigned against the Western Elites control of the narrative and for that "crime" they will destroy him whatever the cost to the Empire's prestige, reputation, trust and self-worth. ..."
oh, I quite agree that the UK government is deliberately torpedoing Brexit through a
deliberate campaign of profound incompetence in the hopes that this will allow them to
prevent Brexit without outraging the voting public. However, my assertion is that the US
& UK elites while think this campaign is oh so clever and will allow them to subvert the
will of the people, they are in fact showing their true incompetence by choosing this method
of Publicly campaigning on one policy to get elected, then deliberately and obviously
sabotaging it.
in civics 101 we are taught that the advantage of a Democracy is that an "informed
populous, making informed decisions will enact informed policies that accurately represent
the will of the people (and hopefully be the best policies overall). of course, we all know
in reality that the political & economic (and now the technical elites) have always
despised the whole concept of Democracy because it restricts their power. Their current
vision for subverting the will of the people is through total information control or the
"control of the narrative" as they call it. But at the end of the day all this really means
is a massive domestic propaganda campaign aimed at the seething masses of plebeians aimed
that tricking the masses into voting as the elite require. However, a Democracy is still a
Democracy so deliberately mis-informing the populous into voting for policies that are bad
for the people, but good for the elite will create a dispirited, apathetic population that
isn't politically invested in the government.
Now people might say "see the elites succeeded, they crushed the democratic will, got
their policies enacted and successfully replaced Democracy with Oligarchism while the sheep
did nothing". But this is actually where the elites (Political, Economic and Technical) show
their utter incompetency in understanding statecraft and governance.
The greatest danger to
any state is NOT foreign invasion or even a rebellion by the peasants. Rather it is internal
conflict between the elites within the society. When civics 101 teachers say that "informed
populous, making informed decisions will enact informed policies that accurately represent
the will of the people", what they really mean (without being able to forthrightly state) is
that through the mandate of the vote the populous will resolve specific conflicts between the
elites and that the legitimacy resolution of the dispute is intrinsically & inseparably
tied to the legitimacy of the vote.
If the elites sabotage the legitimacy of the vote by
propagandized the masses so that they can't make informed decisions or become to apathetic to
vote, then the entire process by which Western Elites resolve internal conflicts in
irrevocably tainted and delegitimized, what will happen next time the elites have an major
internal dispute? The losing side will simply see the failure of their political position as
the result of them not being corrupt and dishonest enough to beat the other side so they will
response by trying to subvert the other side's policies through even more corrupt and
dishonest actions.
Hilary vs Trump is a good example of where the US (and the west in general) is heading,
there's scarcely a hair's difference between the policies these two advocated and the
terrible consequences that the commoners will be subjected to regardless of who ended up
winning the presidency. However, that hair's difference, while having no real impact of the
massive majority of the world's population, it still meant tens of BILLIONS of dollars going
to one group of elites vs another group of elites.
Everyday, throughout the world, people are
killed over essentially trivial amounts of money ($20 drug deals gone bad, $10,000 life
insurance schemes), does anyone really think that in a conflict over billions of dollars,
Western elites will behave any differently than a street corner drug dealer. Bear in mind,
that we have overwhelming evidence that the Iraq War, the Libyan war and the Syrian "civil"
war were about Western interest's desire to loot these countries natural resource (and the
Western tax payer to boot!).
Linking this back to Assange, he campaigned against the Western Elites control of the
narrative and for that "crime" they will destroy him whatever the cost to the Empire's
prestige, reputation, trust and self-worth. But as I said, their too greedy to see the bigger
picture and how their actions against truth, justice, and democracy will place the dagger in
the hand that slits their own throats. What group (the public at large, the military, a
subgroup of the elite, etc...) specifically does the deed is irrelevant, without a legitimate
way to resolve the inevitable internal conflicts between the elites, the end result is clear,
societal collapse.
But that doesn't bother Trump, Bolton, Pompeo and their mob. They think quarter by quarter.
Immediate gratification is the name of their game. They know that "in the long run we are
all dead". And they don't care what happens then.
Your viewpoint is the same as that of Jonathon Cook. He says "Russiagate" was a faction
fight between two groups of the Power Elites.
One wanted to keep 'putting the lipstick on the pig' which is predatory Capitalism, and
the other wants to let it all hang out and rape the planet NOW.
Just as there was a clueless "liberal" cheering group for Mueller, the Looters have a
fan club among the "right". Both sets of the applauding groups are just puppets. And of
course neither has recognized their true role in the unfolding dramas.
Progressive Policies May Hurt the Stock Market. That's Not a Bad Thing.
By Dean Baker
Last week, we saw the media terrified over a plunge in the stock market following an
escalation of Donald Trump's trade war with China. There are good reasons to be concerned
about Trump's ill-defined trade war and reality TV tactics, but the plunge in the stock
market is not one of them.
While the idea that the stock market is a measure of the health of the economy permeates
news reporting and popular understanding, it has no basis in economics. The stock market is a
measure of the expectations of future profits of companies that are listed in the exchange.
It is only coincidental when it provides information about the health of the economy. It is
important that the public understand this distinction as the 2020 election draws closer.
The basic logic here is simple. The price of Microsoft, Boeing or Pfizer stock is not
going to rise because workers are getting pay increases or they can take longer vacations.
The price of these companies' stocks will rise if investors believe that events will cause
their profits to be higher. That's the end of the story.
This is why the Trump tax cut was good news for the stock market. Investors were not
passing judgment on whether lower corporate tax rates would mean more rapid economic growth.
They were betting that if companies paid less money in taxes, there would be more money left
for shareholders.
When we hear Trump boast about the stock market rising on his watch, he is essentially
saying that taxpayers are giving more money to shareholders, thus making shares more
valuable. It is not a measure of the health of the economy. The public needs to recognize
this simple logic, because Democrats are proposing a number of policies that are likely to
hurt corporate profits and therefore lead to lower stock prices.
For example, most of the Democratic presidential candidates are advocating strong measures
to address climate change. These measures will almost, by definition, mean sharply lower
demand for oil and natural gas. This will mean sharply lower profits for a major sector of
the economy, which will surely depress the stock price of fossil fuel companies.
In the same vein, most of the Democrats are proposing measures that will sharply reduce
the profits of the insurance industry and the prescription drug industry. These measures
should be expected to lead to sharply lower stock prices for the companies in these
sectors.
The same story applies to the tech sector, where at least some of the candidates, most
notably Sen. Elizabeth Warren, have proposed measures to break up dominant firms like
Facebook and Google. These measures would be a big hit to some of the most highly valued
companies on the market.
The stock market is a measure of the expectations of future profits of companies that are
listed in the exchange. It is only coincidental when it provides information about the health
of the economy.
Similarly, measures that increase workers' power and make it easier for them to form
unions should also be a hit to profits. Workers will get a higher share of income, and
companies will get a smaller share.
As the election draws closer, if a Democratic presidential candidate pushing this set
of policies appears likely to end up in the White House, it is reasonable to expect the stock
market to fall. This will be especially likely if the Democrats are expected to pick up seats
in the House and Senate, making it easier for a new president to implement progressive
policies.
We can expect that Trump and the Republicans will seize on any decline in the stock market
as evidence of how terrible the Democrats' policies would be for the economy. The media is
likely to go along with this charade, since they routinely treat the stock market as a gauge
of the economy's health.
That is when it will be essential to remind economics reporters of basic economics. The
stock market is a measure of expected future profits and nothing more. Yes, Democrats want to
see some corporations -- like those destroying the planet with fossil fuels or those
ripping-off patients with monopoly-protected drug prices -- make less profit. But that says
nothing about the overall health of the economy.
It is worth noting that we had very strong growth, with widely shared benefits, in the
1950s and 1960s, when stock prices were far lower relative to the economy. So the idea that
we cannot have a rapidly growing economy with a much lower stock market not only contradicts
economic theory, but also a large amount of evidence.
Obviously, some people will be hurt by a falling stock market, but because of the
incredible inequality of stock holdings, the vast majority of the losses will be incurred by
the richest 10 percent of the public, with the top 1 percent seeing close to 40 percent of
the losses.
There will be middle-class people that see some hit to their retirement funds, but this
just goes back to that old saying: If you think you have an effective policy that doesn't
hurt anyone, then you don't understand the policy. We need to make fundamental changes in
many areas, and this will almost certainly mean a decline in the stock market. We need to
acknowledge this fact and recognize that reining in bad practices in the corporate sector is
good for the economy of the country and the world, even if it is bad for investors.
Goldman Sachs economists say fears rise that U.S.-China trade war leading to recession
By Reuters
Goldman Sachs Group Inc (GS.N) said on Sunday that fears of the U.S.-China trade war
leading to a recession are increasing and that Goldman no longer expects a trade deal between
the world's two largest economies before the 2020 U.S. presidential election.
"We expect tariffs targeting the remaining $300bn of US imports from China to go into
effect," the bank said in a note sent to clients.
U.S. President Donald Trump announced on Aug. 1 that he would impose a 10% tariff on a
final $300 billion worth of Chinese imports on Sept. 1, prompting China to halt purchases of
U.S. agricultural products.
The United States also declared China a currency manipulator. China denies that it has
manipulated the yuan for competitive gain.
The year-long trade dispute has revolved around issues such as tariffs, subsidies,
technology, intellectual property and cyber security, among others.
Goldman Sachs said it lowered its fourth-quarter U.S. growth forecast by 20 basis points
to 1.8% on a larger than expected impact from the developments in the trade tensions.
"Overall, we have increased our estimate of the growth impact of the trade war," the bank
said in the note authored by three of its economists, Jan Hatzius, Alec Phillips and David
Mericle.
Rising input costs from the supply chain disruption could lead U.S. companies to reduce
their domestic activity, the note said. Such "policy uncertainty" may also make companies
lower their capex spending, the economists added.
"How many other millionaires and billionaires were part of the illegal activities that he
was engaged in?" he asked. Even the BBC website has as its heading of a news story today "Jeffrey Epstein: Questions raised over financier's death."
The philandering and pedophilia of elites and politicians clearly gave intelligence againces
significant leverage over many movers and shakers within Western establishments
@Haxo Angmark Why
would anyone have to bring down Trump? The man is fully compromised, a puppet and the FBI has
already likely 15 years of material on him as revealed in Kushner, Inc.
There is the possibility that Epstein functioned as a pass to the highest echelons: you
would compromise yourself by having intercourse with minors, let Epstein record it, hand it
over to Mossad and possibly other agencies he worked with. To show that you can be trusted.
Not unlike Unz himself suggested and exemplified by McCain.
But that is not necessary for Trump. Netanyahu gets everything he wants. And the whole
Trump campaign was a distraction, bankrolled by Sheldon Adelson and managed by a former AIPAC
guy and Christian Zionist and personal friend of Adelson Steve Bannon no less. Anyone who
still believes Trump is not part of the deepest filth of "the swamp" is delusional and
ignores way too many facts.
There is no left, no right. There is no democracy. There is an unelected oligarchy and its
political puppets. Long since bought and paid for before you and I were even born
@peterAUS Well, the
particularity with Epstein is: Many people did and are paying attention. Millions.
And the elite knows that we know. As you said it yourself: this was not just a
cover-up. It was a demonstration of power directed at us.
And they are laughing at us; as they are getting away; as they are taking every bit of
freedom and sovereignty away which the patriot act hadn’t already devoured, through
bipartisan decision of the system which should (theoretically) serve the people.
The Dystopia is also already here: the cold-blooded apathy with which the ruling class in
Britain treated victims as in Rotherham, the Savile case and now Epstein exposing their true
characters, and those are also the leaders and elites who lecture us on morality: Ghislaine
Maxwell -- save nature! Clinton Foundation, Mother Merkel… It’s disgusting.
And so many unthinkable theories which were declared “conspiracy theories”
about WW2, the aftermath and our current reality turn out to be true.
But I agree: the internet allowed us to decode the illusion of the media Matrix and its
artificial reality. And it is those possibilities which the ruling class wants to snuff out
for good. So that the monopoly to manufacture consent, truth and reality goes back to
them
Systemic elite kompromat shielded with arbitrary acts spanning all levels of government. Now
anybody who tells you this is a democracy, or an open society, or a free country, or any of
that shit, is either a mental defective or a pedo CP star in Comey’s personal Playpen
stash.
You can’t pretend we’re ever going to vote our way out of this. We’re
deep in the forcible-overthrow zone. If you aspire to rights or rule of law lots of CIA
vermin are going to have to be Ceaușescued.
@Bardon Kaldian‘…All pimps are criminals. But not all criminals are the same.’
Indeed. Some grow up in circumstances at least as dreadful as those of their victims, and
while they indeed need to be locked up, are to be pitied as well.
Others have been given perfectly decent lives, and are even affluent — and yet still
commit acts of depravity and cruelty.
These I have no sympathy for at all. Who is worse: the person who has never known a decent
life, or the person who has been offered it, but prefers moral depravity?
Jeffrey Epstein enjoyed chewing up unfortunate children and spitting them out like
sunflower husks when he was done. There was nothing keeping him from being a reasonably
decent, moral man.
During the ensuing decade since Epstein’s conviction, the seedy truth has slowly
trickled out, exposing the dark, twisted, perverse sex slave trafficking operation that
Epstein and his bevy of co-conspirators recruited child victims as sex slaves from poor
neighborhoods in Florida, New York, South America, Europe and Russia, including three
12-year old girls from France as a birthday gift. Incredibly, his procuring pimp
co-conspirators and scores of powerful pedo patrons were all granted immunity…
This does significantly strain the overall credibility of the system, among those who would like nothing more than to believe
in it, but still have some conscience and working brain cells.
Yet having been raised fairly rural, with a significant respect for the natural cycles, this is nothing so much as watching
necrotic tissue decay even further. Only for those raised in fairly sterile conditions, does it seem abnormal.
this corruption in US politics and DOJ is now so so pervasive hat I think only way to clear the cancer is for trump to use the
Military to replace CIA, FBI, DOJ , clean out the Judges , clean out the Media and start again with STRICT compliance to the Laws
of the US Constitution.
The FBI /DOJ is clearly infested with the cancer of corruption.
The DC and NY offices need to be fired in entirety and replaced by mid America new blood.
I was wondering when I would see a Trump supporter explicitly promoting a military coup in the US in a Trump supportive blog with
the alibi of returning to "Constitution and Law strict compliance"...
No wonder a military coup is anti-constitutional....
I always thought all these stories of the "deep state", the "borg", "drainning the swmp", "paedophilia conspiracy theories",
"Epstein case", "white supremacism terrorism", and attacks by Trump, and his ideologues, against any US institution, were designed
to sow the enough ammount of distrust and confussion amongst the US population so that they become more rone to allow such an
outrage...
"The FBI /DOJ is clearly infested with the cancer of corruption."
Mainly since both ends of the bipartisan system try to hijack the independence of some these powers by placing their ideologically
kindred men any time they grab presidency. This includes Trump.
"The DC and NY offices need to be fired in entirety and replaced by mid America new blood."
A public officers corps which reachs its position by merits independent from political filiation is the best gurantee for a
Constitutional rule and a vaccine against authoritarian aims/intends like coup d´etats.
"... Last time we were promised someone whose integrity was “beyond question” we got Robert Mueller and a team of Hillary donors investigating a GOP President ..."
Epstein's suicide--while on suicide watch in a prison--is simply too convenient for too many wealthy, politically powerful
people (of both parties) whom he might have implicated. The investigation must be thorough, transparent, and by someone whose
integrity is beyond question.
We won't get a special counsel in a case
like this, but if I had the power to appoint one the choice would be easy: Jack Goldsmith of Harvard Law School. We need a
person of his exceptional ability and integrity to get to the bottom of this and stop the further erosion of trust.
Last time we were promised someone whose
integrity was “beyond question” we got Robert Mueller and a team of Hillary donors investigating a GOP President
"... What hopefully happens now is called "diffusion of responsibility". The AG is suitably "appalled". We find that the dumbest prison guard in the history of New York was rostered on that night. He was called away to the telephone- by what proved to be an overseas telemarketing call. The paper records got jammed in the printer. The supervisor had a flat tire on the way to work. The computer broke down. You know the drill. ..."
What hopefully happens now is called "diffusion of responsibility". The AG is suitably "appalled". We find that the dumbest prison
guard in the history of New York was rostered on that night. He was called away to the telephone- by what proved to be an overseas
telemarketing call. The paper records got jammed in the printer. The supervisor had a flat tire on the way to work. The computer
broke down. You know the drill.
I said "hopefully" because if an investigation discovers a perpetrator, then they will be dead in short order too. You always
remove two links between victim and murderer. That way the crime is impossible to investigate.
What this now means in practical terms is that HRC is free to run again for President.
Epstein may have been lured back to the US with some cover story of a get-out-of-jail fake death -- only the powers that be had
decided to terminate his contract.
"... Malcolm Wallace and LBJ had been closely linked. In the early 50’s, LBJ had gone to great extents to save Wallace’s life after he shot down a professional golfer who was having an affair with LBJ’s alcoholic sister. Although guilty of murder, Wallace ended up with a minor sentence. ..."
"... Interestingly, a Wallace fingerprint was apparently found at the TSBD “Sniper nest” from where Oswald allegedly shot JFK. Probably some insurance taken against LBJ by his co-conspirators… ..."
This reminds me a little of a almost forgotten incident from the 1960s
Some government inspector in Texas had agreed to testify about the details of a gigantic
corruption ring that was closely connected with LBJ. I can't remember the exact details, but
not long afterward, he was found dead, shot seven times.
The local Texas court ruled it an apparent suicide and that's exactly how it was reported
in the Washington Post and the other national newspapers
In 1984, Billie Sol Estes told a grand jury investigating the 1961 shooting death of Henry
Marshall, an official with the Department of Agriculture, that LBJ’s associate Malcolm
Wallace was Marshall’s murderer.
Malcolm Wallace and LBJ had been closely linked. In the early 50’s, LBJ had gone
to great extents to save Wallace’s life after he shot down a professional golfer who
was having an affair with LBJ’s alcoholic sister. Although guilty of murder, Wallace
ended up with a minor sentence.
Interestingly, a Wallace fingerprint was apparently found at the TSBD “Sniper
nest” from where Oswald allegedly shot JFK. Probably some insurance taken against LBJ
by his co-conspirators…
@Iris Shortly before
he died, Estes collaborated with a French journalist on a book called “Le dernier
temoin” (“The Last Witness”) in which Estes claimed that he had
participated in a meeting with LBJ in which the JFK assassination was planned. The book was
published in French (I have a copy), but no English translation has ever appeared.
Revised Profit Data Are Good News But Don't Reverse Decades of Wage Stagnation
By Dean Baker
In July, the U.S. Department of Commerce released data showing GDP growth had slowed
sharply in the second quarter. Most economic reporting appropriately highlighted the data
showing that we were not getting the investment boom that the Republicans had promised would
result from their tax cut.
But there was also an important item in the annual GDP data revisions that many overlooked
in the report: The revised profit data for 2018 showed that the profit share of corporate
income had fallen by 0.4 percentage points from the prior year. This is a big deal for two
reasons: It means that workers are now clearly getting their share of the gains from growth,
and it tells us an important story about the structure of the economy.
On the first point, we know that the wages of the typical worker have not kept pace with
productivity growth over the last four decades. While productivity growth has not been great
over most of this period (1995-2005 was the exception), wages have lagged behind even the
slow productivity growth over most of this period.
The one exception was the years of low unemployment from 1996 to 2001, when the wages of
the typical worker rose in line with productivity growth. With unemployment again falling to
relatively low levels in the last four years, many of us expected that wages would again be
keeping pace with productivity growth.
The earlier data on profits suggested that this might not be the case. It showed a small
increase in the profit share of corporate income, suggesting that corporations were able to
increase their share of income at the expense of labor, even with an unemployment rate below
4 percent.
The revised data indicate this is not the case. The low unemployment rate is creating an
environment in which workers have enough bargaining power to get their share of productivity
gains and even gain back some of the income share lost in the Great Recession.
This brings up the second issue. Most of the upward redistribution over this period was
not from ordinary workers to profits, but rather to high-end workers. The big winners in the
last four decades have been CEOs, hedge fund and private equity partners, and at a somewhat
lower level, highly paid professionals like doctors and dentists.
The shift to profits takes place only in this century after much of the upward
redistribution had already occurred. One obvious explanation was the weak labor market
following the Great Recession. With unemployment remaining stubbornly high, wages were not
keeping pace with productivity growth or even inflation. An alternative explanation was that
growing monopolization of major sectors (think of Google, Facebook and Amazon) was allowing
capital to gain at the expense of labor.
The revised profit data seem to support the first story. In the last four years, the
profit share has fallen by 3.2 percentage points. (It had dropped another percentage point in
the first quarter of 2019, although the quarterly data are highly erratic.) At this rate, in
four more years, the run-up in profit shares in this century will be completely reversed.
If the weak labor market following the Great Recession is the story of the rise in profit
shares, there is still the problem of the run-up in profit share in 2003-2007, the years
preceding the Great Recession. One explanation is that the profits recorded in these years
were inflated by phony profits recorded by the financial sector.
Banks like Citigroup and Bank of America were recording large profits in these years on
loans that subsequently went bad. This would be equivalent to a business booking large
profits on sales to customers that did not exist. Their books would show large profits when
the sales were recorded, but then they would show large losses when the business had to
acknowledge that the customer didn't exist, and therefore write off a previously booked
sale.
Profits that are based on sales to nonexistent customers don't come at the expense of
workers, nor do profits that are booked on loans that go bad. (The subsequent recession was,
of course, very much at the expense of workers.) For this reason, we should be somewhat
skeptical of the shift from wages to profits in the years of the housing bubble.
In any case, the revised profits data are good news. They show a tight labor market is
working the way it is supposed to. But this doesn't mean everyone is doing great. You don't
reverse four decades of wage stagnation with four relatively good years.
However, things are at least moving in the right direction now, and that is good news.
That has not generally been the case over the last 40 years.
The 3 month Treasury interest rate is 2.01%, the 2 year Treasury rate is 1.57, the 5 year
rate is 1.48, while the 10 year is 1.65%. Reply
Wednesday, August 07, 2019 at 04:52 AM
What's at Risk if US Stumbles Into
a Currency War https://nyti.ms/2yKGPC1
NYT - Neil Irwin - August 7
When the United States declared China a currency manipulator on Monday, long-building
trade tensions between the world's two largest economies spread to the combustible realm of
currencies -- with potentially huge consequences for the global financial system should the
escalation continue.
Did China allow the value of the yuan to fall against the dollar simply to allow it to
better match the nation's economic situation, as the country's leaders and many international
economists argue? Or was it, as President Trump contends, an effort to give Chinese exporters
an unfair advantage in trade?
That clash reflects Mr. Trump's rejection of the consensus of global economic
policymakers. That consensus says countries should be free to set monetary policies aimed at
generating sustained growth, even if that causes their currency to depreciate. And they
should be free to manage their exchange rates so long as they keep those rates broadly in
line with their economic fundamentals.
The conflict also reflects the president's singular focus on reducing trade deficits,
which he has argued make the United States a loser in the global trade system. But waging a
currency war could come at a big cost.
"I worry it further undermines the international framework that has supported decades of
faster growth," said Kristin Forbes, an economist at M.I.T. and a former official of the U.S.
Treasury and the Bank of England. "Exchange rates are the shock absorber in the global
economy."
There have been international strains over currency valuations for years, all the more so
in a world in which all the major economies are coping with sluggish growth. But the newest
currency frictions are different.
Up until now, countries have been focused on stimulating their domestic economies. In
particular, central banks have cut interest rates and taken other steps to pump money into
their financial systems. That tends to lower the value of their currency. After all,
investing in a currency with lower interest rates is less attractive, all else equal, than in
one with higher rates.
But the conventional wisdom among international economists is that this doesn't count as
currency manipulation. It's not a game in which one country's win means another must lose.
Lower interest rates should generate more economic activity, which makes the whole world
better off.
The Trump administration has introduced a zero-sum approach to global currency policy --
envisioning a loser for every winner -- that violates the spirit of those rules.
In that sense, the latest moves risk upsetting a relatively stable order, creating
unpredictable ripple effects. When currencies swing wildly, they can pull along the economies
of some of the most powerful nations, such as by crushing entire sectors of the economy that
find themselves uncompetitive after a swing in global exchange rates.
And it could undermine the central role the United States has played in the international
financial system, especially if the accusations of manipulation are followed up with concrete
retaliation to try to artificially depress the value of the dollar.
"The dollar being the primary global currency has enormous benefits for the U.S., but with
the side effect that when the U.S. tries to depreciate, there are limits on how much it can
do that," said Adam Posen, president of the Peterson Institute for International Economics.
"But if the U.S. abuses its privilege too much by bullying, there will eventually be a
switch."
The decision to name China a currency manipulator does not, in and of itself, do much. But
it could be followed up with pressure on the International Monetary Fund and other nations to
make similar findings and lean on the Chinese to adjust their policies. Or it could lead to
direct intervention in foreign exchange markets by the United States Treasury.
This is not the first time President Trump has accused a major trading partner of using
currency policy to mistreat the United States.
He assailed the European Central Bank for moving toward monetary stimulus in June --
complaining on Twitter that the resulting drop in the value of the euro was "making it
unfairly easier for them to compete against the USA."
The European Central Bank explained its stimulus as an effort to keep Europe from sliding
back into recession. When the central bank first undertook its "quantitative easing"
policies, it was with encouragement from the Obama administration, which believed a stronger
European economy was ultimately good for the U.S. economy, despite its effect on
currencies.
Similarly, the Trump administration's decision Monday to name China a currency manipulator
-- for allowing the value of its currency to fall -- does not align with how mainstream
economists view China's move.
With the economy slowing in China, in part because of the trade wars, market forces tend
to push its currency lower. But the People's Bank of China has defended the currency from big
drops, aiming to prevent capital from flowing out of the country or destabilizing the world
economy.
The "manipulation" that took place Monday morning wasn't artificially depressing the
Chinese currency to seize advantage with trade partners, but engaging in less manipulation in
order to allow it to fall closer to its market-determined rate.
There is a more nuanced case to be made against Chinese currency policy -- that it did
intervene for years to push down the value of its currency, ending in the early 2010s, and
that Chinese economic might was built on an unfair practice. But the Trump administration's
announcement focuses on the more recent actions, in which different economic rationales
apply.
There is also a paradox for President Trump. Because of the dollar's unique role as the
global reserve currency, when panic sets in overseas, money tends to flow into United States
Treasury bonds, which are viewed as the safest assets on earth. But that movement tends to
prop up the value of the dollar and push overseas currencies lower.
In other words, the more chaos he injects into the global economy by trying to pressure
China, Europe and others to depreciate their currencies, the more upward pressure there will
be on the dollar, undermining those efforts.
That is potentially the worst of both worlds. When the dollar rises on currency markets
because the United States economy is booming, it may be hard on American export industries,
but at least it takes place in the context of strong growth.
But for the dollar to surge because of a global economic troubles, it means exporters
suffer at the same time that the overall economy is under pressure. A particularly extreme
example of this happened in the fall of 2008, when the United States economy was in free fall
and yet the dollar rose because of the global financial crisis.
A habit of the Trump administration has been to link seemingly unrelated items in its
dealings with other countries -- using tariff threats to try to influence Mexican immigration
policy, for example.
If the Trump administration continues down the path of using currency policy to try to
bludgeon China over trade, technology and national security issues, it will signal a
remarkable expansion into a policy area that has been a source of stability in recent
decades.
"It's dangerous to start a currency war because you don't know where it will end," said
Eric Winograd, chief U.S. economist at AllianceBernstein. "We've seen with the trade war that
it started in one place, and ended up much broader. There's every risk a currency war will do
the same."
No we're talking turkey! "It could undermine the central role the United States has played in
the international financial system." All the talk about hurting consumers and jobs is just
noise that policy elites emit to win support on false pretenses.
The real concern is about the primacy of the dollar and US hegemony. When Krugman
trumpeted 'free' trade with China back in 2000, falsely claiming that US labor would benefit,
his main point was that it was good policy strategically. Krugman was woefully wrong, as
China grew to be a geopolitical rival, not a US client state like Japan or Germany as the
Clintonistas and the foreign policy borg had hoped.
Now there is a real debate about global strategy going on. Trump wants to whack China back
into place, reduce it as a geopolitical threat. The other side is still wedded to the 2000
notion having China follow US global leadership and defending the exorbitant privileges of US
corporations, their banksters, and their profits. Their latest gambit is to raise a
potentially real issue--the primacy of the US dollar.
Folks, it ain't about US jobs and consumer prices, which will be affected at worst only
marginally. What it's really about is the dominance of the empire and its enormous, tax-free
profits overseas.
KIEV (Reuters) - Detectives from Ukraine's state investigation bureau have summoned former
president Petro Poroshenko for questioning, the bureau said on Thursday.
"We confirmed that he will be questioned," a bureau spokesman said. He declined to give a
reason for the questioning, which will take place on July 17. A spokeswoman for Poroshenko had
no comment but said one might be available later.
James, 26 days ago
I am in Ukraine every year and all people know that Poroshenko used the war to make money. He
created companies that were then used by the Government to buy military equipment and
everyone knows this and waited for the opportunity to have him voted out. Most people here
want only to have a stable government that works for the people, but president after
president they put their hope in has only turned out to become wealthy at the expense of the
people.
There is hope that the new president will enact "real" reforms and government
acquisition reform that gives all businesses an fair opportunity to compete for work.
Poroshenko never got rid of the corrupt judicial officials that enabled crooks to keep doing
what they were doing.
James, 26 days ago
One has to wonder which Western/NATO intelligence agency Poroshenko represented. It was not
for the benefit of representing Ukraine or Russia that is for sure.
Bamboo, 26 days ago
Gee. It looks like the USA has lost its puppet regime. Is Joe Biden's son still getting a
piece of the Ukrainian Pie?
Peter, 26 days ago
Here's a question for poroshenko. What happened to the millions the US gave him to help the
people of his country?
THE AMERICANO, 26 days ago
And a very nice arrest warrant will magically appear out of no where IF he shows up.
David, 26 days ago
I'm wondering if poroshenko was smart enough to request an american passport as a part of
compensation for pushing the country into the democracy?
26 days ago
Poroshenko is a failure of the West meddling in another country's affair for the sole purpose
of hurting Russia.
26 days ago
A person who led Ukraine to prosperity, fighter with corruption, liberator from Russia, and
he is being questioned? How come? :-) I hope you get the sarcasm.
"... Tensions were then focused on Syria , where a mercenary army of at least 200,000 men, armed and trained by the US, UK, Israel, France, Turkey, Jordan, Saudi Arabia, Qatar and the United Arab Emirates, almost managed to completely topple the country. ..."
"... As the Americans, British, French and Israelis conducted their bombing missions in Syria, the danger of a deliberate attack on Russian positions always remained, something that would have had devastating consequences for the region and beyond. It is no secret that US military planners have repeatedly argued for a direct conflict with Moscow in a contained regional theater. (Clinton called for the downing of Russian jets over Syria, and former US officials claimed that some Russians had to " pay a little price ".) ..."
"... Trump's dramatic U-turn following his historic meeting with Kim Jong-un (a public relations/photo opportunity) began to paint a fairly comical and unreliable picture of US power, revealing to the world the new US president's strategy. The president threatens to nuke a country, but only as a negotiating tactic to bring his opponent to the negotiating table and thereby clinch a deal. He then presents himself to his domestic audience as the "great" deal-maker. ..."
"... With Iran, the recent target of the US administration, the bargaining method is the same, though with decidedly different results. In the cases of Ukraine and North Korea, the two most powerful lobbies in Washington, the Israeli and Saudi lobbies, have had little to say. Of course the neocons and the arms lobbyists are always gunning for war, but these two powerful state-backed lobbies were notably silent with regard to these countries, less towards Syria obviously. As distinguished political scientist John J. Mearsheimer has repeatedly explained , the Israel and Saudi lobbies have unlimited funds for corrupting Democrats and Republicans in order to push their foreign-policy goals. ..."
"... These two lobbies (together with their neocon allies) have for years been pushing to have a few hundred thousand young Americans sent to Iran to sacrifice themselves for the purposes of destroying Iran and her people. Such geopolitical games are played at the cost of US taxpayers, the lives of their children sent to war, and the lives of the people of the Middle East, who have been devastated by decades of conflict. ..."
"... The reasons vary with each case, and I have previously explained extensively why the possibilities for conflict are unthinkable. With Ukraine, a conflict on European soil between Russia and NATO was unthinkable , bringing to mind the type of devastation that was seen during the Second World War. Good sense prevailed, and even NATO somewhat refused to fully arm the Ukrainian army with weapons that would have given them an overwhelming advantage over the Donbass militias. ..."
"... In Syria, any involvement with ground troops would have been collective suicide, given the overwhelming air power deployed in the country by Russia. Recall that since the Second World War, the US has never fought a war in an airspace that was seriously contested (in Vietnam, US air losses were only elevated because of Sino-Soviet help), allowing for ground troops to receive air cover and protection . A ground assault in Syria would have therefore been catastrophic without the requisite control of Syria's skies. ..."
"... Because a war with Iran would be difficult to de-escalate, we can conclude that the possibility of war being waged against the country is unlikely if not impossible. The level of damage the belligerents would inflict on each other would make any diplomatic resolution of the conflict difficult. While the powerful Israeli and Saudi lobbies in the US may be beating the war drums, an indication of what would happen if war followed can be seen in Yemen. Egypt and the UAE were forced to withdraw from the coalition fighting the Houthis after the UAE suffered considerable damage from legitimate retaliatory missile strikes from the Yemen's Army Missile Forces. ..."
"... An open war against Iran continues to be a red line that the ruling financial elites in the US, Israelis and Saudis don't want to cross, having so much at stake. ..."
"... With an election looming, Trump cannot risk triggering a new conflict and betraying one of his most important electoral promises. The Western elite does not seem to have any intention of destroying the petrodollar-based world economy with which it generates its own profits and controls global finance. ..."
"... Even if we consider the possibility of Netanyahu and Bin Salman being mentally unstable, someone within the royal palace in Riyadh or the government in Tel Aviv would have counseled them on the political and personal consequences of an attack on Iran. ..."
In 2014 we were almost at the point of no return in Ukraine following the coup d'etat supported and funded by NATO and involving
extremist right-wing Ukrainian nationalists. The conflict in the Donbass risked escalating into a conflict between NATO and the Russian
Federation, every day in the summer and autumn of 2014 threatening to be doomsday. Rather than respond to the understandable impulse
to send Russian troops into Ukraine to defend the population of Donbass, Putin had the presense of mind to pursue the less direct
and more sensible strategy of supporting the material capacity of the residents of Donbass to resist the depredations of the Ukrainian
army and their neo-Nazi Banderite thugs. Meanwhile, Europe's inept leaders initially egged on Ukraine's destabilization, only to
get cold feet after reflecting on the possibility of having a conflict between Moscow and Washington fought on European soil.
With the resistance in Donbass managing to successfully hold back Ukrainian assaults, the conflict began to freeze, almost to
the point of a complete ceasefire, even as Ukrainian provocations continue to this day.
Tensions were then focused on Syria , where a mercenary army of at least 200,000 men, armed and trained by the US, UK, Israel,
France, Turkey, Jordan, Saudi Arabia, Qatar and the United Arab Emirates, almost managed to completely topple the country. Russian
intervention in 2015 managed to save the country with no time to spare, destroying large numbers of terrorists and reorganizing the
Syrian armed forces and training and equipping them with the necessary means to beat back the jihadi waves. The Russians also ensured
control of the skies through their network of Pantsir-S1, Pantsir-S2, S-300 and S-400 air-defence systems, together with their
impressive jamming (Krasukha-4), command and control
information management system (Strelets C4ISR System) and electronic-warfare technologies (1RL257 Krasukha-4).
As the Americans, British, French and Israelis conducted their bombing missions in Syria, the danger of a deliberate attack
on Russian positions always remained, something that would have had devastating consequences for the region and beyond. It is no
secret that US military planners have repeatedly argued for a direct conflict with Moscow in a contained regional theater. (Clinton
called
for the downing of Russian jets over Syria, and former US officials claimed that some Russians had to "
pay a little price ".)
Since Trump became president, the rhetoric of war has soared considerably, even as the awareness remains that any new conflict
would sink Trump's chances of re-election. Despite this, Trump's bombings in Syria were real and potentially very harmful to the
Syrian state. Nevertheless, they were
foiled by Russia's electronic-warfare capability, which was able to send veering away from their intended target more than 70%
of the latest-generation missiles launched by the British, French, Americans and Israelis.
One of the most terrifying moments for the future of humanity came a few months later when Trump started hurling threats and abuses
at Kim Jong-un , threatening to reduce Pyongyang to ashes. Trump, moreover, delivered his fiery threats in a speech at the United
Nations General Assembly.
Trump's dramatic U-turn following his historic meeting with Kim Jong-un (a public relations/photo opportunity) began to paint
a fairly comical and unreliable picture of US power, revealing to the world the new US president's strategy. The president threatens
to nuke a country, but only as a negotiating tactic to bring his opponent to the negotiating table and thereby clinch a deal. He
then presents himself to his domestic audience as the "great" deal-maker.
With Iran, the recent target of the US administration, the bargaining method is the same, though with decidedly different
results. In the cases of Ukraine and North Korea, the two most powerful lobbies in Washington, the Israeli and Saudi lobbies, have
had little to say. Of course the neocons and the arms lobbyists are always gunning for war, but these two powerful state-backed lobbies
were notably silent with regard to these countries, less towards Syria obviously. As distinguished political scientist John J. Mearsheimer
has repeatedly explained , the Israel and Saudi lobbies
have unlimited funds for corrupting Democrats and Republicans in order to push their foreign-policy goals.
The difference between the case of Iran and the aforementioned cases of Ukraine, Syria and North Korea is precisely the direct
involvement of these two lobbies in the decision-making process underway in the US.
These two lobbies (together with their neocon allies) have for years been pushing to have a few hundred thousand young Americans
sent to Iran to sacrifice themselves for the purposes of destroying Iran and her people. Such geopolitical games are played at the
cost of US taxpayers, the lives of their children sent to war, and the lives of the people of the Middle East, who have been devastated
by decades of conflict.
What readers can be assured of is that in the cases of Ukraine, Syria, North Korea and Iran, the US is unable to militarily impose
its geopolitical or economic will.
The reasons vary with each case, and I have previously explained
extensively
why the possibilities for conflict are unthinkable. With Ukraine, a conflict on European soil between Russia and NATO was
unthinkable
, bringing to mind the type of devastation that was seen during the Second World War. Good sense prevailed, and even NATO
somewhat refused
to fully arm the Ukrainian army with weapons that would have given them an overwhelming advantage over the Donbass militias.
In Syria, any involvement with ground troops would have been collective suicide, given the overwhelming air power deployed
in the country by Russia. Recall that since the Second World War, the US has never fought a war in an airspace that was seriously
contested (in Vietnam, US air losses were only elevated because of Sino-Soviet help), allowing for ground troops to receive air cover
and protection . A ground assault in Syria would have therefore been catastrophic without the requisite control of Syria's skies.
In North Korea, the country's tactical and strategic nuclear and conventional deterrence discourages any missile attack. Any overland
attack is out of the question, given the high number of active as well as reserve personnel in the DPRK army. If the US struggled
to control a completely defeated Iraq in 2003, how much more difficult would be to deal with a country with a resilient population
that is indisposed to bowing to the US? The 2003 Iraq campaign would really be a "cakewalk" in comparison. Another reason why a missile
attack on North Korea is impossible is because of the conventional power that Pyongyang possesses in the form of tens of thousands
of missiles and artillery pieces that could easily reduce Seoul to rubble in a matter of minutes. This would then lead to a war between
the US and the DPRK being fought on the Korean Peninsula. Moon Jae-in, like Merkel and Sarkozy in the case of Ukraine, did everything
in his power to prevent such a devastating conflict.
Concerning tensions between the US and Iran and the resulting threats of war, these should be taken as bluster and bluff. America's
European allies are heavily involved in Iran and depend on the Middle East for their oil and gas imports. A US war against Iran would
have devastating consequences for the world economy, with the Europeans seeing their imports halved or reduced. As Professor Chossudovsky
of the strategic think tank Global Research has so ably
argued , an attack on Iran is unsustainable, as the oil sectors of the UAE and Saudi Arabia would be hit and shut down. Exports
would instantly end after the pipelines going West are bombed by the Houthis and the Strait of Hormuz closed. The economies of these
two countries would implode and their ruling class wiped out by internal revolts. The state of Israel as well as US bases in the
region would see themselves overwhelmed with missiles coming from Syria, Lebanon, the Golan Heights and Iran. The Tel Aviv government
would last a few hours before capitulating under the pressure of its own citizens, who, like the Europeans, are unused to suffering
war at home.
Because a war with Iran would be difficult to de-escalate, we can conclude that the possibility of war being waged against
the country is unlikely if not impossible. The level of damage the belligerents would inflict on each other would make any diplomatic
resolution of the conflict difficult. While the powerful Israeli and Saudi lobbies in the US may be beating the war drums, an indication
of what would happen if war followed can be seen in Yemen. Egypt and the UAE were forced to
withdraw from the
coalition fighting the Houthis after the UAE suffered considerable
damage from legitimate retaliatory missile strikes from the Yemen's Army Missile Forces.
An open war against Iran continues to be a red line that the ruling financial elites in the US, Israelis and Saudis don't
want to cross, having so much at stake.
With an election looming, Trump cannot risk triggering a new conflict and betraying one of his most important electoral promises.
The Western elite does not seem to have any intention of destroying the petrodollar-based world economy with which it generates its
own profits and controls global finance. And finally, US military planners do not intend to suffer a humiliating defeat in Iran
that would reveal the extent to which US military power is based on propaganda built over the years through Hollywood movies and
wars successfully executed against relatively defenceless countries. Even if we consider the possibility of Netanyahu and Bin
Salman being mentally unstable, someone within the royal palace in Riyadh or the government in Tel Aviv would have counseled them
on the political and personal consequences of an attack on Iran.
It is telling that Washington, London, Tel Aviv and Riyadh have to resort to numerous but ultimately useless
provocations against Iran, as they
can only rely on hybrid attacks in order to economically isolate it from the rest of the world.
Paradoxically, this strategy has had devastating consequences for the role of the US dollar as a reserve currency together with
the SWIFT system. In today's multipolar environment, acting in such an imperious manner leads to the acceleration of de-dollarization
as a way of circumventing sanctions and bans imposed by the US.
A reserve currency is used to facilitate transactions. If the disadvantages come to exceed the benefits, it will progressively
be used less and less, until it is replaced by a basket of currencies that more closely reflect the multipolar geopolitical reality.
The warmongers in Washington are exasperated by their continuing inability to curb the resilience and resistance of the people
in Venezuela, Iran, Syria, North Korea and Donbass, countries and regions understood by the healthy part of the globe as representing
the axis of resistance to US Imperialism.
America must always threaten someone with war. Syria, Iran, Venezuela, China, Russia, so many to choose from.
Conflicts must never be resolved; they must always kept simmering, so a hot war can be triggered quickly. All Presidents are
turned in the first three months after sworn in.
It's what happens as empires mature. Governance becomes bloated, corrupt and inept (often leading to wars). Maturity time has
become significantly reduced due to the rate of information technology advance. America is five years away from going insolvent
according to most models and forecasts. All new debt after 2024 will be used to pay the interest on existing debts and liabilities.
There is simply no stopping it. The US already pays close to 500 billion in annual interest on debts and liabilities. Factor in
a 600 billion or 700 billion dollar annual military budget, and unrestrained deficit spending clocking in at over a trillion,
and, well, it isn't going to work for long. Considering most new well paying jobs are government jobs... The end is either full
socialism / fascism (folks still don't get how similar these are), a currency crisis and panic, depression and institutional deterioration.
The only good news to libertarians I guess - if you can call it good - is that the blotted government along with the crony corporations
will mostly and eventually collapse. Libertarian governance might not be a choice by an electorate, it might simply become fact
in the aftermath.
I guess Trump eventually will understand this lesson in politics that friendship, mutual respect and helping each other accomplishes
way way more then threatening countries to be bombed back into the stoneage.
Noone likes to do a cutthroat deal enforced upon them by thuggery. Trump's got to learn that you can't run politics like you do
your bussinesses, it's not working unles that was his plan all this time, to destroy America.
"The Israel and Saudi lobbies have unlimited funds for corrupting Democrats and Republicans in order to push their foreign-policy
goals.
These two lobbies (together with their neocon allies) have for years been pushing to have a few hundred thousand young Americans
sent to Iran to sacrifice themselves for the purposes of destroying Iran and her people. Such geopolitical games are played at
the cost of US taxpayers, the lives of their children sent to war, and the lives of the people of the Middle East, who have been
devastated by decades of conflict."
America is increasingly looking like Ancient Rome towards the end. It is overstretched, nearly insolvent, fewer allies want
to be allies, it's population is sick, physically and mentally. Obesity, diabetes, drug use/addiction make it impossible for the
Pentagon to meet recruitment goal. Mental illness causes daily mass killing. The education system is so broken/broke that there
is little real education being done. Americans are among the most ignorant, least educated and least educate-able people in the
developed world.
Militarily, the USA can bomb but that's about it... defeats upon defeats over the past two decades demonstrate the US military
is a paper tiger of astonishing incompetence.
Boeing can't make planes anymore. Lockheed is not much better. Parts of the F-35 are made by Chinese subsidiaries. The most
recently built aircraft carrier cannot launch fighter jets.
Recent estimates indicate that more than 550,000 people experience homelessness in the US on any given night, with about two-thirds
ending up in emergency shelters or transitional housing programs, and one-third finding their way to unsheltered locations like
parks, vehicles, and metro stations. According to the Urban Institute, about 25% of homeless people have jobs.
I find that it is difficult for me to wrap my head around pain and suffering on such an immense scale. Americans often think
of the homeless as drug-addicted men that don't want to work, but the truth is that about a quarter of the homeless population
is made up of children.
Seriously, why would Iran want to hijack a German ship? Iran took the UK one in retaliation for the Brits seizing the one at
Gibraltar. Had that not happened, no Brit ships in the Persian Gulf would have been touched. This is all a carefully engineered
USA provocation designed to, inter alia, increase tension in the Persian Gulf, put more nails in coffin of JCPOA...and most importantly
give UK an excuse, as remaining signatory, to call for the original UN sanctions on Iran to be snapped-back.
Federico, let me explain it simply: the U.S. is allied with Israel, and Iran hates Israel. Why, I don't know (nor do I care),
but that's why the U.S. needs to keep Iran in check.
Yet CONGRESS just passed the largest defense bill in history. The WAR industry is bankrupting us financially spiritually and
morally.
A war is coming. But upon whom this time (or STILL?), because with President Bolton and Vice President Adelson in power, China
Iran or Russia or maybe all three, are open options.
Interview with a Russian I saw 2 years ago "USA wants to create local conflicts on foreign shores, ...on our borders, we will
not allow that to happen and make the war international" I will translate: Russia will not be pulled in to some stupid small war
draining their resources while the US sits comfortable, they will throw their missiles around - no escape from nuclear winter.
If spending has reached the limit now, during peacetime....what will happen during a protracted war? Even if it stays conventional,
it would appear that a huge war effort, comparable to WWII, just won't be possible. The US seems to be in a pre-war Britain position,
but there isn't a friendly giant across the water to bail them out with both cash and resources.
Either things become insane in fairly short order, or wiser heads will prevail and the US will step back from the brink. Do
we have any wiser heads at the moment?
I keep seeing John Bolton's moustache, Andi am not filled with confidence.
the upwardly-mobile are the voice for those left behind. do you see how the caste system
works in India?
4 castes! same thing in US. we have 4 castes.
1. we have billionaires,
2. then we have the multi-millionaires those who have more than 50 million dollars per
household but not as much as 1 billion,
3. then we have the millionaires who have more than 1 million dollars but not 50 million
dollars
4. then we have everyone else, the poor, We the People if you like, We the 89%,
how can we prevent upward Mobility?
Ahh! Very simple! all we have to do is tax people back down to their own level; in other
words, if we can simply tax the Billionaire's at a rate which is equal to 2% of the net worth
each year, but tax poor people at a rate of 7% of their net worth each year then we can
prevent upward Mobility. do you see how easy that is?
whoops we don't even have to do that. according to Elizabeth Warren we are doing that
already. we can relax now.
was Joe Biden presiding over the Senate when all that ground work was being done on the
tax code so that we don't have to do any of that anymore? well bless his bones! senile as he
is, he was right there with it when we needed him the most.
Excellent article, I agree.
As regards clear language and definitions, I much prefer Michael Hudson's insistence that, to
the liberal economists, free markets were markets free from rent seeking, while to the
neoliberals free markets are free from government regulation.
"As governments were democratized, especially in the United States, liberals came to endorse
a policy of active public welfare spending and hence government intervention, especially on
behalf of the poor and disadvantaged. neoliberalism sought to restore the centralized
aristocratic and oligarchic rentier control of domestic politics." http://michael-hudson.com/2014/01/l-is-for-land/
– "Liberal"
"... US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism, as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it." ..."
"... Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. ..."
"... IMO, China can continue to refuse and stand up for its principles, while the world looks on and nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner. ..."
"... It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning. ..."
"... Russia's a target too, but most of its available loot was already grabbed during the 1990s. ..."
"... I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance hegemony and fiat money. ..."
"... The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates what you think Trump's trying to accomplish. Hudson has explained it all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it to exert control/hegemony on all aspects of political-economy. ..."
"... Trump hasn't proposed any new policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate Ship out to plunder all and sundry, including those that elected him. ..."
I will mention this again, to see what people here think, as they are intelligent people. I sent mails to Russian and Chinese
authorities about this.
"I will provide you with possible reasons behind the current trade wars and rejection of globalisation by the US. In short,
they think that they will save their hegemony, to a certain degree, that way.
There are long term GDP Growth and Socioeconomic Scenarios developed by the Intergovernmental Panel on Climate Change, the
OECD, and the world scientific community. They are generally used to measure the impact of Climate change on the World. In order
to measure it, Socioeconomic Scenarios were developed, as the level of economic growth in the world is very important for determining
the impact of Climate Change in the future. High growth levels will obviously affect Climate Change, so these GDP estimates are
important. The scenarios are with time horizon 2100.
For more on this you can check these studies here, some of the many dealing with this topic. They describe the scenarios for
the world.
There are 5 main scenarios, or "Shared Socioeconomic Pathways". All of them describe different worlds.
SSP 1 - Green World, economic cooperation, reduced inequality, good education systems. High level of economic growth, fast
catch up of the developing world with the developed world. High level of multipolarity.
SSP 2 - More of the same/ Muddling through - continuation of the current trends. Relatively high level of economic growth,
relatively fast catch up of the developing world with the developed world. Good level of multipolarity.
SSP 3 - Regional Rivalry - nationalisms, trade wars, lack of global cooperation, fragmentation of the word, environmental
degradation. Low levels of economic growth everywhere, the developing world remains poor and undeveloped. Low level of multipolarity,
West retains many positions.
SSP 4 Inequality - depicts a world where high-income countries use technological advances to stimulate economic growth;
leading to a high capacity to mitigate. In contrast, developments in low income countries are hampered by very low education
levels and international barriers to trade. Growth is medium, the catch up process between the developing world and the developed
world is not fast. Medium level of multipolarity.
SSP 5 Economic growth and fossil fuels take priority over green world - High levels of economic growth, fast catch up of
the developing world with the developed world. High level of multipolarity.
See SSP 3. A world of rivalry, trade wars, trade barriers, lack of global cooperation, and fragmentation, will lead to lower
level of growth in the developing world, and thus a slow catch up process. Multipolarity in such a world is weak as the developing
world is hampered.
In other words, a world of cooperation between countries will lead to higher economic growth in the developing world, faster
catch up process, and thus stronger multipolarity.
Low cooperation, fragmented world, high conflict scenarios consistently lead to low growth in the developing world and thus
to the US and the West retaining some of its positions - a world with overall bad economy and low level of multipolarity.
Basically, globalisation is key. The developing world (ex West) was growing slowly before globalisation (before 1990). Globalisation
means sharing of technology and knowledge, and companies investing in poorer countries. Outsourcing of western manufacturing.
Etc. After globalisation started in 1990, the developing world is growing very well. It is globalisation that is weakening the
relative power of the West and empowering the developing world. The US now needs to kill globalisation if it is to stop its relative
decline.
So what do we see: exactly attempts to create the SSP 3 scenario. Trade wars, sanctions, attacks on multilateral institutions
- the WTO, on international law, on the Paris Climate Change Agreement (which if accepted would put constraints on the US economy),
on the UN, bullying of Europe, lack of care for european energy needs, support for Brexit (which weakens Europe), crack down on
chinese students and scientists in the US, crack down on chinese access to western science data, demands to remove the perks for
poor countries in the WTO, etc. This is hitting economic growth in the whole world and the global economy currently is not well.
By destroying the world economy, the US benefits as it hampers the rise of the developing nations.
US President Trump does not do that in order to dismantle the dollar or US hegemony because of so called isolationism,
as some may think. Trump does that in order to save US hegemony, implementing policies, in my opinion, devised by the US military/intelligence/science
community. They now want to hamper globalisation and create fortress US, in order to bring back manufacturing and save as much
as possible of the US Empire. Chaos and lack of cooperation in the world benefit the US. They now realise globalisation no longer
serves the US as it leads to the rise of developing nations. Thus they no longer support it and even sabotage it."
You ask, "The concept of multilateralism is not completely clear to me in relation to the global public/private finance issue
and I am not of faith but of questions...."
"In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal."
The key point for the Chinese during negotiations as I understand them via their published White Paper on the subject is
development and the international rules put in place at WTO for nations placed into the Developing category, which
get some preferential treatment to help their economies mature. As China often reminds the global public--and officials of the
Outlaw US Empire--both the BRI and EAEU projects are about developing the economies of developing economies, that the process
is designed to be a Win-Win for all the developing economies involved. This of course differs vastly from what's known as the
Washington Consensus, where all developing economies kowtow to the Outlaw US Empire's diktat via the World Bank and IMF and thus
become enslaved by dollar dependency/debt. Much is written about the true nature of the Washington Consensus, Perkins Confessions
of an Economic Hit Man and Klein's Disaster Capitalism being two of the more recent and devastating, and many nations
are able to attest to the Zero-sum results. The result is very few nations are willing to subject their economies to the pillaging
via Washington Consensus institutions, which Hudson just recently reviewed.
The Empire is desperate and is looking for ways to keep its Super Imperialism intact and thus continue its policy aimed at
Full Spectrum Dominance. But the Empire's abuse of the dollar-centric institutions of international commerce has only served to
alienate its users who are openly and actively seeking to form parallel institutions under genuine multilateral control.
However as Hudson illustrates, Trump doesn't know what he's doing regarding his trade and international monetary policies. Today's
AP above the fold headline in Eugene's The Register Guard screamed "Trump threatens 10% tariffs;" but unusually for such
stories, it explains that the 10% is essentially a tax on US consumers, not on Chinese companies, which provides a message opposite
of the one Trump wants to impart--that he's being tough on the Chinese when the opposite's true. China will continue to resist
the attempts to allow the international financial sharks to swim in Chinese waters as China is well aware of what they'll attempt
to accomplish--and it's far easier to keep them out than to get them out once allowed in, although China's anti-corruption laws
ought to scare the hell out of the CEOs of those corps.
The Empire wants to continue its longstanding Open Door policy in the realm of target nations opening their economies to the
full force of Imperial-based corps so they can use their financial might to wrestle the market from domestic players and institute
their Oligopoly. China already experienced the initial Open Door (which was aimed at getting Uncle Sam's share of China during
the Unequal Treaties period 115 years ago) and will not allow that to recur. China invokes its right under WTO rules for developing
economies to protect their financial services sector from predation; the Empire argues China is beyond a developing economy and
must drop its shields. We've read what Hudson advised the Chinese to do--resist and develop a publicly-based yuan-centered financial
system that highly taxes privatized rent-seekers while keeping and enhancing state-provided insurance--health, home, auto, life,
etc--while keeping restrictions on foreign land ownership since it's jot allowed to purchase similar assets within the domestic
US market.
The Outlaw US Empire insists that China give so it can take. Understandably, China says no; what we allow you to do, you should
allow us to do. Trump and his trade negotiators continue to insist on China agreeing to an unequal trade treaty. Obviously,
the latest proposal was merely a repetition of what came before and was rejected as soon as the meeting got underway, so it ended
as quickly as it started. IMO, China can continue to refuse and stand up for its principles, while the world looks on and
nods its head in agreement with China as revealed by the increasing desire of nations to become a BRI partner.
It should be noted that Trump's approach while differing from the one pushed by Obama/Kerry/Clinton the goal is the same
since the Empire needs the infusion of loot from China to keep its financial dollarized Ponzi Scheme functioning.
Russia's a target too, but most of its available loot was already grabbed during the 1990s. D-Party Establishment
candidates have yet to let it be known they'll try to do what Trump's failing to do, which of course has nothing to do with aiding
the US consumer and everything to do with bolstering Wall Street's Ponzi Scheme.
Good comment, karlof1 , i think that the attack against China is attack against the heart of multipolarity. It will be good
if b could post about the escalation of the trade war. This is important. The US clearly intends to resist multipoarity, and tries
to stop it.
If I would have had my act together last night I would have posted another link fro Xinhuanet (can't find now) about how
China wants to retain developing nation status and provides as data that the (I think) per capita GDP had gone down....gotten
worse in relation to the US per capita GDP.
I keep going back to believing that multilateralism is a code word for no longer allowing empire global private finance
hegemony and fiat money.
Passer by @30--
The continuing practice of Neoliberalism by the Outlaw US Empire and its associated corporations and vassal nations checkmates
what you think Trump's trying to accomplish. Hudson has explained it
all very well in a series of recent papers and interviews: Neoliberalism is all about growing Financial Capitalism and using it
to exert control/hegemony on all aspects of political-economy.
Thus, there's no need to sponsor the reindustrialization that would lead to MAGA. Indeed, Trump hasn't proposed any new
policy to accomplish his MAGA pledge other than engaging in economic warfare with most other nations. His is a Unilateral Pirate
Ship out to plunder all and sundry, including those that elected him.
In your outline, it's very easy to see why BRI is so attractive to other nations as it forwards SSP1. Awhile ago during a discussion
of China's development goals, I posted links to its program that's very ambitious and doing very well with its implementation,
the main introduction portal
being here .
psychohistorian @11 asked: "The concept of multilateralism is not completely clear to me in relation to the global public/private
finance issue and I am not of faith but of questions...."
karlof1 @31 covered it pretty well I think, but I want to try to answer in just a couple sentences (unusual for me).
Global private finance is driven by one thing and one thing only: making maximum profits for the owners quarter by financial
quarter. Global public finance is driven by the agendas of the nations with the public finance, with profits being a secondary
or lesser issue.
This boils down to private finance being forever slave to the mindless whims of "The Market™" (hallowed be Its name),
while public finance is, by its nature, something that is planned and deliberated. Nobody can guess where "The Market™"
(hallowed be Its name) will lead society, though people with the resources like placing bets in stock markets on the direction
It is taking us. On the other hand, if people have an idea which direction society should be heading in, public control
over finance is a precondition to making it so.
"The continuing practice of Neoliberalism by the Outlaw US Empire"
I'm not sure this will be the case anymore -
Former heads of DHS and NSA explain how the U.S. can keep Huawei at bay
"Perhaps more importantly, this proposal demonstrates one way the U.S. can reinforce elements of what the government calls
the “national technology and industrial base” (NTIB), the collection of companies who design, build and supply the U.S. with vital
national-security related technologies."
President Donald Trump's threat Thursday to put 10% tariffs on the remaining $300 billion of Chinese imports that aren't subject
to his existing levies
sent markets tumbling from Asia to Europe and in the U.S. on Friday. The new tax would hit American consumers, and businesses
are going to face even more
supply disruptions . China has already vowed to retaliate if Trump follows through.
Bloomberg Economics ' initial estimate of the
additional costs of U.S. tariffs and Chinese retaliation sees both economies taking a 0.2% hit to GDP by 2021.
Meanwhile, a simmering trade fight between Japan and South Korea
is boiling over , putting the health of two Asian export powers at stake. In Europe, concerns are mounting for a
hard U.K. exit from the European Union.
The week ended with fresh numbers out of Washington that show
U.S. trade actually declined during the first
six months of the year as exports flattened out.
I think that 10 years from now the biggest impact from Trump will be from his cancellation
of the Iran nuclear accord and unilateral imposition of strict sanctions which the Europeans
were not able to bypass in any meaningful way due the prevalence of the US dollar in global
transactions.
There is now significant motivation in Europe and even China in creating a real
alternative to the US dollar for international transactions which bypasses US banks. If this
happens to any significant degree, it would undercut the US dollar as the world's reserve
currency, resulting in a permanent drop in its value.
Without international support, US Government deficits and trade deficits will become
unsustainable, and there will be a significant drop in the American median standard of
living.
Hongkong is no longer of great importance for bejing as a financial and trading locus. up and
down the south china sea coast are many cities of far greater importance than Hongkong.
perhaps when the PLA finish in hongkong they can come over here and deal with antifa since
our government at any level does not appear to have the sense or spine to do it
themselves
Some of the other stuff we've encouraged, such as The EU, ETFs, Hi-Frequency Trading, Neil
Woodford and Deutsche Bank look likely to be highly effective vectors of short-term economic
destruction and destabilization
(Edited version of the speech given by the TJ Wormwood, Chief Demonic Officer –
Finance, Lord of 3rd Ring of the 7th Circle, to invited audience at Davos.)
Dear Colleagues,
As you all know, I've been wrecking finance for millennia. [Pause for effect]
Nearly every major big idea, evolutionary leap forward, invention and discovery has improved
the miserable lot of mankind only through their ability to monetise it. Forget the theft of
fire – being able to monetise fire by attracting pretty and willing mates around a warm
campfire, or cooking the food others have hunted, is what mattered. Strip out the noise, and
the rise of mankind is largely due to improvements in the efficiency and ease of means of
exchange.
From the realisation hunters could barter their furs for other goods, to the rise of complex
products to finance global growth – the innovation of financial markets has been a major
driver of success for the Other Side in raising the wellbeing and prosperity of mankind. Pretty
much anything that holds back or disrupts trade, increases costs and holds back services is
naturally positive for our goal of global destabilisation.
So, here is the big plan:
Since 2007 we've been turning the Other Side's successful innovation of financial markets
against them. Global Financial Markets are incredibly rich in opportunities to distort truth,
hide lies, and undermine mankind – generating immediate greed, envy, suspicion and anger.
We've uncovered previously unimaginable ways in which to financially screw the World with
consequences that impact everyone.
We've overlaid the programme with our mastery and understanding of temptation, human greed,
avarice and pride, while adding subtlety and cunning. We merely suggest and advise. We are
facilitating the train-wreck of the global economy by destroying asset values while confounding
their understanding of money and wealth – the pillars of their society.
At its simplest form we are manipulating and driving constant market instability to keep
mankind distracted. Uncertainty clouds their future expectations – so we keep it raining.
A Mortgage crisis one year, followed by a Sovereign Debt crisis the next, spiced with a couple
of bank failures, and threats of global trade war. Overlay with confusion and distraction such
as social media, fake news, Bitcoin and populism, and it all works rather well.
Keep their leaders arguing. Keep the blame game going.
Our success can be seen in current financial asset prices. These are now hopelessly inflated
and distorted by foolish post financial crisis policy decisions. They are bubbles set to pop.
Empower the regulators and bureaucrats to compromise finance through zealous over-regulation,
making banking safer by destroying it. Usher in a new era of trade protectionism, the end of
Free Trade and increase the suspicion some countries are manipulating their currencies for
economic advantage. Sprinkle some dust of political catastrophe, the collapse of law, undo the
fair, just and caring society, while adding some eye of newt and complex environmental threats.
Make the rich so rich they don't notice, and the poor so poor they become invisible. If the
markets remain uncertain, then it distracts mankind from addressing these issues, making
society less stable!
There as some things we're really proud of, including the Euro, Social Media, Investment
Banks, the Tech Boom, and especially Quantitative Easing (which is still delivering confusion
and pain). New Monetary Theory could prove even better – it shows tremendous potential to
thoroughly unsettle confidence in money. Cybercurrencies are particularly fun – despite
coming up with the idea, neither we, nor even the distinguished members of our panel of eternal
guests, understand the why of them. They are libertarian nonsense – so, naturally we
continue to encourage them as get-rich-quick schemes, but they also further undermine
confidence in money and government. We made something up in a bar one night and called it a
Distributed Ledger - the humans ran with it and invented Blockchain, whatever that might
be..
Some of the other stuff we've encouraged, such as The EU, ETFs, Hi-Frequency Trading, Neil
Woodford and Deutsche Bank look likely to be highly effective vectors of short-term economic
destruction and destabilisation, triggering systemic market events and regulatory backlashes
across markets. We are only now exploring the full potential of market illiquidity to rob
billions of pensioners of their savings.
We've persuaded investors to overturn proven tried and tested investment strategies and
wisdoms, nurturing a whole range of overpriced unprofitable US Tech "Unicorn" companies which
we are confident will prove utterly over-hyped and largely worthless. The success of social
media, data mining and new tech has increased levels of dissatisfaction and envy –
especially in our target younger demography.
The way we successfully pinned the blame on banks for the Global Financial Crisis –
despite the fact it was people who wanted mortgages to buy houses and fast cars - ensured
global regulators would over-react. We've allowed regulators to focus on banks while we target
the next financial crisis in other parts of the financial ecosystem.
Regulators forced the banks to de-risk. But risk does not disappear - it just goes somewhere
else. While banks understood risk and had massive staffs to manage risk, risk is now
concentrated in the hands of "investment managers" who are singularly ill-equipped to withstand
the next credit crunch and global recession, (which we've planned for next October – Save
the Date cards have been sent).
We are particularly pleased that many banks now exceed the 2.3 compliance officers for every
profitable banker ratio. Compliance and regulatory costs now exceed 10% of income at some
European banks – a stunning success and substantially decreasing the efficiency of
banking and exchanges.
We've some great new financial ideas we are still experimenting with, some of which show
great promise for further weakening society. Facebook Money is going to be a cracker, and I
particularly like the Spaceship to Mars project if only they knew what awaits them
By hiding inflation in the stock market, we assisted the accumulation of massive wealth by a
tiny percentage of the population to ferment income inequality dissatisfaction. When capital is
concentrated and the workers under the cosh, it creates all the right conditions for weak
disjointed government to aid and abet the rise of destabilising populism.
It's highly satisfying to watch the instability we've created in financial markets drive
fear and distrust across society. The debt crisis we engineered led to global financial
austerity, job insecurity, and rising inequality. We were surprised how easily we pushed the
Gig economy concept to further exploit and cow workers through regulators and authorities
– they barely noticed. Over this we've layered whole new levels of anxiety such as the
unknowns of data theft, the rise in envy coefficients through social media, fake news while
fuelling social distrust through resentment.
We've managed to persuade Governments to follow damaging and contradictory policies. As
society reeled in the wake of the financial crisis, we persuaded policy makers to cut back
spending through "austerity" spending programmes, simultaneously bailing out bankers while
flooding the financial economy with free money through Quantitative Easing.
Effectively we've split the world into two economies. A real economy which is sad, miserable
and deflating, and a financial economy that's insanely optimistic, massively inflated and ripe
to pop on the back of free money.
The resentment, instability, fear and general sense of decay has paid dividends in our drive
to break society by undermining the credibility of the political classes. Our approach to
politics has been simple – deskill the political classes, reduce their effectiveness as
leaders, while engineering economic, social and financial instability to drive rampaging
populist politics – just like in 1932! Populism may ultimately prove short-lived, but
it's difficult to see how the political classes will recover their power in time to reverse the
damages being done to the global environment.
While markets have burned, society become increasingly riven, and politics has failed, we've
distracted the humans from the rising levels of carbon dioxide in the atmosphere which
threatens to create global warming and rising sea levels, while plastics poison the oceans and
soil erosion threatens agriculture.
Now I love the ravenous hunger and sharp pointy teeth of polar bears as much as the next
demon, but needs must... needs must. I was also rather fond of the dinosaurs...
Our approach to ensuring destructive climate change has proved very effective. We've
supported, financed and advised the loudest green lobbies to ensure their message looks
ill-considered, wrong and economic suicide. We also paid big bucks to fund the loudest climate
change deniers. Our innovation of fake news to discredit and mitigate anything positive means
climate change remains a crank topic – even as our polar bears drown.
Meanwhile, through our dominance of global boardrooms and investment firms, we've made sure
that large corporates have bought-out and stifled new technologies that could solve the
environmental crisis.
Our future looks great – because their future is bleak!
Most states lean heavily on lower-income families. An Illinois referendum is a step toward
correcting the problem.
Economic inequality is on the rise in Illinois, and the state government is part of the
problem. Illinois taxes low-income families at much higher rates than high-income families,
asking the most of those who have the least.
Low-income households in Illinois pay about 14 cents in state and local taxes from every
dollar of income, while the state's most affluent households pay about 7 cents per
dollar.
That gap between the poor and the wealthy in Illinois is one of the largest in any state,
but the poor pay taxes at higher rates in 45 of the 50 states, according to a 2018 study * by
the Institute on Taxation and Economic Policy.
It's a bipartisan phenomenon. The institute's list of the 10 states with the most
regressive tax systems -- the states doing the most to increase inequality through taxation
-- also includes conservative Tennessee and Texas, purple Nevada and Florida, and liberal
Washington.
Now Illinois is trying to take its name off the list. The state plans to hold a referendum
next year on a constitutional amendment that would authorize the state to tax higher incomes
at progressively higher rates -- the system used by the federal government and 32 states.
Illinois currently taxes income at a flat rate of 4.95 percent. Under the proposed system,
income below $100,000 would be taxed at a slightly lower rate. Income up to $250,000 would be
taxed at the current rate. And income above that amount would be taxed at rates of up to 7.99
percent. There is also a kind of millionaire's tax: Individuals making more than $750,000, or
couples making more than $1 million, would pay the 7.99 percent rate on all their income.
Moving Toward Tax Fairness
Illinois will hold a referendum next year on replacing its flat income tax with a system
requiring higher-income households to pay higher rates. Even including sales and property
taxes, the rich still would pay a smaller share of income in state and local taxes than
lower-income people.
Economic inequality in the United States has reached the highest levels since the 1920s,
and there is mounting evidence that the unequal distribution of income and wealth is
contributing to the nation's economic and political problems. Reducing inequality ought to be
a focus of public policy. Rewriting state tax laws to place the greater burden on those with
greater means is an effective and sensible response.
Taxation in the United States remains progressive because the federal income tax remains
the largest source of government revenue. But the distribution of the total burden has become
much less progressive. In 1961, Americans with the highest incomes paid an average of 51.5
percent of that income in federal, state and local taxes. Half a century later, in 2011,
Americans with the highest incomes paid just 33.2 percent of their income in taxes, according
to a study ** by Thomas Piketty, Emmanuel Saez and Gabriel Zucman published last year. Over
that same period, the bottom 90 percent of Americans, ranked by income, saw their tax burden
increase from 22.3 percent of income to 26 percent of income.
Tax Cuts for the Affluent, More Taxes for Everyone Else
Over 50 years, federal tax cuts reduced the overall burden on the well-to-do, while others
paid more because of increases in federal payroll taxation, and in state and local taxes.
(Since 2011, federal income taxation has increased under President Barack Obama and
declined under President Trump. Data on the full impact of those countervailing changes is
not yet available.)
The headline problem is that Congress sharply reduced taxation of the wealthy, cutting top
income tax rates as well as corporate and estate taxation.
Meanwhile, the tax burden on everyone else has increased. One reason is the gradual rise
of federal payroll taxation, the flat-rate income tax that provides funding for Social
Security and Medicare. The Social Security tax is particularly regressive because it applies
only to income up to $132,900. The relative scale of state and local taxation also has risen,
partly because the federal government increasingly funds its operations with borrowed money
rather than tax dollars.
State and local governments rely heavily on sales and property taxes, which impose a
greater burden on less affluent households because wealthier people typically spend a smaller
share of income on food, housing and other forms of consumption. In roughly one-third of
states, this effect is partly offset by progressive income taxation. But even in most of
those states, the overall burden still falls more heavily on those with lower incomes. Only a
handful of states -- California, Delaware, Minnesota, New Jersey and Vermont -- and the
District of Columbia have written their tax laws so that those with the highest incomes pay
the largest share of their incomes.
The Illinois plan is a step in the right direction rather than a complete corrective.
Under current law, households in the bottom quintile of the income distribution pay 14.4
percent of their income in taxes on average, while those in the top 1 percent pay 7.4 percent
of their income in taxes -- a difference of 7 percentage points. The proposed changes in the
income tax would cut that gap to 4.3 percentage points, according to the Institute on
Taxation and Economic Policy.
Illinois is seeking to address longstanding fiscal problems, notably an underfunded
pension system, so it is raising taxes on the rich without significantly reducing taxes for
everyone else. Other states, however, could do better by raising taxes on the rich and using
the money to reduce the taxation of low-income families.
Opponents of progressive taxation warn that wealthy people and businesses will flee to
other states, and that those with the most money are the most mobile. People can vote with
their feet, and some do prefer low-tax states like Florida. But a quick look at the list of
states with progressive tax structures should make clear that plenty of rich people choose to
stay put.
Indeed, the Cornell sociologist Cristobal Young has calculated that people with
million-dollar incomes move across state lines less often than other Americans. They are more
likely to be married, more likely to have children, more likely to be involved in civic and
social groups -- and, in many cases, their wealth stems from their communities. A successful
Springfield dentist cannot relocate her patients to Missouri. A man who owns a chain of gas
stations around Peoria is likely to remain in Peoria. A company that relies on Chicago's
highly educated work force may not be focused on finding the place with the lowest tax
rates.
The potential cost of losing a few millionaires also needs to be weighed against the
benefits of equitable taxation. By imposing a somewhat larger burden on high-income
households, states can significantly improve the material circumstances of lower-income
households and slow the troubling expansion of economic inequality.
At the very least, states ought to stop making things worse.
Missing Issues on the Economics of a Fed Rate Cut
By Dean Baker
A Washington Post piece * on the issues surrounding a rate cut this week by the Federal
Reserve Board missed many important points. First, and most importantly, it never once
mentioned that inflation has been persistently below the Fed's 2.0 percent target. This
matters both for the Fed's credibility and more importantly as a protection policy in the
next downturn.
On the first point, the Fed has repeatedly stated that its 2.0 percent inflation target is
an average, not a ceiling. That means that the inflation rate must occasionally rise above
2.0 percent in order for the average to be 2.0 percent. Inflation in the core personal
consumption deflator, the rate targeted by the Fed, has not exceeded 2.0 percent since the
Fed Chair Ben Bernanke adopted it as an official target in 2012. If Fed policy is not
consistent with achieving the 2.0 percent inflation target, then markets will not believe the
Fed is committed to this target.
The other side of this is that we know that there will be another recession at some point.
Inflation almost always falls in a recession. If we go into a recession with a 1.5 percent
inflation rate (the figure for the last twelve months) then we are likely to see inflation
fall very close to zero in a downturn. This matters because the Fed would like to have a
large negative real interest rate (the nominal rate minus the inflation rate) in a recession.
If inflation is near zero, then even with a zero federal funds rate, the real interest rate
is only slightly negative.
The piece was also misleading when in discussing mortgage interest rates. After telling
readers that rates are already low, it presents a quote from a housing industry
economist:
"'A Fed rate cut will have zero impact on the housing market,' said Tendayi Kapfidze,
chief economist at Lending Tree. 'Mortgage rates are already at three-year lows.'"
Mortgage rates dropped in the spring precisely because markets were anticipating Fed rate
cuts this summer. It is virtually certain that if the Fed does not cut rates, and indicates
that no cuts are on the horizon, then mortgage rates will rise back to their levels of
earlier this year (roughly half a percentage point on a 30-year mortgage).
The piece also suggests that labor shortages are a problems for the economy. There are few
sectors where wages are rising especially rapidly, the most obvious sign of a labor shortage.
In fact, overall wage growth has slowed in recent months, suggesting increasing slack in the
labor market.
The most obvious reason to lower rates is that in an economy with no evidence of
inflationary pressure, there really is no reason not to try to push demand higher. This will
allow more people to get jobs and improve workers' bargaining position. The benefits from a
tighter labor market accrue disproportionately to those with the least power in the labor
market: minorities, people with less education, people with criminal records.
It is difficult to design social programs that effectively and efficiently benefit these
groups, it is easy for the Fed to lower interest rates and let them get jobs and pay
increases.
'Dr Doom' economist Nouriel Roubini in Bitcoin battle
3 July 2019
Outspoken economist Nouriel Roubini, nicknamed Dr Doom for his gloomy warnings, has caused a
stir with his latest attack on Bitcoin and its fellow cryptocurrencies.
Prof Roubini, who foresaw the financial crisis, says Bitcoin is "overhyped".
At a summit in Taiwan on Tuesday, he likened it to a "cesspool".
But his sparring partner at the event, who runs a cryptocurrency exchange, has angered the
professor by blocking the release of video of the event.
Arthur Hayes, the chief executive of the BitMex exchange, controls the rights to footage
of their debate, which took place during the Asia Blockchain Summit.
In a post on Twitter, Prof Roubini said he "destroyed" Mr Hayes in the debate and called him
a "coward" for not making it available...
Cryptocurrencies have given rise to an entire new criminal industry, comprising unregulated
offshore exchanges, paid propagandists, and an army of scammers looking to fleece retail
investors. Yet, despite the overwhelming evidence of rampant fraud and abuse, financial
regulators and law-enforcement agencies remain asleep at the wheel.
NEW YORK – There is a good reason why every civilized country in the world tightly
regulates its financial system. The 2008 global financial crisis, after all, was largely the
result of rolling back financial regulation. Crooks, criminals, and grifters are a fact of
life, and no financial system can serve its proper purpose unless investors are protected
from them...
*
[Go get 'em Doctor Doom. Does he know that this is a feature and not a bug?]
Wild traders are always here, as Doctor Doom points out. They are there when we use rocks,
when we used sea shells, when we used paper and now crypto, the wild traders remain.
Regulate as much as Dr. Doom thinks regulators should regulate. But do not deploy
government bean counters looking for stone age rocks under our matress, we are using digital
crypto instead.
Just yesterday Daimler announce a completely independent hard wallet for crypto use, in a
car. They are giving a car all the freedom to hold bearer assets in crypto form. The car
needs this to automate much of the car industry functions from gas taxes to used car sales.
So tell Dr. Doom to complain about car industry violating financial regulations.
The crypto casino was created so that speculators could profit from the money laundering
industry that provides investor liquidity to the back end of the human and illegal narcotics
trafficking industry. It was built on the anti-bank angst that emerged after the financial
crisis. It gives organized crime the legitimacy that they need to spend their enormous wealth
that is generated by so many ruined lives. Fools have always run with dicks. They just do not
know any better.
The crypto casinos were created to automate trading. Crypto insures that a bot trading obeys
the prior contract, and thus great simplifies transactions everywhere, from the Fed down to
you and me with significant savings, at least 1% increase in productivity.
We have a technology change happening. You get the wildcatters, they don't scare me, so
Dr. Doom is likely missing something here. More than likely he is short sided, looking at
this one thing and ignoring the fact that this is our 7th or 8th time we have changed money
tech. How did we do it last time? Wildcatters, hysterics, and failure to read history. Worked
fine then.
Crypto currencies are not money. They are just private scrip. Only demand give them exchange
value and only crooks and speculators have any demand for scrip born of the daughters of
ENIAC. To believe otherwise is to be a sovereign fool.
The Empire, in all its wisdom, has declared some countries as illegal, unworthy of using the
banking system. And then, sanctioned anyone who does business with those illegals. So, it is
illegals all the way down, in our ever-expanding WOE (War On Everyone).
This has generated interest in cryptocurrencies from some of those crooks and criminals
(aka "other countries").
You are too focused on the technology. Banks are not there just to conduct transactions, they
are there to track them and report to the government. They are required to know something
about the people behind the transactions.
Joe appears to miss the significance of underlying technology as much as anything else. Joe's
focus is directed somewhere inside his own mind that is separated from any reality that I am
aware of.
No, we are using cryptography everywhere, from cars to toys to wallets. Dr. Doom fails to see
this happening, happening as sure as we switched from metal to paper. Dr. Doom wants more
regulation of shadow banking, fine, why not say that out loud?
His ability to regulated shadow bankers has nothing to do with technology. Crypto is no
different than the embedded water mark on paper, same technology. Both regulators and
regulated have to adapt.
He has created a red Herring, a useless talking point to fool the delusionals, give them
some worthless talking point.
"Crypto insures that a bot trading obeys the prior contract, and thus great simplifies
transactions everywhere, from the Fed down to you and me with significant savings, at least
1% increase in productivity."
Huh?
How does crypto ensure that my wages producing a thousand meals as a food worker will
allow me to buy a thousand meals in the future? What I've seen is crypto turning a thousand
meals produced into a contracct that will buy two thousand one day, but only 500 the next
day.
Crypto really just wastes a bunch of computing power to solve a problem that only exists if
you are trying to hide illegal transactions from governments. Crypto currency is a solution
in search of problem unless you are engaged in laundering money, selling large quantities of
drugs/guns/people/animals/other illegal products, or buying same. Governments should make it
prosecutable wire fraud to use them.
The Resolution Foundation's James Smith has written a nice paper * on the likelihood of
recession and the fact that, with monetary less able to support the economy, we need to think
about alternative ways of tackling recessions. I just want to amplify what he says in two
ways.
First, there's increasing evidence that recessions can do long-term damage, even if the
economy appears to bounce back in the short-term. There are at least three mechanisms
here:
- Education. Bryan Stuart shows that the 1980-82 recession in the US "generated sizable
long-run reductions in education and income." Parents who suffer a drop in income spend less
on children's books and educational trips, and this makes them less likely to go to college a
few years later. Such effects are magnified if bad macro policy causes restraints upon public
spending on schools and libraries.
- Productivity. Recessions increase uncertainty, which depresses investment in both
capital and R&D, leading to lower productivity growth. The Bank of England's Dario
Bonciani and Joonseok Jason Oh say:
"Shocks increasing macroeconomic uncertainty can lead to very persistent negative effects
on economic activity that last well beyond the business cycle frequency."
- Scarring. A recent paper by Erin McGuire shows that people who grow up in hard times
"invest less in risky assets throughout their lives, invest more in property, and are less
likely to be self-employed." This corroborates research by Ulrike Malmendier and Stefan
Nagel. Through this channel, recessions can reduce entrepreneurship and increase the cost of
capital even decades later.
Against all this, it is theoretically possible that recessions have a beneficial
"cleansing" effect: in driving inefficient firms out of business, they make it easier for
more efficient ones to expand, and this raises productivity growth.
One Big Fact tells us that effect hasn't operated recently: productivity has flatlined
since 2008. One reason for this is that financial crises can hamper the expansion of even the
best firms, in part by causing them to fear for the future availability of credit.
All this evidence makes me believe that recessions are more costly than I (and I suspect
others) previously thought. Policy-makers should, therefore, do more to prevent or mitigate
them.
Which brings me to my second amplification of James' paper. "We can't recession-proof the
economy" he says. He's right. We cannot prevent recessions by seeing them in advance and
relaxing monetary or fiscal policy, simply because recessions are unpredictable. Back in 2000
Prakash Loungani wrote that "the record of failure to predict recessions is virtually
unblemished", a fact that remains true today. The Bank of England did not cut Bank rate to
0.5 per cent until March 2009, a full year after the recession began.
For me, this requires alternative policies. Some should aim at reducing the risk of
recession, for example by ensuring that banks are so well capitalized that losses needn't
lead to cuts in lending. Others should aim at moderating recessions via strong automatic
stabilizers, such as progressive taxation and a strong welfare state – and perhaps a
job guarantee.
Yes, such changes might reduce the benefits of the cleansing effects of recession. I
suspect, though, that such productivity-enhancing gains could be achieved at much lesser cost
by policies to increase product market competition.
Of course, recessions are an inevitable aspect of capitalism. With their costs now greater
than previously thought, it is all the more important to mitigate them, which requires not
just macro policy but also institutional change.
Failing to plan = planning to fail
The risk of recessions and the importance of macroeconomic policy in limiting the damage they
cause
By James Smith
Summary
Recessions are bad for living standards, in both the short term and the longer term. And
because recessions are triggered in a number of ways, we can't recession-proof the economy.
Macroeconomic policy can, however, limit the economic pain they cause. But the legacy of the
last recession has left policy underprepared for the next. This means that the adequacy of
our macro policy framework should loom far larger in our economic debates than it does at the
moment – particularly as there is a relatively high risk of another downturn in the
next few years.
Technical recessions (where economic output contracts for two consecutive quarters) have
come along roughly once a decade in the UK. With the current period of economic expansion now
into its tenth year, there is therefore concern that we are nearer to the next recession than
we are to the last. Of course there is no mechanical link between the passage of time and the
onset of a downturn. That said, risks can build over time. And, in this context, the global
outlook has clouded over the past two years with a number of obvious recession triggers.
Indeed, a simple model based on financial-market data suggests that the risk of a recession
is currently close to levels only seen around the time of past recessions and sharp slowdowns
in GDP growth, and is at its highest level since 2007.
This matters. Looking across the past five recessions, GDP has fallen by around four per
cent on average from peak to trough. That's equivalent to a hit today of around £2,500
per household. Similarly, the average rise in unemployment over past recessions equates to
around one million people. There is of course much variation around this average, and in
thinking about what effect the next recession might have on living standards, the potential
scale of the downturn is clearly central. But so too is the way in which the economy adjusts
to a new lower output equilibrium.
Recessions can be triggered in a number of ways, with no two the same, and all of them
bad. They often reflect developments abroad, though domestic circumstances can also be at
play. What characterises recessions is a synchronised fall in spending across the economy.
The economic pain caused by that fall in demand leads to higher unemployment (i.e. fewer
hours of production), a drop in earnings (i.e. lower reward for each hour of work) or a
combination of the two. When the bulk of that supply-side adjustment manifests as higher
unemployment, the effects are concentrated on a small group (with clear distributional
implications). When the pay takes most of the strain, it results in a more generalised
sharing of the pain.
Recent UK history tells us that the exchange rate plays an important role in determining
the balance between these two forms of adjustment. When sterling adjusts sharply downwards,
wages tend to take the strain; when it does not, unemployment spikes more markedly instead. A
comparison of the past two UK recessions illustrates this point. In the early-1990s, GDP fell
by 2.0 per cent and the value of the pound saw a sustained fall of less than 10 per cent.
Unemployment subsequently jumped by over a million people, but real-terms pay growth slowed
only marginally relative to the pre-recession trend. In 2008-09, GDP plummeted by 6.3 per
cent and the exchange rate fell nearly 30 per cent. Unemployment still jumped – by
around a million (1.1 million) – but by much less than had been expected given the
severity of the downturn. The period was characterised instead by a severe wage squeeze in
which median hourly pay (adjusted for inflation) fell by around 7 per cent between 2009 and
2014.
This case-by-case variation should caution us against assuming that the next recession
will necessarily feel like the last: unemployment may be at historically low levels today,
but there is every chance that the next downturn – even if it is smaller in scale than
the last one – causes it to balloon once more. But whatever form the economy's
adjustment takes, it should also be clear that the effects of a recession can persist for
many years. GDP, unemployment and real incomes rarely fully return to the path they were on
prior to the recession, and recession scars can mean some areas and cohorts find themselves
permanently left behind. Policy response is therefore vital.
Macroeconomic stabilisation policy – the use of macroeconomic tools, such as
monetary and fiscal policy to offset fluctuations in economic activity – plays a
crucial role in stopping a recession becoming much more severe. Without it, there is evidence
that he severity of the recession may be magnified greatly.
Indeed, effective policy works both by addressing the underlying causes of a recession,
and by providing substantial and timely support to overall demand. During the Global
Financial Crisis (GFC) that meant direct action to resolve failings in the financial sector,
along with large-scale policy stimulus. On the monetary side, that involved slashing the Bank
of England's base rate (from 5.75 per cent in December 2007, to just 0.5 per cent by March
2009) and engaging in the previously untried policy of Quantitative Easing (with £375
billion of assets being purchased by the Bank). On the fiscal side, the stimulus took the
form of tax cuts (with VAT being lowered from 17.5 per cent to 15 per cent for instance) and
spending rises – with subsequent unwinding during the long period of fiscal
consolidation from 2010. Absent the policy support delivered in the immediate postcrisis
period, GDP could have been 12 per cent lower after the recession – equivalent to over
£8,000 for every household in the UK.
Worryingly, however, policymakers are unlikely to be able to respond in the same way
should another recession hit. On the monetary side, there is the very real constraint
provided by the proximity of policy interest rates to zero: a base rate of just 0.75 per cent
equates to much reduced room for manoeuvre. On the fiscal side, there is at least the
perceived constraint that comes with a debt-to-GDP ratio that is more than double the one
prevailing ahead of the GFC (at over 80 per cent). There are still policy choices available,
but a new approach will almost certainly be required. And preparations for this new approach
should already be under way.
It's against this backdrop that the Resolution Foundation's new Macroeconomic Policy Unit
(MPU), has been established. The MPU will seek to contribute to a better-informed and more
inclusive macroeconomic policy debate. That debate will be particularly important for those
on low to middle incomes who are often particularly exposed when the economy falls into a
recession – with this forming the subject of the next MPU briefing note. Thereafter, we
will publish a comprehensive assessment of the UK's existing macroeconomic framework by way
of understanding just how recession ready the UK is.
Can We Find a Taxi Driver to Bring Thomas Friedman to Planet Earth?
By Dean Baker
I can't say I know anyone who reads Thomas Friedman, but I suppose such people must exist
since the New York Times keeps running his column. Anyhow, while the guy probably hasn't had
a real insight for at least two decades, his column * this week really paves new ground in
absurdity.
The piece boldly tells readers in the headline, "the answers to our problems aren't as
simple as left or right," this followed with the subhead, "the old binary choices no longer
work."
The piece is then filled with small bore ideas that completely ignore the debates that
actually are taking place on the issues he is addressing. More importantly, he completely
ignores the fact that the right has soared into unreality land and shows no interest in
returning.
To be specific, the right insists that climate change is not happening because, because,
well, just because they don't feel like doing anything about it. Is there someone who could
tell Friedman this fact?
The right also has no interest in economic policy other than giving more money to rich
people. So great ideas for improving the plight of poor children or the position of women in
the workforce, or anything else that the rest of us might thing of as positive are simply off
the agenda.
The fact that the right is quite explicitly uninterested in any positive policy changes is
obvious to anyone who reads papers like the New York Times. Fortunately for Thomas Friedman,
you don't have to read the New York Times to have a column in it. You can just spew nonsense
that is totally divorced from reality and collect your paycheck.
A Recession Is Coming (Eventually). Here's Where You'll See It First. https://nyti.ms/2K886nd
NYT - Ben Casselman - July 28, 2019
Last week's report on second-quarter gross domestic product showed that the economy slowed
last spring. It also came exactly 10 years since the Great Recession ended, making this
officially the longest expansion in American history. (Well, probably. More on that in a
second.) So perhaps it's no surprise that forecasters, investors and ordinary people are
increasingly asking when the next downturn will arrive.
Economists often say that "expansions don't die of old age." That is, recessions are like
coin flips -- just because you get heads five times in a row doesn't mean your next flip is
more likely to come up tails.
Still, another recession will come eventually. Fortunately, economic expansions, unlike
coin-flip streaks, usually provide some hints about when they are nearing their end -- if you
know where to look. Below is a guide to some of the indicators that have historically done
the best job of sounding the alarm.
One caveat: Economists are notoriously terrible at forecasting recessions, especially more
than a few months in advance. In fact, it's possible (though unlikely) that a recession has
already begun, and we just don't know it yet.
"Historically, the best that forecasters have been able to do consistently is recognize
that we're in a recession once we're in one," said Tara Sinclair, an economist at George
Washington University. "The dream of an early warning system is still a dream that we're
working on."
Indicator 1: The Unemployment Rate
What to watch for: Rapid increases, even from a low level.
What it's saying: All clear.
Discussion: The unemployment rate is near a 50-year low, but that isn't what matters for
recession forecasting. What matters is the change: When the unemployment rate rises quickly,
a recession is almost certainly on its way or has already arrived.
Even small increases are significant. Claudia Sahm, an economist at the Federal Reserve,
recently developed a rule of thumb that compares the current unemployment rate to its low
point over the previous 12 months. (Both are measured using a three-month average, to smooth
out short-term blips.) When that gap hits 0.3 percentage points, the risks of a recession are
elevated. At half a percentage point, the downturn has probably already begun.
Unemployment is considered a "lagging" indicator, and it is unlikely to be the first place
to pick up on signs of trouble. But what it lacks in timeliness, it makes up for in
reliability: The unemployment rate pretty much always spikes in a recession, and it rarely
rises much without one.
Which is why right now the unemployment rate should be a source of comfort: Not only is it
low, it's trending down. When that has been the case historically, there has been less than a
one in 10 chance of a recession within a year, according to a Brookings Institution analysis
that worked off Ms. Sahm's measure.
Related indicators: Initial claims for unemployment insurance; payroll job growth.
Indicator 2: The Yield Curve
What to watch for: Interest rates on 10-year Treasury bonds falling below those on
three-month bonds. (It has already happened.)
What it's saying: Storm warning.
Discussion: The yield curve is less intuitive than the unemployment rate, but it has
historically been among the best predictors of recessions.
The fundamentals are straightforward: The curve essentially shows the difference between
the interest rate on short-term and long-term government bonds. When long-term interest rates
fall below short-term ones, the yield curve is said to have "inverted."
Think of the yield curve as a measure of how confident investors are in the economy. In
normal times, they demand higher interest rates in return for tying up their money for longer
periods. When they get nervous, they're willing to accept lower rates in return for the
unrivaled safety bonds offer. (That's the simplified version. My colleague Matt Phillips gave
a more detailed explanation last year.)
The Federal Reserve Bank of New York has developed a handy metric that translates
fluctuations in the yield curve into recession probabilities. Right now, it puts the chance
of a recession starting in the next year at about one in three -- up sharply from a year ago,
and not far from where it was on the eve of the Great Recession.
Don't panic yet, though. Many economists argue that the yield curve means less than it
used to, partly because the Fed was until recently raising short-term interest rates, even as
the huge holdings of bonds that it accumulated during the recession are putting downward
pressure on long-term rates. Taken together, those actions could be skewing the shape of the
yield curve. And, in any case, it has taken as long as two years for a recession to follow a
yield-curve inversion in the past.
Related indicators: The Financial Conditions Index (from the Chicago Fed); the stock
market.
Indicator 3: The ISM Manufacturing Index
What to watch for: The index falling below about 45 for an extended period.
What it's saying: Mostly cloudy.
Discussion: Every month, the Institute for Supply Management surveys purchasing managers
at major manufacturers about their companies' orders, inventories, hiring and other activity.
It then aggregates those responses into an index: Readings above 50 indicate that the
manufacturing sector is growing; below 50, it is contracting. (The institute also releases a
measure of activity in the service sector, but that index doesn't go back as far.)
The manufacturing index has some significant advantages. It is released early, often on
the first day of the subsequent month, and unlike lots of economic data, it doesn't get
revised. Most importantly, the index is a true leading indicator: It has historically shown
signs of trouble before the broader economy hit the skids.
On the other hand, manufacturing no longer drives the American economy, which means a
contraction in the sector doesn't guarantee a recession. The ISM index fell below 50 for
several months in 2015 and 2016, for example, signaling an "industrial recession" that never
turned into the real thing. But steep downturns in manufacturing tend to be signs of trouble
-- it is rare for the index to fall much below 45 or so without a recession hitting.
Right now, American manufacturers are being battered by a global slowdown and by trade
tensions. As of June, the index is still in expansion territory, but barely. Many economists
think it will fall below 50 in the coming months but don't expect a steeper drop.
Related indicators: New orders for capital goods; regional manufacturing surveys from
Federal Reserve banks; the employment and compensation components of the National Federation
of Independent Business's monthly survey.
Indicator 4: Consumer Sentiment
What to watch for: Declines of 15 percent or more over a year.
What its saying: Partly cloudy.
Discussion: Consumers drive the economy, now more than ever. It is pretty much impossible
for the economy to keep growing if Americans decide to keep their wallets closed.
The trouble is, by the time spending slows, a recession is probably already underway.
Measures of consumer confidence, such as the long-running indexes from the Conference Board
and the University of Michigan, provide insight into how consumers will spend in the
future.
Confidence indexes are volatile from month to month, and they sometimes drop sharply as
consumers react (and overreact) to the stock market, political developments and other events.
Those declines often don't translate into real changes in spending.
But sustained declines are another matter. Economists at Morgan Stanley recently found
that a 15 percent year-over-year drop in the Conference Board's index is a reliable predictor
of a recession.
By that metric, the economy isn't in trouble. Consumer confidence is basically flat
compared to a year ago, but it has fallen since late last year.
Related indicators: Retail sales; average hourly earnings; real personal income.
Indicator 5: Choose Your Favorite
O.K., this is cheating. But no single indicator can tell the whole story of the $20
trillion United States economy, and the measures that performed well in the past might not do
so in the future. So it pays to keep an eye on a variety of data sources.
The indicators above are among the most common inputs into the formal models that
economists use to forecast recessions. But many economists have a favorite indicator (or
maybe a couple) that they also watch as a gut check.
•Temporary staffing levels: Temp workers are, by definition, flexible -- companies
hire them when they need help quickly and get rid of them when demand dries up. That makes
them a good measure of business sentiment. As of June, temp staffing is near a record high,
but it has pretty much stopped growing.
•The quits rate: When workers are confident in the economy, they are more likely to
quit voluntarily. The quits rate, a favorite indicator of Janet Yellen, the former Fed chair,
bottomed out shortly after the Great Recession ended and rose steadily until leveling off in
the middle of last year.
•Residential building permits: The housing market has frequently led the economy both
into and out of recessions. That has made building permits -- which are generally issued
several weeks before construction begins -- one of the best historical indicators of economic
activity. But construction has lagged since the last recession, and housing makes up a
smaller share of the economy than in the past, so permits may not be as meaningful now.
•Auto sales: After houses, cars are the most expensive thing most families buy. And
while owning a car is effectively required in large parts of the country, buying a new one
almost never is. So when new car sales are strong, it's a sign consumers are feeling good.
Retail car sales have typically peaked before recessions, then dropped sharply once one
began. So it isn't a great sign that sales are falling.
Acknowledging and pricing macroeconomic uncertainties - Hansen and Sargent
False pretences of knowledge about complicated economic situations have become all too
common in public policy debates. This column argues that policymakers should take into
account what they don't know in their decision making. It describes a tractable approach for
acknowledging, characterising, and responding to different forms of uncertainty, by using
theories and statistical methods available at any particular moment.
---------
Yes, starting about 10,000 years ago.
After our current MMT, we will get the same false pretence, we will have a bunch of AOC
geeks on this blog explaining things have been fixed,'We won't do it again' to quote Ben,
among the many thousands of false pretencers. We will hear from the 'Uncle can fix it later'
crowd. "This time is different' chants another tribe. Someone will put up a blog, and we will
recite talking points absent any evidence.
The delusionals and their preachers do not go away, and neither do their followers. It is
like a religion, we know it is BS, but it keeps our hysteria in check.
"... He says everything USA lower 48 other than shale is completely dead, and has been for sometime. He said look at Kansas since 2014. That is pretty much the rest of conventional lower 48. ..."
"... They are also concerned about 2020 big time. A lot of wasted money on new pipes if there is a fracking ban, which they are taking seriously. ..."
"... I would say that as far as the shale industry is concerned, the shit is about to hit the fan. ..."
"... Yes, all liquids includes ethanol from corn or sugar cane. ..."
I talked to a guy with a pretty key position in a pipeline company recently.
He says everything USA lower 48 other than shale is completely dead, and has been for
sometime. He said look at Kansas since 2014. That is pretty much the rest of conventional
lower 48.
He also said they are getting nervous about shale because the financial people in New York
are turning against it. He says it is not profitable sub $75 WTI and if the money is cut off,
it's going to fall like a rock.
They are also concerned about 2020 big time. A lot of wasted money on new pipes if there
is a fracking ban, which they are taking seriously.
Thanks. I referred to Judy Shelton's book for the reasons to support the gold standard. But,
I can list some of them here:
1) The gold standard was the core mechanism of Bretton-Woods that worked so well at keeping
world prices stable, promoting growth, and tying the money supply to the real economy.
2) Free market currencies have led to speculation taking over from market exchange rates to
support trade. Currency trading is ~100x the underlying trade in goods and services.
3) The exchange rates of currencies fluctuate far greater under a free market fiat currency
system than under the gold standard
4) Fiat currencies are always subject to political intervention.
5) gold can't be faked or conjured into existence.
6) The gold supply grows about 2%/year, which has been stable for many decades.
7) gold, as a real commodity, ties money to the real economy rather than the financial
markets.
2. This has what to do with the gold standard? There was lots of currency trading under
the gold standard. This is primarily a result of algorithmic trading.
3. True - but this is good. Why would this be bad?
4. This is why you have an independent central bank.
5. No but gold can also be hoarded. Please see Krugman's Baby Sitter Klatch article.
6. This is utterly absurd. Gold production stops when the price is too low, ramps up when
it is high.
7. How is gold a commodity? 99% of the gold in the world sits in a basement being guarded
by governments. It's only value is in making shiny things and the current supply is wildly
more than there is demand for said shiny things. Ohhhh, Shiny! does not make something a
commodity. If there were any large industrial applications for the metal maybe - but there
really isn't.
Thanks for the good points. Some clarification:
1) By world prices this means the exchange rate. Under Bretton-Woods the price of gold was
set at $35/oz and other currencies were pegged to the dollar.
2) If the purpose of currency exchange is to facilitate trade, then this is the tail wagging
the dog, and indicates a currency trading system that has become disconnected from its core
purpose.
3) Price stability is a core goal of money. So that tomorrow I will be confident of what that
money will be worth.
4) Independence is not disinterest. Central banking has shown itself to sway with political
winds such as the German central bank in the 1990s, and the US central bank under Nixon.
5) Hoarding of gold, in the sense of cornering the market, is essentially impossible because
of the wide distribution of gold in the world and because moving to gold in general would
indicate a loss of confidence in a currency, which is good. (as long as we're saying good v.
bad).
6) True. production is not that stable, but on average it is fairly constant. See Fig 1. :
https://pubs.usgs.gov/of/2002/of02-303/OFR_02-303.pdf
7) Not true. Again see the USGS publication. Most gold goes into jewelry, and so is held by
the public. Much of the other gold goes into industry, dental
The reason to prefer gold, besides the above, is that most money created since 1971 has
gone into the financial sector rather than the real economy. Thus, workers don't get a real
raise, but financial instruments just keep going up with no limit.
David,
tell me now, how did George Soros get so rich, and why was the Bretton Woods system
abandoned?
5. Shows that you don't understand the issue. Hoarding doesn't have to corner the market
to be an issue, it's just that rewards people who are creating a problem and so can create a
vicious circle.
P.S. 2% is way too low. Money needs to expand at least enough to match nominal GDP - and that
assumes that the rate of savings and circulation velocity are constant. And if prices are
absolutely constant how will people ever pay off debts. People have to pay back the nominal
capital of a loan. If income/head in nominal terms is relatively constant (in some countries
at some times there will be actual deflation) then compared to the current situation in
situations of absolute price stability delinquency rates will rise. You quote the 50/60s as a
golden - what were inflation rates like then (answer >2% with real growth of >5% so
>7% nominal GDP growth)?
Gold is not a great system for a money supply, but its the best one we have so far. Other
commodities could be used as the means of value and settlement, but they are far less
convenient and have other properties that are not as good as gold.
Perhaps a global crypto currency will take the place of gold in the future? It would need
to be of a fixed amount that does not change over time, and secure against hacking. So, maybe
not.
[Great answer inasmuch as changing the question is always the best answer when one has no
answer to some obvious questions.
OTOH, the US dollar based global reserve currency is a problem, although mostly for the US
in just general economic terms, but a problem for the entire world in terms of limiting the
use of carbon based fuels. Cheap oil is good for the dollar hegemon, but bad for supporting
continued human existence on Earth.
Internationally managed reserve currency and FOREX institutional arrangements along the
lines of Keynes's Bancor might be a better idea. Crypto currency is an invitation to black
market traffickers and hackers. Primary support is from drug and sex trafficking. So, what is
not to love?
The hard money crew in the US defeated Keynes's Bancor proposal at the Bretton Woods
conference and basically all of the problems that the gold bugs complain about today have
been the results of following their preferred policy path after WWII.]
How John Maynard Keynes' most radical idea could save the world
As the Second World War was drawing to a close, the economic experts of the Allies met in
a New Hampshire resort to try to hammer out an international monetary system that would help
prevent a recurrence of the Great Depression. The ensuing debate centered around two main
proposals, one from the British delegation and one from the American. John Maynard Keynes,
the greatest economist of the 20th century, presented the British case while Harry Dexter
White, one of FDR's key economic advisers, presented the American one.
Keynes lost on many key points. The result was the Bretton Woods system, named after the
small town in which the conference was held. As part of the agreement, it also created what
would later become the International Monetary Fund and the World Bank. That served as the
system of managing international trade and currencies for nearly three decades. Today the IMF
and World Bank survive, but Bretton Woods was broken in 1971 when Nixon suspended the
convertibility of the dollar into gold.
Yet most of the problems that spurred the creation of Bretton Woods have since returned in
only somewhat less dire form. It's worth returning to Keynes' original, much more ambitious
idea for an international institution to manage the flow of goods and money around the
globe.
The basic problem with international trade is that imbalances can develop: Some countries get
big export surpluses, while others necessarily develop big trade deficits (since the world
cannot be in surplus or deficit with itself). And because countries typically must borrow to
finance trade deficits, it's a quick and easy recipe for a crash in those countries when
their ability to take on more debt reaches its limit. It's not as bad for surplus countries,
since they will not have a debt crisis or a collapse in the value of their currency, but they
too will be hurt by the loss of export markets. This problem has haunted nations since well
before the Industrial Revolution.
Nations like Germany with a large export surplus often portray it as resulting from their
superior virtue and technical skill. But the fundamental reality of such a surplus is that it
requires someone to buy the exports. As Yanis Varoufakis points out in his new book, without
some sort of permanent mechanism to recycle that surplus back into deficit countries, the
result will be eventual disaster. It's precisely what caused the initial economic crisis in
Greece that is still ongoing.
Bretton Woods addressed this problem with a set of rather ad hoc measures. The dollar
would be pegged to a particular amount of gold, and semi-fixed exchange rates for other
currencies were to be fixed around that. In keeping with White's more orthodox economic
views, all trade imbalances were to be solved on the deficit side. There was no limit to the
surplus nations could build up (importantly, at the time the U.S. was a huge exporter), and
the IMF was tasked with shoring up countries having serious trade deficit problems by
enforcing austerity and tight money. (This would lead to repeated disaster for developing
countries.)
Keynes' idea, by contrast, was substantially more ambitious. He proposed an overarching
"International Clearing Union" that potentially every country in the world could join. It
would create a new reserve currency, the "bancor," that could only be used for settling
international accounts, and member nations would pay a membership quota in proportion to
their total trade. Countries in surplus would receive bancor credit, while those in deficit
would have a negative account.
The union was also explicitly aimed at facilitating increased trade overall (also unlike
Bretton Woods). And critically, it would incentivize nations to keep their trade balanced on
both sides -- surplus and deficit. Run too far into deficit, and a country would be required
to devalue to reduce imports. But run too far into surplus, and a country's currency would be
required to appreciate so as to increase imports. A bancor tax would also be levied at an
increasing rate on anyone with a large trade imbalance.
There's much more to the story, but the fundamental idea is fairly simple. As Keynes wrote in
his original proposal, the basic "principle is the necessary equality of credits and debits,
of assets and liabilities. If no credits can be removed outside the clearing system but only
transferred within it, the Union itself can never be in difficulties."
For the postwar generation, Bretton Woods worked tolerably well -- and it certainly was a
vast improvement on the prewar gold standard. But its mechanisms were far less legible, and
required constant good-faith efforts from various nations, particularly Germany and the U.S.,
to work properly. More importantly, it relied on large American surpluses to soak up the huge
aid that was being sent to Europe under the Marshall Plan, a goodly portion of which was used
to buy American-made exports. When the U.S. moved to deficit, the system broke down within
only a few years.
Keynes' plan, by contrast, would likely have had the flexibility to adapt to a massive 180
degree shift in the balance of trade. It is also far more transparent and comprehensible to
average people, perhaps disrupting the excessive pride of surplus countries to some extent.
And if it were to be created in the future, it would be under effective supervision from the
member states. The vast carnage inflicted by the unaccountable, supranational European
Central Bank is too stark to ignore.
It would undoubtedly take years and years to build and update Keynes proposal to where it
might be implemented. But the problems it is designed to address will always keep cropping
up. Perhaps after the eurozone implodes, the world will get another chance to do it
right.
*
[The rallying cry of the gold bugs is "Idiots of the world unite," which is very effective
given the considerable majority held by idiots in the electorates of republics and among
their controlling elites both public and private.]
Under Bretton-Woods no trade imbalances were possible because of the settlement mechanism in
gold. The deficit nations (that imported more than exported) would have to settle by
transferring gold out in the amount of the deficit. Thus, in effect selling the commodity of
gold for the excess imports. This all works well if the imbalances are periodically settled
by the gold transfers, which didn't happen as many countries simply held onto the currencies,
and if trade is balanced.
Balance of trade is the key to stable trade. All imbalances eventually come back into
balance. The question is: will this happen in a smooth orderly manner, like under
Bretton-Woods, or in a calamity where for example the dollar crashes?
"...This all works well if the imbalances are periodically settled by the gold transfers,
which didn't happen as many countries simply held onto the currencies, and if trade is
balanced..."
*
[You are getting warmer, but still no cigar and a whole lot of cart before the horse. What
happened under the original Bretton Woods agreement was that surplus traders held onto their
US dollar reserves while convertibility (more to silver than gold - which we hold) kept the
US dollar from becoming overvalued under the simultaneous pressures of what remained small US
trade deficits and growing foreign reserves of US dollars. This was not a gold standard per
se, but rather the establishment of the US dollar, the currency of the dominant global
economic power, as the global reserve currency for foreign held reserves and also the
dominant currency of international trade exchange. Trade remained relatively well balanced
because convertibility limited how overvalued the dollar could maintain itself under trade
deficits despite its broadly held status as the dominate global reserve currency.
The end of Bretton Woods US dollar convertibility saw growing US trade deficits with
simultaneous growth in US dollar denominated foreign reserves and an over-valued dollar which
just accelerated US trade deficits even further. Bigger US trade deficits just fed into even
larger USD foreign reserves. It was a vicious cycle of dollar over-valuation despite growing
US trade deficits because surplus partners had relatively secure means of holding large USD
reserves. The world's high demand for dollars was great for rentiers, arbitrage seekers, and
global corporations. Trading partners could hold USD reserves to keep their currencies
undervalued relative to the USD more successfully than with convertibility. OTOH, the US
gained cheap access to global oil reserves and also US multinational corporations gained
global price arbitrage advantages if they were willing to offshore much labor to countries
with currencies undervalued relative to the dollar or merely countries with lower standards
of living (i.e., real wages) and environmental protection standards for industrial
production. Winning all three together on the same US dollar capital flow was the global
price arbitrage trifecta. ]
The US could have had it both ways in the sense that it could have run budget deficits by
monetizing the dollar and causing inflation as it was starting to do in the late 1960s and
maintain the international exchange rate. The mechanism to do this is US tariffs. This would
have made imports to the US expensive and kept all those excess dollars from flowing
overseas. The rational is balance of trade. As long as the current account is balanced the
Bretton-Woods system would continue to function.
The US went all in on free trade and eliminating tariffs when it implemented the income tax
system to finance government operations spending in 1913. At the time the US dollar was
underpriced against most European currencies in FOREX, particularly the pound sterling, and
the US had a growing trade surplus which eventually contributed significantly to the
settlements crisis under the gold standard that was a major cause for precipitating the Great
Depression. Once that path was taken it became difficult to turn back since the wealthy build
their rentier and arbitrage systems upon the world that is rather than some world that might
be. Policy makers rely upon the stock of wealth both for campaign contributions and to raise
their miserable lives into something of elite significance because of who they hang out with
and in turn whose interests that they serve.
I understand it that if a frog had wings then it would not bump its ass every time that it
leaped.
The US consistently ran a trade surplus during the Bretton Woods period, but Bretton Woods
was based on US dollars. So the world was being drained of US dollars (or the rest of the
world of Gold). That is clearly not sustainable. There is a problem with unbalanced trade if
it is either direction. Under Bretton Woods there was no penalty for mercantilism. You just
need to know history to no that financial crises are nothing new and that a gold standard
didn't prevent them, but in fact exacerbated them. I don't where you get your ideas from, but
you should go back and read some history.
The real questions are:
1) During Bretton-Woods worker compensation grew with growth in productivity, but since the
withdrawal in 1971, worker compensation has been flat. Why? And how to re-mediate this?
2) Why has so much of GDP shifted to financial speculation and away from the productive
economy? And how to shift economic activity back to the productive sector?
3) Given our use of fiat currency, what limits the growth of the money supply in the
financial sector? That is, what prevents financial instruments that are disconnected from the
productive economy from creating an endless cycle of: new instruments drives new money to buy
them, rinse and repeat...
The second one in particular lays out the issue quite clearly. It literally forms an arrow
with the tip pointing to the divergent point where something major happened to create such a
stark and durable systematic change.
This is classical cargo cult thinking, these two things are correlated so one must have
caused the other. There were lots of things changed at that time, I was there, I followed the
debates (in which the world basically decided to follow some of what Milton Friedman said -
and ignored some other things that he said - like negative interest rates and that money
supply expansion should come mostly from expanding the central bank balance sheet - see also
Robert Waldmann's explanation that Lucas and Friedman are methodical opposites and yet both
belong to the "Chicago School"). You have to not only note a correlation, but also show the
mechanism and control for other factors. Get to it.
1. Other things happened at the same time (see tariffs, changes in laws related to unions,
containerization and also relaxation of capital controls and banking regulation). You went
from a world of relatively isolated economies (especially the US) to a world of tightly
integrated economies. Bretton Woods fall had almost nothing to do with it.
2. Washington consensus that budget deficits are bad and monetary policy (i.e. encouraging
private debt) are good. We need to expand the central bank balance sheet in line with nominal
GDP and reduce private indebtedness again.
True, but whatever the cause, to have such a sharp and clear divergence, one or more
significant changes had to happen in a short span of time. Do those things mentioned above
add up to enough of a cumulative durable change?
But it wasn't a SHARP divergence at all. I actually wish that Anne had done the chart in
terms of rates of change. Having it in terms of levels hides more than it shows. But think
about this - there was a reason that Bretton Woods was abandoned - it didn't happen in a
vacuum. Maybe you should ask why that happened.
And as commodities go gold has a number of advantages
Over say concrete blocks or diamonds
Lots of clever souls would like to use an exchange medium that
Wasn't subject to modern state financial casuistry
And usually they aren't overly focused on the existing
Unregulated market systems hitches and loops
and
Perversities
Cold mining costs have always tracked the monetary price of gold. Aka, the marginal price of
a new ounce is the monetary price.
To get the cost of mining goold down to $20 in the late 20s, food, housing prices had tlo
fall by slashing wages which cut demand for food forcing prices of food down by forcing wages
down, thus gold miners could eat enough food to mine an ounce of gold.
When FDR set the price government paid for gold to $35 dollars, the number of gold miners,
and gold ounces mined doubled in less than a year, and stayed up until government prohibited
gold mining to reallocate labor to the war industrial production.
What we don't see is the actual marginal costs of gold mining in either the short or long
run. The global gold mining cartel keeps all the data secret, eg, South Africa, Russia, which
produce about half the gold aannually. They can easily bankrupt a big corporation investing
in a new big mineing and refining operation by releasing some of their massive gold hoard at
prices just below the corporation marginal cost plus debt service. The big driver of gold
demand is Asia and Muslim consumption for gold hoops and rings so people, especially women
have their wealth with them at all times.
MULP made an assertion a couple of days ago that there were far more empty beds in the
country now that several decades ago. I questioned the assertion, since there was no
supporting data, but now I am finding the data in Census tracts and know MULP was correct.
Family and household sizes have been declining for decades.
"... For example, as a Stanford graduate he nonetheless argues that "The skills required for getting into Stanford at 17 (extracurriculars, SAT prep etc) do not correlate to job success as a software developer ..."
"... How good a student you were at 17, is not very relevant to who you are at 25." References are flawed because "People will only ever list references who will say good things about them," and they ultimately punish people who've had bad managers. But asking for source code from past sides projects penalizes people with other interests or family, while "most work product is confidential." ..."
Posted by EditorDavid on Sunday July 28, 2019 @06:34AM from the if-it-is-broke-fix-it dept.
DevNull127 writes: Hiring is
broken and yours is too," argues a New York-based software developer whose LinkedIn profile
says he's worked at both Amazon and Google, as well as doing architecture verification work for
both Oracle and Intel. Summarizing what he's read about hiring just this year in numerous
online articles, he lists out the
arguments against virtually every popular hiring metric , ultimately concluding that "Until
and unless someone does a rigorous scientific study evaluating different interviewing
techniques, preferably using a double-blind randomized trial, there's no point in beating this
dead horse further. Everyone's hiring practices are broken, and yours aren't any
better."
For example, as a Stanford graduate he nonetheless argues that "The skills required for
getting into Stanford at 17 (extracurriculars, SAT prep etc) do not correlate to job success as
a software developer.
How good a student you were at 17, is not very relevant to who you are at
25." References are flawed because "People will only ever list references who will say good
things about them," and they ultimately punish people who've had bad managers. But asking for
source code from past sides projects penalizes people with other interests or family, while
"most work product is confidential."
Brain teasers "rely on you being lucky enough to get a flash of inspiration, or you
having heard it before," and are "not directly related to programming.
Even Google says it is useless ." And live-coding exercises are "artificial and contrived,"
and "not reflective of practical coding," while pair programming is unrealistic, with the
difficulty of the tasks varying from day to day.
He ultimately criticizes the ongoing discussion
for publicizing the problems but not the solutions. "How exactly should we weigh the various
pros and cons against each other and actually pick a solution? Maybe we could maybe try
something novel like data crunch the effectiveness of each technique, or do some randomized
experiments to measure the efficacy of each approach? Lol, j/k. Ain't nobody got time for
that!"
Overall, it seems that the F.A.A. was far too differential to Boeing, reportedly treating
them like "a client" and acquiescing to decisions the company made based on their budget and
deadlines, instead of overseeing them more strictly.
Most damningly, Boeing never submitted the autopilot software MCAS for formal F.A.A. review,
after the company began using it to fly the 737 Max, so the F.A.A. was unaware about its
flaws.
Boeing has stopped producing the popular 737 Max model, which is hurting not only Boeing's
bottom line but airlines as well, many of whom have been pushing for compensation for lost
earnings.
Michael O'Leary, CEO of the budget airline Ryanair, is worried that if Boeing doesn't get
the model working again, he might have to cut jobs, as he is not getting the amount of planes
he was expecting and it's hurting his bottom line. "It may well move to 20, it could move to
10, and it could well move to zero if Boeing don't get their s--- together pretty quickly with
the regulator," O'Leary reportedly said on an earnings call.
Turn out that Boeing is not the only company with worrisome autopilot software, as airlines
using certain models of Airbus's A350 software have been told that they have to power down the
software every 149 hours or risk "...partial or total loss of some avionics systems or
functions.
Trump definitely contributes a lot to the collapse of classic neoliberalism. He rejected neoliberal globalization in favor of using
the USA dominant position for cutting favorable to the USA bilateral deals. That undermined the role of dollar of the world reserve
currency and several mechanisms emerged which allow completely bypass dollar system for trade.
Notable quotes:
"... US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic interdependence. ..."
"... A new world is emerging, in which it will be much harder to separate economics from geopolitics. ..."
US President Donald Trump's ruthless use of the centrality of his country's financial system and the dollar to force economic
partners to abide by his unilateral sanctions on Iran has forced the world to recognise the political price of asymmetric economic
interdependence.
In response, China (and perhaps Europe) will fight to establish their own networks and secure control of their nodes. Again, multilateralism
could be the victim of this battle.
A new world is emerging, in which it will be much harder to separate economics from geopolitics. It's not the world according
to Myrdal, Frank, and Perroux, and it's not Tom Friedman's flat world, either. It's the world according to Game of Thrones
.
It made me do a face palm. Somebody thought they had separated economics from geopolitics or power…or at least they wanted
people to believe that and the jig is up.
“One reason for this is that in an increasingly digitalised economy, where a growing part of services are provided at zero
marginal cost, value creation and value appropriation concentrate in the innovation centers and where intangible investments are
made. This leaves less and less for the production facilities where tangible goods are made.”
It depends on what you mean by value.
If value is dollars in someone’s Cayman Islands tax-free account, then value is concentrated in NYC and SF.
But if we follow Natural Law (Marx or Mohammed) and define value as labor, then this is exactly wrong. A Natural Law economy
tries to maximize paid and useful work, because people are made to be useful.
The digital world steadily eliminates useful work, and steadily crams down the wages for the little work that remains. Real
value is avalanching toward zero, while Cayman value is zooming to infinity.
He’s talking more about the whims of the stock market and of our intellectual property laws. For example the marginal cost
for Microsoft to issue another copy of “Windows” is zero. Even their revised iterations of the OS were largely a rehash of the
previous software. Selling this at high prices worked out well for a long time but now the software can practically be had for
free because competitors like Linux and Android are themselves free. So digital services with their low marginal cost depend on
a shaky government edifice (patent enforcement, lack of antitrust) to prop up their value. Making real stuff still requires real
labor and even many proposed robot jobs–driving cars, drone deliveries, automated factories and warehouses–are looking dubious.
Dean Baker has said that the actual investment in automation during the last decades has slowed–perhaps because expensive and
complicated robots may have trouble competing with clever if poorly paid humans. And poorly paid is the current reality due to
population increases and political trends and perhaps, yes, automation.
And even if the masters of the universe could eliminate labor they would then have nobody to buy their products. The super
yacht market is rather small.
>the distribution of gains from openness and participation in the global economy is increasingly skewed. …. True, protectionism
remains a dangerous lunacy.
Well “openness and participation” is looking like lunacy to the Deplorables for exactly the reason given, so what is actually
on offer here?
With useful physical labor being off-shored, first world citizens should all be made shareholders in the new scheme. We shall
all then become dividend collecting layabouts buying stuff made by people we do not know, see, or care about. If they object we
simply have the military mount a punitive expedition until they get whipped back into shape. Sort of like now but with a somewhat
larger, more inclusive shareholder base. It will be wonderful!
Are you sayin’ the lefty Social Wealth Fund concept is really just another way of replicating the same old bougie program of
domination and suppression?
I’m saying that it can be and historically, and that there are and have been multi-national systems of super exploitation of
peripheral, primarily resource exporting populations, relative to a more broadly distributed prosperity for “higher” skilled populations
of the center. This has been a common perspective within anti-imperialist movements.
The argument is not without merit. Is this a “contradiction among the people” where various sectors of a larger labor movement
can renegotiate terms, or is it some more intransigent, deeply antagonistic relationship is a crucial question. The exportation
of manufacturing to the periphery is disrupting the political status-quo as represented by the center’s centrism, political sentiments
are breaking away to the left and right and where they’ll land nobody knows.
Why is Iran such a high priority for so many US elites?
I was just reading this John Helmer below, like Pepe Escobar I’m not sure who’s buttering his bread but it’s all food for thought
and fresh cooked blinis are tastier than the Twinkies from the western msm, and this thought came to mind: Iran is the perfect
test ground for the US to determine Russian weapons and tactical capabilities in a major war context in 2019. That alone might
make it worth it to the Pentagon, why they seem so enthusiastic to take the empire of chaos to unforseen heights (depts?). Somewhat
like the Spanish Civil War was a testing ground for the weapons of WW2.
1. Because it has a lot of non US controlled Oil.
2. Because it is Central on the eastern end of the silk road.
3. Because it does not kiss the US Ring bearers hand at every opportunity, and the US is determined to make it an example not
to be followed.
But consider Saudi us relations… who is kissing who’s ring?
Or consider Israeli us relations… ditto.
We’re a thuggish whore whose favors are easily bought; bring dollars or votes. Or kiss the ring.
An environmental insight here. The world stands devastated. It has reached its carrying capacity for thoughtless humans. From
here on in we have to take the consequences of our actions into account. So when it is said, as above, that the dollar exchange
rate is more important than the other bilateral exchange rates, I think that is no longer the reality. There is only a small amount
of global economic synergy that operates without subsidy. The vast majority is subsidized. And the dollar is just one currency.
And, unfortunately, the United States does not control the sun and the wind (well we’ve got Trump), or the ice and snow. Let alone
the oceans. The big question going forward is, Can the US maintain its artificial economy? Based on what?
That is a factor that seems ignored by the philosophers who are the subjects of the headline posting. It is a great oversight,
a shoe which has been released and is now impacting the floor. “The best laid schemes o’ mice an’ men”
"Gold is being accumulated, by the wisest among us, as a safe haven asset to buffet the expected effects of a very ugly
contraction, one that is man made in every respect. The dogs in the street look worried, and so they should be."
Mark O'Byrne
"Signs of decreasing volume of industrial output are proliferating worldwide. FedEx and days ago DHL issue very negative
outlooks. Maersk gloomy more than a year. Now, even inside US collapse in orders for big rigs to move containers. Trade in
manufactures falling everywhere."
Dr. Harald Malmgren
"Hate obscures all distinctions."
C.S. Lewis
"Intellectual freedom is essential -- freedom to obtain and distribute information, freedom for open-minded and unfearing
debate and freedom from pressure by officialdom and prejudices. Such freedom of thought is the only guarantee against an infection
of people by mass myths, which, in the hands of treacherous hypocrites and demagogues, can be transformed into bloody dictatorship."
Andrei Sakharov
The IMF issued a report today that says that the US Dollar is overvalued. And it sank on that news. Perhaps this will give Trumpolini
a little more leverage in arguing policy with Larry 'King Dollar' Kudlow.
I am not persuaded that the markets are going to resolve these recent moves into trends, given we have a stock option expiration
dead ahead, but especially because of the FOMC meeting scheduled for July 30-31. Well, if something happens in the meanwhile they
will resolve pretty quickly.
Every so often someone writes to me complaining that I do not show sufficient and proper respect for our politicians (and the
pampered corporate princes if you can believe it). Yikes.
And, this just cracks me up, they are just dying to 'cancel their subscription' or 'withhold their donations' in punishment for
my not catering to them, telling them what they want to hear, for not being sufficiently servile.
And well surprise, I don't have much regard for the powers that be these days. Have you noticed?
I think Trump is a classic NY City shyster from way back, a pathological liar, and nuts. The GOP are disgusting hypocrites and
the shameless servants of the wealthiest few, and the DNC are untrustworthy rentboys for money and power who betray their base at
every opportunity for Wall Street and Silicon Valley. They are highly credentialed 'professionals' who play a great game in feeling
your pain but doing as little as possible. And the media are just stooges who take dictation for the deep state and the corporate
powers.
So yeah, you might pick up a certain undercurrent of disgust, even revulsion, with the current situation and the lack of significant
reform and regard for the common person. If that bothers you, get your financial information from some payrolled stooge and sycophant
for the fat cats, and good luck with that.
I think we are in a bad spot, and don't see many bright lights on the horizon for the system internally. I think we are heading
for another financial crash, and a lot of ugliness is going to be exposed when the latest bubble recedes.
As a reminder there will be a stock market option expiration for July on Friday.
Looks like the world order established after WWIII crumbed with the USSR and now it is again the law if jungles with the US as the
biggest predator.
Notable quotes:
"... The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world's largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet. ..."
"... Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign policy. It defines "democracy" to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure, dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence, not democracy ..."
"... A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls "internationalism" (meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest. ..."
"... For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties that called themselves socialist (Tony Blair's British Labour Party, France's Socialist Party, Germany's Social Democrats, etc.) to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness. ..."
"... Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II. ..."
"... Here's the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America "the exceptional nation." But for seventy years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which let other countries share in prosperity and rising living standards. ..."
"... Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations' International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture policies to bombing of civilian targets such as hospitals, weddings and infrastructure. "That investigation ultimately found 'a reasonable basis to believe that war crimes and crimes against humanity." ..."
"... This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago, and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer. ..."
"... England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo. As Bloomberg reported: "The U.S. officials are trying to steer Venezuela's overseas assets to [Chicago Boy Juan] Guaido to help bolster his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign reserves held by the Venezuelan central bank." ..."
"... But now, cyber warfare has become a way of pulling out the connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium. ..."
"... On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX -- Instrument in Support of Trade Exchanges. The promise is that this will be used only for "humanitarian" aid to save Iran from a U.S.-sponsored Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas, this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions attack on Europe ..."
"... The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above. In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945. ..."
"... By following U.S. advice, countries have left themselves open to food blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands. ..."
"... It is worthwhile to note that our global imposition of the mythical "efficiencies" of forcing Latin American countries to become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically to deliver better lives, especially for those living in Central America. The "spread" between the export crops and cheaper food imports from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either. ..."
"... But a few years ago Ukraine defaulted on $3 billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid. ..."
"... It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. ..."
"... Anticipating just such a double-cross, President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe. ..."
"... It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence. ..."
"... Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs, but doesn't have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and settle for being a dominant minority. ..."
"... Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast their vote for Trump did so under the assumption that he would act as a catalyst for systemic change. ..."
"... Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as "norms". Interesting times. ..."
"... Exactly. He hasn't exactly lived up to advanced billing so far in all respects, but I suspect there's great deal of skulduggery going on behind the scenes that has prevented that. ..."
"... To paraphrase the infamous Rummy, you don't go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the best thing we can say about Trump after the historic dust of his administration finally settles. ..."
"... Yet we find out that Venezuela didn't managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet again. Nothing to see here, actually. ..."
"... So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging by some pygmy leaders (Merkel) does not signal a global change. ..."
"... Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. ..."
"... I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you haven't read it yet, move it to the top of your queue if you want to have any idea of how the world really works. ..."
"... If it isn't clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long as the world continues to chase the debt created on the keyboards of Wall Street banks and 'deficits don't matter' Washington neocons – as long as the world's 1% think they are getting 'richer' by adding more "debts that can't be repaid (and) won't be" to their portfolios, the global economy can never be put on a sustainable footing. ..."
"... In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same pretensions to superiority by the same people, to get number 3. ..."
"... Few among Washington's foreign policy elite seem to fully grasp the complex system that made U.S. global power what it now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he's inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of a ruined building standing starkly above the smoking rubble." ..."
"... He's draining the swamp in an unpredicted way, a swamp that's founded on the money interest. I don't care what NYT and WaPo have to say, they are not reporting events but promoting agendas. ..."
"... The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed the OT WH reference to dawg both choosing and then compelling him to run. ..."
"... Highly doubt Trump is a "witting agent", most likely is that he is just as ignorant as he almost daily shows on twitter. On US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household "logics" on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners. ..."
"... Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence. There will be fierce competition to fill the gap. ..."
"... On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and austerity for all globally, a permanent recession. Probably not much better with the Chinese on top. I'll take the USD hegemony any day compared to that prospect. ..."
"... Former US ambassador, Chas Freeman, gets to the nub of the problem. "The US preference for governance by elected and appointed officials, uncontaminated by experience in statecraft and diplomacy, or knowledge of geography, history and foreign affairs" https://www.youtube.com/watch?annotation_id=annotation_882041135&feature=iv&src_vid=Ge1ozuXN7iI&v=gkf2MQdqz-o ..."
"... Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the rest of the world. It would get all these imports effectively for nothing, the US's exorbitant privilege. I tied this in with this graph from MMT. ..."
"... The Government was running a surplus as the economy blew up in the early 1990s. It's the positive and negative, zero sum, nature of the monetary system. A big trade deficit needs a big Government deficit to cover it. A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy. ..."
The end of America's unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons
who gave the world the Iraq, Syria and the dirty wars in Latin America. Just as the Vietnam War drove the United States off gold
by 1971, its sponsorship and funding of violent regime change wars against Venezuela and Syria – and threatening other countries
with sanctions if they do not join this crusade – is now driving European and other nations to create their alternative financial
institutions.
This break has been building for quite some time, and was bound to occur. But who would have thought that Donald Trump would become
the catalytic agent? No left-wing party, no socialist, anarchist or foreign nationalist leader anywhere in the world could have achieved
what he is doing to break up the American Empire. The Deep State is reacting with shock at how this right-wing real estate grifter
has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using
Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black
political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense
that we might adhere to international norms, let alone laws or treaties.
The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together
– the great nightmare of Henry Kissinger and Zbigniew Brzezinski. They also are driving Germany and other European countries into
the Eurasian orbit, the "Heartland" nightmare of Halford Mackinder a century ago.
The root cause is clear: After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution
of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported
even before the Iraq/Iran-Contra boys turned their attention to the world's largest oil reserves in Venezuela: The United States
is now the greatest threat to peace on the planet.
Calling the U.S. coup being sponsored in Venezuela a defense of democracy reveals the Doublethink underlying U.S. foreign
policy. It defines "democracy" to mean supporting U.S. foreign policy, pursuing neoliberal privatization of public infrastructure,
dismantling government regulation and following the direction of U.S.-dominated global institutions, from the IMF and World Bank
to NATO. For decades, the resulting foreign wars, domestic austerity programs and military interventions have brought more violence,
not democracy.
In the Devil's Dictionary that U.S. diplomats are taught to use as their "Elements of Style" guidelines for Doublethink, a "democratic"
country is one that follows U.S. leadership and opens its economy to U.S. investment, and IMF- and World Bank-sponsored privatization.
The Ukraine is deemed democratic, along with Saudi Arabia, Israel and other countries that act as U.S. financial and military protectorates
and are willing to treat America's enemies are theirs too.
A point had to come where this policy collided with the self-interest of other nations, finally breaking through the public
relations rhetoric of empire. Other countries are proceeding to de-dollarize and replace what U.S. diplomacy calls "internationalism"
(meaning U.S. nationalism imposed on the rest of the world) with their own national self-interest.
This trajectory could be seen 50 years ago (I described it in Super Imperialism [1972] and Global Fracture [1978].) It had to
happen. But nobody thought that the end would come in quite the way that is happening. History has turned into comedy, or at least
irony as its dialectical path unfolds.
For the past half-century, U.S. strategists, the State Department and National Endowment for Democracy (NED) worried that
opposition to U.S. financial imperialism would come from left-wing parties. It therefore spent enormous resources manipulating parties
that called themselves socialist (Tony Blair's British Labour Party, France's Socialist Party, Germany's Social Democrats, etc.)
to adopt neoliberal policies that were the diametric opposite to what social democracy meant a century ago. But U.S. political planners
and Great Wurlitzer organists neglected the right wing, imagining that it would instinctively support U.S. thuggishness.
The reality is that right-wing parties want to get elected, and a populist nationalism is today's road to election victory in
Europe and other countries just as it was for Donald Trump in 2016.
Trump's agenda may really be to break up the American Empire, using the old Uncle Sucker isolationist rhetoric of half a century
ago. He certainly is going for the Empire's most vital organs. But it he a witting anti-American agent? He might as well be – but
it would be a false mental leap to use "quo bono" to assume that he is a witting agent.
After all, if no U.S. contractor, supplier, labor union or bank will deal with him, would Vladimir Putin, China or Iran be any
more naďve? Perhaps the problem had to erupt as a result of the inner dynamics of U.S.-sponsored globalism becoming impossible
to impose when the result is financial austerity, waves of population flight from U.S.-sponsored wars, and most of all, U.S. refusal
to adhere to the rules and international laws that it itself sponsored seventy years ago in the wake of World War II.
Dismantling International Law and Its Courts
Any international system of control requires the rule of law. It may be a morally lawless exercise of ruthless power imposing
predatory exploitation, but it is still The Law. And it needs courts to apply it (backed by police power to enforce it and punish
violators).
Here's the first legal contradiction in U.S. global diplomacy: The United States always has resisted letting any other country
have any voice in U.S. domestic policies, law-making or diplomacy. That is what makes America "the exceptional nation." But for seventy
years its diplomats have pretended that its superior judgment promoted a peaceful world (as the Roman Empire claimed to be), which
let other countries share in prosperity and rising living standards.
At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their equity
share was large enough to give them veto power over any loan or other policy. Without such power, the United States would not join
any international organization. Yet at the same time, it depicted its nationalism as protecting globalization and internationalism.
It was all a euphemism for what really was unilateral U.S. decision-making.
Inevitably, U.S. nationalism had to break up the mirage of One World internationalism, and with it any thought of an international
court. Without veto power over the judges, the U.S. never accepted the authority of any court, in particular the United Nations'
International Court in The Hague. Recently that court undertook an investigation into U.S. war crimes in Afghanistan, from its torture
policies to bombing of civilian targets such as hospitals, weddings and infrastructure. "That investigation ultimately found 'a reasonable
basis to believe that war crimes and crimes against humanity."
[1]
Donald Trump's National Security Adviser John Bolton erupted in fury, warning in September that: "The United States will use any
means necessary to protect our citizens and those of our allies from unjust prosecution by this illegitimate court," adding that
the UN International Court must not be so bold as to investigate "Israel or other U.S. allies."
That prompted a senior judge, Christoph Flügge from Germany, to resign in protest. Indeed, Bolton told the court to keep out of
any affairs involving the United States, promising to ban the Court's "judges and prosecutors from entering the United States." As
Bolton spelled out the U.S. threat: "We will sanction their funds in the U.S. financial system, and we will prosecute them in the
U.S. criminal system. We will not cooperate with the ICC. We will provide no assistance to the ICC. We will not join the ICC. We
will let the ICC die on its own. After all, for all intents and purposes, the ICC is already dead to us."
What this meant, the German judge spelled out was that: "If these judges ever interfere in the domestic concerns of the U.S. or
investigate an American citizen, [Bolton] said the American government would do all it could to ensure that these judges would no
longer be allowed to travel to the United States – and that they would perhaps even be criminally prosecuted."
The original inspiration of the Court – to use the Nuremburg laws that were applied against German Nazis to bring similar prosecution
against any country or officials found guilty of committing war crimes – had already fallen into disuse with the failure to indict
the authors of the Chilean coup, Iran-Contra or the U.S. invasion of Iraq for war crimes.
Dismantling Dollar Hegemony from the IMF to SWIFT
Of all areas of global power politics today, international finance and foreign investment have become the key flashpoint. International
monetary reserves were supposed to be the most sacrosanct, and international debt enforcement closely associated.
Central banks have long held their gold and other monetary reserves in the United States and London. Back in 1945 this seemed
reasonable, because the New York Federal Reserve Bank (in whose basement foreign central bank gold was kept) was militarily safe,
and because the London Gold Pool was the vehicle by which the U.S. Treasury kept the dollar "as good as gold" at $35 an ounce. Foreign
reserves over and above gold were kept in the form of U.S. Treasury securities, to be bought and sold on the New York and London
foreign-exchange markets to stabilize exchange rates. Most foreign loans to governments were denominated in U.S. dollars, so Wall
Street banks were normally name as paying agents.
That was the case with Iran under the Shah, whom the United States had installed after sponsoring the 1953 coup against Mohammed
Mosaddegh when he sought to nationalize Anglo-Iranian Oil (now British Petroleum) or at least tax it. After the Shah was overthrown,
the Khomeini regime asked its paying agent, the Chase Manhattan bank, to use its deposits to pay its bondholders. At the direction
of the U.S. Government Chase refused to do so. U.S. courts then declared Iran to be in default, and froze all its assets in the United
States and anywhere else they were able.
This showed that international finance was an arm of the U.S. State Department and Pentagon. But that was a generation ago,
and only recently did foreign countries begin to feel queasy about leaving their gold holdings in the United States, where they might
be grabbed at will to punish any country that might act in ways that U.S. diplomacy found offensive. So last year, Germany finally
got up the courage to ask that some of its gold be flown back to Germany. U.S. officials pretended to feel shocked at the insult
that it might do to a civilized Christian country what it had done to Iran, and Germany agreed to slow down the transfer.
But then came Venezuela. Desperate to spend its gold reserves to provide imports for its economy devastated by U.S. sanctions
– a crisis that U.S. diplomats blame on "socialism," not on U.S. political attempts to "make the economy scream" (as Nixon officials
said of Chile under Salvador Allende) – Venezuela directed the Bank of England to transfer some of its $11 billion in gold held in
its vaults and those of other central banks in December 2018. This was just like a bank depositor would expect a bank to pay a check
that the depositor had written.
England refused to honor the official request, following the direction of Bolton and U.S. Secretary of State Michael Pompeo.
As Bloomberg reported: "The U.S. officials are trying to steer Venezuela's overseas assets to [Chicago Boy Juan] Guaido to help bolster
his chances of effectively taking control of the government. The $1.2 billion of gold is a big chunk of the $8 billion in foreign
reserves held by the Venezuelan central bank."
Turkey seemed to be a likely destination, prompting Bolton and Pompeo to warn it to desist from helping Venezuela, threatening
sanctions against it or any other country helping Venezuela cope with its economic crisis. As for the Bank of England and other European
countries, the Bloomberg report concluded: "Central bank officials in Caracas have been ordered to no longer try contacting the Bank
of England. These central bankers have been told that Bank of England staffers will not respond to them."
This led to rumors that Venezuela was selling 20 tons of gold via a Russian Boeing 777 – some $840 million. The money probably
would have ended up paying Russian and Chinese bondholders as well as buying food to relieve the local famine.
[4] Russia denied this report, but Reuters has confirmed is that Venezuela has sold 3 tons of a planned 29 tones of gold to the
United Arab Emirates, with another 15 tones are to be shipped on Friday, February 1.
[5] The U.S. Senate's Batista-Cuban hardliner Rubio accused this of being "theft," as if feeding the people to alleviate the
U.S.-sponsored crisis was a crime against U.S. diplomatic leverage.
If there is any country that U.S. diplomats hate more than a recalcitrant Latin American country, it is Iran. President Trump's
breaking of the 2015 nuclear agreements negotiated by European and Obama Administration diplomats has escalated to the point of threatening
Germany and other European countries with punitive sanctions if they do not also break the agreements they have signed. Coming on
top of U.S. opposition to German and other European importing of Russian gas, the U.S. threat finally prompted Europe to find a way
to defend itself.
Imperial threats are no longer military. No country (including Russia or China) can mount a military invasion of another major
country. Since the Vietnam Era, the only kind of war a democratically elected country can wage is atomic, or at least heavy bombing
such as the United States has inflicted on Iraq, Libya and Syria. But now, cyber warfare has become a way of pulling out the
connections of any economy. And the major cyber connections are financial money-transfer ones, headed by SWIFT, the acronym for the
Society for Worldwide Interbank Financial Telecommunication, which is centered in Belgium.
Russia and China have already moved to create a shadow bank-transfer system in case the United States unplugs them from SWIFT.
But now, European countries have come to realize that threats by Bolton and Pompeo may lead to heavy fines and asset grabs if they
seek to continue trading with Iran as called for in the treaties they have negotiated.
On January 31 the dam broke with the announcement that Europe had created its own bypass payments system for use with Iran
and other countries targeted by U.S. diplomats. Germany, France and even the U.S. poodle Britain joined to create INSTEX -- Instrument
in Support of Trade Exchanges. The promise is that this will be used only for "humanitarian" aid to save Iran from a U.S.-sponsored
Venezuela-type devastation. But in view of increasingly passionate U.S. opposition to the Nord Stream pipeline to carry Russian gas,
this alternative bank clearing system will be ready and able to become operative if the United States tries to direct a sanctions
attack on Europe.
I have just returned from Germany and seen a remarkable split between that nation's industrialists and their political leadership.
For years, major companies have seen Russia as a natural market, a complementary economy needing to modernize its manufacturing and
able to supply Europe with natural gas and other raw materials. America's New Cold War stance is trying to block this commercial
complementarity. Warning Europe against "dependence" on low-price Russian gas, it has offered to sell high-priced LNG from the United
States (via port facilities that do not yet exist in anywhere near the volume required). President Trump also is insisting that NATO
members spend a full 2 percent of their GDP on arms – preferably bought from the United States, not from German or French merchants
of death.
The U.S. overplaying its position is leading to the Mackinder-Kissinger-Brzezinski Eurasian nightmare that I mentioned above.
In addition to driving Russia and China together, U.S. diplomacy is adding Europe to the heartland, independent of U.S. ability to
bully into the state of dependency toward which American diplomacy has aimed to achieve since 1945.
The World Bank, for instance, traditionally has been headed by a U.S. Secretary of Defense. Its steady policy since its inception
is to provide loans for countries to devote their land to export crops instead of giving priority to feeding themselves. That is
why its loans are only in foreign currency, not in the domestic currency needed to provide price supports and agricultural extension
services such as have made U.S. agriculture so productive. By following U.S. advice, countries have left themselves open to food
blackmail – sanctions against providing them with grain and other food, in case they step out of line with U.S. diplomatic demands.
It is worthwhile to note that our global imposition of the mythical "efficiencies" of forcing Latin American countries to
become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically
to deliver better lives, especially for those living in Central America. The "spread" between the export crops and cheaper food imports
from the U.S. that was supposed to materialize for countries following our playbook failed miserably – witness the caravans and refugees
across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either.
Likewise, the IMF has been forced to admit that its basic guidelines were fictitious from the beginning. A central core has been
to enforce payment of official inter-government debt by withholding IMF credit from countries under default. This rule was instituted
at a time when most official inter-government debt was owed to the United States. But a few years ago Ukraine defaulted on $3
billion owed to Russia. The IMF said, in effect, that Ukraine and other countries did not have to pay Russia or any other country
deemed to be acting too independently of the United States. The IMF has been extending credit to the bottomless it of Ukrainian corruption
to encourage its anti-Russian policy rather than standing up for the principle that inter-government debts must be paid.
It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington. Europe has taken
notice that its own international monetary trade and financial linkages are in danger of attracting U.S. anger. This became clear
last autumn at the funeral for George H. W. Bush, when the EU's diplomat found himself downgraded to the end of the list to be called
to his seat. He was told that the U.S. no longer considers the EU an entity in good standing. In December, "Mike Pompeo gave a speech
on Europe in Brussels -- his first, and eagerly awaited -- in which he extolled the virtues of nationalism, criticised multilateralism
and the EU, and said that "international bodies" which constrain national sovereignty "must be reformed or eliminated."
[5]
Most of the above events have made the news in just one day, January 31, 2019. The conjunction of U.S. moves on so many fronts,
against Venezuela, Iran and Europe (not to mention China and the trade threats and moves against Huawei also erupting today) looks
like this will be a year of global fracture.
It is not all President Trump's doing, of course. We see the Democratic Party showing the same colors. Instead of applauding democracy
when foreign countries do not elect a leader approved by U.S. diplomats (whether it is Allende or Maduro), they've let the mask fall
and shown themselves to be the leading New Cold War imperialists. It's now out in the open. They would make Venezuela the new Pinochet-era
Chile. Trump is not alone in supporting Saudi Arabia and its Wahabi terrorists acting, as Lyndon Johnson put it, "Bastards, but they're
our bastards."
Where is the left in all this? That is the question with which I opened this article. How remarkable it is that it is only right-wing
parties, Alternative for Deutschland (AFD), or Marine le Pen's French nationalists and those of other countries that are opposing
NATO militarization and seeking to revive trade and economic links with the rest of Eurasia.
The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed observer like
me. It took a colossal level of arrogance, short-sightedness and lawlessness to hasten its decline -- something that only crazed
Neocons like John Bolton, Elliot Abrams and Mike Pompeo could deliver for Donald Trump.
[2] Patricia Laya, Ethan Bronner and Tim Ross,
"Maduro Stymied in Bid to Pull $1.2 Billion of Gold From U.K.," Bloomberg, January 25, 2019. Anticipating just such a double-cross,
President Chavez acted already in 2011 to repatriate 160 tons of gold to Caracas from the United States and Europe.
Well, if the StormTrumpers can tear down all the levers and institutions of international US dollar strength, perhaps they
can also tear down all the institutions of Corporate Globalonial Forced Free Trade. That itself may BE our escape . . . if there
are enough millions of Americans who have turned their regionalocal zones of habitation into economically and politically armor-plated
Transition Towns, Power-Down Zones, etc. People and places like that may be able to crawl up out of the rubble and grow and defend
little zones of semi-subsistence survival-economics.
If enough millions of Americans have created enough such zones, they might be able to link up with eachother to offer hope
of a movement to make America in general a semi-autarchik, semi-secluded and isolated National Survival Economy . . . . much smaller
than today, perhaps likelier to survive the various coming ecosystemic crash-cramdowns, and no longer interested in leading or
dominating a world that we would no longer have the power to lead or dominate.
We could put an end to American Exceptionalism. We could lay this burden down. We could become American Okayness Ordinarians.
Make America an okay place for ordinary Americans to live in.
If Populists, I assume that's what you mean by "Storm Troopers", offer me M4A and revitalized local economies, and deliver
them, they have my support and more power to them.
That's why Trump was elected, his promises, not yet delivered, were closer to that then the Democrats' promises. If the Democrats
promised those things and delivered, then they would have my support.
If the Democrats run a candidate, who has a no track record of delivering such things, we stay home on election day. Trump
can have it, because it won't be any worse.
I don't give a damn about "social issues." Economics, health care and avoiding WWIII are what motivates my votes, and I think
more and more people are going to vote the same way.
Good point about Populist versus StormTrumper. ( And by the way, I said StormTRUMper, not StormTROOper). I wasn't thinking
of the Populists. I was thinking of the neo-etc. vandals and arsonists who want us to invade Venezuela, leave the JCPOA with Iran,
etc. Those are the people who will finally drive the other-country governments into creating their own parallel payment systems,
etc.
And the midpoint of those efforts will leave wreckage and rubble for us to crawl up out of. But we will have a chance to crawl
up out of it.
My reason for voting for Trump was mainly to stop the Evil Clinton from getting elected and to reduce the chance of near immediate
thermonuclear war with Russia and to save the Assad regime in Syria from Clintonian overthrow and replacement with an Islamic
Emirate of Jihadistan.
Much of what will be attempted " in Trump's name" will be de-regulationism of all kinds delivered by the sorts of basic Republicans
selected for the various agencies and departments by Pence and Moore and the Koch Brothers. I doubt the Populist Voters wanted
the Koch-Pence agenda. But that was a risky tradeoff in return for keeping Clinton out of office.
The only Dems who would seek what you want are Sanders or maybe Gabbard or just barely Warren. The others would all be Clinton
or Obama all over again.
I couldn't really find any details about the new INSTEX system – have you got any good links to brush up on? I know they made
an announcement yesterday but how long until the new payment system is operational?
arguably wouldn't it be better if for USD hegemony to be dismantled? A strong USD hurts US exports, subsidizes American consumption
(by making commodities cheaper in relative terms), makes international trade (aka a 8,000-mile+ supply chain) easier.
For the sake of the environment, you want less of all three. Though obviously I don't like the idea of expensive gasoline,
natural gas or tube socks either.
It would be good for Americans, but the wrong kind of Americans. For the Americans that would populate the Global Executive
Suite, a strong US$ means that the stipends they would pay would be worth more to the lackeys, and command more influence.
Dumping the industrial base really ruined things. America is now in a position where it can shout orders, and drop bombs,
but doesn't have the capacity to do anything helpful. They have to give up being what Toynbee called a creative minority, and
settle for being a dominant minority.
Having watched the 2016 election closely from afar, I was left with the impression that many of the swing voters who cast
their vote for Trump did so under the assumption that he would act as a catalyst for systemic change.
What this change would consist of, and how it would manifest, remained an open question. Would he pursue rapprochement with
Russia and pull troops out of the Middle East as he claimed to want to do during his 2016 campaign, would he doggedly pursue corruption
charges against Clinton and attempt to reform the FBI and CIA, or would he do both, neither, or something else entirely?
Now we know. He has ripped the already transparent mask of altruism off what is referred to as the U.S.-led liberal international
order and revealed its true nature for all to see, and has managed to do it in spite of the liberal international establishment
desperately trying to hold it in place in the hope of effecting a seamless post-Trump return to what they refer to as "norms".
Interesting times.
Exactly. He hasn't exactly lived up to advanced billing so far in all respects, but I suspect there's great deal of skulduggery
going on behind the scenes that has prevented that. Whether or not he ever had or has a coherent plan for the havoc he has
wrought, he has certainly been the agent for change many of us hoped he would be, in stark contrast to the criminal duopoly parties
who continue to oppose him, where the daily no news is always bad news all the same. To paraphrase the infamous Rummy, you
don't go to war with the change agent and policies you wished you had, you go to war with the ones you have. That might be the
best thing we can say about Trump after the historic dust of his administration finally settles.
Look on some bright sides. Here is just one bright side to look on. President Trump has delayed and denied the Clinton Plan
to topple Assad just long enough that Russia has been able to help Assad preserve legitimate government in most of Syria and defeat
the Clinton's-choice jihadis.
That is a positive good. Unless you are pro-jihadi.
Clinton wasn't going to "benefit the greater good" either, and a very strong argument, based on her past behavior, can be made
that she represented the greater threat. Given that the choice was between her and Trump, I think voters made the right decision.
Hudson's done us a service in pulling these threads together. I'd missed the threats against the ICC judges. One question:
is it possible for INSTEX-like arrangements to function secretly? What is to be gained by announcing them publicly and drawing
the expected attacks? Does that help sharpen conflicts, and to what end?
Maybe they're done in secret already – who knows? The point of doing it publicly is to make a foreign-policy impact, in this
case withdrawing power from the US. It's a Declaration of Independence.
It certainly seems as though the 90 percent (plus) are an afterthought in this journey to who knows where? Like George C.Scott
said while playing Patton, "The whole world at economic war and I'm not part of it. God will not let this happen." Looks like
we're on the Brexit track (without the vote). The elite argue with themselves and we just sit and watch. It appears to me that
the elite just do not have the ability to contemplate things beyond their own narrow self interest. We are all deplorables now.
The end of America's unchallenged global economic dominance has arrived sooner than expected
Is not supported by this (or really the rest of the article). The past tense here, for example, is unwarranted:
At the United Nations, U.S. diplomats insisted on veto power. At the World Bank and IMF they also made sure that their
equity share was large enough to give them veto power over any loan or other policy.
And this
So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. Germany agreed
to slow down the transfer.
Doesn't show Germany as breaking free at all, and worse it is followed by the pregnant
But then came Venezuela.
Yet we find out that Venezuela didn't managed to do what they wanted to do, the Europeans, the Turks, etc bent over yet
again. Nothing to see here, actually.
So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging
by some pygmy leaders (Merkel) does not signal a global change.
"So what I'm saying is he didn't make his point. I wish it were true. But a bit of grumbling and (a tiny amount of) foot-dragging
by some pygmy leaders (Merkel) does not signal a global change."
I'm surprised more people aren't recognizing this. I read the article waiting in vain for some evidence of "the end of our
monetary imperialism" besides some 'grumbling and foot dragging' as you aptly put it. There was some glimmer of a buried lede
with INTEX, created to get around U.S. sanctions against Iran ─ hardly a 'dam-breaking'. Washington is on record as being annoyed.
Currency regime change can take decades, and small percentage differences are enormous because of the flows involved. USD
as reserve for 61% of global sovereigns versus 64% 15 years ago is a massive move. World bond market flows are 10X the size
of world stock market flows even though the price of the Dow and Facebook shares etc get all of the headlines.
And foreign exchange flows are 10-50X the flows of bond markets, they're currently on the order of $5 *trillion* per day. And
since forex is almost completely unregulated it's quite difficult to get the data and spot reserve currency trends. Oh, and buy
gold. It's the only currency that requires no counterparty and is no one's debt obligation.
That's not what Hudson claims in his swaggering final sentence:
"The end of our monetary imperialism, about which I first wrote in 1972 in Super Imperialism, stuns even an informed
observer like me."
Which is risible as not only did he fail to show anything of the kind, his opening sentence stated a completely different reality:
"The end of America's unchallenged global economic dominance has arrived sooner than expected" So if we hold him to his first
declaration, his evidence is feeble, as I mentioned. As a scholar, his hyperbole is untrustworthy.
No, gold is pretty enough lying on the bosom of a lady-friend but that's about its only usefulness in the real world.
Always bemusing that gold bugs never talk about gold being in a bubble . yet when it goes south of its purchase price speak
in tongues about ev'bal forces.
thanks Mr. Hudson. One has to wonder what has happened when the government (for decades) has been shown to be morally and otherwise
corrupt and self serving. It doesn't seem to bother anyone but the people, and precious few of them. Was it our financial and
legal bankruptcy that sent us over the cliff?
Indeed! It is to say the least encouraging to see Dr. Hudson return so forcefully to the theme of 'monetary imperialism'.
I discovered his Super Imperialism while looking for an explanation for the pending 2003 US invasion of Iraq. If you
haven't read it yet, move it to the top of your queue if you want to have any idea of how the world really works. You can
find any number of articles on his web site that return periodically to the theme of monetary imperialism. I remember one in particular
that described how the rest of the world was brought on board to help pay for its good old-fashioned military imperialism.
If it isn't clear to the rest of the world by now, it never will be. The US is incapable of changing on its own a corrupt
status quo dominated by a coalition of its military industrial complex, Wall Street bankers and fossil fuels industries. As long
as the world continues to chase the debt created on the keyboards of Wall Street banks and 'deficits don't matter' Washington
neocons – as long as the world's 1% think they are getting 'richer' by adding more "debts that can't be repaid (and) won't be"
to their portfolios, the global economy can never be put on a sustainable footing.
Until the US returns to the path of genuine wealth creation, it is past time for the rest of the world to go its own way with
its banking and financial institutions.
In other words, after 2 World Wars that produced the current world order, it is still in a state of insanity with the same
pretensions to superiority by the same people, to get number 3.
UK withholding Gold may start another Brexit? IE: funds/gold held by BOE for other countries in Africa, Asian, South America,
and the "stans" with start to depart, slowly at first, perhaps for Switzerland?
Where is the left in all this? Pretty much the same place as Michael Hudson, I'd say. Where is the US Democratic Party in all
this? Quite a different question, and quite a different answer. So far as I can see, the Democrats for years have bombed, invaded
and plundered other countries 'for their own good'. Republicans do it 'for the good of America', by which the ignoramuses mean
the USA. If you're on the receiving end, it doesn't make much difference.
Agreed! South America intervention and regime change, Syria ( Trump is pulling out), Iraq, Middle East meddling, all predate
Trump. Bush, Clinton and Obama have nothing to do with any of this.
" So last year, Germany finally got up the courage to ask that some of its gold be flown back to Germany. "
What proof is there that the gold is still there? Chances are it's notional. All Germany, Venezuela, or the others have is
an IOU – and gold cannot be printed. Incidentally, this whole discussion means that gold is still money and the gold standard
still exists.
What makes you think that the gold in Fort Knox is still there? If I remember right, there was a Potemkin visit back in the
70s to assure everyone that the gold was still there but not since then. Wait, I tell a lie. There was another visit about two
years ago but look who was involved in that visit-
And I should mention that it was in the 90s that between 1.3 and 1.5 million 400 oz tungsten blanks were manufactured in the
US under Clinton. Since then gold-coated tungsten bars have turned up in places like Germany, China, Ethiopia, the UK, etc so
who is to say if those gold bars in Fort Knox are gold all the way through either. More on this at --
http://viewzone2.com/fakegoldx.html
It wasn't last year that Germany brought back its Gold. It has been ongoing since 2013, after some political and popular pressure
build up. They finished the transaction in 2017. According to an article in Handelblatt (but it was widely reported back then)
they brought back pretty much everything they had in Paris (347t), left what they had in London (perhaps they should have done
it in reverse) and took home another 300t from the NY Fed. That still leaves 1236t in NY. But half of their Gold (1710t) is now
in Frankfurt. That is 50% of the Bundesbanks holdings.
They made a point in saying that every bar was checked and weighed and presented some bars in Frankfurt. I guess they didn't
melt them for assaying, but I'd expect them to be smart enough to check the density.
Their reason to keep Gold in NY and London is to quickly buy USD in case of a crisis. That's pretty much a cold war plan, but
that's what they do right now.
Regarding Michal Hudsons piece, I enjoyed reading through this one. He tends to write ridiculously long articles and in the
last few years with less time and motivation at hand I've skipped most of his texts on NC as they just drag on.
When I'm truly fascinated I like well written, long articles but somehow he lost me at some point. But I noticed that some
long original articles in US magazines, probably research for a long time by the journalist, can just drag on for ever as well
I just tune out.
This is making sense. I would guess that tearing up the old system is totally deliberate. It wasn't working so well for us
because we had to practice too much social austerity, which we have tried to impose on the EU as well, just to stabilize "king
dollar" – otherwise spread so thin it was a pending catastrophe.
Now we can get out from under being the reserve currency – the currency that maintains its value by financial manipulation
and military bullying domestic deprivation. To replace this old power trip we are now going to mainline oil. The dollar will become
a true petro dollar because we are going to commandeer every oil resource not already nailed down.
When we partnered with SA in Aramco and the then petro dollar the dollar was only backed by our military. If we start monopolizing
oil, the actual commodity, the dollar will be an apex competitor currency without all the foreign military obligations which will
allow greater competitive advantages.
No? I'm looking at PdVSA, PEMEX and the new "Energy Hub for the Eastern Mediterranean" and other places not yet made public.
It looks like a power play to me, not a hapless goofball president at all.
So sand people with sociological attachment to the OT is a compelling argument based on antiquarian preferences with authoritarian
patriarchal tendencies for their non renewable resource . after I might add it was deemed a strategic concern after WWII .
Considering the broader geopolitical realities I would drain all the gold reserves to zero if it was on offer . here natives
have some shiny beads for allowing us to resource extract we call this a good trade you maximize your utility as I do mine .
Hay its like not having to run C-corp compounds with western 60s – 70s esthetics and letting the locals play serf, blow back
pay back, and now the installed local chiefs can own the risk and refocus the attention away from the real antagonists.
Indeed. Thanks so much for this. Maybe the RICS will get serious now – can no longer include Brazil with Bolsonaro. There needs
to be an alternate system or systems in place, and to see US Imperialism so so blatantly and bluntly by Trump admin –
"US
gives Juan Guaido control over some Venezuelan assets" – should sound sirens on every continent and especially in the developing
world. I too hope there will be fracture to the point of breakage. Countries of the world outside the US/EU/UK/Canada/Australia
confraternity must now unite to provide a permanent framework outside the control of imperial interests. The be clear, this must
not default to alternative forms of imperialism germinating by the likes of China.
" such criticism can't begin to take in the full scope of the damage the Trump White House is inflicting on the system of global
power Washington built and carefully maintained over those 70 years. Indeed, American leaders have been on top of the world for
so long that they no longer remember how they got there.
Few among Washington's foreign policy elite seem to fully grasp the complex system that made U.S. global power what it
now is, particularly its all-important geopolitical foundations. As Trump travels the globe, tweeting and trashing away, he's
inadvertently showing us the essential structure of that power, the same way a devastating wildfire leaves the steel beams of
a ruined building standing starkly above the smoking rubble."
I read something like this and I am like, some of these statements need to be qualified. Like: "Driving China and Russia together".
Like where's the proof? Is Xi playing telephone games more often now with Putin? I look at those two and all I see are two egocentric
people who might sometimes say the right things but in general do not like the share the spotlight. Let's say they get together
to face America and for some reason the later gets "defeated", it's not as if they'll kumbaya together into the night.
This website often points out the difficulties in implementing new banking IT initiatives. Ok, so Europe has a new "payment
system". Has it been tested thoroughly? I would expect a couple of weeks or even months of chaos if it's not been tested, and
if it's thorough that probably just means that it's in use right i.e. all the kinks have been worked out. In that case the transition
is already happening anyway. But then the next crisis arrives and then everyone would need their dollar swap lines again which
probably needs to cleared through SWIFT or something.
Anyway, does this all mean that one day we'll wake up and a slice of bacon is 50 bucks as opposed to the usual 1 dollar?
Driving Russia and China together is correct. I recall them signing a variety of economic and military agreement a few years
ago. It was covered in the media. You should at least google an issue before making silly comments. You might start with the report
of Russia and China signing 30 cooperation agreements three years ago. See
https://www.rbth.com/international/2016/06/27/russia-china-sign-30-cooperation-agreements_606505
. There are lots and lots of others.
He's draining the swamp in an unpredicted way, a swamp that's founded on the money interest. I don't care what NYT and
WaPo have to say, they are not reporting events but promoting agendas.
The financial elites are only concerned about shaping society as they see fit, side of self serving is just a historical
foot note, Trumps past indicates a strong preference for even more of the same through authoritarian memes or have some missed
the OT WH reference to dawg both choosing and then compelling him to run.
Whilst the far right factions fight over the rudder the only new game in town is AOC, Sanders, Warren, et al which Trumps supporters
hate with Ideological purity.
Highly doubt Trump is a "witting agent", most likely is that he is just as ignorant as he almost daily shows on twitter. On
US role in global affairs he says the same today as he did as a media celebrity in the late 80s. Simplistic household "logics"
on macroeconomics. If US have trade deficit it loses. Countries with surplus are the winners.
On a household level it fits, but there no "loser" household that in infinity can print money that the "winners" can accumulate
in exchange for their resources and fruits of labor.
One wonder what are Trumps idea of US being a winner in trade (surplus)? I.e. sending away their resources and fruits of labor
overseas in exchange for what? A pile of USD? That US in the first place created out of thin air. Or Chinese Yuan, Euros, Turkish
liras? Also fiat-money. Or does he think US trade surplus should be paid in gold?
When the US political and economic hegemony will unravel it will come "unexpected". Trump for sure are undermining it with
his megalomaniac ignorance. But not sure it's imminent.
Anyhow frightening, the US hegemony have its severe dark sides. But there is absolutely nothing better on the horizon, a crash
will throw the world in turmoil for decades or even a century. A lot of bad forces will see their chance to elevate their influence.
There will be fierce competition to fill the gap.
On could the insane economic model of EU/Germany being on top of global affairs, a horribly frightening thought. Misery and
austerity for all globally, a permanent recession. Probably not much better with the Chinese on top.
I'll take the USD hegemony any day compared to that prospect.
Michael Hudson, in Super Imperialism, went into how the US could just create the money to run a large trade deficit with the
rest of the world. It would get all these imports effectively for nothing, the US's exorbitant privilege. I tied this in with this graph from MMT.
The trade deficit required a large Government deficit to cover it and the US government could just create the money to cover
it.
Then ideological neoliberals came in wanting balanced budgets and not realising the Government deficit covered the trade deficit.
The US has been destabilising its own economy by reducing the Government deficit. Bill Clinton didn't realize a Government surplus is an indicator a financial crisis is about to hit. The last US Government surplus occurred in 1927 – 1930, they go hand-in-hand with financial crises.
Richard Koo shows the graph central bankers use and it's the flow of funds within the economy, which sums to zero (32-34 mins.).
The Government was running a surplus as the economy blew up in the early 1990s. It's the positive and negative, zero sum, nature of the monetary system. A big trade deficit needs a big Government deficit to cover it. A big trade deficit, with a balanced budget, drives the private sector into debt and blows up the economy.
It should be remembered Bill Clinton's early meeting with Rubin, where in he was informed that wages and productivity had diverged –
Rubin did not blink an eye.
Over the past two years, the White House has initiated trade disputes, insulted allies and
enemies alike, and withdrawn from or refused to ratify multinational treaties and agreements.
It has also expanded the reach of its unilaterally imposed rules, forcing other nations to
abide by its demands or face economic sanctions. While the stated Trump Administration
intention has been to enter into new arrangements more favorable to the United States, the end
result has been quite different, creating a broad consensus within the international community
that Washington is unstable, not a reliable partner and cannot be trusted. This sentiment has,
in turn, resulted in conversations among foreign governments regarding how to circumvent the
American banking system, which is the primary offensive weapon apart from dropping bombs that
Washington has to force compliance with its dictates.
Consequently, there has been considerable blowback from the Make America Great Again
campaign, particularly as the flip side of the coin appears to be that the "greatness" will be
obtained by making everyone else less great. The only country in the world that currently
regards the United States favorably is Israel, which certainly has good reason to do so given
the largesse that has come from the Trump Administration. Everyone else is keen to get out from
under the American heel.
Well the worm has finally turned, maybe. Even the feckless Angela Merkel's Germany now
understands that national interests must prevail when the United States is demanding that it do
the unspeakable. At the recently concluded G20 meeting in Tokyo Britain, France and Germany
announced that the special trade mechanism that they have been working on this year is now
up and running. It is called the Instrument in Support of Trade Exchanges (Instex) and it will
permit companies in Europe to do business with countries like Iran, avoiding American sanctions
by trading outside the SWIFT system, which is dollar denominated and de facto controlled by the
US Treasury.
The significance of the European move cannot be understated. It is the first major step in
moving away from the dominance of the dollar as the world's trading and reserve currency. As is
often the case, the damage to US perceived interests is self-inflicted. There has been talk for
years regarding setting up trade mechanisms that would not be dollar based, but they did not
gain any momentum until the Trump Administration abruptly withdrew from the Joint Comprehensive
Plan of Action (JCPOA) with Iran over a year ago.
There were other signatories to the JCPOA, all of whom were angered by the White House move,
because they believed correctly that it was a good agreement, preventing Iranian development of
a nuclear weapon while also easing tensions in the Middle East. Major European powers Germany,
France and Great Britain, as well as Russia and China, were all signatories and the agreement
was endorsed by the United Nations Security Council. The US withdrawal in an attempt to destroy
the "plan of action" was therefore viewed extremely negatively by all the other signatories and
their anger increased when Washington declared that it would reinstate sanctions on Iran and
also use secondary sanctions to punish any third party that did not comply with the
restrictions on trade.
Instex is an upgrade of a previous "Special Purpose Vehicle" set up by the Europeans a year
ago to permit trading with Iran without any actual money transfers, something like a barter
system based on balancing payments by value. The announcement regarding Instex came as a result
of last week's meeting in Vienna in which the JCPOA signatories minus the US got together with
Iranian ministry spokesman Abbas Mousavi, who called the gathering "the last chance for the
remaining parties to gather and see how they can meet their commitments towards Iran."
Iran is quietly pleased by the development, even though there are
critics of the arrangement and the government is officially declaring that Instex is
not
enough and it will proceed with plans to increase its uranium production. This produced
an immediate response from Secretary of State Mike Pompeo last week speaking in New Delhi
"If there is conflict, if there is war, if there is a kinetic activity, it will be because the
Iranians made that choice." Nevertheless, Instex could possibly be a model for mechanisms that
will allow Iran to sell its oil without hindrance from Washington. But a sharp reaction from
the White House is expected. While Instex was in the development phase, US observers noted that
the Iranian Special Trade and Finance Instrument, that will do the actual trading, includes
government agencies that are already under US sanctions. That likely means that Washington will
resort to secondary sanctions on the Europeans, a move that will definitely make the bilateral
relationship even more poisonous than it already is. A global trade war is a distinct
possibility and, as observed above, the abandonment of the dollar as the international reserve
currency is a possible consequence.
Trump
has already been "threatening penalties against the financial body created by Germany, the
U.K. and France to shield trade with the Islamic Republic from US sanctions." The Treasury's
undersecretary for terrorism and financial intelligence, Israeli Sigal Mandelker, warned in a
May 7 th letter that "I urge you to carefully consider the potential sanctions
exposure of Instex. Engaging in activities that run afoul of US sanctions can result in severe
consequences, including a loss of access to the US financial system."
Indeed, the White House appears to be willing to engage in economic warfare with Europe over
the issue of punishing Iran. The Treasury Department
issued a statement regarding the Mandelker letter, saying "entities that transact in trade
with the Iranian regime through any means may expose themselves to considerable sanctions risk,
and Treasury intends to aggressively enforce our authorities." Mike Pompeo also was explicit
during a visit to London on May 8 th when he stated that " it doesn't matter what
vehicle's out there, if the transaction is sanctionable, we will evaluate it, review it, and if
appropriate, levy sanctions against those that were involved in that transaction. It's very
straightforward."
It is perhaps not unreasonable to wish the Europeans success, as they are supporting free
trade while also registering their opposition to the White House's bullying tactics using the
world financial system. And if the dollar ceases to be the world's trade and reserve currency,
what of it? It would mean that the Treasury might have to cease printing surplus dollars and
the US ability to establish global hegemony on a credit card might well be impeded. Those would
be good results and one might also hope that some day soon the United States might once again
become a normal country that Americans would be proud to call home.
I'm a little bit suspicious of Rystad because they tilt bullish consistently, and I'm
specifically suspicious because only 10% of the shale companies operating int he US have
positive free cash flows.
If these wells were really spitting out mid to high double digit IRR's then these
companies would be rolling in cash.
They are not.
Despite saying "fully burdened" multiple times, it wasn't until I got to the very last
paragraph of the report where I found this:
++++++++++
"While the economics of recent vintages in the most prospective US liquid basin remain
exceptionally robust, we should note that these ATAX IRRs still do not correspond to
fully-burdened returns.
For a complete picture, we also need to take into account land cost, where the variability
between early and late entrants is expected to be significant. We aim to tackle this
assumption in a forthcoming analysis."
+++++++
Oh.
They left out land costs. You know, one of the largest line-item expenses there is.
Put those back and these wells are negative I will bet you. And that's a decidedly
"bearish tilting" discovery.
Yeah, the "singers" leave off land cost, road cost, earth moving equipment, tanks, and
pipelines, which can easily add up to a couple of million more per well.
Thanks Chris
I missed that. For some basins there might be a 10% IRR at 65 per barrel for the average new
well over its productive life for all costs including land.
Howdy from a hot S. Texas, Chris. IRR is a bad financial metric for the shale oil biz; its
easily manipulated, much like break'even prices. And generally speaking it's the same folks
always doing the manipulating. The IEA and the EIA are Rystad, DI and IHS's biggest clients.
Good news sells, bad news, not. As George says, it's not a lie if you believe it.
ROI's on CAPEX have always been an important, and overlooked key to the failed shale oil
business model. The possibility (often based on exaggerated EUR's to begin with) of earning
$13MM undiscounted cash flow on a $8.5MM dollar investment, over 15-20 years, no less, was
never conducive to staying out of debt to grow. And current 165% ROI's on the very BEST of
wells are not now conducive to paying interest, reserve replacement and ultimately, we hope,
deleveraging debt. It simply does not work. The "models" that predict growth, and debt
reduction, short of $85 oil prices, sustained for many consecutive years, are ridiculous. By
year end '19 we'll see how ridiculous.
The American shale oil phenomena (not to be confused with the American oil industry) is a
textbook example of "non-profit capitalism." From printing press to Central Banks to lenders
to shale companies, the end result is suppose to benefit the American consumer at the pump
and burner tip and is a great redistribution of wealth in our nation. But it's the people in
the middle that are making the killing, the lawyers that put the deals together, the banks
that get the yields, the CEO's that make the +$20MM annual compensation packages while their
EPS suck the royalty owners getting the free money, they are the big winners. And none of
those folks want to see it end. EVER. They could care less about 2 BCFPD of associated gas
being flared, or all the LTO getting exported at $20 discounts to Brent, or ground water
levels in Reeves County they love the shale thing because it makes them money. And they all
do whatever they can to make sure people believe it's a miracle, a revolution; a game
changer.
Phftttttt.
The real oil business, the real America, works on profit. Debt is for pussies, for
weenie-necks, for dads who do not care what sort of life they leave for their kids.
Yeah, $85 and above would work for some, not all. $65 would work for a lot less of them, and
$55 is pretty much a sucking action for cash on almost all. And as a royalty owner, I would
much prefer them not to drill until $85. But, royalty owners do not run the damn companies.
Faulting them is like laughing at the homeless. I have about 30, or more, wells that can be
drilled on my lease, and I have a tiny ownership. Do you think I am happy with $55 to $60
drilling on it, you are wrong. It's about the last hope in life I have, and I am happy with
wasting it??? GD, I am 70, but not that senile, yet. Ok, I may be an exception, but, at
least, you could say some, or maybe even a lot. Otherwise, it's discrimination, which for
you, I would not guess. But, all royalty owners, is like downgrading the homeless. Most, do
not have a clue they could have had steaks, instead of mush.
I am "discriminating" against greed and in any way I can trying to draw attention to the need
to conserve America's remaining resources. Continuous 120 day drilling commitments in MOST
oil and gas leases, term assignments and/or farmouts has led to over drilling, increased GOR
and potential loss of BHP and recovery rates. It's also led to excessive flaring and the
waste of associated gas, overproduction, much lower product prices and more debt. If
operators (Lessees/Assignees) do not comply with these continuous drilling provisions they
typically lose acreage they've paid thousands of dollars per acre to lease.
I am a royalty owner and consider it one of America's great privileges. By proper
management of my minerals I have ensured my family will benefit from them for many, many
decades. Onerous drilling to earn provisions, however, are part of why the shale oil and
shale phenomena in America is, essentially, out of control and on a mission to drain the last
of our country's hydrocarbon resources as fast as borrowed capital will allow. If your leases
do not contain Pugh clauses and drilling commitments then ignore my observations and
goodonya.
I guess I see a different picture of most royalty owners than you, and I will just
concentrate on the EF, as that's where I am. Most of the EF was leased up by around 2009, far
before public knowledge of the field. Ours was originally with Cheatapeak for about $800 a
net acre. The common way to lease it, was through third party land men, who would lie with
impunity. The standard story was, if you don't lease it, with our lease, you may not get
anything if they find oil. In return for signing their lease, as is, was a generous quarter,
rather than the usual eighth. I knew the rest was BS, but a quarter sounded pretty good. The
continuous drilling clause in that, was so weak to be non-existent. No Pugh clause. That was
standard. I actually did not sign with Cheatapeake, nor EOG, but the lease wording was
basically the same. My guess, is the vast majority of mineral right owners were given the
same deal. Maybe not the majority of land, but certainly the number of signers. Most of the
Permian was leased many years ago, with an eighth, or less. Chevron actually owns 100% on a
lot, and so does Oxy, no doubt. Exxon's acquisition of the Bass families' holdings in the
Delaware span 4 decades. EOG's entry into the Delaware was through purchase of Yates. I
believe the picture you are painting of royalty owners is distorted, for most. With, at
least, the big holders, the number of wells is determined by the company. Not the lease. And
most of the rest have very little capex to complete with.
There are so many mineral owners in so many different situations that it is difficult to
paint all with a broad brush.
However, management of shale weren't playing with their own money, and so what happened
happened.
If we could just not keep having these quick drops like Q4 2018 and Q2 2019.
I think that it will be interesting to see what happens to all of the sub 10 BOPD shale
wells. Better hope no down hole failures. Pretty hard to pay 8 figure pay packages to
management on the backs of those. Lol.
I think all investors need to think about what happens when these companies start to run
out of shale locations and have falling production.
Just go to shaleprofile.com and run some calculations on 2014-2016 wells in the various shale
basins.
By the time you subtract 25% royalty, then severance, LOE, G & A, it's apparent that
the majority of the wells cannot payout in a reasonable time. 3-5 years.
I guess in early 2015 those of us in the conventional upstream arena were saying this.
Vertical wells fell off a cliff. But shale wells (with OPM) kept on trucking.
And the stories told about break evens, which we knew were fraudulent, have proven
such.
It is not necessary I "distort" the truth or generalize the role greedy mineral owners have
in the overdrilling and premature depletion of America's shale oil resources; the evidence is
in every courthouse in every county in every shale oil basin in America. Google it, or better
yet, go research public records yourself, as I often have to do. It is abysmal, the
requirements made of Lessees, Assignees and Farmoutees to develop those shale oil resources,
regardless of price, or pressure preservation or common sense. It is very much part of the
problem the shale industry faces. They, and the regulatory agencies that protect them, may
have brought it on themselves when they changed applicable field rules nevertheless the big
winner in all of this shale gig is the American royalty owner, RI and ORRI combined. I
estimate to the tune of about $800 billion in free money the past decade. Those are just the
facts, as painful as they may be.
As a side note, the Texas DPS reports 30 people have been killed on Texas oilfield roads
in July so far all in a hurry to deplete America's last remaining hydrocarbon resources,
flare its associated gas, and export the shit to Korea.
I'm not familiar with Texas shale leases nor who the mineral owners tend to be, so I am
not qualified to comment as I did.
Where I am, several royalty companies have bought fractional interests in active leases
and also where production is inactive.
During the high prices we tried to lease a tract offsetting us, which had been abandoned.
The wells are in the state plugging fund. The mineral owners are from a shale state, and they
wanted a large royalty, much larger than had been granted here. Plus cash upfront. Plus
wanted us to drill the two remaining locations within a certain time or forfeit them (which
made no sense given the lease boundaries, etc. So we passed. It has sat abandoned for several
more years, Wells haven't been plugged either.
However, we have reactivated several leases from 1990s to present, and we are working on
two more small ones that offset us right now. In each case the mineral owners have been
relatively easy to work with.
I ballpark that we have produced over 50K BO from those reclamation projects. With
royalties from 1/6 to 1/8, I'd say those that worked with us have fared pretty well.
I guess maybe when you aren't operating near shale things are a lot easier.
This is a whole different topic: Kayross (I haven't heard of them) are quoted on Rigzone
today as saying that Permian CAPEX data for 2018 have been underreported by some $4.1
billion. They quote Andrew Gould: Average production costs have been underestimated and
production per well overestimated. He says that current shale-oil production is substantially
more water- and sand- intensive than commonly believed.
Kayross: Sand and water intensity in Permian tight-oil production in 2018 is 23% higher
than previously recorded, with sand demand underestimated by 9.2 billion pounds and water by
12.5 billion gallons.
Chart below from that Bloomberg piece suggests that without all the external capital, US
tight oil output would be only about 2 Mb/d instead of 7.5 Mb/d in May 2019. We might see
relatively flat growth going forward, much will depend on future oil prices (low prices might
result in decline, medium prices, flat output and high prices a small increase, perhaps to 9
Mb/d or so.
Even EOG. Flat, at best. One could expect more rig count drops soon. Because, this does
not reflect the multitude of smaller companies that make up a good portion of production.
This can be used for reference to the article for perspective. https://www.rrc.state.tx.us/media/50413/top32producers2018.pdf
Oxy is actually three of those companies, now. Both the Oxies and Anadarko.
" Chinese consumption is enroute to a 6-7% growth year .It's relentless'
I'll leave other to respond to the call for war, if they so choose.
But I will say that the USA would be wise to have no plan to import oil from beyond this
hemisphere, because others, including China, will be consuming all that is available from
Africa and Asia.
There will come a time when EV's look brilliant. To some they already do.
The early season hurricane in the GOM is going to put a major dent in US July crude output.
Around 60% of production is shut-in and will be that way for around a week. This storm is
weak but so sprawling there is a huge area of the Gulf flying helicopters is dangerous
Not the Big One for the industry, New Orleans or Houston by any means. Still, Gulf is hot
and favorable for storms this year.
As long as this BS continues, oil prices will stay low. More BKs and mergers, and flat
shale output. Because, it's now official, big oil determines Permian output. Which will not
be recognized much until 2020. Because, the elevator do not go to upper floors. I wasn't
going to call it until an Oxy takeover by a major, but I can finish the sentence with the
words we have. Final conclusion will have to wait for the official autopsy, but the doc needs
to be smart enough to know that the patient died. May be quite smelly by then.
Lots of Ag professors at major universities study grain trade. I listen to some of their
podcasts. This is what they say in unison.
Right now the US corn and soybean crop is not looking good. But the funds do not so crop
tours, talk to farmers, fly drones over fields, etc. So as long as USDA says all is well,
grain prices stay low.
USDA estimated 91.7 million acres of corn planted most recently. None of the Ag professors
believe the number, nor do the various independent traders I listen to. But the funds went
with it and corn sold off limit down.
Crude -1.401M Cushing: -1.115 M Gasoline -476K Distillate +6.226M
U.S. crude stocks fell less than expected last week, while gasoline inventories decreased
and distillate stocks built, industry group the American Petroleum Institute said on Tuesday.
Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million, compared
with analysts' expectations for a decrease of 2.7 million barrels. Crude stocks at the
Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, API said. Refinery crude runs
rose by 17,000 barrels per day, API data showed. Gasoline stocks fell by 476,000 barrels,
compared with analysts' expectations in a Reuters poll for a 925,000-barrel decline.
Distillate fuels stockpiles, which include diesel and heating oil, rose by 6.2 million
barrels, compared with expectations for a 613,000-barrel gain, the API data showed. U.S.
crude imports fell last week by 41,000 barrels per day to 7 million bpd.
Just as I predicted, plant condensate which is not crude has entered the refinery as crude.
Mason Hamilton of EIA confirmed it in his tweets yesterday.
The adjustment factor will likely remain above 500 KBD as a portion of plant condensate has
entered the refinery as input on a consistent basis. The plant condensate can be directly
used as gasoline blend material just as butane in winter months. Expect gasoline production
to remain high as a result.
These NG shale management folks have even less of a brain that shale oil folks. The NG
stocks have pummeled and many stocks such as RRC and AR hit 52 week lows.
Enno posted yesterday that the shale decline rate is running at the rate of 350KBD/month (or
4.2 MBD/year). I expect the treadmill effect to slow down the shale growth to a virtual crawl
sooner rather than later.
An answer to my own Q from The (IEEFA) – Institute for Energy Economics and Financial
Analysis.
"EQT's former CEO Steve Schlotterbeck recently made headlines when he called fracking an
"unmitigated disaster" because it helped crash prices and produce mountains of red ink."
"In fact, I'm not aware of another case of a disruptive technological change that has done so
much harm to the industry that created the change," Schlotterbeck said at an industry
conference in June.
Amazingly Appears EQT displaced CHK as the GASSEST one to rule them all with an Unresolved
Strategy to bury their stakeholders even deeper in doom. https://www.zerohedge.com/news/2019-07-22/why-us-shale-doomed-no-matter-what-they-do
https://www.rigzone.com/news/permian_fracking_activity_underreported_in_2018-23-jul-2019-159378-article/
Latest news from Rig zone , fracking underreported in permian in 2018. Seems there are not
maby DUCs left to compleate and the oroduction each well is lower than reported that increase
the break even price each barrel.significant. If this is true EIA need to revice their shale
play forcast, also the majours their plans if they used the data reported that was wrong
U.S. crude stocks fell more than expected last week, while gasoline and distillate
inventories built, industry group the American Petroleum Institute said on Tuesday.
Crude inventories fell by 11 million barrels in the week to July 19 to 449 million,
compared with analysts' expectations for a decrease of 4 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 448,000 barrels, API said.
Refinery crude runs fell by 396,000 barrels per day, API data showed.
Gasoline stocks rose by 4.4 million barrels, compared with analysts' expectations in a
Reuters poll for a 730,000-barrel decline.
Distillate fuels stockpiles, which include diesel and heating oil, rose by 1.4 million
barrels, compared with expectations for a 499,000-barrel gain, the API data showed.
U.S. crude imports fell last week by 467,000 barrels per day to 6.6 million bpd.
Hi guys, please read this article in the Oil&Gas journal:
"Oil and gas companies under-reported hydraulic fracturing activity for producing light,
tight oil by more than 20% in the Permian basin during 2018, estimates Kayrros, a data
analytics company serving energy markets.
Using optical and synthetic aperture radar imagery tracking coupled with proprietary
algorithms to identify rigs and fracturing crews, Kayrros found that more than 1,100 Permian
wells were completed but not reported through state commissions or FracFocus, a public
repository for information on fracturing chemicals.
Kayrros counted 6,394 completed wells for 2018, representing a 21% increase on the FracFocus
estimate of 5,272 wells as of June 20.
The backlog of drilled but uncompleted (DUC) wells is considerably smaller than believed,
Kayrros said. In any given month, Kayrros evaluates the Permian DUC inventory at just about
1,000 wells."
If this were true, it would be a massive fraudulent behavior, more typical of an emerging
market with a large black economy. I am somewhat speechless and waiting for more
information.
That part may not be illegal but it certainly sounds like the average return per well is 20%
less than we thought. So, the already poor productivity of shale wells is now 20% less than
previous estimates.
Commenting on the discovery, Andrew Gould, former Chairman of BG and Chairman CEO of
Schlumberger and Kayrros advisory board chairman, said: "Misperceptions about shale oil in
general and the Permian in particular have consequences, hence the importance of these
measurements that show Permian production per well has been substantially overestimated. By
the same token, average production costs per well are understated. With far more wells
contributing to Permian and US oil production than accounted for, current shale oil
production is substantially more water- and sand-intensive than is commonly believed."
The findings have significant implications for the assumed efficiency of the Permian
Basin. The analysis revealed that while oil production is accurately measured in monthly US
statistics, it took many more wells to account for that production in 2018 than were
reported. Assuming a cost of $5 million per horizontal completion, 2018 operator capex is
also underestimated by as much as USD 4.1 billion. Further, the sand and water intensity of
Permian tight oil production in 2018 was 23% greater than previously recorded with sand
demand being underestimated by 9.2 billion pounds and water by 12.5 billion gallons.
Seems this finding by Kayrros could be a really big deal. I am unclear on how exactly a well
gets completed and put into production without triggering the state reporting mechanisms
seems nigh impossible to me.
But it's a heavy-hitting firm with Andrew Gould on its board. From the Kayrros media page
of their website:
+++++++++++++++
New Satellite Data Highlight Large Underreporting of Hydraulic Fracturing Activity
Houston, 23 July 2019
Kayrros, the leading data-driven analysis company serving the energy markets, disclosed
today that hydraulic fracturing activity (fracking), the process for producing light tight
oil, was underreported by more than 20% in the Permian, the most prolific US basin, in
2018.
Using optical and synthetic aperture radar imagery tracking together with proprietary
algorithms to identify rigs and frac crews, Kayrros found that in 2018 alone, more than 1,100
wells were completed in the Permian basin but not reported through state commissions or
FracFocus, a public repository for information on the chemicals used during fracking. The
total figure of 6,394 completed wells counted by Kayrros for 2018 represents a 21% increase
on the FracFocus estimate of 5,272 wells as of June 20, 2019.
US light tight oil (commonly referred to as "shale oil") has been the world's fastest
growing source of oil supply in the last 10 years, turning the United States into the largest
liquids producer and a major exporter of crude oil and refined products. Experts rely their
analysis of the sector on data submitted by operators to state commissions and FracFocus.
Kayrros measurements reveal that public data fail to capture the full scale of fracking.
The macroeconomic implications of this underreporting are far-reaching. For one thing, the
backlog of drilled but uncompleted (DUC) wells is considerably smaller than thought. In any
given month, Kayrros evaluates the Permian DUC inventory at just around 1,000 wells. Most of
this rolling inventory results from regular drilling and completions operations. Over time,
the number of wells drilled generally matches that of wells completed, leaving DUC
inventories relatively unchanged.
The prevalent view that shale operators sit on a large backlog of DUCs that could be
quickly brought to production in the event of an oil crisis even without further drilling is
thus deeply misleading. There is just no such inventory.
The findings also transform the perception of light tight oil economics. In light of these
measurements, the average well is both less productive and higher-cost than reflected in
public data.
Commenting on the discovery, Andrew Gould, former Chairman of BG and Chairman CEO of
Schlumberger and Kayrros advisory board chairman, said: "Misperceptions about shale oil in
general and the Permian in particular have consequences, hence the importance of these
measurements that show Permian production per well has been substantially overestimated. By
the same token, average production costs per well are understated. With far more wells
contributing to Permian and US oil production than accounted for, current shale oil
production is substantially more water- and sand-intensive than is commonly believed."
Kayrros Chief Analyst and Co-Founder Antoine Halff added: "For all its revolutionary
impact on the oil industry, shale remains poorly understood. Publicly available data based on
old-fashioned company reporting have their limits. Hard measurements unlocked by new data
technologies show that contrary to public belief, there is no great buildup of DUCs just
waiting to be brought online. The whole idea that the market can rely on this sort of de
facto spare production capacity is an illusion. The industry is actually running on a much
tighter leash than that."
The findings have significant implications for the assumed efficiency of the Permian
Basin. The analysis revealed that while oil production is accurately measured in monthly US
statistics, it took many more wells to account for that production in 2018 than were
reported. Assuming a cost of $5 million per horizontal completion, 2018 operator capex is
also underestimated by as much as USD 4.1 billion. Further, the sand and water intensity of
Permian tight oil production in 2018 was 23% greater than previously recorded with sand
demand being underestimated by 9.2 billion pounds and water by 12.5 billion gallons.
+++++++++++++++++++++
Enno Peters reports 4832 horizontal wells completed in the Permian basin in 2018, his data
tends to be quite good, though over time more data shows up at the state agencies so this
number will likely get revised higher. The most recent Permian basin report has 3583 Permian
wells completed in 2017, in July 2018 the estimate was 3251 Permian wells completed in 2017,
so about 91% of wells were reported after 7 months, if this rate is consistent (and it may
not be) this suggests perhaps 5310 total wells will be reported for 2018 by July 2020. Pretty
convinced that Enno Peters gets this right.
There is a bit of discussion of this at shaleprofile.com
"... But Dean Baker, the co-founder of the liberal Centre for Economic and Policy Research, said that the increase in corporate debt has corresponded with higher profits and manageably low interest rates. "The idea that you're going to have this massive cascade of defaults - it's very hard to see," Baker said. ..."
"... Michael Madowitz, an economist at the Centre for American Progress, said that most predictions about recessions were wrong, not just those offered by politicians. ..."
"... But he interpreted Warren's essay as a broader warning about how Trump's efforts to support growth by curbing regulations and attacking government institutions might eventually be destructive ..."
"... With my total lack of understanding of world economics I predict a stock market crash sometime between May 2020 and October 2020 and a recession, including Australia (worse than the unofficial one we have really been in here in Australia for the last 10 years), over following few years. ..."
Elizabeth Warren became a household name thanks to her prescient warning of what became a global financial crisis.
Now she's staking her credentials on another forecast of fiscal trauma ahead. The Democratic presidential candidate published an
online essay this week saying that a rise in consumer and corporate debt is imperilling the longest expansion in US history.
"Whether
it's this year or next year, the odds of another economic downturn are high - and growing," Warren wrote.
Her prediction could help
her win over primary voters by tapping into anxieties about middle-class economic stability despite broad gains over the past decade.
But Warren's opponents could seize on her warning to undermine her credibility should a crash fail to materialise before next year's
election, and some economists sympathetic to her agenda say that - for the moment - her conclusion of a looming recession is overblown.
Recessions are notoriously difficult to forecast. Warren first warned in 2003 about subprime mortgage lending, yet it was roughly
five years later when the US housing market fully collapsed.
And although her dire forecast echoed in style some warnings made by
Donald Trump during the 2016 presidential campaign, Warren hasn't aligned with him in portraying her potential election to the White
House as the only way to avert disaster. "I went through this back in the years before the 2008 crash, and no one wanted to listen.
So, here we are again," Warren said on Capitol Hill last week. "I'm trying to point out where the warning signs are. I hope
our regulators and Congress listen, make changes, and that the economy strengthens."
Even economists who like her prescription are skeptical about her diagnosis. Warren rooted her concerns about
the economy in a Federal Reserve report that found a 6.8 per cent increase in household debt over the past decade, allowing the Massachusetts
senator to write that American families are "taking on more debt than ever before." But that figure is not adjusted for inflation,
nor is it adjusted for population growth - and the number of US households has risen by 9.5 per cent during the same period, meaning
that Fed data also shows debt levels have fallen on a per capita basis.
"I don't see a huge bubble on the other side of household
debt that is going to savage people's assets," said Josh Bivens, director of research at the liberal Economic Policy Institute. At
the moment, families can afford their debt because of low interest rates, and that minimises the risks to the economy. American households
are devoting less than 10 per cent of their disposable income to debt service, down from roughly 13 per cent in 2008, according to
the Fed. This doesn't mean that Warren is wrong to conclude that families are burdened by student debt and childcare costs, just
that data suggests the debt produced by those expenses is unlikely to cause a downturn.
Part of Warren's forecast hinges on a spike
in interest rates that seems unlikely as most benchmark rates have declined since November. Warren has assembled a litany of proposals
aimed at bringing down household debt, through student loan forgiveness and affordable childcare availability as well as a housing
plan designed to lower rent costs. She touted her policy agenda - which has propelled her higher in the polls - as ways to avert
her predicted crash.
Warren's warning of a downturn is a somewhat unique maneuver for a presidential candidate. Past White House hopefuls have waited
for the downturns to start before capitalising on them. Bill Clinton won the presidency in 1992, for example, on a post-recession
message summed up by then-adviser James Carville's edict to focus on "the economy, stupid."
Warren also warned this week that an increase in corporate borrowing could crush the economy.
But Dean Baker, the co-founder of the liberal Centre for Economic and Policy Research, said that the increase in corporate debt
has corresponded with higher profits and manageably low interest rates. "The idea that you're going to have this massive cascade
of defaults - it's very hard to see," Baker said.
While the US economy may not be entering into a recession, many economic forecasters say growth is still slowing because of global
and demographic pressures. Evidence of this has already caused Fed officials to signal that they plan to cut interest rates at their
meeting next week. Trump has repeatedly called for the Fed to make even steeper cuts to improve his economic track record.
Michael Madowitz, an economist at the Centre for American Progress, said that most predictions about recessions were wrong, not
just those offered by politicians.
But he interpreted Warren's essay as a broader warning about how Trump's efforts to support growth by curbing regulations and
attacking government institutions might eventually be destructive. "It's hard to say what a debt-driven problem would look like until
it happens," Madowitz said.
"I think it's also reasonable to elevate concern at the moment given how politicised Trump has made apolitical economic institutions
like the Fed. That's not a free lunch. It creates real risks, so it's more important than usual to think about what happens if things
go bump in the night."
AP Mick 8 hours ago
I really have no idea about economics - seriously the mechanics of world financing, where every country seems
to in debt baffles me. But if you look at the last 40 years or so - my adult life - there seems to be a stock market crash about
each 10 years and a recession in the USA about each 10 years. From memory, stock markets in 1987, 1997, 2008 (I suppose also dot
com stuff in around 1999/2000 as well). Recessions in the US in early 90's, early 2000's, 2009 into 2010's.
With my total lack of understanding of world economics I predict a stock market crash sometime between May 2020 and October 2020
and a recession, including Australia (worse than the unofficial one we have really been in here in Australia for the last 10 years),
over following few years.
I wonder how my predictions will stand up to the experts. Gillespie 8 hours ago No facts seem to be the hallmark of your post.
"Warren first warned in 2003 about subprime mortgage lending" shshus 10 hours ago The incoming economic meltdown in a insanely indebted
global ponzi scheme is a no brainer. Despite Trump's usual bombast, the US economy is hardly growing and manufacturing is already
in recession. The lunatic policies of central banks to offer free money at almost zero interest rates has caused a greed based credit
frenzy that is simply unsustainable. The coming economic collapse will be far worse as the trade wars between US and China and rest
of the world will simply compound the problem. Australia is particularly vulnerable in both economic and strategic terms. Time to
batten the hatches, rather than pile on more consumer debt.
"... The USA hegemony is based on ideological hegemony of neoliberalism. And BTW both Russia and China are neoliberal countries. That's probably why President Putin calls the USA administration "partners," despite clearly anti-Russian policies of all US administrations since 1991. ..."
"... One fascinating fact that escapes my understanding is why the USA elite wasted colossal advantage it got after the collapse of the USSR in just 25 years or so. I always thought that the USA elite is the most shrewd out of all countries. ..."
"... May be because they were brainwashed by neocon "intellectuals." I understand that most neocons are simply lobbyists of MIC, and MIC has huge political influence, but still neocon doctrine is so primitive that no civilized elite can take it seriously. ..."
"... I also understand Eisenhower hypocritical laments that "train with MIC left the station" and that the situation can't be reversed (lament disguised as a "warning"; let's remember that it was Eisenhower who appointed Allen Dulles to head the CIA. ..."
>US hegemony is imposed militarily, both covertly and overtly, throughout the world. It is maintained through the petrodollar,
corporate power, and the Federal Reserve Bank and its overseas counterparts
All true, but the key element is missing. The USA hegemony is based on ideological hegemony of neoliberalism. And BTW both
Russia and China are neoliberal countries. That's probably why President Putin calls the USA administration "partners," despite
clearly anti-Russian policies of all US administrations since 1991.
Ability to use military is important but secondary. Without fifth column of national elites which support neoliberalism that
would be impossible, or at least more difficult to use. Like it was when the USSR existed (Vietnam, Cuba, etc). The USSR has had
pretty powerful military, which was in some narrow areas competitive, or even superior to the USA, but when the ideology of Bolshevism
collapsed, the elite changed sides and adopted a neoliberal ideology. This betrayal led to the collapse of the USSR and all its
mighty military and the vast KGB apparatus proved to be useless.
In this sense, the article is weak, and some comments are of a higher level than the article itself in the level of understanding
of the situation (Simon in London at December 21, 2018, at 9:23 am one example; longevity of neoliberalism partially is connected
to the fact that so far there is no clear alternative to it and without the crisis similar to Great Depression adoption of New
Deal style measures is impossible )
It is really sad that the understanding that the destiny of the USA is now tied to the destiny of neoliberalism (much like
the USSR and Bolshevism) is foreign for many.
So it might well be that the main danger for the US neoliberal empire now is not China or Russia, but the end of cheap oil,
which might facilitate the collapse of neoliberalism as a social system based on wasteful use on commodities (and first of all
oil)
One fascinating fact that escapes my understanding is why the USA elite wasted colossal advantage it got after the collapse
of the USSR in just 25 years or so. I always thought that the USA elite is the most shrewd out of all countries.
May be because they were brainwashed by neocon "intellectuals." I understand that most neocons are simply lobbyists of MIC,
and MIC has huge political influence, but still neocon doctrine is so primitive that no civilized elite can take it seriously.
I also understand Eisenhower hypocritical laments that "train with MIC left the station" and that the situation can't be reversed
(lament disguised as a "warning"; let's remember that it was Eisenhower who appointed Allen Dulles to head the CIA.
When Alex Stamos announced that the Internet Research Agency's ad buys were a drop in
the ocean, Zuckerberg was promptly taken to the Congressional Woodshed and told to report
to the Atlantic Council. Those two billion-odd fake accounts may be a fraud perpetrated on
the advertisers, but they are invaluable to US "law" enforcement and to US propaganda, where
the ability to open a fake account on Facebook gives the illusion of privacy.
With all due respect to Mr. Greenspan and his Lowell House creds, I think he fails to
understand that Facebook is now an NSA asset.
This is a fascinating article and it certainly put a smile on my dial. As an asset for use
by governments around the world, Facebook may be too invaluable to just let sink. One guy
reported that he was in a meeting with Facebook’s top brass including the Zuck when a
head honcho of the FBI came into the meeting and sang Zuck’s praises for all the help
that Facebook gave the FBI. So the question remains. Just how many “real” Facebook
accounts does Facebook have? Ones that people check on daily. Now that is the killer
question.
"... When scanning the news most days, I see a constant amplification of wedge issues by mass media, blue-check pundits and even many in the so-called alternative media. I see people increasingly being encouraged to demonize and dehumanize their fellow citizens. Anyone who voted for Trump is automatically a Nazi, likewise, anyone who supports Sanders is an anti-American communist. The reality is neither of these things is even remotely true, so why are people so quick to say them? ..."
"... The Epstein case shines a gigantic spotlight on just how twisted and sociopathic the highest echelons of U.S. society have become. This is exactly what happens when you fail to put wealthy and powerful super predators behind bars. They get more brazen, they get more demented and, ultimately, they destroy the very fabric that holds society together. We are in fact ruled by monsters. ..."
Perhaps, at long last, a serial rapist and pedophile may be brought to justice , more than a dozen years after he was first
charged with crimes that have brutalized countless girls and women. But what won't change is this: the cesspool of elites, many
of them in New York, who allowed Jeffrey Epstein to flourish with impunity.
For decades, important, influential, "serious" people attended Epstein's dinner parties, rode his private jet, and furthered
the fiction that he was some kind of genius hedge-fund billionaire. How do we explain why they looked the other way, or flattered
Epstein, even as they must have noticed he was often in the company of a young harem? Easy: They got something in exchange from
him , whether it was a free ride on that airborne "Lolita Express," some other form of monetary largesse, entrée into the extravagant
celebrity soirées he hosted at his townhouse, or, possibly and harrowingly, a pound or two of female flesh.
An honest assessment of the current state of American politics and society in general leaves little room for optimism regarding
the public's ability to accurately diagnose, much less tackle, our fundamental issues at a root level. A primary reason for this
state of affairs boils down to the ease with which the American public is divided against itself and conquered.
Though there are certain issues pretty much everyone can agree on, we simply aren't focusing our collective energy on them or
creating the mass movements necessary to address them. Things such as systemic bipartisan corruption, the institutionalization of
a two-tier justice system in which the wealthy and powerful are above the law, a broken economy that requires both parents to work
and still barely make ends meet, and a military-industrial complex consumed with profits and imperial aggression not national defense.
These are just a few of the many issues that should easily unite us against an entrenched power structure, but it is not happening.
At least not yet.
We currently find ourselves at a unique inflection point in American history. Though I agree with Charles Hugh Smith's assessment
that " Our Ruling
Elites Have No Idea How Much We Want to See Them All in Prison Jumpsuits, " we have yet to reach the point where the general
public is prepared to do something about it. I think there are several reasons for this, but the primary obstacle relates to how
easily the citizenry is divided and conquered. The mass media, largely owned and controlled by billionaires and their corporations,
is highly incentivized to keep the public divided against itself on trivial issues, or at best, on real problems that are merely
symptoms of bipartisan elitist plunder.
The key thing, from a plutocrat's point of view, is to make sure the public never takes a step back and sees the root of society's
problems. It isn't Trump or Obama, and it isn't the Republican or Democratic parties either. These individuals and political gangs
are just useful vehicles for elitist plunder. They help herd the rabble into comfortable little tribal boxes that results in made
for tv squabbling, while the true forces of power carry on with the business of societal pillaging behind the scenes.
You're encouraged to attach your identity to team Republican or team Democrat, but never unite as one voice against a bipartisan
crew of depraved, corrupt and unaccountable power players molding society from the top. While the average person living paycheck
to paycheck fashions themselves part of some biblical fight of good vs. evil by supporting team red or blue, the manipulative and
powerful at the top remain beyond such plebeian theater (though they certainly encourage it). These folks know only one team -- team
green. And their team keeps winning, by the way.
When scanning the news most days, I see a constant amplification of wedge issues by mass media, blue-check pundits and even
many in the so-called alternative media. I see people increasingly being encouraged to demonize and dehumanize their fellow citizens.
Anyone who voted for Trump is automatically a Nazi, likewise, anyone who supports Sanders is an anti-American communist. The reality
is neither of these things is even remotely true, so why are people so quick to say them?
Why is most of the anger in this country being directed at fellow powerless Americans versus upward at the power structure which
nurtured and continues to defend the current depraved status quo? I don't see any upside to actively encouraging one side of the
political discussion to dehumanize the other side, and I suggest we consciously cease engaging in such behavior. Absolutely nothing
good can come from it.
Which is partly why I've been so consumed by the Jeffrey Epstein case. For once, it allows us to focus our energy on the depraved
nature of the so-called American "elite," rather than pick fights with each other. How many random Trump or Sanders supporters do
you know who systematically molest children and then pass them off to their wealthy and powerful friends for purposes of blackmail?
The Epstein case shines a gigantic spotlight on just how twisted and sociopathic the highest echelons of U.S. society have
become. This is exactly what happens when you fail to put wealthy and powerful super predators behind bars. They get more brazen,
they get more demented and, ultimately, they destroy the very fabric that holds society together. We are in fact ruled by monsters.
Unfortunately, by being short-sighted, by fighting amongst ourselves, and by taking the easy route of punching down versus punching
up, we allow such cretins to continue to rape and pillage what remains of our civilization.
If we can truly get to the bottom of exactly what Epstein was up to, I suspect it has the potential to focus the general public
(beyond a few seconds) on the true nature of what's really going on and what makes the world tick. Revelations of such a nature could
provide the proverbial tipping point that's so desperately needed, but this is also why the odds of us actually getting the whole
story is quite low. There's simply too much at stake for those calling the shots.
* * *
Side note: I've been consistently updating my
Epstein twitter thread as I learn new information.
I suggest checking back in from time to time.
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If we can truly get to the bottom of exactly what Epstein was up
1. We can't.
2. Epstein was in the business to set up people with kompromat material ...
3. ...and did it for someone else , it appears as he was protected from above for many years.
4. These " elses " won't allow that the support of the Americans to forever fight Israels wars gets shattered.
5. I expect operation diversion & coverup soon. My hunch is that they will pull a 9/11 hoax as a last resort if things get out
of hand fast.
6. They did it in the past, they will do it in the future.
7. Human lives don't matter to them.
Michael Krieger said: "It's sad and mind-boggling how easy it is to divide and conquer the American public. Manipulating the
masses in this country is trivial. The next few years will not be pretty".
Despite all the news of how the elites have manipulated the American public, it still goes on, unabated. Americans, for the
most part, are dumb and fat couch potatoes. They are not going to rise up against their elite masters, because they don't have
the wherewithal to do so. So, the show continues on, and the elites don't seem to have anything to worry about, and do as they
will.
If Americans were truly energetic about reigning in the abuses of the elites, they would have done so back in the 1870's, when
Mark Twain wrote about the Gilded Age Elites. Here it is, 149 years later, and nothing has changed in America today. The elites
still rule, and everyone else is an indentured servant. Of course, there are benefits for the elites to keep the American masses
dumbed down, and letting them lead couch potato life styles. Doing so, keeps them in power.
I suspect it was the CIA or FBI. But the goal was to keep Acosta from investigating Virginia Roberts' claims. If authorities
did this they would have had to investigate Prince Andrew.
If they found her to be truthful, they might even have to arrest Prince Andrew (can you imagine this happening?). Or at least
ask him to testify in a trial.
If the truth came out, this would humiliate the British nation, and Great Britain was (still is) one of America's most important
allies in the "war on terror" and all our other neocon initiatives.
Acosta was essentially told to "back off" Prince Andrew (not necessarily Epstein, who was best buddies with "Andy.")
This doesn't mean Israel intelligence was not involved in some way. It just means that American intelligence was involved,
or wanted to protect key people. Hell, they still do.
We can be almost certain that the exact same thing that happened with Acosta is happening right now. Some prosecutor is being
told to "back off. Don't go here. Focus only on Epstein and Epstein only."
This is why Ghislaine Maxwell has not been charged and will not be charged. This is why the FBI has not raided Pedo Island
or Pedo Ranch. This is why Epstein's four "co-accomplices" have not been charged.
Prosecutors have again been told that "intelligence" is saying that it's okay to do this (charge Epstein with sex crimes),
but NOT okay to do this (investigate and arrest any fellow predators).
It isn't just the elites and we need to stop pretending it is
"Child sex trafficking which is the buying and selling of women, young girls and boys for sex, some as young as 9 years old,
has become big business in America. It is the fastest growing business in organized crime and the second-most-lucrative commodity
traded illegally after drugs and guns.
Adults purchase children for sex at least 2.5 million times a year in the United States.
It's not just young girls who are vulnerable to these predators, either.
According to a 2016 investigative report, "boys make up about 36% of children caught up in the U.S. sex industry (about 60% are
female and less than 5% are transgender males and females)."
Who buys a child for sex?
Otherwise, ordinary men from all walks of life. "They could be your co-worker, doctor, pastor or spouse."
If Epstein was muslin would this be a crime? Of course not it would be part of Muslim Culture. Look into the Abuse done to
young girls in the Rotherham abuse case. BTW I am no sticking up for Epstein but the ruling elites and certain minorities are
treated different from Joe and Jane Public
"The Epstein Case Is A Rare Opportunity To Focus "On The Depraved Nature Of America's Elite"
This IS a "rare opportunity' for Americans to do just this (focus on how deprived our elite leaders really are).
If Americans really started to do this, for an extended period of time, and got, you know, kind of pissed off about this state
of affairs, we might even throw all the bums out. We might really "drain the swamp."
So this is a BIG story. Potentially.
Of course, the Powers that Be are going to do everything they can to make sure Americans do NOT focus on this story for too
long. Or that the "narrative" is controlled. (For example by focusing only on Epstein, not his hundreds of depraved buddies and
corrupt institutions).
I've been posting for 10 days that there are "too many" of these people. And they are too powerful.
Seems to me if authorities went after one of the "johns," they would have to go after ALL of the "Johns." And this includes
Prince Andrew, Bill Clinton, former senators, governors, CEOs, secretaries of the treasury, bankers, etc.
It's the massive numbers of possible offenders that is probably keeping all of these people "safe."
And I still think Prince Andrew is the biggest fish the authorities don't want to humiliate/charge.
Even more so than Clinton. Half the country would throw a party if Clinton was charged. But in the UK, 90 percent of British
citizens would be mortified and greatly embarrassed if one of their Princes was proven to have done all the things that have been
alleged he did.
Following Russia signalling last week, its willingness to join the controversial payments channel Instex - designed to circumvent
both SWIFT as well as US sanctions banning trade with Iran - new statements from Russian Deputy Foreign Minister Sergei Ryabkov called
on the international community to free itself from a purely US-controlled international financial system and US dollar dominance.
"We must protect ourselves from political abuses made with the help of the US dollar and the American banking system," he said
while addressing a ministerial meeting of the Non-Aligned Movement held in Venezuela, according to
TASS . "We must turn our dependence in this sphere into independence,"
he added.
"Let us be multipolar in the spheres of finance and currency," he said.
The senior diplomat was specifically addressing US-led sanctions and the tightening economic noose, including a near total oil
export blockade, on the Maduro government in Caracas.
The comments also come after early this year the Maduro regime was stymied in its bid to pull $1.2 billion worth of gold out of
the Bank of England , according to a January
Bloomberg report . The Bank of England's (BoE) decision to deny Maduro officials' withdrawal request was a the height of US coup
efforts targeting Maduro.
Specifically top US officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, had lobbied
their UK counterparts to help cut off the regime from its overseas assets, as we
reported at the time. Washington has further lobbied other international institutions, and especially its Latin American allies,
to seize Venezuelan assets and essentially hold them for control of Juan Guaido's opposition government in exile.
"This is just one of the examples of a wider policy of deliberate instigation of crises to change government, to replace legitimately
elected politician with American stooges ."
Despite western capitals virtue-signaling their "rules-based order" approach, Ryabkov said instead, "We think that it is not a
rule-based world order, it is rather a foisted and imposed world order ."
Meanwhile, the establishment of the 'SWIFT-alternative' Instex - now online as of three weeks ago - constitutes the biggest threat
the dollar as a reserve currency to date, especially if Russia follows through on its signalling it could join.
DeDollarization is inevitable. The US has abused the dollar reserve currency by weaponizing it first under FDR when he dropped
the price of gold from $50 to 35 over night, a violation of Bretton Woods.
Then Nixon devalued three times
The worst infraction of all was Obama Sanctioning Russia and weaponizing the dollar reserve.
Trump who knows nothing at all except bullyism, then used Obama weaponizing sanctions and now covers nearly 50% of the global
population. Trump is dumber than dirt.
It is now inevitable that the rest of the world will find methods to trade outside of the dollar. That is currently being done
with Iron ore and coal with China in Yuan and this will spread.
The present system of demigod dollars is not sustainable. Maynard Keynes proposed a synthetic currency called the Bancor comprise
of five of the world's leading currencies. New technology in Cryptos may at last be a method of trade that cannot be weaponized.
Obviously a global currency that could not be manipulated is necessary. A crypto could be instantly valued correctly based on
real instant transactions not speculators buying and selling.
Bitcoin is unsatisfactory for many reasons, primarily because the developers gave themselves lots of free bitcoins and its
circulation is so limited that its value cannot be determined due to volatility. It's worthless. But the idea is the future.
Until then the best alternative is competing currencies. Let buyers and sellers determine the currency to be used.
The big question on my mind is how long before all confidence in the Dollar is lost? Foreign central banks are buying gold
which leaves the U.S. government with a funding problem. Just this year the U.S. has to roll over 11 Trillion in debt. Without
central banks adding Dollars to their core reserves who's going to fund U.S. deficits ? certainly not the domestic financial economy.
Then you have INSTEX bypassing the petro Dollar with Iran and now potentially with Russia. We know Russia and China are trading
directly and bypassing the Dollar. We're also losing weapons sales and Boeing aircraft sales to competitors. These are Dollar
denominated big ticket items that support the Dollar. How long before people start getting rid of Dollars in mass? When is the
confidence lost?
According to all the expert articles written on ZH both Russia and China had fully functioning alternatives to SWIFT several
years ago.
And they were going to facilitate the abandonment of the dollar, with the dollars demise any day.
Now, the experts tell us Russia wants to join the Instex club, which was created by Europe and controlled by Europe and has
very limited abilities to handle international trade.
The inability of Russia to avoid SWIFT and having to use the dollar in much of Russia's trade is a huge tactical error in this
financial war.
"The Bank of the United States is one of the most deadly hostilities existing, against the principles and form of our Constitution.
An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical
moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any
other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States,
with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we
then to give further growth to an institution so powerful, so hostile?" –Thomas Jefferson to Albert Gallatin, 1803. ME 10:437
When you are going to war, dig two graves for yourself too.
American sanctions undermine the hegemony of the dollar.
Russia, Iran, China, North Korea, Venezuela, Cuba and those many others who are tired of the hegemony of the dollar. The total
population of these countries exceeds two billion people, and the cumulative GDP is over 15 trillion.
Almost eight year ago
, we first presented a chart first created by JPMorgan's Michael Cembalest, which showed very simply and vividly that reserve currencies
don't last forever, and that in the not too distant future, the US Dollar would also lose its status as the world's most important
currency, since it is never different this time.
As Cembalest put it back in January 2012, "I am reminded of the following remark from late MIT economist Rudiger Dornbusch: 'Crisis
takes a much longer time coming than you think, and then it happens much faster than you would have thought.'"
Perhaps it is not a coincidence then that in light of the growing number of mentions of MMT and various other terminal, destructive
monetary policies that have been proposed to kick on the current financial system the can just a little bit longer, that the topic
of longevity of reserve currency status is once again becoming all the rage, and none other than JPMorgan's Private Bank ask in this
month's investment strategy note whether "the dollar's "exorbitant privilege" is coming to an end?"
So why is JPM, after first creating the iconic chart above which has since spread virally across all financial corners of the
internet, not only worried that the dollar's reserve status may be coming to an end, but in fact goes so far as to state that "we
believe the dollar could lose its status as the world's dominant currency (which could see it depreciate over the medium term) due
to structural reasons as well as cyclical impediments."
Read on to learn why even the largest US bank has started to lose faith in the world's most powerful currency.
Is the dollar's "exorbitant privilege" coming to an end?
In Brief
The U.S. dollar (USD) has been the world's dominant reserve currency for almost a century. As such, many investors today, even
outside the United States, have built and become comfortable with sizable USD overweights in their portfolios. However, we believe
the dollar could lose its status as the world's dominant currency (which could see it depreciate over the medium term) due to structural
reasons as well as cyclical impediments .
As such, diversifying dollar exposure by placing a higher weighting on other currencies in developed markets and in Asia, as well
as precious metals makes sense today. This diversification can be achieved with a strategy that maintains the underlying assets in
an investment portfolio, but changes the mix of currencies within that portfolio. This is a completely bespoke approach that can
be customized to meet the unique needs of individual clients.
The rise of the U.S. dollar
It is commonly perceived that the U.S. dollar overtook the Great British Pound (GBP) as the world's international reserve currency
with the signing of the Bretton Woods Agreements after World War II. The reality is that sterling's value was eroded for many decades
prior to Bretton Woods. The dollar's rise to international prominence was fueled by the establishment of the Federal Reserve System
a little over a century ago and U.S. economic emergence after World War I. The Federal Reserve System aided in the establishment
of more mature capital markets and a nationally coordinated monetary policy, two important pillars of reserve-currency countries.
Being the world's unit of account has given the United States what former French Finance Minister Valery d'Estaing called an "exorbitant
privilege" by being able to purchase imports and issue debt in its own currency and run persistent deficits seemingly without consequence.
The shifting center
There is nothing to suggest that the dollar dominance should remain in perpetuity . In fact, the dominant international currency
has changed many times throughout history going back thousands of years as the world's economic center has shifted.
After the end of World War II, the U.S. accounted for biggest share of world GDP at more than 25%. This number is brought to more
than 40% when we include Western European powers. Since then, the main driver of economic growth has shifted eastwards towards Asia
at the expense of the U.S. and the West. China is at the epicenter of this recent economic shift driven by the country's strong growth
and commitment to domestic reforms. Over the last 70 years, China has quadrupled its share of global GDP to around 20% -- roughly
the same share as the U.S. -- and this share is expected to continue to grow in the years ahead. China is no longer just a manufacturer
of low cost goods as a growing share of corporate earnings is coming from "high value add" sectors like technology.
In addition to China, the economies of Southeast Asia, including India, have strong secular tailwinds driven by younger demographics
and proliferating technological know-how. Specifically, the Asian economic zone -- from the Arabian Peninsula and Turkey in the West
to Japan and New Zealand in the East and from Russia in the North and Australia in the South -- now represents 50% of global GDP
and two-thirds of global economic growth. Of the estimated $30 trillion in middle-class consumption growth between 2015 and 2030,
only $1 trillion is expected to come from today's Western economies. As this region grows, the share of non-USD transactions will
inevitably increase which will likely erode the dollar's "reserveness", even if the dollar isn't replaced as the dominant international
currency.
In other words, in the coming decades we think the world economy will transition from U.S. and USD dominance toward a system where
Asia wields greater power. In currency space, this means the USD will likely lose value compared to a basket of other currencies,
including precious commodities like gold.
Dollar's declining role already under way?
Recent data on currency reserve holdings among global central banks suggests this shift may already be under way. As a share of
overall central bank reserves, the USD's role has been declining ever since the Great Recession (see chart). The most recent central
bank reserve flow data also suggests that for the first time since the euro's introduction in 1999, central banks simultaneously
sold dollars and bought euros.
Central banks across the globe are also adding to gold reserves at their strongest pace on record. 2018 saw the strongest demand
for gold from central banks since 1971 and a rolling four-quarter sum of gold purchases is the strongest on record. To us, this makes
sense: gold is a stable source of value with thousands of years of trust among humans supporting it.
The current U.S. administration has called into question agreements with nearly all of its largest partners -- tariffs on China,
Mexico and the European Union, renegotiating NAFTA, as well as abandoning the Trans Pacific Partnership. A more adversarial U.S.
administration could also encourage countries to reduce their reliance on USD in trade. Currently 85% of all currency transactions
involve the USD despite the U.S. accounting for only roughly 25% of global GDP.
Countries around the world are already developing payment mechanisms that would avoid using the dollar. These systems are small
and still developing but this is likely to be a structural story that will extend beyond one particular administration. In a recent
speech on the international role of the euro, Bank for International Settlements Chief Economist Claudio Borio brought up the benefits
of pricing oil in the euro saying, "Trading and settling oil in the euro would move payments from dollars to euros and thereby shift
ultimate settlement to the euro's TARGET2 system. This could limit the reach of U.S. foreign policy insofar as it leverages dollar
payments." The European Central Bank also alluded to this theme in a recent report saying that "growing concerns about the impact
of international trade tensions and challenges to multilateralism, including the imposition of unilateral sanctions seem to have
lent support to the euro's global standing."
We believe we are at an important juncture. On a real basis, the dollar stands currently more than 10% above its long-term average
and on a nominal basis has actually been trending lower for 50 years (see chart below).
Source: Bloomberg as of June 13, 2019
Given the persistent -- and rising -- deficits in the United States (in both fiscal and trade), we believe the U.S. dollar could
become vulnerable to a loss of value relative to a more diversified basket of currencies, including gold . As we scan client portfolios,
we see that many of them have far more U.S. dollar exposure than we feel is prudent. At this stage of the economic cycle, we believe
this exposure should be more diversified. In many cases, our recommendation would likely be to place a higher weighting on other
G10 currencies, currencies in Asia and gold (see chart).
The Spanish Piece of Eight (a silver coin) was in circulation until Mao's Long March (1934) and was legal tender in the US
until 1857. Known as the Spanish dollar it was one of the few currencies accepted by the Chinese until the Opium Wars.
It was silver and it was reliably minted. And as you prolly know, the Chinese only accepted silver or precious metals as currency.
Then the British declared war on them bc ...reasons.
Spain minted a huge ammount of Po8 in 300 years, that went on circulation for a long time. The coins were minted in Bolivia
from Mexican and Peruvian mines. In that time Mexicans earned like 5 times the wage of most Europeans.
But I guess you're right in some way. However, Mexico was not the country that it is now.
The Fed has become the great enabler. A key role of a reserve currency is to force other currencies to toe the line or pay
a stiff price. Ignoring this economic reality translates into pain for those holding the currency of any country that abuses this
economic law.
The rapid expansion of debt and credit during the last decade could have occurred without the Fed being totally complicit and
in agreement. It has been the Fed that decided to allow the dollar to be used as a global prop.
Trump's desire to manipulate the dollar lower to boost exports would take the world down a very slippery slope. The article
below argues this is a destabilizing force.
Many of us see the introduction of a single "World Currency" as a major part of the economic endgame. This is something that
will be forced on us as part of a "needed reset" to a global economy that has gone off track. The fact this issue is again in
the news may be an indication we are getting closer to where currencies begin to fail.
The new world order and globalization which has been pushed by many world leaders and the rich elite touting that "larger,
more cooperative governments under one financial unit will benefit us all" plays into the world currency scenario. The article
below delves into how this might unfold.
Most Americans are financial illiterates and easy prey for the wolves. How many know that the USD / FRN is the WRC? I am guessing
five, or less, out of 100.
That bill alone makes Warren a viable candidate again, despite all her previous blunders. She is a courageous woman, that
Warren. And she might wipe the floor with the completely subservant to Israel lobby Trump. Who betrayed his electorate
in all major promises.
Notable quotes:
"... Not only would Warren's legislation prohibit some of the most destructive private equity activities, but it would end their ability to act as traditional asset managers, taking fees and incurring close to no risk if their investments go belly up. The bill takes the explicit and radical view that: ..."
"... Private funds should have a stake in the outcome of their investments, enjoying returns if those investments are successful but ab-1sorbing losses if those investments fail. ..."
"... Critics will say that Warren's bill has no chance of passing, which is currently true but misses the point. ..."
"... firms would share responsibility for the liabilities of companies under their control, including debt, legal judgments, and pension obligations to "better align the incentives of private equity firms and the companies they own." The bill, if enacted, would end the tax subsidy for excessive leverage and closes the carried interest loophole. ..."
"... The bill also seeks to ban dividends to investors for two years after a firm is acquired. Worker pay would be prioritized in the bankruptcy process, with guidelines intended to ensure affected employees are more likely to receive severance pay and pensions. It would also clarify gift cards are consumer deposits, ensuring their priority in bankruptcy proceedings. If enacted, private equity managers will be required to disclose fees, returns, and political expenditures. ..."
"... This is a bold set of proposals that targets abuses that hurt workers and investors. Most readers may not appreciate the significance of the two-year restriction on dividends. One return-goosing strategy that often leaves companies crippled or bankrupt in its wake is the "dividend recap" in which the acquired company takes on yet more debt for the purpose of paying a special dividend to its investors. Another strategy that Appelbaum and Batt have discussed at length is the "op co/prop co." Here the new owners take real estate owned by the company, sell it to a new entity with the former owner leasing it. The leases are typically set high so as to allow for the "prop co" to be sold at a richer price. This strategy is often a direct contributor to the death of businesses, since ones that own their real estate usually do so because they are in cyclical industries, and not having lease payments enables the to ride out bad times. The proceeds of sale of the real estate is usually dividended out to the investors, hence the dividend restriction would also pour cold water on this approach. ..."
"... However, there is precedent in private equity for recognizing joint and several liability of an investment fund for the obligations of its portfolio companies. In a case that winded its way through the federal courts until last year ( Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund ), the federal court held that Sun Capital Partners III was liable under ERISA, the federal pension law, for the unfunded pension obligations of Scott Brass, a portfolio company of that fund. The court's key finding was that Sun Capital played an active management role in Scott Brass and that its claim of passive investor status therefore should not be respected. ..."
"... Needless to say, private equity firms have worked hard to minimize their exposure to the Sun Capital decision, for example by avoiding purchasing companies with defined benefit pension plans. The Warren bill, however, is so broad in the sweep of liability it imposes that PE firms would be unlikely to be able to structure around it. It is hard to imagine the investors in private equity funds accepting liability for what could be enormous sums of unfunded pension liabilities ultimately flowing onto them. Either they would have to set up shell companies to fund their PE investments that could absorb the potential liability, or they would have to give up on the asset class. Either way, it would mean big changes to the industry and potentially a major contraction of it. ..."
"... I am surprised that Warren sought to make private equity funds responsible for the portfolio company debts by "joint and several liability". You can get to economically pretty much the same end by requiring the general partner and potentially also key employees to guarantee the debt and by preventing them from assigning or buying insurance to protect the guarantor from being liable. There is ample precedent for that for entrepreneurs. Small business corporate credit cards and nearly all small business loans require a personal guarantee. ..."
"... Warren's bill also has strong pro-investor provisions. It takes on the biggest feature of the ongoing investor scamming, which is the failure of PE managers to disclose to the investors all of the fees they receive from portfolio companies. The solution proposed by the bill to this problem is exceedingly straightforward, basically proclaiming, "Oh yeah, now you will have to disclose that." The bill also abolishes the ability of private equity managers to claim long term capital gains treatment on the 20 percent of fund profits that they receive, which is unrelated to the return on any capital that the private equity managers may happen to invest in a fund. ..."
"... We need a reparations movement for all those workers harmed by private equity. Seriously. ..."
"... It's so nice to see someone taking steps to protect the rights and compensation of the people actually doing the work at the companies and putting their interests first in case of bankruptcy. That those who worked hardest to make the company succeed were somehow the ones who took it in the shorts the worst has always struck me as a glaring inequity bordering on cruelty. ..."
Elizabeth Warren's
Stop Wall Street Looting Act , which is co-sponsored by Tammy Baldwin, Sherrod Brown, Mark Pocan and Pramila Jayapal, seeks to
fundamentally alter the way private equity firms operate. While the likely impetus for Warren's bill was the spate of private-equity-induced
retail bankruptcies, with Toys 'R' Us particularly prominent, the bill addresses all the areas targeted by critics of private equity:
how it hurts workers and investors and short-changes the tax man, thus burdening taxpayers generally.
"... Contrary to the official rationale, the detention of the Iranian tanker was not consistent with the 2012 EU regulation on sanctions against the Assad government in Syria. The EU Council regulation in question specifies in Article 35 that the sanctions were to apply only within the territory of EU member states, to a national or business entity or onboard an aircraft or vessel "under the jurisdiction of a member state." ..."
"... The notice required the Gibraltar government to detain any such ship for at least 72 hours if it entered "British Gibraltar Territorial Waters." Significantly, however, the video statement by Gibraltar's chief minister Fabian Picardo on July 4 explaining the seizure of the Grace 1 made no such claim and avoided any mention of the precise location of the ship when it was seized. ..."
"... There is a good reason why the chief minister chose not to draw attention to the issue of the ship's location: it is virtually impossible that the ship was in British Gibraltar territorial waters at any time before being boarded. The UK claims territorial waters of three nautical miles from its coast, whereas the Strait of Gibraltar is 7.5 nautical miles wide at its narrowest point. That would make the limit of UK territory just north of the middle of the Strait. ..."
"... But international straits must have clearly defined and separated shipping lanes going in different directions. The Grace 1 was in the shipping lane heading east toward the Mediterranean, which is south of the lane for ships heading west toward the Atlantic and thus clearly closer to the coast of Morocco than to the coast of Gibraltar, as can be seen from this live view of typical ship traffic through the strait . So it is quite implausible that the Grace 1 strayed out of its shipping lane into British territorial waters at any time before it was boarded. ..."
"... Such a move clearly violates the global treaty governing the issue -- the United Nations Convention on the Law of the Sea . Articles 37 through 44 of that agreement, ratified by 167 states, including the UK and the European Union, establish a "regime of transit passage" for international straits like the Strait of Gibraltar that guarantees freedom of navigation for merchant ships. The rules of that regime explicitly forbid states bordering the strait from interfering with the transit passage of a merchant ship, with very narrowly defined exceptions. ..."
"... The evidence indicates, moreover, that the UK's actions were part of a broader scheme coordinated with the Trump administration to tighten pressure on Iran's economy by reducing Iran's ability to export goods. ..."
"... On July 19, Reuters London correspondent Guy Falconbridge reported , "[S]everal diplomatic sources said the United States asked the UK to seize the vessel." ..."
"... Detailed evidence of Bolton deep involvement in the British plan to seize the Iranian tanker has surfaced in reporting on the withdrawal of Panamanian flag status for the Grace 1. ..."
"... The role of Panama's National Security Council signaled Bolton's hand, since he would have been the point of contact with that body. The result of his maneuvering was to leave the Grace 1 without the protection of flag status necessary to sail or visit a port in the middle of its journey. This in conjunction with the British seizure of the ship was yet another episode in the extraordinary American effort to deprive Iran of the most basic sovereign right to participate in the global economy. ..."
"... Back in 2013 2013 there was a rumour afoot that Edward Snowden, who at the time was stuck in the Moscow airport, trapped there by the sudden cancellation mid-flight of his US passport, was going spirited away by the President of Bolivia Evo Morales aboard his private jet. So what the US apparently was lean on it European allies to stop him. This they duly and dutifully did. Spain, France, and others denied overflight rights to the Bolivian jet, forcing it to turn back and land in Austria. There was even a report that once on the ground, the Spanish ambassador to Austria showed up and asked the Bolivian president if he might come out to the plain for a coffee--and presumably to have a poke around to see he could catch Snowden in the act of vanishing into the cargo hold. ..."
"... The rumor turned out to be completely false, but it was the Europeans who wound up with the egg on their face. Not to mention the ones who broke international law. ..."
"... Bolton persuaded the British to play along with the stupid US "maximum pressure" strategy, regardless of its illegality. (Maybe the British government thought that it would placate Trump after Ambassadorgate.) And then of course Pompeo threw them under the bus. It's getting hard to be a US ally (except for Saudi Arabia and Israel.) ..."
"... Spain lodged a formal complaint about the action, because it considers the sea around Gibraltar to be part of its international waters, "We are studying the circumstances and looking at how this affects our sovereignty," Josep Borell, Spain's acting foreign minister, said. So Gibraltar or Spanish waters? Gibraltar – Territorial Waters (1 pg): ..."
"... Worse than the bad behavior of Bolton, and the poodle behavior of Britain, is the utter failure of our press to provide us a skeptical eye and honest look at events. They've been mere stenographers and megaphones for power doing wrong. ..."
"... And this just in. A UK government official has just stated, related to the Iranian tanker stopped near Gibraltar, the UK will not be part of Trump's 'maximum pressure' gambit on Iran. We shall see if Boris Johnson is for or against that policy. ..."
"... John Bolton, war criminal. ..."
"... John Bolton has been desperate for a war with Iran for decades. This is just another escalation in his desperate attempt to get one. He's the classic neocon chicken hawk who is bravely ready to risk and sacrifice other people's lives at the drop of a hat. ..."
"... Since UK is abusing its control of Gibraltar by behaving like a thug, maybe it is better for the international community to support an independent state of Gibraltar, or at least let Spain has it. It will be better for world peace. ..."
"... While I agree with the gist of the article, remember that Bolton has no authority except that which is given to him. So stop blaming Bolton. Blame Trump. ..."
"... The provocations will go on and on until Iran shoots back and then Wash. will get the war it's been trying to start for some time now to pay back all those campaign donors who will profit from another war. ..."
"... The MIC needs constant wars to use up munitions so new ones can be manufactured. It's really just about business and politicians working together for mutual benefit to keep those contributions coming in. With all the other issues facing America, a war with Iran will just add to the end of the USA which is coming faster than you think. ..."
Did John Bolton Light the Fuse of the UK-Iranian Tanker Crisis? Evidence suggests he pressured the Brits to seize an
Iranian ship. Why? More war. By Gareth
Porter •
July 23, 2019
While Iran's seizure of a British tanker near the Strait of Hormuz on Friday was a clear response to the British capture of an
Iranian tanker in the Strait of Gibraltar on July 4, both the UK and U.S. governments are insisting that Iran's operation was illegal
while the British acted legally.
The facts surrounding the British detention of the Iranian ship, however, suggest that, like the Iranian detention of the British
ship, it was an illegal interference with freedom of navigation through an international strait. And even more importantly, evidence
indicates that the British move was part of a bigger scheme coordinated by National Security Advisor John Bolton.
British Foreign Secretary Jeremy Hunt called the Iran seizure of the British-flagged tanker Stena Impero "unacceptable" and insisted
that it is "essential that freedom of navigation is maintained and that all ships can move safely and freely in the region."
But the British denied Iran that same freedom of navigation through the Strait of Gibraltar on July 4.
The rationale for detaining the Iranian vessel and its crew was that it was delivering oil to Syria in violation of EU sanctions.
This was never questioned by Western news media. But a closer look reveals that the UK had no legal right to enforce those sanctions
against that ship, and that it was a blatant violation of the clearly defined global rules that govern the passage of merchant ships
through international straits.
The evidence also reveals that Bolton was actively involved in targeting the Grace 1 from the time it began its journey in May
as part of the broader Trump administration campaign of "maximum pressure" on Iran.
Contrary to the official rationale, the detention of the Iranian tanker was not consistent with the 2012 EU regulation on
sanctions against the Assad government in Syria. The
EU Council regulation in question
specifies in Article 35 that the sanctions were to apply only within the territory of EU member states, to a national or business
entity or onboard an aircraft or vessel "under the jurisdiction of a member state."
The UK government planned to claim that the Iranian ship was under British "jurisdiction" when it was passing through the Strait
of Gibraltar to justify its seizure as legally consistent with the EU regulation. A
maritime news outlet has reported that on July 3, the day before the seizure of the ship, the Gibraltar government, which has
no control over its internal security or foreign affairs, issued
a regulation to provide what it would claim
as a legal pretext for the operation. The regulation gave the "chief minister" of the British the power to detain any ship if there
were "reasonable grounds" to "suspect" that it had been or even that it was even "likely" to be in breach of EU regulations.
The notice required the Gibraltar government to detain any such ship for at least 72 hours if it entered "British Gibraltar
Territorial Waters." Significantly, however, the video statement
by Gibraltar's chief minister Fabian Picardo on July 4 explaining the seizure of the Grace 1 made no such claim and avoided any
mention of the precise location of the ship when it was seized.
There is a good reason why the chief minister chose not to draw attention to the issue of the ship's location: it is virtually
impossible that the ship was in British Gibraltar territorial waters at any time before being boarded. The UK claims
territorial waters of three nautical miles from its coast, whereas
the Strait of Gibraltar is 7.5 nautical miles wide at its narrowest point. That would make the limit of UK territory just north of
the middle of the Strait.
But international straits must have clearly defined and separated shipping lanes going in different directions. The Grace
1 was in the shipping lane heading east
toward the Mediterranean, which is south of the lane for ships heading west toward the Atlantic and thus clearly closer to the
coast of Morocco than to the coast of Gibraltar, as can be seen from this
live view of typical ship traffic
through the strait . So it is quite implausible that the Grace 1 strayed out of its shipping lane into British territorial waters
at any time before it was boarded.
But even if the ship had done so, that would not have given the UK "jurisdiction" over the Grace 1 and allowed it to legally
seize the ship. Such a move clearly violates the global treaty governing the issue -- the
United Nations Convention
on the Law of the Sea . Articles 37 through 44 of that agreement, ratified by 167 states, including the UK and the European Union,
establish a "regime of transit passage" for international straits like the Strait of Gibraltar that guarantees freedom of navigation
for merchant ships. The rules of that regime explicitly forbid states bordering the strait from interfering with the transit passage
of a merchant ship, with very narrowly defined exceptions.
These articles allow coastal states to adopt regulations relating to safety of navigation, pollution control, prevention of fishing,
and "loading or unloading any commodity in contravention of customs, fiscal, immigration or sanitary laws and regulations" of bordering
states -- but for no other reason. The British seizure and detention of the Grace 1 was clearly not related to any of these concerns
and thus a violation of the treaty.
The evidence indicates, moreover, that the UK's actions were part of a broader scheme coordinated with the Trump administration
to tighten pressure on Iran's economy by reducing Iran's ability to export goods.
The statement by Gibraltar's chief minister said the
decision to seize the ship was taken after the receipt of "information" that provided "reasonable grounds" for suspicion that it
was carrying oil destined for Syria's Banyas refinery. That suggested the intelligence had come from a government that neither he
nor the British wished to reveal.
BBC defense correspondent Jonathan Beale reported: "[I]t appears
the intelligence came from the United States." Acting Spanish Foreign Minister Joseph Borrell commented on July 4 that the British
seizure had followed "a demand from the United States to the UK." On July 19, Reuters London correspondent Guy Falconbridge
reported , "[S]everal diplomatic sources said the United States asked the UK to seize the vessel."
Detailed evidence of Bolton deep involvement in the British plan to seize the Iranian tanker has surfaced in reporting on
the withdrawal of Panamanian flag status for the Grace 1.
Panama was the flag state for many of the Iranian-owned vessels carrying various items exported by Iran. But when the Trump administration
reinstated economic sanctions against Iran in October 2018, it included prohibitions on industry services such as insurance and reinsurance.
This decision was accompanied by
political pressure on Panama to withdraw Panamanian flag status from 59 Iranian vessels, many of which were owned by Iranian
state-affiliated companies. Without such flag status, the Iranian-owned vessels could not get insurance for shipments by freighter.
That move was aimed at discouraging ports, canal operators, and private firms from allowing Iranian tankers to use their facilities.
The State Department's Brian Hook, who is in charge of the sanctions,
warned those
entities last November that the Trump administration believed they would be responsible for the costs of an accident involving a
self-insured Iranian tanker.
But the Grace 1 was special case, because it still had Panamanian flag status when it began its long journey around the Southern
tip of Africa on the way to the Mediterranean. That trip began in late May, according to Automatic Identification System
data cited by Riviera Maritime Media . It was no coincidence that the Panamanian Maritime Authority
delisted the Grace 1 on May 29 -- just as the ship was beginning its journey. That decision came immediately after Panama's National
Security Council issued an alert
claiming that the Iranian-owned tanker "may be participating in terrorism financing in supporting the destabilization activities
of some regimes led by terrorist groups."
The Panamanian body did not cite any evidence that the Grace 1 had ever been linked to terrorism.
The role of Panama's National Security Council signaled Bolton's hand, since he would have been the point of contact with
that body. The result of his maneuvering was to leave the Grace 1 without the protection of flag status necessary to sail or visit
a port in the middle of its journey. This in conjunction with the British seizure of the ship was yet another episode in the extraordinary
American effort to deprive Iran of the most basic sovereign right to participate in the global economy.
Now that Iran has detained a British ship in order to force the UK to release the Grace 1, the British Foreign Ministry will claim
that its seizure of the Iranian ship was entirely legitimate. The actual facts, however, put that charge under serious suspicion.
Gareth Porter is an investigative reporter and regular contributor to The American Conservative . He is also the author
of Manufactured Crisis: The Untold Story of the Iran Nuclear Scare.
Honestly the Brits are such idiots, we lied them into a war once. They knew we were lying and went for it anyway. Now the are
falling for it again. Maybe it is May's parting gift to Boris?
Same EU legislation only forbids Syria exporting oil and not EU entities selling to Syria (albeit with some additional paperwork).
However, it doesn't forbid other non-EU states to sell oil to Syria. They are not behaving like the US. And this is also not UN
sanctioned. In fact, UK is also acting against the spirit of JPCOA towards Iran. Speak about Perfidious Albion (others would say
US lapdog).
Back in 2013 2013 there was a rumour afoot that Edward Snowden, who at the time was stuck in the Moscow airport, trapped
there by the sudden cancellation mid-flight of his US passport, was going spirited away by the President of Bolivia Evo Morales
aboard his private jet. So what the US apparently was lean on it European allies to stop him. This they duly and dutifully did.
Spain, France, and others denied overflight rights to the Bolivian jet, forcing it to turn back and land in Austria. There was
even a report that once on the ground, the Spanish ambassador to Austria showed up and asked the Bolivian president if he might
come out to the plain for a coffee--and presumably to have a poke around to see he could catch Snowden in the act of vanishing
into the cargo hold.
The rumor turned out to be completely false, but it was the Europeans who wound up with the egg on their face. Not to mention
the ones who broke international law.
Now we find that once again a European country had (apparently) gone out on a limb for the US--and wound up with egg on its
face for trying to show its loyalty to the US in an all-too-slavish fashion by doing America's dirty work.
Bolton persuaded the British to play along with the stupid US "maximum pressure" strategy, regardless of its illegality. (Maybe
the British government thought that it would placate Trump after Ambassadorgate.) And then of course Pompeo threw them under the
bus. It's getting hard to be a US ally (except for Saudi Arabia and Israel.)
The very fact that the UK tried to present its hijack of Iran Oil as an implementation of EU sanctions dovetail well with Bolton's
objective of creating another of those "international coalitions" without a UN mandate engaging in 'Crimes of Aggression".
The total lack of support from the EU for this UK hijack signals another defeat to both the UK and the neocons of America.
Too bad there isn't an international version of the ACLU to argue Iran's legal case before the EU body. What typically happens
is that Iran will refuse to send representation because that would in effect, acknowledge their authority. The EU will have a
Kangaroo court and enter a vacant decision. This has happened numerous times in the U.S.
Would anyone in the U.S. or EU recognize an Iranian court making similar claims? Speaking of which, the entire point of UN
treaties and international law is to prevent individual countries from passing special purpose legislation targeting specific
countries. Why couldn't Iran pass a law sanctioning EU vessels that tried to use their territorial waters, what is so special
about the EU, because it is an acronym?
Spain lodged a formal complaint about the action, because it considers the sea around Gibraltar to be part of its international
waters, "We are studying the circumstances and looking at how this affects our sovereignty," Josep Borell, Spain's acting foreign
minister, said. So Gibraltar or Spanish waters? Gibraltar – Territorial Waters (1 pg):
https://www.academia.edu/30...
Worse than the bad behavior of Bolton, and the poodle behavior of Britain, is the utter failure of our press to provide us
a skeptical eye and honest look at events. They've been mere stenographers and megaphones for power doing wrong.
Thanks for the investigative reporting. Trump has lied almost 11,000 times, so I think nobody expects the truth from The Trump
Administration anytime soon. Especially if it goes against the narrative.
And this just in. A UK government official has just stated, related to the Iranian tanker stopped near Gibraltar, the UK will
not be part of Trump's 'maximum pressure' gambit on Iran. We shall see if Boris Johnson is for or against that policy.
OK, so why did the Brits go along with it? Are they so stupid as to not figure out that Iran might respond in kind, or did the
Brits not also want war?
John Bolton has been desperate for a war with Iran for decades. This is just another escalation in his desperate attempt to
get one. He's the classic neocon chicken hawk who is bravely ready to risk and sacrifice other people's lives at the drop of a
hat.
Since UK is abusing its control of Gibraltar by behaving like a thug, maybe it is better for the international community to
support an independent state of Gibraltar, or at least let Spain has it. It will be better for world peace.
While I agree with the gist of the article, remember that Bolton has no authority except that which is given to him.
So stop blaming Bolton. Blame Trump.
The provocations will go on and on until Iran shoots back and then Wash. will get the war it's been trying to start for some time
now to pay back all those campaign donors who will profit from another war.
The MIC needs constant wars to use up munitions so
new ones can be manufactured. It's really just about business and politicians working together for mutual benefit to keep those
contributions coming in. With all the other issues facing America, a war with Iran will just add to the end of the USA which is
coming faster than you think.
"On a similar note, I've wondered why Russia has not defaulted on it's considerable USD and
EUR debt (also too, why is Russia still doing debt in USD and thus strengthening U.S.?)"
It should be noted that Russia has almost zero foreign public debt and that the private foreign
debt has been much reduced and now amounts to US dollars 450 billion.
As Russia has a surplus of more than US dollars 100 billion on the current account the total
foreign debt amounts to 4 years current account surplus only.
Ad to this that Russias international currency reserves amounts to ca. US dollars 500
billion which meens that Russia is in a very strong fiscal position as it is capable of paying
off its entire foreign debt any time it chooses.
Along the same lines, the summary starts with, "The first existential objective is to
avoid the current threat of war by winding down U.S. military interference in foreign
countries and removing U.S. military bases as relics of neocolonialism." Either would be
taken as proof of evil anti-US intentions, leading to sanctions, coups, assassinations,
regime change, and eventually outright war. As Mael Colium says, the US picks off individual
countries by isolating them.
"... Do not allow yourself to be swayed back and forth by those snakes and vipers who prey upon the innocent for a living, and lead them into destruction, for gain, and too often just for sport. ..."
Stocks and Precious Metals Charts -
The Mask of Agamemnon
- Deliberate Lies and Mispricing of Risks
"At the root of America's economic crisis lies a moral crisis: the decline of civic
virtue among America's political and economic elite. A society of markets, laws, and
elections is not enough if the rich and powerful fail to behave with respect, honesty,
and compassion toward the rest of society and toward the world."
Jeffrey Sachs
"Of this
Logos
the Word being eternal, men have proven to be uncomprehending,
both before they hear and once they have heard it. For although all things happen
according to this Word, they are like the uneducated who first experience words and
deeds such as when I distinguish each thing according to its essence and show how it
is.
And as for the rest, they are as unaware of what they do when they are awake, as they
are when they are asleep."
Heraclitus
"I believe order is better than chaos, creation better than destruction. I prefer
gentleness to violence, forgiveness to vendetta. On the whole I think that knowledge
is preferable to ignorance, and I am sure that human sympathy is more valuable than
ideology. I believe that in spite of the recent triumphs of science, men haven't
changed much in the last two thousand years; and in consequence we must try to learn
from history. History is ourselves.
I believe in courtesy, the ritual by which we avoid hurting other people's feelings, by
satisfying our own egos. And I think we should remember that we are all part of a
great whole, which for convenience we call nature. All living things are our brothers
and sisters."
Kenneth Clark,
Civilisation
The broken wall, the burning roof and tower
And Agamemnon dead.
W. B. Yeats,
Leda and the Swan
"Each day we are becoming a creature of splendid glory, or one of unthinkable horror."
C. S. Lewis
Lies seem to be coming more and more easily to and prevalent among the ruling elite, and
their enablers and acolytes in the professional class. And it is therefore no surprise
that hatred and irrationality are also in the air.
It will get worse before it gets better. If history is any guide, may God forgive us, this
will end in blood.
Pray for each other, that you do not lose your way in this madness.
Stocks were soaring to new highs today, and gold rose sharply, off of the rather dovish testimony of Fed chair Powell.
His rationale for cutting rates in such a 'strong economy' is trade risks. Although he did note correctly that despite the apparent
improvements, wages still remain sub-par.
Gold rallied smartly, up $20 to the upper bound of the consolidation pattern in which it is currently coiling.
If it breaks out to the upside it could be rather impressive.
I am stunned, and I hear little talk about it, at the lack of withdrawals from the Comex Hong Kong warehouses, much less the NY
ones.
Hong Kong has been an active supplier of physical gold to Asia for some time.
Something momentous is happening behind the scenes. I am almost certain of this. It will of course be brought to light, eventually.
But it will not be acknowledged readily by those who draw power from this rotten system. This is the credibility trap.
"The truth has to be melted out of our stubborn lives by suffering. Nothing speaks the truth, nothing tells us how things really
are, nothing forces us to know what we do not want to know except pain."
Aeschylus, The Oresteia
Do not allow yourself to be swayed back and forth by those snakes and vipers who prey upon the innocent for a living, and lead them
into destruction, for gain, and too often just for sport.
Regarding money, and the difference between private and public money.
As with all things public and private, public money is not required to make a profit, but
in contrast, private money has no other reason to exist than to make a profit.
What we call money in the US, is privately owned. It is actually a promissory note, the
signifier of a loan made to those who hold the note. This is how US money comes into
existence.
We could trade coconut shells, or beads, but we trade promissory notes. They are legal
tender by law. And they fulfill the role of money pretty well. But we the people do not
ultimately own those obligations.
Public money is issued out of the same thin air as private money, but not as a debt,
simply as an issuance. The bills do their job for exchange and storage, and circulate until
being retired as taxes and the like. No one pays interest on that money.
Public money doesn't charge interest. Private money charges interest. This is the only
difference, and this difference is killing us and destroying the entire world.
~~
Professor Richard Werner illustrates nicely how a mortgage comes into existence through a
bank, which doesn't actually create money in this loan, but purchases a promissory note from
the home buyer. It is this promissory note that then enters the public record as new money,
which we then trade like sea shells - happy children, except that we now will pay interest of
more than 100 percent over the next 30 years. This interest is the profit on the private
money.
You'll find the mortgage part specifically around 16:15.
~~
As to all the rest, there is much more collateral, including the flagship work by Helen
Brown. Sorry I have no time to supply more links.
But I'm surprised to see so much wordy ignorance here on the subject, which is actually
very simple (although obfuscated, of course). Thanks to psychohistorian and karlof1 and
others who show that the good economists are all calling for public money which charges no
interest. And the communists and socialists do this as a matter of course.
As Hudson ended in his address cited by b and discussed here: "nations face a choice
between socialism and barbarism" .
Neoliberal economics and private finance is this very barbarism. It is accompanied by
fascism, oppression and the utter loss of freedom. As I cited in my previous comment, Dambisa
Moyo suggests very cogently that economic sufficiency undergirds democratic freedom. The
corollary is obvious: as we get more impoverished, freedom flees away.
~~
Interest charged on a loan is a claim on wealth that it doesn't create. It therefore
steals existing wealth in order to be redeemed. That's where our wealth went, and why we're
all so broke.
A loan for a productive purpose that will create new wealth can hopefully afford to slice
some of this new wealth off to pay the interest. It's still usury. But any loan at interest
that doesn't create wealth - such as a mortgage that simply buys an existing asset - is
something vastly more wicked.
"... As Mael Colium says, the US picks off individual countries by isolating them. ..."
"... there's a fundamental difference between debt in the past and debt today. In the past debt was owed to the state, today it's owed to some wealthy corporations. Good luck with debt jubilees in the absence of violent uprisings. ..."
"... The difference is they internalize profit and externalize cost. And that's fundamentally different from all other epochs in the past. Even the birth of nation state was out of their rationalization of how to maximize profit extraction and cost externalization in the 1st place. Good luck with debt jubilees. ..."
"... How would this occur aside from a repudiation of the almighty buck one wonders, and would it be based on reserves in the vault, or actual use as money? ..."
"... The Eurozone and China could run trade deficits, thereby creating an opportunity for their currencies to become reasonably viable alternative reserves. But they don't because they don't want to cede control of their manufacturing and export-driven economic bases away. ..."
"... The sine qua non of our economic empire (which I learned here) is that a global currency requires global trade deficits, which must grow as quickly as the global economy to fulfill its role. ..."
"... So American deficits are structural. Our debt-ceiling controversies are theater. And our dollar is exceptional until the instant it isn't–then the Fed electron-tranfers trillions more to the speculators whose notional dollars just evaporated, keeping the currencies in the air with their new casino chips. Is this a loan? A gift? An electron cloud? It's the fog of war by other means . . . ..."
"... Resources and the critical health of the planet bother me a lot. Money and "gold" are, in the end, both fictitious obsessions. ..."
"... You'll find few authors willing to provide their seminal work for free online– 2nd Edition PDF . I think it fair for those unfamiliar with Hudson's work to read his analysis prior to being judgmental. ..."
"On a similar note, I've wondered why Russia has not defaulted on it's considerable USD and
EUR debt (also too, why is Russia still doing debt in USD and thus strengthening U.S.?)"
It should be noted that Russia has almost zero foreign public debt and that the private foreign
debt has been much reduced and now amounts to US dollars 450 billion.
As Russia has a surplus of more than US dollars 100 billion on the current account the total
foreign debt amounts to 4 years current account surplus only.
Ad to this that Russias international currency reserves amounts to ca. US dollars 500
billion which meens that Russia is in a very strong fiscal position as it is capable of paying
off its entire foreign debt any time it chooses.
Along the same lines, the summary starts with, "The first existential objective is to avoid the current threat of war by
winding down U.S. military interference in foreign countries and removing U.S. military bases as relics of neocolonialism."
Either would be
taken as proof of evil anti-US intentions, leading to sanctions, coups, assassinations,
regime change, and eventually outright war. As Mael Colium says, the US picks off individual
countries by isolating them.
When we have MMT paying for arts, history, journalism and particularly editors, I won't be
so irritated by these kinds of criticisms.
We live in a very advanced world of Bernaysian propaganda where the communicative
industries are privately owned and directed to ensure deep criticisms of the
hyper-exploitative current reality CANNOT be published and promoted.
When someone takes the effort to produce something, like this or the book other commenters
on this thread are also slighting, at great personal expense to themselves without corporate
backing or institutional support, a decent reply would be "Thank you!", rather than tasking
them or our hosts here at this site to "go back and clean up this mess??"
If you had any decency, you might suggest clarifying edits in comments, like changing
"– so that it can taxing its own citizens." at the end of the 23rd paragraph to,
"– so that it can avoid taxing its own citizens", to help the people you are
criticizing for making things so difficult for you.
Michael Hudson is a modern day Saint! Who cares about a few typos when his ideas are truly REVOLUTIONARY!
For example, i had no idea about Debt Jubilees in early civilizations 3000 years ago! The
pyramids built by FREE MEN! Liberty and Freedom originating from canceling debts! Torches and
Beacons of light as representatives of said Debt Jubilees!
If you ask me, the #HudsonHawk is trying to awaken the Workers of the World in
Forgiveness, Peace, Love, and Solidarity.
I didn't know that until I read anthropologist David Graeber's Debt: The First 5,000
Years.
But there's a fundamental difference between debt in the past and debt today. In the past
debt was owed to the state, today it's owed to some wealthy corporations. Good luck with debt
jubilees in the absence of violent uprisings.
The difference is they internalize profit and externalize cost. And that's fundamentally
different from all other epochs in the past. Even the birth of nation state was out of their
rationalization of how to maximize profit extraction and cost externalization in the 1st
place. Good luck with debt jubilees.
That is why Russia, China and other powers that U.S. strategists deem to be strategic
rivals and enemies are looking to restore gold's role as the preferred asset to settle
payments imbalances.
How would this occur aside from a repudiation of the almighty buck one wonders, and would
it be based on reserves in the vault, or actual use as money?
Keep in mind that there isn't a human alive now who ever proffered a monetized gold coin
in order to purchase something, and increasingly relatively few that have ever used a
monetized silver coin for the same purpose.
I don't have a huge amount of sympathy. The Eurozone and China could run trade deficits,
thereby creating an opportunity for their currencies to become reasonably viable alternative
reserves. But they don't because they don't want to cede control of their manufacturing and
export-driven economic bases away.
The US doesn't mind and doesn't care about the domestic repercussions. For how much longer
that can continue, especially as Trump's America First policy is putting that under
some strain, is an open question. But for now, it's willing to be satisfied with a little
rowing back rather than wholesale reversal (back to, for example, an immediate-post war
position of significant trade surpluses although the article is correct to point out this was
due to the US being the last man standing, in terms of having a manufacturing base still
intact).
The Eurozone and China are not only not showing any signs of a policy change, they've
continued embedding and strengthening the current modus operandi. You pays your money, you
takes your choices. Here as elsewhere. If they'd rather not have the US$ having a
more-or-less monopoly position in then global financial system as a reserve currency, they'll
need to make the compromises needed to set up these challenger currencies as viable
alternatives.
But they can't have their economic cakes and eat them, too.
And it's not just currencies. You need legal systems which are deemed to be (which can
only come through real, observational experience) investor-friendly -- not just prone to
supporting or at the very least given an easy ride to domestic stalwarts. Again, this has
repercussions if you then have to stop cosseting domestic "champions". The US legal system is
ridiculously business friendly. But it doesn't, overtly, differentiate between US and non-US
companies in a commercial dispute.
The sine qua non of our economic empire (which I learned here) is that a global currency requires global trade
deficits, which must grow as quickly as the global economy to fulfill its role. Tell that to Germany! If your silly little euro or yen or renminbi tries to go
global, the dollar-based currency speculators will shrivel it like Soros did the pound in the
90s.
So American deficits are structural. Our debt-ceiling controversies are theater. And our
dollar is exceptional until the instant it isn't–then the Fed electron-tranfers
trillions more to the speculators whose notional dollars just evaporated, keeping the
currencies in the air with their new casino chips. Is this a loan? A gift? An electron cloud?
It's the fog of war by other means . . .
It may have been Hudson who explained that a quarter (or was it half?) of all corporate
profits after WWII went to American companies, when our economy was that much of the world's.
Now we're a much smaller fraction of the global economy, but our corporate sector still
profits as much as it did when it was producing, rather than marketing, real goods. Another
exceptional achievement.
Really all we know is that such a plan would create a different order. That so many
countries have continued to pauper their populations long after the obviousness that
"development" is a sham doesn't bode well for their intentions even after the USA is brought
to heel.
Agreed. The likes of the Regional Comprehensive Economic Partnership are still under
negotiation and still, like every other multilateral investment agreement of recent vintage,
apparently primarily concerned with creating supranational rights for landlords, especially
of the absentee variety, at the expense of citizens in their collective capacity.
This is a good summary of our irrational world. MMT and the GND can save the situation but
only if we industrialized humans forego any more fossil fuels except for long-term survival
purposes. Ration it with draconian discipline. That in turn will discipline our military and
turn our energies to things we can no longer ignore. Money doesn't bother me much. Resources
and the critical health of the planet bother me a lot. Money and "gold" are, in the end, both
fictitious obsessions.
Thanks for providing this transcript prior to Hudson posting it to his own website. He was
the first political-economist to lay out the Outlaw US Empire's game plan when he published
Super Imperialism: The Economic Strategy of American Empire in 1972.
You'll find few
authors willing to provide their seminal work for free online– 2nd Edition
PDF . I think it fair for those unfamiliar with Hudson's work to read his analysis prior
to being judgmental.
I think Calvin and his role in today's debt based monetary system is much underestimated.
The meteoric rise of the seven provinces and what was to become the Dutch colonial empire was
in no small part funded and financed by this debt based system in the latter half of the 16th
century. The same applied shortly afterwards to the UK. The book passage I quoted from is
from Devaluing the Scholastics: Calvin's Ethics of Usury .
I read the Michael Hudson piece and shake my head at the manifest obfuscation at play
The world is in WWIII which is between private and public finance. To characterize the
private finance side as being just the US is obfuscation
Global private finance exists outside the bounds of any one nation state and the US is
just the current face of the centuries of empires under this model.
Why is the West unable to have a discussion about the core component to the world war we
are engaged in?
Sad comment on the successful brainwashing at work here.....that is why I call the web
site Michael Hudson's writing is provided at ALMOST Naked Capitalism
Wake the rest of the way up fellow humans of the West.
The essential problem is that money functions as a contract, with one side an asset and
the other a debt, but as we experience it as quantified hope and security, we try to save and
store it. Thus Econ 101 tells us it is both medium of exchange and store of value. Even
though one is dynamic and the other is static, like blood and fat, or roads and parking
lots.
Necessarily then, in order to store the asset side, generally equal amounts of debt have
to be manufactured and this creates a centripetal effect, as positive feedback pulls the
asset side to the center of the economy, while negative feedback accumulates the debt on the
fringes.
The ancients used debt jubilees to push the reset button, but since we have been conditioned
to think of money as private property, not a public medium, now the only way to reset is for
societal collapse.
Value, as a savings for the future, needs to be stored in tangibles, like strong social
and environmental networks, not as abstractions in the financial circulation system. The
functionality of money is in its fungibility. We own it like we own the section of road we
are using, or the fluids passing through our bodies.
We are also conditioned to think of ourselves as individuals, not as parts of a larger
community, so this social atomization enables finance to mediate most transactions and tax
them. A figurative version of The Matrix.
I was pretty much banned from NC for questioning MMT. Yves called me a troll. The exchange
is jan 6, in the links post.
Consequently I'll only try posting very occasionally and one or two have gone through
moderation.
My view in MMT is that either these people are extremely naive, or operatives for the
oligarchy, as there is no free lunch and the public issuing ever more promises only drives it
further into debt. Which is then accumulated by the oligarchy and eventually traded for
remaining public assets. It's basic predatory lending/disaster capitalism and has been going
on since the dawn of civilization.
Not that people are not often incredibly stupid, but I suspect some recognize the dynamic.
When you start having to pay tolls on most roads, you will know we are way down that rabbit
hole.
John Merryman @7: Sure there are free lunches, Uncle Sugar has been getting lots of free
lunches ever since WWII. The thing about free lunches is those situations cannot be permanent
in a growth economy. To have permanent free lunches you have to have an ecologically stable
economy and a stable population consuming it. In other words, you can't get too greedy.
What's ridiculous is to fall for the "public vs. private" scam, one of the most potent
divide-and-conquer scams of the corporate state, where in reality there's zero distinction
between public and private power.
Power is power, and the finance sector is purely wasteful, purely destructive, serves zero
legitimate purpose, and needs to be abolished as a necessary part of any kind of human
liberation.
Of course the Mammon religion has brainwashed almost everyone into believing, among other
lies, that the dominion of money is necessary for human existence. Never mind that the vast
majority of societies didn't use money for more than a few special transactions, and many
didn't use it at all. Almost all of those societies were humanly more wholesome than this
one, and all of them were less ecologically destructive by many orders of magnitude.
"The ancients used debt jubilees to push the reset button, but since we have been conditioned
to think of money as private property, not a public medium, now the only way to reset is for
societal collapse."
John Merryman @4
There are compromises in this business: debt repudiation being an obvious one.
It is easy enough to make a case for declaring large parts of the public debt, odious. This
is particularly true of the enormous debts run up by Public-Private Partnerships of the sort
that the former UK Premier Brown promoted so enthusiastically. But it is generally true of
debts contracted for purposes which contradict the public interest.
Debt used to make deposits in private bank accounts in the Caymans for example can
justifiably be repudiated by the public, particularly when the creditor was well aware that
its loans were going to be employed for corrupt purposes.
Most of the US Debt, contracted to finance the MIC, is not only odious on general grounds
(Defending what against whom?) but on a contract to contract basis, most contracts being
padded to ensure the ability to provide kickbacks: when Congressmen receive funds from
government contractors and 'public servants', including military types, get jobs/sinecures
from the same, then any money borrowed to finance such contracts is, clearly, odious.
It would be revolutionary no doubt but perfectly practicable to push a 'reset' button on
the Public Debt by proclaiming that, in future, all borrowing for purposes not approved or
understood the putative taxpayer would be found to be odious.
Another possible course would be to stop paying interest on public debt and issue bonds to
repay the capital amounts lent.
The fact that such options are understood would make the regular claims, by neo-liberals
pushing austerity, that there is no money for such things as social security or living wages,
an obvious trigger for debt reduction measures designed to impact the rich rather than their
victims.
Predators and Prey. But the prey believe themselves to be predators also, or at least to have
the potential to become predators should they win the lotto.
"When the music stops, in terms of liquidity, things will be complicated. But as long as the
music is playing, you've got to get up and dance. We're still dancing,"
"A baited banker thus desponds,
From his own hand foresees his fall,
They have his soul, who have his bonds;
'Tis like the writing on the wall.
How will the caitiff wretch be scared,
When first he finds himself awake
At the last trumpet, unprepared,
And all his grand account to make!
For in that universal call,
Few bankers will to heaven be mounters;
They'll cry, 'Ye shops, upon us fall!
Conceal and cover us, ye counters!'
When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
'Weigh'd in the balance and found light!'
Today's world is at war on many fronts. The rules of international law and order put in
place toward the end of World War II are being broken by U.S. foreign policy escalating its
confrontation with countries that refrain from giving its companies control of their economic
surpluses. Countries that do not give the United States control their oil and financial sectors
or privatize their key sectors are being isolated by the United States imposing trade sanctions
and unilateral tariffs giving special advantages to U.S. producers in violation of free trade
agreements with European, Asian and other countries.
This global fracture has an increasingly military cast. U.S. officials justify tariffs and
import quotas illegal under WTO rules on "national security" grounds, claiming that the United
States can do whatever it wants as the world's "exceptional" nation. U.S. officials explain
that this means that their nation is not obliged to adhere to international agreements or even
to its own treaties and promises. This allegedly sovereign right to ignore on its international
agreements was made explicit after Bill Clinton and his Secretary of State Madeline Albright
broke the promise by President George Bush and Secretary of State James Baker that NATO would
not expand eastward after 1991. ("You didn't get it in writing," was the U.S. response to the
verbal agreements that were made.)
Likewise, the Trump administration repudiated the multilateral Iranian nuclear agreement
signed by the Obama administration, and is escalating warfare with its proxy armies in the Near
East. U.S. politicians are waging a New Cold War against Russia, China, Iran, and oil-exporting
countries that the United States is seeking to isolate if cannot control their governments,
central bank and foreign diplomacy.
The international framework that originally seemed equitable was pro-U.S. from the outset.
In 1945 this was seen as a natural result of the fact that the U.S. economy was the least
war-damaged and held by far most of the world's monetary gold. Still, the postwar trade and
financial framework was ostensibly set up on fair and equitable international principles. Other
countries were expected to recover and grow, creating diplomatic, financial and trade parity
with each other.
But the past decade has seen U.S. diplomacy become one-sided in turning the International
Monetary Fund (IMF), World Bank, SWIFT bank-clearing system and world trade into an
asymmetrically exploitative system. This unilateral U.S.-centered array of institutions is
coming to be widely seen not only as unfair, but as blocking the progress of other countries
whose growth and prosperity is seen by U.S. foreign policy as a threat to unilateral U.S.
hegemony. What began as an ostensibly international order to promote peaceful prosperity has
turned increasingly into an extension of U.S. nationalism, predatory rent-extraction and a more
dangerous military confrontation.
Deterioration of international diplomacy into a more nakedly explicit pro-U.S. financial,
trade and military aggression was implicit in the way in which economic diplomacy was shaped
when the United Nations, IMF and World Bank were shaped mainly by U.S. economic strategists.
Their economic belligerence is driving countries to withdraw from the global financial and
trade order that has been turned into a New Cold War vehicle to impose unilateral U.S.
hegemony. Nationalistic reactions are consolidating into new economic and political alliances
from Europe to Asia.
We are still mired in the Oil War that escalated in 2003 with the invasion of Iraq, which
quickly spread to Libya and Syria. American foreign policy has long been based largely on
control of oil. This has led the United States to oppose the Paris accords to stem global
warming. Its aim is to give U.S. officials the power to impose energy sanctions forcing other
countries to "freeze in the dark" if they do not follow U.S. leadership.
To expand its oil monopoly, America is pressuring Europe to oppose the Nordstream II gas
pipeline from Russia, claiming that this would make Germany and other countries dependent on
Russia instead of on U.S. liquified natural gas (LNG). Likewise, American oil diplomacy has
imposed unilateral sanctions against Iranian oil exports, until such time as a regime change
opens up that country's oil reserves to U.S., French, British and other allied oil majors.
U.S. control of dollarized money and credit is critical to this hegemony. As Congressman
Brad Sherman of Los Angeles told a House Financial Services Committee hearing on May 9, 2019:
"An awful lot of our international power comes from the fact that the U.S. dollar is the
standard unit of international finance and transactions. Clearing through the New York Fed is
critical for major oil and other transactions. It is the announced purpose of the supporters of
cryptocurrency to take that power away from us, to put us in a position where the most
significant sanctions we have against Iran, for example, would become irrelevant."[1]
The U.S. aim is to keep the dollar as the transactions currency for world trade, savings,
central bank reserves and international lending. This monopoly status enables the U.S. Treasury
and State Department to disrupt the financial payments system and trade for countries with
which the United States is at economic or outright military war.
Russian President Vladimir Putin quickly responded by describing how "the degeneration of
the universalist globalization model [is] turning into a parody, a caricature of itself, where
common international rules are replaced with the laws of one country."[2]That is the trajectory
on which this deterioration of formerly open international trade and finance is now moving. It
has been building up for a decade. On June 5, 2009, then-Russian President Dmitry Medvedev
cited this same disruptive U.S. dynamic at work in the wake of the U.S. junk mortgage and bank
fraud crisis.
Those whose job it was to forecast events were not ready for the depth of the crisis and
turned out to be too rigid, unwieldy and slow in their response. The international financial
organisations – and I think we need to state this up front and not try to hide it –
were not up to their responsibilities, as has been said quite unambiguously at a number of
major international events such as the two recent G20 summits of the world's largest
economies.
Furthermore, we have had confirmation that our pre-crisis analysis of global economic trends
and the global economic system were correct. The artificially maintained uni-polar system and
preservation of monopolies in key global economic sectors are root causes of the crisis. One
big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly
strong reserve currency, and one dominant system of assessing assets and risks – these
are all factors that led to an overall drop in the quality of regulation and the economic
justification of assessments made, including assessments of macroeconomic policy. As a result,
there was no avoiding a global crisis.[3]
That crisis is what is now causing today's break in global trade and payments.
Warfare on Many Fronts, with Dollarization Being the Main Arena
Dissolution of the Soviet Union 1991 did not bring the disarmament that was widely expected.
U.S. leadership celebrated the Soviet demise as signaling the end of foreign opposition to
U.S.-sponsored neoliberalism and even as the End of History. NATO expanded to encircle Russia
and sponsored "color revolutions" from Georgia to Ukraine, while carving up former Yugoslavia
into small statelets. American diplomacy created a foreign legion of Wahabi fundamentalists
from Afghanistan to Iran, Iraq, Syria and Libya in support of Saudi Arabian extremism and
Israeli expansionism.
The United States is waging war for control of oil against Venezuela, where a military coup
failed a few years ago, as did the 2018-19 stunt to recognize an unelected pro-American puppet
regime. The Honduran coup under President Obama was more successful in overthrowing an elected
president advocating land reform, continuing the tradition dating back to 1954 when the CIA
overthrew Guatemala's Arbenz regime.
U.S. officials bear a special hatred for countries that they have injured, ranging from
Guatemala in 1954 to Iran, whose regime it overthrew to install the Shah as military dictator.
Claiming to promote "democracy," U.S. diplomacy has redefined the word to mean pro-American,
and opposing land reform, national ownership of raw materials and public subsidy of foreign
agriculture or industry as an "undemocratic" attack on "free markets," meaning markets
controlled by U.S. financial interests and absentee owners of land, natural resources and
banks.
A major byproduct of warfare has always been refugees, and today's wave fleeing ISIS, Al
Qaeda and other U.S.-backed Near Eastern proxies is flooding Europe. A similar wave is fleeing
the dictatorial regimes backed by the United States from Honduras, Ecuador, Colombia and
neighboring countries. The refugee crisis has become a major factor leading to the resurgence
of nationalist parties throughout Europe and for the white nationalism of Donald Trump in the
United States.
Dollarization as the Vehicle for U.S. Nationalism
The Dollar Standard – U.S. Treasury debt to foreigners held by the world's central
banks – has replaced the gold-exchange standard for the world's central bank reserves to
settle payments imbalances among themselves. This has enabled the United States to uniquely run
balance-of-payments deficits for nearly seventy years, despite the fact that these Treasury
IOUs have little visible likelihood of being repaid except under arrangements where U.S.
rent-seeking and outright financial tribute from other enables it to liquidate its official
foreign debt.
The United States is the only nation that can run sustained balance-of-payments deficits
without having to sell off its assets or raise interest rates to borrow foreign money. No other
national economy in the world can could afford foreign military expenditures on any major scale
without losing its exchange value. Without the Treasury-bill standard, the United States would
be in this same position along with other nations. That is why Russia, China and other powers
that U.S. strategists deem to be strategic rivals and enemies are looking to restore gold's
role as the preferred asset to settle payments imbalances.
The U.S. response is to impose regime change on countries that prefer gold or other foreign
currencies to dollars for their exchange reserves. A case in point is the overthrow of Libya's
Omar Kaddafi after he sought to base his nation's international reserves on gold. His
liquidation stands as a military warning to other countries.
Thanks to the fact that payments-surplus economies invest their dollar inflows in U.S.
Treasury bonds, the U.S. balance-of-payments deficit finances its domestic budget deficit. This
foreign central-bank recycling of U.S. overseas military spending into purchases of U.S.
Treasury securities gives the United States a free ride, financing its budget – also
mainly military in character – so that it can taxing its own citizens.
Trump Is Forcing Other Countries To Create an Alternative to the Dollar Standard
The fact that Donald Trump's economic policies are proving ineffective in restoring American
manufacturing is creating rising nationalist pressure to exploit foreigners by arbitrary
tariffs without regard for international law, and to impose trade sanctions and diplomatic
meddling to disrupt regimes that pursue policies that U.S. diplomats do not like.
There is a parallel here with Rome in the late 1 st century BC. It stripped its
provinces to pay for its military deficit, the grain dole and land redistribution at the
expense of Italian cities and Asia Minor. This created foreign opposition to drive Rome out.
The U.S. economy is similar to Rome's: extractive rather than productive, based mainly on land
rents and money-interest. As the domestic market is impoverished, U.S. politicians are seeking
to take from abroad what no longer is being produced at home.
What is so ironic – and so self-defeating of America's free global ride – is
that Trump's simplistic aim of lowering the dollar's exchange rate to make U.S. exports more
price-competitive. He imagines commodity trade to be the entire balance of payments, as if
there were no military spending, not to mention lending and investment. To lower the dollar's
exchange rate, he is demanding that China's central bank and those of other countries stop
supporting the dollar by recycling the dollars they receive for their exports into holdings of
U.S. Treasury securities.
This tunnel vision leaves out of account the fact that the trade balance is not simply a
matter of comparative international price levels. The United States has dissipated its supply
of spare manufacturing capacity and local suppliers of parts and materials, while much of its
industrial engineering and skilled manufacturing labor has retired. An immense shortfall must
be filled by new capital investment, education and public infrastructure, whose charges are far
above those of other economics.
Trump's infrastructure ideology is a Public-Private Partnership characterized by high-cost
financialization demanding high monopoly rents to cover its interest charges, stock dividends
and management fees. This neoliberal policy raises the cost of living for the U.S. labor force,
making it uncompetitive. The United States is unable to produce more at any price right now,
because its has spent the past half-century dismantling its infrastructure, closing down its
part suppliers and outsourcing its industrial technology.
The United States has privatized and financialized infrastructure and basic needs such as
public health and medical care, education and transportation that other countries have kept in
their public domain to make their economies more cost-efficient by providing essential services
at subsidized prices or freely. The United States also has led the practice of debt pyramiding,
from housing to corporate finance. This financial engineering and wealth creation by inflating
debt-financed real estate and stock market bubbles has made the United States a high-cost
economy that cannot compete successfully with well-managed mixed economies.
Unable to recover dominance in manufacturing, the United States is concentrating on
rent-extracting sectors that it hopes monopolize, headed by information technology and military
production. On the industrial front, it threatens disrupt China and other mixed economies by
imposing trade and financial sanctions.
The great gamble is whether these other countries will defend themselves by joining in
alliances enabling them to bypass the U.S. economy. American strategists imagine their country
to be the world's essential economy, without whose market other countries must suffer
depression. The Trump Administration thinks that There Is No Alternative (TINA) for other
countries except for their own financial systems to rely on U.S. dollar credit.
To protect themselves from U.S. sanctions, countries would have to avoid using the dollar,
and hence U.S. banks. This would require creation of a non-dollarized financial system for use
among themselves, including their own alternative to the SWIFT bank clearing system. Table 1
lists some possible related defenses against U.S. nationalistic diplomacy.
As noted above, what also is ironic in President Trump's accusation of China and other
countries of artificially manipulating their exchange rate against the dollar (by recycling
their trade and payments surpluses into Treasury securities to hold down their currency's
dollar valuation) involves dismantling the Treasury-bill standard. The main way that foreign
economies have stabilized their exchange rate since 1971 has indeed been to recycle their
dollar inflows into U.S. Treasury securities. Letting their currency's value rise would
threaten their export competitiveness against their rivals, although not necessarily benefit
the United States.
Ending this practice leaves countries with the main way to protect their currencies from
rising against the dollar is to reduce dollar inflows by blocking U.S. lending to domestic
borrowers. They may levy floating tariffs proportioned to the dollar's declining value. The
U.S. has a long history since the 1920s of raising its tariffs against currencies that are
depreciating: the American Selling Price (ASP) system. Other countries can impose their own
floating tariffs against U.S. goods.
Trade dependency as an Aim of the World Bank, IMF and US AID
The world today faces a problem much like what it faced on the eve of World War II. Like
Germany then, the United States now poses the main threat of war, and equally destructive
neoliberal economic regimes imposing austerity, economic shrinkage and depopulation. U.S.
diplomats are threatening to destroy regimes and entire economies that seek to remain
independent of this system, by trade and financial sanctions backed by direct military
force.
Dedollarization will require creation of multilateral alternatives to U.S. "front"
institutions such as the World Bank, IMF and other agencies in which the United States holds
veto power to block any alternative policies deemed not to let it "win." U.S. trade policy
through the World Bank and U.S. foreign aid agencies aims at promoting dependency on U.S. food
exports and other key commodities, while hiring U.S. engineering firms to build up export
infrastructure to subsidize U.S. and other natural-resource investors.[4]The financing is
mainly in dollars, providing risk-free bonds to U.S. and other financial institutions. The
resulting commercial and financial "interdependency" has led to a situation in which a sudden
interruption of supply would disrupt foreign economies by causing a breakdown in their chain of
payments and production. The effect is to lock client countries into dependency on the U.S.
economy and its diplomacy, euphemized as "promoting growth and development."
U.S. neoliberal policy via the IMF imposes austerity and opposes debt writedowns. Its
economic model pretends that debtor countries can pay any volume of dollar debt simply by
reducing wages to squeeze more income out of the labor force to pay foreign creditors. This
ignores the fact that solving the domestic "budget problem" by taxing local revenue still faces
the "transfer problem" of converting it into dollars or other hard currencies in which most
international debt is denominated. The result is that the IMF's "stabilization" programs
actually destabilize and impoverish countries forced into following its advice.
IMF loans support pro-U.S. regimes such as Ukraine, and subsidize capital flight by
supporting local currencies long enough to enable U.S. client oligarchies to flee their
currencies at a pre-devaluation exchange rate for the dollar. When the local currency finally
is allowed to collapse, debtor countries are advised to impose anti-labor austerity. This
globalizes the class war of capital against labor while keeping debtor countries on a short
U.S. financial leash.
U.S. diplomacy is capped by trade sanctions to disrupt economies that break away from U.S.
aims. Sanctions are a form of economic sabotage, as lethal as outright military warfare in
establishing U.S. control over foreign economies. The threat is to impoverish civilian
populations, in the belief that this will lead them to replace their governments with
pro-American regimes promising to restore prosperity by selling off their domestic
infrastructure to U.S. and other multinational investors.
US Warfare on Many Fronts Dedollarization defense
Military warfare (the Near East, Asia)
NATO and bilateral treaty (Saudi, ISIS, Al Qaida). color revolutions and proxy
wars.
Shanghai Cooperation Organization, and pressure for Europe to
withdraw from NATO unless the U.S. alleviates its New Cold War threats.
Dollarization is monetary warfare. The US Treasury-bill
standard finances the mainly military U.S. balance-of-payments deficit. SWIFT threatens to
isolate Iran and Russia
Dedollarization will refrain from foreign central banks financing U.S. overseas military
spending by keeping their savings in dollars.
Creation of alternative payments clearing system.
The IMF finances US client regimes and seeks to isolate those
not following US policy.
An alternative global financial organization, such as Europe's
INSTEX to circumvent US anti-Iran sanctions, and Russo-China alternative to SWIFT.
Creditor policy forcing austerity on debtor economies, forcing
them to privatize and sell off their public domain to pay debts.
An international court empowered to write down debts to the
ability to pay, based on the original principles that were to guide the BIS in 1931.
The World Bank finances trade dependency on US food exports and
opposes national food self-sufficiency.
An alternative development organization based on food
self-sufficiency. Annulment of World Bank and IMF debt as "odious debt."
Unilateral US trade war based on levy of US protectionist
tariffs, quotas and sanctions,
Countervailing sanctions, and creation of an alternative to the
WTO or a strengthened organization free of US control.
Cyber War, spycraft via US internet platforms, and Stuxnet
sabotage.
Work with Huawei and other alternatives to US internet
options.
Class War: austerity program for labor
MMT, taxation of rentier income and capital gains.
Neoliberal monetarist doctrine of privatization and creditor-oriented
rules
Promotion of a mixed economy with public infrastructure as a
factor of production.
US patent policy seeks monopoly rents.
Non-recognition of predatory monopoly patents.
Investment control
Deprivatization and buyoutsof US assets abroad.
International law and diplomacy
The U.S. as the world's "exceptional nation," not subject to international laws or even
to its own treaty agreements.
Veto power in any organization it joins. The basic principle that the U.S. is not
subject to any foreign say over its laws and policies.
Global Problems caused by US Policy Response to U.S. Disruptive Policy
U.S. refuses to join international agreements to reduce carbon emissions, Global Warming
and Extreme Weather.
U.S. diplomacy is based on control of oil to make other countries dependent on U.S.
energy dominance.
Trade and tax sanctions against U.S. exporters and banks. Taxes on U.S. tax avoidance by
the oil industry's "flags of convenience" (convenient for tax avoidance).
Taxation or isolation of U.S. exports based on high-carbon production.
Attempt to monopolize new G5 Internet technology, Sanctioning of Huawei,
insistence on US priority in high-tech.
Rejection of patents on basic IT, medicine and other basic human
needs.
Patent laws in pharmaceuticals, etc.
Taxation of monopoly rents.
There Are Alternatives, on Many Fronts
Militarily, today's leading alternative to NATO expansionism is the Shanghai Cooperation
Organization (SCO), along with Europe following France's example under Charles de Gaulle and
withdrawing. After all, there is no real threat of military invasion today in Europe. No nation
can occupy another without an enormous military draft and such heavy personnel losses that
domestic protests would unseat the government waging such a war. The U.S. anti-war movement in
the 1960s signaled the end of the military draft, not only in the United States but in nearly
all democratic countries (Israel, Switzerland, Brazil and South Korea are exceptions).
The enormous spending on armaments for a kind of war unlikely to be fought is not really
military, but simply to provide profits to the military industrial complex. The arms are not
really to be used. They are simply to be bought, and ultimately scrapped. The danger, of
course, is that these not-for-use arms actually might be used, if only to create a need for new
profitable production.
Likewise, foreign holdings of dollars are not really to be spent on purchases of U.S.
exports or investments. They are like fine-wine collectibles, for saving rather than for
drinking. The alternative to such dollarized holdings is to create a mutual use of national
currencies, and a domestic bank-clearing payments system as an alternative to SWIFT.Russia,
China, Iran and Venezuela already are said to be developing a crypto-currency payments to
circumvent U.S. sanctions and hence financial control.
In the World Trade Organization, the United States has tried to claim that any industry
receiving public infrastructure or credit subsidy deserves tariff retaliation in order to force
privatization. In response to WTO rulings that U.S. tariffs are illegally imposed, the United
States "has blocked all new appointments to the seven-member appellate body in protest, leaving
it in danger of collapse because it may not have enough judges to allow it to hear new
cases."[5]In the U.S. view, only privatized trade financed by private rather than public banks
is "fair" trade.
An alternative to the WTO (or removal of its veto privilege given to the U.S. bloc) is
needed to cope with U.S. neoliberal ideology and, most recently, the U.S. travesty claiming
"national security" exemption to free-trade treaties, impose tariffs on steel, aluminum, and on
European countries that circumvent sanctions on Iran or threaten to buy oil from Russia via the
Nordstream II pipeline instead of high-cost liquified "freedom gas" from the United States.
In the realm of development lending, China's bank along with its Belt and Road initiative is
an incipient alternative to the World Bank, whose main role has been to promote foreign
dependency on U.S. suppliers. The IMF for its part now functions as an extension of the U.S.
Department of Defense to subsidize client regimes such as Ukraine while financially isolating
countries not subservient to U.S. diplomacy.
To save debt-strapped economies suffering Greek-style austerity, the world needs to replace
neoliberal economic theory with an analytic logic for debt writedowns based on the ability to
pay. The guiding principle of the needed development-oriented logic of international law should
be that no nation should be obliged to pay foreign creditors by having to sell of the public
domain and rent-extraction rights to foreign creditors. The defining character of nationhood
should be the fiscal right to tax natural resource rents and financial returns, and to create
its own monetary system.
The United States refuses to join the International Criminal Court. To be effective, it
needs enforcement power for its judgments and penalties, capped by the ability to bring charges
of war crimes in the tradition of the Nuremberg tribunal. U.S. to such a court, combined with
its military buildup now threatening World War III, suggests a new alignment of countries akin
to the Non-Aligned Nations movement of the 1950s and 1960s. Non-aligned in this case means
freedom from U.S. diplomatic control or threats.
Such institutions require a more realistic economic theory and philosophy of operations to
replace the neoliberal logic for anti-government privatization, anti-labor austerity, and
opposition to domestic budget deficits and debt writedowns. Today's neoliberal doctrine counts
financial late fees and rising housing prices as adding to "real output" (GDP), but deems
public investment as deadweight spending, not a contribution to output. The aim of such logic
is to convince governments to pay their foreign creditors by selling off their public
infrastructure and other assets in the public domain.
Just as the "capacity to pay" principle was the foundation stone of the Bank for
International Settlements in 1931, a similar basis is needed to measure today's ability to pay
debts and hence to write down bad loans that have been made without a corresponding ability of
debtors to pay. Without such an institution and body of analysis, the IMF's neoliberal
principle of imposing economic depression and falling living standards to pay U.S. and other
foreign creditors will impose global poverty.
The above proposals provide an alternative to the U.S. "exceptionalist" refusal to join any
international organization that has a say over its affairs. Other countries must be willing to
turn the tables and isolate U.S. banks, U.S. exporters, and to avoid using U.S. dollars and
routing payments via U.S. banks. To protect their ability to create a countervailing power
requires an international court and its sponsoring organization.
Summary
The first existential objective is to avoid the current threat of war by winding down U.S.
military interference in foreign countries and removing U.S. military bases as relics of
neocolonialism. Their danger to world peace and prosperity threatens a reversion to the
pre-World War II colonialism, ruling by client elites along lines similar to the 2014 Ukrainian
coup by neo-Nazi groups sponsored by the U.S. State Department and National Endowment for
Democracy. Such control recalls the dictators that U.S. diplomacy established throughout Latin
America in the 1950s. Today's ethnic terrorism by U.S.-sponsored Wahabi-Saudi Islam recalls the
behavior of Nazi Germany in the 1940s.
Global warming is the second major existentialist threat. Blocking attempts to reverse it is
a bedrock of American foreign policy, because it is based on control of oil. So the military,
refugee and global warming threats are interconnected.
The U.S. military poses the greatest immediate danger. Today's warfare is fundamentally
changed from what it used to be. Prior to the 1970s, nations conquering others had to invade
and occupy them with armies recruited by a military draft. But no democracy in today's world
can revive such a draft without triggering widespread refusal to fight, voting the government
out of power. The only way the United States – or other countries – can fight other
nations is to bomb them. And as noted above, economic sanctions have as destructive an effect
on civilian populations in countries deemed to be U.S. adversaries as overt warfare. The United
States can sponsor political coups (as in Honduras and Pinochet's Chile), but cannot occupy. It
is unwilling to rebuild, to say nothing of taking responsibility for the waves of refugees that
our bombing and sanctions are causing from Latin America to the Near East.
U.S. ideologues view their nation's coercive military expansion and political subversion and
neoliberal economic policy of privatization and financialization as an irreversible victory
signaling the End of History. To the rest of the world it is a threat to human survival.
The American promise is that the victory of neoliberalism is the End of History, offering
prosperity to the entire world. But beneath the rhetoric of free choice and free markets is the
reality of corruption, subversion, coercion, debt peonage and neofeudalism. The reality is the
creation and subsidy of polarized economies bifurcated between a privileged rentier
class and its clients, eir debtors and renters. America is to be permitted to monopolize trade
in oil and food grains, and high-technology rent-yielding monopolies, living off its dependent
customers. Unlike medieval serfdom, people subject to this End of History scenario can choose
to live wherever they want. But wherever they live, they must take on a lifetime of debt to
obtain access to a home of their own, and rely on U.S.-sponsored control of their basic needs,
money and credit by adhering to U.S. financial planning of their economies. This dystopian
scenario confirms Rosa Luxemburg's recognition that the ultimate choice facing nations in
today's world is between socialism and barbarism.
___________________
[1]Billy Bambrough, "Bitcoin Threatens To 'Take Power' From The U.S. Federal Reserve,"
Forbes , May 15, 2019.
https://www.forbes.com/sites/billybambrough/2019/05/15/a-u-s-congressman-is-so-scared-of-bitcoin-and-crypto-he-wants-it-banned/#36b2700b6405.
[2]Vladimir Putin, keynote address to the Economic Forum, June 5-6 2019. Putin went on to
warn of "a policy of completely unlimited economic egoism and a forced breakdown." This
fragmenting of the global economic space "is the road to endless conflict, trade wars and maybe
not just trade wars. Figuratively, this is the road to the ultimate fight of all against
all."
[3]Address to St Petersburg International Economic Forum's Plenary Session, St Petersburg,
Kremlin.ru, June 5, 2009, from Johnson's Russia List, June 8, 2009, #8,
[4] https://www.rt.com/business/464013-china-russia-cryptocurrency-dollar-dethrone/
. Already in the late 1950s the Forgash Plan proposed a World Bank for Economic Acceleration.
Designed by Terence McCarthy and sponsored by Florida Senator Morris Forgash, the bank would
have been a more truly development-oriented institution to guide foreign development to create
balanced economies self-sufficient in food and other essentials. The proposal was opposed by
U.S. interests on the ground that countries pursuing land reform tended to be anti-American.
More to the point, they would have avoided trade and financial dependency on U.S. suppliers and
banks, and hence on U.S. trade and financial sanctions to prevent them from following policies
at odds with U.S. diplomatic demands.
[5]Don Weinland, "WTO rules against US in tariff dispute with China," Financial Times
, July 17, 2019.
Views from an economist who has been promoting neoclassical ideology for decades and then
wonders when there are no alternatives to escape the narrative? Completely ignores how a
monetary sovereign capacity can move away from US hegemony. The countries under the heel of
the US are there because the IMF has engineered their economies in favour of the US. They
could all threaten default at the same time and scare off the IMF horses – the US picks
off individual countries by isolating them. Play the united game and the power of division
practiced by the US would crumble. Just saying.
"They could all threaten default at the same time and scare off the IMF horses – the
US picks off individual countries by isolating them. Play the united game and the power of
division practiced by the US would crumble."
This is interesting. On a similar note, I've wondered why Russia has not defaulted on it's
considerable USD and EUR debt (also too, why is Russia still doing debt in USD and thus
strengthening U.S.?).
But only after she sells off all her U.S. holdings which will be (and have been already)
seized by Out Law America.
I believe Russia would be on some sort of legal ground in doing so in response to the
illegal sanctions imposed upon by by the EU and U.S.
And it will be interesting to see if Germany backs down on Nordstream II. Will she be a
total puppet of the U.S.?
Of course, it's depressing Russia has not reformed it's internal economy so that she can
grow faster. Maybe because while Putin and others don't want to take orders from Washington
they are trapped in neoliberal economic thinking and can't think outside the box?
Until Washington changes, I firmly believe Russia and other nations must act as if their
future hold one totally without U.S. interdependence and must create completely independent
economies the U.S. can not touch. China? Hard to include China in that right now with so much
trade with the U.S. but on the other hand their are reports U.S. related firms are starting
to move out of China.
The corporations that moved manufacturing to Mexico and then subsequently to China will
continue to seek cheaper labor so that their management can feather their own nests. They're
not going to bring back manufacturing to the US. Look at these greedy corporations that sell
Hanes underwear for example. They get rid of labels on their product to save less than a cent
per item and spend money and spend millions in extolling the virtues of not having labesl on
their tee shirts (Michael Jordon is the spokesman in the ad). Greed has no limits.
"Maybe because while Putin and others don't want to take orders from Washington they are
trapped in neoliberal economic thinking and can't think outside the box?"
Probably a lot there. Maybe the idea is that the system can work but needs to be fiddled
with to make it more fair to B stringers like Russia and China.
The only time anyone has had any success escaping Anglo-American finance was Germany,
Japan and the USSR in the 1930-45 period. The Soviets managed to keep their thing going until
much later, but internal corruption ( where isn't this a factor?) did them in.
Post WWII Japan kept away from the stranglehold of US Financiers by only purchasing
technology and protecting their markets which other countries have to emulate.
"I've wondered why Russia has not defaulted on it's considerable USD and EUR debt (also
too, why is Russia still doing debt in USD and thus strengthening U.S.?)"
Notice how this hasn't effected anything; other parties just happily bought it all up. The
Russians were stupid to drop it because Treasury Securities are a guaranteed return on
investment. Because, stick with me here on this, the US government can't run out of US
dollars.
They have removed those assets from the very great possibility of seizure by the US and
others (like the Venezuelan gold seized by the UK). When push comes to shove the US and its
minions have no ethics abut breaking whatever laws they deem to be in their way.
They bought quite a lot of gold, which seems to be doing pretty well these days.
You misunderstood me. Russia borrows USD and EUR from Western banks. That makes US –
Russia's enemy – stronger. Russia should borrow from Russia not the US. I'm asking why
don't they default on that debt. Your response assumed I was referring to Russia holding US
assets. That's different. BTW I don't agree with you that Russia made a mistake getting rid
of US assets given the US has stolen Russian real estate holdings in the US and other nations
property held in US banks like Venezuela's USD deposits and gold.
Along the same lines, the summary starts with, "The first existential objective is to
avoid the current threat of war by winding down U.S. military interference in foreign
countries and removing U.S. military bases as relics of neocolonialism." Either would be
taken as proof of evil anti-US intentions, leading to sanctions, coups, assassinations,
regime change, and eventually outright war. As Mael Colium says, the US picks off individual
countries by isolating them.
I noticed that. I think Michael Hudson is a classical economist pushing back against the
currently reigning neo-classical economists. Classical economics is not Neo-classical
economics. Saying Hudson promotes neo-classical economics is a mistake.
I believe his hope is for the world to recognise that Athens, Rome and Constantinoiple
collapsed economically due to legislatively favoring creditors over debtors. Its a process we
see alive in North America and Europe today. That's where he is coming from
"Views from an economist who has been promoting neoclassical ideology for decades and then
wonders when there are no alternatives to escape the narrative?"
Really, you should read the article you posted this note under. What text is this comment
in reference to?
Michael Hudson promoting neoclassical ideology for decades?? Are we talking about the same
Michael Hudson from UMKC?
Could you please provide one single link to a paper that was written by him relying on
inductive methodology-based equilibrium theory??
There are a number of such "unclear sentences" in the article. Is the original article so
poorly written/edited, or is it errata in the transcription here?
Either way, it's a shame that such errors detract from the clarity of the ideas presented.
Is there any way to go back and clean this mess up??
Reading Michael's fascinating history of debt forgiveness isn't much different. I'm
grateful for his writing but suffer from his typing. Have proofreaders gone the way of buggy
whips?
(And we must stipulate that typos here on NC are so buggy they're a feature. Which makes
me wonder if/when Roman inscriptions went illiterate–first century BC civil wars, or
third century AD Christian takeover? Valuable historic perspective!)
Support. I would go further and say the article should be taken down for editing. Needs to
be translated into English.
Also, too, the final sentence: "This dystopian scenario confirms Rosa Luxemburg's
recognition that the ultimate choice facing nations in today's world is between socialism and
barbarism." is a rather large jump from the text. While many regular NC readers will agree,
the connection for others is obscure.
Wait the final sentence is what it is because it comes after everything before it. The
quote distills much of what precedes it: The US is determined to be "the winner" in all
dealings and nations acquiescing to US goals will likely lead to barbarism (austerity) for
those populations.
Sometimes a phrase hits to the core of a wider meaning: "Send Her Back!" (a racist chant
in any language).
When we have MMT paying for arts, history, journalism and particularly editors, I won't be
so irritated by these kinds of criticisms.
We live in a very advanced world of Bernaysian propaganda where the communicative
industries are privately owned and directed to ensure deep criticisms of the
hyper-exploitative current reality CANNOT be published and promoted.
When someone takes the effort to produce something, like this or the book other commenters
on this thread are also slighting, at great personal expense to themselves without corporate
backing or institutional support, a decent reply would be "Thank you!", rather than tasking
them or our hosts here at this site to "go back and clean up this mess??"
If you had any decency, you might suggest clarifying edits in comments, like changing
"– so that it can taxing its own citizens." at the end of the 23rd paragraph to,
"– so that it can avoid taxing its own citizens", to help the people you are
criticizing for making things so difficult for you.
Who cares about a few typos when his ideas are truly REVOLUTIONARY!
For example, i had no idea about Debt Jubilees in early civilizations 3000 years ago! The
pyramids built by FREE MEN! Liberty and Freedom originating from canceling debts! Torches and
Beacons of light as representatives of said Debt Jubilees!
If you ask me, the #HudsonHawk is trying to awaken the Workers of the World in
Forgiveness, Peace, Love, and Solidarity.
I didn't know that until I read anthropologist David Graeber's Debt: The First 5,000
Years.
But there's a fundamental difference between debt in the past and debt today. In the past
debt was owed to the state, today it's owed to some wealthy corporations. Good luck with debt
jubilees in the absence of violent uprisings.
The difference is they internalize profit and externalize cost. And that's fundamentally
different from all other epochs in the past. Even the birth of nation state was out of their
rationalization of how to maximize profit extraction and cost externalization in the 1st
place. Good luck with debt jubilees.
I agree. I can read through typos, missing words, etc as long as the writing conveys the
intended meaning. I think the criticism of the document for grammatical perfection is not
warranted. I enjoyed the article myself anad I thank the author.
That is why Russia, China and other powers that U.S. strategists deem to be strategic
rivals and enemies are looking to restore gold's role as the preferred asset to settle
payments imbalances.
How would this occur aside from a repudiation of the almighty buck one wonders, and would
it be based on reserves in the vault, or actual use as money?
Keep in mind that there isn't a human alive now who ever proffered a monetized gold coin
in order to purchase something, and increasingly relatively few that have ever used a
monetized silver coin for the same purpose.
I don't have a huge amount of sympathy. The Eurozone and China could run trade deficits,
thereby creating an opportunity for their currencies to become reasonably viable alternative
reserves. But they don't because they don't want to cede control of their manufacturing and
export-driven economic bases away.
The US doesn't mind and doesn't care about the domestic repercussions. For how much longer
that can continue, especially as Trump's America First policy is putting that under
some strain, is an open question. But for now, it's willing to be satisfied with a little
rowing back rather than wholesale reversal (back to, for example, an immediate-post war
position of significant trade surpluses although the article is correct to point out this was
due to the US being the last man standing, in terms of having a manufacturing base still
intact).
The Eurozone and China are not only not showing any signs of a policy change, they've
continued embedding and strengthening the current modus operandi. You pays your money, you
takes your choices. Here as elsewhere. If they'd rather not have the US$ having a
more-or-less monopoly position in then global financial system as a reserve currency, they'll
need to make the compromises needed to set up these challenger currencies as viable
alternatives.
But they can't have their economic cakes and eat them, too.
And it's not just currencies. You need legal systems which are deemed to be (which can
only come through real, observational experience) investor-friendly -- not just prone to
supporting or at the very least given an easy ride to domestic stalwarts. Again, this has
repercussions if you then have to stop cosseting domestic "champions". The US legal system is
ridiculously business friendly. But it doesn't, overtly, differentiate between US and non-US
companies in a commercial dispute.
The sine qua non of our economic empire (which I learned here) is that a global currency
requires global trade deficits, which must grow as quickly as the global economy to fulfill
its role. Tell that to Germany! If your silly little euro or yen or renminbi tries to go
global, the dollar-based currency speculators will shrivel it like Soros did the pound in the
90s. So American deficits are structural. Our debt-ceiling controversies are theater. And our
dollar is exceptional until the instant it isn't–then the Fed electron-tranfers
trillions more to the speculators whose notional dollars just evaporated, keeping the
currencies in the air with their new casino chips. Is this a loan? A gift? An electron cloud?
It's the fog of war by other means . . .
It may have been Hudson who explained that a quarter (or was it half?) of all corporate
profits after WWII went to American companies, when our economy was that much of the world's.
Now we're a much smaller fraction of the global economy, but our corporate sector still
profits as much as it did when it was producing, rather than marketing, real goods. Another
exceptional achievement.
Oops, and I meant to begin with strong agreement, Clive, just developing your point about
the need for deficits to 'buy' control with unpayable debt. And it's an excellent point that
"The US doesn't mind and doesn't care about the domestic repercussions." Just imagine if we
did.
Oh man, this is definitely a two coffee cup read with a ton of material to absorb.
Definitely a keeper this. I'll just make a brief comment as it is late here. Maybe what is
key here is that there are so many trends working against the US as power shifts from a
unipolar to a multipolar world that a determination has been made in Washington to try to set
out a unilateral domineering position with regards the rest of the world to stop the loss of
prestige and power. This is just not Trump but the Washington political establishment backing
him up to put the US in a domineering position for at least the first half of this
century.
This is the first serious article I've seen linking opposition to climate action with the
US strategic focus on securing oil. The current oil wars may have started in 2003, but we've
really been fighting them for longer, at least since the Tanker War of the late 80s, which
led into the first Gulf War (which was explicitly for oil). We've been openly preparing for
such wars since the Carter Doctrine of the late 70s as well. Those dates matter because the
public generally became aware of global warming with the congressional hearings in 1988, and
the oil companies (and thus presumably the rest of the deep state) became aware of the
science as early as the 70s.
US military strategy has been based around ensuring climate change happens for as long as
climate change has been known about. Why isn't this more of a scandal? Why isn't this more
openly discussed as a justification for changing US foreign policy? Why isn't reducing
imperial adventures discussed as a side benefit of any policy, like a Green New Deal, that
seriously attempted to cut carbon emissions? It boggles the mind, and seems like the sort of
thing that'll be obvious to future generations so long as civilization hasn't collapsed by
then.
Really all we know is that such a plan would create a different order. That so many
countries have continued to pauper their populations long after the obviousness that
"development" is a sham doesn't bode well for their intentions even after the USA is brought
to heel.
This is a good summary of our irrational world. MMT and the GND can save the situation but
only if we industrialized humans forego any more fossil fuels except for long-term survival
purposes. Ration it with draconian discipline. That in turn will discipline our military and
turn our energies to things we can no longer ignore. Money doesn't bother me much. Resources
and the critical health of the planet bother me a lot. Money and "gold" are, in the end, both
fictitious obsessions.
Thanks for providing this transcript prior to Hudson posting it to his own website. He was
the first political-economist to lay out the Outlaw US Empire's game plan when he published
Super Imperialism: The Economic Strategy of American Empire in 1972. You'll find few
authors willing to provide their seminal work for free online– 2nd Edition
PDF . I think it fair for those unfamiliar with Hudson's work to read his analysis prior
to being judgmental.
The first existential objective is to avoid the current threat of war by winding down
U.S. military interference in foreign countries and removing U.S. military bases as relics of
neocolonialism.
Clark Air Force base in Angeles City, Philippines had closed the year earlier in 1991.
China is growing power and challenger to shipping freedom of the South China Sea trading
route, building artificial fortified islands and aircraft carriers. History has not ended.
Power abhors a vacuum.
I agree with Hudson's point about the dangers of misdirected militarism, but I don't think
closing military bases around the world necessarily guarantees the end of military
adventurism dangers by other rising powers.
"... And ultimately, this is why I can't blame graduate students for figuring out that they need to be technocrats in order to survive. The job market is tough, there are very few tenure-track jobs available, and the people who make it are the people who don't do History for the love of it but who do it like...a career. ..."
Right now, for a creative or artistic or even just a curious person, I think over-exposure to academia is intellectual and spiritual
poison.
But I should qualify that disillusionment by saying that academia also saved me. If I hadn't read Franz Kafka in community college
and discovered (to my utter shock) that I had a gift for writing poetry in my first creative writing class, I have no idea what kind
of bad roads I would've wandered down. So my disillusionment with academia was gradual and fairly late.
I can maybe explain if you'll indulge a mini-narrative of my academic career. After community college, I went to a very conservative
Christian college in the Missouri Ozarks. It was a school for working class kids where you worked on campus to pay for your tuition
and room and board. So for most students it was our one realistic chance at a full college education without crushing debt.
So, no matter how crazy the school's politics got in our eyes, we felt like we were stuck there. But when I was a student, the
college also had a great English faculty who turned us on to William Butler Yeats, Flannery O'Connor, Gabriel Garcia Marquez, Emily
Dickinson, Faulkner, Hemingway. There was also a healthy theater department.
Little by little, my handful of weirdo artsy friends and I learned how to creatively thrive without institutional sanction or
ideological kinship with our hyper-conservative college.
After my undergrad education, I went to the University of Arkansas's MFA program in creative writing to study poetry. And that
was pretty amazing in its own feral way. I connected with this great generation of old school Southern writers in Arkansas, though
that generation began phasing out during my four years in the program. They started getting replaced by writers who were more slick,
more credentialed, more politically astute, less problematic but also infinitely less interesting than the generation that preceded
them. [Emphasis mine -- RD]
... So I think my issues are less with Duke or that particular English department and more with this emerging academic generation,
which to me seems to double-down on the older generation's worst trait (ideological certainty) while skimping out on its greatest
strengths (genuine erudition and intellectual curiosity). As an academic, I generally felt like as soon as the older professors retired,
I was going to be surrounded by people who all read the same ten theorists and who uniformly had pretty banal tastes in literature
and who were all frothing to cancel and leap-frog each other into eternity and/or tenure. [Emphasis mine -- RD]
If Cambridge decolonizes its curriculum then our heritage will be preserved at places like the College of the Ozarks.
I had a very similar experience in my PhD program, mine was in History. I did an MA in London and loved every minute of it.
It was designed as a very international program, and I have so many fond memories of sitting in pubs after our seminars arguing
in a good natured way about the topic of the day, and I thought "this is what I want to do with my life!" But graduate work for
a career in academia is nothing like that. People have to specialize, and so you find quickly that in a room full of PhD candidate
historians there is actually not that much to talk about because everyone's silo is so specific and so different. Politics plays
a role too, I suppose. I was free to be an out and proud conservative in my MA program.
I did not feel that freedom in my PhD
program, where you need good professional relationships in order to have a chance at a job.
And ultimately, this is why I can't blame graduate students for figuring out that they need to be technocrats in order to survive.
The job market is tough, there are very few tenure-track jobs available, and the people who make it are the people who don't do
History for the love of it but who do it like...a career.
Which is what they want it to be. They had the right approach and I
had the romantic, and wrong, approach. It's not their fault. Being one of the few to carve out a career in such an industry takes
determination and not a little joyless professionalism. If you aren't ready to turn your passion into a business, don't go to
graduate school.
I noticed when I was in graduate school in the 80s that one thing that seemed to characterize many of the students and professors
in literature-oriented fields -- particularly Comp Lit -- was that they didn't really seem to enjoy reading very much. I'm not
sure they were even capable anymore of just sitting and reading a book purely for enjoyment with trying to mine it for nuggets
to support their pet theory.
"If you deeply love art or books or music, I really believe the last thing you should do is pursue a graduate degree studying
that thing you love. "
They will beat that love right out of you, replace it with vapid ideology, and you'll never love those things with the same
wide-eyed innocence as before.
This is unfortunate, as a cooler, more mature perspective on art is something we should all try to cultivate. But critique
as murder + autopsy is the order of the day.
My American poetry professor in college (a proper reactionary, he spoke without irony of 'the War of Northern Aggression) inoculated
me against 'interrogating the text' in the way the modern academy trains its cadres to do.
Yet another issue is that annuities can be complex financial contracts, and hard for an
average person to evaluate. How long do you pay into the annuity? When does it start paying
out? Does it pay our for a fixed period, or over the rest of one's life? Are the payouts
adjusted for inflation? How large a commission is being charged by the seller? Does the annuity
include a minimum payout if you die soon--which could be left to one's heirs? What happens if
the company that sold you the annuity goes broke a decade or two in the future? How will the
tax code treat income from annuities in the future? In the past, some annuities were not an
especially good financial deal, in the sense that someone with the discipline to withdraw money
from their retirement accounts in a slow-and-steady way have a high probability of ending up
better off than someone who purchased a life annuity.
Dmitry Orlov offers a highly-pertinent review of a current report to the US Congress about
the severe degradation of the US's capacity to produce ANY heavy industrial goods - including
advanced weapons such as replacement aircraft carriers, cruisers, tanks and all the rest -
within its own borders, independent of (exceedingly vulnerable) global supply networks:
Also, the US only has 'plenty' of fossil-hydrocarbon fuel on cloud-cuckoo-land paper. In
reality, it has quite a lot of such stuff which it will never access, and will never be able
to access, because of the non-negotiable, iron logic of EROEI and EROCI (the second acronym
relating to energy returned on financial capital invested; currently a long way red-ink
negative across the whole US fracking ponzi). EROEI refers to the even more intractable,
terminally-insoluble problem of energy returned on ENERGY invested. When this gets down to
around 4 to 1 or thereabouts, it's game over for actually being able to maintain an
industrial hitech society that can hope - credibly - to do fossil-hydrocarbon mining in any
seriously challenging conditions - which most of the world's remaining pools of such fuels
now exhibit.
These predicaments are qualitatively different from problems; problems, by definition, can
hope to be solved; predicaments, inherently, can't be, and can only be endured. The world is
now close to the edge of a decisive non-availability of sufficient fossil-hydrocarbon fuels
to keep even a skeleton semblance of modern hitech industrial society operating - at all.
That's the predicament that is already staring us in the face, and that will soon be
trampling us into the ground. Doesn't mean that hopeless political inadequates such as
PompousHippo and The Insane Geriatric Walrus won't attempt to trigger such insanity as an
aggression against Iran, though, they being too stupid, too delusional, and too
morally-degenarate, to know any better.
This is the overall situation which insists that the US has literally zero chance of
attacking Iran, and actually getting anything remotely resembling a 'win' out of it. Read
Dmitry's piece to get a more detailed outline of why this is so.
PS: The above considerations apply just as decisively to the US's nuclear weapon capacity
as they do to all the other hitech industrial toys which USAmerica is now barely able to
produce on its own - at all.
"... Of course, correlation is not causation, and there is no shortage of alternative explanations for the decline in U.S. manufacturing. Globalization, offshoring, and skills gaps are just three frequently cited causes. Moreover, some researchers, like MIT's David Autor, have argued that workers are benefiting from working alongside robots. ..."
"... Yet the evidence suggests there is essentially no relationship between the change in manufacturing employment and robot use. Despite the installation of far more robots between 1993 and 2007, Germany lost just 19 percent of its manufacturing jobs between 1996 and 2012 compared to a 33 percent drop in the United States. (We introduce a three-year time lag to allow for robots to influence the labor market and continued with the most recent data, 2012). ..."
"... Korea, France, and Italy also lost fewer manufacturing jobs than the United States even as they introduced more industrial robots. On the other hand, countries like the United Kingdom and Australia invested less in robots but saw faster declines in their manufacturing sectors. ..."
Don't blame the robots for lost manufacturing jobs
Scott Andes and Mark Muro
Wednesday, April 29, 2015
a recent blog we described new research by George Graetz
and Guy Michaels that shows the impact of automation
technology in productivity statistics. So now there is good
evidence that robots are a driver of economic growth.
However, this new evidence poses a question: Has
productivity growth from robots come at the cost of
manufacturing jobs?
Between 1993 and 2007 (the timeframe studied by Graetz and
Micheals) the United States increased the number of robots
per hour worked by 237 percent. During the same period the
U.S. economy shed 2.2 million manufacturing jobs. Assuming
the two trends are linked doesn't seem farfetched.
Of course, correlation is not causation, and there is no
shortage of alternative explanations for the decline in U.S.
manufacturing. Globalization, offshoring, and skills gaps are
just three frequently cited causes. Moreover, some
researchers, like MIT's David Autor, have argued that workers
are benefiting from working alongside robots.
So is there a relationship between job loss and the use of
industrial robots?
The substantial variation of the degree to which countries
deploy robots should provide clues. If robots are a
substitute for human workers, then one would expect the
countries with much higher investment rates in automation
technology to have experienced greater employment loss in
their manufacturing sectors. Germany deploys over three times
as many robots per hour worked than the United States,
largely due to Germany's robust automotive industry, which is
by far the most robot-intensive industry (with over 10 times
more robots per worker than the average industry). Sweden has
60 percent more robots per hour worked than the United States
thanks to its highly technical metal and chemical industries.
Yet the evidence suggests there is essentially no
relationship between the change in manufacturing employment
and robot use. Despite the installation of far more robots
between 1993 and 2007, Germany lost just 19 percent of its
manufacturing jobs between 1996 and 2012 compared to a 33
percent drop in the United States. (We introduce a three-year
time lag to allow for robots to influence the labor market
and continued with the most recent data, 2012).
Korea,
France, and Italy also lost fewer manufacturing jobs than the
United States even as they introduced more industrial robots.
On the other hand, countries like the United Kingdom and
Australia invested less in robots but saw faster declines in
their manufacturing sectors.
"Despite the installation of far more robots between 1993 and
2007, Germany lost just 19 percent of its manufacturing jobs
between 1996 and 2012 compared to a 33 percent drop in the
United States. "
Yes the U.S. and Germany have a similar
pattern. So what.
Why Factory Jobs Are Shrinking Everywhere
by Charles Kenny
April 28, 2014, 1:16 PM EDT
A report from the Boston Consulting Group last week
suggested the U.S. had become the second-most-competitive
manufacturing location among the 25 largest manufacturing
exporters worldwide. While that news is welcome, most of the
lost U.S. manufacturing jobs in recent decades aren't coming
back. In 1970, more than a quarter of U.S. employees worked
in manufacturing. By 2010, only one in 10 did.
The growth in imports from China had a role in that
decline–contributing, perhaps, to as much as one-quarter of
the employment drop-off from 1991 to 2007, according to an
analysis by David Autor and colleagues at the Massachusetts
Institute of Technology. But the U.S. jobs slide began well
before China's rise as a manufacturing power. And
manufacturing employment is falling almost everywhere,
including in China. The phenomenon is driven by technology,
and there's reason to think developing countries are going to
follow a different path to wealth than the U.S. did-one that
involves a lot more jobs in the services sector.
Pretty much every economy around the world has a low or
declining share of manufacturing jobs. According to OECD
data, the U.K. and Australia have seen their share of
manufacturing drop by around two-thirds since 1971. Germany's
share halved, and manufacturing's contribution to gross
domestic product there fell from 30 percent in 1980 to 22
percent today. In South Korea, a late industrializer and
exemplar of miracle growth, the manufacturing share of
employment rose from 13 percent in 1970 to 28 percent in
1991; it's fallen to 17 percent today.
@ james 39 basically, the prognosis isn't good.. none of the colonies are capable of speaking up to
the usa regime, largely because they lack strong leadership and independence of thought in
all this...
I agree with Summer Diaz at 26 and would say the folks most at fault here are the american
sheeple. The boomers, their parents and grandparents are at fault for allowing the american
dream to evaporate. We watched it occur before our very eyes, but were too self indulged to
care. We have only ourselves to blame, nobody else.
I recently stumbled upon Charles Lindbergh Sr's articles of impeachment against the
officers of the federal reserve and the federal reserve act itself. What amazes me whilst
reading it is how much life then, mimics life today. Because of this circumstance our lives
have been stifled, even with all this wondrous technology around us.
Imho, most of our problems today emulate from both the formation of that despicable act
and the failure to impeach and dispose of it four years later. Had it been we likely wouldn't
be having this discussion on Iran, today.
Again I mention President Wilson only became Pres after a grand election rigging when
Former Pres Theodore Roosevelt suddenly announced a 3rd party that split the Repub ticket
between him and incumbent[!] Pres Taft, enabling Dem candidate Wilson to get a majority.
Congressman C A Lindbergh, Sr. warned over and over against passage of Fed Reserve Act,
which finally passed Congress during Christmas holidays in 1913 and was immediately signed b
Pres Wilson.
He wrote an amazingly clear booklet forecasting the harm that would happen if the Fed was
established. And the harm happened.
I recommend any interested reader to read Lindbergh's 1913 "Banking. Currency and the
Money Trust". It's freely available on the internet.
After Congress passed and Woodrow Wilson signed the Fed Res Act, Lindbergh, Sr. tried in
1916, without success, to impeach Fed Res director Paul Warburg, et al.
[His son CAS,Jr did the NY-to-Paris solo flight in 1927.
Add to that amazing Lindbergh essay, the definitive work on the subject by E. G. Griffin,
The Creature from Jekyll Island. Between the two, you will find out how the US of A was sold
wholesale by a bunch of unscrupulous scoundrels and started a perpetual cycle of debt
slavery.
"... The power elite is composed of men whose positions enable them to transcend the ordinary environments of ordinary men and women, they are in positions to make decisions having major consequences. They arc in command of the major hierarchies and organizations of modern society. ..."
Posted by Political Issues in Sep 07, 2011, under Issues
Who really holds power in the
United States' Do "we the people" genuinely run the country through elected representatives? Or
is there small elite of Americans that governs behind the scenes? It is difficult to determine
the location of power in a society as complex as the Unite States In exploring this critical
question, social scientists have developed two basic views of our nation's power structure the
elite and pluralism models.
Elite Model
Karl Marx essentially believed that nineteenth century representative democracy was a
shape.
He argued that industrial societies were dominated by relatively small numbers of people who
owned factories and controlled natural resources.
In Marx's view, government officials and military leaders were essentially servants of the
capitalist class and followed their wishes therefore, any key decisions made by politicians
inevitably reflected the interests of the dominant bourgeoisie Like others who hold an elite
model of power relations, Marx thus believed that society is ruled by a small group of
individuals who share a common set of political and economic interests.
The Power Elite . In his pioneering work. The Power Elite , sociologist C. Wright
Mills described the existence of a small ruling elite of military, industrial, and governmental
leaders who controlled the fate of the United States. Power rested in the hands of a few, both
inside and outside of government -- the power elite . In Mill's words:
The power elite is composed of men whose positions enable them to transcend the ordinary
environments of ordinary men and women, they are in positions to make decisions having major
consequences. They arc in command of the major hierarchies and organizations of modern
society.
In Mills's model, the power structure of the United States can be illustrated by the use of
a pyramid. At the top are the corporate rich, leaders of the executive branch of government,
and heads of the military (whom Kills called the "warlords"). Below this triumvirate are local
opinion leaders, members of the legislative branch of government, and leaders of
special-interest groups. Mills contended that such individuals and groups would basically
follow the wishes of the dominant power elite. At the bottom of society are the unorganized,
exploited masses.
This power elite model is, in many respects, similar to the work of Karl Marx. The most
striking difference is that Mills felt that the economically powerful coordinate their
maneuvers with the military and political establishments in order to serve their mutual
interests. Yet, reminiscent of Marx. Mills argued that the corporate rich were perhaps the most
powerful element of the power elite (first among "equals"). And, of course, there is a further
dramatic parallel between the work of these conflict theorists The powerless masses at the
bottom of Mills's power elite model certainly bring to mind Marx's portrait of the oppressed
workers of the world, who have "nothing to lose but their chains".
Mills failed to provide detailed case studies which would substantiate the interrelationship
among members of the power elite. Instead, he suggested that such foreign policy decisions as
America's entry into the Korean war reflected a determination by business and military leaders
that each could benefit from such armed conflict. In Mills s view, such a sharing of
perspectives was facilitated by the frequent interchange of commanding roles among the elite.
For example, a banker might become the leader of a federal regulatory commission overseeing
financial institutions, and a retired general might move to an executive position with a major
defense contracting firm.
A fundamental element in Mills's thesis is that the power elite not only has relatively few
members but also operates as a self-conscious, cohesive unit. Although not necessarily
diabolical or ruthless, the elite comprises similar types of people who regularly interact with
one another and have essentially the same political and economic interests. Mills's power elite
is not a conspiracy but rather a community of interest and sentiment among a small number of
influential Americans.
Admittedly, Mills failed to clarify when the elite acts and when it tolerates protests.
Nevertheless, his challenging theories forced scholars to look more critically at the
"democratic" political system of the United States.
The Ruling Class
Sociologist G. William Domhoff agreed with Mills that American society is
run by a powerful elite. But, rather than fully accepting Mills's power elite model, Domhoff
argued that the United States is controlled by a social upper class "that is a ruling class by
virtue of its dominant role in the economy and government". This socially cohesive ruling class
owns 20 to 25 percent of all privately held wealth and 45 to 50 percent of all privately held
common stock.
Unlike Mills, Domhoff was quite specific about who belongs to this social upper class.
Membership comes through being pan of a family recognized in The Social Register --
the directory of the social elite in many American cities. Attendance at prestigious private
schools and membership in exclusive social clubs are further indications that a person comes
from America's social upper class. Domhoff estimates that about 0.5 percent of the American
population (or 1 of every 200 people) belongs to this social and political elite.
Of course, this would mean that the ruling class has more than 1 million members and could
hardly achieve the cohesiveness that Mills attributed to the power elite. However, Domhoff adds
that the social upper class as a whole does not rule the nation. Instead, members of this class
who have assumed leadership roles within the corporate community or the nation's
policy-planning network join with high-level employees of profit-making and nonprofit
institutions controlled by the social upper class to exercise power.
In Domhoff's view, the ruling class should not be seen in a conspiratorial way, as "sinister
men lurking behind the throne." On the contrary they tend to hold public positions of
authority. Almost all important appointive government posts -- including those of diplomats and
cabinet members -- are filled by members of the social upper class. Domhoff contends that
members of this class dominate powerful corporations, foundations, universities, and the
executive branch of government. They control presidential nominations and the political party
process through campaign contributions. In addition, the ruling class exerts a significant
(though not absolute) influence within Congress and units of state and local government.
Perhaps the major difference between the elite models of Mills and Domhoff is that Mills
insisted on the relative autonomy of the political elite and attached great significance to the
independent power of the military. By contrast, Domhoff suggests that high-level government and
military leaders serve the interests of the social upper class. Both theorists, in line with a
Marxian approach, assume that the rich are interested only in what benefits them financially.
Furthermore, as advocates of elite models of power. Mills and Domhoff argue that the masses of
American people have no real influence on the decisions of the powerful.
One criticism of the elite model is that its advocates sometimes suggest that elites are
always victorious. With this in mind, sociologist J. Alien Whitt (1982) examined the efforts of
California's business elites to support urban mass transit. He found that lobbying by these
elites was successful in San Francisco but failed in Los Angeles. Whitt points out that
opponents of policies backed by elites can mobilize to thwart their implementation.
Domhoff admits that the ruling class does not exercise total control over American society.
However, he counters that this elite is able to set political terms under which other groups
and classes must operate. Consequently, although the ruling class may lose on a particular
issue, it will not allow serious challenges to laws which guarantee its economic privileges and
political domination.
Pluralist Model
Several social scientists have questioned the elite models of power relations proposed by
Marx, Mills, Domhoff, and other conflict theorists. Quite simply, the critics insist that power
in the United States is more widely shared than the elite model indicates. In their view, a
pluralist model more accurately describes the American political system. According to the
pluralist model , "many conflicting groups within the community have access to
government officials and compete with one another in an effort to influence policy
decisions".
Veto Groups . David Riesman's The Lonely Crowd suggested that the American political
system could best be understood through examination of the power of veto groups. The term
veto groups refers to interest groups that have the capacity to prevent the exercise of
power by others. Functionally, they serve to increase political participation by preventing the
concentration of political power. Examples cited by Riesman include farm groups, labor unions,
professional associations, and racial and ethnic groups. Whereas Mills pointed to the dangers
of rule by an undemocratic power elite, Riesman insisted that veto groups could effectively
paralyze the nation's political processes by blocking anyone from exercising needed
leadership functions. In Riesman's words, "The only leaders of national scope left in the
United States are those who can placate the veto groups".
Dahl's Study of Pluralism . Community studies of power have also supported the pluralist
model. One of the most famous -- an investigation of decision making in New Haven, Connecticut
-- was reported by Robert Dahl in his book, Who Governs? (1961). Dahl found that while
the number of people involved in any important decision was rather small, community power was
nonetheless diffuse. Few political actors exercised decision-making power on all issues.
Therefore, one individual or group might be influential in a battle over urban renewal but at
the same time might have little impact over educational policy. Several other studies of local
politics, in such communities as Chicago and Oberlin, Ohio, further document that monolithic
power structures do not operate on the level of local government.
Just as the elite model has been challenged on political and methodological grounds, the
pluralist model has been subjected to serious questioning. Domhoff (1978) reexamined Dahl's
study of decision making in New Haven and argued that Dahl and other pluralists had failed to
trace how local elites prominent in decision making were part of a larger national ruling
class. In addition, studies of community power, such as Dahl's work in New Haven, can examine
decision making only on issues which become pan of the political agenda. This focus fails to
address the possible power of elites to keep certain matters entirely out of the realm of
government debate. Conflict theorists contend that these elites will not allow any outcome of
the political process which threatens their dominance. Indeed, they may even be strong enough
to block discussion of such measures by policymakers.
Congress and the courts are the enablers of America's destruction. Legislation is
morality; it's the definition of how you live together, where people can live together and
raise their families. Our Congress instead serves the sex industry, whether it be in our
schools and universities or in our homes via television and the internet and magazines.
Yvonne Ridley in "**** in the USA" wrote on June 2, 2011:
"In Obama's Apple Pie America, cable and satellite companies pump *********** into
millions of homes where the American Dream has, for some, become X-rated.
"And the Americans are keen to share – I remember one of the first things that
followed the arrival of US forces in Afghanistan was the sex industry. Scores of channels
promoting straight and gay **** suddenly became readily available on television sets without
even the need to subscribe ."
And, our media, upon arrival, gleefully subjected small children to **** just to watch
their innocence torn asunder.
*********** and its consequences in America wears a Supreme Court robe... ***********
is the law of the land.
"... Of course the types who perpetrated this horror should go down but if you are naive enough to believe the lie that zionists pull all the greedies (jew/gentile/saudi) strings instead of the blindingly obvious, that all the greedies pull the strings of everyone they can, including those of the stupid & ignorant israeli settlers, then the odds of you anon, finding any 'truth' in the machinations of empire are slim. ..."
anon , Jul 11 2019 6:36 utc | 134 whatever, coward. I won't be staying long I see
little point is spending time at a place taken over by nonce's who can only read stuff that
adheres to their tiny world view. Otherwise they lose their sh1t.
Even worse few do more than hunt out anything, including stuff from the very same msm they
profess to eschew, which buttresses that view in an odd and pointless game of "see what I just
read, one upmanship". Actually getting out and involved helping even one of the humans whose
life is sh1t thanks to the empire is never even considered.
Of course the types who perpetrated this horror should go down but if you are naive
enough to believe the lie that zionists pull all the greedies (jew/gentile/saudi) strings
instead of the blindingly obvious, that all the greedies pull the strings of everyone they can,
including those of the stupid & ignorant israeli settlers, then the odds of you anon,
finding any 'truth' in the machinations of empire are slim.
If there weren't any twisted Clintons or Trumps prepared do do any damn thing just to
sodomise a preadolescent girl, no one would abduct the girls in the first place.
Every f++ker who went to edelsteins island should be locked up for the rest of their lives
unless they can prove beyond a shadow of a doubt that they only cut the grass/washed the
dishes.
ps if 'the jews' control everything why are so many of em on the bones of their arses?
Surely any jew who was stuck with driving a cab/pushing a pen/ or even robbing a bank would
just manipulate the nearest billionaire 'goy' into handing over his/her dosh?
(((Debisdead))) comes back from the dead to tell everyone the rampant child abuse is the
fault of anyone except the jewish names actually involved...
You said it.
What brought me here at 3:30 am was an Amber Alert on my phone, with an incredibly obnoxious
alarm, for a child apparently abducted 500kms away. I've received three such alerts in the past
hour so I know everyone in Ontario will be talking about it tomorrow.
"... Serial pederast Jeffrey Epstein is going to be arrested again. The big questions are why? And why now? I never doubted Donald Trump's sincerity in wanting Hillary in jail. But the reality is that Trump was not in any position to do so. Until a few months ago. ..."
"... Mueller, his staff of hatchetmen, the Obama administration and the rest of the corrupt old-guard in D.C. fully expected to be allowed free rein to convict Trump politically of Obstruction of Justice based on an interpretation of Federal Statutes that could only be justified in the world of Philip K. Dick's Minority Report. When that didn't happen, they are now looking at potential blowback from a vain and vindictive man occupying the supposedly most powerful office in the world. ..."
"... It seems John Bolton has been more president than Trump recently. ..."
"... I was cautiously optimistic that Trump would turn the corner on his presidency now that Mueller, impeachment and the rest of it would lift from his shoulders. His foreign policy maneuvers didn't fill me with much, if any, confirmation of this hope. ..."
"... Because this goes directly to the heart of the matter. Trump left the Clintons' social circle in disgust and I'm convinced he ran to stop her corrupt sell out of the U.S. Never forget that, while corruption is rampant in D.C., it is not all-pervasive. It's not a black and white thing. ..."
"... The level of corruption of the Departments of Justice, State, Treasury and the intelligence agencies needed to coordinate the RussiaGate hoax all to serve as Hillary's revenge porn was too much for enough people. ..."
"... And there are still plenty of people in all of those departments willing to step up now that the board state has changed. Remember back when Trump said we should just leave Hillary be, she's been through enough? That wasn't him capitulating to the Deep State, that was him offering her a way out. He knew then what was going on but thought he was powerless to stop it, politically. ..."
"... And Robert Mueller is up to his neck in this. Because it was Mueller who helped Epstein mostly get off the hook the last time and had the court documents sealed. ..."
"... Even if Barr and Trump have a marriage of convenience here, it doesn't matter. What matters is that Epstein will no longer be able to hide behind Clinton bag men and will this time have to cut a real deal to stay out of gen pop. ..."
"... This Epstein arrest is a testament to what happens when the pendulum swings too far in one direction. Where despicable people get away with the most heinous acts simply because they are connected in a web of corruption and venality. ..."
"... Maybe this is the moment of Peak Swamp? Maybe it's the moment where we can see things begin, ever so slightly to improve. Is it too little, too late? Likely. But something had to be done to keep our faith in our political and social institutions intact. Because otherwise that way leads to only chaos and collapse. ..."
"Bernie Birnbaum is a horse of a different color, ethics-wise that is...
...as in he ain't got none!"
-- Johnny Caspar, "Miller's Crossing"
Serial pederast Jeffrey Epstein is going to be arrested again. The big questions are why? And why now? I never doubted Donald Trump's sincerity in wanting Hillary in jail. But the reality is that Trump was not in any position to
do so. Until a few months ago.
When Attorney General William Barr ended the Mueller investigation back in February that was a turning point. I talked about
it back then in a piece called "
The Old Political Order is Just
Old ."
Mueller, his staff of hatchetmen, the Obama administration and the rest of the corrupt old-guard in D.C. fully expected to
be allowed free rein to convict Trump politically of Obstruction of Justice based on an interpretation of Federal Statutes that
could only be justified in the world of Philip K. Dick's Minority Report. When that didn't happen, they are now looking at potential blowback from a vain and vindictive man occupying the supposedly
most powerful office in the world.
But is that really the case anymore? It seems John Bolton has been more president than Trump recently.
I was cautiously optimistic that Trump would turn the corner on his presidency now that Mueller, impeachment and the rest of
it would lift from his shoulders. His foreign policy maneuvers didn't fill me with much, if any, confirmation of this hope.
But domestically signs were there that he had stabilized the battlefield.
Epstein's arrest tells me he's now out for blood.
Because this goes directly to the heart of the matter. Trump left the Clintons' social circle in disgust and I'm convinced he
ran to stop her corrupt sell out of the U.S. Never forget that, while corruption is rampant in D.C., it is not all-pervasive. It's not a black and white thing.
William Barr may not be a Boy Scout or anything but even he, like Trump,
has a disgust circuit.
And that circuit has a threshold.
The level of corruption of the Departments of Justice, State, Treasury and the intelligence agencies needed to coordinate the
RussiaGate hoax all to serve as Hillary's revenge porn was too much for enough people.
And there are still plenty of people in all of those departments willing to step up now that the board state has changed. Remember back when Trump said we should just leave Hillary be, she's been through enough? That wasn't him capitulating to the
Deep State, that was him offering her a way out. He knew then what was going on but thought he was powerless to stop it, politically.
To go after her you go after the person who is her Achilles' heel, Epstein through his association with Bill. Because what if
this isn't just about Bill's antics? But this is more than just Hillary and Bill. This is likely far deeper a rabbit hole than anyone in D.C. wants to admit. Don't think for a second that Epstein hasn't been
blackmailing very prominent people for years. Because he has. And they are all now scared to death.
And Robert Mueller is up to his neck in this. Because it was Mueller who helped Epstein mostly get off the hook the last time
and had the court documents sealed.
Now that Mike Cernovich worked to get those documents unsealed, we have an arrest warrant a week later by a Justice Department
led by someone, at this point, loyal to Trump.
Even if Barr and Trump have a marriage of convenience here, it doesn't matter. What matters is that Epstein will no longer be able to hide behind Clinton bag men and will this time have to cut a real deal
to stay out of gen pop.
This process will be slow and painful, but it will grind to the kind of conclusion that will only benefit Trump's re-election
bid. It will be an epic drip feed of leaks, innuendos, implications, indictments and the rest.
Because there comes a point where the Alinsky method of accusing your enemy of the thing you do backfires when it's raping 14-year-old
girls.
Once this thing gets a head of steam, once the #MeToo crowd gets a hold of this, there won't be anyone left standing. I always
said Hillary would indict herself. Her insane lust for power and revenge against her obstacles led us here. And it will lead her
to the kind of shame and disgrace that befits her avarice.
When Nancy Pelosi's daughter is out there
signaling for her mother on this immediately, you know this is bad. Pelosi doesn't roll over for nothing folks. Think what you want
about her but she's a pitbull. And she rolled over on border wall funding last week.
This Epstein arrest is a testament to what happens when the pendulum swings too far in one direction. Where despicable people
get away with the most heinous acts simply because they are connected in a web of corruption and venality.
Maybe this is the moment of Peak Swamp? Maybe it's the moment where we can see things begin, ever so slightly to improve.
Is it too little, too late? Likely. But something had to be done to keep our faith in our political and social institutions intact.
Because otherwise that way leads to only chaos and collapse.
* * *
Join my Patreon because you also weep for humanity at where
these people have led us.
"... Aditya Chakrabortty ( It's reckless. But a Tory cash splurge could win an election , 3 July) is right to point out the hypocrisy of the political right about public expenditure. While progressive proposals for public spending are decried as burdening the hard-pressed taxpayer, the right is happy to use public money to rescue the banks or boost their electoral chances. ..."
"... As I explain in my book Money: Myths, Truths and Alternatives, neoliberal economics is built on a fairytale about money that distorts our view of how a contemporary public money system operates. It is assumed that public spending depends on extracting money from the market and that money (like gold) is always in short supply. Neither is true. Both the market and the state generate money – the market through bank lending and the state through public spending. Both increase the money supply, while bank loan repayments and taxation reduce it. There is no natural shortage of money – which today mainly exists only as data. ..."
Neoliberal economics and other fairytales about money Politics is not about a
struggle over a fixed pot of money, says Mary Mellor, and the best way to end austerity is to
reject it as an ideology, says Peter McKenna
Aditya Chakrabortty (
It's reckless. But a Tory cash splurge could win an election , 3 July) is right to point
out the hypocrisy of the political right about public expenditure. While progressive proposals
for public spending are decried as burdening the hard-pressed taxpayer, the right is happy to
use public money to rescue the banks or boost their electoral chances.
As I explain in my book Money: Myths, Truths and Alternatives, neoliberal economics is built
on a fairytale about money that distorts our view of how a contemporary public money system
operates. It is assumed that public spending depends on extracting money from the market and
that money (like gold) is always in short supply. Neither is true. Both the market and the
state generate money – the market through bank lending and the state through public
spending. Both increase the money supply, while bank loan repayments and taxation reduce it.
There is no natural shortage of money – which today mainly exists only as data.
The case for austerity missed the point. Politics is not about a struggle over a fixed pot
of money. What is limited are resources (particularly the environment) and human capacity. How
these are best used should be a matter of democratic debate. The allocation of money should
depend on the priorities identified. In this the market has no more claim than the public
economy to be the source of sustainable human welfare.
Professor Mary Mellor Newcastle upon Tyne
• Over the years Aditya Chakrabortty has provided us with powerful critiques of
austerity. His message now – that EU membership "is the best way to end austerity"
– overlooks the fact that the UK was in the EU all that time.
Moreover, the EU's stability and growth pact requires that budget deficits and public debt
be pegged below 3% and 60% of GDP respectively.
Such notions are the beating heart of austerity, and the European commission's excessive
deficit procedure taken against errant states has almost universally resulted in swingeing
austerity programmes. These were approved and monitored by the commission and council, with the
UK only taken off the naughty step in 2017 after years of crippling austerity finally reduced
the deficit to 2.3% of GDP.
The best way to end austerity – and to sway voters – is to reject austerity as
an ideology regardless of remain or leave, and rehabilitate the concept of public investment in
a people's economy.
Peter McKenna
"... Brand's fast-talking, plain-speaking criticism of the existing political order, calling it discredited, unaccountable and unrepresentative, was greeted with smirking condescension by the political and media establishment. Nonetheless, in an era before Donald Trump had become president of the United States, the British media were happy to indulge Brand for a while, seemingly believing he or his ideas might prove a ratings winner with younger audiences. ..."
"... Then he overstepped the mark. ..."
"... Instead of simply criticising the political system, Brand argued that it was in fact so rigged by the powerful, by corporate interests, that western democracy had become a charade. Elections were pointless . Our votes were simply a fig-leaf, concealing the fact that our political leaders were there to represent not us but the interests of globe-spanning corporations. Political and media elites had been captured by unshored corporate money. Our voices had become irrelevant. ..."
"... But just as Brand's rejection of the old politics began to articulate a wider mood, it was stopped in its tracks. ..."
"... These "New Labour" MPs were there, just as Brand had noted, to represent the interests of a corporate class, not ordinary people. ..."
"... It wasn't that Corbyn's election had shown Britain's political system was representative and accountable. It was simply evidence that corporate power had made itself vulnerable to a potential accident by preferring to work out of sight, in the shadows, to maintain the illusion of democracy. Corbyn was that accident. ..."
"... The system was still in place and it still had a chokehold on the political and media establishments that exist to uphold its interests. Which is why it has been mobilising these forces endlessly to damage Corbyn and avert the risk of a further, even more disastrous "accident", such as his becoming prime minister. ..."
"... Listing the ways the state-corporate media have sought to undermine Corbyn would sound preposterous to anyone not deeply immersed in these media-constructed narratives. But almost all of us have been exposed to this kind of " brainwashing under freedom " since birth. ..."
"... The initial attacks on Corbyn were for being poorly dressed, sexist, unstatesmanlike, a national security threat, a Communist spy – relentless, unsubstantiated smears the like of which no other party leader had ever faced. But over time the allegations became even more outrageously propagandistic as the campaign to undermine him not only failed but backfired – not least, because Labour membership rocketed under Corbyn to make the party the largest in Europe. ..."
"... As the establishment's need to keep him away from power has grown more urgent and desperate so has the nature of the attacks. ..."
In the preceding two years, it was hard to avoid on TV the figure of Russell Brand, a
comedian and minor film star who had reinvented himself, after years of battling addiction, as
a spiritual guru-cum-political revolutionary.
Brand's fast-talking, plain-speaking criticism of the existing political order, calling it
discredited, unaccountable and unrepresentative, was greeted with smirking condescension by the
political and media establishment. Nonetheless, in an era before Donald Trump had become
president of the United States, the British media were happy to indulge Brand for a while,
seemingly believing he or his ideas might prove a ratings winner with younger audiences.
But Brand started to look rather more impressive than anyone could have imagined. He took on
supposed media heavyweights like the BBC's Jeremy
Paxman and Channel 4's Jon
Snow and charmed and shamed them into submission – both with his compassion and his
thoughtful radicalism. Even in the gladiatorial-style battle of wits so beloved of modern TV,
he made these titans of the political interview look mediocre, shallow and out of touch. Videos
of these head-to-heads went viral, and Brand won hundreds of thousands of new followers.
Then he overstepped the mark.
Democracy as charade
Instead of simply criticising the political system, Brand argued that it was in fact so
rigged by the powerful, by corporate interests, that western democracy had become a charade.
Elections were pointless
. Our votes were simply a fig-leaf, concealing the fact that our political leaders were there
to represent not us but the interests of globe-spanning corporations. Political and media
elites had been captured by unshored corporate money. Our voices had become irrelevant.
Brand didn't just talk the talk. He started committing to direct action. He shamed our do-nothing
politicians and corporate media – the devastating Grenfell Tower fire had yet to happen
– by helping to gain attention for a group of poor tenants in London who were taking on
the might of a corporation that had become their landlord and wanted to evict them to develop
their homes for a much richer clientele. Brand's revolutionary words had turned into
revolutionary action.
But just as Brand's rejection of the old politics began to articulate a wider mood, it was
stopped in its tracks. After Corbyn was unexpectedly elected Labour leader, offering for the
first time in living memory a politics that listened to people before money, Brand's style of
rejectionism looked a little too cynical, or at least premature.
While Corbyn's victory marked a sea-change, it is worth recalling, however, that it occurred
only because of a mistake. Or perhaps two.
The Corbyn accident
First, a handful of Labour MPs agreed to nominate Corbyn for the leadership contest,
scraping him past the threshold needed to get on the ballot paper. Most backed him only because
they wanted to give the impression of an election that was fair and open. After his victory,
some loudly regretted having assisted him. None had
thought a representative of the tiny and besieged left wing of the parliamentary party stood a
chance of winning – not after Tony Blair and his acolytes had spent more than two decades
remaking Labour, using their own version of entryism to eradicate any vestiges of socialism in
the party. These "New Labour" MPs were there, just as Brand had noted, to represent the
interests of a corporate class, not ordinary people.
Corbyn had very different ideas from most of his colleagues. Over the years he had broken
with the consensus of the dominant Blairite faction time and again in parliamentary votes,
consistently taking a minority view that later proved to be on the
right side of history . He alone among the leadership contenders spoke unequivocally
against austerity, regarding it as a way to leech away more public money to enrich the
corporations and banks that had already pocketed vast sums from the public coffers – so
much so that by 2008 they had nearly bankrupted the entire western economic system.
And second, Corbyn won because of a recent change in the party's rulebook – one now
much regretted by party managers. A new internal balloting system gave more weight to the votes
of ordinary members than the parliamentary party. The members, unlike the party machine, wanted
Corbyn.
Corbyn's success didn't really prove Brand wrong. Even the best designed systems have flaws,
especially when the maintenance of the system's image as benevolent is considered vitally
important. It wasn't that Corbyn's election had shown Britain's political system was
representative and accountable. It was simply evidence that corporate power had made itself
vulnerable to a potential accident by preferring to work out of sight, in the shadows, to
maintain the illusion of democracy. Corbyn was that accident.
'Brainwashing under freedom'
Corbyn's success also wasn't evidence that the power structure he challenged had weakened.
The system was still in place and it still had a chokehold on the political and media
establishments that exist to uphold its interests. Which is why it has been mobilising these
forces endlessly to damage Corbyn and avert the risk of a further, even more disastrous
"accident", such as his becoming prime minister.
Listing the ways the state-corporate media have sought to undermine Corbyn would sound
preposterous to anyone not deeply immersed in these media-constructed narratives. But almost
all of us have been exposed to this kind of " brainwashing under freedom
" since birth.
The initial attacks on Corbyn were for being poorly dressed, sexist, unstatesmanlike, a
national security threat, a Communist spy – relentless, unsubstantiated smears the like
of which no other party leader had ever faced. But over time the allegations became even more
outrageously propagandistic as the campaign to undermine him not only failed but backfired
– not least, because Labour membership rocketed under Corbyn to make the party the
largest in Europe.
As the establishment's need to keep him away from power has grown more urgent and desperate
so has the nature of the attacks.
There were no Jews anywhere around most native Britons. And yet the Empire was banked most
importantly by Jews back to at least the post-Glorious Revolution closing the 17th century,
and that pattern of Jewish bankers being indispensable to the UK and the Brit WASP Empire
goes back to Oliver Cromwell.
Over the last two years, a different, in some ways unrecognizable Larry Summers has been appearing in newspaper editorial pages.
More circumspect in tone, this humbler Summers has been arguing that economic opportunities in the developing world are slowing,
and that the already rich economies are finding it hard to get out of the crisis. Barring some kind of breakthrough, Summers says,
an era of slow growth is here to stay.
In Summers's recent writings, this sombre conclusion has often been paired with a surprising political goal: advocating for a
"responsible nationalism". Now he argues that politicians must recognise that "the basic responsibility of government is to maximise
the welfare of citizens, not to pursue some abstract concept of the global good".
One curious thing about the pro-globalisation consensus of the 1990s and 2000s, and its collapse in recent years, is how closely
the cycle resembles a previous era. Pursuing free trade has always produced displacement and inequality – and political chaos, populism
and retrenchment to go with it. Every time the social consequences of free trade are overlooked, political backlash follows. But
free trade is only one of many forms that economic integration can take. History seems to suggest, however, that it might be the
most destabilising one.
... ... ...
The international systems that chastened figures such as Keynes helped produce in the next few years – especially the Bretton
Woods agreement and the General Agreement on Tariffs and Trade (Gatt) – set the terms under which the new wave of globalisation
would take place.
The key to the system's viability, in Rodrik's view, was its flexibility – something absent from contemporary globalisation,
with its one-size-fits-all model of capitalism. Bretton Woods stabilised exchange rates by pegging the dollar loosely to gold, and
other currencies to the dollar. Gatt consisted of rules governing free trade – negotiated by participating countries in a series
of multinational "rounds" – that left many areas of the world economy, such as agriculture, untouched or unaddressed. "Gatt's purpose
was never to maximise free trade," Rodrik writes. "It was to achieve the maximum amount of trade compatible with different nations
doing their own thing. In that respect, the institution proved spectacularly successful."
Partly because Gatt was not always dogmatic about free trade, it allowed most countries to figure out their own economic objectives,
within a somewhat international ambit. When nations contravened the agreement's terms on specific areas of national interest, they
found that it "contained loopholes wide enough for an elephant to pass", in Rodrik's words. If a nation wanted to protect its steel
industry, for example, it could claim "injury" under the rules of Gatt and raise tariffs to discourage steel imports: "an abomination
from the standpoint of free trade". These were useful for countries that were recovering from the war and needed to build up their
own industries via tariffs – duties imposed on particular imports. Meanwhile, from 1948 to 1990, world trade grew at an annual average
of nearly 7% – faster than the post-communist years, which we think of as the high point of globalisation. "If there was a golden
era of globalisation," Rodrik has written, "this was it."
Gatt, however, failed to cover many of the countries in the developing world. These countries eventually created their own system,
the United Nations conference on trade and development (UNCTAD). Under this rubric, many countries – especially in Latin America,
the Middle East, Africa and Asia – adopted a policy of protecting homegrown industries by replacing imports with domestically produced
goods. It worked poorly in some places – India and Argentina, for example, where the trade barriers were too high, resulting in
factories that cost more to set up than the value of the goods they produced – but remarkably well in others, such as east Asia,
much of Latin America and parts of sub-Saharan Africa, where homegrown industries did spring up. Though many later economists and
commentators would dismiss the achievements of this model, it theoretically fit Larry Summers's recent rubric on globalisation:
"the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global
good."
The critical turning point – away from this system of trade balanced against national protections – came in the 1980s. Flagging
growth and high inflation in the west, along with growing competition from Japan, opened the way for a political transformation.
The elections of Margaret Thatcher and Ronald Reagan were seminal, putting free-market radicals in charge of two of the world's
five biggest economies and ushering in an era of "hyperglobalisation". In the new political climate, economies with large public
sectors and strong governments within the global capitalist system were no longer seen as aids to the system's functioning, but
impediments to it.
Not only did these ideologies take hold in the US and the UK; they seized international institutions as well. Gatt renamed itself
as the World Trade Organization (WTO), and the new rules the body negotiated began to cut more deeply into national policies. Its
international trade rules sometimes undermined national legislation. The WTO's appellate court intervened relentlessly in member
nations' tax, environmental and regulatory policies, including those of the United States: the US's fuel emissions standards were
judged to discriminate against imported gasoline, and its
ban on imported shrimp caught without turtle-excluding
devices was overturned. If national health and safety regulations were stricter than WTO rules necessitated, they could only
remain in place if they were shown to have "scientific justification".
The purest version of hyperglobalisation was tried out in Latin America in the 1980s. Known as the "Washington consensus", this
model usually involved loans from the IMF that were contingent on those countries lowering trade barriers and privatising many of
their nationally held industries. Well into the 1990s, economists were proclaiming the indisputable benefits of openness. In an
influential 1995 paper, Jeffrey Sachs and Andrew Warner wrote: "We find no cases to support the frequent worry that a country might
open and yet fail to grow."
But the Washington consensus was bad for business: most countries did worse than before. Growth faltered, and citizens across
Latin America revolted against attempted privatisations of water and gas. In Argentina, which followed the Washington consensus
to the letter, a grave crisis resulted in
2002 , precipitating an economic collapse and massive street protests that forced out the government that had pursued privatising
reforms. Argentina's revolt presaged a left-populist upsurge across the continent: from 1999 to 2007, leftwing leaders and parties
took power in Brazil, Venezuela, Bolivia and Ecuador, all of them campaigning against the Washington consensus on globalisation.
These revolts were a preview of the backlash of today.
Rodrik – perhaps the contemporary economist whose views have been most amply vindicated by recent events – was himself a beneficiary
of protectionism in Turkey. His father's ballpoint pen company was sheltered under tariffs, and achieved enough success to allow
Rodrik to attend Harvard in the 1970s as an undergraduate. This personal understanding of the mixed nature of economic success may
be one of the reasons why his work runs against the broad consensus of mainstream economics writing on globalisation.
"I never felt that my ideas were out of the mainstream," Rodrik told me recently. Instead, it was that the mainstream had lost
touch with the diversity of opinions and methods that already existed within economics. "The economics profession is strange in
that the more you move away from the seminar room to the public domain, the more the nuances get lost, especially on issues of trade."
He lamented the fact that while, in the classroom, the models of trade discuss losers and winners, and, as a result, the necessity
of policies of redistribution, in practice, an "arrogance and hubris" had led many economists to ignore these implications. "Rather
than speaking truth to power, so to speak, many economists became cheerleaders for globalisation."
In his 2011 book The Globalization Paradox
, Rodrik concluded that "we cannot simultaneously pursue democracy, national determination, and economic globalisation." The
results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push
back, for better or for worse, against the campaigns and institutions that promised more globalisation. "I'm not at all surprised
by the backlash," Rodrik told me. "Really, nobody should have been surprised."
But what, in any case, would "more globalisation" look like? For the same economists and writers who have started to rethink
their commitments to greater integration, it doesn't mean quite what it did in the early 2000s. It's not only the discourse that's
changed: globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. The
benefits of globalisation have been largely concentrated in a handful of Asian countries. And even in those countries, the good
times may be running out.
Statistics from Global Inequality
, a 2016 book by the development economist Branko Milanović, indicate that in relative terms the greatest benefits of globalisation
have accrued to a rising "emerging middle class", based preponderantly in China. But the cons are there, too: in absolute terms,
the largest gains have gone to what is commonly called "the 1%" – half of whom are based in the US. Economist Richard Baldwin has
shown in his recent book, The Great Convergence, that nearly all of the gains from globalisation have been concentrated in six countries.
Barring some political catastrophe, in which rightwing populism continued to gain, and in which globalisation would be the least
of our problems – Wolf admitted that he was "not at all sure" that this could be ruled out – globalisation was always going to slow;
in fact, it already has. One reason, says Wolf, was that "a very, very large proportion of the gains from globalisation – by no
means all – have been exploited. We have a more open world economy to trade than we've ever had before." Citing The Great Convergence,
Wolf noted that supply chains have already expanded, and that future developments, such as automation and the use of robots, looked
to undermine the promise of a growing industrial workforce. Today, the political priorities were less about trade and more about
the challenge of retraining workers , as technology renders old jobs obsolete and transforms the world of work.
Rodrik, too, believes that globalisation, whether reduced or increased, is unlikely to produce the kind of economic effects it
once did. For him, this slowdown has something to do with what he calls "premature deindustrialisation". In the past, the simplest
model of globalisation suggested that rich countries would gradually become "service economies", while emerging economies picked
up the industrial burden. Yet recent statistics show the world as a whole is deindustrialising. Countries that one would have expected
to have more industrial potential are going through the stages of automation more quickly than previously developed countries did,
and thereby failing to develop the broad industrial workforce seen as a key to shared prosperity.
For both Rodrik and Wolf, the political reaction to globalisation bore possibilities of deep uncertainty. "I really have found
it very difficult to decide whether what we're living through is a blip, or a fundamental and profound transformation of the world
– at least as significant as the one that brought about the first world war and the Russian revolution," Wolf told me. He cited
his agreement with economists such as Summers that shifting away from the earlier emphasis on globalisation had now become a political
priority; that to pursue still greater liberalisation was like showing "a red rag to a bull" in terms of what it might do to the
already compromised political stability of the western world.
Rodrik pointed to a belated emphasis, both among political figures and economists, on the necessity of compensating those displaced
by globalisation with retraining and more robust welfare states. But pro-free-traders had a history of cutting compensation: Bill
Clinton passed Nafta, but failed to expand safety nets. "The issue is that the people are rightly not trusting the centrists who
are now promising compensation," Rodrik said. "One reason that Hillary Clinton didn't get any traction with those people is that
she didn't have any credibility."
Rodrik felt that economics commentary failed to register the gravity of the situation: that there were increasingly few avenues
for global growth, and that much of the damage done by globalisation – economic and political – is irreversible. "There is a sense
that we're at a turning point," he said. "There's a lot more thinking about what can be done. There's a renewed emphasis on compensation
– which, you know, I think has come rather late."
As Noam Chomsky
says, the term globalisation has been appropriated by a narrow sector of power and privilege to
refer to their version of international integration and it makes sense for them to own the term
because anyone who is opposed to their version becomes anti-globalisation -- someone who is
primitive and wants to go back to the stone age and that everyone likes international integration
but not the investor rights version of it.
In reality globalization was a politically correct term for neocolonialism
Notable quotes:
"... In finance, the change was marked by a fundamental shift in governments' attitudes away from managing capital flows and toward liberalization ..."
Globalization is in trouble. A populist backlash, personified by U.S. President Donald
Trump, is in full swing. A simmering trade war
between China and the United States could easily boil over. Countries across Europe are
shutting their borders to immigrants. Even globalization's biggest boosters now concede that it
has produced lopsided benefits and that something
will have to change .
Today's woes have their roots in the 1990s, when policymakers set the world on its current,
hyperglobalist path, requiring domestic economies to be put in the service of the world economy
instead of the other way around. In trade, the transformation was signaled by the creation of
the World Trade Organization, in 1995. The WTO not only made it harder for countries to shield
themselves from international competition but also reached into policy areas that international
trade rules had not previously touched: agriculture, services, intellectual property,
industrial policy, and health and sanitary regulations. Even more ambitious regional trade
deals, such as the North American Free Trade Agreement, took off around the same time.
In finance, the change was marked by a fundamental shift in governments' attitudes away from
managing capital flows and toward liberalization. Pushed by the United States and global
organizations such as the International Monetary Fund and the Organization for Economic
Cooperation and Development, countries freed up vast quantities of short-term finance to slosh
across borders in search of higher returns.
At the time, these changes seemed to be based on sound economics. Openness to trade would
lead economies to allocate their resources to where they would be the most productive. Capital
would flow from the countries where it was plentiful to the countries where it was needed. More
trade and freer finance would unleash private investment and fuel global economic growth.
But
these new arrangements came with risks that the hyperglobalists did not foresee, although
economic theory could have predicted the downside to globalization just as well as it did the
upside.
"... The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers ..."
"... It was set up basically by the United States in 1944, along with its sister institution, the International Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent on the United States ..."
"... American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this veto power was to make sure that any policy was, in Donald Trump's words, to put America first. "We've got to win and they've got to lose." ..."
"... The World Bank was set up from the outset as a branch of the military, of the Defense Department. John J. McCloy (Assistant Secretary of War, 1941-45), was the first full-time president ..."
"... Many countries had two rates: one for goods and services, which was set normally by the market, and then a different exchange rate that was managed for capital movements. That was because countries were trying to prevent capital flight. They didn't want their wealthy classes or foreign investors to make a run on their own currency – an ever-present threat in Latin America. ..."
"... The IMF and the World Bank backed the cosmopolitan classes, the wealthy. Instead of letting countries control their capital outflows and prevent capital flight, the IMF's job is to protect the richest One Percent and foreign investors from balance-of-payments problems ..."
"... The IMF enables its wealthy constituency to move their money out of the country without taking a foreign-exchange loss ..."
"... Wall Street speculators have sold the local currency short to make a killing, George-Soros style. ..."
"... When the debtor-country currency collapses, the debts that these Latin American countries owe are in dollars, and now have to pay much more in their own currency to carry and pay off these debts. ..."
"... Local currency is thrown onto the foreign-exchange market for dollars, lowering the exchange rate. That increases import prices, raising a price umbrella for domestic products. ..."
"... Instead, the IMF says just the opposite: It acts to prevent any move by other countries to bring the debt volume within the ability to be paid. It uses debt leverage as a way to control the monetary lifeline of financially defeated debtor countries. ..."
"... This control by the U.S. financial system and its diplomacy has been built into the world system by the IMF and the World Bank claiming to be international instead of an expression of specifically U.S. New Cold War nationalism. ..."
"... The same thing happened in Greece a few years ago, when almost all of Greece's foreign debt was owed to Greek millionaires holding their money in Switzerland ..."
"... The IMF could have seized this money to pay off the bondholders. Instead, it made the Greek economy pay. It found that it was worth wrecking the Greek economy, forcing emigration and wiping out Greek industry so that French and German bondholding banks would not have to take a loss. That is what makes the IMF so vicious an institution. ..."
"... America was able to grab all of Iran's foreign exchange just by the banks interfering. The CIA has bragged that it can do the same thing with Russia. If Russia does something that U.S. diplomats don't like, the U.S. can use the SWIFT bank payment system to exclude Russia from it, so the Russian banks and the Russian people and industry won't be able to make payments to each other. ..."
"... You can't create the money, especially if you're running a balance of payments deficit and if U.S. foreign policy forces you into deficit by having someone like George Soros make a run on your currency. Look at the Asia crisis in 1997. Wall Street funds bet against foreign currencies, driving them way down, and then used the money to pick up industry cheap in Korea and other Asian countries. ..."
"... This was also done to Russia's ruble. The only country that avoided this was Malaysia, under Mohamed Mahathir, by using capital controls. Malaysia is an object lesson in how to prevent a currency flight. ..."
"... Client kleptocracies take their money and run, moving it abroad to hard currency areas such as the United States, or at least keeping it in dollars in offshore banking centers instead of reinvesting it to help the country catch up by becoming independent agriculturally, in energy, finance and other sectors. ..."
"... But in shaping the World Trade Organization's rules, the United States said that all countries had to promote free trade and could not have government support, except for countries that already had it. We're the only country that had it. That's what's called "grandfathering". ..."
"The purpose of a military conquest is to take control of foreign economies, to take control of their land and impose
tribute. The genius of the World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute,
or to take over its industry, agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries
play an artificial economic game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing
and loss of life by soldiers."
I'm Bonnie Faulkner. Today on Guns and Butter: Dr. Michael Hudson. Today's show: The IMF and World Bank: Partners In Backwardness
. Dr. Hudson is a financial economist and historian. He is President of the Institute for the Study of Long-Term Economic Trend,
a Wall Street Financial Analyst, and Distinguished Research Professor of Economics at the University of Missouri, Kansas City.
His most recent books include " and Forgive them Their Debts: Lending, Foreclosure and Redemption from Bronze Age Finance
to the Jubilee Year "; Killing the Host: How Financial Parasites and Debt Destroy the Global Economy , and J Is for
Junk Economics: A Guide to Reality in an Age of Deception . He is also author of Trade, Development and Foreign Debt
, among many other books.
We return today to a discussion of Dr. Hudson's seminal 1972 book, Super Imperialism: The Economic Strategy of American Empire
, a critique of how the United States exploited foreign economies through the IMF and World Bank, with a special emphasis on
food imperialism.
... ... ...
Bonnie Faulkner : In your seminal work form 1972, Super-Imperialism: The Economic Strategy of American Empire ,
you write: "The development lending of the World Bank has been dysfunctional from the outset." When was the World Bank set up and
by whom?
Michael Hudson : It was set up basically by the United States in 1944, along with its sister institution, the International
Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent
on the United States. To make sure that no other country or group of countries – even all the rest of the world – could not
dictate U.S. policy. American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this
veto power was to make sure that any policy was, in Donald Trump's words, to put America first. "We've got to win and they've got
to lose."
The World Bank was set up from the outset as a branch of the military, of the Defense Department. John J. McCloy (Assistant
Secretary of War, 1941-45), was the first full-time president. He later became Chairman of Chase Manhattan Bank (1953-60).
McNamara was Secretary of Defense (1961-68), Paul Wolfowitz was Deputy and Under Secretary of Defense (1989-2005), and Robert Zoellick
was Deputy Secretary of State. So I think you can look at the World Bank as the soft shoe of American diplomacy.
Bonnie Faulkner : What is the difference between the World Bank and the International Monetary Fund, the IMF? Is
there a difference?
Michael Hudson : Yes, there is. The World Bank was supposed to make loans for what they call international development.
"Development" was their euphemism for dependency on U.S. exports and finance. This dependency entailed agricultural backwardness
– opposing land reform, family farming to produce domestic food crops, and also monetary backwardness in basing their monetary system
on the dollar.
The World Bank was supposed to provide infrastructure loans that other countries would go into debt to pay American engineering
firms, to build up their export sectors and their plantation sectors by public investment roads and port development for imports
and exports. Essentially, the Bank financed long- investments in the foreign trade sector, in a way that was a natural continuation
of European colonialism.
In 1941, for example, C. L. R. James wrote an article on "Imperialism in Africa" pointing out the fiasco of European railroad
investment in Africa: "Railways must serve flourishing industrial areas, or densely populated agricult5ural regions, or they must
open up new land along which a thriving population develops and provides the railways with traffic. Except in the mining regions
of South Africa, all these conditions are absent. Yet railways were needed, for the benefit of European investors and heavy industry."
That is why, James explained "only governments can afford to operate them," while being burdened with heavy interest obligations.
[1] What was "developed" was Africa's
mining and plantation export sector, not its domestic economies. The World Bank followed this pattern of "development" lending without
apology.
The IMF was in charge of short-term foreign currency loans. Its aim was to prevent countries from imposing capital controls to
protect their balance of payments. Many countries had a dual exchange rate: one for trade in goods and services, the other rate
for capital movements. The function of the IMF and World Bank was essentially to make other countries borrow in dollars, not in
their own currencies, and to make sure that if they could not pay their dollar-denominated debts, they had to impose austerity on
the domestic economy – while subsidizing their import and export sectors and protecting foreign investors, creditors and client
oligarchies from loss.
The IMF developed a junk-economics model pretending that any country can pay any amount of debt to the creditors if it just impoverishes
its labor enough. So when countries were unable to pay their debt service, the IMF tells them to raise their interest rates to bring
on a depression – austerity – and break up the labor unions. That is euphemized as "rationalizing labor markets." The rationalizing
is essentially to disable labor unions and the public sector. The aim – and effect – is to prevent countries from essentially following
the line of development that had made the United States rich – by public subsidy and protection of domestic agriculture, public
subsidy and protection of industry and an active government sector promoting a New Deal democracy. The IMF was essentially promoting
and forcing other countries to balance their trade deficits by letting American and other investors buy control of their commanding
heights, mainly their infrastructure monopolies, and to subsidize their capital flight.
BONNIE FAULKNER : Now, Michael, when you began speaking about the IMF and monetary controls, you mentioned that there
were two exchange rates of currency in countries. What were you referring to?
MICHAEL HUDSON : When I went to work on Wall Street in the '60s, I was balance-of-payments economist for Chase Manhattan,
and we used the IMF's monthly International Financial Statistics every month. At the top of each country's statistics would
be the exchange-rate figures. Many countries had two rates: one for goods and services, which was set normally by the market,
and then a different exchange rate that was managed for capital movements. That was because countries were trying to prevent capital
flight. They didn't want their wealthy classes or foreign investors to make a run on their own currency – an ever-present threat
in Latin America.
The IMF and the World Bank backed the cosmopolitan classes, the wealthy. Instead of letting countries control their capital
outflows and prevent capital flight, the IMF's job is to protect the richest One Percent and foreign investors from balance-of-payments
problems.
The World Bank and American diplomacy have steered them into a chronic currency crisis. The IMF enables its wealthy constituency
to move their money out of the country without taking a foreign-exchange loss. It makes loans to support capital flight out
of domestic currencies into the dollar or other hard currencies. The IMF calls this a "stabilization" program. It is never effective
in helping the debtor economy pay foreign debts out of growth. Instead, the IMF uses currency depreciation and sell-offs of public
infrastructure and other assets to foreign investors after the flight capital has left and currency collapses. Wall Street speculators
have sold the local currency short to make a killing, George-Soros style.
When the debtor-country currency collapses, the debts that these Latin American countries owe are in dollars, and now have
to pay much more in their own currency to carry and pay off these debts. We're talking about enormous penalty rates in domestic
currency for these countries to pay foreign-currency debts – basically taking on to finance a non-development policy and to subsidize
capital flight when that policy "fails" to achieve its pretended objective of growth.
All hyperinflations of Latin America – Chile early on, like Germany after World War I – come from trying to pay foreign debts
beyond the ability to be paid. Local currency is thrown onto the foreign-exchange market for dollars, lowering the exchange
rate. That increases import prices, raising a price umbrella for domestic products.
A really functional and progressive international monetary fund that would try to help countries develop would say: "Okay, banks
and we (the IMF) have made bad loans that the country can't pay. And the World Bank has given it bad advice, distorting its domestic
development to serve foreign customers rather than its own growth. So we're going to write down the loans to the ability to be paid."
That's what happened in 1931, when the world finally stopped German reparations payments and Inter-Ally debts to the United States
stemming from World War I.
Instead, the IMF says just the opposite: It acts to prevent any move by other countries to bring the debt volume within
the ability to be paid. It uses debt leverage as a way to control the monetary lifeline of financially defeated debtor countries.
So if they do something that U.S. diplomats don't approve of, it can pull the plug financially, encouraging a run on their currency
if they act independently of the United States instead of falling in line. This control by the U.S. financial system and its
diplomacy has been built into the world system by the IMF and the World Bank claiming to be international instead of an expression
of specifically U.S. New Cold War nationalism.
BONNIE FAULKNER : How do exchange rates contribute to capital flight?
MICHAEL HUDSON : It's not the exchange rate that contributes. Suppose that you're a millionaire, and you see that your
country is unable to balance its trade under existing production patterns. The money that the government has under control is pesos,
escudos, cruzeiros or some other currency, not dollars or euros. You see that your currency is going to go down relative to the
dollar, so you want to get our money out of the country to preserve your purchasing power.
This has long been institutionalized. By 1990, for instance, Latin American countries had defaulted so much in the wake of the
Mexico defaults in 1982 that I was hired by Scudder Stevens, to help start a Third World Bond Fund (called a "sovereign high-yield
fund"). At the time, Argentina and Brazil were running such serious balance-of-payments deficits that they were having to pay 45
percent per year interest, in dollars, on their dollar debt. Mexico, was paying 22.5 percent on its tesobonos .
Scudders' salesmen went around to the United States and tried to sell shares in the proposed fund, but no Americans would buy
it, despite the enormous yields. They sent their salesmen to Europe and got a similar reaction. They had lost their shirts on Third
World bonds and couldn't see how these countries could pay.
Merrill Lynch was the fund's underwriter. Its office in Brazil and in Argentina proved much more successful in selling investments
in Scudder's these offshore fund established in the Dutch West Indies. It was an offshore fund, so Americans were not able to buy
it. But Brazilian and Argentinian rich families close to the central bank and the president became the major buyers. We realized
that they were buying these funds because they knew that their government was indeed going to pay their stipulated interest charges.
In effect, the bonds were owed ultimately to themselves. So these Yankee dollar bonds were being bought by Brazilians and other
Latin Americans as a vehicle to move their money out of their soft local currency (which was going down), to buy bonds denominated
in hard dollars.
BONNIE FAULKNER : If wealthy families from these countries bought these bonds denominated in dollars, knowing that they
were going to be paid off, who was going to pay them off? The country that was going broke?
MICHAEL HUDSON : Well, countries don't pay; the taxpayers pay, and in the end, labor pays. The IMF certainly doesn't want
to make its wealthy client oligarchies pay. It wants to squeeze ore economic surplus out of the labor force. So countries are told
that the way they can afford to pay their enormously growing dollar-denominated debt is to lower wages even more.
Currency depreciation is an effective way to do this, because what is devalued is basically labor's wages. Other elements of
exports have a common world price: energy, raw materials, capital goods, and credit under the dollar-centered international monetary
system that the IMF seeks to maintain as a financial strait jacket.
According to the IMF's ideological models, there's no limit to how far you can lower wages by enough to make labor competitive
in producing exports. The IMF and World Bank thus use junk economics to pretend that the way to pay debts owed to the wealthiest
creditors and investors is to lower wages and impose regressive excise taxes, to impose special taxes on necessities that labor
needs, from food to energy and basic services supplied by public infrastructure.
BONNIE FAULKNER: So you're saying that labor ultimately has to pay off these junk bonds?
MICHAEL HUDSON: That is the basic aim of IMF. I discuss its fallacies in my Trade Development and Foreign Debt
, which is the academic sister volume to Super Imperialism . These two books show that the World Bank and IMF were viciously
anti-labor from the very outset, working with domestic elites whose fortunes are tied to and loyal to the United States.
BONNIE FAULKNER : With regard to these junk bonds, who was it or what entity
MICHAEL HUDSON : They weren't junk bonds. They were called that because they were high-interest bonds, but they weren't
really junk because they actually were paid. Everybody thought they were junk because no American would have paid 45 percent interest.
Any country that really was self-reliant and was promoting its own economic interest would have said, "You banks and the IMF have
made bad loans, and you've made them under false pretenses – a trade theory that imposes austerity instead of leading to prosperity.
We're not going to pay." They would have seized the capital flight of their comprador elites and said that these dollar bonds were
a rip-off by the corrupt ruling class.
The same thing happened in Greece a few years ago, when almost all of Greece's foreign debt was owed to Greek millionaires
holding their money in Switzerland. The details were published in the "Legarde List." But the IMF said, in effect that its
loyalty was to the Greek millionaires who ha their money in Switzerland. The IMF could have seized this money to pay off the
bondholders. Instead, it made the Greek economy pay. It found that it was worth wrecking the Greek economy, forcing emigration and
wiping out Greek industry so that French and German bondholding banks would not have to take a loss. That is what makes the IMF
so vicious an institution.
BONNIE FAULKNER : So these loans to foreign countries that were regarded as junk bonds really weren't junk, because
they were going to be paid. What group was it that jacked up these interest rates to 45 percent?
MICHAEL HUDSON : The market did. American banks, stock brokers and other investors looked at the balance of payments of
these countries and could not see any reasonable way that they could pay their debts, so they were not going to buy their bonds.
No country subject to democratic politics would have paid debts under these conditions. But the IMF, U.S. and Eurozone diplomacy
overrode democratic choice.
Investors didn't believe that the IMF and the World Bank had such a strangle hold over Latin American, Asian, and African countries
that they could make the countries act in the interest of the United States and the cosmopolitan finance capital, instead of in
their own national interest. They didn't believe that countries would commit financial suicide just to pay their wealthy One Percent.
They were wrong, of course. Countries were quite willing to commit economic suicide if their governments were dictatorships propped
up by the United States. That's why the CIA has assassination teams and actively supports these countries to prevent any party coming
to power that would act in their national interest instead of in the interest of a world division of labor and production along
the lines that the U.S. planners want for the world. Under the banner of what they call a free market, you have the World Bank and
the IMF engage in central planning of a distinctly anti-labor policy. Instead of calling them Third World bonds or junk bonds, you
should call them anti-labor bonds, because they have become a lever to impose austerity throughout the world.
BONNIE FAULKNER : Well, that makes a lot of sense, Michael, and answers a lot of the questions I've put together to ask
you. What about Puerto Rico writing down debt? I thought such debts couldn't be written down.
MICHAEL HUDSON : That's what they all said, but the bonds were trading at about 45 cents on the dollar, the risk of their
not being paid. The Wall Street Journal on June 17, reported that unsecured suppliers and creditors of Puerto Rico, would
only get nine cents on the dollar. The secured bond holders would get maybe 65 cents on the dollar.
The terms are being written down because it's obvious that Puerto Rico can't pay, and that trying to do so is driving the population
to move out of Puerto Rico to the United States. If you don't want Puerto Ricans to act the same way Greeks did and leave Greece
when their industry and economy was shut down, then you're going to have to provide stability or else you're going to have half
of Puerto Rico living in Florida.
BONNIE FAULKNER : Who wrote down the Puerto Rican debt?
MICHAEL HUDSON : A committee was appointed, and it calculated how much Puerto Rico can afford to pay out of its taxes.
Puerto Rico is a U.S. dependency, that is, an economic colony of the United States. It does not have domestic self-reliance. It's
the antithesis of democracy, so it's never been in charge of its own economic policy and essentially has to do whatever the United
States tells it to do. There was a reaction after the hurricane and insufficient U.S. support to protect the island and the enormous
waste and corruption involved in the U.S. aid. The U.S. response was simply: "We won you fair and square in the Spanish-American
war and you're an occupied country, and we're going to keep you that way." Obviously this is causing a political resentment.
BONNIE FAULKNER : You've already touched on this, but why has the World Bank traditionally been headed by a U.S. secretary
of defense?
MICHAEL HUDSON : Its job is to do in the financial sphere what, in the past, was done by military force. The purpose of
a military conquest is to take control of foreign economies, to take control of their land and impose tribute. The genius of the
World Bank was to recognize that it's not necessary to occupy a country in order to impose tribute, or to take over its industry,
agriculture and land. Instead of bullets, it uses financial maneuvering. As long as other countries play an artificial economic
game that U.S. diplomacy can control, finance is able to achieve today what used to require bombing and loss of life by soldiers.
In this case the loss of life occurs in the debtor countries. Population growth shrinks, suicides go up. The World Bank engages
in economic warfare that is just as destructive as military warfare. At the end of the Yeltsin period Russia's President Putin said
that American neoliberalism destroyed more of Russia's population than did World War II. Such neoliberalism, which basically is
the doctrine of American supremacy and foreign dependency, is the policy of the World Bank and IMF.
BONNIE FAULKNER : Why has World Bank policy since its inception been to provide loans for countries to devote their land
to export crops instead of giving priority to feeding themselves? And if this is the case, why do countries want these loans?
MICHAEL HUDSON : One constant of American foreign policy is to make other countries dependent on American grain exports
and food exports. The aim is to buttress America's agricultural trade surplus. So the first thing that the World Bank has done is
not to make any domestic currency loans to help food producers. Its lending has steered client countries to produce tropical export
crops, mainly plantation crops that cannot be grown in the United States. Focusing on export crops leads client countries to become
dependent on American farmers – and political sanctions.
In the 1950s, right after the Chinese revolution, the United States tried to prevent China from succeeding by imposing grain
export controls to starve China into submission by putting sanctions on exports. Canada was the country that broke these export
controls and helped feed China.
The idea is that if you can make other countries export plantation crops, the oversupply will drive down prices for cocoa and
other tropical products, and they won't feed themselves. So instead of backing family farms like the American agricultural policy
does, the World Bank backed plantation agriculture. In Chile, which has the highest natural supply of fertilizer in the world from
its guano deposits, exports guano instead of using it domestically. It also has the most unequal land distribution, blocking it
from growing its own grain or food crops. It's completely dependent on the United States for this, and it pays by exporting copper,
guano and other natural resources.
The idea is to create interdependency – one-sided dependency on the U.S. economy. The United States has always aimed at being
self-sufficient in its own essentials, so that no other country can pull the plug on our economy and say, "We're going to starve
you by not feeding you." Americans can feed themselves. Other countries can't say, "We're going to let you freeze in the dark by
not sending you oil," because America's independent in energy. But America can use the oil control to make other countries freeze
in the dark, and it can starve other countries by food-export sanctions.
So the idea is to give the United States control of the key interconnections of other economies, without letting any country
control something that is vital to the working of the American economy.
There's a double standard here. The United States tells other countries: "Don't do as we do. Do as we say." The only way it can
enforce this is by interfering in the politics of these countries, as it has interfered in Latin America, always pushing the right
wing. For instance, when Hillary's State Department overthrew the Honduras reformer who wanted to undertake land reform and feed
the Hondurans, she said: "This person has to go." That's why there are so many Hondurans trying to get into the United States now,
because they can't live in their own country.
The effect of American coups is the same in Syria and Iraq. They force an exodus of people who no longer can make a living under
the brutal dictatorships supported by the United States to enforce this international dependency system.
BONNIE FAULKNER : So when I asked you why countries would want these loans, I guess you're saying that they wouldn't,
and that's why the U.S. finds it necessary to control them politically.
MICHAEL HUDSON : That's a concise way of putting it Bonnie.
BONNIE FAULKNER : Why are World Bank loans only in foreign currency, not in the domestic currency of the country to which
it is lending?
MICHAEL HUDSON : That's a good point. A basic principle should be to avoid borrowing in a foreign currency. A country
can always pay the loans in its own currency, but there's no way that it can print dollars or euros to pay loans denominated in
these foreign currencies.
Making the dollar central forces other countries to interface with the U.S. banking system. So if a country decides to go its
own way, as Iran did in 1953 when it wanted to take over its oil from British Petroleum (or Anglo Iranian Oil, as it was called
back then), the United States can interfere and overthrow it. The idea is to be able to use the banking system's interconnections
to stop payments from being made.
After America installed the Shah's dictatorship, they were overthrown by Khomeini, and Iran had run up a U.S. dollar debt under
the Shah. It had plenty of dollars. I think Chase Manhattan was its paying agent. So when its quarterly or annual debt payment came
due, Iran told Chase to draw on its accounts and pay the bondholders. But Chase took orders from the State Department or the Defense
Department, I don't know which, and refused to pay. When the payment was not made, America and its allies claimed that Iran was
in default. They demanded the entire debt to be paid, as per the agreement that the Shah's puppet government had signed. America
simply grabbed the deposits that Iran had in the United States. This is the money that was finally returned to Iran without interest
under the agreement of 2016.
America was able to grab all of Iran's foreign exchange just by the banks interfering. The CIA has bragged that it can do
the same thing with Russia. If Russia does something that U.S. diplomats don't like, the U.S. can use the SWIFT bank payment system
to exclude Russia from it, so the Russian banks and the Russian people and industry won't be able to make payments to each other.
This prompted Russia to create its own bank-transfer system, and is leading China, Russia, India and Pakistan to draft plans
to de-dollarize.
BONNIE FAULKNER : I was going to ask you, why would loans in a country's domestic currency be preferable to the country
taking out a loan in a foreign currency? I guess you've explained that if they took out a loan in a domestic currency, they would
be able to repay it.
MICHAEL HUDSON : Yes.
BONNIE FAULKNER : Whereas a loan in a foreign currency would cripple them.
MICHAEL HUDSON : Yes. You can't create the money, especially if you're running a balance of payments deficit and if
U.S. foreign policy forces you into deficit by having someone like George Soros make a run on your currency. Look at the Asia crisis
in 1997. Wall Street funds bet against foreign currencies, driving them way down, and then used the money to pick up industry cheap
in Korea and other Asian countries.
This was also done to Russia's ruble. The only country that avoided this was Malaysia, under Mohamed Mahathir, by using capital
controls. Malaysia is an object lesson in how to prevent a currency flight.
But for Latin America and other countries, much of their foreign debt is held by their own ruling class. Even though it's denominated
in dollars, Americans don't own most of this debt. It's their own ruling class. The IMF and World Bank dictate tax policy to Latin
America – to un-tax wealth and shift the burden onto labor. Client kleptocracies take their money and run, moving it abroad
to hard currency areas such as the United States, or at least keeping it in dollars in offshore banking centers instead of reinvesting
it to help the country catch up by becoming independent agriculturally, in energy, finance and other sectors.
BONNIE FAULKNER : You say that: "While U.S. agricultural protectionism has been built into the postwar global system at
its inception, foreign protectionism is to be nipped in the bud." How has U.S. agricultural protectionism been built into the postwar
global system?
MICHAEL HUDSON : Under Franklin Roosevelt the Agricultural Adjustment Act of 1933 called for price supports for crops
so that farmers could earn enough to invest in equipment and seeds. The Agriculture Department was a wonderful department in spurring
new seed varieties, agricultural extension services, marketing and banking services. It provided public support so that productivity
in American agriculture from the 1930s to '50s was higher over a prolonged period than that of any other sector in history.
But in shaping the World Trade Organization's rules, the United States said that all countries had to promote free trade
and could not have government support, except for countries that already had it. We're the only country that had it. That's what's
called "grandfathering". The Americans said: "We already have this program on the books, so we can keep it. But no other country
can succeed in agriculture in the way that we have done. You must keep your agriculture backward, except for the plantation crops
and growing crops that we can't grow in the United States." That's what's so evil about the World Bank's development plan.
BONNIE FAULKNER : According to your book: "Domestic currency is needed to provide price supports and agricultural extension
services such as have made U.S. agriculture so productive." Why can't infrastructure costs be subsidized to keep down the economy's
overall cost structure if IMF loans are made in foreign currency?
MICHAEL HUDSON : If you're a farmer in Brazil, Argentina or Chile, you're doing business in domestic currency. It doesn't
help if somebody gives you dollars, because your expenses are in domestic currency. So if the World Bank and the IMF can prevent
countries from providing domestic currency support, that means they're not able to give price supports or provide government marketing
services for their agriculture.
America is a mixed economy. Our government has always subsidized capital formation in agriculture and industry, but it insists
that other countries are socialist or communist if they do what the United States is doing and use their government to support the
economy. So it's a double standard. Nobody calls America a socialist country for supporting its farmers, but other countries are
called socialist and are overthrown if they attempt land reform or attempt to feed themselves.
This is what the Catholic Church's Liberation Theology was all about. They backed land reform and agricultural self-sufficiency
in food, realizing that if you're going to support population growth, you have to support the means to feed it. That's why the United
States focused its assassination teams on priests and nuns in Guatemala and Central America for trying to promote domestic self-sufficiency.
BONNIE FAULKNER : If a country takes out an IMF loan, they're obviously going to take it out in dollars. Why can't they
take the dollars and convert them into domestic currency to support local infrastructure costs?
MICHAEL HUDSON : You don't need a dollar loan to do that. Now were getting in to MMT. Any country can create its own currency.
There's no reason to borrow in dollars to create your own currency. You can print it yourself or create it on your computers.
BONNIE FAULKNER: Well, exactly. So why don't these countries simply print up their own domestic currency?
MICHAEL HUDSON : Their leaders don't want to be assassinated. More immediately, if you look at the people in charge of
foreign central banks, almost all have been educated in the United States and essentially brainwashed. It's the mentality of foreign
central bankers. The people who are promoted are those who feel personally loyal to the United States, because they that that's
how to get ahead. Essentially, they're opportunists working against the interests of their own country. You won't have socialist
central bankers as long as central banks are dominated by the International Monetary Fund and the Bank for International Settlements.
BONNIE FAULKNER : So we're back to the main point: The control is by political means, and they control the politics and
the power structure in these countries so that they don't rebel.
MICHAEL HUDSON : That's right. When you have a dysfunctional economic theory that is destructive instead of productive,
this is never an accident. It is always a result of junk economics and dependency economics being sponsored. I've talked to people
at the U.S. Treasury and asked why they all end up following the United States. Treasury officials have told me: "We simply buy
them off. They do it for the money." So you don't need to kill them. All you need to do is find people corrupt enough and opportunist
enough to see where the money is, and you buy them off.
BONNIE FAULKNER : You write that "by following U.S. advice, countries have left themselves open to food blackmail." What
is food blackmail?
MICHAEL HUDSON : If you pursue a foreign policy that we don't like -- for instance, if you trade with Iran, which we're
trying to smash up to grab its oil -- we'll impose financial sanctions against you. We won't sell you food, and you can starve.
And because you've followed World Bank advice and not grown your own food, you will starve, because you're dependent on us, the
United States and our Free World Ó allies. Canada will no longer follow its own policy independently of the United States,
as it did with China in the 1950s when it sold it grain. Europe also is falling in line with U.S. policy.
BONNIE FAULKNER : You write that: "World Bank administrators demand that loan recipients pursue a policy of economic dependency
above all on the United States as food supplier." Was this done to support U.S. agriculture? Obviously it is, but were there other
reasons as well?
MICHAEL HUDSON : Certainly the agricultural lobby was critical in all of this, and I'm not sure at what point this became
thoroughly conscious. I knew some of the World Bank planners, and they had no anticipation that this dependency would be the result.
They believed the free-trade junk economics that's taught in the schools' economics departments and for which Nobel prizes are awarded.
When we're dealing with economic planners, we're dealing with tunnel-visioned people. They stayed in the discipline despite its
unreality because they sort of think that abstractly it makes sense. There's something autistic about most economists, which is
why the French had their non-autistic economic site for many years. The mentality at work is that every country should produce what
it's best at – not realizing that nations also need to be self-sufficient in essentials, because we're in a real world of economic
and military warfare.
BONNIE FAULKNER : Why does the World Bank prefer to perpetrate world poverty instead of adequate overseas capacity to
feed the peoples of developing countries?
MICHAEL HUDSON : World poverty is viewed as solution , not a problem. The World Bank thinks of poverty as low-priced
labor, creating a competitive advantage for countries that produce labor-intensive goods. So poverty and austerity for the World
Bank and IMF is an economic solution that's built into their models. I discuss these in my Trade, Development and Foreign Debt
book. Poverty is to them the solution, because it means low-priced labor, and that means higher profits for the companies bought
out by U.S., British, and European investors. So poverty is part of the class war: profits versus poverty.
BONNIE FAULKNER : In general, what is U.S. food imperialism? How would you characterize it?
MICHAEL HUDSON : Its aim is to make America the producer of essential foods and other countries producing inessential
plantation crops, while remaining dependent on the United States for grain, soy beans and basic food crops.
BONNIE FAULKNER : Does World Bank lending encourage land reform in former colonies?
MICHAEL HUDSON : No. If there is land reform, the CIA sends its assassination teams in and you have mass murder, as you
had in Guatemala, Ecuador, Central America and Columbia. The World Bank is absolutely committed against land reform. When the Forgash
Plan for a World Bank for Economic Acceleration was proposed in the 1950s to emphasize land reform and local-currency loans, a Chase
Manhattan economist to whom the plan was submitted warned that every country that had land reform turned out to be anti-American.
That killed any alternative to the World Bank.
BONNIE FAULKNER : Does the World Bank insist on client governments privatizing their public domain? If so, why, and what
is the effect?
MICHAEL HUDSON : It does indeed insist on privatization, pretending that this is efficient. But what it privatizes are
natural monopolies – the electrical system, the water system and other basic needs. Foreigners take over, essentially finance them
with foreign debt, build the foreign debt that they build into the cost structure, and raise the cost of living and doing business
in these countries, thereby crippling them economically. The effect is to prevent them from competing with the United States and
its European allies.
BONNIE FAULKNER : Would you say then that it is mainly America that has been aided, not foreign economies that borrow
from the World Bank?
MICHAEL HUDSON : That's why the United States is the only country with veto power in the IMF and World Bank – to make
sure that what you just described is exactly what happens.
BONNIE FAULKNER : Why do World Bank programs accelerate the exploitation of mineral deposits for use by other nations?
MICHAEL HUDSON : Most World Bank loans are for transportation, roads, harbor development and other infrastructure needed
to export minerals and plantation crops. The World Bank doesn't make loans for projects that help the country develop in its own
currency. By making only foreign currency loans, in dollars or maybe euros now, the World Bank says that its clients have to repay
by generating foreign currency. The only way they can repay the dollars spent on American engineering firms that have built their
infrastructure is to export – to earn enough dollars to pay back for the money that the World Bank or IMF have lent.
This is what John Perkins' book about being an economic hit man for the World Bank is all about. He realized that his job was
to get countries to borrow dollars to build huge projects that could only be paid for by the country exporting more – which required
breaking its labor unions and lowering wages so that it could be competitive in the race to the bottom that the World Bank and IMF
encourage.
BONNIE FAULKNER : You also point out in Super Imperialism that mineral resources represent diminishing assets,
so these countries that are exporting mineral resources are being depleted while the importing countries aren't.
MICHAEL HUDSON : That's right. They'll end up like Canada. The end result is going to be a big hole in the ground. You've
dug up all your minerals, and in the end you have a hole in the ground and a lot of the refuse and pollution – the mining slag and
what Marx called the excrements of production.
This is not a sustainable development. The World Bank only promotes the U.S. pursuit of sustainable development. So naturally,
they call their "Development," but their focus is on the United States, not the World Bank's client countries.
BONNIE FAULKNER : When Super Imperialism: The Economic Strategy of American Empire was originally published in
1972, how was it received?
MICHAEL HUDSON : Very positively. It enabled my career to take off. I received a phone call a month later by someone from
the Bank of Montreal saying they had just made $240 million on the last paragraph of my book. They asked what it would cost to have
me come up and give a lecture. I began lecturing once a month at $3,500 a day, moving up to $6,500 a day, and became the highest-paid
per diem economist on Wall Street for a few years.
I was immediately hired by the Hudson Institute to explain Super Imperialism to the Defense Department. Herman Kahn said
I showed how U.S. imperialism ran rings around European imperialism. They gave the Institute an $85,000 grant to have me go to the
White House in Washington to explain how American imperialism worked. The Americans used it as a how-to-do-it book.
The socialists, whom I expected to have a response, decided to talk about other than economic topics. So, much to my surprise,
it became a how-to-do-it book for imperialists. It was translated by, I think, the nephew of the Emperor of Japan into Japanese.
He then wrote me that the United States opposed the book being translated into Japanese. It later was translated. It was
received very positively in China, where I think it has sold more copies than in any other country. It was translated into Spanish,
and most recently it was translated into German, and German officials have asked me to come and discuss it with them. So the book
has been accepted all over the world as an explanation of how the system works.
BONNIE FAULKNER : In closing, do you really think that the U.S. government officials and others didn't understand how
their own system worked?
MICHAEL HUDSON : Many might not have understood in 1944 that this would be the consequence. But by the time 50 years went
by, you had an organization called "Fifty Years Is Enough." And by that time everybody should have understood. By the time Joe Stiglitz
became the World Bank's chief economist, there was no excuse for not understanding how the system worked. He was amazed to find
that indeed it didn't work as advertised, and resigned. But he should have known at the very beginning what it was all about. If
he didn't understand how it was until he actually went to work there, you can understand how hard it is for most academics to get
through the vocabulary of junk economics, the patter-talk of free trade and free markets to understand how exploitative and destructive
the system is.
BONNIE FAULKNER : Michael Hudson, thank you very much.
MICHAEL HUDSON : It's always good to be here, Bonnie. I'm glad you ask questions like these.
I've been speaking with Dr. Michael Hudson. Today's show has been: The IMF and World Bank: Partners in Backwardness. Dr.
Hudson is a financial economist and historian. He is president of the Institute for the Study of Long-Term Economic Trend, a Wall
Street financial analyst and Distinguished Research Professor of Economics at the University of Missouri, Kansas City. His 1972
book, Super Imperialism : The Economic Strategy of American Empire , a critique of how the United States exploited foreign economies
through the IMF and World Bank, the subject of today's broadcast, is posted in PDF format on his website at michael-hudson.com.
He is also author of Trade, Development and Foreign Debt , which is the academic sister volume to Super Imperialism. Dr. Hudson
acts as an economic advisor to governments worldwide on finance and tax law. Visit his website at michael-hudson.com.
Guns and Butter is produced by Bonnie Faulkner, Yarrow Mahko and Tony Rango. Visit us at
gunsandbutter.org to listen to past programs, comment on shows, or join
our email list to receive our newsletter that includes recent shows and updates. Email us at
[email protected]. Follow us
on Twitter at #gandbradio.
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How many dealerships you should visit depends on what type of car you are looking to buy,
your ideal price point and how quickly you are looking to get a vehicle.
Another big mistake people make, according to Pendergast, is obtaining a vehicle loan
through a dealer without speaking with your bank or credit union first. Speaking with your
financial institution or credit union about available options can boost your purchasing
power.
There is an article on here by Michael Hudson, an economist who wrote about U.S. control of
the World Bank and IMF since 1948. He claims that the U.S. wages war because it gets other
countries to unwittingly finance them and the trade deficit. After WWII the U.S. forced
European countries to pay their war debt, by selling corporate assets, reducing barriers and
reduce their social programs. They had 3/4 of the world gold reserves because of those loans
during the war. Korea and Vietnam reduced their gold reserves to 10 billion by the late 60's
and were forced to get out off the Gold Standard. The French Banks that had a big presense in
Indochina sending their dollars to the French Central Bank and they were trading dollars for
gold. Nixon stopped it.
The dollar gave U.S. the means to have other countries finance their trade deficit, all
their wars and the military buildup. By ending the Gold backed dollar they forced the countries
that had U.S. debt dollars to purchase U.S. Treasury Bonds. As the U.S. debt grew so did the
dollars being held by those countries and the purchase of Treasury Bonds. The U.S. does not
allow countries holding those dollars to buy US property or buy Corporations and risk being
acused of commiting an act of war. So they are forced to buy U.S. debt while the US uses its
dollars to buy other countries resources with those worthless dollars.
The U.S. forces countries that default on their loans to pay penalties and huge interest
payments while the U.S. debt goes un checked and growing without the threat of being in
default...
Just in time for the 2020 presidential election, the Democrats have discovered that there is
real economic inequality in the United States. But they have not yet fully addressed the role
that the Democratic party and its leaders have played in creating this vast inequality that led
to the election of President Donald Trump in 2016.
The presidential candidates have been slow to fully recognize the role that former President
Bill Clinton's globalization policies (NAFTA and WTO) played in the outsourcing of American
jobs or the lowering of wages for workers.
As the Democratic presidential debates have shown, Vice President Biden is having a hard
time defending his long public record, especially as an opponent of federally mandated "forced"
busing to integrate our public schools decades after the Supreme Court's overturning of racial
segregation in Brown v. Board of Education (1954). As a Senator Joe Biden was a free
trade advocate as well.
But Senator Biden played a large role in creating inequality in two additional realms. He
was a strong backer of a 2005 bankruptcy "reform" law that made it harder for people to file
personal bankruptcy and to wipe out all of their debts. Given that perhaps as many as fifty
percent of all personal bankruptcies in America are caused by debt incurred from health care
not covered by insurance, this was an especially cruel blow to those seeking relief from their
heavy debt loads.
In "'
Lock the S.O.B.s Up: Joe Biden and the Era of Mass Incarceration ," The New York
Times documents his decades-long support of tough on criminals legislation, culminating in
the 1994 Violent Crime Control and Law Enforcement Act. This bill, signed into law by President
Clinton, has been blamed for the jailing of high numbers of African Americans and other
minorities, in particular.
Unlike the Republicans whose goal is to increase inequality by lowering taxes on the
wealthy, at least the Democrats seem sincere about reducing it. To do this, they have fallen
all over themselves to offer free college tuition and to reduce student loan debt. Sen. Bernie
Sanders recently proposed to
eliminate all student loans entirely .
Why have Democrats focused on college as a means of solving economic inequality? Statistics
have shown that in general the more education you have, the higher your lifetime earnings will
be. For example, men with bachelor's degrees earn nearly a million more
dollars in median lifetime earnings than high school graduates.
Globalization is simply a neoliberal economic substitute for colonialism.
Neoliberals contrary to popular opinion do not believe in self-regulating markets as
autonomous entities. They do not see democracy as necessary for capitalism.
The neoliberal globalist world is not a borderless market without nations but a doubled
world (economic -global and social- national) . The global economic world is kept safe from
democratic national demands for social justice and equality, and in return each nation enjoys
cultural freedom.
Neoliberals see democracy as a real problem. Democracy means the unwashed masses can
threaten the so called market economy (in fact manipulated and protected markets) with worker
demands for living wages and equality and consumer demands for competitive pricing and safe
products. Controlling both parties with money prevents that.
In fact, neoliberal thinking is comparable to that of John Maynard Keynes in one respect :
"the market does not and cannot take care of itself".
The neoliberal project did not liberate markets so much as protect them by protecting
capitalism against the threat of democracy and to reorder the world where borders provide a
captive market
Neoliberals insulate the markets by providing safe harbor for capital, free from fear of
infringement by policies of progressive taxation or redistribution. They do this by
redesigning government, laws, and other institutions to protect the market.
For example the stock market is propped up by the Feds purchases of futures, replacing the
plunge protection teams intervention at an even more extreme level. Manipulation of economic
statistics by the BLS also serve a similar purpose.
Another example is getting government to accept monopoly capitalism over competitive
capitalism and have appointed judges who believe illegal collusion is nothing more than
understandable and legal "conscious parallelism"
Now it seems to me the Koch-Soros think tank is an attempt to unify the neoliberal
globalist forces which represent factions from international greenies to nationalist
protectionists . In other words to repackage and rename neoliberal globalism while keeping
its essence. Be interesting to see what they come up with.
As for China opening to private international finance. They already did that but this
takes it to a new level. Like I said. Fake wrestling. This was one of the demands in the
trade negotiations by Trump. Why take one of your chips off the table if the game is for
real?
China was Made in USA (includes the City of London) like the EU and Putins neoliberal
Russia.
One day they will get around telling us they are all buddies, or maybe not. I suspect they
have a lot of laughs playing us like they do.
I could be wrong but this is more interesting than the official and semi official
narratives.
"... if the US ever held unipolar control in reality it was briefly during the period after the downfall of the USSR and up until the conquest of Iraq. ..."
"... An economic system, of which the financial system is a part of, is one of the fundamental structures of any society. Societies in today's world are defined at the sovereign state level, and the economic systems are defined by the governments of these states ..."
"... 'Globalism' as discussed in these blogs, in opposition to 'multi-polarity' is not about global commerce, but rather about an effort by a certain group of wealthy elites, primarily centered in London and New York, and commonly referred to as 'Globalists' to transfer the authority for the definition and control of economic systems from sovereign states to a set of international institutions under their control. ..."
"... In doing so they strip the sovereignty from sovereign states, as as already happened with the EU, and create a global dictatorship, under the control of the 'Globalists' and completely isolated from any democratic oversight. A fascist project in the purest sense of fascism. ..."
"... The 'Multi-polar' group of nations are those nations who oppose this fascist project and who are working to maintain and restore the sovereignty of nations. ..."
Stating "globalism" is antithetical to "multipolarity" is a non-sequitor.
Globalism is the financial structure (or "system" if you will) through which capitalist
enterprises function. This is complex of course and includes capital markets, corporations,
multinational corporations, currency markets, commodities markets, trading agreements.
Politicians intervene in the functioning of globalism so there is seldom if ever anything
like a globalism free of political influence.
OTOH, "multipolarity" has no structure that I can see. It is an empty vessel, purely a
political, statist-inspired idea (whereas globalism is a "thing" which contains
political and economic ideas of course but those ideas may or may not be statist in concept
depending on the context) which can mean anything to anyone at any point in time.
I guess I would say the term is purely Orwellian. Thus, without reading anything other
than James's comment I would guess the author's idea is either nonsensical or propagandistic
in nature.
For me, the world became "multipolar" the minute the US invaded Iraq in 2003. The idea
that the US wishes to maintain its "unipolar" leadership of the world may be true in the
wishful sense of some neocons, however if the US ever held unipolar control in reality it
was briefly during the period after the downfall of the USSR and up until the conquest of
Iraq.
Today, I view the world as both multipolar and globalist. While many of the political and
economic tensions we see result from the disconnects between national political and global
economic conditions, I think we must admit if we are honest that many of the more recent
tensions are simply the result of Trump's presidency, which has the intended affect of being
"a bull in the china shop" of the globalist system.
This is not necessarily a bad thing in theory. Sadly, however, Trump is a geopolitical and
foreign policy moron who doesn't know what he is doing beyond enriching himself and creating
daily fake news headlines in hopes of being re-elected on behalf of the same global elites he
playacts at combatting for his worshipful audience of true believers.
'Globalism is the financial structure (or "system" if you will) through which capitalist
enterprises function.'
What B.S.!!
An economic system, of which the financial system is a part of, is one of the
fundamental structures of any society. Societies in today's world are defined at the
sovereign state level, and the economic systems are defined by the governments of these
states , which are supposed to function on behalf of the population of each state, and
in democratic states, are also supposed to be under the control of the overall population
through their democratic institutions. International institutions are there to coordinate
commerce between the different economic systems of sovereign states.
'Globalism' as discussed in these blogs, in opposition to 'multi-polarity' is not
about global commerce, but rather about an effort by a certain group of wealthy elites,
primarily centered in London and New York, and commonly referred to as 'Globalists' to
transfer the authority for the definition and control of economic systems from sovereign
states to a set of international institutions under their control.
In doing so they strip the sovereignty from sovereign states, as as already happened
with the EU, and create a global dictatorship, under the control of the 'Globalists' and
completely isolated from any democratic oversight. A fascist project in the purest sense of
fascism.
The 'Multi-polar' group of nations are those nations who oppose this fascist project
and who are working to maintain and restore the sovereignty of nations.
@ donkeytale 15
I think the world has always been multipolar, the differences that give the definition
coming to (being presented to) the forefront, or being dissimilated, according to choice and
circumstance. The globalist direction aims to interweave or merge these differences (cultural
and historic, religion, philosophy and so on), or at least bring them under a common control.
So the idea that multipolarity represents anything more than increased recognition of various
regional power as opposed to recognition of one regional power (say western) as more visible,
is not much more than an indication of how global policy will be conducted, i.e. with an
emphasis on regional responsibility.
Recent US policy is not aimed at destroying the globalist order, it is a result of the
failure of one format of the globalist order, where the global financial order no longer
fitted into national or regional economic sense. This was the gfc, and there is simply no way
to continue the flow of trade and finance as it existed for the previous decades. The easing
of rates across the globe is paliative, it is no solution, you only have to look at national
debt levels to understand this, or in Eurozone try target2 differences. The world is now
partly funded by negative yielding debt. All of this works contrary to capitalist (in its
basic honest philosophy) understanding. In short "something" is going to happen to readjust
this circumstance, planned or otherwise. I have watched how in EU the single currency has
been used to takeover the traditional national hierarchies (banking, political and to a
degree social), but we don't have that sort of framework accepted at global level, only
various currency pegs, bilateral arrangements and so on. The IMF and sdr is not much liked.
What I have noted is virtual central bank currency is being promoted in several ways, be it
the bis just announcing it may become a necessity face to cryptocurrency or similar (with a
caveat of harmonising monetary policy) , EU organising a parallel payment system that avoids
commercial banks, even Instex is along these lines. Where the US and some others truly stand
with regard to this is a different question, as for now it (et al) still enjoy a financial
hegemony that is both organised and profitable. Interesting times, I just hope that a major
event is not the catalyst for reform, that the various parties can agree to withdraw to more
localised structure and agreement if any grand plans meet the resistance or failure that is
already partly visible. I doubt that will be allowed though, by the time people really want
to take part, there won't be much option left and circumstance will already be already
confused and conflictive.
@31 donkeytale.. well, if the usa didn't commit as much paper money as it does to the
military complex it runs, i suppose the financial complex where the us$ can be printed ad
nauseam might come into question.. the sooner oil isn't pegged to the us$ and etc. etc.
happens, the better off the world will be... and, i don't blame the usa people for this..
they are just being used as i see it - much the same here in canada with our politicians
thinking the prudent thing to do is to support the status quo.. the problem is the status quo
can only go on for so long, before a change inevitably happens...
as for swift - they went along with usa sanctions back in 2011 on iran, but then it was
brought to court in europe and overturned... but again - they are back in the same place
bowing down to usa exceptionalism... call it what you want.. another system needs to get made
if this one that exists is beholden to a special interest group - usa-uk-europe, where others
are 2nd rate citizens of the world... same deal imf... these world financial institutions
need to be changed to reflect the changes that are taking place... the voting rights of the
developed countries are skewed to favour the ones who have been raping and pillaging africa,
and etc. etc.. you may not think it matters, but i personally do.. and i don't blame the usa
for it..but they are being used as a conduit to further an agenda which is very unbalanced
and unfriendly to the world as i see it..
I am afraid that I cannot agree with much of what you said.
Dictatorship, as a governance system, has always failed, and will always fail. The
'Globalists' who grabbed power, and imposed an effective oligarchic dictatorship, in the U.S.
in 1980 and the EU since 1990, have clearly demonstrated this fact through the destruction of
the economies of the U.S. and much of Europe and the impoverishment of their populations. And
since 2001, they have used the U.S. and British military and intelligence services and NATO
as their personal bludgeon in order to force the submission of any state that did not
voluntarily submit to their project of a 'Global' dictatorship.
Resistance to this 'Globalist' project is at the root of almost all conflicts in the world
today. The 'Multi-Polar' nations resisting the 'Globalists', in Ukraine, Syria, North Korea,
Venezuela, etc. is one front in this resistance. The other front is the resistance of
'Nationalists' (such as Trump, the Brexiteers, the Yellow Vests, and populists across Europe)
to the 'Globalists.
The Trump Presidency is not the cause of tensions in the world today, as you suggest, but
rather the symptom. Trump understands that without an industrial base, the U.S. is condemned
to becoming the 'India' of the Americas'. The central theme of his actions is to restore the
U.S. industrial base and U.S. sovereignty, which have largely been destroyed by the
'Globalists' and their 'Deep State' machine over the past 40 years. The 'Globalists' need
only the U.S. military and intelligence services, and care nothing for its population and
less for its sovereignty, and thus are fighting Trump every step of the way.
Trump may be coarse and a buffoon, and he may be completely wrong in carrying Israel's
water with respect to Iran, but he is just about the only American politician that I see that
is working on behalf of the U.S. population rather than on behalf of the 'Globalists'.
Reversing the 'Globalization' that has savaged the U.S. and Europe over the past several
decades will not come easily, nor without pain and tensions, and winners and losers. However
failure to do so guarantees the likely rapid and long term decline and impoverishment of all
populations under 'Globalist' control.
dh-mtl @29 explained it well, I thought, but some still don't seem to get it.
It is the difference between the UN, which has a law-based charter which upholds the national
sovereignty of each nation and forbids aggression against any sovereign country, and
the WTO, which is a rules-based agreement which forbids any national government to pass laws
which interfere in the profits of corporations.
Globalism is the project in which capital has complete freedom to do as it will, while humans
and national governments are forbidden such freedom.
Putin and Lavrov frequently point to the difference between international law, which they
support, and the "rules-based order" which the US and its partners-in-crime support, in which
the rules are used to destroy sovereign countries and enrich the multi-national corporations
which strip the planet at will, and go to the cheapest labor countries, with no environmental
laws, for their global production lines.
A multi-polar world is one with many sovereign countries, ruled by international law,
respected by all, with peaceful relations between all countries.
Globalism is when corporations rule the world, and we continue on the path of destruction of
all the natural wealth of the world in the turning of nature into commodities and then
trash.
@ wagelaborer who wrote
"
Globalism is the project in which capital has complete freedom to do as it will, while humans
and national governments are forbidden such freedom.
"
Perfectly stated!
I appreciate you, dh-mtl, bevin and others responding to donkeytale. I have not read the
comment because donkeytale is on bypass for me but it is nice to read other commenters taking
on donkeytale BS for others to see....thanks
Sorry if I need to pick your resopnse to donkeytale apart but there are a lot of
inconsistencies in your argument.
The 'Globalists' who grabbed power, and imposed an effective oligarchic dictatorship, in
the U.S. in 1980 and the EU since 1990, have clearly demonstrated this fact through the
destruction of the economies of the U.S. and much of Europe and the impoverishment of their
populations.
You seem to imply that the 'globalists' (illuminati, Zionist bankers etc., etc.) did not
exist or had power before the 1980s, which could not be further from the truth. There are
several reasons why neo-liberalism took hold in the 1980s, creating the economic narrative
and agenda of today, none of which, are related to some kind of power grab by people that did
not hold any power beforehand. The threat of the cold war was waning in the 1980s and elites
felt less pressured by local populations potentially becoming 'too' sympathetic to communism
anymore. So they began rolling back social policies implemented in the post-war years to
counter communism's appeal. Computer technology going mainstream, creating all sorts of
economic spillovers to be harnessed by increased open and international trade was another
reason, there were many more. But the people you call 'globalists' controlled matters much,
much earlier than the 1980s.
The other front is the resistance of 'Nationalists' (such as Trump, the Brexiteers, the
Yellow Vests, and populists across Europe) to the 'Globalists.
If there truly were such politicians as 'nationalists' who somehow only hold the best
interest of their native people at heart, then why is that most European populists cosy up to
Israel? None of them have tried to reclaim control over their Central Banks and in the case
of i.e. Italy, do they try to break free from the Euro? Why are Polish nationalists rabidly
supporting the build up of US arms on their territory? I think it is about time to see beyond
this silly dichotomy of 'Globalist' vs 'Nationalist', at least while these Nationalists do
nothing substantial to actually help their lot and further squeeze the lower classes of their
countries in good neo-liberal fashion, same as their Globalist political 'opponents' they
claim to oppose.
Trump may be coarse and a buffoon, and he may be completely wrong in carrying Israel's
water with respect to Iran, but he is just about the only American politician that I see
that is working on behalf of the U.S. population rather than on behalf of the 'Globalists'.
So you admit that Trump is essentially a controlled zionist buffoon but at the same time
he is working towards restoring US sovereignty on behalf of the people? You mean he worked
for the US people when he lowered taxes for the rich even further, creating an ever larger US
public debt, and throwing Americans further into debt servitude of private finance? Or do you
mean his still open promise to invest large sums in the US crumbling infrastructure? Oh
right, he has instead opted to increase defence spending to combat the US many imaginary
enemies around the globe.
Look, I agree with you that global neo-liberalism is bad for the vast majority of people
on this planet but don't go looking for help from false prophets, such as Trump or other
'nationalists', you will only find yourself completely disappointed before long.
donkeytale , Jun 30, 2019 6:48:21 PM |
58dh-mtl , Jun 30, 2019 6:50:23 PM |
59
@50 Alexander P
Response to a few of your criticisms.
1. You say 'You seem to imply that the 'globalists' (illuminati, Zionist bankers etc.,
etc.) did not exist or had power before the 1980s'.
Not at all. They lost power from the mid-1930s to 1980. They regained power with Reagan,
followed by Clinton, W, and Obama. You only need to look at any graph that shows when income
inequality in the U.S. began to ramp up. The date is clear - 1980.
2. You say. 'If there truly were such politicians as 'nationalists' who somehow only hold
the best interest of their native people at heart'.
I didn't say that these 'Nationalists' or 'Populists' hold the best interests of their
native peoples at heart. Usually they are only interested in what they see as best for
themselves. But there is no doubt that they are resisting the 'Globalists' push to strip
their countries of their sovereignty, to transfer their wealth to the 'Globalist' elites, to
transfer their industries to wherever labor is the cheapest. I said that this was a 'second
front' against the 'Globalists'. And there is no doubt, from the fight that the 'Globalists'
are waging against Trump, 'Brexit' and populists and nationalists across Europe, that the
'Globalists' take this 'front' seriously.
3. You say. 'don't go looking for help from false prophets, such as Trump'.
You are right. It is unlikely that Trump will be able to 'Make America Great Again'. At
best he may be able to break the 'Globalists' hold on power in the U.S. However, this is a
necessary first step if the U.S. is ever to recover wealth and power that it had during the
middle of the last century, but which today is rapidly evaporating.
I agree with Alexander P that nationalist and populist presentation is often either
controlled opposition or a method of splintering and isolating influence. That is not to say
there are a lot of public in many countries who are sincere in their sentiment.
Sorry no link, recent :
"As he arrived at the Kempinski hotel lobby last December, journalists scuffled with
bodyguards as they tried to get their microphones and cameras close. Despite being jostled,
Zanganeh remained calm and waited to deliver a simple message: Iran can’t participate
in OPEC’s production cuts as long as it remains under U.S. sanctions and won’t
allow other members to steal its rightful market share."
I.E. approval for continued reduced opec oil supply to support prices depends on Iran (?),
lower prices otherwise affecting all other producers, and/or Iran is making the case that
sanctions are a theft of market share by other producers. The latter has been a part of the
cause of hostility in the gulf.
In Germany
"The 2018 report by the Federal Office for the Protection of the Constitution of Germany
(Bundesmat fur Verfassungsschutz, BfV), which was released on June 27, 2019 by the Federal
Minister of the Interior, Horst Seehofer and Thomas Haldenwang, head of the organization,
examines the activities of the intelligence services of the Iranian regime in Germany....
The BfV annual report states: "The central task of the Iranian intelligence services is to
spy against opposition movements and confront these movements. In this regard, evidences of
state-sponsored terrorism in Europe, which originates in Iran, have intensified during 2018."
" etc
is being used by ncr (the article source) to the effect of calling for closure of the
Iranian embassy. That aside, the report does show Germany is moving towards, or is willing
to, apply pressure on Iran now. France has also given indication that it is not fully behind
Iran (reprimand and warning on not respecting jcpoa etc.)
You are correct to say inequality began rising again in 1980; however, the rise must be
attributed to Carter and Volker--Reagan just continued the process. It seemed odd the GHW
Bush initially opposed it as "Voodoo Economics" but readily championed it all as VEEP, making
it just a political posture in the nomination race.
Thanks for the excellent response. One thing I failed to take into account is the
difference between the EU and the US financial systems so thanks for that corrective
explanation.
The Euro represents the biggest failure of the EU from where I sit. Centralised control of
the currency and banking systems is a grave error in that construct and the "European
Parliament" just seems too silly for me to even contemplate, although I'm sure there is some
logical explanation for its existence that I'm missing.
And you bet, I'm also sure the day of reckoning for the global debt overload is fast
approaching. What I don't understand is how one form of capitalism (neoliberal) versus
another (state managed) makes any difference in how this debt overload developed. China, for
instance, has used similar stimulus methods more frequently even than the US since 2008 to
keep its economic growth chugging along and certainly way more than the EU, which under
stimulated its own economy in response to the recession.
IMHO, Brexit is a forced over the top politicised reaction to this conservative German-led
response in light of the fact the UK kept its own currency and banking systems separate and
had the means to provide stimulus but didn't under the Tory buffoons in charge.
Grexit made much more sense to me than Brexit for many reasons. I was dismayed when the
Greek people failed in their courage after voting in Syriza follow through and tell the
Germans to take the Euro and their debt and put it where the sun don't shine.
What I believe people are tending to forget or overlook, such as wagelabourer @ 48 and
dh-mtl elsewhere, that while these postwar international re-orderings such as NATO, the UN
and the EU are nowhere near perfect, they are also not purely NWO conspiratorial constructs.
Rather they were created for a very specific purpose stemming from a lesson of history which
seems to have been rather easily tossed aside because of the relative success of these same
institutions: that is, clashing nationalisms inevitably lead to major conflict and
devastating wars, especially among the major imperialist states.
"... As Curtis notes, full-time salaries are only one part of the faculty salary picture. Curtis' own research for the AAUP (published as an appendix to my Equality for Contingent Faculty documents that only twenty-five percent of professors now teach on the tenure-track, and only sixteen percent have tenure. Seventy-five percent of all college professors, one million in total, teach off the tenure-track, with fifty percent of all professors teaching part-time. ..."
"... While "free trade" agreements encouraged the closing of American factories and the loss of millions of American jobs, colleges and universities instituted their own brand of wage theft called by adjunct Ron Swift "inside-outsourcing." Even though the number of students was increasing, the colleges staunched the number of well-paid, secure, full-time tenure-track positions. They met rising enrollments by staffing classrooms with "contingent" faculty who teach off the tenure-track without the protections for free speech afforded their tenured brothers and sisters. ..."
"... The colleges save money by refusing to pay these contingent professors a living wage, in flagrant violation of the principle of equal pay for equal work. They are paid on a completely separate and lower pay scale than their full-time counterparts are paid for teaching the very same courses; they are paid on average only about fifty percent of what a full-timer would earn for teaching the same number of courses. See my " The Wal-Martization of Higher Education: How Young Professors Are Getting Screwed "). ..."
"... In " The Ph.D. Now Comes with Food Stamps ," the Chronicle of Higher Education has documented hundreds of thousands of people with graduate degrees receiving some form of public assistance, many of them contingent faculty. ..."
So are the Democrats right to try and solve the equality problem
by making college more affordable, with tuition perhaps free? Or are these proposals simply the
current version of the Herbert Hoover's 1928 Presidential campaign where he literally offered
voters "
A chicken for every pot."
But before we go spending trillions of dollars on college tuition and eliminating student
debt, shouldn't we ask: What has been driving up the cost of attending college over the past
few decades leading to the current lack of affordable college options?
In his run for re-election as Vice President in 2012, Joe Biden made clear that he blamed
college professors' high salaries for the skyrocketing costs of tuition. This was an
astonishing charge, especially given that his wife has long been a college professor. He was
immediately admonished by faculty groups around the country. "
Faculty Groups Try to Educate Biden on Salaries ".
John Curtis, former Director of Research for the American Association of University
Professors, wrote a rebuttal to Biden on January 18, 2012. He took issue with Biden's claim,
pointing out that full-time faculty salaries have been stagnant for a number of years. He noted
that tuition rates, in contrast, had risen "between three and fourteen times as fast as
full-time faculty salaries." (underlining added)
As Curtis notes, full-time salaries are only one part of the faculty salary picture. Curtis'
own research for the AAUP (published as an appendix to my Equality for
Contingent Faculty documents that only twenty-five percent of professors now teach on
the tenure-track, and only sixteen percent have tenure. Seventy-five percent of all college
professors, one million in total, teach off the tenure-track, with fifty percent of all
professors teaching part-time.
While "free trade" agreements encouraged the closing of American factories and the loss of
millions of American jobs, colleges and universities instituted their own brand of wage theft
called by adjunct Ron Swift "inside-outsourcing." Even though the number of students was
increasing, the colleges staunched the number of well-paid, secure, full-time tenure-track
positions. They met rising enrollments by staffing classrooms with "contingent" faculty who
teach off the tenure-track without the protections for free speech afforded their tenured
brothers and sisters.
The colleges save money by refusing to pay these contingent professors a living wage, in
flagrant violation of the principle of equal pay for equal work. They are paid on a completely
separate and lower pay scale than their full-time counterparts are paid for teaching the very
same courses; they are paid on average only about fifty percent of what a full-timer would earn
for teaching the same number of courses. See my "
The Wal-Martization of Higher Education: How Young Professors Are Getting Screwed ").
In other words, though women are still paid only 82% percent of what men earn for doing the
same work, with black men earning only 73% and Hispanics only 69%, most adjunct professors are
paid at most 50% of what tenure-track faculty earn for teaching the same course.
Though possessing Master's and Doctorates and tens of thousands of dollars in student loans,
these college professors are not being paid for all of the hours they work outside of class
preparing lectures, grading tests, and meeting with students. They often do not even have
offices. Their work schedule is capped below full-time so they will not qualify for tenure.
Their work varies from quarter to quarter and they are often denied unemployment when they are
in fact unemployed. The adjuncts and other contingent professors usually do not have any health
insurance or retirement benefits
In " The Ph.D. Now Comes with
Food Stamps ," the Chronicle of Higher Education has documented hundreds of
thousands of people with graduate degrees receiving some form of public assistance, many of
them contingent faculty.
The treatment between the two tiers is so disparate that I have called it "faculty
apartheid" because the tenure-track few control and dominate the contingent many. Indeed, the
tenured faculty often serve as the direct supervisors of the contingents. I have called the
kind of discrimination that exists in higher education "tenurism," the baseless but widespread
stereotype that the tenured faculty are superior and warrant higher pay and better treatment
and than the non-tenure-track faculty. (see my " Against Tenurism ").
In an interview with Shankar Vedantam on the NPR show "The Hidden Brain," Raj Chetty, a
Harvard economist who has done research on inequality in education, says the best solution is
to have "the best teachers in American classrooms."
But we are far from that solution, with the majority of the U.S. higher education teaching
force earning much less than the vaunted $15 an hour minimum wage recommended by nearly all of
the Democratic candidates. These contingent faculty are "apprentices to nowhere" with little
realistic hope of escaping the academic ghetto as the contingents far outnumber the dwindling
number of tenure-track professors.
But don't' the Democrats have a tight relation with the faculty unions (American Association
of University Professors, American Federation of Teachers, and the National Education
Association)? Yes, they do. But the unions themselves have collectively bargained the
contingents into poverty and income insecurity. The two-tier system exists within the unions
too, which have long been run by and for the tenure-track faculty; these unions clearly have
not apprised the Democrats of these inequalities, let alone insist they solve them.
Will the Democrats insist that these unions, upon whom they are so dependent for money and
campaign workers, treat all of their members equally? Or will they continue to look the other
way in order to keep union money flowing into their campaign coffers.
Will the Democrats insist that these colleges, upon whom they wish to build an equal
society, treat their professors equally and offer them the same opportunities for a better life
that they are offering their students?
If politicians are going to solve a problem, they must first have a clear diagnosis before
offering a treatment. Before the Democrats spend tax money on free tuition and paying off
student loans, they need to acknowledge the income disparity among the professoriate and make
solving it an equal priority.
https://cdn.districtm.io/ids/index.html Russia's oil production in June was 50,000 bpd below
the level Moscow had pledged under the OPEC and non-OPEC production cut agreement, Russian
Energy Minister Alexander Novak said on Monday, as carried by Russian news agency Interfax .
As part of the OPEC+ production cuts between January and June, Russia is taking the lion's
share of the non-OPEC cuts and pledged to reduce production by
230,000 bpd from October's post-Soviet record level of 11.421 million bpd, to 11.191
million bpd.
"... As I documented on March 9 on this platform in my article " What Makes Gavin Run ?" Williamson knows no shame or integrity and is the living embodiment of the repulsive, two-faced backstabber, intriguer and liar Sammy Glick in the great writer Budd Schulberg's legendary 1941 novel of Hollywood "What Makes Sammy Run?" So he is a natural fit for Johnson, whose entire career has been dictated by similar shameless, reckless lies, opportunism and crass incompetence. ..."
"... According to many UK media reports – which Williamson understandably denies – his most effective weapons are bullying, bluster and threats. These are patterns of behavior which those who have worked for him or who have bothered following his career over the years find extremely convincing and in character (or, rather, lack of it). ..."
"... Putting Williamson in charge of such a delicate, nervously balanced and ultra-sensitive province is like appointing a Sith Lord as head of the Jedi Knights in "Star Wars" or putting the late Boston underworld mass murderer Whitey Bulger in charge of the FBI. ..."
"... Because like attracts like, competent honorable people in any country and culture seek to promote and advance others with the same qualities and empty, shallow sociopaths and confidence tricksters similarly admire and advance people exactly like themselves. ..."
As I documented on March 9 on this platform in my article "
What Makes Gavin Run ?" Williamson knows no shame or integrity and is the living embodiment
of the repulsive, two-faced backstabber, intriguer and liar Sammy Glick in the great writer
Budd Schulberg's legendary 1941 novel of Hollywood "What Makes Sammy Run?" So he is a natural
fit for Johnson, whose entire career has been dictated by similar shameless, reckless lies,
opportunism and crass incompetence.
No one gets every, or usually most, professional predictions right, and in the news business
sensible people make the best of their brilliant insights – or lucky guesses – when
they can. But I have seldom hit a hole-in-one prediction that came true as quickly as my column
on Williamson did.
On March 9, Williamson, after only a decade in the UK main chamber of parliament, the
ancient House of Commons was still riding high and making a fool of himself insulting major
nations from Russia to China and also the UK's badly-needed European allies as the most
incompetent defense chief in the modern history of his nation.
On May 1, less than two months after my article appeared – and with no causality that
I could see – Williamson was humiliatingly sacked by his benefactor, Prime Minister
Theresa May after being accused of leaking highly confidential national security information to
the media.
Williamson immediately turned on his long-time benefactor Mrs. May savagely and helped drive
her from office – which was admittedly long overdue. She resigned on June 7, just over a
single month after sacking him.
Williamson then joined May's arch-enemy, former foreign secretary Boris Johnson, who had
relentlessly schemed to topple her for years and joined Johnson's own campaign to win the
leadership of the rapidly disintegrating Conservative Party and thence become prime
minister.
At the time of writing, Johnson remains far in the lead in the contest to replace May as
prime minister despite repeated attacks on his character, utter lack of political consistency,
convictions or achievement and his entertainingly squalid private life.
Johnson is twice divorced with neither marriage lasting longer than five years and he is now
being accused of screaming rows with his 20-years-younger girl friend that may or may not have
involved him hitting her, which he naturally denies.
Through all this Williamson, who like Johnson himself does not lack for energy in the
service of his own ambition, has been rounding up support for his new master among Conservative
Party Members of Parliament.
According to many UK media reports – which Williamson understandably denies –
his most effective weapons are bullying, bluster and threats. These are patterns of behavior
which those who have worked for him or who have bothered following his career over the years
find extremely convincing and in character (or, rather, lack of it).
Reports are also circulating in the UK media – which are usually well-connected and
informed on such matters – that Williamson is holding out to be reappointed as the UK's
defense chief or as Secretary of State for Northern Ireland.
Northern Ireland is my native land and is tiny in size. But over the past century and more
it has repeatedly displayed an infinite capacity for generating wars, embarrassment and
catastrophe for both Ireland and the UK, which otherwise get along easily and well.
Putting Williamson in charge of such a delicate, nervously balanced and ultra-sensitive
province is like appointing a Sith Lord as head of the Jedi Knights in "Star Wars" or putting
the late Boston underworld mass murderer Whitey Bulger in charge of the FBI.
Therefore it will probably happen.
Because like attracts like, competent honorable people in any country and culture seek to
promote and advance others with the same qualities and empty, shallow sociopaths and confidence
tricksters similarly admire and advance people exactly like themselves.
On Monday, June 24, without mentioning Williamson once, one of the UK's most experienced and
respected journalists, war correspondents and historians, Sir Max Hastings wrote a scathing
article in the liberal "Guardian" newspaper entitled "I was Boris Johnson's boss: he is utterly
unfitted to be prime minister."
Therefore Johnson will re-elevate Williamson, either to drive Northern Ireland back into
civil war or destroy the remaining security of the entire UK as defense secretary once again.
And Williamson will remain loyal, until he in his turn sees the chance to stab Johnson in the
back and briefly rule as prime minister until he in his own turn is politically knifed and
toppled by one of his own hand-picked sociopaths.
And Sammy Glick will rise again – on the suffering and smashed lives of everyone
else.
"... And how many congresspeople served in combat in Iraq or Afghanistan? How many presidential candidates had boots on the ground in combat theaters? The answer is one. Here is the moral decay of America's ruling elites boiled down to a single word. ..."
And how many congresspeople served in combat in Iraq or Afghanistan? How many presidential
candidates had boots on the ground in combat theaters? The answer is one. Here is the moral
decay of America's ruling elites boiled down to a single word.
It didn't matter when they did. McStain fought, and absolutely LOVED war. Plenty of the
Hawks served and fought, it's like frat boys who were hazed, carrying on the hazing.
"... And how many congresspeople served in combat in Iraq or Afghanistan? How many presidential candidates had boots on the ground in combat theaters? The answer is one. Here is the moral decay of America's ruling elites boiled down to a single word. ..."
Here is the
moral decay of America's ruling elites
boiled down to a single
word.
There are many reasons why Imperial Rome declined, but two primary causes that get
relatively little attention are moral decay and soaring wealth inequality.
The two are of
course intimately connected: once the morals of the ruling Elites degrade,
what's mine is mine
and what's yours is mine, too.
I've previously covered two other key characteristics of an empire in terminal decline:
complacency and intellectual sclerosis, what I have termed a failure of imagination.
Michael Grant described these causes of decline in his excellent account
The
Fall of the Roman Empire
, a short book I have been recommending since 2009:
There was no room at all, in these ways of thinking, for the novel, apocalyptic situation
which had now arisen, a situation which needed solutions as radical as itself.
(The
Status Quo) attitude is a complacent acceptance of things as they are, without a single new
idea.
This acceptance was accompanied by greatly excessive optimism about the present and
future. Even when the end was only sixty years away, and the Empire was already crumbling fast,
Rutilius continued to address the spirit of Rome with the same supreme assurance.
This blind adherence to the ideas of the past ranks high among the principal
causes of the downfall of Rome.
If you were sufficiently lulled by these traditional
fictions, there was no call to take any practical first-aid measures at all.
Glenn Stehle, commenting on a thread in the excellent website
peakoilbarrel.com
(operated
by the estimable Ron Patterson) made a number of excellent points that I am taking the liberty of
excerpting: (with thanks to correspondent Paul S.)
The set of values developed by the early Romans called mos maiorum, Peter Turchin
explains in
War
and Peace and War: The Rise and Fall of Empires
, was gradually replaced by one of personal
greed and pursuit of self-interest.
"Probably the most important value was virtus (virtue), which derived from the
word vir (man) and embodied all the qualities of a true man as a member of society," explains
Turchin.
"Virtus included the ability to distinguish between good and evil and to act in ways that
promoted good, and especially the common good. Unlike Greeks, Romans did not stress individual
prowess, as exhibited by Homeric heroes or Olympic champions. The ideal of hero was one whose
courage, wisdom, and self-sacrifice saved his country in time of peril," Turchin adds.
And as Turchin goes on to explain:
"Unlike the selfish elites of the later periods, the aristocracy of the early Republic
did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a
staggering one fifth of Rome's total manpower, perished in the battle of Cannae, as mentioned
previously, the senate lost almost one third of its membership.
This suggests that the
senatorial aristocracy was more likely to be killed in wars than the average citizen...
The wealthy classes were also the first to volunteer extra taxes when they were needed A
graduated scale was used in which the senators paid the most, followed by the knights, and then
other citizens. In addition, officers and centurions (but not common soldiers!) served without
pay, saving the state 20 percent of the legion's payroll...
The richest 1 percent of the Romans during the early Republic was only 10 to 20
times as wealthy as an average Roman citizen."
Now compare that to the situation in Late Antiquity when
"an average Roman noble of senatorial class had property valued in the neighborhood of
20,000 Roman pounds of gold. There was no 'middle class' comparable to the small landholders of
the third century B.C.; the huge majority of the population was made up of landless peasants
working land that belonged to nobles. These peasants had hardly any property at all, but if we
estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be
200,000! Inequality grew both as a result of the rich getting richer (late imperial senators
were 100 times wealthier than their Republican predecessors) and those of the middling wealth
becoming poor."
Do you see any similarities with the present-day realities depicted in these charts?
And how many congresspeople served in combat in Iraq or Afghanistan? How many
presidential candidates had boots on the ground in combat theaters? The answer is one.
Here
is the moral decay of America's ruling elites boiled down to a single word.
The issue of Millennial 'burnout' has been an especially hot topic in recent years - and not
just because the election of President Trump ushered in an epidemic of co-occurring TDS (Trump
Derangement Syndrome) that sent millions of American twenty somethings on a never-ending quest
for a post-grad 'safe space'.
For those who aren't familiar with the subject, the World Health Organization recently
described burnout as "a syndrome conceptualized as resulting from chronic workplace stress that
has not been successfully managed." As birth rates plunge and so-called deaths from despair
(suicides and overdoses) climb, sending the US left expectancy lower for multiple consecutive
years for the first time since the 1960s, many researchers see solving the problem of burnout
as critical to fixing many of our societal issues.
To try and dig deeper into the causes and impact of millennial burnout, Yellowbrick
, a national psychiatric organization, surveyed 2,000 millennials to identify what exactly is
making a staggering 96% of the generation comprising the largest cohort of the American labor
force say they feel "burned out" on a daily basis.
The answer is, unsurprisingly, finances and debt: These are
the leading causes of burnout (and one reason why Bernie Sanders latest proposal to wipe
out all $1.6 trillion in outstanding student debt might be more popular with millennial voters
than many other Americans realize).
At 6% interest with a 6-year amortization, that works out to monthly payments of $497 --
about what many of these folks spend on eating at restaurants or on tattoos or on drugs per
month.
It's a matter or priority -- and repaying the student loans isn't a priority for them
which is why a report in '17 showed that at 7 years after graduation, more than 45% of them
hadn't paid even one dollar of principle on their student loans.
This is becoming exhausting. The boomers and the like simply don't want to admit that it
is much harder today making ends meet than it was when they were younger. That is a fact,
inflation and asset inflation has made the value of a dollar half of what is was 40 years
ago. Meaning, you would have to work 80 hours in today's money to match 40 hours in money
from the late 70's. Now, millenials don't get off easy either because they think they deserve
that same standard and since it does not and cannot exist in our monetary system, they try to
usurp personal responsibility, at any level, by finger pointing and apathy. Our society is
slowly collapsing.
Unlike Occupy, then, Barber has demands, both policy and geographical. Barber and Theoharis,
having convened the "the first-ever Poor People's Moral Action Congress," write in
The Hill , on policy:
We will present a national moral budget, outlining a plan to pay for real, systemic change
as well a challenge to the lie of scarcity. And poor people who haven't seen a place for them
in American public life will testify before the House Budget Committee, in a hearing to share
their stories and address what the federal government can and must do now to address the real
issues affecting everyday Americans.
And on geography:
We are building coalitions among poor people who are too often pitted against one another
by the divide-and-conquer tactics of the Southern Strategy. In the so-called "red-states" of
the South and Midwest, we are organizing people into a movement who will vote, take action
and challenge the assumptions of candidates from both parties. We are organizing across race
and other lines that too often divide us and lifting up and deepening the leadership of those
most affected by systemic racism, poverty, the war economy and ecological devastation.
The United States has abundant resources for an economic revival that will move towards
establishing a moral economy. This report identifies:
$350 billion in annual military
spending cuts that would make the nation and the world more secure; $886 billion in estimated
annual revenue from fair taxes on the wealthy, corporations, and Wall Street; and Billions
more in savings from ending mass incarceration, addressing climate change, and meeting other
key campaign demands.
The below comparisons demonstrate that policymakers have always found resources for their
true priorities. It is critical that policymakers redirect these resources to establish
justice and to prioritize the general welfare instead. The abundant wealth of this nation is
produced by millions of people, workers, and families in this country and around the world.
The fruits of their labor should be devoted to securing their basic needs and creating the
conditions for them to thrive. At the same time, policymakers should not tie their hands with
"pay-as-you-go" restrictions that require every dime of new spending to be offset with
expenditure cuts or new revenue, especially given the enormous long-term benefits of most of
our proposals. The cost of inaction is simply too great.
I think the left could get behind all of this (though sadly, MMT is not explicitly included,
though it's certainly righteous to cripple PayGo).
So why can't we have nice things? The budget concludes on page 115:
For too long, we have turned to those with wealth and power to solve our most pressing
social problems. We have been led to believe that those in positions of influence and
authority will use the resources at hand in the best possible way for the betterment of our
society. This orientation has justified tax cuts for the wealthy and corporations and work
requirements for the poor; it has secured environmental shortcuts for industry and military
expansion around the world; and it has yielded very little for the 140 million people in this
country who are still poor and struggling to meet their needs.
This is not an argument for charity or goodwill to the poor. It is, rather, a simple
recognition that the poor are not only victims of injustice, but agents of profound social
change. Rather than following the direction and leadership of the wealthy and powerful,
it is time to follow the direction and leadership of the poor. Indeed, if we organize
our resources around the needs of the 140 million, this Budget shows that we will strengthen
our society as a whole.
This is why the Poor People's Campaign: A National Call for Moral Revival continues to
organize and build power among the poor today. It understands that those who have been cast
out of the economy and who are living on the few remaining crumbs of its meager offerings are
also articulating a way out of this wretched existence -- not just for themselves, but for us
all.
That's the stuff to give the troops! If I have a criticism of PPC (and the budget) it's that
who "those with wealth and power" might be is not crisply articulated (unlike, for example, "
the billionaire
class "). At this point, I realize I've shifted from saying the left should give an account
to the PPC to saying that the PPC should give an account to the left. Be that as it may, Barber
tweets:
... ... ...
Well, those Democrats who talk about "working people" use that phrase -- "working families"
seems to have, mirabile dictu , vanished from the discourse -- probably started doing so
only recently, having been pressured from their left, and as a replacement for "working class";
they don't take their bourbon neat, that is, but watered down. And yes, they may be scared of
the "free stuff" argument that liberal Democrats deploy against the left. However, I think the
left (very much as opposed to liberals) would view "the poor" as a subset of the working class,
those who are coerced sell or give their labor to survive (forgive the crudity of this
ahistorical analysis). If indeed the PPC/DSA/left are to move beyond a relationship of
"endorsing partners" to something akin to co-operation, both tactical and strategic, then
distinctions like this are going to have to be hashed out. For example, Barber tweets:
... ... ...
"Policy murder" is brilliant framing (and would provide one account of elite behavior on
climate change). However, who is the murderer? Barber says "a legislator." But if you believe
-- as most of the left does, and (I would say) most liberals do not, especially donor-dependent
NGOs -- that we live in an oligarchy, then the murderer is not the legislator, but
the person who hired or owns the legislator: Much more often than not, when all the threads are
traced down, a billionaire. The billionaire class is surely composed of great sinners. And
every
billionaire is a policy failure , just as surely as every slaveowner was. Should this be
hard to say? Should we not seek to remove the systemic occasion of sin?
This kind of discussion is something that is badly needed on the Left. Rev. Barber is
doing an excellent job of making a class-based argument for reform based on Protestant
theology. It's a matter of shame for American Protestantism that more pastors in affluent
suburban congregations and mega-churches are not doing the same.
That said, the persuasiveness of Christian theology is shrinking, not growing. Other
voices from other spiritual traditions are needed who can articulate the connections between
their non-Abrahamic frames of reference and the suffering of the poor and the sacredness of
the Earth and its creatures. This is especially true for making the case to the young who are
constantly bombarded with materialism and individualism on the one side and find patriarchal
religion on the other side too much to swallow, especially given the historical realities of
how those patriarchal religions have conducted themselves in the past. That's one reason why
I find Marianne Williamson's presence in the debates to be refreshing. At least she's
bringing spirituality to the conversation where it's usually absent except for cliches.
I also think that James Fowler's stages of faith analysis is useful for understanding the
impact of one's "faith" and political views. His argument is that everyone lives by "faith,"
which he defines as a worldview through which we encounter and interpret life and its
experiences. The critical difference is not the content of the "faith" but the maturity level
of the individual's faith development. My recent explorations of the thought of Gary Snyder,
a counterculture, Peyote using Buddhist/animist, and Wendell Berry, a Kentucky
born-and-raised Protestant, reveals that the contents of "faith" of each is very different --
they argue about it frequently -- but their way of interacting with the world and their
fellow human beings is essentially the same because they both have a high level of spiritual
maturity. In Fowler's system, both are at top of the pyramid.
The divisive encounters we have with others about spiritual matters are often more a
result of differing levels of spiritual maturity than the content of the faith. The
close-minded Fundamentalist reflexively citing Bible verses rather than truly engaging in
dialog is someone who has not moved beyond the level of faith maturity achieved upon junior
high confirmation training in a tradition. The sort of person who runs through an Eschaton
thread repeating "THERE IS NO GOD!!!!!" over and over again has moved beyond the
indoctrinated stage but has not attained the ability to re-integrate any spiritual aspects
into what amounts to a barren, incomplete "faith" typical of the college freshman who throws
aside his religious training because he's seen through the difficulties in the simplistic
religion he was taught in Sunday School or confirmation class.
This seems like a good prompt to revisit the the Pelagians, from around 400 AD, one of whom
wrote in the marvellous essay On Riches :
Get rid of the rich man, and you will not be able to find a poor one. Let no man have more
than he really needs, and everyone will have as much as they need, since the few who are rich
are the reason for the many who are poor. (p. 194)
Michael Hudson has advice for you old chap, if you have time to read his " .. and forgive
them their debts." It turns out that the Catholics and Protestants of all flavors overlook an
important part of the Christian message about debt jubilees. Overturning the money tables of
the Rabbi-approved bankers in the temple was in pursuit of a fairer economic system such as had
been common in the Bronze Age.
Hudson reveals the precedent cause of the collapse of first Athens, then Rome, then
Constantinople and now us is the oligarchy of each civilisation favoring creditors and writing
laws that advantage them and punish / enslave debtors. The result is the accumulation of global
wealth on a small class of people with the rest of the population in poverty and careless of
the country in which they live.
Its a great pleasure to see Mr Hudson is reading this NC article. Good luck to him. Any
errors in this note are mine.
This seems very different from "For ye have the poor always with you" (Matt 26:11, Mark
14:7, John 12:8). lambert
This is not to excuse poverty but as an indictment of that generation since:
However, there will be no poor among you , since the Lord will surely bless you in
the land which the Lord your God is giving you as an inheritance to possess, if only you
listen obediently to the voice of the Lord your God, to observe carefully all this commandment
which I am commanding you today. Deuteronomy 15:4-5 [New American Standard Bible (NASB)
[bold added]
However obedience included the following:
"You shall not charge interest to your countrymen: interest on money, food, or
anything that may be loaned at interest. You may charge interest to a foreigner, but to your
countrymen you shall not charge interest, so that the Lord your God may bless you in all that
you undertake in the land which you are about to enter to possess. Deuteronomy 23:19-20 New
American Standard Bible (NASB) [bold added]
Draw your own conclusion then as to whether government privileges for a usury cartel are
Biblical.
James could have been the first century PPC leader. Oddly missing from most sermons is this
passage (instead we worship the rich for their "ingenuity" and "work ethic"):
James 5:1-5 (NIV)
Now listen, you rich people, weep and wail because of the misery that is coming on you.
Your wealth has rotted, and moths have eaten your clothes.
Your gold and silver are corroded. Their corrosion will testify against you and eat your
flesh like fire. You have hoarded wealth in the last days.
Look! The wages you failed to pay the workers who mowed your fields are crying out against
you. The cries of the harvesters have reached the ears of the Lord Almighty.
You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the
day of slaughter.
"... Jeffrey Epstein's story is similarly abusive. The convicted sex offender prostituted dozens of underage girls and should have spent the rest of his life in jail. Again this is no 'one-off' abuse of an underage child, he was a serial sex predator. ..."
"... According to Joseph Recarey, the lead Palm Beach detective on the case, Epstein was essentially operating a "sexual pyramid scheme." ..."
"... The Vox writes that the girls and women who reported abuse by Epstein, meanwhile, were markedly powerless. Most of them "came from disadvantaged families, single-parent homes or foster care, Many of the girls were one step away from homelessness." ..."
Jeffrey Epstein's story is similarly abusive. The convicted sex offender prostituted dozens of underage girls and should have
spent the rest of his life in jail. Again this is no 'one-off'
abuse of an underage child, he was a serial sex predator.
According to Joseph Recarey, the lead Palm Beach detective on the case, Epstein was essentially operating a "sexual pyramid scheme."
The Vox
writes that the girls and women who reported abuse by Epstein, meanwhile, were markedly powerless. Most of them "came from disadvantaged
families, single-parent homes or foster care, Many of the girls were one step away from homelessness."
In November 2017 the genius comedian Larry David was criticized in the
Jewish press for admitting on Saturday Night Live that many of those
accused of sexual harassment in Hollywood are Jewish.
... Alan Dershowitz , who was a member
of Epstein's legal team and was later accused by one of the victims' lawyers of himself participating in the
sex trafficking ring .
IMHO, 'calling it off because casualties' was to generate a bragging point to use in his
campaign 'look what a nice guy I am for not wanting to hurt people'. There have been a couple
of other things that have happened that look like set pieces to give him crowing points.
"Better to have said nothing"
Totally agree but we will need to wait and see what he says on the stump. If a war starts the
disciples may not think much of rising oil prices, shortages and falling stock markets.
There"s allways a chance that he finally comprehended some of Putin`s wisdom that conflict in
MENA would be a catastrophic disaster for all. There is always a sliver of hope he has the
Neocons close on purpose to limit some of the chaos they create.
I'd say the neocons are convenient – Trump likes being on the brink of war to keep
everyone scared. Fear is his ally. But actual war would be a negative, so he's on a
tightrope.
A very risky strategy, except that I think the rest of the world understands it, and it's
convenient for some other countries, who are using the same strategy to maintain domestic
power.
It is interesting that Trump destiny now depends on geopolitical events he can't control namely actions of Iran and China.
Trump foreign policy appears to be driven by a combination of resentment and arrogance -- not a good combination for survival of
Trump and/or mankind
Was with Iran might result in high oil prices would kill the already anemic global growth and cause a recession (I guess
the volatility in oil prices will go through the roof at that point), Iran can destabilize the global economy by destroying most
of the oil production infrastructure around the gulf.
While Lyndon Johnson had chosen not running for reelection in 1968 because anti-war sentiment was high, G W Bush who was
reelected and the USA have now contractor army and casualties without draft does not matter much.
Notable quotes:
"... More likely they attack Saudi Arabia directly. Same impact, more justifiable if not outright popular. No one likes Prince Bone Saw. ..."
"... Iran could take those 10 million barrels a day away in 15 minutes. ..."
China will play a large roll in whether trump get re-elected.
If they decide they prefer his dysfunctional governance to his opponent, then they will engage
in a trade deal that will allow to trump to declare victory. It will likely be a very
superficial victory.
If they decide they would prefer to engage with a different administration, they will likely
refrain from a trade deal until after the election.
Have you asked yourself why Putin preferred trump? The answer is not pretty (for trump, or the
USA).
This is probably an absurd point of view. But in my opinion, it might be in Iran's interest
to drag the U.S into war, probably as indirectly as possible. That way they might
significantly reduce the chance of Trump being re-elected. (Obviously lives will be
sacrificed in this scenario)
The question is if it would work and would a Democrat president stop the war and go into the
same JCPOA deal again. Who knows. Very unpredictable.
Well, Mike, as absurd IMO is that Iran would risk self-destruction to get rid of Trump. He's
certainly a PITA for them, but closing the Strait of Hormuz to crash the global economy and
to blame it on Trump wouldn't work: Trump could blame it all on Iran while keeping on cooking
a controlled conflict with them, showing the world that the US doesn't depend on oil from any
other continent.
This would be a very difficult situation for a Democrat to step in and to
promise a better solution. The US would be relatively well off compared to Asia and Europe
and even could emerge out of such a constellation relatively more powerful.
But it could also
end up in a terrible mess. As you wrote: Who knows. Very unpredictable.
"... The result has been a disaster for consumers, the environment and the condition of the infrastructure which was sold off as a result of the privatization. Wikipedia provides a helpful list of the past history of awful, depressing headlines the company has generated: ..."
Of all the inhabitants of the Little Shop of Horrors that is neoliberalism, surely the most
gruesome cohort must be privatization of monopoly public services. And then within this
best-worst category, privatization of potable water and wastewater treatment utilities can't be
anything other than an outright winner of this ugly competition.
Where I live in southern England, the Thatcher administration – who else? –
privatized the previously state-owned company which has a monopoly, as all water supply and
sewage treatment inevitably requires, on providing potable water and treating wastewater which
flows into the sewer system and eventually, via treatment plants, back into the
watercourses.
The result has been a disaster for consumers, the environment and the condition of the
infrastructure which was sold off as a result of the privatization. Wikipedia provides a helpful
list of the past history of awful, depressing headlines the company has generated:
In 2007 Southern Water was fined £20.3 million for 'deliberate misreporting' and
failing to meet guaranteed standards of service to customers. Southern Water Chief Executive
Les Dawson said: "Today's announcement draws a line under a shameful period in the company's
history".
In 2011 Southern Water Ltd was fined £25,000 when sewage flooded into Southampton
water.
The company was ordered to pay £10,000 in fines and costs after sewage seeped into a
stream at Beltinge in Kent.
A leak of sewage from Southern Water's plant at Hurstpierpoint pumping station, West
Sussex, lead to fines and costs of £7,200 in 2011.
Southern Water was fined £50,000 in April 2011 for two offences relating to
unscreened discharges into Langstone Harbour, Hampshire, between November 2009 and April
2010.
In June 2010 Southern Water was fined £3,000 after it admitted polluting 2 km of a
Sussex stream with raw sewage, killing up to a hundred brown trout and devastating the fish
population for the second time in five years. Crawley Magistrates' Court heard that the
Environment Agency received calls from members of the public after dead fish were seen in the
Sunnyside Stream in East Grinstead on 30 August 2009.
In November 2014 Southern Water were fined £500,000 and agreed to pay costs of
£19,224 at Canterbury Crown Court after an Environment Agency investigation found that
untreated sewage was discharged into the Swalecliffe Brook, polluting a 1.2 kilometre stretch
of the watercourse and killing local wildlife. (www.gov.uk/government/news)
In December 2016 Southern Water was fined a record £2,000,000 for flooding beaches
in Kent with raw sewage, leaving them closed to the public for nine days. The Environment
Agency called the event "catastrophic", while the judge at Maidstone crown court said that
Southern Water's repeat offending was "wholly unacceptable " . The company apologised
unreservedly, as it did when fined £200,000 in 2013 for similar offences. Due to health
concerns, Thanet district council was forced to close beaches for nine consecutive days,
including the Queen's diamond jubilee bank holiday weekend. (The Guardian, 19 December
2016)
You would have thought, perhaps in hope rather than realism, that after this deluge of crap
(literally), Southern Water (and their investors) might have, if you'll forgive the pun,
wondered if it wasn't time to clean up their act. If so, you'd be, uncharacteristically for
Naked Capitalism readers, rather naive. Southern Water has made their previous civil
violations look like a spot of mustard on a necktie.
Southern Water was fined by the regulators here £126M on June 25th, which sounds a lot
but is in reality in slap on the wrists territory in view of their latest misconduct.
Before delving into the details of that, to provide some context, the utility is the usual
PE-orchestrated financial-engineering asset-sweating systematical reduction of a former public
service to a hollowed out husk.
Southern Water is owned by a consortium, which came together
Clive again, momentarily interrupting the flow, like a blocked sewer. The use of language
there is almost an art form. "came together". Did they all hook up on Tinder or something? Not
a bit of it. The "consortium" was a Private Equity instigated lash up of yield-hungry investors
chasing, like everyone else these days, above-average rates of return. Why didn't they simply
buy chunks of the publicly-traded equity tranches of the company to give themselves exposure to
this particular asset class (public utilities)? Because this wouldn't have given them
sufficient leverage and control over the institution to do their financial raping and
pillaging. Back, reluctantly, to Southern Water
in 2007 solely for this purpose.
The consortium members are shareholders in Greensands Holdings Limited, the top holding
company. [ ]
The Greensands consortium members comprise a mixture of infrastructure investment
funds, pension funds and private equity. The infrastructure funds are managed by JP Morgan
Asset Management, UBS Asset Management and Hermes Investment Management.
The pension funds are represented by JP Morgan Asset Management, UBS Asset Management,
Hermes Investment Management and Whitehelm Capital or are self-managed. Cheung Kong
Infrastructure and The Li Ka Shing Foundation are direct investors.
What have these fine upstanding custodians of our water supply been up to, then? Lying,
cheating, bullying and polluting. Ofwat, the UK water industry regulator, started peering more
closely at Southern Water in 2018. They
didn't like the look of what they saw .
A board which was asleep at the wheel:
Water resources management plan and market information
What we found
Overall, we had serious concerns in key areas of this assessment such as options
costing, Board involvement, assurance and leakage reduction presentation. The draft water
resources management plan option costs were not presented clearly and a limited description
of assurance was provided for both the plan and market information table. The late provision
of the market information and the time taken to update option cost information did not
provide confidence in the company's management of this data. The leakage reduction target, a
key plan metric, was not consistently presented in the plan and there was no evidence of
Board involvement or sign off.
Our assessment: serious concerns
A company that deliberately obfuscated the regulators:
What we found
[ ] We currently have four open cases – an enforcement case, a sewer requisition
case and two requests to appoint an arbitrator.
[ ]
In terms of the enforcement case, we do not consider that the company has met our
expectations and we have serious concerns. This is based on Southern Water not responding
fully to our requests for information (for example, by providing documents with missing pages
and/or text), not responding in a timely manner and providing relevant information that was
unclear. This has affected our ability to rely on the information provided and has required
us to take steps to seek further clarifications and grant extensions to previous deadlines
for responses, impacting our ability to progress the investigation as quickly and efficiently
as we would have liked.
Our assessment: serious concerns
These failings led the regulator to conduct a much wider-reaching inquiry. The full
regulatory report has to be read in its entirety to convey the awfulness that went on. But
edited highlights, or maybe that should be low-lights, were:
・Falsification of regulatory reporting for effluent discharge quality to avoid
fines:
In summary, as a consequence of now restating past WwTW performance data, we have
calculated that Southern Water has avoided price review penalties in past years amounting to
a total of £75 million (in 2017-18 prices). This has arisen as a direct consequence of
the practices in place within the company to implement ANFs at its WwTW (Clive:
Waste-water Treatment Works) over 2010 to 2017. The total amount of avoided price review
penalties reflects the restated figures that Southern Water has now provided about the
numbers of WwTW that were potentially non-compliant with permit conditions relating to final
effluent quality.
・Deliberate attempts at evasion -- government agencies monitor water treatment plants
but the operator predicted when the inspections and sampling was due and intentionally halted
to flow from treatment plants ("Artificial No Flow or ANF" events) so there was no output to
sample:
The Sampling Compliance Report provides evidence (mostly in the form of email extracts
between employees of Southern Water between 2010 and 2017), of staff anticipating the timing
of planned OSM (Clive: On Site Monitoring) samples across numerous WwTW, in order to ensure
that no effluent was available for sampling purposes. This deliberate practice (which took
place through a number of different methods) of creating an artificial "no flow" event
(described as an "Artificial No Flow or ANF") meant that a sample under the OSM regime could
not be taken thus ensuring that the sample (and as a consequence the relevant WwTW) would be
deemed as being compliant with permit conditions. As a result of this manipulation, a false
picture of Southern Water's WwTW performance (and how this was being achieved) was provided
internally within the company, to the Environment Agency (Clive: the UK's equivalent of
the EPA, similarly gutted, but that's another story for another time ) and to
Ofwat
・They even took waste water discharges away by tanker so nothing could be measured at
the outfall pipes.
Staff then used the knowledge about sample dates to put in place ANFs. This included,
for example, through the improper use of tankering (i.e. by tankering wastewater from one
WwTW to another to cause an ANF). Another method included 'recirculating' effluent within a
WwTW again to ensure there was no final effluent available for sampling.
・Senior management hassled and pressured employees to obfuscate performance
measures.
The report also highlighted occasions where employees felt pressured by senior managers
to create ANFs.
・The whistleblowing policy for employees actually started with a big red frightener
threatening dismissal for using the wrongdoing reporting mechanisms:
Southern Water has acknowledged in its Action Plan that there were deficiencies in its
organisational culture which prevented employees from being comfortable with speaking out
about inappropriate or non-compliant behaviours. This included having in place ineffective
whistleblowing processes which resulted in no staff coming forward to report their concerns
despite certain staff being obviously uncomfortable about the implementation of ANFs and
feeling pressured to act in an improper manner (as evidenced by emails we have seen that are
referenced in the Sampling Compliance Report).
The whistleblower policy Southern Water had in place at the time included on its first
page and highlighted in bold the following text: "Should any investigation conclude that the
disclosure was designed to discredit another individual or group, prove to be malicious or
misleading then that worker concerned would become the subject of the Disciplinary Procedure
or even action from the aggrieved individual."
By pretending that waste water being discharged into watercourses was of a higher quality
than it was, the investors pocketed profits that should have gone on infrastructure
improvements and staffing to enable treatment plants to be safely operated and checked
effectively.
Criminal investigations are pending .
But we've seen this movie many times before. Protected by the best corporate lawyers money
(public consumers' money, that is) can buy, a defence shield of auditors, layers of management
on whom the blame can be pinned and a complex legal argument which has to be constructed to a
high evidence threshold allowing jurors to be thrown off the scent to a degree that a
reasonable doubt emerges, we shouldn't hold our breaths.
So we're left with the penalties imposed. Unfortunately there's less here than meets the eye
initially from the headline figure. From the regulatory report:
This is a notice of Ofwat's intention to issue Southern Water with a financial penalty
amounting to £37.7 million reduced exceptionally to £3 million for significant
breaches of its licence conditions and its statutory duties. This is on the basis that
Southern Water has undertaken to pay customers about £123 million over the next five
years, some of which is a payment of price review underperformance penalties the company
avoided paying in the period 2010 to 2017 and some of which is a payment to customers for the
failures set out in this notice, paid in lieu of a penalty.
This means the regulator reduced the up-front cost (which would have come out of the profits
for fiscal 2019-20 in one hit) for an arrangement which allows Southern Water eee-zee payment
terms and to spread the cost over five years through a customer rebate initiative. And some of
the rebate is itself merely penalties which would have been levied if the wrongdoing --
environmental pollution and missed targets for waste processing quality -- had been identified
at the time. They are trying to bribe me with my own money.
The whole sorry saga shows how the entire publicly-overseen but privately-owned regulated
utility model is completely broken. The system is a sitting-duck for gaming and, at best, the
issues are uncovered well after the fact. If ever.
There is, however, a final failsafe currently still in place. Water quality standards in the
EU are mandated by EU Directive with redress available through the Court of Justice of the
European Union (CJEU). A Member State government can be fined and ordered to implement better
oversight and governance of the utilities. Thus, any temptation which the U.K. government might
succumb to, to "fix" problems like those entrenched in Southern Water by slackening off the
potable and wastewater standards, are prohibited by the threat of EU / CJEU referral.
The U.K. government has promised that, post-Brexit, environmental protections will be
"equivalent or better than" those specified in the EU Directive. I -- and similarly cynical
readers -- might well harbour a few doubts about that.
Mmm. I can't help but think that non-government ownership is not (necessariliy) the
problem, but PE (an industry that has made a lot of people rich in the last 20y by pricing
the same asset off ever-lower discount rates) certainly is.
Government ownership often results in unaccountable, faceless monopolies (I'm old enough to
remember British Rail, which felt that it was an entirely acceptable plan to raise fares to
push travellers off rail and onto the roads when the trains got too full) and the "taking
private" of steady-state utility businesses, with cashflows that were "ripe" for
securitisation and other smoke and mirrors moves, pushed accountability back into the dark
ages.
There have been a number of cases of assets like this bought by JVs of PE and public pension
plans. I wonder, were the latter just solicited to make the actions of the former look more
respectable ?
The government certainly doesn't always do a bang up job with everything it controls, but
when the government runs things, citizens at least theoretically have some recourse.
When a private corporation runs it, citizens can, literally in the case above, eat
s**t.
There is, however, a final failsafe currently still in place. Water quality standards in
the EU are mandated by EU Directive with redress available through the Court of Justice of
the European Union (CJEU). A Member State government can be fined and ordered to implement
better oversight and governance of the utilities. Thus, any temptation which the U.K.
government might succumb to, to "fix" problems like those entrenched in Southern Water by
slackening off the potable and wastewater standards, are prohibited by the threat of EU /
CJEU referral.
I do believe that the combination of Water Quality Framework
Directives , along with the Habitats
and Birds
Directives , are a major 'hidden' driver behind the people behind Brexit. These
Directives are written in such a way as to provide almost no wiggle room for national
regulators to escape hitting hard quantitative targets for water and habitat improvements.
The Fracking industry is a very significant example – the Water Frame Work Directive
also sets standards for groundwater, and its exceptionally difficult for the industry to meet
the standards of proof that they will not degrade the quality of these water bodies. The ECJ
is dominated by judges from northern European jurisdictions, which tend to take a far more
'literal' approach to Directives and their associated national laws and regulations. They
provide zero room to massage failures to hit targets.
Escaping those Directives will be worth billions to those two industries at the very
least. Well worth shoving a bit of money to the various campaigns. There are plenty of other
industries that likewise feel they will benefit from what will be an upcoming bonfire of the
Regulations.
I think too that the wriggle-room on water quality -- wastewater especially, potable is
generally not something that anyone would risk meddling with; well, unless you live in Flint,
Michigan, anyway -- has not escaped the notice of or despicable elites here.
The temptation by government to play along, grant "temporary" "exemptions" in response to
industry whining, sorry, lobbying, will prove difficult to resist, more than ever when the
U.K. government will be in a position to know that its word is final (it can simply make new
laws if it decides it doesn't like the old ones).
Will the U.K. as a society end up doing the right thing, or simply backsliding and
acquiescence because it's just easier? At least in the short term. I wish I had a definitive
answer to that one. Ask me again when we know for sure, although I suspect you'll have to dig
me up and open the coffin first.
International racketeering. First they hide the real "persons of interest" within a
consortium of consortiums of funds of funds – much like some special purpose "vehicle"
for wealthy investors – and then they lobby governments bye gaslighting them, saying
'We can do this economically and efficiently' and you are clearly running our of money, so
sell this water district to us and we'll get it back on track.' Right. Makes me wonder if
Bojo and his cronies are heavy into waste management. Pun intended.
I can only see a change when laws are adjusted so that executives can face actual jail
time. Spending a few months, if not a few years, in HMP Berwyn or HMP Bronzefield would
definitely not look good on either a resume or on LinkedIn so would concentrate their minds
wonderfully about the hazards of breaking laws. Till then, any penalties are merely
costs-of-doing -business and so are not a great risk.
Prison time for top executives and board members. Real cash on the nail fines, to be paid
in lump sums. Right to recover bonuses and distributions made to shareholders. Forfeiture of
company ownership to the Crown. For starters.
Limited liability is a privilege not a right and if the terms for limited liability isn't
fulfilled then the limited liability can, in some countries under certain conditions, become
unlimited liability. An example, trading while insolvent in Sweden (in Swedish, as the laws
are in Swedish and only concerns Sweden then it is unlikely to be found in many other
languages):
How do you put people who sat around a conference table in a corporation committee meeting
in jail? The entire process is designed and perfected to evade responsibility. Anytime I see something like this I class it as a complete fluke:
While I was reading this I was feeling increasingly obfuscated by the similarities I find
in the publicly-owned privately-managed sewage and waste plants in Madrid. I can easily
understand the frustration of the regulator with managers opacity. Imagine how bored must I
be sometimes, that I annually take a look at the reports that the managers of those plants
produce. These are rubbish reports. You have to spend a lot of time, first trying to
understand the real meaning of some concepts, second to gather the truly relevant variables
in order to assess the real performance of the plants.
I have to say that the situation in Spain must be worse than in the UK because regulators,
if they exist, never come up with auditing results, not to mention noticing misconducts. We
are miles away from being able to even fine those misconducts of which only a few have been
brougth to the public by NGOs.
Interestingly the former progressive Major of Madrid Carmena, now replaced with
conservatives in alliance with xenophobe populists, ordered the first audit (i believe it is
the first) of the waste treatment plant, a huge facility called Valdemingómez. I guess
that the current Major, whose name I don't want to recall, will hide audit results to the
public given that his party set years ago the current model for waste management.
Good waste management/recycling is going to be the industry of the future. Instead of
being publicly contrite about their excessive wealth, the Billionaires should all focus their
resources on fixing what will otherwise be an overwhelming mess. We will all be, as the
military says, "Overtaken by events" someday soon unless we get on top of this. Pollution,
garbage and sewage are the byproducts of our irresponsibility. Coupled with overpopulation.
Not good. Andrew Carnegie donated his money away on good things. Every little town in America
was a beneficiary, with a "Carnegie Library" among other things. But it made us all laugh out
loud when San Francisco named its new water treatment facility the "George W. Bush Sewage and
Water Treatment Facility" (or stg. like that). Unfortunately, the joke is really on us unless
we start demanding improvements and responsibility. The problem is already almost too big to
fix, Houston.
I knew an English guy circa 1999 who was then 35 years old and a hard Thatcherite in his
opinions (didn't do any actual political activism, of course) because the previous Labour
governments had ruined everything to the point that the country had to go to the IMF. He was
no fan of the NHS, either. NHS-reimbursed dentists had done a ton of unnecessary fillings on
him and his young friends as children. Worse, NHS doctors had misdiagnosed a life-threatening
illness for years until American emergency room doctors did a bunch of expensive tests and
cured him.
I wonder what he would have to say 20 years later now that the faults of privatization on
both sides of the Atlantic have been laid bare?
I don't think there is any alternative to constant watchdogging and activism by the
general public.
Sewage treatment is part of health care. Places without adequate sewage treatment suffer rampant diseases in potable water, fish,
animals and people exposed to it. Sewage treatment facilities are the only example of publicly run health care in the
U.S.
Each homeowner, and renter, pays a certain amount for it and it is handled to scientific
standards without a profit motive.
"... The control of the energy corridors is of capital importance. By accusing Iran of attempting to " interrupt the flow of oil through the Straights of Hormuz ", Mike Pompeo announced that " the United States will defend freedom of navigation ". In other words, he has announced that the United States want to gain military control of this key area for energy supplies, including for Europe, by preventing above all the transit of Iranian oil (to which Italy and other European countries cannot in any case enjoy free access because of the US embargo). ..."
"... Natural gas might also have arrived directly in Italy from Russia, and from there be distributed to other European countries with notable economical advantages, via the South Stream route through the Black Sea. But the pipeline, already in an advanced stage of construction, was blocked in 2014 by the pressure of the United States and European Union itself, with heavy prejudice for Italy. ..."
While the United States prepared a new escalation of tension in the Middle East by accusing
Iran of attacking petrol tankers in the Gulf of Oman, Italian vice-Prime Minister Matteo
Salvini met with one of the artisans of this strategy in Washington, Secretary of State Mike
Pompeo, assuring him that " Italy wants to regain its place as the major partner on the
European continent of the greatest Western democracy ". Thereby he has allied Italy with the
operation launched by Washington.
The " Gulf of Oman affair " , a casus belli against Iran, is a carbon copy of the " Gulf of
Tonkin affair " of 4 August 1964, itself used as a casus belli to bomb North Vietnam, which was
accused of having attacked a US torpedo boat (an accusation which was later proved to be
false).
Today, a video released by Washington shows the crew of an alleged Iranian patrol boat
removing an unexploded mine from the hull of a petrol tanker in order to conceal its origin
(because the mine would allegedly have borne the inscription " Made in Iran ").
With this " proof " - a veritable insult to our intelligence - Washington is attempting to
camouflage the goal of the operation. It is part of the strategy aimed at controlling the world
reserves of oil and natural gas and their energy corridors [ 1 ]. It is no coincidence if Iran and
Iraq are in US crosshairs. Their total oil reserves are greater than those of Saudi Arabia, and
five times greater than those of the United States. Iranian reserves of natural gas are
approximately 2.5 times those of the USA. Venezuela finds itself targeted by the USA for the
same reason, since it is the country which owns the greatest oil reserves in the world.
The control of the energy corridors is of capital importance. By accusing Iran of attempting
to " interrupt the flow of oil through the Straights of Hormuz ", Mike Pompeo announced that "
the United States will defend freedom of navigation ". In other words, he has announced that
the United States want to gain military control of this key area for energy supplies, including
for Europe, by preventing above all the transit of Iranian oil (to which Italy and other
European countries cannot in any case enjoy free access because of the US embargo).
Low-cost Iranian natural gas might also have reached Europe by way of a pipeline crossing
Iraq and Syria. But the project, launched in 2011, was destroyed by the USA/NATO operation to
demolish the Syrian state.
Natural gas might also have arrived directly in Italy from Russia, and from there be
distributed to other European countries with notable economical advantages, via the South
Stream route through the Black Sea. But the pipeline, already in an advanced stage of
construction, was blocked in 2014 by the pressure of the United States and European Union
itself, with heavy prejudice for Italy.
In fact it was the reproduction of North Stream which continued, making Germany the centre
of triage for Russian gas.. Then, on the basis of the " USA/EU strategic cooperation in the
energy field " agreement stipulated in July 2018, US exports of liquefied natural gas (LNG) to
the EU tripled. The triage centre was in Poland, from which was distributed the " Freedom Gas "
which also arrived in Ukraine.
Washington's objective is strategic – to hurt Russia by replacing Russian gas in
Europe with US gas. But we have no guarantees, neither on the price, nor on the time-scale for
US gas extracted from the bituminous shale by the technique known as fracking (hydraulic
fracturation), which is disastrous for the environment.
So what does Matteo Salvini have to say about all that? When he arrived in the " greatest
democracy in the Western world ", he proudly declared - " I am part of a government which in
Europe is no longer satisfied with breadcrumbs ".
"... The Democratic Party, thanks largely to the Clintons and their DLC nonsense, has certainly moved to the right. So far right that I haven't been able to call it the Democratic Party. ..."
"... Every Democrat should sign on to FDR's 1944 Economic Bill of Rights speech. It is hardly radical, but rather the foundation of the modern Democratic Party, or at least was before being abrogated by the "new Democrats." Any Dem not supporting it is at best one of the "Republican-lights" who led the Dem party into the wilderness. It would also behoove the party to resurrect FDR's Veep Henry Wallace's NY Times articles about the nature of big businesses and fascism, also from '44. Now that was a party of the people. 7 Replies ..."
In its most recent analysis, Gallup
found that from 1994 to 2018, the percentage of all Democrats who call themselves liberal more
than doubled from 25 percent to 51 percent.
Over the same period, the percentage of Democratic moderates and conservatives fell
steadily, with the share of moderates dropping from 48 to 34 percent, and of conservatives
dropping from 25 to 13 percent. These trends began to accelerate during the administration of
George W. Bush and have continued unabated during the Obama and Trump presidencies.
... ... ...
The anti-establishment faction contributed significantly to the large turnout increases in
Democratic primaries last year.
Pew found that from 2014 to 2018, turnout in House primaries rose from 13.7 to 19.6 percent
of all registered Democrats, in Senate primaries from 16.6 to 22.2 percent and in governor
primaries from 17.1 to 24.5 percent.
... ... ...
The extensive support among prospective Democratic presidential candidates for
Medicare for All , government-guaranteed jobs and a higher minimum wage reflects the
widespread desire in the electorate for greater
protection from the vicissitudes of market capitalism -- in response to "increasingly
incomplete risk protection in an era of dramatic social change," as the political scientist
Jacob Hacker put it in "
Privatizing Risk without Privatizing the Welfare State: The Hidden Politics of Social Policy
Retrenchment in the United States ." Support for such protections is showing signs of
becoming a litmus test for candidates running in the 2020 Democratic presidential
primaries.
... ... ...
Sawhill looks at the ideological shifts in the Democratic electorate less from a historical
perspective and more as a response to contemporary economic and social dislocation. Among both
conservatives and liberals, Sawhill argued, there is "an intellectual awakening about the flaws
of modern capitalism" -- a recognition of the failings of "neoliberalism, the idea that a
market economy with a few light guardrails is the best way to organize a society." This
intellectual climate may result in greater receptivity among voters to more radical
proposals.
These "big, bold leftist ideas" pose a strategic problem for liberals and the Democratic
Party," (sigh). Here we go again. I am an older guy (Caucasian). I attended Texas A&M
University from 1978 to 1982. My tuition payments during that entire time was $4 per credit
hour. Same for every Texas resident during that time. Roughly $128 per year. Had Texas
A&M not offered education at this modest entry point financially, I would still be
working in the Holiday Inn kitchen washing dishes. Like I was in high school. So, I don't
understand why older guys who went to school on the cheap, like me, and probably like Mr.
Edsall, are writing articles about "radical" proposals like "free" or at least "affordable"
education for Americans. We could achieve this very easily if America refocused on domestic
growth and health and pulled itself out of its continuous wars. America has spent $6 Trillion
dollars on war since 2001. For what? Nothing. Imagine how much college tuition we could have
paid instead. Imagine how that would change America. What is radical is killing people of
color in other countries for no goal and no reason. Let's refocus on domestic USA issues that
are important. Like how to get folks educated so they/we can participate in the US economy.
Mr. Edsall, what did you pay to
go to school per year? Was that "radically" cheap? For me, it was not radical to pay $128 per year. It was a blessing.
Bruce Rozenblit Kansas City, MO
Jan. 23 Times Pick
To the conservative, liberal means socialist. Unfortunately, they don't know what socialism
is. They think socialism is doing nothing and getting paid for it, a freeloader society.
Socialism is government interference in the free market, interference in production.
Ethanol
is socialism. Oil and gas subsidies are socialism. Agricultural price supports are socialism.
Tax breaks and subsidies are socialism. The defence industry is socialism. All of these
socialist policies greatly benefit big business. What liberals want is socialism of a similar
nature that benefits people. This would include healthcare, education, public transportation,
retirement, and childcare. Currently, people work their tails off to generate the profits
that pay for corporate socialism and get next to nothing in return. Daycare costs as much as
many jobs pay.
Kids graduate from college $50,000 in debt. Get sick and immediately go
bankrupt. They have to work past 70. Pursuing these policies is not some far out leftist
agenda. They are the norm in most industrialized nations.
It's hard to live free or die if
you don't have anything to eat. It's easy to be a libertarian if you make a million bucks a
year. Liberals are not advocating getting paid for doing nothing. They want people to have
something to do and get paid for it. That is the message that should be pushed. Sounds pretty
American to me. 27 Replies
This old white (liberal) man regrets that I was born too late for the FDR New Deal era and
too early to be part of this younger generation taking us back to our roots. I lived in
America when we had a strong middle class and I have lived through the Republican
deconstruction of the middle class, I much preferred the former.
Economic Security and FDR's second bill of rights is a very
good place for this new generation to pick up the baton and start running. 4 Replies
Are these really moves to the left, or only in comparison to the lurch further right by the republicans. What is wrong with
affordable education, health care, maternal and paternal leave, and a host of other programs that benefit all people? Why
shouldn't we have more progressive tax rates? These are not radical ideas. 6 Replies
As a senior, who has been a healthcare provider for decades, I hope that people will not be
afraid if they get sick, that people will not fear going bankrupt if they get sick, that they
do not have to fear they will die needlessly if they get sick, because they did not have
proper access to haeathcare treatment. If a 29 year old woman from Queens, Alexandria
Ocasio-Cortez, can fulfill my hopes and dreams, and alleviate these fears, just to get humane
healthcare - then I say "You Go Girl!" What a wonderful world that would be..... 9 Replies
Moving to the left??? I'm 64 years old. I started out on the left and haven't moved leftward
in all these years. I'm just as far left now as when I registered to vote as a Democrat when
I was 18. We called it being liberal and the Democratic Party reflected my beliefs.
The
Democratic Party, thanks largely to the Clintons and their DLC nonsense, has certainly moved
to the right. So far right that I haven't been able to call it the Democratic Party. So far
right that I have seriously considered changing my party affiliation. Right now, the only
think keeping me in the party is this influx of vibrant new faces. One thing that will make
me leave is any ascendancy of the corporate lapdog "New Democrat Coalition" attempting to
keep my party in thrall to the Republicans. No. The electorate has not shifted sharply
leftward. We've been here all along. Our party went down a wrong path. It had better get back
on track or become a footnote. 12 Replies
I work with young adults in a university setting. The university I work for used to be really
inexpensive. It is still relatively inexpensive and still a bargain. Most of the students
have student loans. They can not make enough money in the summer or during the term to pay
for tuition, fees, housing, and food. They need jobs that will pay enough to pay for those
loans. They also need portable health care. As the employer based health insurance gets
worse, that portable health care becomes a necessity so they can move to where the jobs are.
So if a livable wage and universal health care are far left ideas then so be it. I am a
leftist. 1 Reply
Every Democrat should sign on to FDR's 1944 Economic Bill of Rights speech. It is hardly
radical, but rather the foundation of the modern Democratic Party, or at least was before
being abrogated by the "new Democrats." Any Dem not supporting it is at best one of the
"Republican-lights" who led the Dem party into the wilderness. It would also behoove the
party to resurrect FDR's Veep Henry Wallace's NY Times articles about the nature of big
businesses and fascism, also from '44. Now that was a party of the people. 7 Replies
@Michael. Pell grants and cheap tuition allowed me to obtain a degree in aerospace
engineering in 1985. I'd like to think that that benefited our country, not radicalized it.
I don't think that's entirely accurate, and even if true, leaving students to
the predations of private lenders isn't the answer. Although I'm willing to entertain your
thesis, soaring tuition has also been the way to make up for the underfunding of state
universities by state legislatures.
At the same time, there's been an increase since the 70s
in de luxe facilities and bloated administrator salaries. When administrators make budget
cuts, it isn't for recreational facilities and their own salaries -- it's the classics and
history departments, and it's to faculty, with poorly paid part-time adjuncts teaching an
unconscionable share of courses. So universities have been exacerbating the same unequal
division between the people who actually do the work (faculty) and the people who allocate
salaries (administrators) -- so too as in the business world, as you say.
I have a friend who lives on the West Coast and is constantly posting on social media about
"white privilege" and how we all need to embrace far left policies to "even the playing
field" for minorities. I always bristle at this, not because I don't support these policies,
but because this person chooses to live in a city with actually very few minorities. She also
lives in a state that's thriving, with new jobs, new residents and skyrocketing real estate
values. I, by contrast, live in a state that's declining....steadily losing jobs, businesses
and residents....leaving many people feeling uneasy and afraid. I also live in a city with a
VERY high minority crime rate, which also makes people uneasy and afraid. Coastal liberals
like my friend will instantly consider anyone who mentions this a racist, and hypocritically
suggest that our (assumed) racism is what's driving our politics. But when I look around here
and see so many Trump supporters (myself NOT included), I don't see racists desperately
trying to retain their white privilege in a changing world. I see human beings living in a
time and place of great uncertainty and they're scared! If Dems fail to notice this, and fail
to create an inclusive message that addresses the fears of EVERYBODY in the working/middle
class, regardless of their skin color, they do so at their own peril. Especially in parts of
the country like mine that hold the key to regaining the WH. Preaching as my friend does is
exactly how to lose. 5 Replies
A majority of Americans, including independent voters and some Republicans favor Medicare for
all, a Green New Deal, and higher taxes on the rich. While Trump has polarized voters around
race, Ocasio-Cortez is polarizing around class -- the three-fourths of Americans working
paycheck to paycheck against the 1 percenters and their minions in both parties. Reading the
tea leaves of polls and current Democratic Party factions as Edsall does, is like obsessing
about Herbert Hoover's contradictory policies that worsened the Depression. If Ocasio-Cortez
becomes bolder and calls for raising the business taxes and closing tax incentives,
infrastructure expansion, and federal jobs guarantee, she'll transform the American political
debate from the racist wall meme to the redistribution of wealth and power America needs. 1
Reply
Labels such as 'liberal" fail to characterize the political agenda articulated by Bernie
Sanders. By style and substance, Sanders represented a departure from the hum-drum norm. Is
something wrong about aspiring to free college education in an era when student debt totals
$1.5 trilliion? His mantle falls to Alexandria Ocasio-Cortez and her followers. One hundred
years ago, American progressivism was spawned by Robert La Follette. As governor and senator
from Wisconsin, and as failed third party candidate for president, La Follette called for
laws to protect youth from horrendous labor practices. He called for laws to protect civil
rights. In time, many of La Follette's positions became mainstream. Will history repeated
itself? Maybe. The rise of "liberalism" in the Democratic Party is therapeutic, as evidenced
by youthful audiences who attended the Sander's rallies. Increasing voter turnout will take
back government from a minority that undermines the essence of a democratic system. A
Democratic counterbalance to the Republican "Freedom Caucus" may appear divisive to some. To
others, it offers a path to the future. 4 Replies
Ok, from the perspective of a rural white midwest retiree independent with post graduate
education, the issues weren't the democrats moving to the left, it was the Republican party
turning right (and they show no signs of stopping). Who is against an equal opportunity for
an equal quality education for everyone? My college costs years ago could be met with a
barely minimum wage job and low cost health insurance provided by the school and I could
graduate without debt even from graduate school. Seeing what years of Republican rule did to
our college and university systems with a raise in tuition almost every year while
legislative support declined every year, who is happy with that? Unions that used to provide
a majority of the apprenticeships in good jobs in the skilled were killed by a thousand tiny
cuts passed by Republicans over the years. The social safety net that used to be a hand up
became an ever diminishing hand out. What happened is those that had made it even to the
middle class pulled the ladder up behind them, taking away the self same advantages they had
in the past and denying future generations the opportunity. The young democrats and
independents coming along see this all too clearly. 1 Reply
These so-called liberal and progressive ideas aren't new. They work now in other countries
and have so for many, many years, but the rich keep screaming capitalism good, socialism bad
all the while slapping tariffs on products and subsidizing farmers who get to pretend that
this is somehow still a free market. It's fun to watch my neighbors do mental gymnastics to
justify why subsidizing soy bean farmers to offset the tariffs is a strong free market, but
that subsidizing solar panels and healthcare is socialism AKA the devil's work. All of this
underscores the reality that, much like geography, Americans are terrible with economics.
The tensions between progressive and moderate positions, liberal and conservative positions
in the Democratic Party and in independents, flow from and vary based on information on and
an understanding of the issues. What seems to one, at first glance, radically
progressive/liberal becomes more mainstream when one is better informed. Take just one issue,
Medicare for all, a progressive/liberal objective. At first glance people object based on two
main points: costs and nefarious socialism. How do you pay for Medicare for all? Will it add
to the debt? Will socialism replace our capitalist economy? People who have private medical
insurance pay thousands in premiums, deductibles, co-pays each year. The private insurance is
for profit, paying CEO's million dollar salaries and returns to stockholders. People paying
these private insurance premiums would pay less for Medicare and have more in their own
pockets. Medicare for all is no more nefariously socialistic than social security. Has social
security ended capitalism and made America a socialist country? I think not. Is social
security or Medicare adding to the national debt? Only if Congress will continue to play
their tribal political games. These programs are currently solvent but definitely need
tweaking to avoid near term shortfalls. A bipartisan commission could solve the long term
solvency issues. The more we know and understand about progressive/liberal ideas, the less
radical they become. The solution is education. 17 Replies
@Bruce Rozenblit Absolutely correct. According to the Bible of Saint Reagan, Socialism for
corporations and the rich: Good. Socialism for the poor and working class: bad.
@Michael - cheaper tuition starts with getting the Federal Govt out of the student loan
business, it's as simple as that. Virtually unlimited tuition dollars is what drove up
tuition rates. Higher Ed is a business, make no mistake.
@Bruce, have you ever considered creating a new "reality" network where the truth about
things could be told? You're quite good at articulating and defining how the world works,
without all the usual nonsense. I really appreciate your comments.
Can we please, please stop talking about AOC? Sure, she's young and energetic and is worthy
of note, but what has she accomplished? It's easy to go to a rooftop- or a twitter account-
and yell "health care and education for all!' But please, AOC, tell us how you are going to
not only pay for these ideas but actually get them through Congress and the Senate? It's just
noise, until then, and worse, you're creating a great target for the right that will NOT move
with you and certainly can label these ideas as leftist nutism- which would be fine, if we
weren't trying to get Trump out of office ASAP.. Dreams are great. Ideals are great. But
people who can get stuff actually done move the needle...less rhetoric, more actual plans
please.. 10 Replies
Its ok for a far right bigoted clown to be elected to the president and a tax cut crazy party
that wants to have a full scale assault against the environment and force more medical
related bankruptcies to be in charge? The safe candidate protected by 800 superdelegates in
2016 was met with a crushing defeat. The Democratic establishment wants a safe neo con
corporatist democrat. Fair taxation and redistribution of wealth is not some far out kooky
idea. The idea that the wealthiest Americans getaway with paying tax at 15%, if at all, is
ruinous to the country. Especially since there is an insane compulsion to spend outlandish
trillions on "national security". Universal health care would save the country billions of
dollars. Medicare controls costs much more effectively than private insurers. As with defense
the US spends billions more on health care than other countries and has worse medical
outcomes. Gentrification has opened fissures in the Democrats. The wealthy price out other
established communities. The problems of San Francisco and Seattle and other places with
gentrification need to be addressed before an open fissure develops in the party. 2 Replies
@Midwest Josh It's time for higher education to stop being a business. Likewise it's time to
stop electing leaders who are businessmen/women. 38 Replies
One could argue that many of these ideas are not that far left - rather it's a result of more
and more Americans realizing that WE are not the problem. Clean water and air, affordable
health care and affordable education are not that radical.
@Midwest Josh Hmmm, how old are you Midwest Josh? There were student loans back in the 1970s
when college cost me about $400 a year. Maybe something happened when that failed Hollywood
actor spouted slogans like "Government is not the solution, government is the problem" (and,
no, it was not taken out of context, he most definitely DID mean that government is the
problem - look it up) www.remember-to-breathe.org 38 Replies
You are studying this like it represents some kind of wave but in fact it is just a few
districts out of 435. These young women seem extraordinarily simply because the liberal media
says they are extraordinary. If the media attention on these new representatives were to
cease, no one except their families, their staff, and maybe Stephen Colbert would notice. 9
Replies
Finally, the left came out of its hibernation. We have spent the last decade or more either
sleeping or hiding, while at the same time, the Tea Party, the Freedom Caucus, Trump, and his
minions were taking over our government---It is such a breath of fresh air to finally listen
to airwaves filled with outrage over CEO's making millions of dollars an hour, of companies
that have become monopolies, of tax plans that bring back the middle class---it took us a
while, but we are back. 2 Replies
For so long (40+ years) the political spectrum has been pulled wildly and radically to the
right across so many issues. The Democratic party has for the most part ''triangulated''
their stances accordingly to essentially go along with republicans and corporate interests
for a bargain of even more tax/corporate giveaways to hold the line on social issues or
programs. It has now gotten to the point that continuous war has been waged for two (2)
decades and all the exorbitant costs that go along with that. There has been cut, after cut
after cut whereas some people and businesses are not paying any taxes at all now.
Infrastructure, social spending and education are all suffering because the cupboard is now
bare in the greatest and most richest country in the world. It just came out the other day
that ONLY (26) people have as much wealth as the bottom half of the entire world's
population. That amount of wealth in relation to dwindling resources of our planet and
crushing poverty for billions is abjectly obscene on so many levels. Coupled with all of the
above, is the continued erosion of human rights. (especially for women and dominion over
their own bodies) People are realizing that the founding fathers had a vision of a secular
and Progressive nation and are looking for answers and people that are going to give it to
them. They are realizing that the Democratic party is the only party that will stand up for
them and be consistent for all.
Democrats just don't like to win presidential elections. Go ahead. Move left. But remember,
you are not taking the rest of the country with you. As a NeverTrump Republican, I'll vote
for a moderate Democrat in 2020. No lefties. Sorry. Don't give the country a reason to give
Trump four more years. Win the electoral college vote instead of complaining about it. The
anti-Trump is a moderate. 5 Replies
"These "big, bold leftist ideas" pose a strategic problem." No they don't. The Real Problem
is the non-thinking non-Liberal 40% of Democrats and their simpatico Republicans who are
programmed to scream, "How will we pay for all that?" Don't they know all that money will
just be stolen? They were silent when that money was stolen by the 0.1% for the Tax Giveaway
(they're now working on tax giveaway 2.0) and by the military-industrial complex (to whom
Trump gave an extra $200,000,000,000 last year), various boondoggle theft-schemes like the
Wall, the popular forever Wars (17 years of Iraq/Afghanistan has cost $2,400,000,000,000 (or
7 times WW2)), and the Wall Street bailouts. Don't those so-called Democrats realize whose
money that was? First of all, it's our money. And second, our money "spent" on the People is
a highly positive investment with a positive ROI. Compare that to money thrown into the usual
money pits which has no return at all - except more terrorists for the military, more income
inequality for the Rich, and Average incomes of $422,000 for Wall Street. When the People's
money is continually stolen, how can anyone continue to believe that we're living in a
democracy?
Bruce, a succinct summary of your post is this: What we have now is socialism for the wealthy
and corporations (who, as SCOTUS has made clear, are people, too) and rugged individualism
for the rest of us. What we're asking for is nothing more than a level playing field for all.
And I hope that within my lifetime SCOTUS will have an epiphany and conclude that, gosh,
maybe corporations aren't people after all. We can only hope. 27 Replies
Edsall writes with his normal studious care, and makes some good points. Still, I am growing
weary of these "Democrats should be careful and move back to the center" opinions. Trump
showed us that the old 'left-right-center' way of thinking is no longer applicable. These
progressive policies appeal to a broad majority of Americans not because of their ideological
position, but because so many are suffering and are ready to give power to representatives
who will finally fight for working families. Policies like medicare for all are broadly
popular because the health insurance system is broken and most people are fed up and ready to
throw the greedy bums out. We've been trying the technocratic incrementalism strategy for too
long, with too little to show for it. Bold integrity is exactly what we need. 1 Reply
@Bruce Rozenblit Thank you; as others have commented already, this is so well said. To build
on your point: just yesterday, a commenter on a NYT article described AOC as a communist.
Incredible. The extent to which decent, pragmatic and, in a bygone era, mainstream, ideas are
now painted as dangerous, extreme, and anti-American is both absurd and disturbing. 27
Replies
If Hillary were President, there would never have been a shutdown. That is the lesson that
Mrs. Pelosi, AOC and Democrats should carry forward to 2020. 5 Replies
@LTJ No one is promoting ''free stuff'' - what is being proposed is that people/corporations
pay into a system Progressively upwards (especially on incomes above 10,000,000 dollars per
year) that allowed them and gave them the infrastructure to get rich in the first place. I am
sure you would agree that people having multiple homes, cars, and luxury items while children
go hungry in the richest nation in the world is obscene on its face. Aye ?
@Ronny Respectfully, President Clinton had a role in the deconstruction of the middle class.
My point is many of the folks in the news today were in congress that far back. Say what you
will about President Trump and Congresswoman Ocasio-Cortez,I believe they both have exposed
the left,the right,the press for what they are. Please choose your own example. I don't agree
with all of her positions, but I can't express how I enjoy her making the folks that under
their watch led us to where we find ourselves today squirm and try to hide their anger for
doing what she does so well. I've been waiting 55 years for this. Thank you AOC.
@Bruce Rozenblit Bruce, spot on. The point of the New Deal was not to replace capitalism with
socialism, but to save capitalism from itself by achieving the balance that would preserve a
capitalist economic system but one in which the concerns of the many in terms of freedom from
want and freedom from fear were addressed. In other words, the rich get to continue to be
rich, but not without paying the price of not being hung in the public square - by funding an
expanding middle class. A middle class that by becoming consumers, made the rich even richer.
But then greed took over and their messiah Saint Reagan convinced this large middle class
that they too could be rich and so cutting taxes for the wealthy (and in the process
redistributing the wealth from the expanding middle class to the wealthy) would one day
benefit them - when they were wealthy. Drunk on the promise of future wealth, and working
harder than ever, the middle class failed to notice whose ox was being gored and voted
Republican. And now finally, the pendulum swings. Amen. 27 Replies
@Socrates I'm reminded of a poll I saw several years ago that presented positions on issues
without attaching them to any individual politician or affixing labels of party or ideology.
The pol aimed to express the issue in neutral language without dog whistles or buzzwords.
When the pollsters had the data, they looked for the member of Congress whose positions best
reflected the view of the majority of respondents. It was Dennis Kucinich, the scary liberal
socialist bogeyman of his day.
I lived in Europe for a long time. Not even most right wing parties there wish to abolish
universal healthcare, replace low or tuition-free colleges with college debt, etc. The US has
politically drifted far to the right when the center Democrats were in charge. Now Trump is
lurching the country to extreme raw capitalism at the cost of national debt, even our
environment and climate, Democrats need to stop incrementalism. Simple as that. 1 Reply
@Michael Dr. Martin Luther King, Jr. was opposed to the eternal triumvirate axis of inhumane
evil aka capitalism, militarism and racism. King was a left-wing socialist community
organizer. In the mode of Mahatma Gandhi and Nelson Mandela. And the Nazarene of Matthew 25:
31- 46. America's military and prison industrial complexes are the antithesis of America' s
proclaimed interests and values. America is number one in arms, money and prisoners. MAGA? 38
Replies
Bernie and AOC don't seem all that radical to me for the reason this op-ed points out -- I
grew up in a New Deal Democratic family. My Grampa was an electrician supervisor for the City
of Chicago and my Granma was a legal secretary. They wanted universal health care and free
education and jobs for all. Those things made sense then, and they make sense now. They
provide solutions to the deep problems of our society, so who wouldn't want them? We've had a
lab test -- other than actual jobs for all Northern Europe has these things and we don't.
Neo-liberalism, its Pay-Go formula for government, and its benefits for the rich fails on
most counts except producing massive inequality and concentrated wealth. Bernie voters want
solutions to inequality and climate change, and they are readily available if government can
be wrested from the hands of Republicans like Trump and neo-liberals.
@Michael To me, the key sentence in your excellent post is that American needs to "refocus on
domestic growth and health and pull itself out of its continuous wars." All policiticians
hoping for our votes in the future need to make clear where they stand on this. As to those
who say that making all those weapons creates jobs, is there any reason that we couldn't
instead start producing other quality goods in the U.S. again? 38 Replies
@chele Me too! I am 72 y/o, retired, college educated at a rather tough school in which to
gain entrance. Lived below my means for over 40 years. Parents are both WW2 Marine Corps
officers(not career), who voted Republican and were active in local elections. They would be
shocked and disgusted at what that "party" represents now.
I think you look at all this in a vacuum. Democrats veered left because there was a need to
counterbalance what was happening on the right. They see Republicans aggressively trying to
undo all the gains the left had achieved the previous several decades. Civil rights, Womens'
rights, anti-poverty efforts, and so on all not just being pushed to the right, but forced to
the right with a bulldozer. It got to a tipping point where Democrats could clearly see the
forest for the trees. A great deal of this was a result of Republicans inability to candy
coat their agenda. Universal healthcare....not being replaced by affordable alternatives, but
by nothing. Tax cuts that were supposed to help the middle class, but, as evidenced by the
government shutdown, giving them no economic breathing room. And, in fact, making their tax
cut temporary, something nearly impossible to reverse with such a high deficit. Attacking
immigrants with no plan on who, actually, would do the work immigrants do. The list goes on
and on. In the past, many social programs were put in place not so much to alleviate
suffering as to silence the masses. Now Republicans feel the time has come to take it all
back, offering easily seen through false promises as replacements. That the left should see
the big picture here and say "Not so fast" should come as absolutely no surprise. All they
need now is a leader eloquent enough to rally the masses.
I think the Democratic Party is finally returning to its roots. We are now engaging in the
same politics which gave us control of the House for about fifty years. I went to my first
International Union convention is 1972 at which Ted Kennedy was one of the featured speakers.
One of the themes of the convention was healthcare for all. Now it treated as some sort of
radical proposal from the left. I am not certain why clean air and water, affordable health
care and housing, combating climate change, raising wages, taxing the highest income
brackets, updating our infrastructure, solving the immigration issue, and providing aid not
weapons to other nations, are considered liberal or socialistic. I think it represents the
thinking of a progressive society looking to the future rather than living in the past. 1
Reply
@David G. I would also say that many people think a cooperative economic enterprise, such as
a worker owned factory, is Socialism. But this is blatantly wrong and is pushed by the rich
business and stock owners to denigrate these types of businesses. Cooperatives have often
proven themselves quite successful in navigating a free market system, while simultaneously
focussing on workers rights and ownership. We need more if this in North America. 27 Replies
@Samuel She's been in office less than a month. You want to shut down the conversation that
is finally bringing real hope & passion to average people, & is bringing a new set of
goals (& more integrity) to the Democratic Party? Paying for single-payer has been
rehashed many times; just look at all the other 'civilized' countries who have it. For once,
try putting the savings from ending co-pays, deductibles, & premiums into the equation.
Think about the savings from large-group bids, & negotiations for drug prices, & the
savings from preventative medicine heading off more expensive advanced treatment. Bernie
Sanders has been explaining all this for years now. 'Less rhetoric'? The conversation is
(finally) just now getting started! You start by explaining what is possible. When enough
people understand it, the needle will start to move. Watch.
@JBC, Rep. Ocasio-Cortez was voted into congress and then the media took notice. It wasn't
the other way around. My only hope is that she stays the course.
@Bruce Rozenblit And don't forget the biggest socialist project of our time - the wall! And
withholding 800k employee checks to do so? That's socialism at gun point. 27 Replies
There are two points left out of all of the analysis of both Pressley's and Ocasio-Cortez's
campaigns. First of all, both women did old fashioned retail politics, knocking on doors,
sending out postcards, gathering as many volunteers as they could and talking about the
issues with voters face to face. They took nothing for granted. This is precisely what
Crowley and Capuano did not do. Second, they actually listened to the voters regarding what
they needed and wanted in Congressional representation. What both of the stand for is neither
Liberal or Conservative. What they stand for human values. This is not to say that Capuano
and Crowley did not stand for these same values, but they took the voter for granted. That is
how you lose elections. The Democrats are going back to their roots. They have found that the
Mid-terms proved that issues of Health Care, minimum wages, good educations for all despite
economic circumstances, and how important immigration is to this country really matter to the
voters. They need to be braver in getting this across before the next election And the press
might want to start calling the candidates Humane, period. 1 Reply
@MIMA Yes, absolutely. I'm retired from the healthcare field after practicing 38 years. It is
unconscionable that we question the access of healthcare to everyone. The complaint usually
heard from the right is about "the takers." Data I've seen indicates that the majority on
"the dole" are workers, who can't make ends meet in the gig economy or the disabled. That
some lazy grubbers are in the system is unavoidable; perfection is the enemy of the good.
@Stu Sutin I agree, "Liberal" is too broad a term, as so-called liberals do not agree on
everything, especially the degree. We can be socially liberal, while economically
moderate--or vice versa. Some believe in John Maynard Keynes economics, but appose abortion.
Some want free college tuition, while others support public schools but do not support the
public paying for higher education. Our foreign policy beliefs often differ greatly. What
joins us is a belief in a bottom up economy, not top down--and a greater belief in civil
liberties and a greater distribution of wealth. Beyond that, our religious and cultural
beliefs often differ.
I think the Internet has provided an influx of new understanding for the American left.
They've learned that things considered radical here are considered unexceptional in the rest
of the developed world. There is a realization that the only reason these are not normal here
is because of a lack of political will to enact them. That will is building as the ongoing
inequities are splashed across the front pages and the twitter feeds. It is the beginning of
the end for American exceptionalism (a term coined by Stalin as America resisted the wave of
socialism spreading around the world in the early 20th century). Unbridled capitalism lasted
longer than communism but only because its costs were hidden longer. We need to find the
sustainable middle path that allows for entrepreneurship along with a strong social safety
net (and environmental protection). This new crop of progressive Democrats (with strong
electoral backing) might lead the way.
at 63, I was there. I don't want second Trump administration either, but the route to a
Democratic victory is not cozying up to the corporations and the wealthy, but by stating
clearly, like FDR, "they are unanimous in their hate for me, and I welcome their hatred." We
need people who are willing to say that the rich deserve to be taxed at a higher rate,
because they have benefited more from our society, that no income deserves to be taxed at a
lower rate than the wages paid to working people, and that vast wealth needs to be earned,
not inherited. Emmanuel Saez makes persuasive arguments, but they need to be made in the
language of the working people. 12 Replies
@Michael Your $128 a year would be more like $414 or so in today's dollars. Still . . . I
went to Brooklyn College, part of the tuition-free City University of New York from
1969-1973. We paid a $53 general fee at the start of every semester ($24 for a summer
semester), and that was it. Wealthy or poor, everyone paid the same amount (about $334 in
today's dollars). 38 Replies
@JRS Democratic party leaders have been in favor of more border security and an overhauled
immigration system for as long as I've been alive. The suggestion (clearly this comment's
intention) that Democrats favor "open" borders, ports, etc., is a myth propagated by an ever
more influential right wing. And it's working: it's been repeated so often that it's now
virtually an assumption that Democrats favor open borders, despite that fact that any
critical thought on the subjection indicates the opposite is true.
I'm a very moderate Democrat -liberal on social issues and very supportive of free global
trade- who would vote for any of the current Democrats over Trump, but would leave the party
if AOC's ideas became the norm. I don't have a problem in principle with a 70% top marginal
tax rate or AOC's Green New Deal- Meaning, these aren't moral issues for me per se. I just
believe they would bankrupt the economy and push us into a chaos far worse than what we're
seeing under Trump. 5 Replies
@Michael The increase in fees for education to include the books along with the lowering of
standards for the classes taken is part and parcel of the reagan revolution to remake
American society. One of the most problematic things for those seeking to undo what FDR did
was the plethora of well educated and well read people American had managed to create. How
were they going to be able to overcome this? You can deduce whatever methods you may know but
I saw them tank the economy on purpose and prey on the fear that it created with more and
more radical propaganda. Once they got into office they removed the best and brightest of our
Civil Service and began making legal the crimes they wanted to commit and changing laws and
procedures for how things were done so that people would eventually come to think of this as
the "right" way when it was in fact purpose designed to deny them their due. 38 Replies
Younger candidates, like Alexandria Ocasio-Cortez, appeal to younger voters. John Kennedy
appealed to WWII veterans, most of whom were in their 30s when they elected him. One of the
reasons for Barack Obama's support in 2008 among younger voters is that he was a younger
candidate and they identified with a younger candidate. That appeal to a younger electorate
will play a larger role in future elections. Don't focus too strongly on issues. Democrats
will win by a landslide in 2020 if they nominate a younger candidate that can inspire younger
voters. November 3, 2020. 1 Reply
@Samuel Actually, running a campaign and getting elected is a significant accomplishment.
Before anyone decides about what bills to promote and means of paying for them, we need a
momentum of discourse, and promoting that discourse is another major accomplishment. You and
many millions of others, also, have good reasons to be frustrated. Let's just try to actually
"work" at talking the talking and walking the walk, and maybe we will--or maybe we
won't--arrive some place where we can see some improvement.
The interesting part of this piece is the statement about politicians moving unwillingly. So
some Democratic Congressmen and Congresswomen are allowing their personal beliefs to be
compromised for the glory of being elected or re-elected? Sounds like someone I would not
care to support. 2 Replies
A great essay! The wild card in all this analysis, of course, is what happens when these
(now) young voters, age, eventually partner, and have kids. As every generation has shown,
the needs of a voter changes as they age. I'm surrounded by many new neighbors with little
kids who moved out of Brooklyn and Jersey City who suddenly find themselves concerned about
rising property taxes- they now see the balance between taxes and services. Not something
they worried about a few years ago. 2 Replies
@Tracy Rupp I am a senior citizen heterosexual white male. I do not apologize for my race,
gender, etc. In fact, I am proud of our accomplishments. I do apologize for my personal
wrongs, and strive to improve myself.
"This will be difficult, given the fact that what is being proposed is a much larger role for
government, and that those who are most in need of government support are in the bottom half
of the income distribution and disproportionately minority -- in a country with a long racist
history." True enough, but if progressives want actual people in that bottom half to lead
happier lives, the focus of any programs should not be to employ armies in left-leaning and
self-perpetuating "agencies," but rather to devise policies to help people develop the
self-discipline to: A) finish high school, B) postpone the bearing of children until marriage
(not as a religious construct but as a practical expression of commitment to the child's
future), and; C) Find and get a regular job. These are supported by what objective, empirical
data we have. These have not struck me as objectives of the rising left in the Democratic
party. Mostly, I see endless moral preening, and a tribal demonizing of the "other," just
exactly as they accuse the "other." In this case the "other" is we insufficiently "woke" but
entirely moderate white folks who still comprise a plurality of Americans. I see success on
the left as based primarily on an ability to express performative outrage. But remember, you
build a house one brick at a time, which can be pretty boring, and delivers no jolt of
dopamine as would manning the barricades, but which results in a warm, dry, comfortable place
to live. 4 Replies
@Concerned Citizen For your information, Holiday Inns typically had a restaurant in the hotel
in the days Michael is talking about so... whatever! 38 Replies
My father fought in Germany during WWII, then came home and went to college on the GI bill.
Both my parents received federal assistance for a loan on their first house. Later, during
retirement, they were taken care of by Medicare and given an income by Social Security. They
worked hard, kept their values, lived modestly, and voted for Democrats. Apparently, they
were wild-eyed, leftist-socialist radicals, and I never knew it.
@Bruce Shigeura AOC in some ways is doing what Bernie was doing -- mobilizing people around
class as you say -- but the difference is that AOC doesn't shy away from issues of racial
justice. Bernie seemed to want to unite people by ignoring issues of race, as if he was
afraid that mentioning race too much might drive Whites away. AOC seems able to hold whites
on the class issue while still speaking to the racial justice issues that are important to
non-Whites. She's an extraordinary phenomenon: smart, engaging, articulate and with personal
connections to both the White and Non-White worlds, so she threatens neither and appeals to
both.
@Stu Sutin "Is something wrong about aspiring to free college education in an era when
student debt totals $1.5 trilliion?" Yes. If you're the Congressperson who gets his/her
funding from the lenders.
A O-C has yet to open a district office. A O-C is more interested in "national" issues and
exposure than those of her district. What A O-C may have forgotten is that it is her district
and constituents that have to re-elect her in less than 2 tears (or not): "Would you rather
have a Congress member with an amazing local services office, or one that leads nationally on
issues?" she queried her 1.9 million followers on Instagram -- a number that is well over
twice the population of her district. The results strongly favored national issues."
https://www.nytimes.com/2019/01/22/nyregion/aoc-alexandria-ocasio-cortez-district-office.html
As Mr. Edsall points out, her district is not necessarily progressive and liberal and while
there may be national issues, at the bottom line, many of her instagram groupies are not her
constituents. Democrats like to constantly point out that Ms. Clinton won the popular vote,
and she was the non-liberal-progressive Democrat. I am sure that the Republicans pray for the
success of the Democratic left. They seek to give voice to that left. That will bring the
swing votes right back to or over to the Republicans, without, but possibly even with Mr.
Trump (if the Democrats cross a left-wing tipping point). Bottom line, instagram is fine and
likes are great, twitter is good for snappy answers, but representatives to the House have to
deliver to their district and constituents. A O-C leads, but to the salvation of the
Republican party. 6 Replies
@Joshua Schwartz M. Ocasio-Cortez explained on The Late Show the other night that the reason
she has not opened her district office is due to the Government Shutdown. The people charged
with setting up the office are on furlough, the money for the office is being held up and she
staff or furnish the office.
Isn't this somehow the natural swing of things? Years of heavy-handed politics benefitting
small minorities on the right have taken their toll, so now new ideas are up at bat. By the
way, these ideas aren't really that bold at all - many countries have living minimum wages or
mandatory healthcare, and are thriving, with a much happier population. Only in the context
of decades-long, almost brainwash-like pounding of these ideas as 'Un-American' or
'socialist' can they be seen as 'bold'. American exeptionalism has led to a seriously
unbalanced and dangerously threatened social contract. Tell me again, Republicans: why is a
diverse, healthy and productive population living under inspiration instead of constant fear
so bad?
The "experts" offering advice here seem to have forgotten that Hillary Clinton listened to
them in 2016: the party decided that appealing to suburban Republicans and Jeb Bush voters
was more important than exciting the Democratic party base. The other hazard of calculated
politics is that the candidate is revealed to be a phony, believing in nothing but power or
that it's simply "her turn" -- an uncompelling program for a voter. 1 Reply
They will all face primary challengers in 2020. Tlaib and Omar didn't even win a majority of
the primary vote. There were so many candidates running in those primaries, they only managed
a plurality. And let's be honest about the demographic changes in the districts Pressley and
Ocasio Cortez won. They went from primarily ethnic White to minority majority. Both women
explicitly campaigned on the premise that their identity made them more representative of the
district than an old White male incumbent. Let's not sugarcoat what happened: they ran
explicitly racist campaigns. They won with tribalism, not liberal values. Democrats actually
need more candidates like Lucy McBath, Antonio Delgado, and Kendra Horn if they want to
retain Congressional control and change policy. And many minorities and immigrants aren't
interested in the far left faction. We don't have a problem with Obama and a moderate
approach to social democracy.
@JABarry - Some data: Canada has a program like Medicare for All, and its bottom line health
care statistics are better than ours in spite of a worse climate. We paid $9506.20 per person
for health care in 2016. In Canada, they paid $4643.70. If our system we as efficient as
Canada's, we would save over $1.5 TRILLION each and every year. This is money that can be
used for better purposes. If one uses the bottom line statistics, we see that both Canada and
the UK (real socialized medicine) do better than we do: Life expectancy at birth (OECD):
Canada- 81.9, UK - 81.1, US - 78.8 Infant Mortality (OECD)(Deaths per 1,000): Canada - 4.7,
UK - 3.8, US - 6.0 Maternal Mortality (WHO): Canada - 7, UK - 9, US - 14 Instead of worrying
how we would pay for it, we will have the problem of how to spend all the money we would
save. BTW can you point to a period where too high federal debt hurt the economy? In 1837 the
federal debt as a percentage of GDP was 0%; it was 16% in October of 1929. Both were followed
horrendous depression. It was 121% in 1946 followed by 27 years of Great Prosperity.
Best comment in some time. I work and live too much in the'big flat'. I am a very hard core
Chicago Democratic Liberal from birth, but the distressed towns and small cities are facing
extinction. then what?
@In the know I'm formerly Republican, and female. I'm on the ACA, and while premiums were
going up slowly, they've exploded in the past two years due to Republican sabatoge. They are
certainly no reason to vote for Trump.
@Midwest Then the rich will only be eligible for college. Give me government intervention any
time. I am retired military . Off base in Lewes De a mans hair cut is now 20.00 plus tips.
Just a plain cut. On base with gov intervention it 12.00 . Capitalism you support is only for
the 1 percent the 99 percent never gets ahead. 38 Replies
She has a massive throng of twitter followers, is completely unconcerned with facts, uses
publicity to gain power and seems unwilling to negotiate on her positions. Remind you of
anyone else? 3 Replies
The establishment is trying so hard to spin the progressives push on the issues of Medicare
for All, free state college and university tuition, a livable wage of $15/hr as ponies and
fairy dust and an extreme "socialist" makeover/takeover of America. But from all the polls
that I've seen, these policies are actually quite popular even with a majority of
Republicans. Yes, a majority of Republicans. A Medicare for All would cover everybody,
eliminate health insurance premiums for individuals and businesses ( which by the way are
competing with businesses in other countries that have a single-payer system) and would save
$2 trillion over ten years (Koch bothers funded study). The result would be a healthy and
educated populace. But how to pay for this? Well, we spend over $700 billion on our military
while Russia spends $20 billion and China spends $146 billion, so there seems to be plenty of
money that is already being spent to be redirected back to us without compromising national
security. A Medicare for All system supports a private healthcare system just as it is now,
except instead of giving some insurance company our premium who then skims off a big chunk
for their profit, we pay it to our government who then administers the payments to the
healthcare provider(s). The system is in place and has been for people 65 years and older and
works very well with high satisfaction rates. Just expand it to all. 2 Replies
@Midwest Josh Wrong!!! Tuition's have skyrocketed because for past 35 years States have
slashed support for public universities. The Federal Government took over student loan
business from predatory banks which was a very good thing but unfortunately have kept
interest rates high ... Student loans is a profit center for Federal Government 38 Replies
@Concerned Citizen Go ahead and check the holiday inn in Palestine Texas. It had a small
restaurant in 1978. I was their dishwasher. There was no ford plant nearby. 38 Replies
@Bruce Rozenblit Well put. As Martin Luther King Jr. said: "We all too often have socialism
for the rich and rugged free market capitalism for the poor." 27 Replies
@stuart They used to call it the "Democratic wing of the Democratic party". I was glad when
Thomas Edsall finally got around, in this piece, to mentioning that what is often thought of
as a radical leftist turn today, due to just how far to the right our general political
discussions had gone, was actually pretty much mainstream Democratic policy for much of the
middle 20th century.
@Len Charlap Quite simply Canada's healthcare quality is ranked 16th in the world, while ours
is lower ranked at 23rd. And we pay twice as much. That indicates some funny business going
on.
It is remarkable that "big, bold leftist ideas" include - preserving the historical
relationship between the minimum wage and the cost of living - lowering the cost of college
to something in line with what obtained for most public colleges and universities in the 50s,
60s and 70s and exist in the rest of the Western world today - adapting our existing Medicare
system to deliver universal coverage of the kind generally supported across the political
spectrum in Canada and the UK Democrats should reject the "leftist" label for these ideas and
explain that it is opposition to these mainstream ideas that is, in fact, ideological and
extreme. 2 Replies
@Marc Except that's outright false. Offices are open. All the other new Congress members from
New York are setup and taking care of people. She doesn't care about constituent service. She
revels in the media attention, but isn't getting anything done even in the background. NY has
three Congress members (Lowey, Serrano, Meng) whose under-appreciated work on the
appropriations committee actually helps ensure our region's needs and liberal priorities are
reflected in federal spending. Meanwhile Ocasio Cortez is working on unseating Democrats
incumbents she deems insufficiently leftist e.g. Cuellar, Jeffries. Who needs Republicans
when you have Socialists trying to destroy the Democratic Party.
The NYT should consider getting some columnists who reflect the new (FDR? new?) trends in the
country and in the Democratic party. The old Clinton/Biden/Edsall Republican lite approach --
all in for Wall Street -- is dying. Good riddens. BTW I'm a 65 year old electrical engineer.
1 Reply
You're missing something big here, sir. Capuano was a Clinton superdelegate in 2016 who
declared well before the primaries (like all other Mass superdelegates, save for Warren who
waited until well after the primaries.) Thereby in effect telling constituents that their
vote was irrelevant, as they were willing to override it. Somerville went for Sanders 57% to
42%. Putting party over voters maybe isn't a great idea when 51% of voters in Massachusetts
are registered Unenrolled (Independent) and can vote in primaries. Bit rich to signal that
our votes don't matter, but then expect it later as it maybe actually does matter after all.
Pressley was all in for Clinton, which is of course suspect. But like me, she had only one
vote.
@C Wolfe Wow. Funky Irishman has been, for many months, writing about and presenting
excellent data showing that the US is actually a center-left (if not strongly progressive)
country. I used to present this evidence to Richard Luettgen (where has he gone??) who kept
insisting we are center-right (but never, as was his custom, presented any evidence for
this). your example is the best I've ever seen. I'm a member of a 4000-strong Facebook group,
the "Rational Republicans" (seriously - a local attorney with a decidedly liberal bent
started it and almost beat regressive Patrick McHenry here in Asheville). I've been making
this point on the FB page for the past year and people are stunned when they see the numbers.
I'm going to post your example as well. Excellent!
It's funny to watch people shocked when she makes her proposal. Her ideas are very old and
have worked in the past in various cultures. But the point that she can voice them is because
she can. Her people put her there because she said those things with their approval. She
reflects her community ideals. Just like Steve King.
I'm already tired of Alexandria Ocasio-Cortez and I'm a liberal and Hispanic...its constant
overkill, everybody falling over her, total overexposure. The news media has found their
darling for the moment. Let's see what she accomplishes, what bills she proposes and passes
that is the work to be done not being in the news 24/7.
Until the left figures out that every single one of their most desired Policy Implementations
are only feasible with controlled immigration and secured borders doesn't matter who the
messenger is. Want Single Payer Healthcare? Can't have it and Open Borders too. Want free
College? Can't have it and Open Borders too. Want Guaranteed Basic Income? Cannot have it in
any form without absolutely controlling the Border. So, either you want that influx of new
voters to win elections or you want to see new policy changes that will benefit all
Americans. Pick one and fight for it. You seem to have chosen the new voters. 3 Replies
@Matt Williams But they are extraordinary, relative to their bought and paid for colleagues.
That came first and the media is reporting it. Their authenticity is naive, but it shouldn't
be, and that's the story. It's a glimmer of hope for democracy that may be extinguished -
let's celebrate this light in the darkness, while it lasts.
@Bruce Rozenblit This is. Spot. On. The socialism of: Privatize the profits, socialize the
losses. It's defined American economic and social policy for the last 30+ years and we can
see the results today. 27 Replies
@shstl I agree and as a moderate Democrat, I already feel like an outsider, so imagine what
independents are thinking. AOC stated that she wants to primary Hakeem Jeffries, who is a
moderate. With statements like these, made before spending a day in congress, who needs the
GOP to tear apart the Democratic party? Sanders didn't even win the primary and his
supporters claim the primary was stolen. We lost the house and senate all by ourselves. I
already have AOC fatigue and my rejoice for the blue wave is still there but fading.
The Democratic party was shoved to the right with Bill Clinton's Third Way ideology that made
its focus the same wealthy donor class as the Republicans, while breaking promises to its
former base, the middle and working class. This led to the unchecked capitalism that produced
the Crash of '08, and the subsequent bail out to Wall St. The powers running the DNC - all
Third Way disciples, like Hilary - refused to take up any of these "socialist" causes because
their wealthy donors didn't want to have their escalating wealth diminished. Meanwhile these
Democrats In Republican Clothing were banking on continued support from those they had
abandoned. And they got it for years...until now. Now, finally, we're getting candidates who
represent those abandoned, and who are refusing to hew to the poobah's Third Way agenda. But
the Old Guard is trying to retain their power by labeling these candidates as "socialists",
and "far left". Well, if that's true, then FDR was a "socialist" too. Funny though how all
those "socialists" who voted for FDR, Truman, JFK, and LBJ enjoyed such capitalistic benefits
like good paying jobs, benefits, home ownership, good education, and the fruits of Big
Guv'mint like the Interstate Highway system, electricity, schools, the Space Program and all
the benefits that produced. It was only when we turned our backs on that success and relied
on unchecked capitalism that most of America began their slide backwards. We need to go left
to go forward.
Why is the media lionizing this ignorant, undisciplined child? She should shut up, sit down,
learn how to listen and learn from her elders in government. She is acting like a college
student, who has no one to hold her accountable for her reckless, stupid behavior. Why does
the media seem to be enamored of her?????
@Michael Lucky for you. I went to the University of Michigan at roughly the same time and it
was no where near that cheap--not even close. And housing? Don't get me started on that. Even
then it took my breath away. 38 Replies
@chele That which you are pleased to call the DLC nonsense originated not with the Clintons,
but with one of the worst presidential defeats the Democratic party ever suffered: the 1972
campaign of George McGovern. That debacle resulted in a second Nixon administration and I
hope that the current trends within the Democratic party do not result in a second Trump
administration.
It is exceeding strange to me that "Conservatives" in the US consider Medicare for all and
universal access to higher education as being radical, pie-in-the-sky, proposals. Here in
Canada we have had universal medicare for a half a century and it has proven itself to be
relatively effective and efficient and has not driven us into penury. As for free access to
education beyond high school, I remember learning a while ago that the US government
discovered that it had earned a return of 700% on the money spent on the GI Bill after WWII
which allowed returning GIs to go to colleges and universities. The problem with American
conservatives is that they see investments in the health, welfare and education of the
citizenry as wasteful expenditures, and wasteful expenditures such as the resources going to
an already bloated military, and of course tax cuts for themselves as investments.
@chele Amen to you! I too am old guy (79) and think Alexandria Ocasio-Cortez is a savior of
the Democratic Party! She is young and has great ideas. I agree with you about the Clintons,
they led the party down a sinkhole. I agree with just about everything I have heard
Alexandria espouse. She is refreshing. Glad she is kicking the butts of those old guard
Democrats that have fossilized in place--they are dinosaurs. 12 Replies
@Tracy Rupp The problem with blaming a group based on demographics, rather than behavior or
ideology, is that you are likely to be disappointed. There are a lot of people who are not
old white men who are just as seduced by money, power, and local privilege as was the old
guard. Feminists writing letters to condemn a male student who made charges of being sexually
harassed by his female professor; African American activists who refuse to reject the
antisemitism of charismatic cult leaders. Human beings in charge will be flawed, regardless
of their race, gender identity, or sexual orientation. As the balance of power changes hands,
corruption too will become more diverse. 6 Replies
Money is the mother's milk of politics, so let me comment on "many of whom did not want the
Democrats to nominate a candidate with deep ties to party regulars and to the major donor
community." Include me. Because the major donor community is Charles E Schumer, Leader
Democrats, House Top Contributors, 1989 - 2018 1 Goldman Sachs 2 Citigroup Inc 3 Paul, Weiss
et al 4 JPMorgan Chase & Co 5 Credit Suisse Group That is Wall Street Nancy Pelosi,
leader Democrats, House Top Contributors, 2017 - 2018 1 Facebook Inc 2 Alphabet Inc (Google)
2 Salesforce.com 4 University of California 5 Intel Corp $13,035 That is Silicon Valley . The
U of CA should spent its money on students What is the interest of these donors ? For Wall
Street, it is maximizing profits by suppressing wages, outsourcing to of enterprises it owns
to low wage countries, and immigration of people willing to work for less For Silicon Valley
it is Mining your data, violating your privacy, and immigration of people willing to work for
less via H1B To win general (not primary) elections you need large amounts of money. At in
return for this money, you need to take care of your donors, lest you find you without money
in the next election Until the Democratic Party frees itself of this system, it will spout
liberal rhetoric, but do little to help average Americans As Sanders showed, it can do so,
running on small donations. DNC, eye on frightened donors, killed his attempt. 1 Reply
"The most active wing of the Democratic Party -- the roughly 20 percent of the party's
electorate that votes in primaries and wields disproportionate influence over which issues
get prioritized -- has moved decisively to the left." Yet it seems that you feel that the
party should ignore them and move to the center right in order to capture suburban Republican
women, who will revert back to the Republican party as soon as (and if) it regains something
resembling sanity. Do you seriously think that its worth jettisoning what you describe as
"the most active wing of the party" for that? 2 Replies
@David G. See Norway, Denmark, Germany, England and Finland. Citizens have jobs and health
care; education is affordable and subsidized. Not all young people attend universities; many
go to vocational schools which prepare them for good jobs. We could do the same. 27 Replies
@Midwest Josh That is so NOT true Midwest Josh. The unattainable loans and interest problems
are because the private sector has been allowed into the student loan game. The government
should be the underwriter for all student loan programs unless individual schools offer
specialized lending programs. Whenever the government privatizes anything the real abuse
starts and the little guy gets hurt. 38 Replies
@Bruce Rozenblit, at the end of a long line of commenters, I add my congratulations for a
well-articulated overview of our political dilemma. Both "trickle-down"economics and
"neo-liberalism" have brought us to this pass, giving both Democrats and Republicans a way of
rewarding their corporate masters. I believe both Cinton and Obama believed they could find a
balance between the corporate agenda and a secure society. We see with hindsight how this has
hailed to materialize, and are rightly seeking a more equitable system – one that
addresses the common sense needs of all of us. I, for one, am overjoyed that the younger
generation has found its voice, and has a cause to support. My recollection of demonstrating
against the Viet Nam war (and the draft), marching for civil rights, and even trying to
promote the (then largely inchoate) women's rights movement, still evokes a passionate
nostalgia. We have witnessed an entire generation that lacked passion for any cause beyond
their individual desires. It's good to have young men and women reminding us of our values,
our aspirations, and our power as citizens. As the bumper sticker says, "If you think
education is expensive – try ignorance." Thanks again for a fine post. 27 Replies
@Quiet Waiting That was FIFTY YEARS AGO. People who fought in the Spanish-American War were
still casting ballots, for heaven's sake. McGovern has been used by Third Way apologists as a
cautionary tale to provide cover for doing what they clearly wanted to do anyway. The other
reality is that the McGovern/Nixon race took place in a time when there was broad consensus
that many of the social programs Republicans are now salivating over privatizing weren't
going anywhere. 12 Replies
Abolishing ICE is tantamount to having open borders. No modern country can allow all people
who are able to get to its borders to just move in, and take advantage of its government
services. If a country were to start offering Medicare for All, no or reduced college
tuition, a universal jobs guarantee, a $15 minimum wage, and wage subsidies to the entire
bottom half through an expansion of the Earned Income Tax Credit, paid maternity/paternity
leave, and free child care, it would need tax-payers to support these plans. It could not
afford to support all of the poor, uneducated migrants who have been illegally crossing our
borders, let alone all of those who would run here if ICE were to be abolished. Look at
Canada which has more of a social safety net than is offered in our country. It has
practically no illegal immigrants. (A long term illegal immigrant had to sue for the
government to pay for her extensive medical care, and the court decisions appear to have
limited government payment of her medical bills just to her and not to other illegal
migrants.) It picks the vast majority of its legal immigrants on a merit system that
prioritizes those who would contribute a special needed skill to the Canadian economy, who
are fluent in English and/or French, and who could easily assimilate. Thus, most of Canada's
immigrants start paying hefty taxes as soon as they move to Canada, helping to support the
country's social safety net. 1 Reply
@Samuel To pay for universal health care you capture all the money currently being spent for
the health care system. That includes all the employer insurance premiums, VA medical care
costs, military medical costs, all out-of-pocket expenses, everything. That provides plenty
of money for our health care needs as exemplified by the costs in other advanced countries
with better systems. Also re-activate parts of the ACA that were designed to control and
reduce costs but that have gone unfunded. Reduce hospital and hospital administration costs,
which are exorbitant and provide little real health care benefit. There will be plenty of
funds for actual provider salaries (physicians, nurses, technicians, pharmacists, etc). 10
Replies
You have to accept some of this polling data with a grain of salt. Most of the population has
no idea what "moderate," "slightly liberal," or extremely liberal mean. These tend to be
labels that signify how closely people feel attached to other people on the left side of the
ideological spectrum. The same is true, btw, of people on the right. The odd thing is that if
you ask Trump voters about the economic policies they favor, they generally agree that social
security ought to be expanded, that the government has an obligation to see that everyone has
medical care, that taxes on the rich should be higher and that we ought to be spending more
money, not less on education. Where you see a divergence is on issues tightly aligned with
Trump and on matters that touch on racial resentment. Trump voters do not favor cuts in
spending on the poor, though they do support cuts in "welfare." The moral of the story is
that a strategic Democratic politician who can speak to these Trump voters on a policy level
or at the level of values -- I'm thinking Sharrod Brown -- may be able to win in 2020 with a
landslide.
I saw AOC on the Colbert Show recently and one of her first statements was in regards to
wearing red nail polish. I turned it off. Enough of the red lipstick as well. Please. Next
she'll discuss large hoop earrings. 1 Reply
O'Cortez is a "Fantasy Socialist. She says the stupidest and most outlandish things so the
media puts a microphone in front of her face. She hates when folks fact check her because
nothing she is saying adds up. O'Cortez has all of the same "spread the wealth" tendencies as
the previous president who was much more cunning and clever at hiding his true Socialist
self.
@chele Right on. I expect there is a very large contingent of us. It is disheartening to be
associated by age and ethnicity with the corporatist financial elite power mongers who
control both parties and the media. But we can still continue vote the right way and spread
the word to fight corruption and corporatism. Eschew New Democrats like ORourke. The first
commitment to find out about is the commitment to restore democracy and cut off the power of
the financial elite in politics. All the other liberal sounding stuff is a lie if that first
commitment is not there. Because none of it will happen while the financial elite are
controlling votes. There will always be enough defectors against, for example, the mainstream
support for medicare for all national health care to keep it from happening if New Democrats
aren't understood as the republican lite fifth column corrupters they really are. 12 Replies
Chock full of very interesting data, but we tend to to believe Zeitz's conclusion that Dems
are just returning to their roots, following the spectacular 2008 failures that saw no
prosecutions - in starkest contrast to the S&L failure and boatload of bankers charged:
https://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html
To the extent this primary voter data is replicated across the country in Dem primaries, and
not just the AOC and Ayana Pressley races, we could be convinced some massive swing is
occurring in Dem primary results. Until then, we tend to believe that the cycle of 30-50
House seats which swing back and forth as Dem or GOP from time to time (not the exact same
30-50 districts each cycle, but about 30-50 in total per election cycle or two) is a
continuation of a long-term voting trend. Unpacking the egregious GOP'er gerrymandering, as
is the goal of Eric Holder and Barack Obama: https://www.nytimes.com/2019/01/02/us/politics/voting-gerrymander-elections.html
which has blunted Dem voter effects, will be of far more consequence - get ready !
@Michael Gig'em dude. Class of '88, and I feel the same way. And as far as I can tell, the
increase has been almost totally because state support has fallen in order to fund tax cuts
for the people, like us, who got the free education. Who says you can't have your cake and
eat it too? You just have to raid everyone else's plate. 38 Replies
I understand the Andy Warhol concept of everyone having 15 minutes of fame. But it's absurd
that AOC's 15 minutes of fame coincide with her first 15 minutes in office.
Ocasio-Cortez and the rest haven't been in Congress a month. Get back to me when anyone of
them even gets a bill passed naming a Post Office. Until the, maybe you ought to learn your
jobs?
@In the know, Your party invented the fundamental ACA program. It was the brainchild of the
Heritage Foundation that started this fiasco that you'd like to blame on Dems. Also, you
simply cannot argue that the Republicans attempted to implement the program in good faith.
They have done everything they can to sabotage it. In the end, Republicans don't want people
to have affordable health care. It doesn't fit their "family-unfriendly" philosophy.
Furthermore, the only real business-friendly ideas Republicans embrace are a) eliminate
taxes, b) remove regulations, c) pay employees nothing. If you as a woman believe these are
notions that strengthen you or your family, I'm at a total loss in understanding your
reasoning.
@Matt Williams - You are ignoring the many statistics in the article that apply to the
Democratic party as a whole. For example: "From 2008 to 2018, the percentage of Democrats who
said the government should create "a way for immigrants already here illegally to become
citizens if the meet certain requirements" grew from 29 to 51 percent, while the share who
said "there should be better border security and stronger enforcement of immigration laws"
fell from 21 to 5 percent." There are many others.
"...as millennials and minorities become an ever-larger proportion of the party, it will have
a natural constituency..." I would counter that as they start to actually pay taxes then the
millennials will adopt the standard liberal plaint, 'raise the taxes on everybody except me'
@D I Shaw I think the precise point is that would much easier to do A,B, and C if there were
universal health care, job guarantees, and clean water to drink. It is much easier to make
good long-term decisions when you aren't kept in a state of perpetual desperation.
These 'new' ideas are not new, nor are they 'progressive democrats'', nor are they even the
democratic party's per se. More importantly, the 'issue', for which no one has come up with a
solution, is the same -- how are we going to pay for this all? The GAO reported in '16 that
Sander's proposal for payment was completely unsustainable. Similarly, Cortez's plan for a
tax rate of 70% of earnings (not capital gains) over $10mm per annum does not come close to
funding 'medicare for all', 'free collage/trade school', and 'the New Green Deal'. Our
military is a 'jobs program' rooted in certain state's economy -- it is going to be very
difficult to substantially reduce those expenditures any time soon. The purpose of government
is governance -- what politician is going to have the integrity and cujones to tell the
American people that we need these 'liberal' policies, but that every single one of us is
going to have to contribute, even those at the far lower income strata? Are we all willing to
work longer in life and live in much smaller houses/apartments to do what is necessary? If
the answer is yes, then and only then can any of us claim the moral high ground. Until then,
it's just empty rhetoric for political gain and personal Aggrandizement of so-called
progressives. 5 Replies
@chele I'm an "elder millennial" in my 30s. The first US election I really paid attention to
was in 2000. Remember how all of the Democrats would gripe about, "oh I really *like* Nader,
but the Green Party candidate is never going to win..." It's a party in dire straights when
the ideological base doesn't even particularly love its candidates on the issues. Repeat in
2004 with Kerry. Obama managed to win based on charisma and the nation's collective disgust
with the neocons, but then we did it again with Hillary. 12 Replies
Sorry libs, but with the exception of the Left Coast, and Manhattan, there is not alot of
attention given AOC and her silly class warfare 70% tax nonsense, that goes with the Dem/Lib
territory--nothing new or exciting with her. Being a certain ethnicity or gender is not
exciting or inherently "good" as Progressives attempt to convince others. Identity politics
is nonsense. When she does something of merit, not simply engage in publicity stunts and
class warfare nonsense then maybe she will get some attention outside of Lib/Wacko world.
"With all the attention that is being paid to Alexandria Ocasio-Cortez, Ayanna Pressley,
Rashida Tlaib" Other than these opinion pages and the Lib coasts, not so much. 2 Replies
Since Reagan there has been a steady drumbeat to the right and far-right policies. We've
lived so long in this bubble that we've normalized these For-the-Rich policies as centrist.
So I don't accept the writer's premise that the Democratic party is moving to a radical left.
The Democratic party is simply embracing pro middle class policies that were once the norm
between 1935-1979. And I welcome the shift of the pendulum. 1 Reply
@Giacomo That's right, this country can afford trillions for the Pentagon system--the
military-industrial complex, to coin a phrase--and foolishly criminal wars, but it can't
afford national health insurance, something that some industrialized countries have had since
the late 19th century. Anybody who thinks these ideas are "radical" or "leftist" clearly
understands nothing about politics.
The shift claimed by Mr. Edsall among democratic voters who claim to be liberal or
progressive is more illusion than reality. With President Obama more democrats are willing
and indeed proud that our party represents the cutting edge principle that we protect the
needs and interests of those struggling to find a place in our society. For a long time
Democrats bought into the notion that the word liberal was some how shameful. But now with
the machinations of a McConnell and Trump it becomes obvious that Democratic principles of
justice for all and fighting for economic equality are not outside ideas, but actually
central to the growth of our country. No longer will we kow tow to a false stilted opinion,
but stand up proudly for what we believe and fight for.
AOC behaves like a sanctimonious know-it-all teenager....entertaining for about 5 minutes,
then just plain annoying and tiresome. Does not bode well for the Democratic Party,...
Actually, people like AOC or Bernie aren't that far left at all. Internationally, they'd be
considered pretty centrist. They're simply seen as "far left" because the Overton window in
DC is far to the right. Even domestically, policies like universal healthcare and a living
wage enjoy solid majority support, so they're perfectly mainstream
I understand what you are saying, but please remember- half of this country thinks- rightly
or wrongly- that AOC and many of her ideals are unobtainable and socialist. Whether they are
or are not is NOT the point. We need ideas that are palatable to the mainstream, average
American- not just those of us on the liberal wings. And I AM one of those. Since you bring
up Bernie- how well did that work out? The country isn't ready for those ideas. And rightly
or wrongly, pursuing them at all cost will end up winning Trump the next election.
@Jose Pieste Well here in Australia its 10 minute waits for appointments made on the same
day. I have MS and see my specialist without a problem. And the government through the PBS
prescription benefit scheme pays $78 of my $80 daily tablets. We are not as phenomenally
wealthy a country as the USA and we mange it with universal health care. I pay about $30
Australian for each doctor's visit and sometimes with bulk billing that is free too. You
reflect a uniquely American attitude about social services that is not reflective of what is
done in other modern democracies. I really do feel for you my friend and for all Americans
who have been comprehensively hoodwinked by the "can't afford it" myth. You can pay for
trillion dollar tax cuts for people who don't need it. Honestly mate - you have been conned.
@Samuel Rep. Ocasio-Cortez has sponsored or co-sponsored 18 bills in the House, including
original co-sponsor with Rep. Pressley of H.R.678 -- 116th Congress (2019-2020) To provide
back pay to low-wage contractor employees, and for other purposes. 10 Replies
Ms. Ocasio-Cortez, as is well documented here and throughout world media, prefers spotlights
and baffling interviews to opening her district office and serving her electorate. As with
every other media creation, the shiny star that it has made of Ms. Ocasio-Cortez will fade
soon. The arc of her House career will as well. 4 Replies
"What pundits today decry as a radical turn in Democratic policy and politics actually finds
its antecedents in 1944." This quote in the article should have been the lede. Instead, it
appears 66 paragraphs into the article. What is now being called "left" used to be called
"center." It used to be called the values and the core of the Democratic party.
@Derek Flint There was a reason for the DLC's decision to be more center left. The Democrats
were losing and this gave them a chance to win, which they did with Clinton, almost Gore, and
Obama. 12 Replies
@Jason A. Representatives should represent their constituents. For example, if most of the
voters one represents want Medicare, perhaps that's a sign that one should reconsider their
anti-Medicare views. And think about why constituents want Medicare.
The leftward swing of the Democrats is in direct proportion to the rightward swing of the
Republicans and a gut reaction to the GOP's failure to do anything constructive while in
power -- i.e. failure to replace Obamacare with Trump's promise of "cheaper and better;"
failure to repair our crumbling infrastructure, and yet another failed attempt at
trickle-down economics by robbing the U.S. Treasury with a massive tax cut for the rich that
provided absolutely no benefits for the middle class and the poor. As always, what the
Republicans destroy the Democrats will have to fix.
@Quiet Waiting, the DLC was officially formed after Mondale's loss, in '85. the DLC's main
position is that economic populism is not politically feasible. But I don't recall either
McGovern or Mondale's losses being attributed to being too pro-worker, too pro-regulation of
capitalism, or making tax rates progressive again. Further, the idea that economic populism
has no political value was just disproved by a demagogue took advantage of it to get elected.
The RP's mid-term losses and other data points show that people in the middle are realizing
Trump's not really a populist. Those economic Trump voters, some of whom voted for Obama
twice, are up for grabs. Why would you be afraid that the DP's shift to raising taxes on the
wealthy and being pro-worker will result in a Trump victory? 12 Replies
@Michael The cost of Medicare, Medicaid and Social Security has increased as a fraction of
tax receipts. Twice the as many people go to college as when you went, so the subsidies are
spread more thinly. Colleges have more bureaucrats than professors because of multiple
mandates regarding sex, race, income, sexual preference, etc. People have not been willing to
see taxes raised, so things like college subsidies get squeezed. The US decided in the 1940s
that the only way to avoid a repeat of WW1 and WW2 was to provide a security blanket for
Western Europe and Japan (and really, the world), and prevent military buildups in either
region while encouraging economic development. The world is as a result more peaceful,
prosperous, and free than ever in human history, despite "its continuous wars" as you put it.
For the US to pull back would endanger the stability that gave us this peace and prosperity,
but Trump is with you all the way on that one, so it must be a good idea. Liberal reforms
will mean tax increases, especially Medicare for all, but also more college subsidies, which
largely benefit the middle class and up. Liberal reformers need to convince the public to
send more money to the IRS, for which there is no evident support. Let's not confuse
opposition to Trump with a liberal groundswell. 38 Replies
Why do Political Commentators and Analysts keep operating under the delusion that people vote
their skin colour ? People vote their economic interests. I am all in favour of National
Health Care Letting Immigrants who have not committed a crime stay and become citizens. But I
am also in favour of stricter Border Control as I feel our duty is to the poor citizens of
America. Send Economic aid to poorer countries, help them establish just governments. As for
Ocasio-Cortez, she is aiming too high and has too many lies about her past to go much higher.
The meanings of these labels--liberal, left, center, conservative--, and of the spectrum
along which they supposedly lie, changes year to year, and most pundits and politicians seem
to use them to suit their own purposes. When you realize that a significant group of people
voted for Obama and then for Trump, you realize how radically the politics of the moment can
redefine the terms. The Democrats could create a narrative that unites the interests of all
economically disadvantaged people, including white people. Doing so would create a broad
majority and win elections, but it would arouse the fury of the oligarchs, who will demonize
them as "socialists." But as Obamacare proved, if actually you do something that helps people
across the board even the Republicans and the media will have a hard time convincing people
that they are oppressed, for example, by access to health insurance. For the oligarchs, as
for the Republicans, success depends on creating a narrative that pits the middle class
against the poor. In its current, most vulgar form, this includes pitting disadvantaged white
people against all the rest, but the Republicans have an advantage in that their party is
united behind the narrative. Democratic politicians may be united against Trump, but that
means nothing. The challenge will be uniting the politicians who run on economic justice with
the establishment Democrats who have succeeded by hiding their economic conservativism behind
identity politics.
I applaude AOC. I am 72 white male. I have been waiting for someone like AOC to emerge. I
wish her the best and will work for her positions and re-elections and ultimate ambitions.
She is a great leader, teacher, learner, whip smart, and should not be taken likely. Go for
it AOC! Realize your full potential.
Someone as thoroughly imbedded in the establishment as this Op-Ed writer is necessarily going
to need to be educated on what the political center of gravity really is. The Democrats have
shifted RIGHT over the past few decades. Under Bill Clinton and Pelosi, Schumer, Feinstein
and Obama. They are not left, not center-left, not center, but instead center-right. They
have pursued a center-right agenda that does not engage with the rigged economy or widening
inequality, or inadequate pay, or monopolist abuse of power, or adequate regulation and
punishment of corporate crime. They have enthusiastically embraced our deeply stupid wars of
choice, and wasted trillions that could have been put to productive use at home. The new
generation of progressive Democrats seek to move the debate BACK TO THE CENTER or Center-Left
if you will. Not the Left or Far-Left. They want to address the issues the current Democrat
Establishment have ignored or exacerbated, because they are in essence, the same rarified
rich as the lobbyists and donors they mingle with. The issues that affect MOST of us, but not
the FEW of them. The endgame of this shift is that Obama engineered a pseudo-recovery that
saw the very rich recover their gains, but the poor become MORE impoverished. Such is the
rigged economy, 21st Century style. Things have to change, the old guard have to be neutered.
Too much wealth and power is concentrated in too few hands, and it's too detrimental to our
pseudo-democracy.
This is the difference between R & D's. OAC may get her support from well-to-do, educated
whites, but her platform focuses on those left behind. Even her green revolution will provide
jobs for those less well off. R's, on the other hand, vote only for candidates that further
their selfish interests.
Rep. Ocasio-Cortez and her legislative cohorts are a much needed breath of fresh, progressive
air for the U.S. Congress. And I say that as someone going on age 70 who was raised and
educated in the conservative Deep South. Go left, young people!
@Bruce Rozenblit Unfortunately, the hot button on fox is the word socialism. so undo the
negative press there and have a chance of implementing fairer policies. 27 Replies
@Samuel "It's easy to go to a rooftop- or a twitter account- and yell "health care and
education for all!'" Its not easy to get anyone to listen. The moral impetus precedes the
"actual plans," which come out of the legislative process, Why would you be against this
getting attention?Unless, of course, you oppose health care and education for all. 10 Replies
The further the Democrats go Left with all the cultural politics including white people
bashing and calling Men toxic, the further I am heading towards the right. I personally can't
stand what the Democratic Party has turned into. We'll see who wins in 2020. I think a lot of
people forget what happens in mid term elections. People vote for change and then, after
seeing what they wrought, switch back.
I am a old white male geezer and lifelong liberal living in complete voter disenfranchisement
in Florida due to gerrymandering, voter suppression and rigged election machines (how else
does one explain over 30,000 votes in Broward County that failed to register a preference for
the Senate or Governor in a race where the Republican squeaked in by recount?). I am pleased
to finally see the party moving away from corporatist and quisling centrists to take on
issues of critical import for the economy, the environment and the literal health of the
nation. As "moderate" Republicans come to a cognitive realization that they too are victims
of the fascist oligarch billionaire agenda to end democracy; they too will move to the left.
So, I for one am not going to worry an iota about this hand-wringing over something akin to
revolution and instead welome what amounts to the return of my fellow New Deal Democrats.
Too much attention here to this new cohort of self important attention seekers presenting as
civil servants. Not one of them has had any legislative experience in their lives how can
they do all they say they want. They have no grasp of policy economics and politics. Are they
too good to recall the wise words of Sam Rayburn - "Those who go along get along" or is that
too quaint outdated and patriarchal for them? Why dont journalists and other pols call them
out. Example, AOC calls for 70% marginal tax rate - saying we had it before, ha ha. Yes but
only when defense spending as percent of gdp was 20-40 percent, in the depth of WW2 and the
cold war, life and death struggles - it is now 5%, no one has the stomach for those rates
now, and no need for them to boot. Free school, free healthcare, viva la stat! yeah ok who
will pay for it? Lots of ideas no plans, flash in the pan is what it is, it will die down
then settle in for a long winter.
There is a difference between posturing as a leader and actually leading. So, there is
another, and very direct, way for real Americans to end the shutdown: Recall petitions. With
very little money, why not target Mitch McConnell. Laid off federal workers could go
door-to-door in Kentucky. The message, not just to the Senate majority leader, would be
powerful. And this need not be limited. There are some easy targets among GOP senators.
Perhaps Ms. Ocasio-Cortez can achieve greater national standing with a clipboard and pen down
on the hustings.
All this fuss over a bright young person who stopped complaining and ran for office. She has
a platform. Time will tell how effective she will be. Right now, she's connecting to those
young and old who believe we can do better. If you had a choice who would you rather share a
beer with?A Trump supporter who has no interest beyond building an ineffective wall or an
Ocasio-Cortez supporter, full of ideas, some fanciful, some interesting but most off all
energy and light versus fear and hate?
I'm a liberal Democrat and I remain very skeptical regarding the platforms of these new
members of Congress. Youthful exuberance is admirable, but it's not sufficient to address
complicated issues related to fairness. Fairness does not always mean equity of wealth. Some
people have more because they have worked more, worked longer, or took more risks with their
money. Should the nurse who worked three jobs to make $150,000/year be made to sacrifice a
significant portion for those who chose to work less? Such an anecdotal question may seem
naive, but these are the kinds of questions asked by regular Americans who often value social
programs, but also value fairness. The claim that only some tiny fraction of the 1% will bear
the cost of new programs and will alone suffer increased taxation is simply untrue, and those
who are making this claim know it. This tiny group of wealthy knows how to hide its money
off-shore and in other ways, as documented in the Times last year. Everyone knows the
low-lying fruit for increased taxation is the upper middle class: Those who work hard and
save hard and are nowhere near the top of the wealth pyramid. It's that nurse with the three
jobs, or the small business owner who now clears $200,000 a year, or the pair of teachers
who, after 25 years of teaching, now bring home $150,000 combined. Those are the targets of
the proposed "new" taxes. Don't believe the hype. I'm a liberal, and I know what's up with
these people. 4 Replies
Ocasio-Cortez represents the success of a progressive in ousting a white liberal in a safely
Democratic district. While interesting, that doesn't provide much of a blueprint for winning
in 2020 in districts and states that voted for Trump. As noted elsewhere in this newspaper,
of the roughly 60 new Democrats in Congress elected in 2018, two-thirds, were pragmatic
moderates that flipped Republican seats. Progressives were notably less successful in
flipping Republican seats.
Just keep in mind that what the author deems "radical" ideas are considered mainstream in the
rest of the developed world. We are an extreme outlier in lacking some form of universal
health care, for example. Also, while the NYT clearly saw Bernie's 2016 campaign as
shockingly radical, the very people Edsall says we must court were wild about Bernie. His
message about income inequality resonates with anyone living paycheck to paycheck and the
only thing "radical" about it is that he said the truth out loud about the effects of
unbridled capitalism. The neoliberal types that the NYT embraces are the milquetoast people
who attract a rather small group of voters, so, I am not too eager to accept his analysis. I
fully expect the Times to back Gillibrand and Biden, maybe even that other corporatist,
Booker. They don't scare the moneyed class.
The Dems have been drifting to the right for decades, egged on by pundits who keep telling
them to move to the center. Do the math: moving to the center just moves the center to the
right. Frankly, Nixon was more liberal than most of today's Dems. A move to the left is long
overdue.
The rumblings in the Democratic party may represent a realization that WE THE PEOPLE deserve
a bigger slice of the pie. Democrats such as Sanders, Warren and AOC are tapping into a
reservoir of voters who have been excluded from the American Dream by design. The new message
seems to be "fairness". I think that translates into government which does the most good for
the greatest number of people. Candidates who embody that principle will be the new leaders.
Ignore at your peril.
@Quiet Waiting: if voters believe republicans are helping them economically then follow them
off the cliff. Hopefully enough voters will try a more humane form of capitalism. 12 Replies
Ms Ocasio Cortez is a partial illustration of Reagan's dictum that "The trouble with our
liberal friends is not that they are ignorant, but that they know so much that isn't so". In
the case of AOC she is not only very ignorant but she believes many things that are actually
not true. For her to actually believe that the "world will end in 12 years" and
simultaneously believe that, even if true, Congress could change this awful fact is so
breathtakingly ignorant one hardly knows where to start.
Maybe it's worth considering that a lot of those spooky millennials, the stuff of campfire
scare stories, themselves grew up in the suburbs. They are the children of privilege who have
matured into a world that is far less secure and promising than that of their swing-voter
soccer moms. Health care, student debt, secure retirement, and the ability to support a
family are serious concerns for them. And don't even get me started on climate change and the
fossil fuel world's stranglehold on our polity.
@dudley thompson, if you are one of those elite moderate liberals against the "lefties"
concern about college and medical costs, protections for workers and the environment, and
progressive taxation, then in the end getting your vote isn't worth sacrificing the votes of
all the other people who do care about those things. Your "moderate" way may calm those swing
voters who fear change, and allow them to vote for the Democrat, but it also demoralizes and
disappoints the much larger group of potential Democratic voters that craves change.
@Jessica Summerfield ..."article described AOC as a communist." And I saw an article describe
Ross Douthat as a "columnist"... equally misleading. Will the calumny never cease? 27 Replies
Thomas, this "left" used to be known as the middle. A commitment to housing instead of an
acceptance of homelessness. Dignity. A tax system designed to tax wealthy people, not, as we
have now, a tax system designed to tax the middle class and poor. Can we all just take a look
at what is being promoted -- look at what AOC is proposing compared to Eisenhower era tax
rates. We have lurched right so that event center-right is now considered left.
Rage is the political fuel that fires up the Left. Rage also is the source of some very bad
ideas. Having bad ideas is the reason people don't vote for a political party in a
presidential election. The democrats are now the party of socialism, open borders, very high
taxes, anti-religious bigotry, abolishment of free speech, rewriting the constitution,
stuffing the Supreme Court, impeachment of the President, and being intolerance of other
views. They have also alienated 64 million Americans by calling them deplorables, racist and
a host of other derogatory terms. Not a good strategy to win over voters in swing states.
They also have attacked all men and white men in particular. They think masculinity is toxic
and that gender is not biological but what a person believes themselves to be (noticed that I
used the plural pronoun?). So far a long list of bad ideas. Let's see how it plays out in
2020. 1 Reply
We need to be careful what we refer to as left. Is the concept that we have access to
affordable housing, healthcare, and decent jobs really a position of the far left? Not
really. The 1944 progressives saw access to basic life as a right of all people. This is why
young educated progressives support policies that encourage success within the unregulated
capitalist economy that has been created over the last 40 years. The evidence illustrates
that federal and state governments need to help people survive, otherwise we are looking at
massive amounts of inequality that affect the economy and ultimately affect the very people,
the extremely rich, who support deregulation.
@Bruce Rozenblit The Republicans great skill has been selling lies to the socially
conservative to get their greedy financial agenda through. They have never cared about their
voters other than how best to spin their rhetoric. 27 Replies
Moving left takes a twitter account, a quixotic mentality and the word free. Its sedition
arousing rhetoric is blinkered by the lack of a viable strategy to support and move it
forward. Liberals thrive on the free media attention which feeds their rancor and aplomb.
Liberals are the infants of the Democratic Party. They're young, cute and full of amusing
antics. They have an idyllic view of what the world can be but without efficacy. When they
are challenged, or don't get enough attention, they revert to petulance. As all mammals do,
most liberals eventually grow up to join the Democratic median. Those that don't become the
party regalers brought out when the base needs energized. They grow old and fade away,
remembered only for their flamboyance and dystopian view of the world. The Democratic Party
has never been more fractured since its inception. With close to thirty potential candidates
for President, it is going to take a coalition within their party in order to put forth a
viable nominee. Then the party infighting will commence which will lead the party into
defeat. Democrats must focus on a untied party platform which is viable and will produce
results for the American people. Enough of the loquacious hyperbole and misandrous language;
it's time to stop reacting and start leading.
If it looks like the Democrats are moving strongly to the left, it's because they have
stopped chasing the GOP over the cliff in a vain effort to meet them in some mythical middle.
That's why the gap is widening; Republicans have not slowed in their headlong rush to
disaster. In truth it is the Republican Party and its messaging machine that has been doing
its best to drag America to the extreme right by controlling the narrative and broadcasting
talking points picked up and amplified by the Mainstream Media. The Mainstream Media has its
own issues. Increasingly consolidated under corporate ownership into fewer and fewer hands,
it has developed a reflex aversion to anything that looks too 'left' and a suspicion of
anything that looks progressive. The desperate battle for eyeballs in a fragmenting market
has also taken a toll; deep journalism or reporting that risks alienating any part of the
shrinking audience for traditional news is anathema to the bean counters who have
financialized everything. Deliberate intimidation by the right has also taken a toll.
Republicans have no answers; Democrats do - and that's the gist of it. The real challenge is
to prevail against a party that has embraced disinformation, the politics of resentment and
destruction - and the Mainstream Media that has failed to call them out on it.
We are looking at a future Speaker of the House. Watch out Republicans, this woman is not
afraid of you white, stodgy, misogynistic and racist haters. Your party, once a viable and
caring party, is dead.
The Republican Party used to be a moderate political party that was fully capable of
governing. Over the years, the right wing of the party assumed control and they became a
radically conservative party that basically hated government and did nothing for the benefit
of average Americans. As a result, many voters came to believe that a more liberal stance was
preferred to what the Republicans had become. Basically, the Republican Party veered sharply
to the right and went off and left a lot of their earlier supporters, like me.
Alexandria Ocasio-Cortez is the perfect foil to the Trump twitter fest we've been subjected
to for the past 2 years. However, enough of the tit for tat -- I would still like to see the
freshman representative put forth some legislation for a vote.
In terms of policies, this "sharp shift to the left" represents a return to the New Deal and
the Great Society and a renewed commitment to civil rights. It is a return to things we never
should have turned away from.
@Tracy Rupp Don't be so quick to condemn. The really old white men of today defeated Germany
and Japan. Then those same old white men went into Korea and then Vietnam. Ok so maybe you
have a point.
Shifted to the LEFT? After decades of movement to the Right, by the GOP and even assisted by
Dems such as the Clintons, etc., this political movement is merely a correction, not a
radical shift as your article contends.
Just as the reader comments from yesterday's opinion piece on the Covington School story by
David Brooks reveal rampant confirmation bias, the comments here reveal an equally relevant
truth: nobody, but nobody, eats their own like the left. The "Down With Us" culture in full
effect.
I am confused about what message, what issues resonate with the "moderate" people who are
disaffected from the liberal message of the Democrats on the left. What policies would bring
them to vote Democratic, what is it about health care for all, a living wage and opening the
voting process to all people are they opposed to. Is it policy or message that has them
wavering?
@dudley thompson Do you consider Eisenhower leftist? (highest tax rates ever). How about
Nixon? (established the EPA). We have lurched so far right in this country that the middle
looks left. I'm sick of the labels -- listen to what these leaders are actually proposing. If
you don't understand how the marginal tax rate works, look it up. If you don't realize we
once didn't accept mass homelessness and mass incarceration as a fact of life in America,
learn some history. We're living in a myopic, distorted not-so-fun-house where up is down and
center is left. We need to look with fresh eyes and ask what our communal values are and what
America stands for. 5 Replies
Here is a thought I would like to share with the New York Times: Thomas Edsall's article is
excellent. The corollary I draw from it that the paper that projects itself as the voice of
the liberals in this county has to understand that it has fallen behind times. If the
statistics and commentary accompanying it is a criteria to consider, The Times should move to
a more progressive editorial platform. The sooner, the better! The support given by this
paper to Hillary Rodham Clinton over Bernie Sanders in 2016 is unforgivable. The attitude
exhibited towards Elizabeth Warren is hardy different. This has to change if you want to keep
your relevance unless you believe publishing Edsall's essay is just part of your "diversity"
policy. What the followers of AOC and other progressives are clamoring for are very basic
human needs that have been delivered in affluent (and not so affluent) societies all over the
globe. No need to name those countries, by now the list is well known. What do we need
delivered: Universal Healthcare, Free Public Education K through College, No Citizens United,
Total Campaign Finance Reform, Regulation of Wall Street, Regulation of Pharma, Regulation of
Big Tech, Gender Equality, 21st Century Infrastructure. All paid for by cutting the Military
and Defense Budget Waste (cf Charlie Grassley, a buddy of Karl Marx) and taxing the top
percent at levels AOC cites and Professors Suez and Zucman concur with in their Times OpEd.
Democrats need to win elections first. Progressive ideas may have support on the coasts and
cities but fall flat in red states where there is still widespread dislike for immigrants and
minorities and strong opposition to "having my hard-earned tax money supporting free stuff
for the undeserving who can't/won't take care of themselves." Because the Electoral College
gives red states disproportionate representation the Democrats must win some red states to
win a presidential election. Running on a strong progressive platform won't work in those
Republican-majority states. What Democrats need is a "Trojan Horse" candidate. Someone who
can win with a moderate message that has broad appeal across the entire country but who will
support and enact a strong progressive agenda once he/she is elected. And on a local election
level, Democrats need to field candidates whose message is appropriate for their local
constituency -- progressive in liberal states, more moderate in conservative areas. Winning
elections comes first. Let's do what it takes to win and not let our progressive wish list
blind us to the importance of winning elections.
@Westchester Guy: Leftists want amnesty and, eventually, open borders. This is utterly and
totally incompatible with their push for "free" college, universal health care, and so forth.
The fiscal infeasibility is so obvious that one could only believe in these coexisting
policies if they were blinded by something, like Trump hatred, or just plain dishonest. The
"leftist" label for the new Democrat party is entirely appropriate. You also have your own
bigots to counter Trump. The difference is that their bigotry is sanctioned by most of the
mainstream media.
Has AOC or any other liberal offered any feasible policy to improve the lives of the people
they claim to help? Just take a good hard look at NYC where AOC is from which for many years
the Public Housing Authority cannot even provide adequate heat in the building the city owns.
So while AOC dreams of taxing the wealthy 70% perhaps she needs to slow down and catch up to
reality to realize what she offers is only building towards another Venezuela.
This article is half poison pill. By reading it, you learn a lot about Democratic Party
voting patterns, but you also have to endure a number of false ideas, the worst of which is
Edsall's warning that radical Democrats will foment internal chaos leading to electoral loss.
The fact is, it is the corporate democrats, who in the last 40 years abandoned the base of
working, blue collar democrats in favor of their Wall Street overlords. It is the corporate
democrats who created the billionaire class by reducing corporate tax rates. It is the
corporate Democrats who by reducing marginal tax rates created the plutocracy. It is the
corporate democrats who gave *Trillions of Dollars* to Bush and Obama's perpetual wars and
$70 Billion more than the defense department asks. This impoverishing the citizenry with debt
is their legacy as much as the Republicans. This shoveling of money to the 1% who abandoned
the middle class has been a train ridden by Corporate Democrats. It is the Corporate
Democrats who caused all this friction by letting the middle class fall off the edge of the
economic cliff -- all the while proclaiming how much they care. They show up on MLK day and
read flowing speeches from the podium when what we really need is activism and changes in
marginal tax rates, defense spending and the Medical Insurance and care oligopoly. So now
there is revolution brewing in response to the Corporate Democrats' appeasement of the
Oligarchy? Good. Bring it on.
Honestly, it is the centrist, neoliberal wing of the Democratic party that gave up on talking
to the Midwest and focused on the coasts. That was the Clinton strategy and it didn't work.
Although AOC comes from an urban area, her message is broad: she is for the struggling,
working person. Edsall underestimates AOC's basis in economic thinking and her appeal to
flyover country. She speaks carefully and justly to social issues, but she also speaks to the
"kitchen table" issues that middle America is concerned with--in a much more real way than
the neoliberal Dems have figured out how to.
Please end you outsized coverage of AOC. I really don't know how you justify all the news
coverage. She is one of 435 representatives, and a new one at that. No accomplishments, just
a large Instagram following.
@John Patt Everybody over the age of 50 should apologize for giving our young people
catastrophic climate change, endless wars, broken healthcare, crumbling infrastructure, ever
widening income and wealth disparates, unaffordable post-secondary education, rampant gun
violence, no voice for labor. We over 50 didn't care enough to vote and to make enough
political noise to keep these things from happening. We over 50 all have personal
responsibilities for this messed up world we're leaving the young. 6 Replies
@Zor The answer is no. Remember Schumer saying that for every urban vote Democrats lost by
running Hillary, they would gain 2 suburban votes. It didn't turn out that way. The centrist,
corporatist Democrats (including Hillary and Biden) have no clue how to reach the working
class of any race. The working class focus of AOC is the Democratic Party's best chance at a
future. But of course the establishment, centrist, corporatist Democrats are still focused on
helping their big money donors. Here's another question: Just how are establishment,
centrist, corporatist Democrats different from Republicans?
Here's my thing- though I'm a deeply liberal person who shares a lot of political beliefs
with Ocasio-Cortez, I'm am not the least bit interested in her. Why? Because she's one
representative of a district all the way across the country from where I live. I care about
about my newly flipped district in Sherman Oaks. I care about my solidly Democratic district
in Santa Rosa. Just because one charismatic representative from Brooklyn has a good Twitter
feed doesn't mean that I have to care or that she deserves a highly-placed role on an
important committee. She's a freshman. Let her learn. And then, go ahead and tell me she
deserves a seat.
There really is not a far left in America. You guys have this weird aversion to moderate
sensible socialism that -as the saying goes- is only in America. Our conservative government
in Australia accepts it as a given the things AOC is fighting for. There is nothing weird
about universal health care in modern advanced countries. The conservatives have a magic word
in the USA that they us as a bogeyman and the word is socialism. Ironically they don't mind
Trump snuggling up to extreme left dictators like Kim and ex KGB Soviet operatives like Don's
supervisor Vlad Putin who by definition had to be a card carrying communist to get to his
position. But moderate socialism is all over northern Europe, NZ, UK and Australia. You
people are oppressed by conservatives playing the "that's socialism" card at every turn. We
never ask where does the money come from? here. The money seems to be there in all the
countries that take care of the health of their citizens. America is a wonderful country with
fantastic people- I love visiting... but to use an Aussie word - crikey I wouldn't want to
live there. 1 Reply
A.O.C. Alexandria "Overexposure" Cortez. This young woman is talented but should pace herself
a bit. It's not a marathon but it's not a sprint either. Let's call it "middle distance" in
track terms. You need to save some breath for when it's really needed. Pace for long term
influence on policy. Or be a "one hit wonder".
@Matt Williams Exactly. I'm a Democratic in a conservative area, and all my Democrat friends
think this woman is nuts. Our Senator Jon Tester is wonderful. Alexandria Ocasio-Cortez? Hard
pass. 9 Replies
@Cass You may self-identify as a moderate but you sound like a conservative. Please go join
the other party of no ideas if AOC strikes you as radical. The majority of Democrats don't
agree with you.
Ideology fails when it meets reality. Trump and McConnell are busy teaching the American
middle class what it is to be reduced to poverty - health care they can't afford, rising
taxes on those who have had some economic success, elimination of well paying jobs, and on
and on. Those voters are understandably interested in pocket book issues, the resurgence of
progressive candidates meets this newly emphasized need. In addition, look at the population
demographics. The baby boomers were a "bump" in population, they in turn have produced a new
bump in their children, who are now adults. The boomers were quite left, their children have
inherited some of this belief system - equal rights and protection and support of those with
less opportunity. The voters in general are also completely fed up with politicians lying to
them and taking away their benefits. They generally have a mistrust both of the right wing
destruction of our norms, and the Democrats failure to fight back (Garland should have been
appointed even in the face of McConnell's calumny). The new face of the Democratic party
feeds pocketbook issues, a belief that America is, in fact, a melting pot, and the need for
restoration of our Democracy. This pretty much covers all the bases, the Democrats just need
to get better at educating the populace.
By and large, the majority of 2600+ counties that Trump carried are not economically well
off. However, they are socially very traditional. Do the Democrats have a message that will
resonate with millions of these traditional white middle/lower middle class voters in the
hinterland? 1 Reply
have you listened to her interviews? she doesn't say much of anything. all political about
all these socialist ideas with no means or method of how to get there. and thank goodness she
has no clue how to get there
I used to be friends with a very high-achieving guy I met as a 15-year-old on a teen summer
tour in Israel, run by the national Reform synagogue movement, in 1985. In the course of our
frienship spanning the final years of high school through the beginning of college, gradually
fading to an email or 2 once every couple years; our different paths & outlooks became
very stark, though we'd both call ourselves liberals. My friend left no stone unturned in his
unambivalent achievement orientation, embracing w/religious fervor the absolute virtue of
success, the unimpeachable morality & integrity of our meritocracy, & meritocratic
ideals/ethos. Naturally, he wound up at Harvard, majoring in government, followed by Harvard
Law. What struck me throughout was the unvarnished "empiricism" of his outlook: rarefied,
lofty principles or romantic ideals seemed alien: the nitty gritty of practical &
procedural realities were the whole picture. The one time we explicitly discussed comparative
politics, he only gravitated toward the topic of Harold Washington's coalition-building
prowess. He was an ardent Zionist ("Jewish homeland!"), with little apparent interest in
theology or spirituality for that matter. Eventually he went into corporate law, negotiating
executive compensation. I think he epitomized the Clinton Democrat: A "Social justice," equal
opportunity for all, meritocracy "synthesis." In a word, that peculiarly "practical,"
pragmatic liberalism was *ultimately conservative*.
Let us all remember that since Reagan the "center" has moved decidedly right. So when we talk
about a move left, we are moving back to where we were in the 1950s-1970's. For example take
AOC's tax proposal. Right out of that time period. Look at the GOP platform in the 1950's. It
reads like a progressive platform today. So let's put this in perspective. Everything is
relative and we have adjusted to right wing dominant politics today.
Edsall looks at the fact the Democrats (and, indeed, the whole country) are moving in a
progressive direction. He does not look at the question of why. I maintain that with an
increase in educated voters, the country is moving towards policies that work, that are good
for the country as a whole, not just for a minority. The other wealthy countries, all with a
universal government health care system such as an improved Medicare for all, get BETTER
health care as measured by all 16 of the bottom line public health statistics for ALL of
their people at a cost of less than HALF per person as we pay. High inequality has been bad
for the economy and governance of this country. Look at what happened in 1929 and 2008 both
preceded by periods of high inequality. Compare that with the long period of low inequality
after WWII of Great Prosperity. Today as a result of terrible SCOTUS decisions, the Super
Rich pushing the country towards oligarchy. The situation at our borders was actually better
before 2003 when ICE was created. It has perpetrated so many atrocities, rightly garnered
such a terrible reputation, why isn't it time to abolish the thing and start over with a new
more humane organization. After all, the Germans did not keep the Gestapo after the war. I
running out of space, but let me end by saying we are now getting more progressive voters
that say that 2 + 3 = 5, and fewer conservative ones who say 2 + 3 = 23 and fewer moderates
who want to compromise on 2 + 3 = 14.
@Concerned Citizen, likewise, public education is funded largely by property taxes, even on
those who do not have children in school, or whose children are out of school. This is not
"someone else's" money! It is all our money, and this is the way we choose to employ it
– to educate all our children, realizing, I hope, that educated children are a major
asset of a developed country. 38 Replies
Until AOC starts to achieve some actual LEGISTATIVE VICTORIES, I'm not prepared to follow her
ANYWHERE. I'm willing to listen to what she has to say, some of which I agree with and some I
question. I lean Left on most issues but I'm not a fanatic, and fanatics exist on BOTH sides
of the political spectrum. I believe that one must PROVE themselves before being beatified.
In substance, I'm open to the "new wing" of the Democratic party which I am, officially, a
member of. Let me add that I will NEVER cast a vote for anyone calling themselves a
Republican because that very label is forever tainted in my book. But I don't much care for
the 'tit for tat' Tweeting from AOC either, writing about Joe Lieberman (whom I do not like)
"who dat"? What is "dat", Miss AOC?
The insane part of this never gets addressed. Why should Americans political interests and
aspirations be controlled by two monopolistic parties? 1 Reply
The country may be in a need of a more social agenda, but this agenda must perceptible help
the depressed white rural folk first. Nothing will work what make those, who are already
falling behind feel like a "basket of deplorables". I hope AOC will find a way not just to
become a poster star of the progressive urban left, but also understand the ailing of the
depressed rural right.
The Democratic Party needs to do a very good job of educating an electorate (and possibly
some of its own members) that has for more than 30 years drunk the kool-aid of the "lower our
taxes," small government, and deregulation gurus. We have such a predatory capitalism now,
with government failing over and over again to reign in huge corporations headed by those who
think they should be determining everything from economic to housing to health to foreign
policy. Enough already. Most of the young members of Congress need a lot more experience and
more immersion in the nitty gritty of creating legislation before they can take the reins,
but they can educate their constituents. And maybe they can convince others that everyone
gains through a more level playing field.
Calling these ideas left is a joke. AOC and Bernie Sanders would practically be conservatives
in Canada and Europe. What we have are 3 unofficial parties: 1. The party of people with good
ideas who aren't afraid to speak about them because they aren't beholden to big donors 2. The
party of watered down, unpopular ideas that are vetted by 20 pollsters and donors before
seeing the light of day 3. The party that gets into office by tapping into people's primal
fears, and avoids policy altogether Republicans have been moving the goalposts for decades
now, how can you even tell left from right anymore?
@A. Stanton Since 1990, there have been funding gaps, shutdowns or serious threats of
shutdowns almost every year. The have become routine tactics in the effort of each party to
drive a hard bargain.
Running up the Democratic vote in Blue states by pandering to left leaning views will not
unseat DJT in 2020. Winning the popular vote by 3 or 3 million yields the same results.
Unless or until we adopt the Nation Popular Vote Intrastate Compact or reapportion the House
more equitably, Republicans will continue to exploit the Electoral College's
antimajoritarianism. Courting the minority of lefties mimics DJT's courting of his base; last
November proved that elections are won in the middle. Appealing to moderates in purple states
is the only path to 270. If you have any doubt, ask private citizen HRC how much good the
Democratic over-vote did for her.
@Bruce Rozenblit What is exceedingly strange to me is that those who rail against socialism
completely misread socialism at it's very roots; Family. 27 Replies
Yes, because all these pundits got 2016 so right. They are people with their own opinions,
just like everyone else, except the punditry has a vested interest in maintaining the status
quo that has been so good to them for so long. Enough already! Times, you're as much to blame
as these pundits for 2016!
When progressive solutions are proposed, the opposition yells "socialism" while others bring
up the cost of progressive solutions. No one talks about the significant portion of our
nation's wealth spent on the military. We don't audit the Pentagon or do due diligence on the
efficiency of huge projects undertaken by the military nor do we question the profits of the
industrial-military complex. Meanwhile, Russia manipulated our latest presidential race,
underscoring the worry over cyber attacks. Climate events in the country mean our citizens
experience life changing events not brought on by terrorists or immigrants. A medical event
in a family can initiate bankruptcy; we all live on that edge. Our infrastructure projects
have been delayed for so long that America looks like a second rate country. Income
inequality is ongoing with no sign of lessening. Suicide is on the increase while death by
drugs is an epidemic. An education for students can mean large debt; efforts to train the
workforce for the technological world are inconsistent. For many of us, the hate and fear
promoted in this country is repulsive. Because our society works for an ever smaller number
of us, Americans are increasingly understanding that a sustainable, just society works for
all it's citizens. We are exhausted by the stalemate in Washington leaving us caring very
little about the labels of progressive, moderate, or conservative. We just know what needs to
change.
Edall's final point that thsese are Democrats returning to Democratic roots and not a wave of
radicalism. I along with a lot of other older voters was infected with a kind of gradualism.
I voted for Hilary, much now to my dismay. AOC among others is stating what she, and what
many of us want. The old Democratic party was a mirror image of Republicans, with taking the
same money, voting for the same wars, and within it all a kind of shame,liberal as a kind of
curse, where we were afraid to make our own agenda, make our own plan for America. taking the
burden, in health care, college education, immigration, is an investment in the future
The New Democratic approach in essence is taking wealth and redistributing it, along with
promising free goods and services. Is that high-minded or simply a Brave New World. The
underlying assumption seems to be the rest of America will not find that worrisome, and that
what happened in MA and NY represents a nationwide trend. 3 Replies
These voters are not moving to the left. They are correcting a trend to the right that
accelerated with Reagan: the rise of corporate dominance and societal control; the loss of
worker rights, healthcare and protections through destruction of our unions; and the mass
incarceration of our nation's young African American men for minor drug offenses, thus
destroying their futures and communities. These "left" liberals are fighting to bring back
democratic norms and values that were once taken for granted among those of all political
stripes.
I have always voted in every primary. I have always voted for the most "leftist" available.
So did my whole family, and all the people with whom I discussed our voting. The issue was
always "most leftist available." That often was not very leftist at all. That is what has
changed. Now the option is there. It isn't because we vote for it. We vote for it now because
now we can, now the choice is there. What has changed is not so much the voters as the
invisible primary before anyone asks us voters. What changed is the Overton Window of
potential choices allowed to us. I think voters would have done this a long time ago, if
they'd had the opportunity. So why now? Abject failure of our politics to solve our problems
has been true for decades, so it isn't mere failure. I'd like to think it was voter
rebellion. We just wouldn't vote for their sell outs. Here, that meant Bernie won our
primary, and then we did not turn out for Her. We finally forced it. The money men could not
get away with it anymore.
It is strange that Mr Edsall frames Medicare 4 All , Free College , and higher taxes on
wealthy as RADICAL leftist ideas .. when it fact each of these proposals have the majority of
support from Americans.. The most current poll shows 70% support for Medicare 4 All.. so you
are only radical if you DON'T support.
Unless the progressives start addressing the concerns of the middle class, they will drive
the Democratic Party right off the cliff. You remember us, don't you? People who have tried
to do things right and work hard. Granted, our cares and concerns aren't that sexy or
tweetable so it's easy for you newly elected firebrands to overlook us. Don't forget, we are
the ones who will ultimately foot the bills for your giveaways.
The notion that democrats are moving leftward is borne on revisionist history. There's
nothing new or bold being proposed; Zeitz is right on the money.
"Medicare for All, government-guaranteed jobs and a higher minimum wage" I have a question to
all the "progressive" Democratic voices in Congress - how are you going to pay for such an
agenda? Money doesn't just grow on trees. Either you will have to cut funds from another
program, or raise taxes. Most of these progressive people favor raising taxes on the wealthy.
But what is your definition of "wealthy"? $10 million in annual income? $1 million in annual
income? $500k? $200k? Almost all the proposals I have seen coming from progressives involves
increasing tax rates for families making more than $200k, either through higher rates, phased
out deductions, or ineligibility for certain programs. A professional couple where both are
software engineers could easily surpass this threshold, but they are not rich. They struggle
to pay the mortgage, save for the future, pay taxes, and provide for their children. Why
should they be forced to pay more in taxes percentage-wise than a family earning $100k or
$60k? It is for these reasons that I as an independent will never support progressive
candidates. These candidates lack basic math abilities and a basic notion of fairness. So if
the Democratic party starts to embrace some of the policies espoused by these progressives,
they are on a path to lose elections in the future. 1 Reply
@AutumnLeaf Mitch McConnell blocked Obama at every turn; he denied him the appointment of a
moderate respected Judge to the SC, a Judge the GOP had voted for on the Superior Court.
Congress wasted time with 40 attempts to declare the ACA unconstitutional; the Plan was
modeled on a Romney Plan in MA. Scalia's Citizens United Decision declared that corporations
are people; Scalia knew that he was using a Superior Ct. Decision with a transcription error:
word spoken: corporation; word transcribed: individual. Scalia spent a lot of time at
corporate lodges, "hunting"; mainly eating until he finally ate himself to death. McConnell
spends his time with mine owners. Trump spends his time with lobbyists for Israel and Saudi
Arabia. 9 Replies
I think this article underscores the incredible opportunity available to the left if they
pick a radical democratic socialist candidate. If they are already winning the college
educated crowd that is gentrifying these major urban areas and losing the poorer minority
crowd that is voting for people like the Clinton's over Sanders or Crowley over AOC; we are
getting the people whom one would think would be less incentivized to vote for our platform
and we can gain the people who would benefit more from our platform.Therefore, it is really
just a question of exposure and talking to these people. Reaching out to minorities; talking
about mass-incarceration, how it disproportinately affects precisely these minority voters
that we have to gain; and how the moderate democrats have been benefiting economically and
politically from the chaos and inequities in these communities for years. It is a question of
messaging. Minorities are our natural allies. They are disproportinately affected by the
inequality; and as soon as we can reach them; tell them that there brothers, husbands, sons
are coming home, and that we have a job for them to support their family when they do, that
is a huge % of voters that will swing our way, and accelerate the pace of our revolution--and
what critics will come to remember as the end of their decadence and control over all facets
of society, to the detriment of everyone else. The end is coming--and a new, better society
is on the verge of being reborn 1 Reply
Of all of those quoted in this article, the only one who really gets it right is Joshua
Zeitz. FDR's 1944 State of the Union address should be required reading for every Democrat,
and every Establishment talking head who warns against alienating suburban voters by
advocating for a New Deal social safety net. I share the sentiments of many on who have
responded by noting that it was, and is, the leadership of the Democratic Party that has
moved right rather than the Democratic electorate that shifted left. Don't believe me? Go
back through the sixteen years of the Clinton and Obama presidencies and see how many times
each referenced Ronald Reagan versus even mentioning Franklin Roosevelt, Harry Truman, or
Lyndon Johnson.
Medicare for all? Get ready for 6-week waits for a 10 minute appointment (and that will be
just for primary care). After that, expect to wait 6-12 months to see a specialist. 1 Reply
@José Franco I will not dig out social security trustees' projections of future
funding requirements or the possible solutions bandied about by politicians (google them),
but one single tweak would eliminate any projected shortfalls. Currently the FICA
contribution is limited to earnings of $132,900. Those who earn over that amount pay no FICA
tax on the earnings above that level. The person earning a million dollars in 2019 will stop
paying FICA on his earnings by mid-February. Applying FICA to all earnings of all earners
would keep social security solvent. No raise in retirement age, no reduction in benefits, no
insolvency. As to Medicare's solvency and public benefits, see the excellent comments of Len
Charlap. 17 Replies
There are several issues upon which I and my like-minded moderate family members will cast
our votes in 2020: - Border security and the end to the brazen exploitation of our citizenry
by the millions of foreign migrants who illegally, and with an attitude of entitlement,
trespass into our sovereign country year after year...costing our taxpayers billions. -
Reckless proposals to increase government benefit programs that aren't affordable without
raising taxes, threatening our already stressed social security safety net. - The rise of
Antisemitism and the mendacious obsession with Israel amongst leftists within Congress, as
well as within the ranks of their constituents. Democrats will need to address these issues
to our satisfaction if they want our votes. 2 Replies
Ed, it's time to retire. If you spent time looking at the actual data, Democratic primary
voters, particularly those in overly restrictive closed primary states like New York, are
older, wealthier, "socially liberal" and "fiscally conservative." They are what we would have
called moderate/Rockefeller Republicans 40 years ago, but they vote Democratic because that's
who their parents voted for. Most progressive voters today, the ones who support Medicare for
all, investment in public higher education, taxation on wealth (you know, those pesky issues
that mainstream Democrats used to support 30-40 years ago) are younger and more likely to be
unaffiliated with any political party. This is why Bernie did much better in states with open
primaries, and Hillary did better in closed primary states like NY AOC won in spite of NY's
restrictive primary system. She was able to achieve this because many of the older Democratic
establishment voters who would have voted for Crowley stayed home, and she was able to
motivate enough first-time young voters in her district to register as a Dem and vote for
her. (First time voters in NY can register with party 30 days prior to primary election)
Let's be clear though: your premise that Dem primary voters are driving the party's shift to
the left couldn't be further from the truth--the progressive shift in the body politic you
describe is coming from younger, independent, working class voters and is redefining the
American left.
From the NYT , Edsall April 19, 2018 The Democrats' Gentrification Problem "Conversely, in
the struggling Syracuse metropolitan area (Clinton 53.9 percent, Trump 40.1 percent),
families moving in between 2005 and 2016 had median household incomes of $35,219 -- $7,229
less than the median income of the families moving out of the region, $42,448." Syracuse, a
democratic City in one of the most democratic States in the US, so assuredly democratic that
Democratic Presidential candidates rarely show up has been left by the Democrats and the
Democratic Governor ,Cuomo, in a death spiral of getting poorer by the day That in a State,
that includes NYC, the international capital of the global billionaire elite. Exactly, what
have the Democrats done to help ?
"Sawhill argues that if the goal of Democrats is victory, as opposed to ideological purity,
they must focus on general election swing voters who are not die-hard Democrats." Wow, what
an original argument! I have been hearing the exact same thing since I registered to vote at
age 18 in 1977. Democrats are always urged to support the "sensible, centrist" candidates who
keep on losing elections to Republicans who drag their party, and the whole country by
default, even further to the right. JFK was called a communist and worse by pundits like this
and he would have won by a landslide in 1964. How about if Democrats for once push for
policies that are backed by 90 percent of Americans, like Medicare For All, the higher
minimum wage, universal college education, renewable energy and the rest of the Green New
Deal and higher marginal tax rates for the rich. I would love to see just one presidential
candidate run on this platform before I die so I can fill out my ballot without holding my
nose. 1 Reply
Kind of make sense considering how far to the right the Republican Party has gone with the
Donald. And he's a guy who was a Democrat at one point. He's a dangerous mr nobody. Let's
counter going far to the left so we can come back to some middle ground.
@Len Charlap Canada can also more easily afford universal healthcare and a stronger social
safety net because it doesn't have the outsized military budget that we do. 17 Replies
@Ronny I agree with you - have a subsidized education - (rather I prefer to say equal access
to education) as well as health care guarantees to a greater extent equality of opportunity -
which is what all democratic societies should strive for. It's not equality of outcome but
equality of opportunity. Children should not be punished for have parents of lesser means or
being born on the wrong side of the tracks...
Until I see well-crafted legislation that is initiated by her that will help improve the
lives of many she's just another politician with sound bite platitudes. She doesn't even have
a district office in the Bronx yet to the chagrin of many of the constituents.
@Midwest Josh Perhaps student loans made by the FED at the rates they charge the big banks in
their heist of the American economy achieved back in 1913. 38 Replies
AOC is a liberal darling who's stated (on 60 Minutes) that unemployment rates are low because
everyone is working two jobs; I might add, that has nothing to do with how unemployment rates
are figured and come on, "everyone?" And recently she's stated that the world will end in 12
years if we don't do something about climate change. Come on, this is silliness, ignorance
and borderline stupidity. If she's the poster child for the Democrats, then she's the gift
that will keep on giving to the GOP.
I grew up during the Vietnam War, and over the years came to admire the American people who
ultimately forced their government to withdraw from an immoral (and disastrous) military
adventure. This is rare in human history. Rare in American history too, as the follies in
Iraq drag on and on to remind us. Perhaps the American people are becoming themselves again.
I wouldn't call it drifting left at all.
Thomas Edsall's column is yet another conservative spin on Democrats from The New York Times.
Where are the voices of progressive Democrats, who form the overwhelming majority of New York
City residents? Of New York state residents? Who form the core of the Democratic Party's
support. The Times insists that these conservative voices are the only ones deserving of
publication here. Where in the world did the notion come from that The Times was a "liberal"
publication?
@Chris Young, It seems you aonly approve of departments that teach what you consider
"productive." If schools become an adjuct to the marketplace, then only the material,
quantifiable results will be the metric by which the value of education is measured. This
will leave us, as in some ways we are already becoming, a population that emulates robots,
and has no use for critical thinking, ethics, or art. The profit in education is in the
quality of the students it turns out into the world, not on a corporate balance sheet. 38
Replies
It's all good but important to expand the focus on the entirety of the Democrats in Congress
- and the amazing age range and gender mix. The opportunities are vast - an intergenerational
government of forward thinking, principled women and men. Please media pundits - avoid focus
on only 1 or 2. There are brilliant ideas pouring forth - let the ideas from every corner
flow! Remember that the intense media focus on Trump, liberal as well as conservative,
contributed significantly to what happened in election 2016.
If by liberal you mean the circular firing squad of the politics of aggrievement, no. My
politics fall in line with FDR's Second Bill of Rights. Here he describes them in 1944
https://youtu.be/3EZ5bx9AyI4
"...true individual freedom cannot exist without economic security & independence.
"Necessitous men are not free men." People who are hungry & out of a job are the stuff of
which dictatorships are made... We have accepted, so to speak, a second Bill of Rights under
which a new basis of security & prosperity can be established for all -- regardless of
station, race, or creed. Among these are: The right to a useful and remunerative job...; The
right to earn enough to provide adequate food & clothing & recreation; The right of
every farmer to raise & sell his products at a return which will give him & his
family a decent living; The right of every businessman, large and small, to trade in an
atmosphere of freedom from unfair competition & domination by monopolies at home or
abroad; The right of every family to a decent home; The right to adequate medical care &
the opportunity to achieve & enjoy good health; The right to adequate protection from the
economic fears of old age, sickness, accident & unemployment; The right to a good
education." That is where Democrats used to be. Then came the Corporate Democrats, the DLC
and the Clintons.
This piece misses more than it hits. Where it misses particularly is in it's insistence that
the Class interest of working class Democrats pulls the Party right, rather than left, and
that the insurgents are mostly young, white gentrifying liberals. This is not altogether
false, but misses that many of the gentrifiers are not middle class themselves, but lower
middle class young people with huge college debt who could never dream of living in upper
middle class enclaves like most of the opinion writers in the Time for example. So they move
into the inner city, make it safe for professionals, and then yes, Brooklyn goes white.
Harlem goes white. Berkeley loses its working class majority. Etc. The big problem for the
left of the Democratic Party is not that its mostly young, white and middle class; it is that
the very term "liberal" is now widely understood by working class people as meaning
"establishment." And they are against the "establishment". As it happens, so are the young
insurgents. This then is the task for the left of the Democrats; to unite the culturally
conservative working class with the emerging multi-racial, multi-ethnic youth vote to take
down both the reactionary Right and the Liberal establishment. And the only reason such a
sentiment seems crazy is that the New York Times, far from being a bastion of the resistance
to Trump is actually a bulwark of that Liberal Establishment. Stats are stats but the future
is unwritten.
AOC is pretty interesting. She's charismatic, fearless....and I'm trying to think of
something else. OH, she's personally attractive. If the government gig falls apart she can
probably get TV work. But as an intellectual light or a rational political leader -- she is
clearly lacking. OF course that may not matter as the earth will come to an end in 12 years.
Which is even more ludicrous than saying the earth is only 6000 years old. She is simply
spouting far left talking points which are driven by emotion, not rational thought. And she
keeps making unforced errors in her public speaking engagements. She really doesn't appear to
understand what she's talking about and can't respond to reasonable questions about her
policy positions. But then, that's not too unlike much of the left. So maybe she's a perfect
fit for a fact free faction which is beginning to run the dem party. 1 Reply
One commenter gave a really insightful look at socialism for corporations and the rich here,
otherwise known to most of us as corporate welfare, including subsidies to oil companies, who
seem rich enough, but nevertheless, extend their "impoverished" bank accounts for more of our
dollars. Successful corporations, will reward investors, CEO's, hedge fund managers, all
those at the top, but the worker, not too much for that drone, who was part of the reason of
the success of that corporation. Socialism has been tainted by countries with autocratic
rulers , uneducated masses, and ofttimes, as in Latin America, religious masses. But,
Scandinavia, has shown us a socialism to envy. It's confident citizens know that much of what
makes life livable has been achieved. Finland rates as one of the happiest countries in the
world. Taxes are high, but one isn't bankrupted because of illness, one doesn't lose a home
because of a catastrophic illness, education is encouraged, and one doesn't have to pay the
debt off for 30 years or more. The infrastructure is a priority, war is not. It just seems
like it's a secure way to live. This is socialism I wish we could duplicate. Does anyone
consider that socialism also includes our police, libraries, fire stations, roads, and so
much more? Used for the good of society, it's a boon for all, rather than unregulated
capitalism which enriches the few at the expense of most of us. 3 Replies
@Reilly Diefenbach "Democratic socialism" isn't a thing, but implies two contradictory
ideals. Social democracy is thing, a good thing, and in line with what Nordic nations have.
38 Replies
Never has someone gotta so much for doing so little. None of this means anything if it
doesn't become law. As a life long Liberal Democrat (there, I said it) myself, I find it
infuriating when Liberal/Progressive politicians get out-sized credit for their good
intentions while those same good intentions threaten party unity. The Progressive idea of
party unity seems to be limited to getting what they want or they'll walk away. They just
know better, so there's no need for compromise. Never mind that they have no way of enacting
any of this legislation -- and more often than not Progressives lose at the polls. These
"kids" need to wake up and realize that there are no moral victories in politics. The ONLY
goal of any Democrat has to be unseating Trump and McConnell, everything else is a noise, and
a dangerous distraction.
I support universal health care, free college for students who meet enhanced entrance
requirements and raising marginal tax rates to 70% on wealthy Americans. Yet I do not support
an expansion of the EITC, ending immigration enforcement or putting workers on boards of
directors. So where do I stand? All my life I've voted Democratic. But there has been a
seismic shift in politics. And after the shift I will most likely vote Republican or for a
third party. The issue that causes my change in affiliation is the Me Too movement. I find it
repugnant that feminists seem to argue that the media rather than the courts should determine
guilt or innocence in sexual assault cases. Bill Cosby had an agreement with Andrea Constand
in their case. But feminists weren't happy with the outcome. So they resorted to extra-legal
means to get Cosby convicted. This included a media campaign in which the NY Times and the
New Yorker wrote stories highlighting accusations of 60 women for which statutes of
limitations had elapsed. But statutes of limitations are there for a reason. This became
clear in the confirmation of Brett Kavanaugh which degenerated into a trial for rape. Nobody
except maybe the accuser could remember in any detail events at the party in which the rape
had presumably occurred. So the confirmation became one of character assassination in which
Kavanaugh was convicted of drinking beer. I will NEVER vote for any politician who supports
the Me Too movement.
"... protection from the vicissitudes of market capitalism"? People want protection from
monopoly capitalism. The left-right frame is a fallacy. If you put the actual policies on the
table, the great majority want single payer, clean elections, action on climate change, etc.
Pitting Left v. Right only redounds to tribalism. It ends up with a President who shuts down
the business of which he himself is the CEO. That's not great.
There is nothing natural about money. There is no link to some scarce essential form of money that sets a limit to its creation.
It can be composed of base metal, paper or electronic data – none of which is in short supply. Similarly – despite what you may have
heard about the need for austerity and a lack of certain cash-generating trees – there is no "natural" level of public expenditure.
The size and reach of the public sector is a matter of political choice.
Which puts austerity, the culling of expenditure in the public economy, under some question. For some countries, such as
Greece , the impact of austerity has been devastating. Austerity policies still persist despite numerous
studies arguing that they were entirely misconceived,
based on political choice rather than economic logic. But the economic case for austerity is equally mistaken: it is based on what
can best be described as fairytale economics.
So what were the justifications? Britain, for example, has lived under an austerity regime since 2010, when the incoming Tory-Liberal
Democrat government reversed the Labour policy of raising the level of public expenditure in response to the 2007-8 financial crisis.
The crisis had created a perfect storm: bank rescue required high levels of public spending while economic contraction reduced tax
income. The case for austerity was that the higher level of public expenditure could not be afforded by the taxpayer. This was supported
by "
handbag economics ", which adopts the analogy of states as being like households, dependent on a (private sector) breadwinner.
Under handbag economics, states are required to restrict their expenditure to what the taxpayer is deemed to be able to afford.
States must not try to increase their spending by borrowing from the (private) financial sector or by "printing money" (although
the banks were rescued by doing so by another name – quantitative
easing , the creation of electronic money).
The ideology of handbag economics claims that money is to be generated only through market activity and that it is always in short
supply. Request for increased public expenditure is almost invariably met with the response "where's the money to come from?" When
confronted by low pay in the NHS, the British prime minister, Theresa May, famously declared, "there is no magic money tree".
So where does money come from? And what is money
anyway? What is money?
Until the last 50 years or so the answer seemed to be obvious: money was represented by cash (notes and coin). When money was
tangible, there seemed no question about its origin, or its value. Coins were minted, banknotes were printed. Both were authorised
by governments or central banks. But what is money today? In richer economies the use of cash is
declining rapidly . Most monetary transactions are based on transfers between accounts: no physical money is involved.
In the run up to the financial crisis, the state's role in relation to money held in bank accounts was ambiguous. Banking was
a monitored and licensed activity with some level of state guarantee of bank deposits, but the actual act of creating bank accounts
was, and is, seen as a private matter. There may be regulations and limitations, but there is
no detailed scrutiny of bank accounts and bank lending.
Yet, as the 2007-8 financial crisis showed, when bank accounts came under threat as banks teetered on the edge of bankruptcy,
states and central banks had to step in and
guarantee the security
of all deposit accounts. The viability of money in non-investment bank accounts was demonstrated to be as much a public responsibility
as cash.
This raises fundamental questions about money as a social institution. Is it right that money can be generated by a private choice
to take on debt, which then becomes a liability of the state to guarantee in a crisis?
But far from seeing money as a public resource, under neoliberal handbag economics, money creation and circulation has increasingly
been seen as a function of the market. Money is "made" solely in the private sector. Public spending is seen as a drain on that money,
justifying austerity to make the public sector as small as possible.
This stance, however, is based on a complete misunderstanding of the nature of money, sustained by a series of deeply embedded
myths.
Myths about money
Neoliberal handbag economics is derived from two key myths about the origin and nature of money. The first is that money emerged
from a previous market economy based on barter. The second is that money was originally made from precious metal.
It is claimed that bartering proved to be very inefficient as each buyer-seller needed to find another person who exactly matched
their requirements. A hat maker might barter a hat for some shoes she needs – but what if the shoe maker is in no need of a hat?
The solution to this problem, so the story goes, was to choose one commodity that everyone desired, to act as a medium of exchange.
Precious metal (gold and silver) was the obvious
choice because it had its own value and could be easily divided and carried. This view of the origin of money goes back to at
least the 18th century: the time of economist
Adam Smith .
The 'father of capitalism' Adam Smith, 1723-1790. Matt Ledwinka/Shutterstock.com
These myths led to two assumptions about money that are still current today. First, that money is essentially connected to, and
generated by, the marketplace. Second that modern money, like its original and ideal form, is always in short supply. Hence the
neoliberal
claim that public spending is a drain on the wealth-creating capacity of the market and that public spending must always be as
limited as possible. Money is seen as a commercial instrument, serving a basic, market, technical, transactional function with no
social or political force.
But the real story of money is very different. Evidence from anthropology and history shows that there was no widespread barter
before markets based on money developed, and precious metal coinage emerged long before market economies. There are also many forms
of money other than precious metal coins.
Money as custom
Something that acts as money has existed in most, if not all, human societies. Stones, shells, beads, cloths, brass rods and many
other forms have been the means of comparing and acknowledging comparative value. But this was rarely used in a market context. Most
early human communities lived directly off the land – hunting, fishing, gathering and gardening. The customary money in such communities
was used mainly to celebrate auspicious social events or serve as a way of resolving social conflict.
For example, the Lele people, who lived in what is now the Democratic Republic of Congo in the 1950s, calculated value in
woven raffia
cloths . The number of cloths required for different occasions was fixed by custom. Twenty cloths should be given to a father
by a son on achieving adulthood and a similar amount given to a wife on the birth of a child. The anthropologist Mary Douglas, who
studied the Lele, found
they were resistant to using the cloths in transactions with outsiders, indicating that the cloths had a specific cultural relevance.
Even stranger is the large stone money of the Yap people of Micronesia. Huge circular discs of stone could weigh up to
four metric tons . Not something to put in your
pocket for a trip to the shops.
Try lugging that to the market. Evenfh/Shutterstock.com
There is plenty of other anthropological evidence such as this all over the world, all pointing to the fact that money, in its
earliest form, served a social rather than market-based purpose.
Money as power
For most traditional societies, the origin of the particular money form has been lost in the mist of time. But the origin and
adoption of money as an institution became much more obvious with the emergence of states. Money did not originate as precious metal
coinage with the development of markets. In fact, the new invention of precious metal coinage in around
600BC was adopted
and controlled by imperial rulers to build their empires by waging war.
Most notable was Alexander the Great, who ruled from 336–323BC. He is said to have used
half a ton of silver a day
to fund his largely mercenary army rather than a share of the spoils (the traditional payment). He had more than 20 mints producing
coins, which had images of gods and heroes and the word Alexandrou (of Alexander). From that time, new ruling regimes have
tended to herald their arrival by a new coinage.
Alexandrou. Alex Coan/Shutterstock.com
More than a thousand years after the invention of coinage, the Holy Roman Emperor Charlemagne (742-814), who ruled most of western
and central Europe, developed what became the basis of the British pre-decimal money system: pounds, shillings and pence. Charlemagne
set up a currency system based on 240 pennies minted from a pound of silver. The pennies became established as the denier in France,
the pfennig in Germany, the dinero in Spain, the denari in Italy and the penny in Britain.
So the real story of money as coinage was not one of barterers and traders: it emerged instead from a long history of politics,
war and conflict. Money was an active agent in state and empire building, not a passive representation of price in the market. Control
of the money supply was a major power of rulers: a sovereign power. Money was created and spent into circulation by rulers either
directly, like Alexander, or through taxation or seizure of private holdings of precious metal.
Nor was early money necessarily based on precious metal. In fact, precious metal was relatively useless for building empires,
because it was in short supply. Even in the Roman era, base metal was used, and Charlemagne's new money eventually became debased.
In China, gold and silver did not feature and paper money was being used as early as the 9th century.
A coin from the time of Charlemagne, 768-814 AD. Classical Numismatic Group, CC BY-SA
What the market economy did introduce was a new form of money: money as debt.
Money as debt
If you look at a Ł20 banknote you will see it says: "I promise to pay the bearer on demand the sum of twenty pounds." This is
a promise originally made by the Bank of England to exchange notes for the sovereign currency. The banknote was a new form of money.
Unlike sovereign money it was not a statement of value, but a promise of value. A coin, even if made of base metal, was exchangeable
in its own right: it did not represent another, superior, form of money. But when banknotes were first invented, they did.
The new invention of promissory notes emerged through the needs of trade in the 16th and 17th centuries. Promissory notes were
used to acknowledge receipt of loans or investments and the obligation to repay them through the fruits of future transactions. A
major task of the emerging profession of banking was to periodically set all these promises against each other and see who owed what
to whom. This process of "clearing" meant that a great amount of paper commitments was reduced to relatively less actual transfer
of money. Final settlement was either by payment with sovereign money (coins) or another promissory note (banknote).
Eventually, the banknotes became so trusted that they were treated as money in their own right. In Britain they became equivalent
to the coinage, particularly when they were united under the banner of the Bank of England. Today, if you took a banknote to the
Bank of England, it would merely exchange your note for one that is exactly the same. Banknotes are no longer promises, they are
the currency. There is no other "real" money behind them.
What promissory notes became. Wara1982/Shutterstock.com
What modern money does retain is its association with debt. Unlike sovereign money, which was created and spent directly into
circulation, modern money is largely borrowed into circulation through the banking system. This process shelters behind another myth,
that banks merely act as a link between savers and borrowers. In fact, banks create money. And it is only in the last decade that
this powerful myth has been finally put to rest by banking and monetary authorities.
It is now
acknowledged
by monetary authorities such as the IMF, the US Federal Reserve and the Bank of England, that banks are creating new money when
they make loans. They don't lend the money of other account holders to those who want to borrow.
Bank loans consist of money conjured out of thin air, whereby new money is credited to the borrowers account with the agreement
that the amount will eventually be repaid with interest.
The policy implications of the public currency being created out of nowhere and lent to borrowers on a purely commercial basis
have still not been taken on board. Nor has basing a public currency on debt as opposed to the sovereign power to create and directly
circulate money free of debt.
The result is that rather than using their own sovereign power over money creation, as Alexander the Great did, states have become
borrowers from the private sector. Where there are public spending deficits or the need for large scale future expenditure, there
is an expectation that the state will borrow the money or increase taxation, rather than create the money itself.
Creators of cash. Creative Lab/Shutterstock.com
Dilemmas of debt
But basing a money supply on debt is ecologically, socially and economically problematic.
Ecologically, there is a problem because the need to pay off debt could drive potentially
damaging
growth : money creation based on repaying debt with interest must imply constant growth in the money supply. If this is achieved
through increasing productive capacity, there will inevitably be pressure on natural resources.
Basing the money supply on debt is also socially discriminatory because not all citizens are in a position to take on debt. The
pattern of the money supply will tend to favour the already rich or the most speculative risk-taker. Recent decades, for example,
have seen a
huge amount of borrowing by the financial sector to enhance their investments.
The economic problem is that the money supply depends on the capacity of the various elements of the economy (public and private)
to take on more debt. And so as countries have become more dependent upon bank-created money, debt bubbles and credit crunches have
become more frequent.
This is because handbag economics creates an impossible task for the private sector. It has to create all new money through bank-issued
debt and repay it all with interest. It has to completely fund the public sector and generate a profit for investors.
But when the privatised bank-led money supply flounders, the money creating powers of the state come back into clear focus. This
was particularly plain in the 2007-8 crisis, when central banks created new money in the process known as quantitative easing. Central
banks used the sovereign power to create money free of debt to spend directly into the economy (by buying up existing government
debt and other financial assets, for example).
The question then becomes: if the state as represented by the central bank can create money out of thin air to save the banks
– why can't it create money to save the people?
It's a mistake to think of the state as a piggybank or handbag. ColorMaker/Shutterstock.com
Money for the people
The myths about money have led us to look at public spending and taxation the wrong way around. Taxation and spending, like bank
lending and repayment, is in a constant flow. Handbag economics assumes that it is taxation (of the private sector) that is raising
the money to fund the public sector. That taxation takes money out of the taxpayer's pocket.
But the long political history of sovereign power over money would indicate that the flow of money can be in the opposite direction.
In the same way that banks can conjure money out of thin air to make loans, states can conjure money out of thin air to fund public
spending. Banks create money by setting up bank accounts, states create money by allocating budgets.
When governments set budgets they do not see how much money they have in a pre-existing taxation piggybank. The budget allocates
spending commitments that may, or may not, match the amount of money coming in through taxation. Through its accounts in the treasury
and the central bank, the state is constantly spending out and taking in money. If it spends more money than it takes in, it leaves
more money in people's pockets. This creates a budget deficit and what is effectively an overdraft at the central bank.
Is this a problem? Yes, if the state is treated as if it was any other bank account holder – the dependent household of handbag
economics. No, if it is seen as an independent source of money. States do not need to wait for handouts from the commercial sector.
States are the authority behind the money system. The power exercised by the banks to create the public currency out of thin air
is a sovereign power.
It is no longer necessary to mint coins like Alexander, money can be created by keystrokes. There is no reason why this should
be monopolised by the banking sector to create new public money as debt. Deeming public spending as being equivalent to bank borrowing
denies the public, the sovereign people in a democracy, the right to access its own money free of debt.
Money should be designed for the many, not the few. Varavin88/Shutterstock.com
Redefining money
This foray into the historical and anthropological stories about money shows that long-held conceptions – that money emerged from
a previous market economy based on barter, and that it was originally made from precious metal – are fairytales. We need to recognise
this. And we need to capitalise on the public ability to create money.
But it is also important to recognise that the sovereign power to create money is not a solution in itself. Both the state and
bank capacity to create money have advantages and disadvantages. Both can be abused. The reckless lending of the banking sector,
for example, led to the near meltdown of the American and European monetary and financial system. On the other hand, where countries
do not have a developed banking sector, the money supply remains in the hands of the state, with massive room for corruption and
mismanagement.
The answer must be to subject both forms of money creation – bank and state – to democratic accountability. Far from being a technical,
commercial instrument, money can be seen as a social and political construct that has immense radical potential. Our ability to harness
this is hampered if we do not understand what money is
and how it works . Money must become our servant, rather than our master.
theconversation.com The views of individual contributors do not necessarily represent those of the Strategic Culture Foundation.
Tags: Capitalism Neoliberalism
Print this article June
24, 2019 | Editor's Сhoice Neoliberalism Has Tricked Us Into Believing a Fairytale About Where Money Comes From Mary MELLOR
There is nothing natural about money. There is no link to some scarce essential form of money that sets a limit to its creation.
It can be composed of base metal, paper or electronic data – none of which is in short supply. Similarly – despite what you may have
heard about the need for austerity and a lack of certain cash-generating trees – there is no "natural" level of public expenditure.
The size and reach of the public sector is a matter of political choice.
Which puts austerity, the culling of expenditure in the public economy, under some question. For some countries, such as
Greece , the impact of austerity has been devastating. Austerity policies still persist despite numerous
studies arguing that they were entirely misconceived,
based on political choice rather than economic logic. But the economic case for austerity is equally mistaken: it is based on what
can best be described as fairytale economics.
So what were the justifications? Britain, for example, has lived under an austerity regime since 2010, when the incoming Tory-Liberal
Democrat government reversed the Labour policy of raising the level of public expenditure in response to the 2007-8 financial crisis.
The crisis had created a perfect storm: bank rescue required high levels of public spending while economic contraction reduced tax
income. The case for austerity was that the higher level of public expenditure could not be afforded by the taxpayer. This was supported
by "
handbag economics ", which adopts the analogy of states as being like households, dependent on a (private sector) breadwinner.
Under handbag economics, states are required to restrict their expenditure to what the taxpayer is deemed to be able to afford.
States must not try to increase their spending by borrowing from the (private) financial sector or by "printing money" (although
the banks were rescued by doing so by another name – quantitative
easing , the creation of electronic money).
The ideology of handbag economics claims that money is to be generated only through market activity and that it is always in short
supply. Request for increased public expenditure is almost invariably met with the response "where's the money to come from?" When
confronted by low pay in the NHS, the British prime minister, Theresa May, famously declared, "there is no magic money tree".
So where does money come from? And what is money
anyway? What is money?
Until the last 50 years or so the answer seemed to be obvious: money was represented by cash (notes and coin). When money was
tangible, there seemed no question about its origin, or its value. Coins were minted, banknotes were printed. Both were authorised
by governments or central banks. But what is money today? In richer economies the use of cash is
declining rapidly . Most monetary transactions are based on transfers between accounts: no physical money is involved.
In the run up to the financial crisis, the state's role in relation to money held in bank accounts was ambiguous. Banking was
a monitored and licensed activity with some level of state guarantee of bank deposits, but the actual act of creating bank accounts
was, and is, seen as a private matter. There may be regulations and limitations, but there is
no detailed scrutiny of bank accounts and bank lending.
Yet, as the 2007-8 financial crisis showed, when bank accounts came under threat as banks teetered on the edge of bankruptcy,
states and central banks had to step in and
guarantee the security
of all deposit accounts. The viability of money in non-investment bank accounts was demonstrated to be as much a public responsibility
as cash.
This raises fundamental questions about money as a social institution. Is it right that money can be generated by a private choice
to take on debt, which then becomes a liability of the state to guarantee in a crisis?
But far from seeing money as a public resource, under neoliberal handbag economics, money creation and circulation has increasingly
been seen as a function of the market. Money is "made" solely in the private sector. Public spending is seen as a drain on that money,
justifying austerity to make the public sector as small as possible.
This stance, however, is based on a complete misunderstanding of the nature of money, sustained by a series of deeply embedded
myths.
Myths about money
Neoliberal handbag economics is derived from two key myths about the origin and nature of money. The first is that money emerged
from a previous market economy based on barter. The second is that money was originally made from precious metal.
It is claimed that bartering proved to be very inefficient as each buyer-seller needed to find another person who exactly matched
their requirements. A hat maker might barter a hat for some shoes she needs – but what if the shoe maker is in no need of a hat?
The solution to this problem, so the story goes, was to choose one commodity that everyone desired, to act as a medium of exchange.
Precious metal (gold and silver) was the obvious
choice because it had its own value and could be easily divided and carried. This view of the origin of money goes back to at
least the 18th century: the time of economist
Adam Smith .
The 'father of capitalism' Adam Smith, 1723-1790. Matt Ledwinka/Shutterstock.com
These myths led to two assumptions about money that are still current today. First, that money is essentially connected to, and
generated by, the marketplace. Second that modern money, like its original and ideal form, is always in short supply. Hence the
neoliberal
claim that public spending is a drain on the wealth-creating capacity of the market and that public spending must always be as
limited as possible. Money is seen as a commercial instrument, serving a basic, market, technical, transactional function with no
social or political force.
But the real story of money is very different. Evidence from anthropology and history shows that there was no widespread barter
before markets based on money developed, and precious metal coinage emerged long before market economies. There are also many forms
of money other than precious metal coins.
Money as custom
Something that acts as money has existed in most, if not all, human societies. Stones, shells, beads, cloths, brass rods and many
other forms have been the means of comparing and acknowledging comparative value. But this was rarely used in a market context. Most
early human communities lived directly off the land – hunting, fishing, gathering and gardening. The customary money in such communities
was used mainly to celebrate auspicious social events or serve as a way of resolving social conflict.
For example, the Lele people, who lived in what is now the Democratic Republic of Congo in the 1950s, calculated value in
woven raffia
cloths . The number of cloths required for different occasions was fixed by custom. Twenty cloths should be given to a father
by a son on achieving adulthood and a similar amount given to a wife on the birth of a child. The anthropologist Mary Douglas, who
studied the Lele, found
they were resistant to using the cloths in transactions with outsiders, indicating that the cloths had a specific cultural relevance.
Even stranger is the large stone money of the Yap people of Micronesia. Huge circular discs of stone could weigh up to
four metric tons . Not something to put in your
pocket for a trip to the shops.
Try lugging that to the market. Evenfh/Shutterstock.com
There is plenty of other anthropological evidence such as this all over the world, all pointing to the fact that money, in its
earliest form, served a social rather than market-based purpose.
Money as power
For most traditional societies, the origin of the particular money form has been lost in the mist of time. But the origin and
adoption of money as an institution became much more obvious with the emergence of states. Money did not originate as precious metal
coinage with the development of markets. In fact, the new invention of precious metal coinage in around
600BC was adopted
and controlled by imperial rulers to build their empires by waging war.
Most notable was Alexander the Great, who ruled from 336–323BC. He is said to have used
half a ton of silver a day
to fund his largely mercenary army rather than a share of the spoils (the traditional payment). He had more than 20 mints producing
coins, which had images of gods and heroes and the word Alexandrou (of Alexander). From that time, new ruling regimes have
tended to herald their arrival by a new coinage.
Alexandrou. Alex Coan/Shutterstock.com
More than a thousand years after the invention of coinage, the Holy Roman Emperor Charlemagne (742-814), who ruled most of western
and central Europe, developed what became the basis of the British pre-decimal money system: pounds, shillings and pence. Charlemagne
set up a currency system based on 240 pennies minted from a pound of silver. The pennies became established as the denier in France,
the pfennig in Germany, the dinero in Spain, the denari in Italy and the penny in Britain.
So the real story of money as coinage was not one of barterers and traders: it emerged instead from a long history of politics,
war and conflict. Money was an active agent in state and empire building, not a passive representation of price in the market. Control
of the money supply was a major power of rulers: a sovereign power. Money was created and spent into circulation by rulers either
directly, like Alexander, or through taxation or seizure of private holdings of precious metal.
Nor was early money necessarily based on precious metal. In fact, precious metal was relatively useless for building empires,
because it was in short supply. Even in the Roman era, base metal was used, and Charlemagne's new money eventually became debased.
In China, gold and silver did not feature and paper money was being used as early as the 9th century.
A coin from the time of Charlemagne, 768-814 AD. Classical Numismatic Group, CC BY-SA
What the market economy did introduce was a new form of money: money as debt.
Money as debt
If you look at a Ł20 banknote you will see it says: "I promise to pay the bearer on demand the sum of twenty pounds." This is
a promise originally made by the Bank of England to exchange notes for the sovereign currency. The banknote was a new form of money.
Unlike sovereign money it was not a statement of value, but a promise of value. A coin, even if made of base metal, was exchangeable
in its own right: it did not represent another, superior, form of money. But when banknotes were first invented, they did.
The new invention of promissory notes emerged through the needs of trade in the 16th and 17th centuries. Promissory notes were
used to acknowledge receipt of loans or investments and the obligation to repay them through the fruits of future transactions. A
major task of the emerging profession of banking was to periodically set all these promises against each other and see who owed what
to whom. This process of "clearing" meant that a great amount of paper commitments was reduced to relatively less actual transfer
of money. Final settlement was either by payment with sovereign money (coins) or another promissory note (banknote).
Eventually, the banknotes became so trusted that they were treated as money in their own right. In Britain they became equivalent
to the coinage, particularly when they were united under the banner of the Bank of England. Today, if you took a banknote to the
Bank of England, it would merely exchange your note for one that is exactly the same. Banknotes are no longer promises, they are
the currency. There is no other "real" money behind them.
What promissory notes became. Wara1982/Shutterstock.com
What modern money does retain is its association with debt. Unlike sovereign money, which was created and spent directly into
circulation, modern money is largely borrowed into circulation through the banking system. This process shelters behind another myth,
that banks merely act as a link between savers and borrowers. In fact, banks create money. And it is only in the last decade that
this powerful myth has been finally put to rest by banking and monetary authorities.
It is now
acknowledged
by monetary authorities such as the IMF, the US Federal Reserve and the Bank of England, that banks are creating new money when
they make loans. They don't lend the money of other account holders to those who want to borrow.
Bank loans consist of money conjured out of thin air, whereby new money is credited to the borrowers account with the agreement
that the amount will eventually be repaid with interest.
The policy implications of the public currency being created out of nowhere and lent to borrowers on a purely commercial basis
have still not been taken on board. Nor has basing a public currency on debt as opposed to the sovereign power to create and directly
circulate money free of debt.
The result is that rather than using their own sovereign power over money creation, as Alexander the Great did, states have become
borrowers from the private sector. Where there are public spending deficits or the need for large scale future expenditure, there
is an expectation that the state will borrow the money or increase taxation, rather than create the money itself.
Creators of cash. Creative Lab/Shutterstock.com
Dilemmas of debt
But basing a money supply on debt is ecologically, socially and economically problematic.
Ecologically, there is a problem because the need to pay off debt could drive potentially
damaging
growth : money creation based on repaying debt with interest must imply constant growth in the money supply. If this is achieved
through increasing productive capacity, there will inevitably be pressure on natural resources.
Basing the money supply on debt is also socially discriminatory because not all citizens are in a position to take on debt. The
pattern of the money supply will tend to favour the already rich or the most speculative risk-taker. Recent decades, for example,
have seen a
huge amount of borrowing by the financial sector to enhance their investments.
The economic problem is that the money supply depends on the capacity of the various elements of the economy (public and private)
to take on more debt. And so as countries have become more dependent upon bank-created money, debt bubbles and credit crunches have
become more frequent.
This is because handbag economics creates an impossible task for the private sector. It has to create all new money through bank-issued
debt and repay it all with interest. It has to completely fund the public sector and generate a profit for investors.
But when the privatised bank-led money supply flounders, the money creating powers of the state come back into clear focus. This
was particularly plain in the 2007-8 crisis, when central banks created new money in the process known as quantitative easing. Central
banks used the sovereign power to create money free of debt to spend directly into the economy (by buying up existing government
debt and other financial assets, for example).
The question then becomes: if the state as represented by the central bank can create money out of thin air to save the banks
– why can't it create money to save the people?
It's a mistake to think of the state as a piggybank or handbag. ColorMaker/Shutterstock.com
Money for the people
The myths about money have led us to look at public spending and taxation the wrong way around. Taxation and spending, like bank
lending and repayment, is in a constant flow. Handbag economics assumes that it is taxation (of the private sector) that is raising
the money to fund the public sector. That taxation takes money out of the taxpayer's pocket.
But the long political history of sovereign power over money would indicate that the flow of money can be in the opposite direction.
In the same way that banks can conjure money out of thin air to make loans, states can conjure money out of thin air to fund public
spending. Banks create money by setting up bank accounts, states create money by allocating budgets.
When governments set budgets they do not see how much money they have in a pre-existing taxation piggybank. The budget allocates
spending commitments that may, or may not, match the amount of money coming in through taxation. Through its accounts in the treasury
and the central bank, the state is constantly spending out and taking in money. If it spends more money than it takes in, it leaves
more money in people's pockets. This creates a budget deficit and what is effectively an overdraft at the central bank.
Is this a problem? Yes, if the state is treated as if it was any other bank account holder – the dependent household of handbag
economics. No, if it is seen as an independent source of money. States do not need to wait for handouts from the commercial sector.
States are the authority behind the money system. The power exercised by the banks to create the public currency out of thin air
is a sovereign power.
It is no longer necessary to mint coins like Alexander, money can be created by keystrokes. There is no reason why this should
be monopolised by the banking sector to create new public money as debt. Deeming public spending as being equivalent to bank borrowing
denies the public, the sovereign people in a democracy, the right to access its own money free of debt.
Money should be designed for the many, not the few. Varavin88/Shutterstock.com
Redefining money
This foray into the historical and anthropological stories about money shows that long-held conceptions – that money emerged from
a previous market economy based on barter, and that it was originally made from precious metal – are fairytales. We need to recognise
this. And we need to capitalise on the public ability to create money.
But it is also important to recognise that the sovereign power to create money is not a solution in itself. Both the state and
bank capacity to create money have advantages and disadvantages. Both can be abused. The reckless lending of the banking sector,
for example, led to the near meltdown of the American and European monetary and financial system. On the other hand, where countries
do not have a developed banking sector, the money supply remains in the hands of the state, with massive room for corruption and
mismanagement.
The answer must be to subject both forms of money creation – bank and state – to democratic accountability. Far from being a technical,
commercial instrument, money can be seen as a social and political construct that has immense radical potential. Our ability to harness
this is hampered if we do not understand what money is
and how it works . Money must become our servant, rather than our master.
"... When administrators make budget cuts, it isn't for recreational facilities and their own salaries -- it's the classics and history departments, and it's to faculty, with poorly paid part-time adjuncts teaching an unconscionable share of courses. ..."
"... So universities have been exacerbating the same unequal division between the people who actually do the work (faculty) and the people who allocate salaries (administrators) -- so too as in the business world, as you say. ..."
I don't think that's entirely accurate, and even if true, leaving students to the
predations of private lenders isn't the answer. Although I'm willing to entertain your
thesis, soaring tuition has also been the way to make up for the underfunding of state
universities by state legislatures.
At the same time, there's been an increase since the 70s in de luxe facilities and bloated
administrator salaries. When administrators make budget cuts, it isn't for recreational
facilities and their own salaries -- it's the classics and history departments, and it's to
faculty, with poorly paid part-time adjuncts teaching an unconscionable share of
courses.
So universities have been exacerbating the same unequal division between the people
who actually do the work (faculty) and the people who allocate salaries (administrators) --
so too as in the business world, as you say.
Meanwhile, Brent crude price dropped just a bit while futures remain steady in the low $60s.
So no panic was induced by Trump's idiocy. Gold however jumped over $20 again to just under
$1420 as China continues to dump T-Bills and buy gold. It may seem like a Mexican Standoff,
but it looks pretty one-sided to me.
"... The massive student-debt jubilee would be financed with a tax on Wall Street: Specifically, a 0.5% tax on stock trades, a 0.1% tax on bond trades and a .005% tax on derivatives trades. ..."
"... By introducing the student-debt plan, Sanders has outmaneuvered Elizabeth "I have a plan for that" Warren ..."
In his latest attempt to one-up Elizabeth Warren and establish his brand of "democratic
socialism" as something entirely different from the progressive capitalism practiced by some of
his peers, Bernie Sanders is preparing to unveil a new plan that would involve cancelling all
of the country's outstanding $1.6 trillion in student debt.
The massive student-debt jubilee would be financed with a tax on Wall Street:
Specifically, a 0.5% tax on stock trades, a 0.1% tax on bond trades and a .005% tax on
derivatives trades.
Additionally, Sanders' plan would also provide states with $48 billion to eliminate tuition
and fees at public colleges and universities. Thanks to the market effect, private schools
would almost certainly be forced to cut prices to draw talented students who could simply
attend a state school for free.
Reps Ilhan Omar of Minnesota and Pramila Jayapal of Washington have already signed on to
introduce Sanders' legislation in the House on Monday.
The timing of this latest in a series of bold socialist policy proposals from Sanders -
let's not forget, Bernie is largely responsible for making Medicare for All a mainstream issue
in the Democratic Party - comes just ahead of the first Democratic primary debate, where
Sanders will face off directly against his No. 1 rival: Vice President Joe Biden, who has
marketed his candidacy as a return to the 'sensible centrism' of the Democratic Party of
yesteryear.
By introducing the student-debt plan, Sanders has outmaneuvered Elizabeth "I have a plan
for that" Warren and established himself as the most far-left candidate in the crowded
Democratic Primary field. Hopefully, this can help stall Warren's recent advance in the polls.
The plan should help Sanders highlight how Biden's domestic platform includes little in the way
of welfare expansion during the upcoming debate.
My federal student loan monthly statement says I don't have to make a payment. I don't
qualify for any forgiveness because I'm responsible. Nonetheless, I pay the loan every month.
The balance goes down but every month it's still the same story.
I have to imagine the provider prefers students to see that it says zero dollars owed this
month with the hope that they don't pay because it says 0 dollars owed, default, and rack up
a bunch of fees and interest that the student doesn't see in the fine print.
The provider can then get paid by the taxpayer no questions asked. Much more profit and
payment is significantly faster.
Education costs are in the stratosphere 'because' of conversion of univeristires into
neoliberal institution. Which mean that the costs will skyrocket even more.
Somebody once said: If the neoliberal government took over management of the Sahara
desert, in five years, there would be a shortage of sand.
The only way to rein in neoliberals in government is to stop giving them so damned much
money...
The guaranteed student loan program created a mechanism that increases the price of
education. Before the program, graduates could expect 10 times the cost of a years' tuition.
Now, they'de lucky to get one year. The Americans were pushed out of this business and the
UN-Americans replaced them. This goes on for decades until the marks realized that they've
been screwed. ... The victims are in full support since they've been systematically dumbed
down that it seems like a good idea. It's not. This is a bailout of a failed neoliberal
institution.
Schools are teaching to the test. As someone who recently retrained as a secondary science
teacher - after nearly 30 years as a journalist - I know this to be true.
Education is a prime example of where neoliberalism has had a negative effect. It worked well
when labour was pumping billions into it and they invested in early intervention schemes such
as sure start and nursery expansion. Unfortunately under the tories we have had those
progressive policies scaled right back. Children with SEND and/or in care are commodities
bought and sold by local authorities. I've been working in a PRU which is a private company
and it does good things, but I can't help but think if that was in the public sector that it
would be in a purpose built building rather than some scruffy office with no playground.
The facilities aren't what you would expect in this day in age. If we had a proper
functioning government with a plan then what happens with vulnerable children would be
properly organised rather than a reactive shit show.
"Schools teach to the test, depriving children of a rounded and useful education."
Boy do they. I work in Business/IT training and as the years have rolled on I and every
colleague I can think of have noticed more and more people coming to courses that they are
unfit for. Not because they are stupid, but because they have been taught to be stupid. So
used to being taught to the test that they are afraid to ask questions. Increasingly I get
asked "what's the right way to do...", usually referring to situation in which there is no
right way, just a right way for your business, at a specific point in time.
I had the great pleasure of watching our new MD describe his first customer-facing project,
which was a disaster, but they "learned" from it. I had to point out to him that I teach the
two disciplines involved - businesss analysis and project management - and if he or his team
had attended any of the courses - all of which are free to them - they would have learned
about the issues they would face, because (astonishingly) they are well-known.
I fear that these incurious adult children are at the bottom of Brexit, Trump and many of the
other ills that afflict us. Learning how to do things is difficult and sometimes boring. Much
better to wander in with zero idea of what has already been done and repeat the mistakes of
the past. I see the future as a treadmill where the same mistakes are made repetitively and
greeted with as much surprise as if they had never happened before. We have always been at
war with Eastasia...
It's no wonder the US is so screwed up these days. Somehow the NeoCons, before and after
stealing the 2,000 election for Bush, with the help of abundance of Liars 4 Hire think tanks
like CATO, CEI, AEI, Heritage Foundation blah, blah, blah, bankrolled by the likes of the
Koch Bros, The Scaifes, Exxon, Monsanto, Dow, Dupont the Nuke Industry etc. were, and are
still able to convince low intelligence people that wrong is right, bad is good, meanness is
"compassion" and abuse is "tough love".
But it only works if those being duped are already predisposed to hateful philosophy, and
that they got in spades with careful conditioning (brainwashing) from bastards like Rush
Limbaugh and Rupert Murdoch, people with no moral scruples whatsoever.
Thus the right today (actually for a long while now) is no more than a collection of
racists and bigots, pathological liars and scammers, charlatans and greedmeisters.
It's why they care nothing for the poor, nothing for protection the environment, nothing
for anyone or anything but themselves. They are the cult of mean.
As former right-wing operative Allen Raymond famously said: "this is not about morality,
this is about winning"
The hard reality remains that the financial markets are, in the long term, forward-looking.
But in the short-term, they are dominated by high-speed electronic trading.
Anyone who felt
Monday's (December's, Q4's) meltdown, or watched Tuesday night's reopening of equity index
futures, watched in entertained astonishment, if not anguish.
Clearly, sentient, reasoned
thought has now been sacrificed at the altar of short-term profit. The task is to come up with
a thesis moving forward, and the challenge is to stick to that conclusion at times when the
evils of algorithmic, high-frequency and passive trading styles turn against those core
beliefs. Risk Management. Before one might profit with sustained regularity, one must learn to
effectively preserve one's capital.
just so 5 hours ago
You can
have whatever opinion you want about Yahoo's reporting of the daily ups and downs of the
markets, and keep in mind, the exchanges are betting parlors. That said, these types of wild
swings over the last 6 weeks or so, are very similar to what took place before housing bubble
burst in the late mid-ots, keep an eye on the amount of private uncollateralized debt that
mid-cap companies are carrying, if they start defaulting and these private equity houses
start running for cover, it create the same type of liquidity situation that Lehman's
caused.
"... "the administrator uses social science the way the drunk uses a lamppost, for support rather than illumination." Scholars' disinclination to be used in this way helps explain more of the distance. ..."
The evidence suggests that foreign policymakers do not seek insight from scholars, but
rather support for what they already want to do.
As Desch quotes a World War II U.S. Navy anthropologist, "the administrator uses social
science the way the drunk uses a lamppost, for support rather than illumination." Scholars'
disinclination to be used in this way helps explain more of the distance.
The term Casializatin was repced by more correct term "neoliberalization" for clarity.
Notable quotes:
"... Neoliberalization, a word that says much in, and of, itself, is seen as analogue of broader outsourcing initiatives. Militaries do it, governments do it, and the university does it. Services long held to be the domain of the state, itself an animation of the social contract, the spirit of the people, have now become the incentive of the corporate mind, and, it follows, its associated vices. The entire scope of what has come to be known as outsourcing is itself a creature of propaganda, cheered on as an opportunity drawing benefits rather than an ill encouraging a brutish, tenuous life. ..."
"... Practitioners and policy makers within the education industry have become devotees of the amoral dictates of supply and demand, underpinned by an insatiable management class. Central to their program of university mismanagement is the neoliberal academic, a creature both embraced and maligned in the tertiary sectors of the globe. ..."
"... The neoliberal academic is meant to be an underpaid miracle worker, whose divining acts rescue often lax academics from discharging their duties. (These duties are outlined in that deceptive and unreliable document known as a "workplan", as tedious as it is fictional.) The neoliberal academic grades papers, lectures, tutors and coordinates subjects. The neoliberal provides cover, a shield, and an excuse for a certain class of academic manager who prefers the calling of pretence to the realities of work. ..."
"... Often, these neoliberal academics are students undertaking a postgraduate degree and subject to inordinate degrees of stress in an environment of perennial uncertainty. ..."
"... A representative sample of PhD students studying in Flanders, Belgium found that one in two experienced psychological distress, with one in three at risk of a common psychiatric disorder. Mental health problems tended to be higher in PhD students "than in the highly educated general population, highly education employees and higher education students." ..."
"... Neoliberalization can be seen alongside a host of other ills. If the instructor is disposable and vulnerable, then so are the manifestations of learning. Libraries and research collections, for instance, are being regarded as deadening, inanimate burdens on the modern, vibrant university environment. Some institutions make a regular habit of culling their supply of texts and references: we are all e-people now, bound to prefer screens to paper, the bleary-eyed session of online engagement to the tactile session with a book. ..."
Any sentient being should be offended. Eventually,
the Neoliberalization of the academic workforce was bound to find lazy enthusiasts who neither
teach, nor understand the value of a tenured position dedicated to that musty,
soon-to-be-forgotten vocation of the pedagogue. It shows in the designs of certain universities
who confuse frothy trendiness with tangible depth: the pedagogue banished from the podium, with
rooms lacking a centre, or a focal point for the instructor. Not chic, not cool, we are told,
often by learning and teaching committees that perform neither task. Keep it modern; do not
sound too bright and hide the learning: we are all equal in the classroom, inspiringly even and
scrubbed of knowledge. The result is what was always to be expected: profound laziness on the
part of instructors and students, dedicated mediocrity, and a rejection of all things
intellectually taxing.
Neoliberalization, a word that says much in, and of, itself, is seen as analogue of broader
outsourcing initiatives. Militaries do it, governments do it, and the university does it.
Services long held to be the domain of the state, itself an animation of the social contract,
the spirit of the people, have now become the incentive of the corporate mind, and, it follows,
its associated vices. The entire scope of what has come to be known as outsourcing is itself a
creature of propaganda, cheered on as an opportunity drawing benefits rather than an ill
encouraging a brutish, tenuous life.
One such text is Douglas Brown and Scott Wilson's The
Black Book of Outsourcing . Plaudits for it resemble worshippers at a shrine planning
kisses upon icons and holy relics. "Brown & Wilson deliver on the best, most innovative,
new practices all aimed at helping one and all survive, manage and lead in this new economy,"
praises
Joann Martin, Vice President of Pitney Bowes Management Services. Brown and Wilson take aim at
a fundamental "myth": that "Outsourcing is bad for America." They cite work sponsored by the
Information Technology Association of America (of course) that "the practice of outsourcing is
good for the US economy and its workers."
Practitioners and policy makers within the education industry have become devotees of the
amoral dictates of supply and demand, underpinned by an insatiable management class. Central to
their program of university mismanagement is the neoliberal academic, a creature both embraced and
maligned in the tertiary sectors of the globe.
The neoliberal academic is meant to be an underpaid miracle worker, whose divining acts rescue
often lax academics from discharging their duties. (These duties are outlined in that deceptive
and unreliable document known as a "workplan", as tedious as it is fictional.) The neoliberal
academic grades papers, lectures, tutors and coordinates subjects. The neoliberal provides cover, a
shield, and an excuse for a certain class of academic manager who prefers the calling of
pretence to the realities of work.
Often, these neoliberal academics are students undertaking a postgraduate degree and subject to
inordinate degrees of stress in an environment of perennial uncertainty. The stresses
associated with such students are documented in the Guardian's Academics
Anonymous series and have also been the subject of research
in the journal Research Policy . A representative sample of PhD students studying in
Flanders, Belgium found that one in two experienced psychological distress, with one in three
at risk of a common psychiatric disorder. Mental health problems tended to be higher in PhD
students "than in the highly educated general population, highly education employees and higher
education students."
This is hardly helped by the prospects faced by those PhDs for future permanent employment,
given what the authors of the Research Policy article describe
as the "unfavourable shift in the labour-supply demand balance, a growing popularity of
short-term contracts, budget cuts and increased competition for research sources".
There have been a few pompom holders encouraging the Neoliberalization mania, suggesting that it
is good for the academic sector. The explanations are never more than structural: a neoliberal
workforce, for instance, copes with fluctuating enrolments and reduces labour costs. "Using
neoliberal academics brings benefits and challenges," we find Dorothy Wardale, Julia Richardson and
Yuliani Suseno
telling us in The Conversation . This, in truth, is much like suggesting that
syphilis and irritable bowel syndrome is necessary to keep you on your toes, sharp and
streamlined. The mindset of the academic-administrator is to assume that such things are such
(Neoliberalization, the authors insist, is not going way, so embrace) and adopt a prostrate
position in the face of funding cuts from the public purse.
Neoliberalization can be seen alongside a host of other ills. If the instructor is disposable
and vulnerable, then so are the manifestations of learning. Libraries and research collections,
for instance, are being regarded as deadening, inanimate burdens on the modern, vibrant
university environment. Some institutions make a regular habit of culling their supply of texts
and references: we are all e-people now, bound to prefer screens to paper, the bleary-eyed
session of online engagement to the tactile session with a book.
The neoliberal, sessional academic also has, for company, the "hot-desk", a spot for temporary,
and all too fleeting occupation. The hot-desk has replaced the work desk; the partitions of the
office are giving way to the intrusions of the open plan. The hot-desker, like coitus, is
temporary and brief. The neoliberal academic epitomises that unstable reality; there is little need
to give such workers more than temporary, precarious space. As a result, confidentiality is
impaired, and privacy all but negated. Despite extensive research
showing the negative costs of "hot-desking" and open plan settings, university management
remains crusade bound to implement such daft ideas in the name of efficiency.
Neoliberalization also compounds fraudulence in the academy. It supplies the bejewelled short
cut route, the bypass, the evasion of the rigorous things in learning. Academics may reek like
piddling middle class spongers avoiding the issues while pretending to deal with them, but the
good ones at least make some effort to teach their brood decently and marshal their thoughts in
a way that resembles, at the very least, a sound whiff of knowledge. This ancient code, tested
and tried, is worth keeping, but it is something that modern management types, along with their
parasitic cognates, ignore. In Australia, this is particularly problematic, given suggestions that up to 80
percent of undergraduate courses in certain higher learning institutions are taught by neoliberal
academics.
The union between the spread sheet manager and the uninterested academic who sees promotion
through the management channel rather than scholarship, throws up a terrible hybrid, one
vicious enough to degrade all in its pathway. This sort of hybrid hack resorts to skiving and
getting neoliberals to do the work he or she ought to be doing. Such people co-ordinate courses but
make sure they get the wallahs and helpers desperate for cash to do it. Manipulation is
guaranteed, exploitation is assured.
The economy of desperation is cashed in like a reliable blue-chip stock: the skiver with an
ongoing position knows that a neoliberal academic desperate to earn some cash cannot dissent, will
do little to rock the misdirected boat, and will have to go along with utterly dotty notions.
There are no additional benefits from work, no ongoing income, no insurance, and, importantly,
inflated hours that rarely take into account the amount of preparation required for the
task.
The ultimate nature of the Neoliberalization catastrophe is its diminution of the entire
academic sector. Neoliberals suffer, but so do students. The result is not mere sloth but
misrepresentation of the worst kind: the university keen to advertise a particular service it
cannot provide sufficiently. This, in time, is normalised: what would students, who in many
instances may not even know the grader of their paper, expect? The remunerated, secure
academic-manager, being in the castle, can raise the drawbridge and throw the neoliberals to the
vengeful crowd, an employment environment made safe for hypocrisy.
Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT
University, Melbourne and can be reached at: [email protected] . Read other articles by Binoy .
A Dutch engineering university is taking radical action to increase its share of female
academics by opening job vacancies to women only. Starting on 1 July, the Eindhoven University
of Technology (TUE) in the Netherlands will not allow men to apply for permanent academic jobs
for the first 6 months of the recruitment process under a new fellowship program. If no
suitable applicant has been found within that time, men can then apply, but the selection
committee will still have to nominate at least one candidate of each gender. The [insane] plan
was
announced today and is already attracting controversy.
Portland, OR -- A former top level Walt Disney executive was sentenced to prison this month
for nearly seven years for child rape. Michael Laney, 73, who was the Vice President of Walt
Disney was found guilty of four counts of first-degree sexual abuse and sentenced to 81 months
in prison.
After the sentencing, Laney's attorneys pleaded with the judge to suspend the sentence,
claiming that Laney's wife would suffer if her husband goes to jail.
According to
Oregon Live
, Laney's wife's doctor, Blain Crandell, submitted a letter on Laney's behalf,
saying his wife "could be expected to suffer serious consequences to her health and well-being"
without an in-home caregiver, a role her husband had been filling.
Thankfully, the judge and district attorney did not see it that way. In response to this
request, Multnomah County Deputy District Attorney Charles Mickley called the claims
"peculiarly offensive and insulting."
"Defendant wholly ignores the compelling evidence of his guilt presented at trial, including
the evidence of his longstanding sexual interest in children," Mickley wrote.
Laney will also have to serve an additional 120 months of probation after prison, pay a
$4,000 fine, and register as a sex offender.
Matt Agorist
Matt Agorist
is an honorably discharged veteran of the USMC and former intelligence operator directly tasked
by the NSA. This prior experience gives him unique insight into the world of government
corruption and the American police state. Agorist has been an independent journalist for over a
decade and has been featured on mainstream networks around the world. Agorist is also the
Editor at Large at the Free Thought Project.
Follow @MattAgorist on Twitter
,
Steemit
, and now on
Minds.
PurpleCarrot
8h
Pedophilia is the link between all these Hollyweird freaks and politics as well. I
believe they are all lured into being compromised and dirt kept on them all collectively,
in order to use them and manipulate them and gain control over society.
"... Sherman found that her interviewees, all in the top 1-2 percent of income or wealth or both, had thoroughly imbibed the narrative of meritocracy to rationalize their affluence and immense privileges. That is, they believed they deserved all their money because of hard work and individual effort. Most identified themselves as socially and political liberal and took pains to distinguish themselves from "bad" rich people who flaunt their wealth. ..."
"... Finally, meritocracy is the classic American foundation myth and provides the basis for an entire array of other fairy tales. Foremost, this illusion serves to justify policies that foster economic inequality and hinder the development of social movements. After so many decades of neoliberal ideology, this lie is now firmly lodged in the public's collective consciousness but I'm convinced that with effort and relying on the evidence, it can be expunged. ..."
In 2017,
Sociology Professor Rachel Sherman wrote Uneasy Street: The Anxiety of Affluence , a
book which drew upon 50 in-depth interviews with Uber-wealthy New Yorkers in order to obtain a
picture of just how they perceived their status.
Sherman found that her interviewees, all in the top 1-2 percent of income or wealth or both,
had thoroughly imbibed the narrative of meritocracy to rationalize their affluence and immense
privileges. That is, they believed they deserved all their money because of hard work and
individual effort. Most identified themselves as socially and political liberal and took pains
to distinguish themselves from "bad" rich people who flaunt their wealth. Although one
unselfconsciously acknowledged "I used to say I was going to be a revolutionary but then I had
my first massage."
One striking characteristic was that these folks never talk about money and obsess over the
"stigma of privilege." One typical respondent whose wealth exceeded $50 million told Sherman,
"There's nobody who knows how much money we spend. You're the only person I've ever said the
numbers to out-loud." Another couple who had inherited $50 million and lived in a penthouse had
the post office change their mailing address to the floor number because PH sounded "elite and
snobby." Another common trait was removing the price tags from items entering the house so the
housekeeper and and staff didn't see them. As if the nanny didn't know
Her subjects (who remained anonymous) readily acknowledged being extremely advantaged but
remained "good people, normal people," who work hard, are careful about ostentatious
consumption, and above all, "give back." They spend considerable time trying to legitimate
inequality and Sherman concludes they've largely succeeded in feeling "morally worthy."
As a follow-up to this study, Prof. Sherman has been conducting similar in-depth interviews
with young people whose parents or ancestors accumulated sizable fortunes, wealth they now have
or will soon inherit. Sherman's recent piece, "The Rich Kid Revolution," ( The New York
Times , 4/28/19) reveals a stark contrast in self-perception from her earlier findings.
First, her interviewees totally "get" the lie of meritocracy as they ruefully skewer family
myths about individual effort, scrimping and saving and the origins of wealth. One young woman
who's in line to inherit a considerable fortune told Sherman, "My dad has always been a CEO,
and it was clear to me that he spent a lot of time at work, but it has never been clear to me
that he worked a lot harder than a domestic worker, for example. I will never believe
that."
Sherman discovered that whether the immense fortunes came from "the direct dispossession of
indigenous people, enslavement of African-Americans, production of fossil fuels or obvious
exploitation of workers, they often express especially acute guilt." One response has been that
some wealthy people under age 35 have formed organizations to fund social justice
initiatives.
Second, many of her respondents have read about racialized capitalism and harbor no
illusions about their own success. From access to the "right" schools and acquiring cultural
capital to social networking and good, high paying jobs, they readily acknowledged that it's
all derived from their class (and race) privilege. Third, they are convinced the economic
system is "immoral," equality of opportunity does not exist and their wealth and privileges are
absolutely "unearned." Finally, they grasp, often from personal observation, that traditional
philanthropy is primarily about keeping those at the top in place, obtaining generous tax
breaks and treating symptoms while ignoring the causes rooted in the very social structures
from which they benefit.
Beyond the article's hyperbolic title and a certain vagueness about where this new
consciousness may lead, the piece -- whether intentionally or not -- does raise issues that
demand much wider public discussion.
First, a note about philanthro-capitalism or as Peter Buffet (Warren Buffet's son) terms it,
"conscience laundering." In Chris Rock's pithy phrase, "Behind every fortune is a great crime"
and given what we know about the sources of great wealth -- the collectivity -- these monies
should be supporting public needs that are democratically determined not the cherry-picked, pet
projects of billionaires. And this reveals another motive behind private charity: the desire to
stifle any enthusiasm for an activist government responsible to the public will.
I should add that whenever I hear a philanthropist piously proclaim, "I just wanted to give
something back," my first impulse is to shout "Why not give it all back?" That is, I've always
been partial to the moral injunction, "For unto whomsoever much is given, of him shall much be
required" (Luke 12:48). And although I won't attempt to improve on scripture, I might suggest
"From whom much is taken, much is owed."
Second, one might ask about the case where a person of modest means succeeds at something
and accumulates a fortune? We've all heard or read ad infinitum, someone exclaim, "Damn it!
Nobody even handed me anything. I did it all on my own. I'm entirely self-made." Isn't that
evidence of individual merit? No. For starters, as Chuck Collins, heir to the Oscar Mayer
fortune, once put it, "Where would wealthy entrepreneurs be without taxpayer investments in the
Internet, transportation, public education, the legal system, the human genome project and so
on?" Herbert Simon, a Nobel Prize winner in Economics, has calculated the societal contribution
at ninety percent of what people earn in Northwest Europe and the United States.
In addition to the sources mentioned above, just off the top of my head I can list many
other factors that belie this powerfully seductive but wholly fictional narrative, one that's
also touted to and embraced by many members of the working class: Child labor, Chinese and
Irish immigrant labor (railroads), eminent domain, massacres of striking workers, state
repression of unions, Immigration Act of 1864, public land grabs, corporate welfare, installing
foreign dictators to guarantee cheap labor and resources, inheritance laws, public schools and
universities, public expense mail systems, property and contract laws, government tax breaks
incentives to business, Securities and Exchange Commission to ensure trust in the stock market,
the U.S. military, and a police state to keep the rabble from picking up pitchforks. Another
factor that almost merits its own paragraphs is pure luck. By any objective criteria, we can
conclude that absent this arrangement there would be no accumulation of private wealth.
Finally, meritocracy is the classic American foundation myth and provides the basis for an
entire array of other fairy tales. Foremost, this illusion serves to justify policies that
foster economic inequality and hinder the development of social movements. After so many
decades of neoliberal ideology, this lie is now firmly lodged in the public's collective
consciousness but I'm convinced that with effort and relying on the evidence, it can be
expunged.
"... Supply-side economics did not work for Reagan and it won't work for Trump. Republicans tell themselves and the American people that the Trump tax cut will energize the economy, so much so that the tax losses will be less than the skeptics claim. That's the supply-side argument, and we ought to know' by now that it does not work. ..."
"... Trump, in his 2017 tax bill, is giving us an even bigger dose of policies grounded not in science but in self-serving superstition than that provided by Reagan. President George H. W. Bush himself called Reagan's supply-side economics voodoo economics. Trump's is voodoo economics on steroids. ..."
Supply-side economics did not work for Reagan and it won't work for Trump. Republicans tell themselves and the American
people that the Trump tax cut will energize the economy, so much so that the tax losses will be less than the skeptics claim.
That's the supply-side argument, and we ought to know' by now that it does not work.
Reagan's tax cut in 1981 opened up an era of enormous fiscal deficits, slower growth, and greater inequality.
Trump, in his 2017 tax bill, is giving us an even bigger dose of policies grounded not in science but in self-serving superstition
than that provided by Reagan. President George H. W. Bush himself called Reagan's supply-side economics voodoo economics. Trump's
is voodoo economics on steroids.
"... One of the first major confrontations with the US by Russia and the PRC was to be over the greater Middle East. The main reason was the advance negotiations with all key oil producers -- including Saudi Arabia, Iraq, and Iran -- on substituting the petrodollar with a basket of currencies where the yuan , the euro and the ruble dominate. Using the currency basket would enable the sellers and buyers to go around the US-imposed sanctions and quotas. Indeed, Beijing and Moscow were now enticing the oil producers with huge, long-term export deals which were both financially lucrative and politically tempting by offering guarantees for the well-being of the participating governments. ..."
"... The 26th of March 2018 will go in history as the most momentous day for the United States’ economy, China’s economy and the petrodollar and also for China’s status as an economic superpower. In that day China launched its yuan-denominated crude oil futures in Shanghai thus challenging the petrodollar for dominance in the global oil market. ..."
"... And with tensions escalating between Iran and the United States, Iran figures prominently in the Russia-China strategic partnership. It is an important link in the BRI. Moreover, Iran has recently become more confident in its ability to confront the United States by the joint guarantees of support it received from Russia and China in the event the US moved to strangle it and attempt a regime change. Iran’s understanding is that were the US to take military action against it, Russia and China would prevent an Iranian defeat even if there were major setbacks. ..."
One of the first major confrontations with the US by
Russia and the PRC was to be over the greater Middle East. The main reason was the advance
negotiations with all key oil producers -- including Saudi Arabia, Iraq, and Iran -- on
substituting the petrodollar with a basket of currencies where the yuan , the
euro and the ruble dominate. Using the currency basket would enable the sellers
and buyers to go around the US-imposed sanctions and quotas. Indeed, Beijing and Moscow were
now enticing the oil producers with huge, long-term export deals which were both financially
lucrative and politically tempting by offering guarantees for the well-being of the
participating governments.
The crux of the proposal is regional and includes flagrant disregard of the US sanctions on
Iran.
However, the key to the extent of the commitment of both Beijing and Moscow lies in the
growing importance and centrality of the New Silk Road via Central Asia.
Persia had a crucial rôle in the ancient Silk Road, and both the PRC and Russia now
expect Iran to have a comparable key rôle in the New Silk Road.
The growing dominance of heritage-based dynamics throughout the developing world, including
the greater Central Asia and the greater Middle East, makes it imperative for the PRC to rely
on historic Persia/Iran as a western pole of the New Silk Road. It is this realization which
led both Beijing and Moscow to give Tehran, in mid-May 2019, the original guarantees that
Washington would be prevented from conducting a "regime change".
Therefore, even though both Russia and the PRC were not satisfied with the Iranian and
Iran-proxy activities and policies in the Iraq-Syria-Lebanon area, it was far more important
for them to support Iran, and also Turkey, in their confrontations with the US in order to
expedite the consolidation of the New Silk Road.
Tehran and its key allies in "the Middle Eastern Entente" -- Turkey and Qatar -- are
cognizant of the core positions of Russia and the PRC. Since mid-May, Tehran and, to a lesser
extent, Ankara and Doha, were appraised by Moscow and Beijing of their overall direction of
political decisions. Hence, since early June 2019, Tehran has felt confident to
start building momentum of Iranian assertiveness and audacity.
Tehran has been raising its profile in the region.
Tehran insists that it is now impossible to make decisions, or do anything else, in the
greater Middle East without Iran's approval. On June 2, 2019, the Chief of Staff of the Iranian
Armed Forces, Maj.-Gen. Mohammad Bagheri, touted the new strategic posture of Iran. "The
Islamic movement has affected the entire world and on top of that, it has succeeded in
intimidating the American hegemony and Zionism," he said. Bagheri attributed the new influence
of Iran to the acquisition of regional strategic depth; that is, reaching the shores of the
Mediterranean
Mamdouh Salamehon June 18 2019
Some quarters in the West belittle the strategic partnership between China and Russia describing it as a “marriage of
convenience”. They even had the temerity to urge President Putin to make a choice between China and the West.
President Putin will never sacrifice his strategic partnership with China for the West. Both Russia and China rank their ties
as the “peak” in mutual history. This can be judged by two analytical frameworks: their converging visions of the future
world order and their harmonized national interests.
The Chinese view on the world order at this historical juncture is shared and dovetailed by Putin’s Russia. Both sides hold
the view that Washington’s alienation from both Beijing and Moscow is reflected by the deeply rooted fear of the US losing
hegemonic status as the “only indispensable superpower”. The indications of the US fear are plenty. From Beijing’s point of
view, they manifest themselves by the U.S. decision to restart a Cold War containment strategy of China and by the trade war
it is waging against it. From Moscow’s perspective, US fears manifest themselves by the US attempts to undermine Russia’s
dominance in global energy and also by the Western alliance pushing the Western sphere of influence towards the Russian
border.
In sharp contrast to mutual suspicion and deteriorating relationship between Washington and Beijing, the Chinese-Russian tie
has proved to be a stable strategic partnership built on mutual understanding, respect and national interests.
The Russia-China strategic alliance is destined to shape the global economy and the geopolitics of the world in the 21st
century converting it from a unipolar to a multipolar world.
Relations between China, the world’s largest economy based on purchasing power parity (PPP) and Russia, the world’s energy
superpower, are deepening at a time of profound change in the global geopolitical landscape.
Their tools are the petro-yuan and the Silk Road better known as the Belt & Road Initiative (BRI).
The 26th of March 2018 will go in history as the most momentous day for the United States’ economy, China’s economy and
the petrodollar and also for China’s status as an economic superpower. In that day China launched its yuan-denominated crude
oil futures in Shanghai thus challenging the petrodollar for dominance in the global oil market.
Right now, China is the number one exporter on the globe, the largest crude oil importer in the world and also the world’s
biggest economy. The Chinese would like to see global currency usage reflect this shift in global economic power. The
petrodollar system provides at least three immediate benefits to the United States. It increases global demand for US
dollars. It also increases global demand for US debt securities and it gives the United States the ability to buy oil with a
currency it can print at will. In geopolitical terms, the petrodollar lends vast economic and political power to the United
States. China hopes to replicate this dynamic.
The launching of the crude oil benchmark on the Shanghai exchange could mark the beginning of the end of the petrodollar.
It is probable that the Chinese yuan will emerge as the world’s top reserve currency within the next fifteen years with the
petro-yuan emerging as the top oil currency.
Another tool of the Russian-Chinese strategic partnership is BRI. The BRI is a massive undertaking involving investments
programmes worth trillions of dollars, which will go toward connecting Asia and Europe by sea, rail, and road to promote more
trade between the continents.
And with tensions escalating between Iran and the United States, Iran figures prominently in the Russia-China
strategic partnership. It is an important link in the BRI. Moreover, Iran has recently become more confident in its ability
to confront the United States by the joint guarantees of support it received from Russia and China in the event the US moved
to strangle it and attempt a regime change. Iran’s understanding is that were the US to take military action against it,
Russia and China would prevent an Iranian defeat even if there were major setbacks.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
"... A suicide occurs in the United States roughly once every 12 minutes . What's more, after decades of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do homicides , even though the murder rate gets so much more attention. ..."
"... In some states the upsurge was far higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%). ..."
"... Since 2008 , suicide has ranked 10th among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between 35 and 45, fourth. The United States also has the ninth-highest rate in the 38-country Organization for Economic Cooperation and Development. Globally , it ranks 27th. ..."
"... The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own guns than in cities and suburbs, leading to a higher rate of suicide involving firearms, the means used in half of all such acts in this country. ..."
"... Education is also a factor. The suicide rate is lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill themselves. Suicide rates also tend to be lower among people in higher-income brackets. ..."
"... Evidence from the United States , Brazil , Japan , and Sweden does indicate that, as income inequality increases, so does the suicide rate. ..."
"... One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways) than African Americans, their suicide rate is significantly higher . ..."
"... The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne Case and Angus Deaton have labeled " deaths of despair " -- those caused by suicides plus opioid overdoses and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and its ripple effects do appear to matter. ..."
"... Trump has neglected his base on pretty much every issue; this one's no exception. ..."
Yves here. This post describes how the forces driving the US suicide surge started well before the Trump era, but explains how
Trump has not only refused to acknowledge the problem, but has made matters worse.
However, it's not as if the Democrats are embracing this issue either.
BY Rajan Menon, the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New
York, and Senior Research Fellow at Columbia University's Saltzman Institute of War and Peace Studies. His latest book is The Conceit of Humanitarian Intervention
Originally published at
TomDispatch .
We hear a lot about suicide when celebrities like
Anthony Bourdain and
Kate Spade die by their own hand.
Otherwise, it seldom makes the headlines. That's odd given the magnitude of the problem.
In 2017, 47,173 Americans killed themselves.
In that single year, in other words, the suicide count was nearly
seven times greater than the number
of American soldiers killed in the Afghanistan and Iraq wars between 2001 and 2018.
A suicide occurs in the United States roughly once every
12 minutes . What's more, after decades
of decline, the rate of self-inflicted deaths per 100,000 people annually -- the suicide rate -- has been increasing sharply since
the late 1990s. Suicides now claim two-and-a-half times as many lives in this country as do
homicides , even
though the murder rate gets so much more attention.
In other words, we're talking about a national
epidemic of self-inflicted
deaths.
Worrisome Numbers
Anyone who has lost a close relative or friend to suicide or has worked on a suicide hotline (as I have) knows that statistics
transform the individual, the personal, and indeed the mysterious aspects of that violent act -- Why this person? Why now? Why in
this manner? -- into depersonalized abstractions. Still, to grasp how serious the suicide epidemic has become, numbers are a necessity.
According to a 2018 Centers for Disease Control study , between
1999 and 2016, the suicide rate increased in every state in the union except Nevada, which already had a remarkably high rate. In
30 states, it jumped by 25% or more; in 17, by at least a third. Nationally, it increased
33% . In some states the upsurge was far
higher: North Dakota (57.6%), New Hampshire (48.3%), Kansas (45%), Idaho (43%).
Alas, the news only gets grimmer.
Since 2008 , suicide has ranked 10th
among the causes of death in this country. For Americans between the ages of 10 and 34, however, it comes in second; for those between
35 and 45, fourth. The United States also has the ninth-highest
rate in the 38-country Organization for Economic Cooperation and Development.
Globally , it ranks 27th.
More importantly, the trend in the United States doesn't align with what's happening elsewhere in the developed world. The World
Health Organization, for instance, reports
that Great Britain, Canada, and China all have notably lower suicide rates than the U.S.,
as do all but
six countries in the European Union. (Japan's is only slightly lower.)
World Bank statistics show that, worldwide,
the suicide rate fell from 12.8 per 100,000 in 2000 to 10.6 in 2016. It's been falling in
China ,
Japan
(where it has declined steadily for nearly a
decade and is at its lowest point in 37 years), most of Europe, and even countries like
South Korea and
Russia that
have a significantly higher suicide rate than the United States. In Russia, for instance, it has dropped by nearly 26% from a
high point of 42 per 100,000 in
1994 to 31 in 2019.
We know a fair amount about the patterns
of suicide in the United States. In 2017, the rate was highest for men between the ages of 45 and 64 (30 per 100,000) and those 75
and older (39.7 per 100,000).
The rates in rural counties are almost double those in the most urbanized ones, which is why states like Idaho, Kansas, New
Hampshire, and North Dakota sit atop the suicide list. Furthermore, a far higher percentage of people in rural states own
guns than in cities and suburbs, leading to a
higher rate of suicide involving firearms, the means used in half
of all such acts in this country.
There are gender-based differences as well.
From 1999 to 2017, the rate for men was substantially higher than for women -- almost four-and-a-half times higher in the first of
those years, slightly more than three-and-a-half times in the last.
Education is also a factor. The suicide rate is
lowest among individuals with college degrees. Those who, at best, completed high school are, by comparison, twice as likely to kill
themselves. Suicide rates also tend to be lower
among people in higher-income brackets.
The Economics of Stress
This surge in the suicide rate has taken place in years during which the working class has experienced greater economic hardship
and psychological stress. Increased competition from abroad and outsourcing, the results of globalization, have contributed to job
loss, particularly in economic sectors like manufacturing, steel, and mining that had long been mainstays of employment for such
workers. The jobs still available often paid less and provided fewer benefits.
Technological change, including computerization, robotics, and the coming of artificial intelligence, has similarly begun to displace
labor in significant ways, leaving Americans without college degrees, especially those 50 and older, in
far more difficult straits when it comes to
finding new jobs that pay
well. The lack of anything resembling an
industrial policy of a sort that exists in Europe
has made these dislocations even more painful for American workers, while a sharp decline in private-sector union membership
-- down
from nearly 17% in 1983 to 6.4% today -- has reduced their ability to press for higher wages through collective bargaining.
Furthermore, the inflation-adjusted median wage has barely budged
over the last four decades (even as
CEO salaries have soared). And a decline in worker productivity doesn't explain it: between 1973 and 2017 productivity
increased by 77%, while a worker's average hourly wage only
rose by 12.4%. Wage stagnation has made it
harder for working-class
Americans to get by, let alone have a lifestyle comparable to that of their parents or grandparents.
The gap in earnings between those at the top and bottom of American society has also increased -- a lot. Since 1979, the
wages of Americans in the 10th percentile increased by a pitiful
1.2%. Those in the 50th percentile did a bit better, making a gain of 6%. By contrast, those in the 90th percentile increased by
34.3% and those near the peak of the wage pyramid -- the top 1% and especially the rarefied 0.1% -- made far more
substantial
gains.
And mind you, we're just talking about wages, not other forms of income like large stock dividends, expensive homes, or eyepopping
inheritances. The share of net national wealth held by the richest 0.1%
increased from 10% in the 1980s to 20% in 2016.
By contrast, the share of the bottom 90% shrank in those same decades from about 35% to 20%. As for the top 1%, by 2016 its share
had increased to almost 39% .
The precise relationship between economic inequality and suicide rates remains unclear, and suicide certainly can't simply be
reduced to wealth disparities or financial stress. Still, strikingly, in contrast to the United States, suicide rates are noticeably
lower and have been declining in
Western
European countries where income inequalities are far less pronounced, publicly funded healthcare is regarded as a right (not
demonized as a pathway to serfdom), social safety nets far more extensive, and
apprenticeships and worker
retraining programs more widespread.
Evidence from the United States
, Brazil ,
Japan , and
Sweden does indicate that, as income inequality increases,
so does the suicide rate. If so, the good news is that progressive economic policies -- should Democrats ever retake the White
House and the Senate -- could make a positive difference. A study
based on state-by-state variations in the U.S. found that simply boosting the minimum wage and Earned Income Tax Credit by 10%
appreciably reduces the suicide rate among people without college degrees.
The Race Enigma
One aspect of the suicide epidemic is puzzling. Though whites have fared far better economically (and in many other ways)
than African Americans, their suicide rate is significantly
higher . It increased from 11.3 per 100,000
in 2000 to 15.85 per 100,000 in 2017; for African Americans in those years the rates were 5.52 per 100,000 and 6.61 per 100,000.
Black men are
10 times more likely to be homicide victims than white men, but the latter are two-and-half times more likely to kill themselves.
The higher suicide rate among whites as well as among people with only a high school diploma highlights suicide's disproportionate
effect on working-class whites. This segment of the population also accounts for a disproportionate share of what economists Anne
Case and Angus Deaton have labeled "
deaths of despair
" -- those caused by suicides plus
opioid overdoses
and liver diseases linked to alcohol abuse. Though it's hard to offer a complete explanation for this, economic hardship and
its ripple effects do appear to matter.
According to a study by the
St. Louis Federal Reserve , the white working class accounted for 45% of all income earned in the United States in 1990, but
only 27% in 2016. In those same years, its share of national wealth plummeted, from 45% to 22%. And as inflation-adjusted wages have
decreased for
men without college degrees, many white workers seem to have
lost hope of success of
any sort. Paradoxically, the sense of failure and the accompanying stress may be greater for white workers precisely because they
traditionally were much
better off economically than their African American and Hispanic counterparts.
In addition, the fraying of communities knit together by employment in once-robust factories and mines has increased
social isolation
among them, and the evidence that it -- along with
opioid addiction and
alcohol abuse -- increases the risk of suicide
is strong . On top of that,
a significantly higher proportion of
whites than blacks and Hispanics own firearms, and suicide rates are markedly higher in states where gun
ownership is more widespread.
Trump's Faux Populism
The large increase in suicide within the white working class began a couple of decades before Donald Trump's election. Still,
it's reasonable to ask what he's tried to do about it, particularly since votes from these Americans helped propel him to the White
House. In 2016, he received
64% of the votes of whites without college degrees; Hillary Clinton, only 28%. Nationwide, he beat Clinton in
counties where deaths of despair rose significantly between 2000 and 2015.
White workers will remain crucial to Trump's chances of winning in 2020. Yet while he has spoken about, and initiated steps aimed
at reducing, the high suicide rate among
veterans , his speeches and tweets have never highlighted the national suicide epidemic or its inordinate impact on white workers.
More importantly, to the extent that economic despair contributes to their high suicide rate, his policies will only make matters
worse.
The real benefits from the December 2017 Tax Cuts and Jobs Act championed by the president and congressional Republicans flowed
to those on the top steps of the economic ladder. By 2027, when the Act's provisions will run out, the wealthiest Americans are expected
to have captured
81.8% of the gains. And that's not counting the windfall they received from recent changes in taxes on inheritances. Trump and
the GOP
doubled the annual amount exempt from estate taxes -- wealth bequeathed to heirs -- through 2025 from $5.6 million per individual
to $11.2 million (or $22.4 million per couple). And who benefits most from this act of generosity? Not workers, that's for sure,
but every household with an estate worth $22 million or more will.
As for job retraining provided by the Workforce Innovation and Opportunity Act, the president
proposed
cutting that program by 40% in his 2019 budget, later settling for keeping it at 2017 levels. Future cuts seem in the cards as
long as Trump is in the White House. The Congressional Budget Office
projects that his tax cuts alone will produce even bigger budget
deficits in the years to come. (The shortfall last year was
$779 billion and it is expected to
reach $1 trillion by 2020.) Inevitably, the president and congressional Republicans will then demand additional reductions in spending
for social programs.
This is all the more likely because Trump and those Republicans also
slashed corporate taxes
from 35% to 21% -- an estimated
$1.4
trillion in savings for corporations over the next decade. And unlike the income tax cut, the corporate tax has
no end
date . The president assured his base that the big bucks those companies had stashed abroad would start flowing home and produce
a wave of job creation -- all without adding to the deficit. As it happens, however, most of that repatriated cash has been used
for corporate stock buy-backs, which totaled more than
$800 billion last year. That, in turn, boosted share prices, but didn't exactly rain money down on workers. No surprise, of course,
since the wealthiest 10% of Americans own at least
84% of all stocks and the bottom
60% have less than
2% of them.
And the president's corporate tax cut hasn't produced the tsunami of job-generating investments he predicted either. Indeed, in
its aftermath, more than 80% of American
companies stated that their plans for investment and hiring hadn't changed. As a result, the monthly increase in jobs has proven
unremarkable compared to President Obama's
second term, when the economic recovery that Trump largely inherited began. Yes, the economy did grow
2.3%
in 2017 and
2.9% in 2018 (though not
3.1% as the president claimed). There wasn't, however, any "unprecedented economic boom -- a boom that has rarely been seen before"
as he insisted in this year's State of the Union
Address .
Anyway, what matters for workers struggling to get by is growth in real wages, and there's nothing to celebrate on that front:
between 2017 and mid-2018 they actually
declined by 1.63% for white workers and 2.5% for African Americans, while they rose for Hispanics by a measly 0.37%. And though
Trump insists that his beloved tariff hikes are going to help workers, they will actually raise the prices of goods, hurting the
working class and other low-income Americans
the most .
Then there are the obstacles those susceptible to suicide face in receiving insurance-provided mental-health care. If you're a
white worker without medical coverage or have a policy with a deductible and co-payments that are high and your income, while low,
is too high to qualify for Medicaid, Trump and the GOP haven't done anything for you. Never mind the president's
tweet proclaiming that "the Republican Party Will Become 'The Party of Healthcare!'"
Let me amend that: actually, they have done something. It's just not what you'd call helpful. The
percentage of uninsured
adults, which fell from 18% in 2013 to 10.9% at the end of 2016, thanks in no small measure to
Obamacare , had risen to 13.7% by the end of last year.
The bottom line? On a problem that literally has life-and-death significance for a pivotal portion of his base, Trump has been
AWOL. In fact, to the extent that economic strain contributes to the alarming suicide rate among white workers, his policies are
only likely to exacerbate what is already a national crisis of epidemic proportions.
Trump is running on the claim that he's turned the economy around; addressing suicide undermines this (false) claim. To state
the obvious, NC readers know that Trump is incapable of caring about anyone or anything beyond his in-the-moment interpretation
of his self-interest.
Not just Trump. Most of the Republican Party and much too many Democrats have also abandoned this base, otherwise known as
working class Americans.
The economic facts are near staggering and this article has done a nice job of summarizing these numbers that are spread out
across a lot of different sites.
I've experienced this rise within my own family and probably because of that fact I'm well aware that Trump is only a symptom
of an entire political system that has all but abandoned it's core constituency, the American Working Class.
Yep It's not just Trump. The author mentions this, but still focuses on him for some reason. Maybe accurately attributing the
problems to a failed system makes people feel more hopeless. Current nihilists in Congress make it their duty to destroy once
helpful institutions in the name of "fiscal responsibility," i.e., tax cuts for corporate elites.
I'd assumed, the "working class" had dissappeared, back during Reagan's Miracle? We'd still see each other, sitting dazed on
porches & stoops of rented old places they'd previously; trying to garden, fix their car while smoking, drinking or dazed on something?
Those able to morph into "middle class" lives, might've earned substantially less, especially benefits and retirement package
wise. But, a couple decades later, it was their turn, as machines and foreigners improved productivity. You could lease a truck
to haul imported stuff your kids could sell to each other, or help robots in some warehouse, but those 80s burger flipping, rent-a-cop
& repo-man gigs dried up. Your middle class pals unemployable, everybody in PayDay Loan debt (without any pay day in sight?) SHTF
Bug-out bags® & EZ Credit Bushmasters began showing up at yard sales, even up North. Opioids became the religion of the proletariat
Whites simply had much farther to fall, more equity for our betters to steal. And it was damned near impossible to get the cops
to shoot you?
Man, this just ain't turning out as I'd hoped. Need coffee!
We especially love the euphemism "Deaths O' Despair." since it works so well on a Chyron, especially supered over obese crackers
waddling in crusty MossyOak™ Snuggies®
This is a very good article, but I have a comment about the section titled, "The Race Enigma." I think the key to understanding
why African Americans have a lower suicide rate lies in understanding the sociological notion of community, and the related concept
Emil Durkheim called social solidarity. This sense of solidarity and community among African Americans stands in contrast to the
"There is no such thing as society" neoliberal zeitgeist that in fact produces feelings of extreme isolation, failure, and self-recriminations.
An aside: as a white boy growing up in 1950s-60s Detroit I learned that if you yearned for solidarity and community what you had
to do was to hang out with black people.
" if you yearned for solidarity and community what you had to do was to hang out with black people."
amen, to that. in my case rural black people.
and I'll add Hispanics to that.
My wife's extended Familia is so very different from mine.
Solidarity/Belonging is cool.
I recommend it.
on the article we keep the scanner on("local news").we had a 3-4 year rash of suicides and attempted suicides(determined by chisme,
or deduction) out here.
all of them were despair related more than half correlated with meth addiction itself a despair related thing.
ours were equally male/female, and across both our color spectrum.
that leaves economics/opportunity/just being able to get by as the likely cause.
Actually, in the article it states:
"There are gender-based differences as well. From 1999 to 2017, the rate for men was substantially higher than for women -- almost
four-and-a-half times higher in the first of those years, slightly more than three-and-a-half times in the last."
which in some sense makes despair the wrong word, as females are actually quite a bit more likely to be depressed for instance,
but much less likely to "do the deed". Despair if we mean a certain social context maybe, but not just a psychological state.
Suicide deaths are a function of the suicide attempt rate and the efficacy of the method used. A unique aspect of the US is
the prevalence of guns in the society and therefore the greatly increased usage of them in suicide attempts compared to other
countries. Guns are a very efficient way of committing suicide with a very high "success" rate. As of 2010, half of US suicides
were using a gun as opposed to other countries with much lower percentages. So if the US comes even close to other countries in
suicide rates then the US will surpass them in deaths.
https://en.wikipedia.org/wiki/Suicide_methods#Firearms
Now we can add in opiates, especially fentanyl, that can be quite effective as well.
The economic crisis hitting middle America over the past 30 years has been quite focused on the states and populations that
also tend to have high gun ownership rates. So suicide attempts in those populations have a high probability of "success".
I would just take this opportunity to add that the police end up getting called in to prevent on lot of suicide attempts, and
just about every successful one.
In the face of so much blanket demonization of the police, along with justified criticism, it's important to remember that.
As someone who works in the mental health treatment system, acute inpatient psychiatry to be specific, I can say that of the
25 inpatients currently here, 11 have been here before, multiple times. And this is because of several issues, in my experience:
inadequate inpatient resources, staff burnout, inadequate support once they leave the hospital, and the nature of their illnesses.
It's a grim picture here and it's been this way for YEARS. Until MAJOR money is spent on this issue it's not going to get better.
This includes opening more facilities for people to live in long term, instead of closing them, which has been the trend I've
seen.
One last thing the CEO wants "asses in beds", aka census, which is the money maker. There's less profit if people get better
and don't return. And I guess I wouldn't have a job either. Hmmmm: sickness generates wealth.
"... Early in any psychology course, students are taught to be very cautious about accepting people's reports. A simple trick is to stage some sort of interruption to the lecture by confederates, and later ask the students to write down what they witnessed. Typically, they will misremember the events, sequences and even the number of people who staged the tableaux. Don't trust witnesses, is the message. ..."
"... The three assumptions -- lack of rationality, stubbornness, and costs -- imply that there is slim chance that people can ever learn or be educated out of their biases; ..."
"... So, are we as hopeless as some psychologists claim we are? In fact, probably not. Not all the initial claims have been substantiated. For example, it seems we are not as loss averse as previously claimed. Does our susceptibility to printed visual illusions show that we lack judgement in real life? ..."
"... Well the sad fact is that there's nobody in the position to protect "governments" from their own biases, and "scientists" from theirs ..."
"... Long ago a lawyer acquaintance, referring to a specific judge, told me that the judge seemed to "make shit up as he was going along". I have long held psychiatry fits that statement very well. ..."
"... Here we have a real scientist fighting the nonsense spreading from (neoclassical) economics into other realms of science/academia. ..."
"... Behavioral economics is a sideline by-product of neoclassical micro-economic theory. It tries to cope with experimental data that is inconsistent with that theory. ..."
"... Everything in neoclassical economics is a travesty. "Rational choice theory" and its application in "micro economics" is false from the ground up. It basically assumes that people are gobbling up resources without plan, meaning or relevant circumstances. Neoclassical micro economic theory is so false and illogical that I would not know where to start in a comment, so I should like to refer to a whole book about it: Keen, Steve: "Debunking economics". ..."
"... As the theory is totally wrong it is really not surprising that countless experiments show that people do not behave the way neoclassical theory predicts. How do economists react to this? Of course they assume that people are "irrational" because they do not behave according to their studied theory. (Why would you ever change your basic theory because of some tedious facts?) ..."
"... The title of the 1st ed. of Keen's book was "Debunking Economics: The Naked Emperor of the Social Sciences" which was simply a perfect title. ..."
Early in any psychology course, students are taught to be very cautious about accepting people's reports. A simple trick is
to stage some sort of interruption to the lecture by confederates, and later ask the students to write down what they witnessed.
Typically, they will misremember the events, sequences and even the number of people who staged the tableaux. Don't trust witnesses,
is the message.
Another approach is to show visual illusions, such as getting estimates of line lengths in the Muller-Lyer illusion, or studying
simple line lengths under social pressure, as in the Asch experiment, or trying to solve the Peter Wason logic problems, or the puzzles
set by Kahneman and Tversky. All these appear to show severe limitations of human judgment. Psychology is full of cautionary tales
about the foibles of common folk.
As a consequence of this softening up, psychology students come to regard themselves and most people as fallible, malleable, unreliable,
biased and generally irrational. No wonder psychologists feel superior to the average citizen, since they understand human limitations
and, with their superior training, hope to rise above such lowly superstitions.
However, society still functions, people overcome errors and many things work well most of the time. Have psychologists, for one
reason or another, misunderstood people, and been too quick to assume that they are incapable of rational thought?
He is particularly interested in the economic consequences of apparent irrationality, and whether our presumed biases really result
in us making bad economic decisions. If so, some argue we need a benign force, say a government, to protect us from our lack of capacity.
Perhaps we need a tattoo on our forehead: Diminished Responsibility.
The argument leading from cognitive biases to governmental paternalism -- in short, the irrationality argument -- consists
of three assumptions and one conclusion:
1. Lack of rationality. Experiments have shown that people's intuitions are systematically biased.
2. Stubbornness. Like visual illusions, biases are persistent and hardly corrigible by education.
3. Substantial costs. Biases may incur substantial welfare-relevant costs such as lower wealth, health, or happiness.
4. Biases justify governmental paternalism. To protect people from theirbiases, governments should "nudge" the public
toward better behavior.
The three assumptions -- lack of rationality, stubbornness, and costs -- imply that there is slim chance that people can ever
learn or be educated out of their biases; instead governments need to step in with a policy called libertarian paternalism (Thaler
and Sunstein, 2003).
So, are we as hopeless as some psychologists claim we are? In fact, probably not. Not all the initial claims have been substantiated.
For example, it seems we are not as loss averse as previously claimed. Does our susceptibility to printed visual illusions show that
we lack judgement in real life?
In Shepard's (1990) words, "to fool a visual system that has a full binocular and freely mobile view of a well-illuminated scene
is next to impossible" (p. 122). Thus, in psychology, the visual system is seen more as a genius than a fool in making intelligent
inferences, and inferences, after all, are necessary for making sense of the images on the retina.
Most crucially, can people make probability judgements? Let us see. Try solving this one:
A disease has a base rate of .1, and a test is performed that has a hit rate of .9 (the conditional probability of a positive
test given disease) and a false positive rate of .1 (the conditional probability of a positive test given no disease). What is
the probability that a random person with a positive test result actually has the disease?
Most people fail this test, including 79% of gynaecologists giving breast screening tests. Some researchers have drawn the conclusion
that people are fundamentally unable to deal with conditional probabilities. On the contrary, there is a way of laying out the problem
such that most people have no difficulty with it. Watch what it looks like when presented as natural frequencies:
Among every 100 people, 10 are expected to have a disease. Among those 10, nine are expected to correctly test positive. Among
the 90 people without the disease, nine are expected to falsely test positive. What proportion of those who test positive actually
have the disease?
In this format the positive test result gives us 9 people with the disease and 9 people without the disease, so the chance that
a positive test result shows a real disease is 50/50. Only 13% of gynaecologists fail this presentation.
Summing up the virtues of natural frequencies, Gigerenzer says:
When college students were given a 2-hour course in natural frequencies, the number of correct Bayesian inferences increased
from 10% to 90%; most important, this 90% rate was maintained 3 months after training (Sedlmeier and Gigerenzer, 2001). Meta-analyses
have also documented the "de-biasing" effect, and natural frequencies are now a technical term in evidence-based medicine (Akiet
al., 2011; McDowell and Jacobs, 2017). These results are consistent with a long literature on techniques for successfully teaching
statistical reasoning (e.g., Fonget al., 1986). In sum, humans can learn Bayesian inference quickly if the information is presented
in natural frequencies.
If the problem is set out in a simple format, almost all of us can all do conditional probabilities.
I taught my medical students about the base rate screening problem in the late 1970s, based on: Robyn Dawes (1962) "A note on
base rates and psychometric efficiency". Decades later, alarmed by the positive scan detection of an unexplained mass, I confided
my fears to a psychiatrist friend. He did a quick differential diagnosis on bowel cancer, showing I had no relevant symptoms, and
reminded me I had lectured him as a student on base rates decades before, so I ought to relax. Indeed, it was false positive.
Here are the relevant figures, set out in terms of natural frequencies
Every test has a false positive rate (every step is being taken to reduce these), and when screening is used for entire populations
many patients have to undergo further investigations, sometimes including surgery.
Setting out frequencies in a logical sequence can often prevent misunderstandings. Say a man on trial for having murdered his
spouse has previously physically abused her. Should his previous history of abuse not be raised in Court because only 1 woman in
2500 cases of abuse is murdered by her abuser? Of course, whatever a defence lawyer may argue and a Court may accept, this is back
to front. OJ Simpson was not on trial for spousal abuse, but for the murder of his former partner. The relevant question is: what
is the probability that a man murdered his partner, given that she has been murdered and that he previously battered her.
Accepting the figures used by the defence lawyer, if 1 in 2500 women are murdered every year by their abusive male partners, how
many women are murdered by men who did not previously abuse them? Using government figures that 5 women in 100,000 are murdered every
year then putting everything onto the same 100,000 population, the frequencies look like this:
So, 40 to 5, it is 8 times more probable that abused women are murdered by their abuser. A relevant issue to raise in Court about
the past history of an accused man.
Are people's presumed biases costly, in the sense of making them vulnerable to exploitation, such that they can be turned into
a money pump, or is it a case of "once bitten, twice shy"? In fact, there is no evidence that these apparently persistent logical
errors actually result in people continually making costly errors. That presumption turns out to be a bias bias.
Gigerenzer goes on to show that people are in fact correct in their understanding of the randomness of short sequences of coin
tosses, and Kahneman and Tversky wrong. Elegantly, he also shows that the "hot hand" of successful players in basketball is a real
phenomenon, and not a stubborn illusion as claimed.
With equal elegance he disposes of a result I had depended upon since Slovic (1982), which is that people over-estimate the frequency
of rare risks and under-estimate the frequency of common risks. This finding has led to the belief that people are no good at estimating
risk. Who could doubt that a TV series about Chernobyl will lead citizens to have an exaggerated fear of nuclear power stations?
The original Slovic study was based on 39 college students, not exactly a fair sample of humanity. The conceit of psychologists
knows no bounds. Gigerenzer looks at the data and shows that it is yet another example of regression to the mean. This is an apparent
effect which arises whenever the predictor is less than perfect (the most common case), an unsystematic error effect, which is already
evident when you calculate the correlation coefficient. Parental height and their children's heights are positively but not perfectly
correlated at about r = 0.5. Predictions made in either direction will under-predict in either direction, simply because they are
not perfect, and do not capture all the variation. Try drawing out the correlation as an ellipse to see the effect of regression,
compared to the perfect case of the straight line of r= 1.0
What diminishes in the presence of noise is the variability of the estimates, both the estimates of the height of the sons based
on that of their fathers, and vice versa. Regression toward the mean is a result of unsystematic, not systematic error (Stigler,1999).
Gigerenzer also looks at the supposed finding that people are over-confidence in predictions, and finds that it is another regression
to the mean problem.
Gigerenzer then goes on to consider that old favourite, that most people think they are better than average, which supposedly
cannot be the case, because average people are average.
Consider the finding that most drivers think they drive better than average. If better driving is interpreted as meaning fewer
accidents, then most drivers' beliefs are actually true. The number of accidents per person has a skewed distribution, and an
analysis of U.S. accident statistics showed that some 80% of drivers have fewer accidents than the average number of accidents
(Mousavi and Gigerenzer, 2011)
Then he looks at the classical demonstration of framing, that is to say, the way people appear to be easily swayed by how the
same facts are "framed" or presented to the person who has to make a decision.
A patient suffering from a serious heart disease considers high-risk surgery and asks a doctor about its prospects.
The doctor can frame the answer in two ways:
Positive Frame: Five years after surgery, 90% of patients are alive.
Negative Frame: Five years after surgery, 10% of patients are dead.
Should the patient listen to how the doctor frames the answer? Behavioral economists say no because both frames are logically
equivalent (Kahneman, 2011). Nevertheless, people do listen. More are willing to agree to a medical procedure if the doctor uses
positive framing (90% alive) than if negative framing is used (10% dead) (Moxeyet al., 2003). Framing effects challenge the assumption
of stable preferences, leading to preference reversals. Thaler and Sunstein (2008) who presented the above surgery problem, concluded
that "framing works because people tend to be somewhat mindless, passive decisionmakers" (p. 40)
Gigerenzer points out that in this particular example, subjects are having to make their judgements without knowing a key fact:
how many survive without surgery. If you know that you have a datum which is more influential. These are the sorts of questions patients
will often ask about, and discuss with other patients, or with several doctors. Furthermore, you don't have to spin a statistic.
You could simply say: "Five years after surgery, 90% of patients are alive and 10% are dead".
Gigerenzer gives an explanation which is very relevant to current discussions about the meaning of intelligence, and about the
power of intelligence tests:
In sum, the principle of logical equivalence or "description invariance" is a poor guide to understanding how human intelligence
deals with an uncertain world where not everything is stated explicitly. It misses the very nature of intelligence, the ability
to go beyond the information given (Bruner, 1973)
The key is to take uncertainty seriously, take heuristics seriously, and beware of the bias bias.
One important conclusion I draw from this entire paper is that the logical puzzles enjoyed by Kahneman, Tversky, Stanovich and
others are rightly rejected by psychometricians as usually being poor indicators of real ability. They fail because they are designed
to lead people up the garden path, and depend on idiosyncratic interpretations.
Critics of examinations of either intellectual ability or scholastic attainment are fond of claiming that the items are "arbitrary".
Not really. Scholastic tests have to be close to the curriculum in question, but still need to a have question forms which are simple
to understand so that the stress lies in how students formulate the answer, not in how they decipher the structure of the question.
Intellectual tests have to avoid particular curricula and restrict themselves to the common ground of what most people in a community
understand. Questions have to be super-simple, so that the correct answer follows easily from the question, with minimal ambiguity.
Furthermore, in the case of national scholastic tests, and particularly in the case of intelligence tests, legal authorities will
pore over the test, looking at each item for suspected biases of a sexual, racial or socio-economic nature. Designing an intelligence
test is a difficult and expensive matter. Many putative new tests of intelligence never even get to the legal hurdle, because they
flounder on matters of reliability and validity, and reveal themselves to be little better than the current range of assessments.
In conclusion, both in psychology and behavioural economics, some researchers have probably been too keen to allege bias in cases
where there are unsystematic errors, or no errors at all. The corrective is to learn about base rates, and to use natural frequencies
as a guide to good decision-making.
Don't bother boosting your IQ. Boost your understanding of natural frequencies.
Good concrete advice. Perhaps even more useful for those who need to explain things like this to others than for those seeking
to understand for themselves.
"intelligence deals with an uncertain world where not everything is stated explicitly. It misses the very nature of intelligence,
the ability to go beyond the information given (Bruner, 1973)"
"The key is to take uncertainty seriously, take heuristics seriously, and beware of the bias bias."
Actually I think this is an example of an increasingly common genre of malapropism, where the writer gropes for the right word,
finds one that is similar, and settles for that. The worst of it is that readers intuitively understand what was intended, and
then adopt the marginally incorrect usage themselves. That's perhaps how the world and his dog came to say "literally" when they
mean "figuratively". Maybe a topic for a future article?
In 2009 Google finished engineering a reverse search engine to find out what kind of searches people did most often. Seth Davidowitz
and Steven Pinker wrote a very fascinating/entertaining book using the tool called Everybody Lies
Everybody Lies offers fascinating, surprising, and sometimes laugh-out-loud insights into everything from economics to ethics
to sports to race to sex, gender, and more, all drawn from the world of big data. What percentage of white voters didn't vote
for Barack Obama because he's black? Does where you go to school effect how successful you are in life? Do parents secretly
favor boy children over girls? Do violent films affect the crime rate? Can you beat the stock market? How regularly do we lie
about our sex lives, and who's more self-conscious about sex, men or women?
Investigating these questions and a host of others, Seth Stephens-Davidowitz offers revelations that can help us understand
ourselves and our lives better. Drawing on studies and experiments on how we really live and think, he demonstrates in fascinating
and often funny ways the extent to which all the world is indeed a lab. With conclusions ranging from strange-but-true to thought-provoking
to disturbing, he explores the power of this digital truth serum and its deeper potential – revealing biases deeply embedded
within us, information we can use to change our culture, and the questions we're afraid to ask that might be essential to our
health – both emotional and physical. All of us are touched by big data every day, and its influence is multiplying. Everybody
Lies challenges us to think differently about how we see it and the world.
I shall treat this posting (for which many thanks, doc) as an invitation to sing a much-loved song: everybody should read Gigerenzer's
Reckoning with Risk. With great clarity it teaches what everyone ought to know about probability.
(It could also serve as a model for writing in English about technical subjects. Americans and Britons should study the English
of this German – he knows how, you know.)
Inspired by "The original Slovic study was based on 39 college students" I shall also sing another favorite song. Much of Psychology
is based on what small numbers of American undergraduates report they think they think.
" Gigerenzer points out that in this particular example, subjects are having to make their judgements without knowing a key fact:
how many survive without surgery. "
This one reminds of the false dichotomy. The patient has additional options! Like changing diet, and behaviours such as exercise,
elimination of occupational stress , etc.
The statistical outcomes for a person change when the person changes their circumstances/conditions.
@Tom
Welsh A disposition (conveyance) of an awkwardly shaped chunk out of a vast estate contained reference to "the slither of
ground bounded on or towards the north east and extending two hundred and twenty four meters or thereby along a chain link fence "
Not poor clients (either side) nor cheap lawyers. And who never erred?
Better than deliberately inserting "errors" to guarantee a stream of tidy up work (not unknown in the "professional" world)
in future.
Good article. 79% of gynaecologists fail a simple conditional probability test?! Many if not most medical research papers use
advanced statistics. Medical doctors must read these papers to fully understand their field. So, if medical doctors don't fully
understand them, they are not properly doing their job. Those papers use mathematical expressions, not English. Converting them
to another form of English, instead of using the mathematical expressions isn't a solution.
Regarding witnesses: When that jet crashed into Rockaway several years ago, a high percentage of witnesses said that they saw
smoke before the crash. But there was actually no smoke. The witnesses were adjusting what they saw to conform to their past experience
of seeing movie and newsreel footage of planes smoking in the air before a crash. Children actually make very good witnesses.
Regarding the chart. Missing, up there in the vicinity of cancer and heart disease. The third-leading cause of death. 250,000
per year, according to a 2016 Hopkins study. Medical negligence.
1. Lack of rationality. Experiments have shown that people's intuitions are systematically biased.
2. Stubbornness. Like visual illusions, biases are persistent and hardly corrigible by education.
3. Substantial costs. Biases may incur substantial welfare-relevant costs such as lower wealth, health, or happiness.
4. Biases justify governmental paternalism. To protect people from theirbiases, governments should "nudge" the public toward
better behavior.
Well the sad fact is that there's nobody in the position to protect "governments" from their own biases, and "scientists"
from theirs.
So, behind the smoke of all words and rationalisations, the law is unchanged: everyone strives to gain and exert as much power
as possible over as many others as possible. Most do that without writing papers to say it is right, others write papers,
others books. Anyway, the fundamental law would stay as it is even if all this writing labour was spared, wouldn't it?
But then another fundamental law, the law of framing all one's drives as moral and beneffective comes into play the papers
and the books are useful, after all.
An interesting article. However, I think that the only thing we have to know about how illogical psychiatry is this:
In 1973, the American Psychiatric Association (APA) asked all members attending its convention to vote on whether they believed
homosexuality to be a mental disorder. 5,854 psychiatrists voted to remove homosexuality from the DSM, and 3,810 to retain
it.
The APA then compromised, removing homosexuality from the DSM but replacing it, in effect, with "sexual orientation disturbance"
for people "in conflict with" their sexual orientation. Not until 1987 did homosexuality completely fall out of the DSM.
The article makes no mention of the fact that no "new science" was brought to support the resolution.
It appears that the psychiatrists were voting based on feelings rather than science. Since that time, the now 50+ genders have
been accepted as "normal" by the APA. My family has had members in multiple generations suffering from mental illness. None were
"cured". I know others with the same circumstances.
How does one conclude that being repulsed by the prime directive of every
living organism – reproduce yourself – is "normal"? That is not to say these people are horrible or evil, just not normal. How
can someone, who thinks (s)he is a cat be mentally ill, but a grown man thinking he is a female child is not?
Long ago a lawyer acquaintance, referring to a specific judge, told me that the judge seemed to "make shit up as he was going
along". I have long held psychiatry fits that statement very well.
Thank you for this article. I find the information about the interpretation of statistical data very interesting. My take on the
background of the article is this:
Here we have a real scientist fighting the nonsense spreading from (neoclassical) economics into other realms of science/academia.
Behavioral economics is a sideline by-product of neoclassical micro-economic theory. It tries to cope with experimental
data that is inconsistent with that theory.
Everything in neoclassical economics is a travesty. "Rational choice theory" and its application in "micro economics" is
false from the ground up. It basically assumes that people are gobbling up resources without plan, meaning or relevant circumstances.
Neoclassical micro economic theory is so false and illogical that I would not know where to start in a comment, so I should like
to refer to a whole book about it:
Keen, Steve: "Debunking economics".
As the theory is totally wrong it is really not surprising that countless experiments show that people do not behave the
way neoclassical theory predicts. How do economists react to this? Of course they assume that people are "irrational" because
they do not behave according to their studied theory. (Why would you ever change your basic theory because of some tedious facts?)
We live in a strange world in which such people have control over university faculties, journals, famous prizes. But at least
we have some scientists who defend their area of knowledge against the spreading nonsense produced by economists.
The title of the 1st ed. of Keen's book was "Debunking Economics: The Naked Emperor of the Social Sciences" which was simply
a perfect title.
Neocon donors ask Trump for favors and he can't refuse... Trump foreign policy is a direct continuation of Bush II and Obama
foreign policy and is dominated by neocons, who rule the State Department. Pomeo is a rabid neocon, to the right of
Condoleezza Rice, Hillary and John Kerry. Actually anti-Iranian and pro-Israeli bias was clearly visible even during 2016
campaign, but few voters paid any attention. Now they should.
It is clear that Trump is the most pro-Israel President after Johnson.
Notable quotes:
"... In contrast, in the Middle East the president has been extraordinarily bellicose. In April, the Administration revoked waivers that allowed certain countries to buy oil from Iran without violating U.S. sanctions [ U.S. Won't Renew Sanction Exemptions For Countries Buying Iran's Oil , by Bill Chappell, NPR, April 22, 2019]. In early May, the president imposed new sanctions on Iranian metals, a direct threat to the regime's economic viability. ..."
"... The "maximum pressure campaign," as it has been called, puts Iran in the position of either accepting a humiliating surrender or striking out where it can [ Maximum pressure on Iran Means Maximum Risk of War , by Ilan Goldenberg, Foreign Policy, June 14, 2019]. ..."
"... Why Iran would do this is questionable, unless it's just a move of desperation. ..."
"... But did Iran actually do it? Washington has a credibility gap with the rest of the world and its own people thanks to the disaster of the Iraq War . There were, it turned out, no "Weapons of Mass Destruction." So now many Americans openly question whether Iran attacked these tankers. This includes some MSM reporters who trusted the "intelligence community" when it was attacking Trump but now want an "international investigation of the incident". [ Ben Rhodes, CNN, And Others Purposefully Fuel Pro-Iranian "False Flag Conspiracy Theories After Tanker Attacks , RedState, June 14, 2019] ..."
The most optimistic explanation: Trump intends to use immigration as an election issue in
2020. Yet his fecklessness in office will be as unappealing to many voters as the Democrats'
extremism. [ Trump Is
Vulnerable to Biden on Immigration, by Michael Brendan Dougherty, National
Review, June 11, 2019] After all, Trump
began his campaign vowing to solve the immigration problem almost exactly four years ago --
but essentially nothing has been done.
Later that month, the president said a fight would mean "the official end of Iran" [
Trump threatens Iran With 'Official End' by Kenneth Walsh, US News and World
Report, May 20, 2019].
The "maximum pressure campaign," as it has been called, puts Iran in the position of either
accepting a humiliating surrender or striking out where it can [ Maximum
pressure on Iran Means Maximum Risk of War, by Ilan Goldenberg, Foreign
Policy, June 14, 2019].
Why Iran would do this is questionable, unless it's just a move of desperation.
But did Iran actually do it? Washington has a credibility gap with the rest of the world and
its own people thanks to the disaster of the Iraq War
. There were, it turned out, no "Weapons of Mass Destruction." So now many Americans openly
question whether Iran attacked these tankers. This includes some MSM reporters who trusted the
"intelligence community" when it was attacking Trump but now want an "international
investigation of the incident". [ Ben Rhodes, CNN, And Others Purposefully Fuel Pro-Iranian "False Flag Conspiracy Theories
After Tanker Attacks, RedState, June 14, 2019]
This is not the same country that re-elected George W. Bush in 2004. The trust in
institutions is gone; America is war-weary.
There is also a deeper fundamental question. Our country is crumbling. The border is
non-existent; entire communities are being overrun. There's something perverse about even
entertaining a dangerous and costly military intervention halfway around the world. It's akin
to a Roman emperor declaring he will conquer India while barbarians are crossing the Rhine.
"... "A century after World War I, the great war for oil is still raging, with many of the same fronts as before and also a few new ones. Throughout it all -- whether waged by realists, neoliberals, or neocons -- war has been extremely good for business" (225). ..."
The premise of this book is to say what most of the world's public has probably been thinking since the War on Terror began,
or that it is a "war for natural resources -- and that terrorism has little to do with it. Once the military became mechanized,
oil quickly became the most sought-after commodity on the planet, and the race for energy was eventually framed as a matter of
national security."
John Maszka argues that the "oil conglomerates" are the real "threats to national security". Demonizing "an entire religion"
is a repercussion of this policy. My own research in Rebellion as Genre a few years ago also attempted to point out the misuse
of the term terrorism in its current application, or as a weapon against one's enemies rather than as a reference to a type of
attacks intended to terrorize. Governments that accuse others of terrorism while legitimizing their own "acts of violence" as
"retributive" are clearly breaking human rights agreements and their stated commitments to freedom.
Maszka's perspective is of particular interest because he teaches this subject at the Higher Colleges of Technology in Abu
Dhabi, and has published widely his criticisms of the War on Terror, including Terrorism and the Bush Doctrine.
Many of the books I have read on terrorism from American supporters of this pro-War on Terror doctrine are troubling in their
references to spreading Christianity and other similarly questionable ideologies, so it is refreshing to hear from somebody with
a fresh perspective that is more likely to bring about world peace. The preface acknowledges that this book contrasts with the
bulk of other books in this field. It also explains that it focuses primarily on two "Islamic militant organizations -- al-Qaeda
and the Islamic State".
He explains that perception has a lot to do with who a country is willing to commit violence against, giving the example of
Nazis being able to commit violence on Jews in the Holocaust because of this blindness. Thus, violence against Muslims by the
West in the past two decade is shown as possibly a new Holocaust where the militaries are carrying out orders because Muslims
have been demonized.
Terrorism has historically been the work of a few extremists, or terms like "war" or "revolution" is employed to describe large
groups of such fighters; so it is strange that the West has entered the War on Terror with entire Muslim-majority countries, killing
so many civilians that it is not a stretch to call these Holocaust-like.
The Islamic State targets Muslims as well, also showing dehumanized traits that are even harder to explain (x-xi). The preface
also acknowledges that the author will be using "contractions and anecdotal digressions" as "intentional literary devices", shooing
the standard scholarly style (this is troubling for me personally, as I'm allergic to digressions, but at least he tells readers
what to expect).
As promised, Chapter One begins with a poet's story about the Tree of Life, then discusses the Boston Marathon bombings from
the perspective of the author as he worked in Kyrgyzstan, and goes off on other tangents before reaching this conclusion -- the
marathon's bombers were not terrorists: "They had no political aspirations. They weren't attempting to obtain concessions from
the government or provoke a reaction. They simply believed that they were 'wave sheaves' -- first fruits of God -- and that they
would be instrumental in ushering in the apocalypse" (5).
This conclusion explains the relationship between all of the digressions across this section, so these digressions were necessary
to prove this point, and thus are suitable for a scholarly book. And this is exactly the type of logical reasoning that is missing
in most of the oratory on terrorism. The entire book similarly uses specific acts of supposed terrorism to explain what really
happened and working to understand th motivations of the actors.
Since the author's digressions into his own life are typically very relevant to the subject, they are definitely helpful: "I
was stationed in Riyadh at an American military base that was attacked by an al-Qaeda suicide bomber" (135).
It would actually be unethical if Maszka did not explain that he has been personally affected by al-Qaeda in this context;
and since he has seen this War as a civilian living in the affected countries and as a member of the military that is attaching
these "terrorists", his opinions should be trustworthy for both sides. Given how emotional writing this book with detachment and
carefully crafted research must have been for somebody who has been bombed, it is only fitting that the final chapter is called,
"The Definition of Insanity."
And here is the final chapter:
"A century after World War I, the great war for oil is still raging, with many of the same fronts as before and also
a few new ones. Throughout it all -- whether waged by realists, neoliberals, or neocons -- war has been extremely good for
business" (225).
Very powerful words that are justly supported. I would strongly recommend that everybody in the West's militaries who is responsible
for making decisions in the War on Terror read this book before they make their next decision. Who are they shooting at? Why?
Who is benefiting? Who is dying? Are they committing war crimes as serious as the Nazis? If there is any chance these allegations
are true what kind of a military leader can proceed without understanding the explanations that Maszka offers here? This would
probably also work well in an advanced graduate class, despite its digressions, it will probably help students write better dissertations
on related topics.
"... The Gulf of Credibility - I really cannot begin to fathom how stupid you would have to be to believe that Iran would attack a Japanese oil tanker at the very moment that the Japanese Prime Minister was sitting down to friendly, US-disapproved talks in https://t.co/P1wE1Y886i ..."
"... When the ruling elite wanted a war with Iraq they invented incubator babies and WMD programs that didn't exist. Their inventions were far fetched, but not unbelievable. However, the idea that the paranoid dictator Saddam was just going to hand over his most powerful weapons to religious fanatics that hated his guts, was laughably stupid. ..."
"... When the ruling elite wanted a war with Libya they invented a genocidal, Viagra-fueled, rape army. Their invention was far fetched, and bit lazy, but you could be forgiven for believing that the Mandarins believed it. ..."
"... This latest anti-Iran warmongering is just plain stupid. It's as if they don't really care if anyone believes the lies they are telling. For starters, look at the shameless liar who is telling these lies. ..."
"... Looking at this incident/narrative from any/every angle leaves one to conclude "false flag". ..."
"... As for the "most obvious culprit is usually responsible for the crime" that also happens to be "bazaar-level conspiracy theories involving a false-flag operation by Israel's Mossad". Because Mossad actually does that. ..."
"... If El Trumpo was going to drain the swamp, why did he take these cretins, Bolton, Pompeo, Haspel, Abrams into his cabinet? Is the tail, wagging the dog as usual? ..."
"... The elite are both lazy and stupid. Even the Orange Man will not be sucked into another Douma style false flag operation. The reasons why this is a basic false flag is obvious. If anybody reading about this doesn't understand the culprits responsible weren't Iranian, then they should be interviewed for mental competency. ..."
"... But Pompous Mike and Bolt-on Bolt-off need to be removed from any semblance of governmental authority. I could go on but this whole affair is making me tired...I'm going back to my swamp. ..."
The Gulf of Credibility - I really cannot begin to fathom how stupid you would have to be to believe that Iran would attack
a Japanese oil tanker at the very moment that the Japanese Prime Minister was sitting down to friendly, US-disapproved talks in
https://t.co/P1wE1Y886i
When the ruling elite wanted a war with Iraq they invented incubator babies and WMD programs that didn't exist. Their inventions
were far fetched, but not unbelievable. However, the idea that the paranoid dictator Saddam was just going to hand over his most
powerful weapons to religious fanatics that hated his guts, was laughably stupid.
When the ruling elite wanted a war with Libya they invented a genocidal, Viagra-fueled, rape army. Their invention was far
fetched, and bit lazy, but you could be forgiven for believing that the Mandarins believed it.
This latest anti-Iran warmongering is just plain stupid. It's as if they don't really care if anyone believes the lies they
are telling. For starters, look at the shameless liar who is telling these lies.
You mean "Mr. We Lied, We Cheated, We Stole"? What a disgraceful character...
pic.twitter.com/pMtAgKaZcG
Then there are the many problems of their "proof".
Where is the video of the Iranians PLACING explosives & detonating them? Removal would be prudent by any Navy/CG. Also location
of explosives is VERY high off waterline ...Weird. It's not a limpet mine, it's a demo charge. Had to be put on by fairly high
boat w/ a long gaff/pole https://t.co/3qzB7TrrYv
The distress call went out at 6 am. So, according to CENTCOM's analysis of this video, they're suggesting that 10 hours after
the tanker was hit, the IRGC just casually pulled up to the tanker to remove unexploded limpet mine in broad daylight?!
The Japanese company that owns the ship has refused to cooperate in this
false flag mission.
But in remarks to Japanese media, the president of the company that owns the ship said the vessel wasn't damaged by a mine. "A
mine doesn't damage a ship above sea level," said Yutaka Katada, president of Kokuka Sangyo, the owner and operator of the vessel.
"We aren't sure exactly what hit, but it was something flying towards the ship," he said.
Looking at this incident/narrative from any/every angle leaves one to conclude "false flag".
Finally, there is the question of "why"?
What would Iran hope to accomplish by this? I found one
establishment source that tried to rationalize.
Iran denied responsibility, with Foreign Minister Javad Zarif descending to bazaar-level conspiracy theories involving a false-flag
operation by Israel's Mossad.
If you're not inclined to believe the Trump administration – and such skepticism is entirely reasonable – most detectives would
still tell you that the most obvious culprit is usually responsible for the crime.
To those seeking logic behind the attacks, though, it may be hard to see why Iran would do this – but that assumes that the
regime in Tehran is a rational actor.
The Gulf of Oman attacks are especially hard to explain: targeting Japanese shipping on the very day that Prime Minister Shinzo
Abe was meeting Supreme Leader Ali Khamenei on a well-publicized peace mission would seem extraordinarily counterproductive, even
for a regime with an almost fanatical commitment to self-harm.
Have you ever noticed that everyone that we want to start a war with is crazy? Regimes that stand solid for generations under
hostile conditions are always run by maniacs. You'd think that insanity would prevent them from taking power in the first place,
but that seems to only be true with our allies.
As for the "most obvious culprit is usually responsible for the crime" that also happens to be "bazaar-level conspiracy theories
involving a false-flag operation by Israel's Mossad". Because Mossad actually does that.
Since the U.S.'s tightening of sanctions has squeezed Iranian oil exports, nobody else's should be allowed to pass through
waters within reach of the IRGC.
The Iranians know that these threats, if repeated, can lose their power if not followed with action. The attacks on the tankers,
then, can be explained as a demonstration that Khamenei's attack dogs have some teeth.
There is another rationale. If Iran does eventually agree to negotiate with the U.S., it will want to bring some bargaining
chips to the table – something it can exchange for the removal of sanctions. In the negotiations over the 2015 nuclear deal, Iran
was able to offer the suspension of its nuclear program. It doesn't have that particular chip now, although Tehran has recently
threatened to crank up the centrifuges again.
Meanwhile, the regime may have calculated that the only way to secure some kind of negotiating position is blackmail: End the
sanctions, or we take out some more tankers, and send oil prices surging.
This almost sounds logical, except for one thing: Iran tried that in 1988 and it didn't work. It only caused the one thing the
U.S. was itching for: to kill some Iranians.
Do you think that they've forgotten? Or that the U.S. is less warlike? Oh wait. Iranians are crazy and can't be reasoned with, amirite?
US public radio @NPR does not mention it was Iranians
who saved the crew. That's how terrible they are at journalism
-- boomerWithaLandline (@Irene34799239)
June 14, 2019
The only real question is, why such a transparent lie? Has the ruling elite gotten lazy or stupid? Or do they think that we are
that lazy and stupid? I have an alternative
theory .
For the last two years, as you've probably noticed, the corporate media have been not so subtly alternating between manufacturing
Russia hysteria and Nazi hysteria, and sometimes whipping up both at once. Thus, I've dubbed the new Official Enemy of Freedom
"the Putin-Nazis." They don't really make any sense, rationally, but let's not get all hung up on that. Official enemies don't
have to make sense. The important thing is, they're coming to get us, and to kill the Jews and destroy democracy and something
about Stalin, if memory serves. Putin is their leader, of course. Trump is his diabolical puppet. Julian Assange is well, Goebbels,
or something. Glenn Greenwald is also on the payroll, as are countless "useful idiots" like myself, whose job it is to sow division,
discord, racism, anti-Semitism, anti-capitalism, anti-Hillaryism, collusion rejectionism, ontological skepticism, and any other
horrible thing you can think of.
Their bullsh*t lies have gotten lazy and stupid because real effort isn't required to start a war and kill a lot of people.
That is the question, I ask thee? If El Trumpo was going to drain the swamp, why did he take these cretins, Bolton, Pompeo,
Haspel, Abrams into his cabinet? Is the tail, wagging the dog as usual?
The elite are both lazy and stupid. Even the Orange Man will not be sucked into another Douma style false flag operation.
The reasons why this is a basic false flag is obvious. If anybody reading about this doesn't understand the culprits responsible
weren't Iranian, then they should be interviewed for mental competency.
My money, the little that I have, is on either the Saudis or the Israelis; maybe even both.
But Pompous Mike and Bolt-on Bolt-off need to be removed from any semblance of governmental authority. I could go on but
this whole affair is making me tired...I'm going back to my swamp.
"... The question that must be raised is who gains what from these incidents. Let's start from saying that even if Tehran had nothing to do with these attacks, it will still suffer the consequences. It is enough to recall the Gulf of Tonkin incident that took place in August 1964. Back then, a US-staged false flag initiated full-scale conflict in Southeast Asia. ..."
There have always been people who have tried to gain power and control. The only
distinction was the mechanism through which they planned to achieve it: brute force or
something more original. For example, researchers manipulate data to attain the results they
want, while traders try to manipulate and influence market prices by disseminating erroneous
information. Some go even further by conducting so-called "false flag" and "fake news"
operations.
However, it is a gradual process. First, the technique of misinformation is implemented
– as you may remember, in 2016, the Internet was filled with fake news aimed at
distorting public opinion and helping one of the candidates to become president of the United
States of America. This year, intelligence agencies and non-government entities have decided to
use similar ploys to influence oil prices.
According to Wikipedia, a
false flag is "intentional misrepresentation or covert operation designed to deceive; the
deception creates the appearance of a particular party, group, or nation being responsible for
some activity, disguising the actual source of responsibility." Recently it became popular for
countries to "organize attacks on themselves and make the attacks appear to be by enemy nations
or terrorists, thus giving the nation that was supposedly attacked a pretext for domestic repression and foreign
military or economic aggression."
Recently there were news report that two oil tankers had been damaged in a suspected attack
in the waters between the United Arab Emirates and Iran as they were leaving the Persian Gulf.
And predictably, the United States claimed that Iran was responsible for
damaging the vessels in the Gulf of Oman. This was the second such incident in four weeks.
The question that must be raised is who gains what from these incidents. Let's start from
saying that even if Tehran had nothing to do with these attacks, it will still suffer the
consequences. It is enough to recall the Gulf of Tonkin incident that took
place in August 1964. Back then, a US-staged false flag initiated full-scale conflict in
Southeast Asia.
Iran has already accused the US of lying about a "torpedo attack" on an American-linked oil
tanker. "The US and its regional allies must stop warmongering and put an end to mischievous
plots and false-flag operations in the region," Iran's mission to the United Nations said .
As history has shown, the Americans won't back down. Does it mean that Iran is next on its
target list for war? Only time will tell.
Nevertheless, without waiting for the results of an investigation, Brent prices spiked after the reports
of the attacks on tankers leaving the Persian Gulf.
The Brent
crude quote won 4.45% on Thursday, shortly after news of the attacks broke, but it has
since slightly decreased, or, should we say, corrected. Without any doubt, someone managed to
put up a really good million-dollar front.
The system is broken, and the managerial elite will keep it broken because it serves
their interests to keep it broken.
America's managerial elite came to do good and stayed to do well--at the expense of
everyone beneath them. Now that they've entrenched themselves at the top of the status quo,
there's no way to dislodge them, even as their failure to address what's broken, much less
actually fix what's broken, insures systemic breakdown.
In government, the managerial elite is known as The Deep State : those who
remain in power regardless of who's in elected office. In local government, managerial elites
often shift positions, moving from elected office to a plum position in the bureaucracy where
they can draw a big paycheck out of sight until they retire.
In Corporate America, managerial elites also move around, leaving sinking ships (that they
may well have helped sink) as needed, and moving to think tanks or academia if their failures
start multiplying.
Changing elected officials does nothing to dislodge our managerial elite overlords.
The new mayor, governor or president comes and goes, and all the major institutions--education,
higher education, healthcare, national defense, critical infrastructure--continue down the same
path of enriching entrenched insiders while the institution fails its core missions.
If you think this chart of soaring student loan debt is a sign of "success," you are 1)
delusional 2) protected from the dire consequences of this failure 3) getting your paycheck
from this failed system. That in a nutshell is the state of the nation: those who are
protected from the consequences of failure are loyal to the Establishment, as are the millions
drawing a paycheck from systems they know are irredeemable failures.
Let's review the central institutions of the nation:
Healthcare: a failed system doomed to bankrupt the nation.
Defense: a failed system of cartels and Pentagon fiefdoms that have saddled the nation
with enormously costly failed weapons systems like the F-35 and the LCS.
Foreign policy: Iraq: a disaster. Afghanistan: a disaster. Libya: a disaster. Syria: a
disaster. Need I go on?
Political governance: a corrupt system of self-serving elites, lobbyists, pay-to-play,
corporate puppet-masters, and sociopaths who see themselves as above the law.
The sole output of America's managerial elite is self-serving hubris.
In an open market, failed leadership has consequences. Customers vanish and the
enterprise goes bankrupt, or shareholders and employees rally to fire the failed
leadership.
In our state-cartel system, failed leadership only tightens its grip on the nation's
throat. The Deep State can't be fired, nor does it ever stand for election. The two
political parties are interchangeable, as are the politicos who race from fund-raiser to
fund-raiser.
It's tempting to blame the individuals who inhale the wealth and power of our failed
system, but it's the system, not the individuals , though a more corrupt, craven,
self-serving lot cannot easily be assembled.
Centralized hierarchies concentrate power at the top of the pyramid. That power is a
magnet for everyone who seeks to wield power and enrich themselves in the process.
In the financial system, this concentration of power is visible in the chart below: the
super-rich have become immensely richer in the past few decades of central banks' vast
expansion of credit and financialization.
As systems become more complex, the need for a professional class to manage the
overwhelming complexity grows. This class excels at appearing to manage complexity while
ignoring the larger dynamics driving the system over the cliff.
And so we have endless meetings of highly paid people over trivial issues while the entire
system careens toward meltdown. "Stakeholders" multiply in endless profusion, dooming every
project to a glacial process that increases the sums paid to manage the glacial process and
pushes the final cost to the moon.
The self-serving managerial elite always has one answer for every problem: give us more
money. If the budget expands by 10% and nothing actually changes for the better, then the
"solution" is a 25% increase in funding.
Budgets expand by leaps and bounds, but none of the systemic problems are ever resolved.
It's not hard to figure out why: look at the system's incentives. If systems were
radically simplified and made more efficient, the need for an ever-expanding class of permanent
managers would diminish. And so the solution is always more fodder for the managerial elite:
more complexity, more meetings, more accumulation of power, more managers and always, more
money.
Thus it is no surprise that the calls for "free" college and "Medicare for All" are
rising: the managerial elite that has bankrupted higher education and healthcare while
enriching themselves desperately needs to be bailed out, lest the systems they've steered
toward the fiscal cliff deservedly go broke.
In a similar set of incentives, few weapons systems ever come in under budget when the
Pentagon can always come up with another $10 or $20 billion for cost over-runs.
The system is broken, and the managerial elite will keep it broken because it serves
their interests to keep it broken. Unfortunately we'll all suffer when the managerial elite
is no longer able to stave off the dire fiscal consequences of their self-serving
leadership.
How universities, banks and the government turned student debt into America's next financial black hole...
On a wind-swept, frigid night in February 2009, a 37-year-old schoolteacher named Scott Nailor parked his rusted '92 Toyota Tercel
in the parking lot of a Fireside Inn in Auburn, Maine. He picked this spot to have a final reckoning with himself. He was going to
end his life.
Beaten down after more than a decade of struggle with student debt, after years of taking false doors and slipping into various
puddles of bureaucratic quicksand, he was giving up the fight. "This is it, I'm done," he remembers thinking. "I sat there and just
sort of felt like I'm going to take my life. I'm going to find a way to park this car in the garage, with it running or whatever."
Nailor's problems began at 19 years old, when he borrowed for tuition so that he could pursue a bachelor's degree at the University
of Southern Maine. He graduated summa cum laude four years later and immediately got a job in his field, as an English teacher.
Bu t he graduated with $35,000 in debt, a big hill to climb on a part-time teacher's $18,000 salary. He struggled with payments,
and he and his wife then consolidated their student debt, which soon totaled more than $50,000. They declared bankruptcy and defaulted
on the loans. From there he found himself in a loan "rehabilitation" program that added to his overall balance. "That's when the
noose began to tighten," he says.
The collectors called day and night, at work and at home. "In the middle of class too, while I was teaching," he says. He ended
up in another rehabilitation program that put him on a road toward an essentially endless cycle of rising payments. Today, he pays
$471 a month toward "rehabilitation," and, like countless other borrowers, he pays nothing at all toward his real debt, which he
now calculates would cost more than $100,000 to extinguish. "Not one dollar of it goes to principal," says Nailor. "I will never
be able to pay it off. My only hope to escape from this crushing debt is to die."
After repeated phone calls with lending agencies about his ever-rising interest payments, Nailor now believes things will only
get worse with time. "At this rate, I may easily break $1 million in debt before I retire from teaching," he says.
Nailor had more than once reached the stage in his thoughts where he was thinking about how to physically pull off his suicide.
"I'd been there before, that just was the worst of it," he says. "It scared me, bad."
He had a young son and a younger daughter, but Nailor had been so broken by the experience of financial failure that he managed
to convince himself they would be better off without him. What saved him is that he called his wife to say goodbye. "I don't know
why I called my wife. I'm glad I did," he says. "I just wanted her or someone to tell me to pick it up, keep fighting, it's going
to be all right. And she did."
From that moment, Nailor managed to focus on his family. Still, the core problem – the spiraling debt that has taken over his
life, as it has for millions of other Americans – remains.
Horror stories about student debt are nothing new. But this school year marks a considerable worsening of a tale that ought to
have been a national emergency years ago. The government in charge of regulating this mess is now filled with predatory monsters
who have extensive ties to the exploitative for-profit education industry – from Donald Trump himself to Education Secretary Betsy
DeVos, who sets much of the federal loan policy, to Julian Schmoke, onetime dean of the infamous DeVry University, whom Trump appointed
to police fraud in education.
Americans don't understand the student-loan crisis because they've been trained to view the issue in terms of a series of separate,
unrelated problems.
They will read in one place that as of the summer of 2017, a record 8.5 million Americans are in default on their student debt,
with about $1.3 trillion in loans still outstanding.
In another place, voters will read that the cost of higher education is skyrocketing, soaring in a seemingly market-defying arc
that for nearly a decade now has run almost double the rate of inflation. Tuition for a halfway decent school now frequently surpasses
$50,000 a year. How, the average newsreader wonders, can any child not born in a yacht afford to go to school these days?
In a third place, that same reader will see some heartless monster, usually a Republican, threatening to cut federal student lending.
The current bogeyman is Trump, who is threatening to slash the Pell Grant program by $3.9 billion, which would seem to put higher
education even further out of reach for poor and middle-income families. This too seems appalling, and triggers a different kind
of response, encouraging progressive voters to lobby for increased availability for educational lending.
But the separateness of these stories clouds the unifying issue underneath: The education industry as a whole is a con. In fact,
since the mortgage business blew up in 2008, education and student debt is probably our reigning unexposed nation-wide scam.
It's a multiparty affair, what shakedown artists call a "big store scheme," like in the movie The Sting : a complex deception
requiring a big cast to string the mark along every step of the way. In higher education, every party you meet, from the moment you
first set foot on campus, is in on the game.
America as a country has evolved in recent decades into a confederacy of widescale industrial scams. The biggest slices of our
economic pie – sectors like health care, military production, banking, even commercial and residential real estate – have become
crude income-redistribution schemes, often untethered from the market by subsidies or bailouts, with the richest companies benefiting
from gamed or denuded regulatory systems that make profits almost as assured as taxes. Guaranteed-profit scams – that's the last
thing America makes with any level of consistent competence. In that light, Trump, among other things, the former head of a schlock
diploma mill called Trump University, is a perfect president for these times. He's the scammer-in-chief in the Great American Ripoff
Age, a time in which fleecing students is one of our signature achievements.
It starts with the sales pitch colleges make to kids. The thrust of it is usually that people who go to college make lots more
money than the unfortunate dunces who don't. "A bachelor's degree is worth $2.8 million on average over a lifetime" is how Georgetown
University put it. The Census Bureau tells us similarly that a master's degree is worth on average about $1.3 million more than a
high school diploma.
But these stats say more about the increasing uselessness of a high school degree than they do about the value of a college diploma.
Moreover, since virtually everyone at the very highest strata of society has a college degree, the stats are skewed by a handful
of financial titans. A college degree has become a minimal status marker as much as anything else. "I'm sure people who take polo
lessons or sailing lessons earn a lot more on average too," says Alan Collinge of Student Loan Justice, which advocates for debt
forgiveness and other reforms. "Does that mean you should send your kids to sailing school?"
But the pitch works on everyone these days, especially since good jobs for Trump's beloved "poorly educated" are scarce to nonexistent.
Going to college doesn't guarantee a good job, far from it, but the data show that not going dooms most young people to an increasingly
shallow pool of the very crappiest, lowest-paying jobs. There's a lot of stick, but not much carrot, in the education game.
It's a vicious cycle. Since everyone feels obligated to go to college, most everyone who can go, does, creating a glut of graduates.
And as that glut of degree recipients grows, the squeeze on the un-degreed grows tighter, increasing further that original negative
incentive: Don't go to college, and you'll be standing on soup lines by age 25.
With that inducement in place, colleges can charge almost any amount, and kids will pay – so long as they can get the money. And
here we run into problem number two: It's too easy to find that money.
Parents, not wanting their kids to fall behind, will pay every dollar they have. But if they don't have the cash, there is a virtually
unlimited amount of credit available to young people. Proposed cuts to Pell Grants aside, the landscape is filled with public and
private lending, and students gobble it up. Kids who walk into financial-aid offices are often not told what signing their names
on the various aid forms will mean down the line. A lot of kids don't even understand the concept of interest or amortization tables
– they think if they're borrowing $8,000, they're paying back $8,000.
Nailor certainly was unaware of what he was getting into when he was 19. "I had no idea [about interest]," he says. "I just remember
thinking, 'I don't have to worry about it right now. I want to go to school.' " He pauses in disgust. "It's unsettling to remember
how it was like, 'Here, just sign this and you're all set.' I wish I could take the time machine back and slap myself in the face."
The average amount of debt for a student leaving school is skyrocketing even faster than the rate of tuition increase.
In 2016, for instance, the average amount of debt for an exiting college graduate was a staggering $37,172. That's a rise of six
percent over just the previous year. With the average undergraduate interest rate at about 3.7 percent, the interest alone costs
around $115 per month, meaning anyone who can't afford to pay into the principal faces the prospect of $69,000 in payments over 50
years.
So here's the con so far.
You must go to college because you're screwed if you don't.
Costs are outrageously high, but you pay them because you have to, and because the system makes it easy to borrow massive amounts
of money
The third part of the con is the worst: You can't get out of the debt.
Since government lenders in particular have virtually unlimited power to collect on student debt – preying on everything from
salary to income-tax returns – even running is not an option. And since most young people find themselves unable to make their full
payments early on, they often find themselves perpetually paying down interest only, never touching the principal. Our billionaire
president can declare bankruptcy four times, but students are the one class of citizen that may not do it even once.
October 2017 was supposed to represent the first glimmer of light at the end of this tunnel. This month marks the 10th anniversary
of the Public Service Loan Forgiveness program, one of the few avenues for wiping out student debt. The idea, launched by George
W. Bush, was pretty simple: Students could pledge to work 10 years for the government or a nonprofit and have their debt forgiven.
In order to qualify, borrowers had to make payments for 10 years using a complex formula. This month, then, was to start the first
mass wipeouts of debt in the history of American student lending. But more than half of the 700,000 enrollees have already been expunged
from the program for, among other things, failing to certify their incomes on time, one of many bureaucratic tricks employed to limit
forgiveness eligibility. To date, fewer than 500 participants are scheduled to receive loan forgiveness in this first round.
Moreover, Trump has called for the program's elimination by 2018, meaning that any relief that begins this month is likely only
temporary. The only thing that is guaranteed to remain real for the immediate future are the massive profits being generated on the
backs of young people, who before long become old people who, all too often, remain ensnared until their last days in one of the
country's most brilliant and devious moneymaking schemes.
Everybody wins in this madness, except students. Even though many of the loans are originated by the state, most of them are serviced
by private or quasi-private companies like Navient – which until 2014 was the student-loan arm of Sallie Mae – or Nelnet, companies
that reported a combined profit of around $1 billion last year (the U.S. government made a profit of $1.6 billion in 2016!). Debt-collector
companies like Performant (which generated $141.4 million in revenues; the family of Betsy DeVos is a major investor), and most particularly
the colleges and universities, get to prey on the desperation and terror of parents and young people, and in the process rake in
vast sums virtually without fear of market consequence.
About that: Universities, especially public institutions, have successfully defended rising tuition in recent years by blaming
the hikes on reduced support from states. But this explanation was blown to bits in large part due to a bizarre slip-up in the middle
of a controversy over state support of the University of Wisconsin system a few years ago.
In that incident, UW raised tuition by 5.5 percent six years in a row after 2007. The school blamed stresses from the financial
crisis and decreased state aid. But when pressed during a state committee hearing in 2013 about the university's finances, UW system
president Kevin Reilly admitted they held $648 million in reserve, including $414 million in tuition payments. This was excess hidey-hole
cash the school was sitting on, separate and distinct from, say, an endowment fund.
After the university was showered with criticism for hoarding cash at a time when it was gouging students with huge price increases
every year, the school responded by saying, essentially, it only did what all the other kids were doing. UW released data showing
that other major state-school systems across the country were similarly stashing huge amounts of cash. While Wisconsin's surplus
was only 25 percent of its operating budget, for instance, Minnesota's was 29 percent, and Illinois maintained a whopping 34 percent
reserve.
When Collinge, of Student Loan Justice, looked into it, he found that the phenomenon wasn't confined to state schools. Private
schools, too, have been hoarding cash even as they plead poverty and jack up tuition fees. "They're all doing it," he says.
While universities sit on their stockpiles of cash and the loan industry generates record profits, the pain of living in debilitating
debt for many lasts into retirement. Take Veronica Martish. She's a 68-year-old veteran, having served in the armed forces in the
Vietnam era. She's also a grandmother who's never been in trouble and consid?ers herself a patriot. "The thing is, I tried to do
everything right in my life," she says. "But this ruined my life."
This is an $8,000 student loan she took out in 1989, through Sallie Mae. She borrowed the money so she could take courses at Quinebaug
Valley Community College in Connecticut. Five years later, after deaths in her family, she fell behind on her payments and entered
a loan-rehabilitation program. "That's when my nightmare began," she says.
In rehabilitation, Martish's $8,000 loan, with fees and interest, ballooned into a $27,000 debt, which she has been carrying ever
since. She says she's paid more than $63,000 to date and is nowhere near discharging the principal. "By the time I die," she says,
"I will probably pay more than $200,000 toward an $8,000 loan." She pauses. "It's a scam, you see. Nothing ever comes off the loan.
It's all interest and fees. And they chase you until you're old, like me. They never stop. Ever."
And that's the other thing about lending to students: It's the safest grift around.
There's probably no better symbol of the bankruptcy of the education industry than Trump University. The half-literate president's
effort at higher learning drew in suckers with pathetic promises of great real-estate insights (for instance, that Trump "hand-picked"
the instructors) and then charged them truckfuls of cash for get-rich-quick tutorials that students and faculty later described as
"almost completely worthless" and a "total lie." That Trump got to settle a lawsuit on this matter for $25 million and still managed
to be elected president is, ironically, a remarkable testament to the failure of our education system. About the only example that
might be worse is DeVry University, which told students that 90 percent of graduates seeking jobs found them in their fields within
six months of graduation. The FTC found those claims "false and unsubstantiated," and ordered $100 million in refunds and debt relief,
but that was in 2016 – before Trump put DeVry chief Schmoke, of all people, in charge of rooting out education fraud. Like a lot
of things connected to politics lately, it would be funny if it weren't somehow actually happening.?"Yeah, it's the fox guarding
the henhouse," says Collinge. "You could probably find a worse analogy."
But the real problem with the student-loan story is that it's so poorly understood by people not living the nightmare. There's
so much propaganda that blames the borrowers for taking on the debt in the first place that there's often little sympathy for people
in hopeless situations. To make matters worse, band-aid programs that supposedly offer help hypnotize the public into thinking there
are ways out, when the "help" is usually just another trick to add to the balance.
"That's part of the problem with the narrative," says Nailor, the schoolteacher. "People think that there's help, so what are
you complaining about? All you got to do is apply for help."
But the help, he says, coming from a for-profit predatory system, often just makes things worse. "It did for me," he says. "It
does for a lot of people."
The real flaw is associating "higher" education with value. Get a job. Earn an income. Find an interest for your free time.
Raise a family. Spare the four years of wasted time and money.
If you want to take the risk of going into debt to attend college, you better come out with skills that are in high demand.
Otherwise you are much better off going into the military, or going to trade school. BTW, thank the Clintons for making it
impossible to get out of student debt through bankruptcy.
If you want to give out loans to kids then you should accept the risk that they might default on that debt and leave you
with the tab. Let's stop the coddling the banker bullshit. They lobbied to make this loans extremely difficult to discharge
in bankruptcy. They wanted all the profit and none of the risk. Let them assume risk and they'll stop handing out loans to
unqualified borrowers.
Amen! If the money for an "education" is more difficult to obtain, that ought to be a clue as to the value of the information
/ training one is purchasing. The fact it's so easy to get is all one needs to know about the worth of what's being spewed
by those dispensing their so-called knowledge / truth.
Allow the lawful discharge through bankruptcy and punish every single financial institution, (and especially their individual
persons who oversaw the process), that has profited off of ballooning "principle" amounts that even come close to doubling
an original amount with ties to any government official that voted to place these kind of loans in such a category.
This is madness! "Woe to those who make unjust laws, to those who issue oppressive decrees,..." Isaiah 10:1
Finally at least one person gets it. The inability to discharge student loan debt through the taint of bankruptcy is one
of the greatest financial crimes of the last century. Entirely unAmerican. America used to be all about fresh starts. That
is one reason our business life is more vibrant than say many places in Europe with less benign laws. Same goes for individuals.
If you go through the pain of bankruptcy there is no reason you shouldnt get that debt discharged. Whomever voted for that
law, whether Clintons or others should be beaten to death.
Hobart's 38-week combo welder program costs $16,625. A trained kid willing to travel and work in the field would make more
than an engineering graduate who paid a quarter-million for his degree.
No mention made of the rats nest Social Justice program$ infesting college and university campuses across the country, at
untold cost, worthless sullshit.
Not that the student loan thing isn't another banker scam, but the lead story doesn't make sense.
Firstly, educators get
loan forgiveness after a decade or two of public service. And there are income contingent repayment plans. And lawyers have,
in fact, been able to get these things discharged. None of this changes the scam that is giving out high interest loans to
kids to pursue an education. But you might want to start with a sob story that makes more sense. How about a pediatrician with
400k in loans and making 100k a year living in a coastal city? Or how about the art history majors at private liberal arts
schools with 200k in debt making $10/hour as a barista? But teachers are one of the few groups that has an actual federal out.
Maybe. My wife is a teacher in a Title I, low income school, and had been for 13 years..... She also has about 13K remaining in student loans, originally federal direct and Perkins loans. With her over 10 years in title I schools, she should be able to get them forgiven, except that she consolidated these loans
before I met her, and now they are "serviced" by AES, a private lender, and they are no longer eligible for discharge. This I call the "Consolidation Scam."
Pay off debt before you have children. There is no law that you must have children, if the debt makes it impossible. I would
have liked a lot of tings but could not afford them.
Taibbi has some gall to blame Trump, DeVos and others for the student debt explosion, but not one word about Obama or the
government's takeover of the student loan market as part of Obamacare? The student loan market was folded into the ACA as part
of the fake accounting to make the ACA numbers "work". Every market the govenrment insinuates itself into - housing, health
care, college tuition, etc. - gets distorted and costs explode. Taibbi's yet another dishonest liberal.
Yikes- is this factual? If so fuck him. All name, no cattle.
Obama began his turn as destroyer in chief at the height of the Great Recession, everyone & their brother was running into
the safety of college & student loans to pay the bills. I recall watching the local parking lots swell. :) So there's that.
But numbers are off the charts every year because younger millennials expect the govt to forgive all those loans at some
point. That's how many thought 20 years ago & it's worse today.
"The nexus between the student loan program and ObamaCare is purely opportunistic. As the Affordable Care Act was passing
through Congress, its wheels greased by the wholly fraudulent assertion that it didn't need 60 votes to pass the Senate, the
administration decided to put in a provision eliminating the private student loan industry, fully federalizing the program.
What was not widely understood at the time was that it hoped to raid the funds paid by students to provide money for the bottomless
pit known as ObamaCare"
In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships
has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.
Notable quotes:
"... "easy" student loans are a subsidy to colleges, ..."
"... 1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about 75% of a year at NU. ..."
"... Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy of meritocracy. Financial illiteracy is the enemy of meritocracy. ..."
"... The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget. ..."
"... JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified): ..."
"... of-paying) IF a built for that purpose government agency APPROVES said loan. What do you think? ..."
"... Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. ..."
"... Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply educate the proles? ..."
Thomas Piketty on a theme I've been hammering lately, student debt is too damn high!:
Student Loan Debt Is the Enemy
of Meritocracy in the US: ...the amount of household debt and even more recently of student debt in the U.S. is something
that is really troublesome and it reflects the very large rise in tuition in the U.S. a very large inequality in access to education.
I think if we really want to promote more equal opportunity and redistribute chances in access to education we should do something
about student debt. And it's not possible to have such a large group of the population entering the labor force with such a big
debt behind them. This exemplifies a particular problem with inequality in the United States, which is very high inequality and
access to higher education. So in other countries in the developed world you don't have such massive student debt because you
have more public support to higher education. I think the plan that was proposed earlier this year in 2015 by President Obama
to increase public funding to public universities and community college is exactly justified.
This is really the key for higher growth in the future and also for a more equitable growth..., you have the official discourse
about meritocracy, equal opportunity and mobility, and then you have the reality. And the gap between the two can be quite troublesome.
So this is like you have a problem like this and there's a lot of hypocrisy about meritocracy in every country, not only in the
U.S., but there is evidence suggesting that this has become particularly extreme in the United States. ... So this is a situation
that is very troublesome and should rank very highly in the policy agenda in the future in the U.S.
DrDick -> Jeff R Carter:
"college is heavily subsidized"
Bwahahahahahahaha! *gasp*
In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships
has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.
cm -> to DrDick...
I don't know what Jeff meant, but "easy" student loans are a subsidy to colleges, don't you think? Subsidies don't
have to be paid directly to the recipient. The people who are getting the student loans don't get to keep the money (but they
do get to keep the debt).
DrDick -> to cm...
No I do not agree. If anything, they are a subsidy to the finance industry (since you cannot default on them). More basically,
they do not make college more affordable or accessible (his point).
cm -> to DrDick...
Well, what is a subsidy? Most economic entities don't get to keep the money they receive, but it ends up with somebody else
or circulates. If I run a business and somebody sends people with money my way (or pays me by customer served), that looks like
a subsidy to me - even though I don't get to keep the money, much of it paid for operational expenses not to forget salaries and
other perks.
Just because it is not prearranged and no-strings (?) funding doesn't mean it cannot be a subsidy.
The financial system is involved, and benefits, whenever money is sloshing around.
Pinkybum -> to cm...
I think DrDick has this the right way around. Surely one should think of subsidies as to who the payment is directly helping.
Subsidies to students would lower the barrier of entry into college. Subsidies to colleges help colleges hire better professors,
offer more classes, reduce the cost of classes etc. Student loans are no subsidy at all except to the finance industry because
they cannot be defaulted on and even then some may never be paid back because of bankruptcies.
However, that is always the risk of doing business as a loan provider. It might be interesting to assess the return on student
loans compared to other loan instruments.
mrrunangun -> to Jeff R Carter...
The cost of higher education has risen relative to the earning power of the student and/or the student's family unless that
family is in the top 10-20% wealth or income groups.
50 years ago it was possible for a lower middle class student to pay all expenses for Northwestern University with his/her
own earnings. Tuition was $1500 and room + board c $1000/year. The State of Illinois had a scholarship grant program and all you
needed was a 28 or 29 on the ACT to qualify for a grant that paid 80% of that tuition. A male student could make $2000 in a summer
construction job, such as were plentiful during those booming 60s. That plus a low wage job waiting tables, night security, work-study
etc could cover the remaining tuition and expense burden.
The annual nut now is in excess of $40,000 at NU and not much outside the $40,000-50,000 range at other second tier or elite
schools.
The state schools used to produce the bedrock educated upper middle class of business and professional people in most states
west of the seaboard. Tuition there 50 years ago was about $1200/year and room and board about $600-800 here in the midwest. Again
you could put yourself through college waiting tables part-time. It wasn't easy but it was possible.
No way a kid who doesn't already possess an education can make the tuition and expenses of a private school today. I don't
know what the median annual family income was in 1965 but I feel confident that it was well above the annual nut for a private
college. Now it's about equal to it.
mrrunangun -> to mrrunangun...
1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about
75% of a year at NU.
This allows a reader to understand how the graph was constructed and to work with the graph.
ilsm:
The US spends half the money the entire world spends on war, that is success!
Massive student debt, huge doses poverty, scores of thousands [of annual neglect related] deaths from the wretched health care
system etc are not failure!
tew:
Poor education is the enemy of meritocracy. Costly, bloated administrations full of non-educators there to pamper and pander
to every possible complaint and special interest - that is the enemy of meritocracy.
Convincing kids to simple "follow their dreams" regardless of education cost and career potential is the enemy of meritocracy.
Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy
of meritocracy. Financial illiteracy is the enemy of meritocracy.
Manageable student debt is no great enemy of meritocracy.
cm -> to tew...
This misses the point, aside frm the victim blaming. Few people embark on college degrees to "follow their dream", unless the
dream is getting admission to the middle class job market.
When I was in elementary/middle school, the admonitions were of the sort "if you are not good in school you will end up sweeping
streets" - from a generation who still saw street cleaning as manual labor, in my days it was already mechanized.
I estimate that about 15% or so of every cohort went to high school and then college, most went to a combined vocational/high
school track, and some of those then later also went college, often from work.
This was before the big automation and globalization waves, when there were still enough jobs for everybody, and there was
no pretense that you needed a fancy title to do standard issue work or as a social signal of some sort.
Richard H. Serlin:
Student loans and college get the bulk of the education inequality attention, and it's not nearly enough attention, but it's
so much more. The early years are so crucial, as Nobel economist James Heckman has shown so well. Some children get no schooling
or educational/developmental day care until almost age 6, when it should start in the first year, with preschool starting at 3.
Others get high quality Montessori, and have had 3 years of it by the time they enter kindergarten, when others have had zero
of any kind of education when they enter kindergarten.
Some children spend summers in high quality summer school and educational programs; others spend three months digressing and
learning nothing. Some children get SAT prep programs costing thousands, and high end educational afterschool programs; others
get nothing after school.
All these things should be available in high quality to any child; it's not 1810 anymore Republicans, the good old days of
life expectancy in the 30s and dirt poverty for the vast majority. We need just a little more education in the modern world. But
this also makes for hugely unequal opportunity.
One needs to differentiate between costs (total dollars spent per student credit hour or degree, or whatever the appropriate
metric is) and price (what fraction of the cost is allocated to the the end-user student).
Note that the level of state funding impacts price, not cost; that discussion is usually about cost shifting, not cost reduction.
I'd say that the rate of increase in costs is, more or less, independent of the percent of costs borne by the state. You can
indeed see this in the increase in private schools, the state funding is small/nil (particularly in schools without material endowments,
where actual annual fees (prices) must closely actual match annual costs). Price discounts and federal funding may both complicate
this analysis.
I think much more effort should be spent on understanding and controlling costs. As with health care, just saying "spend more
money" is probably not the wise or even sustainable path in the long term.
Costs were discussed at some length here a year(?) or so ago. There is at least one fairly comprehensive published analysis
of higher education costs drivers. IIRC, their conclusion was that there were a number of drivers - its not just food courts or
more administrators. Sorry, don't recall the link.
Syaloch -> to cm...
Actually for my first job out of college at BLS, I basically was hired for my "rounded personality" combined with a general
understanding of economic principles, not for any specific job-related skills. I had no prior experience working with Laspeyres
price indexes, those skills were acquired through on-the-job training. Similarly in software development there is no degree that
can make you a qualified professional developer; the best a degree can do is to show you are somewhat literate in X development
language and that you have a good understanding of general software development principles. Most of the specific skills you'll
need to be effective will be learned on the job.
The problem is that employers increasingly want to avoid any responsibility for training and mentoring, and to shift this burden
onto schools. These institutions respond by jettisoning courses in areas deemed unnecessary for short-term vocational purposes,
even though what you learn in many of these courses is probably more valuable and durable in the long run than the skills obtained
through job-specific training, which often have a remarkably short shelf-life. (How valuable to you now is all that COBOL training
you had back in the day?)
I guess the question then is, is the sole purpose of higher education to provide people with entry-level job skills for some
narrowly-defined job description which may not even exist in a decade? A lot of people these days seem to feel that way. But I
believe that in the long run it's a recipe for disaster at both the individual and the societal level.
Richard H. Serlin -> to Observer...
"Observer"
The research is just not on you side, as Heckman has shown very well. Early education and development makes a huge difference,
and at age 5-7 (kindergarten) children are much better off with more schooling than morning to noon. This is why educated parents
who can afford it pay a lot of money for a full day -- with afterschool and weekened programs on top.
Yes, we're more educated than 1810, but I use 1810 because that's the kind of small government, little spending on education
(you want your children educated you pay for it.) that the Republican Party would love to return us to if they thought they could
get away with it. And we've become little more educated in the last 50 years even though the world has become much more technologically
advanced.
Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer
to our health care problems - indeed, the only answer - is to rely on the free market. Quite a few seem to believe that this view
reflects the lessons of economic theory.
Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow's "Uncertainty and the Welfare Economics
of Health Care," * which demonstrated - decisively, I and many others believe - that health care can't be marketed like bread
or TVs. Let me offer my own version of Arrow's argument.
There are two strongly distinctive aspects of health care. One is that you don't know when or whether you'll need care - but
if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the
doctor's office; and very, very few people can afford to pay major medical costs out of pocket.
This tells you right away that health care can't be sold like bread. It must be largely paid for by some kind of insurance.
And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense
when it comes to health care. And you can't just trust insurance companies either - they're not in business for their health,
or yours.
This problem is made worse by the fact that actually paying for your health care is a loss from an insurers' point of view
- they actually refer to it as "medical costs." This means both that insurers try to deny as many claims as possible, and that
they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which
is why private insurance has much higher administrative costs than single-payer systems. And since there's a widespread sense
that our fellow citizens should get the care we need - not everyone agrees, but most do - this means that private insurance basically
spends a lot of money on socially destructive activities.
The second thing about health care is that it's complicated, and you can't rely on experience or comparison shopping. ("I hear
they've got a real deal on stents over at St. Mary's!") That's why doctors are supposed to follow an ethical code, why we expect
more from them than from bakers or grocery store owners.
You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent
we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don't trust them - they're
profit-making institutions, and your treatment is their cost.
Between those two factors, health care just doesn't work as a standard market story.
All of this doesn't necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number
of successful healthcare systems, at least as measured by pretty good care much cheaper than here, and they are quite different
from each other. There are, however, no examples of successful health care based on the principles of the free market, for one
simple reason: in health care, the free market just doesn't work. And people who say that the market is the answer are flying
in the face of both theory and overwhelming evidence.
I believe so, as I noted above. The specific market dynamics of health care expenditures are obviously different, but as categories
of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second,
unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where
many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger
chunk of the household budget.
Another interesting feature of both health care and college education is that there are many proffered explanations as to why
their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid
evidence.
anne -> to Syaloch...
Another interesting feature of both health care and college education is that there are many proffered explanations as to why
their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid
evidence.
[ Look to the paper by Kenneth Arrow, which I cannot copy, for what is to me a convincing explanation as to the market defeating
factors of healthcare. However, I have no proper explanation about education costs and am only speculating or looking for an analogy.
]
anne -> to Syaloch...
The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have
some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise,
neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are
held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household
budget.
[ Nicely expressed. ]
Peter K. -> to anne...
"As to increasing college costs, would there be an analogy to healthcare costs?"
Yes, exactly. They aren't normal markets. There should be heavy government regulation.
Denis Drew:
JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified):
Only allow government guaranteed loans (and the accompanying you-can-never-get-out-of-paying) IF a built for that purpose
government agency APPROVES said loan. What do you think?
Denis Drew -> to cm...
A big reason we had the real estate bubble was actually the mad Republican relaxation of loan requirements -- relying on the
"free market." So, thanks for coming up with a good comparison.
By definition, for the most part, people taking out student loans are shall we say new to the world and more vulnerable to
the pirates.
* * * * * * * * * *
[cut and paste from my comment on AB]
Jeff Bezos bought the Washington Post.
According to an article in the Huffington Post At Kaplan University, 'Guerrilla Registration' Leaves Students Deep In Debt,
Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. Going so far as to
falsely pad bills $5000 or so dollars at diploma time - pay up immediately or you will never get your sheepskin; you wasted your
time. No gov agency will act.
According to a lovely graph which I wish I could patch in here the Post may actually be currently be kept afloat only by purloined
cash from Kaplan:
earnings before corporate overhead
2002 - Kaplan ed, $10 mil; Kaplan test prep, $45 mil: WaPo, $100 mil
2005 - Kaplan ed, $55 mil; Kaplan test prep, $100 mil; WaPo, $105 mil
2009 - Kaplan ed, $255 mil; Kaplan test prep, $5 mil; WaPo negative $175 mil
Wonder if billionaire Bezos will reach out to make Kaplan Ed victims whole. Will he really continue to use Kaplan's pirated
money to keep WaPo whole -- if that is what is going on?
Johannes Y O Highness:
"theme I've been hammering lately, student debt is too damn high!: "
Too damn high
but why?
Because! Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply
educate the proles?
Opportunity cost! The burden of the intelligentsia, the brain work can by carried by robots or humans. Choice of the wealthy?
Humans, hands down. Can you see the historical background?
Railroad was the first robot. According to Devon's Paradox, it was overused because of its increment of efficiency. Later,
excessive roadbeds were disassembled. Rails were sold as scrap.
The new robots are not heavy lifters. New robots are there to do the work of the brain trust. As first robots replaced lower
caste jokers, so shall new robots replace upper caste jokers. Do you see the fear developing inside the huddle of high rollers?
Rollers now calling the play?
High rollers plan to educate small time hoods to do the work of the new robots, then kill the new robots before the newbie
'bot discovers how to kill the wealthy, to kill, to replace them forever.
Terrifying fear
strikes
Observer:
Good bit of data on education costs here
http://centerforcollegeaffordability.org/
This chart shows state spending per student and tuition ...
" overall perhaps the best description of the data is something along the lines of "sometimes state appropriations go up and
sometimes they go down, but tuition always goes up." "
Navient, spun off from Sallie Mae, has thrived as student loan debt spirals across the US.
Its story reveals how, instead of fighting inequality, the education industry is reinforcing
it
Nathan Hornes: 'Navient hasn't done a thing to help me. They just want their money. And
they want it now.' Photograph: Fusion
A mong the 44 million Americans who have amassed our nation's
whopping $1.4tn in student loan debt, a call from Navient can produce shivers of dread.
Navient is the primary point of contact, or the "servicer", for more student loans in the
United States than any other company, handling 12 million borrowers and $300bn in debt. The
company flourished as student loan debt exploded under the Obama administration, and its stock
rose sharply after the election of Donald Trump.
But Navient also has more complaints per borrower than any other servicer, according to a
Fusion analysis of data. And these mounting complaints repeatedly allege that
the company has failed to live up to the terms of its federal contracts, and that it
illegally harasses consumers . Navient says most of the ire stems from structural issues
surrounding college finance – like the terms of the loans, which the federal government
and private banks are responsible for – not about Navient customer service.
Navient has positioned itself to dominate the lucrative student loan industry in the midst
of this crisis, flexing its muscles in Washington and increasingly across the states. The story
of Navient's emerging power is also the story of how an industry built around the idea that
education can break down inequities is reinforcing them.The tension at the center of the
current controversy around student loans is simple: should borrowers be treated like any other
consumers, or do they merit special service because education is considered a public good?
Often, the
most vulnerable borrowers are not those with the largest debt, but low-income students,
first-generation students, and students of color – especially those who may attend less
prestigious schools and are less likely to quickly earn enough
to repay their loans, if they graduate at all.
Last year, Navient received 23 complaints per 100,000 borrowers, more than twice that of the
nearest competitor, according to Fusion's analysis. And from January 2014 to December 2016,
Navient was named as a defendant in 530 federal lawsuits. The vast majority were aimed at the
company's student loans servicing operations. (Nelnet and Great Lakes, the two other biggest
companies in the student loans market, were sued 32 and 14 times over the same period,
respectively.)
Many of the complaints and lawsuits aimed at the company relate to its standard practice of
auto-dialing borrowers to solicit payments.
Shelby Hubbard says she has long been on the receiving end of these calls as she has
struggled to pay down her debt. Hubbard racked up over $60,000 in public and private student
loans by the time she graduated from Eastern Kentucky University with a basic
healthcare-related degree.
"It consumes my every day," Hubbard said of the constant calls. "Every day, every hour,
starting at 8 o'clock in the morning." Unlike mortgages, and most other debt, student loans
can't be wiped away with bankruptcy.
These days, Hubbard, 26, works in Ohio as a logistics coordinator for traveling nurses.
She's made some loan payments, but her take-home pay is about $850 every two weeks. With her
monthly student loan bill at about $700, roughly half her income would go to paying the loans
back, forcing her to lean more heavily on her fiancé. "He pays for all of our utilities,
all of our bills. Because at the end of the day, I don't have anything else to give him," she
said. The shadow of her debt hangs over every discussion about their wedding, mortgage
payments, and becoming parents.
The power and reach of the student loan industry stacks the odds against borrowers. Navient
doesn't just service federal loans, it has a hand in nearly every aspect of the student loan
system. It has bought up private student loans, both servicing them and earning interest off of
them. And it has purchased billions of dollars worth of the older taxpayer-backed loans, again
earning interest, as well as servicing that debt. The company also owns controversial
subsidiary companies such as Pioneer Credit Recovery that
stand to profit from collecting the debt of loans that go into default.
label="How the Trump administration is undermining students of color | Mark Huelsman and
Vijay Das"
href="https://www.theguardian.com/commentisfree/2017/jul/15/trump-administration-students-color-debt">
And just as banks have done with mortgages, Navient packages many of the private and
pre-2010 federal loans and sells them on Wall Street as asset-backed securities. Meanwhile,
it's in the running to oversee the Department of Education's entire student debt web portal,
which would open even more avenues for the company to profit from – and expand its
influence over – Americans' access to higher education.
The federal government is the biggest lender of American student loans, meaning that
taxpayers are currently on the hook for more than
$1tn . For years, much of this money was managed by private banks and loan companies like
Sallie Mae. Then in 2010, Congress cut out the middlemen and their lending fees, and Sallie Mae
spun off its servicing arm into the publicly traded company Navient.
Led by former Sallie Mae executives, Navient describes itself as "a leading provider of
asset management and business processing solutions for education, healthcare, and government
clients." But it is best known for being among a handful of companies that have won coveted
federal contracts to make sure students repay their loans. And critics say that in pursuit of
getting that money back, the Department of Education has allowed these companies to all but run
free at the expense of borrowers.
"The problem is that these servicers are too big to fail," said Persis Yu, director of the
National Consumer Law Center's Student Loan Borrower Assistance Project. "We have no place to
put the millions of borrowers whom they are servicing, even if they are not doing the servicing
job that we want them to do."
In its last years, the Obama administration tried to rein in the student loan industry and
promoted more options for reduced repayment plans for federal loans. Since then, Donald Trump's
education secretary, Betsy
DeVos , has reversed or
put on hold changes the former education secretary John B King's office proposed
and appears bent on further loosening the reins on the student loan
industry , leaving individual students little recourse amid bad service.
In late August, DeVos's office announced
that it would stop sharing information about student loan servicer oversight with the federal
consumer watchdog agency known as the Consumer Financial Protection Bureau, or CFPB.
Earlier this year, as complaints grew, the CFPB
sued Navient for allegedly misleading borrowers about the repayment options it is legally
obligated to provide.
A central allegation is that Navient, rather than offering income-based repayment plans,
pushed some people into a temporary payment freeze called forbearance. Getting placed into
forbearance is a good Band-Aid but can be a terrible longer-term plan. When an account gets
placed in forbearance, its interest keeps accumulating, and that interest can be added to the
principal, meaning the loans only grow.
Lynn Sabulski, who worked in Navient's Wilkes-Barre, Pennsylvania, call center for five
months starting in 2012, said she experienced first-hand the pressure to drive borrowers into
forbearance.
"Performing well meant keeping calls to seven minutes or under," said Sabulski. "If you only
have seven minutes, the easiest option to put a borrower in, first and foremost, is a
forbearance." Sabulski said if she didn't keep the call times short, she could be written up or
lose her job.
Navient denies the allegations, and a spokeswoman told Fusion via email seven and a half
minutes was the average call time, not a target. The company maintains "caller satisfaction and
customer experience" are a significant part of call center representatives' ratings.
But in a 24 March motion it filed in federal court for the CFPB's lawsuit, the company also
said: "There is no expectation that the servicer will act in the interest of the consumer."
Rather, it argued, Navient's job was to look out for the interest of the federal government and
taxpayers.
Navient does get more per account when the servicer is up to date on payments, but getting
borrowers into a repayment plan also has a cost because of the time required to go over the
complex options.
The same day the CFPB filed its lawsuit, Illinois and Washington filed suits in state
courts. The offices of attorneys general in nine other states confirmed to Fusion that they are
investigating the company.
At a recent hearing in the Washington state case, the company defended its service: "The
State's claim is not, you didn't help at all, which is what you said you would do. It's that,
you could've helped them more." Navient insists it has forcefully advocated in Washington to
streamline the federal loan system and make the repayment process easier to navigate for
borrowers.
And it's true, Navient, and the broader industry, have stepped up efforts in recent years to
influence decision makers. Since 2014, Navient executives have given nearly $75,000 to the
company's political action committee, which has pumped money mostly into Republican campaigns,
but also some Democratic ones. Over the same timespan, the company has spent more than $10.1m
lobbying Congress, with $4.2m of that spending coming since 2016. About $400,000 of it targeted
the CFPB, which many Republican lawmakers want to do away with.
Among the 22 former federal officials who lobby for Navient is the former US representative
Denny Rehberg, a Republican, who once criticized
federal aid for students as the welfare of the 21st century. His fellow lobbyist and former GOP
representative Vin Weber sits on a board that has aired attack ads against the CFPB, as well as
on the board of the
for-profit college ITT Tech , which shuttered its
campuses in 2016 after Barack Obama's Department of Education accused it of predatory
recruitment and lending.
In response to what they see as a lack of federal oversight, California, Connecticut,
Massachusetts, and the District of Columbia recently required student loan servicers to get
licenses in their states. Not surprisingly, Fusion found a sharp increase in Navient's spending
in states considering such regulations, with the majority of the $300,000 in Navient state
lobbying allocated since 2016.
In Maine and Illinois, the legislatures were flooded with Navient and other industry
lobbyists earlier this year, after lawmakers proposed their own versions of the license bills.
The Maine proposal failed after Navient argued the issue should be left to the federal
government. The Illinois bill passed the legislature, but the Republican governor, Bruce
Rauner, vetoed it in August following lobbying from an
industry trade group . Rauner
said the bill encroached on the federal government's authority.
Researchers argue more data would help them understand how to improve the student loan
process and prevent more people from being overwhelmed by debt. In 2008, Congress made it
illegal for the Department of Education to make the data public, arguing that it was a risk for
student privacy. Private colleges and universities
lobbied to restrict the data. So, too,
did Navient's predecessor, Sallie Mae, and other student loan servicing companies.
Today, companies like Navient have compiled mountains of data about graduations, debt and
financial outcomes – which they consider proprietary information. The lack of
school-specific data about student outcomes can be life-altering, leading students to pick
schools they never would have picked. Nathan Hornes, a 27-year-old Missouri native, racked up
$70,000 in student loans going to Everest College, an unaccredited school, before he
graduated.
"Navient hasn't done a thing to help me," Hornes told Fusion. "They just want their money.
And they want it now."
label="The US cities luring millennials with promises to pay off their student debts"
href="https://www.theguardian.com/world/2016/mar/10/the-us-cities-luring-millennials-with-promises-to-pay-off-their-student-debts">
Hornes' loans were recently forgiven following state investigations into Everest's parent
company Corinthian. But many other borrowers still await relief.
Better educating teens about financial literacy before they apply to college will help
reduce their dependence on student loans, but that doesn't change how the deck is stacked for
those who need them. A few states have made
community colleges free , reducing the need for student loan servicers.
But until the Department of Education holds industry leaders like Navient more accountable,
individual states can fix only so much, insists Senator Elizabeth Warren, one of the industry's
most outspoken critics on Capitol Hill.
"Navient's view is, hey, I'm just going to take this money from the Department of Education
and maximize Navient's profits, rather than serving the students," Warren said. "I hold Navient
responsible for that. But I also hold the Department of Education responsible for that. They
act as our agent, the agent of the US taxpayers, the agent of the people of the United States.
And they should demand that Navient does better."
Laura Juncadella, a production assistant for The Naked Truth also contributed to this
article
The Naked Truth: Debt Trap airs on Fusion TV 10 September at 9pm ET. Find out where to
watch here
A fresh story at Bloomberg, which includes new analysis, shows the ugly student debt picture is getting uglier. The driver is
that higher education costs keep rising, often in excess of the likely wages for graduates. The article's grim conclusion: "The next
generation of graduates will include more borrowers who may never be able to repay."
Student debt is now the second biggest type of consumer debt in the US. At $1.5 trillion, is is second only to the mortgage market,
and is also bigger than the subprime market before the crisis, which was generally pegged at $1.3 trillion. 1 Bloomberg
also points out that unlike other categories of personal debt, student debt balances has shown consistent, or one might say persistent,
growth since the crisis.
From the article:
Student loans are being issued at unprecedented rates as more American students
pursue higher education . But the
cost of
tuition at both private and public institutions is touching
all-time
highs , while interest rates on student loans are also rising. Students are spending more time
working instead of studying . (Some 85 percent of current students now work
paid jobs while enrolled.) Experts and analysts worry that the next generation of graduates could default on their loans at
even higher rates than in the immediate wake of the financial crisis.
The last sentence is alarming. As graduates of the class of 2009 like UserFriendly can attest, the job market was desperate. And
for the next few years, the unemployment rate of new college graduates was higher than that of recent high school graduates. One
of the corollaries of that is that more college graduates than before were taking work that didn't require a college degree; this
is still a significant trend today. And on top of that, studies have found that early career earnings have a significant impact on
lifetime earnings. While there are always exceptions, generally speaking, pay levels key off one's earlier compensation, so starting
out at a lower income level is likely to crimp future compensation.
And on top of that, interest costs are rising. The rate for direct undergraduate loans is 5% and for graduate and professional
schools, 6.6%. So student debt costs will also go up even before factoring in inflating school costs. So the ugly picture of delinquencies
and defaults is destined to get worse.
Students attending for-profit universities and community colleges represented almost half of all borrowers leaving school and
beginning to repay loans in 2011. They also accounted for 70 percent of all defaults. As a result, delinquencies skyrocketed in
the 2011-12 academic year, reaching 11.73 percent.
Today, the student loan delinquency rate remains almost as high, which Scott-Clayton attributes to social and institutional
factors, rather than average debt levels. "Delinquency is at crisis levels for borrowers, particularly for borrowers of color,
borrowers who have gone to a for-profit and borrowers who didn't ultimately obtain a degree," she said, highlighting that each
cohort is more likely to miss repayments on their loans than other public and private college students.
Those most at risk of delinquency tend to be, counterintuitively, those who've incurred smaller amounts of debt, explained
Kali McFadden, senior research analyst at LendingTree. Graduates who leave school with six-figure degrees that are valued in the
marketplace -- such as post-graduate law or medical degrees -- usually see a good return on their investment.
I'm a little leery of cheerful generalizations like "big ticket borrowers for professional degrees do better." "Better" may still
not be that good. Recall that law school and in the last year, business school enrollments have fallen because candidates question
whether the hard costs and loss of income while in school will pay off. And there are some degrees, like veterinary medicine, that
are so pricey it's hard to see how they could possibly make economic sense.
What is distressing about this ugly picture is the lack of effective activism by the victims. I am sure some are trying, but in
addition to the burden of being so overwhelmed by the debt burden as to lack the time and energy to do anything beyond cope, is the
fact that being in debt is stigmatized in our society, and borrowers may not want to deal with condescension and criticism. Another
obstacle to organizing is that most of the victims are lower income and/or from minority groups, which means Team Dem can ignore
them on the usual assumption that they have nowhere else to go. It is also harder to create an effective coalition across disparate
economic, geographic, and age groups
But the experience of the post-Civil War South says things could get a lot worse. From Matt Stoller in 2010:
A lot of people forget that
having debt you can't pay
back really sucks. Debt is not just a credit instrument, it is an instrument of political and economic control.
It's actually baked into our culture. The phrase 'the man', as in 'fight the man', referred originally to creditors. 'The man'
in the 19th century stood for 'furnishing man', the merchant that sold 19th century sharecroppers and Southern farmers their supplies
for the year, usually on credit. Farmers, often illiterate and certainly unable to understand the arrangements into which they
were entering, were charged interest rates of 80-100 percent a year, with a lien places on their crops. When approaching a furnishing
agent, who could grant them credit for seeds, equipment, even food itself, a farmer would meekly look down nervously as his debts
were marked down in a notebook. At the end of a year, due to deflation and usury, farmers usually owed more than they started
the year owing. Their land was often forfeit, and eventually most of them became tenant farmers.
They were in hock to the man, and eventually became slaves to him. This structure, of sharecropping and usury, held together
by political violence, continued into the 1960s in some areas of the South. As late as the 1960s, Kennedy would see rural poverty
in Arkansas and pronounce it 'shocking'. These were the fruits of usury, a society built on unsustainable debt peonage.
Sanders has made an issue of student debt, but politicians who want big bucks from financiers and members of the higher education
complex pointedly ignore this issue. As we've pointed out, top bankruptcy scholar Elizabeth Warren won't even endorse a basic reform,
that of making student debt dischargable in bankruptcy. So it may take student debtors becoming a bigger percentage of voters for
this issue to get the political traction it warrants.
______
1 Higher estimates typically included near subprime mortgages then called "Alt A".
There are many, many passages in this obscure old book called The Bible speaking of usury as a grave sin. So many it is actually
one of the most clear and condemned sins in the entire book. Maybe we could see if any of our Congress persons have ever heard
of it? They could learn something from it regarding this topic.
That said, it's passages on gender equality and family structures are pretty outdated and abhorrent so I wouldn't want them to
get any bad ideas from this book on those subjects.
Indeed, all of the old "Iron Age religions" (Judaism, Early Christianity, and Islam) explicitly denounce usury.
The great irony of the Deep South in te USA is that they've been frequently banning Sharia law, even when Sharia law is one
of the few types of law in the world which explicitly bans charging interest.
It is always intriguing how many politicians are so eager to endorse a literalist fealty to the social structures of the bible
but ignore, or even vehemently rail against, the more balanced social restrictions on things like usury or the old idea of a debt
jubilee. But then Jesus himself railed (physically) against embedding money in religion and now we have "entrepreneurial churches"
who preach a "doctrine of prosperity" so I guess times have changed.
I graduated 10 years ago and the most frustrating part was everyone telling me it would be alright and ignoring thw whole you
never recover thing. I am still unable to find worthwhile employment and probably never will be able to.
You really can't listen to many of us over 40.. we really lived in complete my different conditions. When I got out of college
in the 90's they were basically hiring everyone with a pulse in tech. From what I have seen from recent graduates it's getting
easier, as I am seeing a lot more intershops turn into job offers. But for the generation that you are part of, it's an economic
hole that may never be recovered from simply because you were born at the wrong time.
Looking at that graph, notice how the only debt that is backstopped completely by the federal government is growing the fastest.
The no default on student loans rules have to be rescinded.
Extrapolating from these trends, then in a few years the only young people that would be able to afford higher education in
the United States would the the children of the ten per cent – plus a smattering of scholarships to talented individuals found
worthy of supporting. It follows then that as these educated people entered the workforce, that over time that the people that
would be running the country would be children of the elite in a sort of inbred system. It sounds a lot like 19th century class-based
Britain that if you ask me.
As for the country itself it would be disastrous. Going by present population levels, it would mean that instead of recruiting
the leaders and thinkers of the country from the present population of 325 million, that at most you would be recruiting them
from a base level of about 30-40 million. It is to be hoped that these people are not from the shallow end of the gene pool. You
can forget about any idea of an even-handed meritocracy and America would be competing against countries that might employ the
idea of a full meritocracy in the recruitment of their leaders. I wonder how that might work out.
"America would be competing against countries that might employ the idea of a full meritocracy in the recruitment of their
leaders. I wonder how that might work out"
Would the performance of U. S. men in international soccer competition be a similar situation?
The concept of student debt as it exists today would be repulsive to our Founders. Not just for the larger issue of our country
being on the trajectory of becoming an economic aristocracy, but specifically because the Federal government is profiting tremendously
from this crushing usury being applied to majority and the least among us.
Our Founders had no problem with the conquest and seizure of Native Americans land, and they fully respected the rights and claims
of other European countries to do the same. One of their strongest repudiations of the aristocracy was the expansion of private
property rights beyond what was known under any monarchy on the planet to that point in history. In the pre-industrial world the
vast majority of people lived in an agrarian society and economy. Owning land secured you with your livelihood, your living, and
much of your resources; it fully supported most families.
For its founding and for generation after generation the United States government gave land to countless men for military service,
government service, homesteds, etc. Expansions by the Louisiana Purchase and war and treaties with other European nations, quickly
resulting in making these lands available for settlement to our citizens and to immigrants.
The point is that for well over 100 years the government provided to its citizens a huge amount of what our citizens needed
to live their lifetimes through these grants of land. These land grants were then passed from generation to generation and formed
the economic foundations for millions of people, their children and their next generations.
Our Government did this.
The United States ceased to be a predominantly agrarian country in the mid 20th century. But they did not stop aiding our people
and their economic needs. Our government (Federal and states) did continue to provide to our population through public education
(very affordable college), the GI Bill that served millions with income, housing and educational benefits, Social Security, Medicare,
etc.
Since our country's very founding our government has recognized the benefit and need to facilitate the support of its citizens.
The American economy became the greatest on earth because of our land conquest heritage and our collective investments as a nation.
No one did it all on their own, and no one pretended they did.
Reagan killed this legacy. Reagan claimed that our nations success and our heritage was built on our history of rugged individualism
and that our government was the obstacle to returning to these roots. It was a lie; nothing could have been further from the truth.
Student debt, as it exists to day, is crippling the economic futures of the millions who have accrued this debt and the millions
to come, year after year, who will do the same. The student is debt is robbing our nation of the economic activity that historically
matriculated out from those passing from college to the world. That has come almost to an end. Worse yet, our government has positioned
itself to also profit off this debt, and to prevent the indebted from escaping this type of debt through the legal means available
for virtually all other forms of debt.
Our student debt is un-American. It is a cancer on our economy. It exists for the vast short term profit of the few at the
expense of our nations future.
I hope people keep in mind it was the Democrats, specifically Joe Biden, who made student debt even more crippling and heartless
by changing the bankruptcy laws so that creditors can garnish your Social Security benefits (assuming Mitch McConnell doesn't
gut them first).
Republicans are open about what they hope to accomplish, you have to clear the verbal BS that clouds what Democrats are after,
but at the end of the day they are both about enslavement and debt bondage over unwashed masses.
I'm sure it's often the parents that end up paying the debt, as my sister is doing. Parents have deep pockets and are desperate
to help their loved ones get a good start in life.
In my sister's case, they sent their girls to private high school, where they spent the money that could have paid for college.
Not a smart decision. But they love their children and really wanted to do give them the best.
Now the girls are struggling to make a living and my sister cannot afford to retire.
There are so many feedback loops, multipliers, and perverse incentives driving forward this bubble (and its calamitous social
and cultural effects) that it's hard to know where to begin.
As Goldman Sachs
have pointed
out , student-loan-based securities are increasingly "attractive" investments for speculators:
Although the "bubble" is getting bigger, it's not a risk to overall financial stability, Goldman's Marty Young and Lotfi
Karoui said in a recent note. In fact, there's one segment of the market that's emerging as an attractive investment.
It's the $190 billion of outstanding [student] loans that are held within asset-backed securities (ABS) refinanced by private
lenders such as SoFi.
With these securities, lenders pool loans that have similar risk profiles and sell them as instruments in the public markets.
Investors profit as graduates pay back their principal and interest.
So the more student debt there is, and the higher the interest rates are, the better, from that perspective.
It's undeniable, too, that high student loan burdens mean graduates are slower to form households and will probably have fewer
children than they would otherwise. Their diminished spending power, meanwhile, adds to the ongoing erosion of the "real economy,"
in favour of the financial one. Student loans therefore disrupt the basic means of social reproduction. The resulting declines
in fertility then demand high rates of immigration to compensate. A fact cheered on, inevitably, by the open borders crowd (a
substantial number of whom, oddly or not, seem to work in or for universities).
So we see yet another instance in which "right" neoliberalism and "left" identitarianism go hand in hand–forming, indeed, two
heads of the same beast. Student loans have enabled the enormous inflation in tuition costs that have plagued the Anglosphere
over the last couple of decades. This fees income feeds the academic beast (or at least its administrators and senior managers),
while driving the one economic and social crisis (mass migration and the resulting populist backlash) that "left neoliberals,"
centrists, and Clinton/Progress types appear to care about. It's a self-licking ice cream of catastrophic size and reach.
One specific example: hospital chaplains are facing a big retirement crisis. And yet the job requires (to be hoard certified):
an undergraduate degree & then a Master's of Divinity degree, plus a year-long residency. For a job that pays around $60,000 to
$70,000. At least one school, Princeton, funds almost all of their divinity students. But I don't think it's the norm. And then
you throw in the fact that such person ideally would be emotionally & spiritually mature, with enough life experience to meet
with a wide range of people, who are often facing financial hardship due to being sick (as well as existential concerns). I don't
even know how to begin reframing the job or the qualifications or the salary to fit America in 2020. There are a lot of other
angles, such as: what about well-qualified people who can't afford seminary? I know there needs to be a way to screen-out and
screen-in the best people (who won't proselytize), but is a Master's degree the right hurdle? But, I must say, the need for access
to interfaith Spiritual Care is only increasing, as times get tougher & other hospital staff (RNs) don't have time to sit and
listen. People are in pain, not only in their bodies. One thought leader in the field has speculated that the job will just go
away due to lack of advocacy & inability to evolve into a profit center.
It would be interesting to see that student loan debt chart superimposed over %adjuncts and number of administrators. Its pretty
easy to guess what that would look like, but seeing that would be decisive.
I think a little delineation is in order. I've been an adjunct professor and believe the increasing use of adjuncts at universities
has been very beneficial overall -- in terms of the quality of education students are getting. Unfortunately, as we know, that's
not why universities are hiring so many more adjuncts; they're being hired because schools can get away with paying them abysmally.
The situation is so embarrassing that, at the university where I was teaching five years ago, the full-time faculty passed
a resolution asking the administration to give the entire projected increase in teaching salaries entirely to the adjuncts, an
amazing act of selflessness.
The relevance to our discussion here, of course, is the insupportable increase in the annual cost of attending college even
as the schools radically reduce their overall expenditures on faculty salaries.
So how long before this leads to a mass "We Won't Pay" movement? I'm stuck on the dumb treadmill myself, but I wouldn't begrudge
an entire generation for just saying no. Sure, they can garnish wages and the like, but if 30 million people simultaneously say
'eff this', it's more than just a wrench in the works it's drastic enough to force action.
Why DO they keep paying? The debts are always bought by debt collectors who don't even have COPIES promissory notes. Let them
sue you and show up for the hearing and demand proof. They can still ruin your "credit" but if student loans haven't taught you
to eschew credit nothing will. If EVERYONE "walked away" what could they do?
Unfortunately that is never going to happen. This society has been trained to worship at the altar of the FICO score, and most
job seekers cannot afford to have a low score. Said score will be examined and potentially held against you when pursuing employment.
Also, employers frown upon employees who do not pay their bills and then have their wages garnished – at least the smaller
emlpoyers do. This creates extra work for the employer and makes the employee suspect, as in irresponsible.
This problem was created by the political class and is going to require a political solution, i.e. legislation to assist the
student loan borrower or a debt jubilee. Unfortunately, there's too much money being made off the student borrower – even if the
practice is killing the host. And the "I got mine" crowd will not allow a jubilee even if it is for the greater good of society.
Lastly, student loan borrowers coming from a different era (who have paid off their loans) will begrudge the forgiving of the
loans and consider them undeserved. In this case, perhaps the best resolution is to give everyone money toward their student loans
– whether they are currently paid or unpaid.
I cannot jeopardize my employment by joining in a "eff this" movement as much as I would like to. Instead, I will continue
on this treadmill called life, pay my bills and hope to escape as unscathed as possible.
I work for a company that contracts with department of Ed to get student loan borrowers out if default and back into the hands
of loan servicers. The amount of money sloshing around is stunning. I'm sure they've got well paid lobbyists telling legislators
that people will be unemployed if student loans are reformed. I owe well over six figures so the irony is not lost on me. Hiring
one half of the working class to debt collect from the other.
Who pays for diploma-mill educations, and why? I have always assumed that people attended cash-n-carry schools because they
did not qualify aptitude/grade-wise for entrance to a state school, OR a 3rd party like DOD or VA was footing the tab. Both assumptions
appear to be supported by data. Given the far-above-average drop/flunkout rate of diploma mills. I know from my military career
that enlisted members sign up for courses (local or online) at diploma mills to get extra points toward promotions – at Navy expense.
Personally, I would not pay to send my dog to such institutions to learn how to sit up and beg.
One thing is certain, collich kidz do not appear to spend nearly as much time researching where they go to $chool as they do
buying the car they drive.
Jumping into the conversation a little late, but my alma mater recently embarked on a major rethink of the college business
model, and cut tuition from around 50k to around 30k. We even got
a writeup from Frank Bruni
for it .
College officials (I'm relatively active as a fundraiser for my class) describe it as a shift to a "philanthropy model" of
funding. Which worries me for lots of reasons. But at least it's a conversation-starter.
It's also very much a school that is not for people looking to buy a future income flow, but rather an education.
The person was definitely taken for a ride. He does not write how he obtained such a huge debt. It is difficult to do
attending state college.
Also when you are young you often stupid, and when
you became wiser, it's too late.
Notable quotes:
"... The price of a college education has quadrupled since the 1980s while wages haven't budged and rents went up by 50 percent. No wonder nearly 5 million American are in default on their student loans. At this rate, 40 percent of borrowers are expected to be in default by 2023. ..."
"... College was supposed to be about getting ahead in life. But it's become a driver of inequality . It does not have to be this way. ..."
"... Got to call BS on the 120k debt from a "state school". ..."
"... I do not understand how you got $120k of debt attending a state school for undergraduate. Either your stayed there 6 or more years or you basically earned no money during any summer or school year of your entire undergraduate and went to a really expensive school. ..."
I have $235,000 of student debt. The first $120,000 came with a bachelor's degree from my
state school. Another $70,000 or so came with my master's degree. The remainder is accrued
interest.
The suggested minimum monthly payment on my private debt alone is approximately $1,200. For
reference: that's nearly rent for the 600-square-foot apartment where I live with my partner in
New Jersey.
Without income driven repayment, the minimum payment amount for my federal student debt
would be around $1,000.
I would have to begin devoting half of my income to debt payment if I cared to pay it off by
2042. I can't do that because I make just under $4,000 per month. And that income is a fairly
new development in my life. Why would I choose to pay down my debt if it meant I wouldn't be
able to afford basic living expenses?
Short of winning the lottery, there's no way I could ever afford to pay off my debt. And
though I have a higher debt burden than most, I'm certainly not alone.
Meanwhile more and more people can't make their minimum payments.
The price of a college education has quadrupled
since the 1980s while
wages haven't budged and rents went up by 50
percent. No wonder nearly 5 million American are in default on their student loans. At this
rate, 40 percent of borrowers are expected to
be in default by 2023.
I'm privileged to have made it through the first few years of repayment. With a financial
hardship agreement with Sallie Mae, my parents – cosigners on my private loans –
pay $600 per month to keep default at bay from our family and allow me to live a decent life.
And through an income driven repayment plan (IDR) with Navient, I've been paying less than $50
per month on my public loans, though that could change as my income changes.
My parents cosigned my loans because we're first-generation immigrants. Moving to the U.S.
was about giving me a chance to live my best life. College was a critical component and we
couldn't afford it any other way. The only reason they can afford those $600 monthly payments
now is because they paid off their 30-year mortgage just a few years ago.
My parents are in their 60s and 70s and will live the rest of their lives with my student
debt. Likely so will I. Again – we won't be alone.
Three million Americans over the age of 60 are
paying off student debt . Approximately 40,000 of them are having Social Security or other
government payments garnished
.
College was supposed to be about getting ahead in life. But it's become a driver
of inequality . It does not have to be this way.
Some economists say that forgiving student debt would boost GDP by $100 billion per year for
ten years and add several million jobs to the economy. It would unlock the capacity of 44
million Americans to buy
homes , launch small businesses , and
retire with dignity.
Congress could pay for it by repealing the $1.5 trillion tax
cut it passed in 2017. Primarily
benefiting the wealthy and corporations, even
Goldman Sachs says that whatever economic boost the tax cut brought with it has passed.
And to keep future generations from suffering under the burden of student debt, Congress
could make public colleges, universities, and trade schools in the United States free.
The federal government already spends
$80 billion per year on grants and tax breaks for students pursuing higher education. It
spends another
$100 billion every year issuing new student loans.
That's $180 billion the U.S. could stop spending on a broken system if it decided to invest
it in a new one. Coincidently, that amount is more than enough to cover the cost of that new
system.
Tuition at public institutions of higher education totals
$63 billion . Add cost of living and that number reaches
$127 billion . With the remaining $53 billion, the U.S. can invest in expanding access to
higher education with job training and small business accelerators.
Until then, I'm focused on keeping the cost of servicing my debt low while I do other things
a 29-year-old should be doing, like saving for an emergency
fund or a down payment on a
house.
I'm spending my money in a way that invests in my future. Can the country do the same?
J Jive Turkey 7 hours ago
$235k for a job that pays less than $48k/year. I'm sure there was no cheaper way to go
about this, like, say, taking general education credits at a community college before
transferring over to the 'State School'. Millennials are awesome.
W WillyWonga 7 hours ago
I had around $3K in student loan debt when I graduated. That's because I received some
grants (partly based on my grades) and I WORKED...and WORKED SOME MORE...while I was
studying. Two P/T jobs that were the equivalent of a full-time job, maybe more on certain
weeks, whenever I could get the extra work.
My parents didn't co-sign anything for me. My dad passed long before I graduated high
school, and my family home went into foreclosure so my mom had a horrible credit rating
and didn't have two dimes to rub together.
Your story is an example of why we should NOT forgive student loan debt. No one forced
you to take the loans out, and given your somewhat cavalier attitude towards it there's a
good chance you'll ring up debt someplace else and expect others to pay for that too.
J James 6 hours ago
I'm playing my tiny little violin for you. I worked night shifts to pay my way through
college. Then for my second degree in engineering, I co-oped and graduated with money in
the bank. Seven years of 60 hour weeks, but it was worth it. I retired in my mid-50s.
j jim 7 hours ago
so a state school plus masters and you are making $4k a month?
And "Some economists say that forgiving student debt would boost GDP by $100 billion per
year for ten years and add several million jobs to the economy" Sure in the Bernie
Sanders way of how things work.
R R 5 hours ago
Got to call BS on the 120k debt from a "state school". This is a problem with the younger
generations. They do not want to work while going to college so they take out a ton of
loans and then complain when they get out and have a life long debt barring some
windfall. I say the issue is the government and companies giving these loans without
making sure they pay them back. That is an investment for them so they should have
programs to help them stay on track and make sure they get well paying jobs. I retired
from a company after 32 years at 50. They paid for my education and I moved up the ladder
pretty fast. I was over their clinical labs when I retired and I started in the
warehouse.
T Theo the Cat 7 hours ago
I do not understand how you got $120k of debt attending a state school for undergraduate.
Either your stayed there 6 or more years or you basically earned no money during any
summer or school year of your entire undergraduate and went to a really expensive school.
R Really 7 hours ago
Maybe your partner ought to be helping you pay off your debt. I helped my partner. That's
how "partner" is defined.
Also, the notion that if we all absorb your debt will allow you to buy a house, I say,
BS. I don't want to take any risk financing your house buy (through any government
support -- FHA, VA, FDIC insurance on banks covering your mortgage, etc.) since you were
not good for your student loan debt. No way.
P Paul 7 hours ago
My kids are in their 20s and they are in community school to get associate degrees. They
wanted to go to a university and get bachelor's but we can't afford it. So we lived
within our means and our kids deprived themselves of that "college experience". And now
thru our taxes, we will have to pay for someone else's student loans? How is that fair?
D Dustin 6 hours ago
Typical millennial....doesn't want to have to pay for anything. My wife and I are in our
40's and we made the last payment on her student debt this year. I didn't complain about
it for the last 15 years, I just paid it off.
P Pete 7 hours ago
The parents busted their hump to pay off their mortgage then get saddled with a $600 per
month payment because of the kid's degree that lead to nowhere?
"... A few years ago, Sheldon Adelson wanted the US to drop a nuke on Iran. Video below. What Sheldon wants, Trump the errand-boy delivers. The fact that the US public is overwhelmingly against a war with Iran is completely irrelevant. ..."
"... Probably a 50/50 chance it was an American-Saudi-Israel false flag. ..."
"... Just like how the Reichstag Fire took place and by pure happenstance, the Nazis had the Enabling Act all ready to go. ..."
"... If I was a betting man I'd put my money on the "actual" culprits being Mossad, CIA, MI6 or any combination of the three. The Neocons and Zionists in Washington are traitors to our Constitutional Republic! Don't let them drag us into another foreign war for Israel! ..."
"... Remember the USS Liberty! Never Forget! ..."
"... This updated post from "Moon of Alabama" is definitely worth reading: "Today's Attacks On Ships In The Gulf Of Oman Are Not In Iran's Interest – Or Are They? (Updated)": https://www.moonofalabama.org/2019/06/todays-attacks-on-ships-in-the-gulf-of-oman-are-not-in-irans-interest.html#more ..."
"... Maybe Colin Powell can come out of retirement and deliver the US/neocon presentation at the UN Security Council: https://www.youtube.com/embed/Rp6WuTSTyS8 ..."
"... The only person whom I can recall endlessly deceiving on this is Benjamin Netanyahu, whom I recall making speech after speech claiming that Iran was just about to have nuclear weapons. He's been doing that for over a decade now. ..."
"... As for incentives/disincentives, Mossad doesn't have much disincentive. If they are caught, they and their friends in the USA will scream 'Fake News!'. ..."
"... Who wants war? Saudis to prop up oil prices and get Iran in trouble? Pompeo because he wants to bring on the Rapture and the return of JC? Donald Trump so he can be a "wartime president" stir up his base and please the military contractor donors? Netanyahu to distract from his corruption charges and weaken Iranian Islamists? Some really stupid underground hardliners in Iran? ..."
"... I forgot one more who wants war: Bolton because he is an immoral idiot who wants to strut. ..."
Back in the 1960's as the Cuban missile crisis was brewing, JFK conferred with then French
president Charles DeGaulle and offered to show him the reconnaissance pictures showing the
Russian missiles in Cuba. DeGaulle is said to have replied "No, I do not need to see
pictures. The word of the President of the United States is enough."
It's impossible to imagine anyone saying that today, unless they still believe in the
tooth fairy.
It very well could an act by a state that according to an elite Army warfare college, is
"known to disregard international law to accomplish mission" and also a
"wildcard. Ruthless and cunning. Has capability to target U.S. forces and make it look like a
Palestinian/Arab act."
What state? See "U.S. troops would enforce peace under Army study," Washington Times, September 10,
2001.
A few years ago, Sheldon Adelson wanted the US to drop a nuke on Iran. Video below. What
Sheldon wants, Trump the errand-boy delivers. The fact that the US public is overwhelmingly
against a war with Iran is completely irrelevant.
Yes, Iran is to be blamed! Absolutely true, US President himself said so!
Let's look at some facts and then deductions. So, the US drone was following the Iranian
boat. Iranians saw the drone, fired at it and missed. Regardless, they continued their
"journey" to the tanker, all the while their supreme leader was trying to persuade Abe to
help Iran.
Tump: It was Iran the terrorist nation, not leaders but the nation. Not long ago Trump lauded
Iranians as very nice people. If the drone was there, why don't we see the beginning of the
boat's journey and then where that boat with the mine went? According to Mr Pompeo and Mr
Bolton, the nation of terrorists is not only evil but stupid too. Yet no other actor in the
region has the sophistication to perform such an act (that is stupid act) – according
to Mr.Pompeo.
Hm who else, I wonder would be interested in bringing down Iran? I can't think even of one
such actor.
Lest we forget. Gen. Wesley Clark's revelation. This was first revealed to General Wesley
Clark in 1991 by neo-con Paul Wolfowitz. The seven countries which were to be invaded and
blessed with regime change were Iraq, Libya, Syria, Lebanon, Somalia, Sudan, and the big
prize, Iran with its wealth of resources and potential market of over 70 million persons.This
same plan was revealed again to General Clark during a visit to the Pentagon ten days after
9-11, the event that presented the neo-cons, and no doubt others behind the scenes, with
their Pearl Harbor, their justification to proceed with the plan, somewhat conveniently. You
can see Clark say it in person on YouTube if you don't believe it.
The only thing missing is a bunch of Iranian passports "just accidentally found" near the
ships with a big floating arrow pointing towards them, just in case we're clueless. If we get dragged into a bunfight with Iran because of this we deserve all the opprobrium
anyone hurls at us–if only for our outright stupidity.
""This assessment is based on intelligence [I think we already know what the Saudis and
Israelis want us to think], the weapons used [which were what again?], the level of expertise
needed to execute the operation [more than what was needed to prove the existence of fake
WMDs], recent similar Iranian attacks on shipping ['Iranian attacks' according to who,
exactly?], and the fact that no proxy group operating in the area has the resources and
proficiency to act with such a high degree of sophistication [so sophisticated there's no
evidence they did it]," the Secretary said, without taking questions [or citing proof]"
He doesn't even bother with a Colin Powell style PowerPoint to convince us he believes any
of the horsesh!t he's peddling. Real contempt for the American public.
Let's quote that fellow with the little moustache, shortly before he ordered the invasion of
Poland: "I will provide a propagandistic casus belli. Its credibility doesn't matter. The
victor will not be asked whether he told the truth."
To think that the only obstacle between peace and war is a president too stupid to
understand that he brought this on himself.
It's very sad that I trust the word of the Ayatollah Khameni more than the President of the
United States or any of his spokesman. The proxy which had the weapons, level of expertise needed to execute the operation,
resources and proficiency to act with such a high degree of sophistication is called the
Central Intelligence Agency.
How utterly convenient!
Abe is meeting with the Iranian leadership, what better time to attack Japanese tankers
(what better time for Saudi Arabia, Israel and the neocons, that is)? Not 24 hours go by after the supposed attack and Pompeo already knows who did it and has a
response ready. Why, it's almost like his mind were already made up! (But when it comes to,
say, that Saudi prince who chops up journalists, it seems that we can never ever ever really
know what happened!)
Just like how the Reichstag Fire took place and by pure happenstance, the Nazis had the
Enabling Act all ready to go.
Sarcasm aside, everyone knows that Pompeo is lying, looking for an excuse to escalate
tensions. The question is whether anyone will do anything about it.
If I was a betting man I'd put my money on the "actual" culprits being Mossad, CIA, MI6 or
any combination of the three. The Neocons and Zionists in Washington are traitors to our
Constitutional Republic! Don't let them drag us into another foreign war for Israel!
Jason Ditz, the News Editor at Antiwar.com reports: "Pompeo's declaration of Iran's guilt was
based chiefly on similar incidents happening in mid-May. John Bolton and Pompeo blamed Iran
then, and since this was the same sort of thing, they blame Iran now. The problem is, they
have offered no evidence Iran was responsible for the first incidents, let alone today's, and
are just tying them all together. Pompeo rattled off a list of things to blame Iran for,
including multiple incidents that were done by Yemen's Houthis, a rocket fired in Iraq that
was never convincingly blamed on anyone, and an Afghanistan bombing that clearly was nothing
to do with Iran at all."
Jason Ditz goes on to report: "The big questions are, as always, motive. Iran has no
conceivable reason to attack such ships. In this case, one of the ships is even
Japanese-owned. Japan is a very important trading partner of Iran, and Japan's prime minister
Abe Shinzo is visiting Iran right now, trying to reduce tensions. Abe has also declared Iran
to have no intention to make nuclear arms. This would be a preposterous move for Iran to even
consider. Iranian Foreign Minister Javad Zarif declared that 'suspicious doesn't begin to
describe' what happened, noting that the attacks were timed to when Japanese PM Abe Shinzo
was meeting with Iran's Supreme Leader. Abe's meeting was also a subject of Pompeo's
comments, as Pompeo falsely accused Ayatollah Ali Khamenei of having refused the meeting with
Abe. In reality, the meeting took place, and Khamenei simply rejected a proposal to trade
messages with President Trump. Pompeo went on to declare the attack on a Japanese ship during
Abe's Iran visit as an Iranian 'insult to Japan.' This all rests on the US assumption of
Iran's guilt, and as Zarif points out, makes the attack look suspiciously like it might have
been carried out for the benefit of the anti-Iran narrative. "
I read somewhere that the Iranians used weapons of mass destruction given to them by Saddam
to attack the USS Maine in the Gulf of Tonkin, taking American lives on American soil.
I had forgotten that basically all wars are "protected by a bodyguard of lies," according
to the video. Most poignant to me was the Iraqi woman pleading to Congress about Sadam
Hussein's destruction of incubators, which George HW Bush later referenced as the "babies
strewn about the floor like firewood." Except it was all fabricated by a PR firm!
Is anyone really that delusional to believe that Iran is going to attack a Japanese tanker
while the Japanese PM is meeting with the Ayatollah? The ONLY explanation that makes sense is
that it was planned in the White House by Pompeo and Bolton. Whether it was with or without
Trump's knowledge and approval is irrelevant. P & B have been openly salivating for any
excuse to start a war with Iran, and Trump has given them free rein. It is a war crime, and
all three are guilty.
The USS Liberty is spot on. That was our Versailles Treaty and Johnson ceded much of our
foreign policy and intelligence to Israel – we capitulated and have continued to
capitulate to Israel. Things are looking grim and look like a repeat of Iraq. What can stop
this momentum to war?
Well, it seems that just about 100% of those who comment here have this figured out. Once
these things were a bit more sophisticated, but now the Empire doesn't seem to care if its
schemes are blatantly transparent.
Abe has been closely consulting with Trump and the Iranians as a go-between to create the
conditions which can allow Trump to save face now that Bolton's and Pompeo's campaign against
Iran is a big fat failure.
It is clear who hopes to gain by this little stunt, which will not go anywhere. Abe is
certainly not going to be fooled by any of this. Don't expect the WaPo or the NYT to expose
this obvious false flag.
Iran is a rather divided country, and some groups regard USA with as much hatred and
suspicion as the neocons hold towards them. The responsible party might have been IRGC,
intending to raise tensions enough to make their government's current fence-straddling act
unviable and force them to scrap the JCPA.
I'd try to avoid the logic that it must have been
Saudis/Israel/USA, because if it was Iran, the likes of Bolton would somehow be in the right.
They're not. So far, Iran hasn't been the one responsible for the vast majority of
provocations, and even if it elements on their side were did this, the chickenhawks running
USA's national security won't bother to secure proof before escalating. It's not a secret
that they want war and aren't particularly picky about how they get it.
Saudi Arabia.
The other agencies speculated here are off the mark: Israel would fear getting caught, CIA
leaks like a sieve, MI6 has no incentive. But the Saudis? They have the combination of economic incentives, religious hatred,
technical knowledge, advanced (American) weaponry, and who-gives-a-crap-if-we-get-caught
attitude.
Given Iran's history of endless deception in their nuclear weapons development program, might
all these suggestions of these attacks being an American fabrication be a bit premature? How
about even a tiny bit of objectivity? Or did Larsen write all these comments? (:
I have a question about the video footage supposedly showing Iranians removing a mine from a
tanker. The quality of the picture is no better than that we saw back in the 1965 Tonkin Gulf
incident, when N Vietnamese boats allegedly attacked a US Navy ship. But that was 54 years
ago. In video technology today 1080p is a standard resolution, 4k is pretty common. Why is
the US Navy still showing something that looks like it came from my Dad's 8mm home movie
set-up?
"Given Iran's history of endless deception in their nuclear weapons development program,
might all these suggestions of these attacks being an American fabrication be a bit
premature? How about even a tiny bit of objectivity? Or did Larsen write all these comments?
(:"
What "history of endless deception"? Every third party has confirmed that Iran has
complied strictly with the JCPOA.
The United States, on the other hand, has a long track record of blatant lies to get the
wars it seeks ..
Exactly what I am hoping for IF the US attacks Iran. All depends on the Iranian
capabilities to cripple the flow of oil from the ME. So I say: Go Iran, make us pay! And
don't forget to throw some missiles on the royal Saudi palace and Riyad. Make that a few
dozen. Or hundred.
"Given Iran's history of endless deception in their nuclear weapons development program,
might all these suggestions of these attacks being an American fabrication be a bit
premature? How about even a tiny bit of objectivity? Or did Larsen write all these comments?
(:"
The only person whom I can recall endlessly deceiving on this is Benjamin Netanyahu, whom
I recall making speech after speech claiming that Iran was just about to have nuclear
weapons. He's been doing that for over a decade now.
As for incentives/disincentives, Mossad doesn't have much disincentive. If they are
caught, they and their friends in the USA will scream 'Fake News!'.
Mr. Bone Saw has got to be extremely cocky now.
And both of them could reasonably expect that if they succeed in triggering a US-Iran war,
that even later exposure wouldn't matter.
Yesterday (June 13th) Rep. Tulsi Gabbard (D-Hawaii), a Democratic candidate for President in
2020, was interviewed by the Washington Post's Robert Costa. Here (at 23:58-28:06) is a brief
excerpt of Rep. Gabbard's excellent views on US Iran policy:
Who wants war?
Saudis to prop up oil prices and get Iran in trouble?
Pompeo because he wants to bring on the Rapture and the return of JC?
Donald Trump so he can be a "wartime president" stir up his base and please the military
contractor donors?
Netanyahu to distract from his corruption charges and weaken Iranian Islamists?
Some really stupid underground hardliners in Iran?
There are some plausible choices but none of them is the Iranian government.
I frankly just don't believe anything coming form the US government anymore, especially
warmongering neo-cons in charge of foreign policy, the Pentagon, and Deep State actors.
What on earth would Iran have to gain from attacking a Japanese oil tanker while their
leader is meeting with the Japanese PM? More likely a false-flag CIA operation.
"I have a question about the video footage supposedly showing Iranians removing a mine
from a tanker. The quality of the picture is no better than that we saw back in the 1965
Tonkin Gulf incident, when N Vietnamese boats allegedly attacked a US Navy ship. But that was
54 years ago. In video technology today 1080p is a standard resolution, 4k is pretty common.
Why is the US Navy still showing something that looks like it came from my Dad's 8mm home
movie set-up?"
100%. When I heard on the news this morning that there was video showing Iranians, I
thought "They have them". Then I saw the video. Now I call BS.
Are these the same guys that provided the irrefutable "evidence" of weapons of mass
destruction in Iran?
I am sure that since the Mossad provides us with intelligence in that area of the world, they
are completely objective, and have the best interest of the American military at heart.
@Snark: I tend to agree that the video raises more questions: -what would be the purpose of a
mine above the water line?
-why does it take a group of 10-20 people milling about on the bow to remove a mine?
-does 10-20 people really indicate a clandestine effort to remove a mine, more like a
clusterf____?
As OffGuardian remarked, does the deep state (cia,mi6,mossad) really think we are that
stupid?
Why would Iranians attack their own interests? Because they are "evil". Let's see: Front
Altair is owned by John Frederiksen, the owner of the Frontline Tanker company, who moved
Iranian oil for nearly 40 years including during the "tanker war" with Iraq siding with Iran.
Mr Federiksen was called Khomeini's blood life.
What about the Japanese tanker? While the Supreme Leader of Iran was working on Abe to help
Iran?
Who's evil, who's stupid?
"Outrage on Capitol Hill over 'completely unacceptable' US-funded scheme to shape Iran
debate," The Independent, Wednesday, June 12, 2019:
"United States officials say they are outraged by a government-funded troll campaign that
has targeted American citizens critical of the administration's hardline Iran policy and
accused critics of being loyal to the Tehran regime. State Department officials admitted to
Congressional staff in a closed-door meeting on Monday that a project they had funded to
counter Iranian propaganda had gone off the rails. Critics in Washington have gone further,
saying that the programme resembled the type of troll farms used by autocratic regimes
abroad. 'It's completely unacceptable that American taxpayer dollars supported a project that
attacked Americans and others who are critical of the Trump administration's policy of
escalation and conflict with Iran,' a senior Congressional aide told The Independent, on
condition of anonymity. 'This is something that happens in authoritarian regimes, not
democracies'."
The Independent article by Negar Mortazavi and Borzou Baragahi continues: "One woman
behind the harassment campaign, a longtime Iranian-American activist, has received hundreds
of thousands of dollars from the State Department over the years to promote 'freedom of
expression and free access to information.' The campaign relentlessly attacked critics of the
Iran policy on social media, including Twitter and Telegram messaging app, accusing them
without evidence of being paid operatives of the regime in Tehran. A spokeswoman for the
State Department told reporters on Monday that funding for the 'Iran Disinformation Project'
had been suspended and is under review after it was reported that it went beyond the scope of
its mandate by veering from countering propaganda from Iran to smearing domestic critics of
White House policy. State Department officials disclosed to lawmakers they had granted $1.5
million for Iran Disinfo, which repeatedly targeted, harassed and smeared critics of Trump's
tough stance against Iran on social media.
The Independent article noted: "Among those targeted were American activists, scholars,
and journalists who challenged the Trump administration's 'maximum pressure campaign' against
Iran. The revelation that US taxpayer money was being used to attack administration critics
has now sparked a flurry of queries. 'There are still so many unanswered questions here,'
Congresswoman Ilhan Omar wrote on Twitter. 'What rules are in place to prevent state-funded
organisation from smearing American citizens? If there wasn't public outcry, would the
Administration have suspended funding for Iran Disinfo?' Cold War-era US rules barring the
use of government-funded propaganda against American citizens have been flouted for decades
State Department officials speaking at the closed-door meeting admitted the project was out
of bounds, according to Congressional staffers speaking to The Independent on condition of
anonymity. Both Democratic and Republican Congressional staffers were highly critical of the
project and questioned whether US officials should continue to work with the contractor,
E-Collaborative for Civic Education. The State Department spokeswoman declined to outline
steps to prevent such an operation in the future E-Collaborative for Civic Education,
co-founded by Iranian American activist Mariam Memarsadeghi, is a long-time State Department
contractor "
Foundation for Defence of Democracies and MEK involved in creating fake articles. The
Independent continues:
"Congressional officials also confirmed to The Independent that one individual working for
the Foundation for Defence of Democracies, an influential Washington organisation with
hawkish views on Iran, is part of the E-Collaborative for Civic Education's Iran
Disinformation Project Over the weekend, The Intercept revealed that a purported Iranian
activist, who had published dozens of articles on Iran in prominent outlets such as Forbes
and The Hill, does not exist and is a fake persona run by a team of operatives connected to a
bizarre Iranian political cult. The "Heshmat Alavi" persona had a strong presence on Twitter
and harassed Iranian journalists, academics, and activists who are critical of the
Mujahedin-e-Khalq organisation, a one-time armed guerilla group now holed up in Albania.
There is no known link between the Iran Disinfo programme and the fake persona. At least one
was cited by the Trump administration as proof against the effectiveness of the Obama-era
nuclear deal. Some of the MEK articles were also picked up by US government funded Voice of
America's Persian-language service "
Let's not forget the lies our great-grandparents were told to inveigle us into WWI: "German
troops are raping Belgian nuns" and "German troops are using Belgian babies for bayonet
practice."
100 years from now a future historian, (probably Russian or Chinese), writing about the
collapse of the US, will chronicle how the Americans gullibly believed the war propagandists
asserting that Iran fired on oil tankers, which belonged to it trading partner, with the same
sense of disbelief we now feel upon reading of the crazy assertions made about German
troops.
The Japanese ship's captain came out today and said that there was no way the ship was hit by
a mine as US claimed, it was hit above sea level and sailors saw something hitting the
vessel, like a torpedo.
Why on earth would Iran want to bomb a Japanese ship in the middle of a visit by the
Japanese PM?
This whole thing stinks to high heaven.
The US under the rule of the neocons in the Trump admin, the Pence-Pompeo-Bolton trifecta,
is a menace and a danger to the whole world. From Iran to Venezuela, Ukraine to North Korea,
China to Russia, there isn't a country these neocon stooges don't want to pick a quarrel
with. America has become the greatest threat to world peace.
Sam – When was the last time Iran invaded another country? Why is Israel pushing so
hard for us to fight yet another war on their behalf. As Ron Paul said – if they want
to fight Iran – let them, but we must stand aside as they duke it out. Israel has
created enough Gold Star mothers in the US. Time to do their own fighting. Larsen and Giraldi
make a lot of sense.
"... For example, she discusses neoliberal attempts to be "multicultural," but points out that economic resources are constantly redistributed upward. Neoliberal politics, she argues, has only reinforced and increased the divide between economic and social political issues. ..."
"... Because neoliberal politicians wish to save neoliberalism by reforming it, she argues that proposing alternate visions and ideas have been blocked. ..."
Duggan
articulately connects social and economic issues to each other, arguing that neoliberal
politics have divided the two when in actuality, they cannot be separated from one another.
In the introduction, Duggan argues that politics have become neoliberal - while politics
operate under the guise of promoting social change or social stability, in reality, she argues,
politicians have failed to make the connection between economic and social/cultural issues. She
uses historical background to prove the claim that economic and social issues can be separated
from each other is false.
For example, she discusses neoliberal attempts to be "multicultural," but points out that
economic resources are constantly redistributed upward. Neoliberal politics, she argues, has
only reinforced and increased the divide between economic and social political issues.
After the introduction, Duggan focuses on a specific topic in each chapter: downsizing
democracy, the incredible shrinking public, equality, and love and money. In the first chapter
(downsizing democracy), she argues that through violent imperial assertion in the Middle East,
budget cuts in social services, and disillusionments in political divides, "capitalists could
actually bring down capitalism" (p. 2).
Because neoliberal politicians wish to save neoliberalism by reforming it, she argues that
proposing alternate visions and ideas have been blocked. Duggan provides historical background
that help the reader connect early nineteenth century U.S. legislation (regarding voting rights
and slavery) to perpetuated institutional prejudices.
The right-wing libertarian gold-currency types hate the 2% target. They call the Fed
"economic illiterates" for having a 2% inflationary target. After all, "why would anyone think
it's a good thing to have prices go up on purpose?"
That is the end of their analysis.
But these boneheads completely miss the point: the 2% target isn't about an intentional
effort to create inflation and make things constantly more expensive for people. It's instead
about stability.
The 2% target came about almost by accident and fairly unintentionally when it was first set
by
New Zealand . So this isn't about an intentional effort by the diabolical (((Fed))) to make
things more expensive for everyone, or to prevent inflation from becoming lower.
Before, the Fed would just say they want to "lower" inflation, or "increase" inflation
without a real target other than to stave off run away inflation. You had chairman like Volker
just let the interest rate rip in order to break the back of inflation in a reactionary way.
What we ended up with were massive inflationary and deflationary swings and the Central Bankers
became tired of it.
So instead of reacting to swings, they decided to just set the target at 2%, that way you
are trying to hit the target rather than trying to react to economic indication of rising or
lowering inflation.
This isn't all good news. Because when you see the 2% target for what it is, an artificial
target that Central Bankers are hell-bent on hitting, you can see why the Fed is getting really
anxious these days.
The Central Bankers have pulled out all the tricks out of the bag, QE, ZIRP, rock bottom
interest, and even negative interest in Europe, and for a while in 2018 they pretty much hit
their 2% target (at least in the US). And we were all styling. Home prices were growing in a
stable way. Jobs numbers were great. Stock Market was high. The Trump tax cut scam pumped the
economy up even further.
But then December 2018 hit. The sugar high from the Trump tax cut wore off. Wall Street took
a 20% bear-market nose dive. Housing prices slowed growth and sales slowed. And now we are
seeing manufacturing indexes, initial jobs reports showing things have slowed.
Now they can't keep it at the target and they aren't sure what to do about it. You don't cut
interest rates in a strong economy (which is what we supposedly have), but at the same time
Wall Street is screaming for further rate cuts. And when Wall Street threw its temper tantrum
in December 2018, the Fed rewarded them with putting a stop to the three anticipated rate hikes
this year.
If the current CPI stats are an indication of where things are going, it sounds like Wall
Street had it right and the Fed had it wrong–the Fed wanted to increase interest rates,
which would have had a deflationary effect. Wall Street wanted the cut to get an inflationary
effect that helps the market. Wall Street won.
The problem is now that the pause in interest rates didn't have the inflationary effect Wall
Street wanted (even though the Fed is still holding on to hope that deflation is "transitory")
and so now they are demanding more cuts. At the same time the Fed is scratching its head saying
it's "open" to more cuts, but showing some genuine misgivings about cutting rates when they
were certain just 7 months ago that rate hikes were what the economy needed.
This is on top of a mixed bag of data suggesting the economy isn't really coming or going at
this point, it's just frothy. What we are seeing is paralysis. he only thing left is more cuts.
J-Rome knows it.
The other problem is that CPI is also largely a contrived number. It's based on funny math.
Don't like the swings in the price of gas? Just take it out of the CPI! Don't like the price of
food in there, take it out! Don't like the price of houses, take it out!
If you are trying to manage an economy by hitting an artificial inflationary target of 2%
based on artificial inflationary data that doesn't give you the whole picture, an observer
could see why you'd be a little confused when your decisions don't lead to your intended
outcome.
The reality is for the vast majority of Americans, the price they pay at the pump has
direct, immediate and visible impact on their bills, spending and outlook. The price of food
does too, and so does the price of the roof over their head. People notice when the price of
the big mac extra value meal shoots up a dollar. This is probably also why we have the
cognitive dissonance of a "great" economy while people are buried in credit card debt, student
loan debt and corporate debt and while a majority ( https://www.cnbc.com/2017/06/19/heres-how-many-americans-have-nothing-at-all-in-savings.html
) of Americans don't have $1,000 liquid money to tap in case of an emergency.
So if CPI is going lower, but CPI doesn't take into account the basic costs of living that
are actually extremely volatile and not just smoothly going down, and the Fed is chasing a 2%
CPI number that doesn't include these inflationary variables, the Fed could be targeting an
inflationary target that is actually deflationary when all the gimmicky math is taken out of
the equation.
Now we see why the fed is struggling, CPI is going down. Consumers are feeling the pain
of higher prices none-the-less, along with stagnant wages and more debt. What the consumers
are experience aren't being taken into consideration by the Fed because those numbers "don't
count." You have the market demanding further cuts because the lower the interest rate, the
more likely people are to dump their money into the market searching for some investment
returns that at least are par with inflation that is probably a lot higher in reality for the
average Joe than core CPI lets on.
Why bother saving when you get no return and you can't save anyway because your cost of
living is out of control?
No wonder the Fed is being indecisive. They don't want to believe their lying
eyes.
"... The demand for renewable energy and storage technologies will far exceed the reserves for cobalt, lithium and nickel. In the case of cobalt, of which 58 per cent is currently mined in the DR of Congo, it has helped fuel a conflict that has blighted the lives of millions, led to the contamination of air, water and soil, and left the mining area as one of the top 10 most polluted places in the world. ..."
"... According to a recent report from the DOE's Office of Energy Efficiency & Renewable Energy (via Charged), plug-in vehicles displaced 323 million gallons of gasoline in the US in 2018. That's still a mere drop in the gas can: it amounts to 0.25% of all gasoline used in the US in that year (another dose of reality: the increasing popularity of trucks and SUVs has more than wiped out all the emissions reductions from EVs). ..."
My attention was caught yesterday by a press release from the UK's Natural History
Museum, authored by a group of British geoscientists:
The letter explains that to meet UK electric car targets for 2050 we would need to
produce just under two times the current total annual world cobalt production, nearly the
entire world production of neodymium, three quarters the world's lithium production and at
least half of the world's copper production.
A friend alerted me to a piece by Asad Rehman of War on Want, provocatively entitled The
'green new deal' supported by Ocasio-Cortez and Corbyn is just a new form of colonialism
which makes the point:
The demand for renewable energy and storage technologies will far exceed the reserves
for cobalt, lithium and nickel. In the case of cobalt, of which 58 per cent is currently
mined in the DR of Congo, it has helped fuel a conflict that has blighted the lives of
millions, led to the contamination of air, water and soil, and left the mining area as one
of the top 10 most polluted places in the world.
In a sense hybrid cars are more promising as they have much smaller battery and as such
consume less rare elements per car.
It looks like the current stress on "pure" EV is really unhealthy and unscientific.
You are right in your belief that people will not want to change their lifestyles, but they
will, there will be no choice and soon they will mostly forgot how it was in the past.
2050 will be a very different world than the present, and 2080 will again be a very different
world.
Specific societal projections into the future beyond about 10 years are pure fantasy and
should be ignored.
Some major physical changes are underway on this planet which will change everything. Those
should not be ignored.
There's an enormous amount of lithium out there – far more than the proven reserves
of the USGS, which were never, ever intended to be used for this kind of long-term planning
exercise. But it doesn't really matter.
There are many, many different chemistries for making batteries. Lead, aluminum, sulfur,
iron the list is almost as long as the periodic table. Lithium has a little higher energy
density than most, but they'd all work, in a pinch.
For instance, there was a company recently developing an advanced lead battery that was at
least twice as energy dense as convention lead-acid and half the cost, but it couldn't quite
compete with the li-ion juggernaut, and it went out of business.
Think VHS vs Beta. Beta was better, but VHS was a bit cheaper and better marketed, and got
to economies of scale before Beta. Both worked.
Think Laserdisc vs Blueray. Laserdisc was a bit larger, and it didn't quite compete with
DVD and Blueray. But it worked just fine.
The one really critical point that Tesla bashers are VERY careful to avoid is that Tesla's
market cap at the lowest point a few days back was still roughly eighty percent of Ford's and
not much less than that, about sixty five percent ( mental arithmetic in both cases) of GM .
and that Tesla manufactures only a tiny percentage of the volume of these two old line
companies. FOR NOW, lol.
Folks who bought GM years ago haven't seen any stock price appreciation worth writing home
about it. Ditto Ford.
Tesla even in the dumps is a big winner for long term investors.
According to a recent report from the DOE's Office of Energy Efficiency & Renewable
Energy (via Charged), plug-in vehicles displaced 323 million gallons of gasoline in the US
in 2018. That's still a mere drop in the gas can: it amounts to 0.25% of all gasoline used
in the US in that year (another dose of reality: the increasing popularity of trucks and
SUVs has more than wiped out all the emissions reductions from EVs).
However, the trend of falling demand for gas is gathering speed. The amount of gasoline
displaced was about 42% higher in 2018 than in 2017, and about double the amount in 2016.
Furthermore, the share of pure electric vehicles is growing. Gasoline displacement from
pure EVs versus plug-in hybrids was evenly split in 2012 and 2013, but in 2018, EVs
accounted for two thirds of the displacement.
As gas consumption begins to fall, electricity consumption is rising. Another DOE report
shows that the amount of energy consumed by plug-in vehicles in the US has nearly doubled
in the last two years, from 1.44 terawatt hours in 2016 to 2.85 TWh in 2018. Here we also
see the trend toward pure EVs – in 2018, pure EVs accounted for 61% of electricity
consumption from plug-in vehicles, while plug-in hybrids accounted for 39%.
A new poll from Democracy Fund Voter Study Group shows that President Trump could lose swing
voters on economic issues, and the President responded in a tweet calling it "Fake
Polling".
Huawei Technologies Co Ltd has told Verizon Communications Inc that
the U.S. carrier should pay licensing fees for more than 230 of the Chinese telecoms equipment
maker's patents and in aggregate is seeking more than $1 billion, a person briefed on the
matter said on Wednesday.
Verizon should pay to "solve the patent licensing issue," a Huawei intellectual property
licensing executive wrote in February, the Wall Street Journal reported earlier. The patents
cover network equipment for more than 20 of the company's vendors including major U.S. tech
firms but those vendors would indemnify Verizon, the person said. Some of those firms have been
approached directly by Huawei, the person said.
The patents in question range from core network equipment, wireline infrastructure to
internet-of-things technology, the Journal reported. The licensing fees for the more than 230
patents sought is more than $1 billion, the person said.
Huawei has been battling the U.S. government for more than a year. National security experts
worry that "back doors" in routers, switches and other Huawei equipment could allow China to
spy on U.S. communications. Huawei has denied that it would help China spy.
Companies involved, including Verizon have notified the U.S. government and the dispute
comes amid a growing feud between China and the United States. The licensing fee demand may be
more about the geopolitical battle between China and the United States rather than a demand for
patent fees.
Huawei and Verizon representatives met in New York last week to discuss some of the patents
at issue and whether Verizon is using equipment from other companies that could infringe on
Huawei patents.
Verizon spokesman Rich Young declined to comment "regarding this specific issue because it's
a potential legal matter."
However, Young said, "These issues are larger than just Verizon. Given the broader
geopolitical context, any issue involving Huawei has implications for our entire industry and
also raise national and international concerns."
Huawei and U.S. wireless carriers T-Mobile US Inc and AT&T Inc did not respond to
Reuters' requests for comment. Sprint Corp declined to comment.
The United States last month put Huawei on a blacklist that barred it from doing business
with U.S. companies on security grounds without government approval, prompting some global tech
firms to cut ties with the world's largest telecoms equipment maker.
Washington is also seeking the extradition of Huawei Chief Financial Executive Meng Wanzhou
from Canada after her arrest in Vancouver last December on a U.S. warrant.
China has since upped the pressure on Canada, halting Canadian canola imports and in May
suspended the permits of two major pork producers.
(Reporting by Arjun Panchadar in Bengaluru and David Shepardson in Washington; Editing by
Anil D'Silva, Sriraj Kalluvila and Sandra Maler)
" -- seems to me a very complicated explanation for: If a country doesn't produce what it
consumes Such a country is entirely F ed!"
This is totally NOT what I said, so I'll restate my point differently.
IF people (localists, sovereignists etc.) really wanted less globalisation, without global
supply chains, etc., then it would be possible, at a price (in terms of productivity).
BUT in reality localists, sovereignists etc. don't really want de-globalisation for the sake
of it, they mostly want to increase exports and decrease imports, and in fact these localists
desires are stronger in countries (USA, UK) that are big net importers, and therefore think
they are losing in the globalisation race.
The reason localists want to increase exports and decrease imports is that it is a form of
mercantilism: if exports increase and imports decrease, there are more jobs and
contemporaneously there are also more profits for businesses, so it's natural that countries
want to import less and export more.
BUT exports are a zero sum game, so while this or that country can have some advantages by
being a net exporter, this automatically means that some other country becomes a net importer,
so onne can't solve the problem of unemployment by having everyone being net exporters (as
Krugman once joked by having everyone export to Mars).
So the big plan of localists cannot work in aggregate, if it works for one country it
creates a problem for another country. This is a really big problem that will cause increasing
international tensions.
We are seeing this dinamic, IMHO, in the Brexit negotiations, where in my opinion many
brexiters had mercantilist hopes, but of course the EU will not accept an accord that makes it
easy for the UK to play mercantilist.
I'll add that I think that Brexiters don't really realise that they are mercantilists,
but if you look at the demands and hopes of many Brexiters this is their "revealed
preference".
This is also a problem because apparently many people (not only the Brexiters, see also
EU's policies towards Greece) don't really realise what's the endgame for the policies they are
rooting for, it seems more like a socially unconscious tendency, so it is difficult to have a
rational argument with someone that doesn't really understand what he wants and what he is in
practice trying to do.
The reason that every country is trying to play mercantilist is that in most countries
inequality rose in the last decades, which creates a tendency towards underconsumption, that
must be countered through one of these 3 channels: (1) Government deficits; (2) Easy money
finance and increased levels of financial leverage; (3) net exports.
The first two channels lead to higher debt levels, the third apparently doesn't but, as
on the other side of net exports there has to be a net importer, in reality it still relies on
an increase in debt levels, only it is an increase in debt levels by someone else (sometimes
known as the net exporter -- "vendor-financing" the net importer)
The increase in leverage goes hand in hand with an increase of the value of capital assets
VS GDP, that is an increase of the wealth to income ratio.
So ultimately the increased level of inequality inside countries (as opposed to economic
inequality between countries, that is falling) leads to a world where both debt levels and
asset prices grow more than proportionally to GDP, hence speculative behaviour, and an economy
that is addicted to the increase of debt levels, either at home or abroad (in the case of net
exporting countries).
The countries that seriously want to become net exporters have to depress internal
consumption, which makes the problem worse at a world level. The countries like the USA, where
internal consumption is too much a big share of the pie relative to what the USA could gain by
exports, are forced to the internal debt route, and so are more likely to become net
importers.
However, in this situation where everyone acts mercantilist, by necessity someone will end
up a net importer because import/export is a zero sum game, so it doesn't really make sense to
blame this or that attitude of, for example, Americans for they being net importers: they are
forced into it because otherwise they would be in perma-depression.
“But it is unquestionably and unarguably true that American conflict (which may or may
not be of a military nature) with a rising China is literally inevitable”
As long as the US Casino -(”the stock market”) will react unfavourable to a
(real) American-Chinese conflict – there will be no (real) American-Chinese conflict
–
(just the games which are going on currently) – and just never forget – all of my
Chinese friends are really ”tough gamblers”.
“As long as the US Casino -(”the stock market”) will react unfavourable
to a (real) American-Chinese conflict – there will be no (real) American-Chinese
conflict “
Crash, then conflict?
One possibility is a US market crash entirely due to domestic shenanigans, followed by
demagogue blaming it all on “Chiner.”
You stated, "Let's also ignore the fact that the sons and grandsons of the unionised
postwar generation for the most part subsequently rejected blue collar work no matter what
the pay. This is a sign of decadence I will grant you, and I am guilty as charged. "
This canard doesn't hold up in the face of empirical evidence. One example: 20,000 waiting
in line for lousy warehouse jobs at Amazon. The fact is, open borders and illegal immigration
are NeoLiberal tactics to promote wage arbitrage. In California, those impacted the most by
illegal immigration are African Americans. Whole sectors, such as hotel maintenance and
janitorial service, had been unionized, and had principally employed black workers whose
salaries enabled them to move into the middle class. The hotel industry welcomed the influx
of illegal immigrants willing to work for drastically lower wages. Black workers were
replaced and the union destroyed. Unfortunately, many in the US and globally have been so
propagandized about illegal immigration that even mentioning illegal immigration gets one
falsely labeled racist. in the US, Democrats use illegal immigration as a "demographic
strategy," which enables Democrats to remain in power while remaining wholly loyal to Wall
Street and doing nothing to ameliorate the misery of the bottom 90%.
"... The FAA has a clearly established pro-Boeing bias and will likely allow Boeing to unground the 737 MAX. We must demand that the two top FAA officials resign or recuse themselves from taking any more steps that might endanger the flying public. The two Boeing-indentured men are Acting FAA Administrator Daniel Elwell and Associate FAA Administrator for Aviation Safety Ali Bahrami. ..."
"... The FAA has long been known for its non-regulatory, waiver-driven, de-regulatory traditions. It has a hard time saying NO to the aircraft manufacturers and the airlines. After the aircraft hijackings directing flights to Cuba in the 1960s and 1970s, the FAA let the airlines say NO to installing hardened cockpit doors and stronger latches in their planes. These security measures would have prevented the hijackers from invading the cockpits of the aircrafts on September 11, 2001. The airlines did not want to spend the $3000 per plane. Absent the 9/11 hijackings, George W. Bush and Dick Cheney might not have gone to war in Afghanistan. ..."
"... Boeing has about 5,000 orders for the 737 MAX. It has delivered less than 400 to the world's airlines. From its CEO, Dennis Muilenburg to its swarms of Washington lobbyists, law firms, and public relations outfits, Boeing is used to getting its way. ..."
"... Right now, the Boeing/FAA strategy is to make sure Elwell and his FAA quickly decide that the MAX is safe for takeoff by delaying or stonewalling Congressional and other investigations. ..."
"... Time is not on the side of the 737 MAX 8. A comprehensive review of the 737 MAX's problems is a non-starter for Boeing. Boeing's flawed software and instructions that have kept pilots and airlines in the dark have already been exposed. New whistleblowers and more revelations will emerge. More time may also result in the Justice Department's operating grand jury issuing some indictments. More time would let the House Transportation and Infrastructure Committee, led by Chairman Peter DeFazio (D-OR) dig into the failure of accountability and serial criminal negligence of Boeing and its FAA accomplices. Chairman DeFazio knows the history of the FAA's regulatory capture. ..."
"... The FAA and its Boeing pals are using the "trade secret" claims to censor records sought by the House Committee. When it comes to investigating life or death airline hazards and crashes, Congress is capable of handling so-called trade secrets. This is all the more reason why the terminally prejudiced Elwell and Bahrami should step aside and let their successors take a fresh look at the Boeing investigations. That effort would include opening up the certification process for the entire Boeing MAX as a "new plane." ..."
The Boeing-driven FAA is rushing to unground the notorious prone-to-stall Boeing 737
MAX (that killed 346 innocents in two crashes) before several official investigations are
completed. Troubling revelations might keep these planes grounded worldwide.
The FAA has a clearly established pro-Boeing bias and will likely allow Boeing to unground
the 737 MAX. We must demand that the two top FAA officials resign or recuse themselves from
taking any more steps that might endanger the flying public. The two Boeing-indentured men are
Acting FAA Administrator Daniel Elwell and Associate FAA Administrator for Aviation Safety Ali
Bahrami.
Immediately after the crashes, Elwell resisted grounding and echoed Boeing claims that the
Boeing 737 MAX was a safe plane despite the deadly crashes in Indonesia and Ethiopia.
Ali Bahrami is known for aggressively pushing the FAA through 2018 to further abdicate its
regulatory duties by delegating more safety inspections to Boeing. Bahrami's actions benefit
Boeing and are supported by the company's toadies in the Congress. Elwell and Bahrami have both
acquired much experience by going through the well-known revolving door between the industry
and the FAA. They are likely to leave the FAA once again for lucrative positions in the
aerospace lobbying or business world. With such prospects, they do not have much 'skin in the
game' for their pending decision.
The FAA has long been known for its non-regulatory, waiver-driven, de-regulatory traditions.
It has a hard time saying NO to the aircraft manufacturers and the airlines. After the aircraft
hijackings directing flights to Cuba in the 1960s and 1970s, the FAA let the airlines say NO to
installing hardened cockpit doors and stronger latches in their planes. These security measures
would have prevented the hijackers from invading the cockpits of the aircrafts on September 11,
2001. The airlines did not want to spend the $3000 per plane. Absent the 9/11 hijackings,
George W. Bush and Dick Cheney might not have gone to war in Afghanistan.
The FAA's historic "tombstone" mentality (slowly reacting after the crashes) is well known.
For example, in the 1990s the FAA had a delayed reaction to numerous fatal crashes caused by
antiquated de-icing rules. The FAA was also slow to act on ground-proximity warning
requirements for commuter airlines and flammability reduction rules for aircraft cabin
materials.
That's the tradition that Elwell and Bahrami inherited and have worsened. They did not even
wait for Boeing to deliver its reworked software before announcing in April that simulator
training would not be necessary for the pilots. This judgment was contrary to the experience of
seasoned pilots such as Captain Chesley "Sully" Sullenberger. Simulator training would delay
ungrounding and cost the profitable airlines money.
Boeing has about 5,000 orders for the 737 MAX. It has delivered less than 400 to the world's
airlines. From its CEO, Dennis Muilenburg to its swarms of Washington lobbyists, law firms, and
public relations outfits, Boeing is used to getting its way. Its grip on Congress – where
300 members take campaign cash from Boeing – is legendary. Boeing pays little in federal
and Washington state taxes. It fumbles contracts with NASA and the Department of Defense but
remains the federal government's big vendor for lack of competitive alternatives in a highly
concentrated industry.
Right now, the Boeing/FAA strategy is to make sure Elwell and his FAA quickly decide that
the MAX is safe for takeoff by delaying or stonewalling Congressional and other
investigations.
The compliant Senate Committee on Commerce, Science and Transportation, under Senator Roger
Wicker (R-MS), strangely has not scheduled anymore hearings. The Senate confirmation of Stephen
Dickson to replace acting chief Elwell is also on a slow track. A new boss at the FAA might
wish to take some time to review the whole process.
Time is not on the side of the 737 MAX 8. A comprehensive review of the 737 MAX's problems
is a non-starter for Boeing. Boeing's flawed software and instructions that have kept pilots
and airlines in the dark have already been exposed. New whistleblowers and more revelations
will emerge. More time may also result in the Justice Department's operating grand jury issuing
some indictments. More time would let the House Transportation and Infrastructure Committee,
led by Chairman Peter DeFazio (D-OR) dig into the failure of accountability and serial criminal
negligence of Boeing and its FAA accomplices. Chairman DeFazio knows the history of the FAA's
regulatory capture.
Not surprising on June 4, 2019, DeFazio sent a stinging letter to FAA's Elwell and his
corporatist superior, Secretary of Transportation Elaine L. Chao, about the FAA's intolerable
delays in sending requested documents to the Committee. DeFazio's letter says: "To say we are
disappointed and a bit bewildered at the ongoing delays to appropriately respond to our records
requests would be an understatement."
The FAA and its Boeing pals are using the "trade secret" claims to censor records sought by
the House Committee. When it comes to investigating life or death airline hazards and crashes,
Congress is capable of handling so-called trade secrets. This is all the more reason why the
terminally prejudiced Elwell and Bahrami should step aside and let their successors take a
fresh look at the Boeing investigations. That effort would include opening up the certification
process for the entire Boeing MAX as a "new plane."
The Boeing-biased Elwell and Bahrami have refused to even raise in public proceedings the
question: "After eight or more Boeing 737 iterations, at what point does the Boeing MAX 8
become a new plane?" Many, including Cong. David Price (D-NC), chair of the House
Appropriations Subcommittee, which oversees the FAA's budget, have already questioned the
limited certification process.
Heavier engines on the old 737 fuselage changed the MAX's aerodynamics and made it
prone-to-stall. It is time for the FAA's leadership to change before the 737 MAX flies with
vulnerable, glitch-prone software "fixes".
Notwithstanding the previous Boeing 737 series' record of safety in the U.S. during the past
decade – (one fatality), Boeing's bosses, have now disregarded warnings by its own
engineers. Boeing executives do not get one, two, three or anymore crashes attributed to their
ignoring long-known aerodynamic engineering practices.
The Boeing 737 MAX must never be allowed to fly again, given the structural design defects
built deeply into its system.
The U.S. tariffs on Mexico might be off, but Citigroup Inc. strategists warn that trade
tensions are set to climb, roiling financial markets from stocks and bonds to commodities.
"Tensions are mounting and the outcome looks more likely to be driven by politics than
economics," Citigroup's Global Macro strategy team, led by Mark Schofield, wrote in a June 10
note to clients. President Donald Trump "is likely to continue to take a hard line."
Citigroup's base case sees Trump applying 25% tariffs on the remaining Chinese goods not
yet hit -- a "shock and awe" strategy in the run-up to a handshake deal -- along with duties on
automobile imports and increased tensions with Europe and Japan. If the Federal Reserve doesn't
cut interest rates, this scenario leaves markets on course for the following: A "full scale
bear market" in the S&P 500 Index, sending it 20% down from its April peak, to 2,350A
tumble in 10-year Treasury yields to 1.50% and "maybe lower"A surge in gold prices to $1,600 an
ounce, a level unseen since 2013
The good news is that the landscape "may be transitioning" to a different scenario, with no
trade deal forthcoming with China, but the Fed providing 75 basis points worth of rate cuts.
That would see new highs on the S&P 500, with 10-year yields as high as 2%. Gold would
still gain thanks to a cheaper dollar, with a $1,500 target, the Citigroup team wrote.
A third scenario has a trade deal at the Group of 20 summit at the end of this month in
Japan, where Trump may meet with Chinese President Xi Jinping. Equities would surge, with
emerging markets "significantly outperforming." Yields would rise while gold would slip along
with the dollar.
To contact the reporter on this story: Eric Lam in Hong Kong at [email protected]
To contact the editors responsible for this story: Christopher Anstey at
[email protected], Joanna Ossinger
"... He would be given a lavish reception in Riyadh, where he would deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian homophobia." ..."
On the bright side, if ever there were a candidate who might be inclined to rethink our
relationship with the Saudis, it's Buttigieg.
Oh, who am I kidding? He would be given a lavish reception in Riyadh, where he would
deliver a speech thanking our Saudi allies for leading the brave fight against "Iranian
homophobia."
"... The Wall Street Journal today has an article about how sources of funding have dried up for frackers. ..."
"... LTO is going to have to slow down with low prices and less access to capital. North Dakota drilling in at least the past 8 months is going to lose money. Getting mid-$40s at best and in December much worse in the initial flow burst is no bueno. Even if hedged, it's still an overall economic loser with operators having no positive free cash flow. ..."
"... Cash for additional drilling *has* to come from investors or lenders. That gets choked off, theres no money to pay the up front capital and labor costs of new wells. ..."
The Wall Street Journal today has an article about how sources of funding have dried up for
frackers.
I'm not sure substitution will kill oil prices. And while I know peak oil will happen,
putting a date on it doesn't much matter to me.
What most interests me is when investors, lenders, and execs at oil companies decide
having their money tied up in petroleum just doesn't make financial sense and it is time to
bail.
LTO is going to have to slow down with low prices and less access to capital. North Dakota
drilling in at least the past 8 months is going to lose money. Getting mid-$40s at best and
in December much worse in the initial flow burst is no bueno. Even if hedged, it's still an
overall economic loser with operators having no positive free cash flow.
Cash for additional
drilling *has* to come from investors or lenders. That gets choked off, theres no money to
pay the up front capital and labor costs of new wells.
According to Mark Papa in Q4 2018 presentation EOG did not see any possibility to increase
oil production as they need 75 usd / bbl WTI. They priority to pay depth , interest and
dividend to their investors.
If the vreak even price WTI average shale oil is 65 usd today ,
I doubt this will be reduced the next 3-5 years as the rock formation will have reduced
production Quality, the max. latitude lenght and number each drill pad might be reach, now I
read gaz is injected to stimulat production the impact of this remain to see.
Higher labour
cost , increase cost of funding as oil & Gaz is already less popular because of
environmental issues. Than there is some increase offshore activity, and onshore drilling in
Europe.
But even the oil majours want cheeper wells and service work it will not be any
cheaper because all need profit to grow a healthy Buisiness. In the mean time about 15% of
the oil produced are replaced adding 6-7% decline rate to that and at least 1% growth in
demand even with trade war it seems clear the world need significant more oil that is
profittable to develop to a cost consumers around the globe , mostely poor in development
Country can afford to buy and during time there need to be less energy made from fosil fuel.
I saved the Rystad article that has US at 12.5 now, and 13.4 by the end of the year. I will
revisit it from time to time. It's classic BS to the point of being really funny. Like
"Little shop of Horrors" (the original, not the 1986 remake) the really bad SF movie.
I mean, really. We were at 11.9 the end of March per EIA monthlies. With no substantial
increase in completions and drops in active rigs, we have increased 600k in two months???
Then in the last half of 2019, we are going to increase another 900k per day, when prices are
less than $55 now? Well, if your going to lie, tell a big one. My Venus flytrap ate my
homework :-)
In 2018 World C+C average output was about 82.84 Mb/d, so my "best guess" (which could
indeed be incorrect) scenario sees an increase of 4.46 Mb/d from 2018 to 2026.
Okay, that ain't all that unreasonable except except you have C+C production in 2019
increasing by 1,449 over the average of 2018. February 2019 World C+C production was
82,389,000 barrels per day. Your 2019 average is 1,901,000 barrels per day above that figure.
Dennis, that just ain't gonna happen.
OPEC + Russia + Canada accounts for 55% of the World's oil production. These 14
OPEC nations plus Canada plus Russia averaged 47,849,000 barrels per day in 2018. Their
average for the first four months of 2019 was exactly 46,000,000 barrels per day or 1,848,000
barrels per day below their 2018 average. Their April output was 2,352,000 barrels per day
below their 2019 average.
If World C+C is higher in 2019 than in 2018, who will make up this huge difference. US
Shale?
Canada still has lots of potential, their tars sands are just declining because of low oil
prices.
I believe that the Aberta Tar Sands are pretty much "guaranteed" (much less risk compared
to drilling for nothing) as long as the price is right. They are definitely there.
I am sure that statement will be destroyed by oil professionals (which I am not). But
RockMtnGuy from Oil Drum who used to work on them I think, said pretty much the same
thing.
Isn't the answer the difference will be made up by drawing from storage until the price gets
high enough to bring more production on? $120 barrel is going to get offshore fired back up
and maybe even Venezuela.
No, there is just not that much storage. A nation can draw from storage for only a couple of
months until they run out of storage. That is unless they have a tremendous amount of
storage. Not many nations have that much storage. 120$ a barrel? You're dreaming. Perhaps in
a decade or so.
What role do the giant oil fields play? As I write in my book "When trucks stop running:
the average size of new oil fields has declined, leaving us heavily dependent on the
original giant oil fields discovered many decades ago.
Of the roughly 47,500 oil fields in the world, 507 of them, about one percent, are
giant oil fields holding nearly two-thirds of all the oil that has ever been, or ever
will be produced, with the largest 100 giants, the "elephants," providing nearly half of all
oil today
Since giant oil fields dominate oil production, the rate they decline at is a good
predictor of future world oil production. In 2005, they provided 60 % of world oil. Giant
fields only begin to decline after a long plateau phase where production
fluctuates within a 4 % range. In 2007, the 261 giants past their plateau phase were
declining at an average rate of 6 % a year. Their decline rate will continue to increase by
0.15 % a year, to 6.15, 6.3, 6.45 % and so on. By 2030 these giants, and the other giants
joining them as time goes on, will be declining at an average rate of over 9 % a year
Since nongiant oil fields decline at much higher rates, especially offshore and tight
oil, by 2030, the average decline rate of all oil fields past their peak production
will be higher than 9 percent.
by 2030, from half to two-thirds of global crude oil production will need to be replaced --
40 to 50 Mb/d of today's 77.8 Mb/d
Making up this shortfall will be difficult, since four out of five barrels now
come from fields found before 1973 and the majority of them are declining.
So far, Enhanced oil recovery in giant fields has increased the decline rate after peak
production, because oil extracted now is unavailable after the peak, making the decline rate
steeper. For example, Cantarell in Mexico, the second largest oil field ever found,
declined at 20 % rates due to the EOR used to increase the maximum rate of production
Aleklett, K., et al. 2012. Peeking at peak oil. Berlin: Springer.
Hook, M., et al. 2009. Giant oil field decline rates and their influence on world
oil production. Energy Policy 37(6):2262–2272.
Murphy, D.J., et al. 2011. Energy return on investment, peak oil, and the end of economic
growth. Annals of the New York Academy of Sciences 1219: 52–72.
Thanks Alice, that was very informative. That is why I believe the decline curve will be much
steeper than the ascension curve. Individual fields, of course, reach their peak production
in only a few years and their decline could take many years. But I am speaking of all the
world's production combined. I think the decline curve will shock most people.
I once made a large poster about this 1978 Rand study. Had become interested in resource
studies years earlier and occasionally lectured at ZPG and elsewhere. https://www.rand.org/pubs/reports/R2284.html
That's very informative, Alice. Very rough estimation from that, is that if shale were able
to eke out another 600k increase a year, for a year or two, it could not possibly keep up
with current decline rates in the bigger fields. Especially, when that shale increase is not
going to start in 2019. World will be down, and add on another year of decline. 2018 will be
looking more like peak year.
This poster has been considering post peak for, obviously, years. Kudos, this stuff is
good! http://energyskeptic.com/
First of all, oil field geography (not geology) can be changed. So that can be one source of
corruption in whatever number you want to quote for field production.
Second of all, choke management can also corrupt whatever number you want to quote for
field production.
And how about third of all you can change the definition of oil and call all sorts of
liquids coming up the well bore "oil" regardless of API density and corrupt whatever number
you want to quote for field production. Executives are paid for production, agencies collect
taxes for production, royalty recipients are paid regardless of profit, so who is it that
would oppose manufacturing any number for production you want to quote? Lenders? The Fed is
providing nearly 0% interest rates. Why would lenders care? Maybe refineries would care, but
you can probably cut them in.
So you can pretty much put numbers and conclusions about flow to bed.
I do think that geological depletion isn't the only factor that could knock it up to
6%.
Very little oil has been explored for and found in the past 5 years, plus add on another
10 years to develop what's discovered
As the contribution declines from the Giants more will have to be provided by the other
50,000 fields that have much higher decline rates. Onshore may be 3.5%, but a lot of new oil
is offshore with a much higher decline rate, perhaps higher than it needs to be. I've heard
that oil is left offshore due to the haste in building these rigs to pay investors off as
quickly as possible.
Since diesel is all that matters in keeping civilization alive, and U.S. shale oil is only
good for plastics, we depend on heavy oil producers like venezuela, mexico, Iran, and
canadian tar sands which are all problematic
I'm not so sure there are a lot of good places to drill. A quarter of remaining oil is in
the arctic and can't be obtained because of ice bergs, nor is it likely fields will be
developed on land in Alaska due to the challenges of permafrost.
A financial crash stops or slows much of the exploration and production. Potentially for a
long time, since unlike in the Great Depression, we won't have fossils to recover with as we
did back then.
Oil is a global commodity today, but will it be when production declines? If not, that
will accelerate the decline rate for nation's that can't get oil (i.e. the export land model
of Jeffrey Brown).
Though we'll be just fine, I'm sure most nations will be keen to send us diesel in
exchange for U.S. fracked plastic.
This is only true to an extent. Because refineries we're designed over the years to process
heavier oils than LTO the ones that exist have trouble handling all the light stuff. And the
light stuff has less of the distillates needed for diesel. However, they don't produce no
diesel at all, and refineries can be modified/upgraded to produce diesel from pretty much
whatever oil you want, for a cost.
What products you get out from the refinery is a function of both what oil you put into it
and what refinery you have. There is some diesel in LTO but not as high as conventional oil.
Getting a higher share diesel requires a complex refinery (and is costly). It currently makes
more sense for refineries to blend with medium and heavy oil.
Oil demand has over time shifted to higher API oil. LTO is too high but perhaps not that
bad. I think the main issue is that supply of LTO has increased very fast and demand was not
as responsive due to lack of investments in US refineries and export capacity.
In addition to what Jeff said, LTO is just that Light Tight Oil. Light implies short
polymers. Gasoline has (ideally) 8 carbon atoms, kerosene 12 to 15 and diesel 16, or mostly
around 16. So you can see that in very light oil, only a tiny fraction would have polymers
that long.
In petroleum molecules, the carbon atoms are all in a string. That's why they call them
polymer strings.
The first explicit reaction against globalization to gain
popular attention was the Battle of Seattle in 1999
Why not the Zapatista uprising in 1994? It was explicitly against Nafta and neoliberalism.
The 1997 Asian financial crisis also triggered a very strong reaction against the US centered
globalized financial system, its hedge funds, and the IMF.
the neoliberal ideology on which it rested, didn't face any serious challenge until the
Global Financial Crisis of 2008
In 2003, the unified challenge of the poorer countries was so serious that it the collapsed
the WTO talks to the point that it has never recovered. 2008 was simply catastrophic.
More than globalization being challenged, I think it is US hegemony. Trump is definitely
uniting its challengers with his media circus in Venezuela, disruptive tariff threats against
Mexico, and the blacklisting of Huawei.
Likbez 06.09.19 at 11:38 pm (no link)
Trump election in 2016 was in essence a rejection of neoliberal globalization by the
American electorate which showed the USA neoliberal establishment the middle finger. That's
probably why Russiagate hysteria was launched to create a smoke screen and patch the
cracks.
The same is probably true about Brexit. That's also explains Great Britain prominent role
in pushing anti-Russia hysteria.
I think the collapse of neoliberal ideology in 2008 (along with the collapse of financial
markets) mortally wounded "classic" neoliberal globalization. That's why we see the
conversion of classic neoliberalism into Trump's "national neoliberalism" which rejects
"classic" neoliberal globalization based on multinational treaties like WTO.
As the result of crisis of neoliberal ideology we see re-emergence of far-right on the
political scene. We might also see the emergence of hostile to each other trading blocks
(China Russia Turkey Iran; possibly plus Brazil and India ) vs G7. History repeats
I suspect that the USA neoliberal elite (financial oligarchy and MIC) views the current
trade war with China as the key chance to revitalize Cold War schemes and strategically
organize US economic, foreign and security policies around them. It looks like this strategic
arrangement is very similar to the suppression of the USSR economic development during the
Cold War.
The tragedy is that Trump administration is launching the conflict with China, while
simultaneously antagonizing Russia, attacking EU and undermining elements of the postwar
world order which propelled the USA to its current hegemonic position.
The question is at what level of inequality it turns toxic. Druker mentioned the coefficient 20 between salary of the top
executive and average salary paid by the corporation.
Notable quotes:
"... Inequality encourages the rich to invest not innovation but in what Sam Bowles calls " guard labour" (pdf) – means of entrenching their privilege and power. ..."
"... Unequal corporate hierarchies – what Jeffrey Nielsen calls rank-based organizations – can demotivate junior employees. ..."
"... "Economic inequality leads to less trust" say (pdf) Eric Uslaner and Mitchell Brown. ..."
"... Inequality can prevent productivity-enhancing changes, as Sam Bowles has described . We have good evidence that coops can be more efficient than hierarchical ones, but the spread of them is prevented by credit constraints. ..."
"... Inequality can cause the rich to be fearful of future redistribution or nationalization, which will make them loath to invest. ..."
"... Inequalities of power – in the sense of workers' voices being less heard than they were in the post-war period and trades unions becoming less powerful – have allowed governments to abandon the aim of truly full employment and given firms more ability to boost profits by suppressing wages and conditions. That has disincentivized investments in labour-saving technologies. ..."
"... The high-powered incentives that generate inequality within companies can backfire . As Benabou and Tirole have shown (pdf) , they encourage bosses to hit measured targets and neglect less measurable things that are nevertheless important for a firm's success such as a healthy corporate culture. ..."
"... High management pay can entrench what Joel Mokyr calls the "forces of conservatism" which are antagonistic to technical progress. ..."
"... Erik Brynjolfsson signalled the "winner take all" dynamics of Silicon Valley as an example on how technology drives inequality nowadays. ..."
By Chris Dillow, an economics writer at Investors Chronicle. He blogs at Stumbling and Mumbling,
and is the author of New Labour and the End of Politics. Follow him on Twitter: @CJFDillow. Originally
published at
Stumbling and Mumbling
; cross posted from
Evonomics
I welcome Professor Sir Angus Deaton's report into
inequality
.
I especially like its
emphasis
(pdf)
upon the causes of inequality:
To understand whether inequality is a problem, we need to understand the sources of inequality, views
of what is fair and the implications of inequality as well as the levels of inequality. Are present
levels of inequalities due to well-deserved rewards or to unfair bargaining power, regulatory failure or
political capture?
I fear, however, that there might be something missing here – the impact that inequality has upon
economic performance.
My chart shows the point. It shows the 20-year annualized rate of growth in GDP per worker-hour. It's
clear that this was much stronger during the relatively egalitarian period from 1945 to the mid-70s than it
was before or since, when inequality was higher.
This might, of course, be coincidence: maybe WWII caused both a backlog
of investment and innovation which allowed a subsequent growth spurt and a desire for greater
equality.
Or it might not. This is not the only evidence for the possibility that inequality is bad for growth.
Roland Benabou gave the
example
(pdf)
of how egalitarian South Korea has done much better than the unequal Philippines. And IMF
researchers have
found
(pdf)
a "strong negative relation" between inequality and the rate and duration of subsequent growth
spells across 153 countries between 1960 and 2010.
Correlations, of course, are only suggestive. They pose the question: what is the mechanism whereby
inequality might reduce growth? Here are eight possibilities:
1. Inequality encourages the rich to invest not innovation but in what Sam Bowles calls "
guard
labour" (pdf)
– means of entrenching their privilege and power. This might involve restrictive copyright
laws, ways of
overseeing
and
controlling workers, or the corporate rent-seeking and lobbying that has led to what Brink Lindsey and
Steven Teles call the "
captured
economy.
" An especially costly form of this rent-seeking was banks' lobbying for a "too big to fail"
subsidy
.
This encouraged over-expansion of the banking system and the subsequent crisis, which has had a massively
adverse
effect
upon economic
growth
.
2. Unequal corporate hierarchies – what Jeffrey Nielsen
calls
rank-based
organizations – can demotivate junior employees. One study of Italian football teams, for example, has
found
that
"high pay dispersion has a detrimental impact on team performance." That's consistent with a study of
Bundesliga and NBA teams by Benno Torgler and colleagues which
found
that
"positional concerns and envy reduce individual performance."
3. "Economic inequality leads to less trust"
say
(pdf)
Eric Uslaner and Mitchell Brown. And we've good evidence that less
trust
means
less
growth
.
One reason for this is simply that if people don't trust each other they'll not enter into transactions
where there's a risk of them being ripped off.
4. Inequality can prevent productivity-enhancing changes, as Sam Bowles has
described
.
We have good evidence that coops can be more
efficient
than
hierarchical ones, but the spread of them is prevented by credit constraints. Poverty
reduces
education
levels by making it impossible to afford books, or encouraging bright but poor students to leave earlier
than they should, and women and BAME people might avoid careers for which they are otherwise well-suited
because of a lack of role modelss
5. Inequality can cause the rich to be fearful of future redistribution or nationalization, which will
make them loath to invest. National Grid is belly-aching, maybe rightly, that Labour's plan to nationalize
it will delay
investment
.
But it should instead ask: why is Labour proposing such a thing, and why is it
popular
?
6. Inequalities of power – in the sense of workers' voices being less heard than they were in the
post-war period and trades unions becoming less powerful – have allowed governments to abandon the aim of
truly full employment and given firms more ability to boost profits by suppressing wages and conditions.
That has disincentivized investments in labour-saving technologies.
7. The high-powered incentives that generate inequality within companies can
backfire
.
As Benabou and Tirole have
shown
(pdf)
, they encourage bosses to hit measured targets and neglect less measurable things that are
nevertheless important for a firm's success such as a healthy corporate culture. Or they might crowd out
intrinsic
motivations
such
as professional ethics. Big bank bonuses, for example, encouraged mis-selling and
rigging
markets
rather than productive activities.
8. High management pay can
entrench
what
Joel Mokyr
calls
the
"forces of conservatism" which are antagonistic to technical progress. Reaping the full benefits of new
technologies often requires organizational change. But why bother investing in this if you are doing very
nicely thanks to the
increased
(pdf)
market
power
of
your firm? And if you have, or hope to have, a big salary from a corporate bureaucracy why should you set up
a new company?
My point here is that what matters is not so much the level of inequality as the effect it has. And it
might well be a pernicious one. If inequality has contributed to weaker growth, then it is very likely to
have
contributed
to
the rise of populism and to
Brexit
and
the divisions with which both are associated. In this way, inequality does political damage too.
From this perspective, pointing out that the Gini coefficient has been flat for years (which is
true
if
we ignore housing costs) is like saying that because the bus has stopped moving we need not care about the
man who has been run over by it. It misses the main point.
Very good analysis on the consequences of inequality. I miss a conclusive one:
disengagement
.
It is, in part, an objective of the wealthy because it discourages political participation of the masses. It
is also root of populist movements. But maybe the most critical consequence of disengagement now is the
difficulty to implement social changes badly needed to fight climate change.
The reason why there is inequality is because that is what people in power want. So while there are many
reasons why inequality is a problem to be resolved I believe that the only way to deal with it is to use
power. The power of the ballot at the election. Voting for people with history of serving other interests
than the electorate and then trying to reason with them to get them to change their mind is a bad idea.
Is there anyone who believes that the powers that be will change simply by presenting logical arguments
to them?
The healthcare situation in the US is the best example. There are few, if any, logical arguments to have
a healthcare system as the US has. Is there really anything to do but to elect people who will change it? Or
is there a possibility to change the minds of the politicians who maintains it?
There is more to do than just elect the "right" people to office, which is important. As we painfully
know, elected leaders have a rather sorry record of making change, so simple reliance on the ballot is
inadequate. We need resilience, mutual aid and organizational support in the polis, independent of the
political class. This in order to not only elect good leaders, but also to hold them accountable from day
one. To create such requires the long work of organizing. Organizing is not just advocacy (lobbying,
e.g.) nor just mobilizing (mass demos, e.g.), it is about changing lives. When done properly, organizing
changes politics and its possibilities in fundamental ways. But when done right, it is literally one
person at a time over time. No quick fixes, no easy solutions. Are we up to this or not? That is the
question facing us all.
High levels of inequality lead to the economy being demand-limited rather than capital-limited. Now
either one can choke off economic growth, but monetary stimulus is more sustainable when it operates on the
latter than the former. Buliding a new factory and employing more people in it is hopefully* going to be
better for the economy in the long term than loaning cash strapped people money to be paid back with
interest.
*But not always, look at all that dark fiber installed during the dot com boom.
We are paying off our existing debt we built up while raising kids. It doesn't matter how much cheap
debt Mr. Powell and Mr. Dimon want to throw at us, we aren't going to use it and will continue paying off
the old debt. the bank calculators tell us we could take on hundreds of thousands of debt to buy a bigger
house, fancy cars etc. but that is not happening. One of the key reasons is that we look at the political
uncertainty and know that ultimately the best defense is low debt levels and well-diversified savings.
The high student debt levels many people have taken on means they are not taking on much new debt. so
they used the debt to pay the universities but that is probably not as productive for the economy as
buying condos, houses, cars, etc.
Many other people have been taking on debt because they don't make enough to cover their ongoing
expenses. In a recession, that debt is likely to be high risk.
Corporations have been issuing lots of covenant-light junk bonds because Mr. Bernanke and Powell have
provided inexpensive money. Many of those will likely go south in a recession creating a bigger issue.
Unlike the dark fiber, most of that has not been for long-term capital projects so is unlikely to provide
that economic stimulus in the future.
And a big part of the reason debt levels are so high is because the wealthy have much more money to
lend than they can find productive uses for. High debt levels are the direct result and evidence of a
greater concentration of wealth than is optimal.
It is pretty clear that the period of low income inequality from WW II to the early 80s coincided with
the giant productivity bump. So when Trump says "Make America Great Again" which I have assumed relates to
that post-WW II boom, is he calling for reduced inequality and better sharing of wealth across the society?
Or does he assume that the policies that lead to reduced productivity growth are what make America great?
While the stats aren't strong, my understanding is that the Gilded Age of the 1870s was another classic
period of concentrated wealth that then started a period of frequent depressions from the 1880s to WW II,
including the Panic of 1908 and the Great Depression. The Great Depression was preceded by a brief period of
high inequality in the Roaring 20s that was not erased until after the 1937 stock market drop and the
beginning of WW II.
I think the most interesting thing about inequality is how much distortion a short period of it can put
into a society. It appears that it takes 2-3 decades for society to fully recover from each decade of high
inequality. This is similar to the relative rates of stock market recovery compared to a stock market drop.
My primary hope is that we can come out of this period of inequality without a major global conflict. I
suspect that the retiring of the baby boomers and the stress that puts on the system will lead to the
realization of many retirees that they are on the menu instead of picking from the menu. That will likely
begin to change their voting patterns in the coming decade coinciding with the growing political clout of
the millenials.
Point #6 has me confused (that's not so difficult to do). The section ends with this sentence:
"That has disincentivized investments in labour-saving technologies."
Huh? I've been under the impression that not only labor-saving but labor-eliminating tech. is a very big
deal. A big selling point for automation is that by eliminating jobs & job-related expenses it more than
pays for itself.
You point to the interesting debate on technology and jobs. IMO labour-saving techs mostly shift jobs.
Whether it destroys more or less than those created is open to many informed and uninformed discussions.
It almost certainly ends in higher productivity, but what about inequality? For some time technology
raised all boats but lately not. I would argue that technology itself is not the evil. Erik Brynjolfsson
signalled the "winner take all" dynamics of Silicon Valley as an example on how technology drives
inequality nowadays.
The big question is what happens to those doing the jobs that are left? If they share in the
benefits of productivity growth through higher wages, they can buy more of OTHER products and services
which creates demand and provides employment for those creating those products. But If they do not get
higher wages, those displaced are competing for jobs with other displaced workers and depressing
wages. The economy simply works better, with fewer speculative bubbles and more economic security for
the vast majority when productivity gains are linked to rising pay, as they were in the post-war
period. How to achieve this is a non-trivial question, but increasing the minimum wage and capital
gains taxes are a start.
Some of the jobs have been automated. However, many have gone overseas to cheaper labor. Instead of
keeping the jobs in country and using automation to reduce the labor cost and increase productivity, they
just shipped everything off. In some cases where they kept the work in country, they simply moved the
jobs to non-union states where the workers would work for much less.
If all you are concerned about is earnings per share, it doesn't really matter where or how the work
gets done as long as you reduced the cost per unit revenue.
Someone, please remind me why we all need more growth in our economy. So far as I was aware, it was
capitalism's need for constant growth that was a major cause of climate change. Whilst inequality has
dreadful effects in other ways, surely lowering overall growth might be a good thing for the natural world.
Infinite growth on a finite planet can go on only so long without serious consequences – or so it seems. The
much-vaunted and much-hated Green New Deal takes as given that there is such a thing as green growth. Is
there?
"... Still this is a clear and provable case of racket. Academic racket but still a racket. ..."
"... But even minor prosecution of those academic rentiers is impossible under neoliberalism as regulators are captured and corrupted. ..."
"... And students mostly are too badly informed and too naďve to shop around and find a better price. Which is still possible. For example using community college for the first two years and then transferring credits to a state university. And if student is talented enough he always can get masters at Ivy League school later and it will cost less. ..."
"... 8% insurance policy, ..."
"... The explosion in administrative employment and the resulting bureaucratic bloat and costs is ridiculous and unsustainable, including the promised pension and benefit payouts in the years to come. ..."
"... Young people borrowing tens of thousands of dollars to attend private, for-profit colleges (???) or to study the humanities, social sciences, or business is a waste of time and money for the vast majority. ..."
"... Most urban/suburban high schools have evolved into what might be described as college preparatory girls schools where a large majority of males are marginalized as necessary nuisances and the vast majority of kids learn little that is practical to participating as gainfully employed and self-supporting adults. ..."
"... But that is not an accident, of course. Feminization and infantilization of the society and economy has been underway coincident with deindustrialization and financialization since the 1970s-80s. ..."
"... The cost containment of colleges is the same as what is needed for healthcare. The government should intervene since it is the principal financier in more ways than one. ..."
"... To my knowledge and experience with Federal Direct Loans, students can go into forbearance at any time. There is also a 3 year window of no interest accumulation. After the 3 years, interest accumulates. ..."
The private enterprise system is built to limit overborrowing by sharing risk between lenders and borrowers. ... They charge more
interest when they take on more risk. Because most loans can be discharged in bankruptcy, lenders share the cost of default. ...
But the federal student loan program doesn't work that way. Those ads that run on bus stop signs and on late-night television
- "No Cash? No Credit? No Problem!" - are essentially the Department of Education's official policy on student loans.
On the front end, the department is the world's nicest, most accommodating lender. Interest rates ... are lower than banks charge...
Borrowing for college is essentially an entitlement...
When the loan bill finally comes due, the federal government transforms into a heartless loan collector. You don't need burly
men with brass knuckles to enforce debts when you have the Internal Revenue Service..., which can and will follow you as long as
you live.
The government acts this way because the federal student loan program has been removed from the norms and values of prudent lending.
Because the Department of Education doesn't consider risk, it takes no responsibility. If life, luck and bad choices leave you ...
in the hole, it's all on you. ...
Most college students ... pay back their loans and enjoy the fruits of their degrees. But most pack-a-day smokers don't die of
lung cancer. And most people who bought cars with Takata airbags from 2002 to 2008 weren't killed by shrapnel from explosions. Nevertheless,
we still regard small risks of catastrophic outcomes as problems to be solved. ...
Just one quick comment. We need to solve the student loan problem for existing loans, but I wish talk about how to address this
problem going forward was more about how to provide adequate funding for colleges so that large loans aren't needed in the first
place rather than focusing on how to change the loan program itself.
The cost containment of colleges is the same as what is needed for healthcare. The government should intervene since it is the
principal financier in more ways than one.
=== end of quote ===
Very true. May be even the idea of the net of eligible providers (in network vs out of network) can be borrowed form healthcare.
As this is a public good, it should be severe punishment including jail terms for inflating the cost of education. For example
I think Mankiw should be at investigated using RICO act for the cost of his textbook. But I think that students who enroll into Mankiw
class are already second rate students because at this point they should do some research about who Mankiw really is and avoid his
classes like a plague.
Still this is a clear and provable case of racket. Academic racket but still a racket.
But even minor prosecution of those academic rentiers is impossible under neoliberalism as regulators are captured and corrupted.
And students mostly are too badly informed and too naďve to shop around and find a better price. Which is still possible. For
example using community college for the first two years and then transferring credits to a state university. And if student is talented
enough he always can get masters at Ivy League school later and it will cost less.
Please note that quality of university education is already very problematic. Switching to preparing "ready for jobmarket" graduates
backfired. I would say that quality now is dismal as student lacks fundamentals. They are now kind of "bug of tricks" degree holders.
So the idea of cost control of college education can't be refuted with the hypothesis that it will lower the quality of education.
Essentially what Ivy league college degree buys is the first place in a heap of resumes to major companies (some companies simply
discard resumes from applicant who do not have Ivy League education).
Now about subsidies. Neoliberal colleges are for profit business with academic sharks no different that sharks in chemical or
pharmaceutical companies. They do not care about education, only about lining this own pockets. As simple as that.
That means that in a current environment any "broad" subsidies will result in raising of the cost of education. I would make subsidies
more focused, subject to means test as well as passing a qualifying exam similar to GED. After all at this point the society invests
some money into student.
djb
so is he saying that we shouldn't give student loans unless a bank would loan the money
that's means many people who can now afford college wont be able to
and this:
"Most college students don't end up like Ms. Kelley. They pay back their loans and enjoy the fruits of their degrees. But most
pack-a-day smokers don't die of lung cancer. And most people who bought cars with Takata airbags from 2002 to 2008 weren't killed
by shrapnel from explosions. Nevertheless, we still regard small risks of catastrophic outcomes as problems to be solved."
is he kidding me??? My student loans required an 8% insurance policy, money I didn't even get to use, came out before
I could pay tuition room and board, but I still owed it. The fact that most people pay their student loans means the government doesn't
lose anything from student loans
Dan Berg
Rather than "provide adequate (more) funding (taxes)for colleges" - how about ways to reduce cost? Beginning with the absurd costs
of textbooks; administrative bloat; disparities between tenured and part-time teachers; etc
Here is where Greg Mankiw will tell you he needs to charge $300 a book for his text because he wants his kids to be rich.
A Thomas
And how does anyone propose to remedy monies being deducted from Social Security for delinquent student loans when the person
(victim) cannot make timely payments because of AGE DISCRIMINATION IN EMPLOYMENT. While illegal, it is practiced by a majority of
employers. Often the Soc Sec recipient is reduced to living at poverty level - even though they want to work and would if they could
find paying employment.
Or does anyone want to remedy this? Just let the "old folks" starve and become homeless!!!!!!
RGC
"As a senator from Delaware -- a corporate tax haven where the financial industry is one of the state's largest employers -- Biden
was one of the key proponents of the 2005 legislation that is now bearing down on students like Ryan. That bill effectively prevents
the $150 billion worth of private student debt from being discharged, rescheduled or renegotiated as other debt can be in bankruptcy
court.
Biden's efforts in 2005 were no anomaly. Though the vice president has long portrayed himself as a champion of the struggling
middle class -- a man who famously commutes on Amtrak and mixes enthusiastically with blue-collar workers -- the Delaware lawmaker
has played a consistent and pivotal role in the financial industry's four-decade campaign to make it harder for students to shield
themselves and their families from creditors, according to an IBT review of bankruptcy legislation going back to the 1970s."
80-85% of jobs today and in the future will not require post-secondary training or a university credential. If accelerating automation
and elimination of service employment (retail, health care, education, gov't, legal, etc.) continues apace as anticipated, including
middle- and upper-income employment, there will be still fewer jobs requiring post-secondary "education" that pay what was once perceived
as breadwinner compensation.
Universities all over the US have since the 1970s-80s become costly public jobs programs primarily for females at low or no productivity
and increasing cost to the private sector (as in the case of "health" care). The explosion in administrative employment and the
resulting bureaucratic bloat and costs is ridiculous and unsustainable, including the promised pension and benefit payouts in the
years to come.
Young people borrowing tens of thousands of dollars to attend private, for-profit colleges (???) or to study the humanities,
social sciences, or business is a waste of time and money for the vast majority.
Most urban/suburban high schools have evolved into what might be described as college preparatory girls schools where a large
majority of males are marginalized as necessary nuisances and the vast majority of kids learn little that is practical to participating
as gainfully employed and self-supporting adults.
But that is not an accident, of course. Feminization and infantilization of the society and economy has been underway coincident
with deindustrialization and financialization since the 1970s-80s.
there should be a subsidy for college, because otherwise people tend to underinvest in education. Individuals are often liquidity
constrained or just short sighted.
But IMO we are doing the subsidies all wrong. We are offering subsidized loans and tax deductions. We should instead be using
plain old grants more often. That's how you ensure access to people who would otherwise lack it.
But the grants should be relatively small. They should just be sufficient to coverage get of a public university education, without
a little t of extra amenities. The critics of higher ed who say that subsidies are driving up the costs are half right. It's really
consumer preferences, for the most part. But that doesn't mean government should contribute to that problem, of that taxpayers should
pay limitless amounts. Some price pressure should still be left to exist.
The cost containment of colleges is the same as what is needed for healthcare. The government should intervene since it is the
principal financier in more ways than one.
There is a movement afoot from the Jason Delisles, Matt Chingos, and the Beth Akers of both the New America Foundation and Brookings
who advocate interest rates do not matter, higher interest rates make sense for advanced degrees, and student loans should be risk
sensitive using Fair Market Valuation techniques.
Getting a student loan is like checking into a Roach Motel. You can sign in via your signature; but, you can never check out without
paying it off. If you default, it gets worst for you as stated in the story. So the risk to the Federal Gov and taxpayers is minimal.
Indeed some would tell you, the Gov makes more money in default than in payoff. I also think there is more to the story than being
revealed.
The highest default rate is with those who have student loans of < $10,000 [~39% of them have loans of less than $10,000 (NY Fed)]
and are the result of Community Colleges. Potentially these are people attempting to improve their status in life. Student loan borrowers
with $100,000 of debt had a default rate of 18% and are also the higher earners after graduation.
To my knowledge and experience with Federal Direct Loans, students can go into forbearance at any time. There is also a 3 year
window of no interest accumulation. After the 3 years, interest accumulates. The 3 year window of no interest accumulation needs
to be expanded to cover what we experienced since 2008 and perhaps go as long as 10 years. The 20-25 life time of IBR should be shortened
to 10 - 15 years. This is not like students ordered up a 2008 recession, they were penalized unknowingly and were encouraged to seek
a college education of sorts. The same holds true for those returning to college to better themselves.
Not only does student debt hurt the student, it is also playing out in the overall economy as I reported using NY Fed information
at AB. Households with Student Loan Debt are a higher risk than those without Student Loan Debt. They are buying fewer homes and
autos than households without Student Loan debt.
State financing has decreased. In Michigan it has gone from ~60% to ~30% with families picking up the load through various sources.
Perhaps expanding the public service to erase college debt after 10 years would make more sense than doing so with strings attached.
Colleges do not appear to be cost sensitive to what the market may bear. There has always been a need for them and like healthcare
colleges are allowed to increase as needed in cost without question. If you can not pay it upfront, you can always borrow it seems
to rule. The new programs was supposed to hold colleges accountable for default rates. From the get-go, the administration let some
of them off the hook.
According
to a
brand new Pew survey, approximately 7 out of every 10 Americans believe that "debt is a necessity
in their lives", and approximately 8 out of every 10 Americans actually have debt right now.
Most of us like to think that "someday" we will get out of the hole and quit being debt slaves, but
very few of us ever actually accomplish this.
That is because the entire system is
designed to trap us in debt before we even get out into the "real world" and keep us in debt until
we die. Sadly, most Americans don't even realize what is being done to them.
In America today, debt is considered to be just part of normal life. We go
into debt to go to college, we go into debt to buy a vehicle, we go into debt to buy a home, and
we are constantly using our credit cards to buy the things that we think we need.
As a result, this generation of Americans is absolutely swimming in debt. The
following are some of the findings of
the Pew survey that I mentioned above
*"8 in 10 Americans have debt, with mortgages the most common liability."
*"Although younger generations of Americans are the most likely to have debt (89 percent of
Gen Xers and 86 percent of millennials do), older generations are increasingly carrying debt into
retirement."
*"7 in 10 Americans said debt is a necessity in their lives, even though they prefer not to
have it."
Most of us wish that we didn't have any debt, but we have bought into the lie that it
is a necessary part of life in America in the 21st century.
It has been estimated that 43 percent of all American households spend more money than they make
each month, and U.S. households are
more than 11 trillion dollars in debt at this point.
When it comes to government debt, that is easy for us to blame on someone else, but all of this
household debt is undoubtedly something that we have done to ourselves.
It all starts at a very early age for most of us. When we are still in
high school, we are endlessly told about how important a college education is. All of the authority
figures in our lives insist that we should just try to get into the best school that we possibly
can and to not even worry about how much it will cost.
So many of us go into staggering amounts of debt before we even get out into the working world.
We had faith that the "good jobs" that were being promised to us would be there when we graduated.
Unfortunately, in this day and age those "good jobs" end up being a mirage more often than not.
But whether or not we can find a good job, we still have to pay off all that debt.
According to new data that was recently released, the total amount of student loan debt in the
United States has risen to a grand total 1.2 trillion dollars. If you can believe it, that
total has
more than doubled over the past decade.
Right now, there are approximately
40 million Americans that are paying off student loan debt. For many of them, they will
keep making payments on this debt until they are senior citizens.
Another way that they get you while you are still in school is with credit card debt.
I got my first credit card while I was in college, and nobody ever taught me about the potential
dangers.
Today, the average U.S. household that has at least one credit card has approximately
$15,950 in credit card debt.
So let's say that you have that much credit card debt and you are paying an annual interest rate
of 17 percent. If you only pay the minimum payment each month, it will take you 229 months
to pay your credit card off, and during that time you will have paid $13,505.82 in interest charges.
In other words, you will almost have paid twice as much for everything that you originally bought
with your credit card by the time it is all said and done.
This is why banks love to give you credit cards. If they can get back nearly twice as much
money as they originally give you, they get rich and you get poor.
Most of us get loaded down with even more debt when we go to buy a vehicle. Instead of saving
up and getting what we can afford, many of us end up getting the largest loans that we can qualify
for.
In a
previous article, I discussed the fact that the average auto loan at signing in America
today is
approximately $27,000. In order to get the monthly payments down to a level where we can
afford them, many of these auto loans are now being stretched out for six or seven years.
In fact, the number of auto loans that exceed 72 months
has hit at an all-time high of 29.5 percent.
It is the same thing with home loans.
In the old days, it was extremely rare for a mortgage to be stretched over 30 years, but today
that is pretty much the standard.
Sadly, most people don't understand how much money this is costing them.
If you take out a $300,000 mortgage at 3.92 percent and stretch it over 30 years, you will end
up paying back a grand total of $510,640.
In other words, you will pay for two houses by the time you are done.
Yes, we all need somewhere to live, and there are definitely negatives to renting as well.
But it is very important that we all understand what is being done to us.
And I haven't even discussed one of the most insidious forms of debt yet.
Have you noticed that most doctors and most hospitals will never tell you how much something is
going to cost in advance?
They get us when we are at our most vulnerable. When there is something wrong with us physically,
we are often desperate to get help. So we don't ask too many questions and we just go along
with whatever they say.
But then later we get the bill and we are often
completely shocked by what they have charged us.
If you are completely unethical, it is a great business model. People that are extremely
desperate and needy come to you and you don't even have to tell them how much your services are going
to cost. And then once they leave, you send them an absolutely outrageous bill for whatever
you feel like charging.
Frankly, I don't know how a lot of people working in the medical field live with themselves.
In their extreme greed, they are ruining the lives of millions of ordinary American families.
One very disturbing study found that
approximately 41 percent of all working age Americans either currently have medical bill problems
or are paying off medical debt. And collection agencies seek to collect unpaid medical bills
from about 30 million of us each and every year.
Most of us will spend our entire lives paying off debt.
That is why we are called debt slaves – our hard work makes others extremely wealthy.
ebworthen
All by design. The great lie is that you should "work hard and be responsible".
Yeah? Why? Because it feeds the beast in Wall Street and Washington? The bailouts and free money
for the banks/corporations/insurers wiped that idea off the slate.
Give me sound money and start producing again while offering me interest on my savings and we
can start talking about responsibility. The example set by Wall Street and Washington is that
debt is good, so what the fuck do they expect regular folks to do, keep carrying their bags?
Fuck you assholes, to Hell and back on a bed of nails.
European American
I must confess. I declared bankruptcy back in the late 80's. Not proud of that time in my life
but it was legal and it literally saved me. Since then, "If I can't buy that product/service with
the cash in my wallet, then I wasn't suppose to have it." has been my philosophy for the last
25 years, and even though the State stills owns my real estate, more or less (various taxes),
I'm basically free. Debt is a killer of ones mental, physical and emotional immune system. I highly
recommend avoiding IT at all costs. Debit card is the only plastic money in my wallet, along with
some fiat currency. My bank is the color of Gold and SIlver.
Welcome to the club. Been a member for about that long myself.
I knew I'd like the financial freedom. I knew I'd like how much money it saved me.
What it took a few years debt-free to understand was that in a world measured in debt, I
would become invisible. I can not be viewed using their technology any more. I'm
a steath bomber with glider wings and a zero coefficient of drag.
If the 100th monkey effect applies here, we will be part of an awakened populace that watches
the ctrl+alt+del of USD and the resultant house of cards.
As we know debt is not always a bad thing. Sometimes it is worth becoming an indentured
servent for a payout later.
We take out a loan, or at least most of us, for a house. This helps us build up equity
instead of wasting it all on rent every month. By retirement people should own their
home outright and not have to pay rent during their retirement. Most smart people are
even able to downsize and stick some money in their savings.
A large percentage of people take out a loan for school. We have all read articled
of idiots getting a 4 year degree in women's studies at a fancy private school, having a loan
of $120,000, and never being able to pay it off. But the smart people who go to school
maybe a state school, for a degree that is marketable do better than those without a degree.
A reliable car can help us save time, thus money, getting to and from work and other places.
The key buying something basic and reliable and not a brand new sports car.
I'm glad we have the ability to borrow money. It has helped me immensily in my own
personal life. And I would say, I would be worse off without it.
Ugh. You all know my screen name, what it stands for and my opinions on debt. Posting
up on this subject borders on the tedious for me, but for those who haven't heard it yet, here
it is....
If you have a valid financial reason for going into debt, that is to say you have a well-considered
goal for your debt exposure, debt is not necessarily bad. For instance, if you are going
to be a professional photographer you might need to buy some cameras and photography equipment
that will be necessary for you to exist in that world. You are INVESTING in yourself.
Nothing wrong with using debt for that if you can't pay as you go straight out of pocket.
Further down the totem pole is something like buying a house. A collateralized obligation.
One you have the USE of the asset while you pay it off. I'm less enthusiastic about this
sort of stuff but if it's a necessity (like having a place to live) I can't fault you for
doing it. BUT IT WILL NEVER MAKE YOU MORE PRODUCTIVE OR INCREASE YOUR EARNING POWER.
You feeling me on this? The key here is to pay that bitch down as fast as possible and minimize
your interest expense because it's a pure dead-weight loss to you.
ANYTHING else, you don't need to go into debt over. So just don't. Better to do
without than go into debt over anything beyond this point.
There really are very few exceptions to these simple rules (unless you are a government in
which case everything is an excuse to go into debt since you're just spending other people's money).
We should object to the neoliberal complete "instumentalization" of education: education became just a mean to get nicely paid job.
And even this hope is mostly an illusion for all but the top 5% of students...
And while students share their own part of responsibility for accumulating the debt the predatory behaviour of neoliberal universities
is an important factor that should not be discounted and perpetrators should be held responsible. Especially dirty tricks of ballooning
its size and pushing students into "hopeless" specialties, which would be fine, if they were sons or daughters of well to do and parent
still support then financially.
Actually neoliberalism justifies predatory behaviour and as such is a doomed social system as without solidarity some members of
financial oligarchy that rules the country sooner or later might hand from the lampposts.
Notable quotes:
"... It also never ceases to amaze me the number of anti-educational opinions which flare up when the discussion of student loan default arises. There are always those who will prophesize there is no need to attain a higher level of education as anyone could be something else and be successful and not require a higher level of education. Or they come forth with the explanation on how young 18 year-olds and those already struggling should be able to ascertain the risk of higher debt when the cards are already stacked against them legally. ..."
"... There does not appear to be much movement on the part of Congress to reconcile the issues in favor of students as opposed to the non-profit and for profit institutes. ..."
"... It's easy to explain, really. According to the Department of Education ( https://studentaid.ed.gov/sa/repay-loans/understand/plans ) you're going to be paying off that loan at minimum payments for 25 years. Assuming your average bachelor's degree is about $30k if you go all-loans ( http://collegecost.ed.gov/catc/ ) and the average student loan interest rate is a generous 5% ( http://www.direct.ed.gov/calc.html ), you're going to be paying $175 a month for a sizable chunk of your adult life. ..."
"... Majoring in IT or Computer Science would have a been a great move in the late 1990's; however, if you graduated around 2000, you likely would have found yourself facing a tough job market.. Likewise, majoring in petroleum engineering or petroleum geology would have seemed like a good move a couple of years ago; however, now that oil prices are crashing, it's presumably a much tougher job market. ..."
"... To confuse going to college with vocational education is to commit a major category error. I think bright, ambitious high school graduates– who are looking for upward social mobility– would be far better served by a plumbing or carpentry apprenticeship program. A good plumber can earn enough money to send his or her children to Yale to study Dante, Boccaccio, and Chaucer. ..."
"... A bright working class kid who goes off to New Haven, to study medieval lit, will need tremendous luck to overcome the enormous class prejudice she will face in trying to establish herself as a tenure-track academic. If she really loves medieval literature for its own sake, then to study it deeply will be "worth it" even if she finds herself working as a barista or store-clerk. ..."
"... As a middle-aged doctoral student in the humanities you should not even be thinking much about your loans. Write the most brilliant thesis that you can, get a book or some decent articles published from it– and swim carefully in the shark-infested waters of academia until you reach the beautiful island of tenured full-professorship. If that island turns out to be an ever-receding mirage, sell your soul to our corporate overlords and pay back your loans! Alternatively, tune in, drop out, and use your finely tuned research and rhetorical skills to help us overthrow the kleptocratic regime that oppresses us all!! ..."
"... Genuine education should provide one with profound contentment, grateful for the journey taken, and a deep appreciation of life. ..."
"... Instead many of us are left confused – confusing career training (redundant and excessive, as it turned out, unfortunate for the student, though not necessarily bad for those on the supply side, one must begrudgingly admit – oops, there goes one's serenity) with enlightenment. ..."
"... We all should be against Big Educational-Complex and its certificates-producing factory education that does not put the student's health and happiness up there with co-existing peacefully with Nature. ..."
"... Remember DINKs? Dual Income No Kids. Dual Debt Bad Job No House No Kids doesn't work well for acronyms. Better for an abbreviated hash tag? ..."
"... I graduated law school with $100k+ in debt inclusive of undergrad. I've never missed a loan payment and my credit score is 830. my income has never reached $100k. my payments started out at over $1000 a month and through aggressive payment and refinancing, I've managed to reduce the payments to $500 a month. I come from a lower middle class background and my parents offered what I call 'negative help' throughout college. ..."
"... my unfortunate situation is unique and I wouldn't wish my debt on anyone. it's basically indentured servitude. it's awful, it's affects my life and health in ways no one should have to live, I have all sorts of stress related illnesses. I'm basically 2 months away from default of everything. my savings is negligible and my net worth is still negative 10 years after graduating. ..."
"... My story is very similar to yours, although I haven't had as much success whittling down my loan balances. But yes, it's made me a socialist as well; makes me wonder how many of us, i.e. ppl radicalized by student loans, are out there. Perhaps the elites' grand plan to make us all debt slaves will eventually backfire in more ways than via the obvious economic issues? ..."
It also never ceases to amaze me the number of anti-educational opinions which flare up when the discussion of student loan
default arises. There are always those who will prophesize there is no need to attain a higher level of education as anyone could
be something else and be successful and not require a higher level of education. Or they come forth with the explanation on how young
18 year-olds and those already struggling should be able to ascertain the risk of higher debt when the cards are already stacked
against them legally. In any case during a poor economy, those with more education appear to be employed at a higher rate than
those with less education. The issue for those pursuing an education is the ever increasing burden and danger of student loans and
associated interest rates which prevent younger people from moving into the economy successfully after graduation, the failure of
the government to support higher education and protect students from for-profit fraud, the increased risk of default and becoming
indentured to the government, and the increased cost of an education which has surpassed healthcare in rising costs.
There does not appear to be much movement on the part of Congress to reconcile the issues in favor of students as opposed
to the non-profit and for profit institutes.
Ranger Rick, November 9, 2015 at 11:34 am
It's easy to explain, really. According to the Department of Education (
https://studentaid.ed.gov/sa/repay-loans/understand/plans
) you're going to be paying off that loan at minimum payments for 25 years. Assuming your average bachelor's degree is about $30k
if you go all-loans ( http://collegecost.ed.gov/catc/ ) and the
average student loan interest rate is a generous 5% ( http://www.direct.ed.gov/calc.html
), you're going to be paying $175 a month for a sizable chunk of your adult life.
If you're merely hitting the median income of a bachelor's degree after graduation, $55k (http://nces.ed.gov/fastfacts/display.asp?id=77
), and good luck with that in this economy, you're still paying ~31.5% of that in taxes (http://www.oecd.org/ctp/tax-policy/taxing-wages-20725124.htm
) you're left with $35.5k before any other costs. Out of that, you're going to have to come up with the down payment to buy a
house and a car after spending more money than you have left (http://www.bls.gov/cex/csxann13.pdf).
Louis, November 9, 2015 at 12:33 pm
The last paragraph sums it up perfectly, especially the predictable counterarguments. Accurately assessing what job in demand
several years down the road is very difficult, if not impossible.
Majoring in IT or Computer Science would have a been a great move in the late 1990's; however, if you graduated around
2000, you likely would have found yourself facing a tough job market.. Likewise, majoring in petroleum engineering or petroleum
geology would have seemed like a good move a couple of years ago; however, now that oil prices are crashing, it's presumably a
much tougher job market.
Do we blame the computer science majors graduating in 2000 or the graduates struggling to break into the energy industry, now
that oil prices have dropped, for majoring in "useless" degrees? It's much easier to create a strawman about useless degrees that
accept the fact that there is a element of chance in terms of what the job market will look like upon graduation.
The cost of higher education is absurd and there simply aren't enough good jobs to go around-there are people out there who
majored in the "right" fields and have found themselves underemployed or unemployed-so I'm not unsympathetic to the plight of
many people in my generation.
At the same time, I do believe in personal responsibility-I'm wary of creating a moral hazard if people can discharge loans
in bankruptcy. I've been paying off my student loans (grad school) for a couple of years-I kept the level debt below any realistic
starting salary-and will eventually have the loans paid off, though it may be a few more years.
I am really conflicted between believing in personal responsibility but also seeing how this generation has gotten screwed.
I really don't know what the right answer is.
Ulysses, November 9, 2015 at 1:47 pm
"The cost of higher education is absurd and there simply aren't enough good jobs to go around-there are people out there who
majored in the "right" fields and have found themselves underemployed or unemployed-so I'm not unsympathetic to the plight of
many people in my generation."
To confuse going to college with vocational education is to commit a major category error. I think bright, ambitious high
school graduates– who are looking for upward social mobility– would be far better served by a plumbing or carpentry apprenticeship
program. A good plumber can earn enough money to send his or her children to Yale to study Dante, Boccaccio, and Chaucer.
A bright working class kid who goes off to New Haven, to study medieval lit, will need tremendous luck to overcome the
enormous class prejudice she will face in trying to establish herself as a tenure-track academic. If she really loves medieval
literature for its own sake, then to study it deeply will be "worth it" even if she finds herself working as a barista or store-clerk.
None of this, of course, excuses the outrageously high tuition charges, administrative salaries, etc. at the "top schools."
They are indeed institutions that reinforce class boundaries. My point is that strictly career education is best begun at a less
expensive community college. After working in the IT field, for example, a talented associate's degree-holder might well find
that her employer will subsidize study at an elite school with an excellent computer science program.
My utopian dream would be a society where all sorts of studies are open to everyone– for free. Everyone would have a basic
Job or Income guarantee and could study as little, or as much, as they like!
Ulysses, November 9, 2015 at 2:05 pm
As a middle-aged doctoral student in the humanities you should not even be thinking much about your loans. Write the most
brilliant thesis that you can, get a book or some decent articles published from it– and swim carefully in the shark-infested
waters of academia until you reach the beautiful island of tenured full-professorship.
If that island turns out to be an ever-receding mirage, sell your soul to our corporate overlords and pay back your loans!
Alternatively, tune in, drop out, and use your finely tuned research and rhetorical skills to help us overthrow the kleptocratic
regime that oppresses us all!!
subgenius, November 9, 2015 at 3:07 pm
except (in my experience) the corporate overlords want young meat.
I have 2 masters degrees 2 undergraduate degrees and a host of random diplomas – but at 45, I am variously too old, too qualified,
or lacking sufficient recent corporate experience in the field to get hired
Trying to get enough cash to get a contractor license seems my best chance at anything other than random day work.
MyLessThanPrimeBeef, November 9, 2015 at 3:41 pm
Genuine education should provide one with profound contentment, grateful for the journey taken, and a deep appreciation
of life.
Instead many of us are left confused – confusing career training (redundant and excessive, as it turned out, unfortunate
for the student, though not necessarily bad for those on the supply side, one must begrudgingly admit – oops, there goes one's
serenity) with enlightenment.
"I would spend another 12 soul-nourishing years pursuing those non-profit degrees' vs 'I can't feed my family with those paper
certificates.'
jrs, November 9, 2015 at 2:55 pm
I am anti-education as the solution to our economic woes. We need jobs or a guaranteed income. And we need to stop outsourcing
the jobs that exist. And we need a much higher minimum wage. And maybe we need work sharing. I am also against using screwdrivers
to pound in a nail. But why are you so anti screwdriver anyway?
And I see calls for more and more education used to make it seem ok to pay people without much education less than a living
wage. Because they deserve it for being whatever drop outs. And it's not ok.
I don't actually have anything against the professors (except their overall political cowardice in times demanding radicalism!).
Now the administrators, yea I can see the bloat and the waste there. But mostly, I have issues with more and more education being
preached as the answer to a jobs and wages crisis.
MyLessThanPrimeBeef -> jrs, November 9, 2015 at 3:50 pm
We all should be against Big Educational-Complex and its certificates-producing factory education that does not put the
student's health and happiness up there with co-existing peacefully with Nature.
"You must be lazy – you're not educated."
"Sorry, you are too stupid for our elite university to admit, just as your brother was too poor for our rich club to let
in."
"I am going to kill you intellectually. I will annihilate you intellectually. My idea will destroy you and I don't have
to feel sorry at all."
Kris Alman, November 9, 2015 at 11:11 am
Remember DINKs? Dual Income No Kids. Dual Debt Bad Job No House No Kids doesn't work well for acronyms. Better for an abbreviated
hash tag?
debitor serf, November 9, 2015 at 7:17 pm
I graduated law school with $100k+ in debt inclusive of undergrad. I've never missed a loan payment and my credit score
is 830. my income has never reached $100k. my payments started out at over $1000 a month and through aggressive payment and refinancing,
I've managed to reduce the payments to $500 a month. I come from a lower middle class background and my parents offered what I
call 'negative help' throughout college.
my unfortunate situation is unique and I wouldn't wish my debt on anyone. it's basically indentured servitude. it's awful,
it's affects my life and health in ways no one should have to live, I have all sorts of stress related illnesses. I'm basically
2 months away from default of everything. my savings is negligible and my net worth is still negative 10 years after graduating.
student loans, combined with a rigged system, turned me into a closeted socialist. I am smart, hard working and resourceful.
if I can't make it in this world, heck, then who can? few, because the system is rigged!
I have no problems at all taking all the wealth of the oligarchs and redistributing it. people look at me like I'm crazy. confiscate
it all I say, and reset the system from scratch. let them try to make their billions in a system where things are fair and not
rigged...
Ramoth, November 9, 2015 at 9:23 pm
My story is very similar to yours, although I haven't had as much success whittling down my loan balances. But yes, it's
made me a socialist as well; makes me wonder how many of us, i.e. ppl radicalized by student loans, are out there. Perhaps the
elites' grand plan to make us all debt slaves will eventually backfire in more ways than via the obvious economic issues?
University of Phoenix is a typical diploma mill designed for producing debt-slaves... Private equity sharks like Mark DeFusco
try to devour weaker colleges, which no longer get enough state support.
The game plan is to strips assets like land and buildings. Essentially nobody can stop them.
Notable quotes:
"... Mr. DeFusco, 51, is a veteran of the for-profit-college industry. For the past five years, he's been a deal maker with Berkery Noyes, an investment bank that handles many mergers and acquisitions of education and information companies that often don't get publicized. From 2002 to 2005, as a new wave of private-equity investors came onto the scene, he was president of Vatterott College, a privately held institution based in St. Louis. He was a top manager at the University of Phoenix for 10 years before that, at a time when it was broadening its footprint and becoming the national powerhouse it is today. ..."
"... Voluble and refreshingly unslick, Mr. DeFusco was the guy on the PBS Frontline documentary College Inc. who, with just a little coaxing, memorably discussed how "very, very well" he and his University of Phoenix colleagues made out financially as the university expanded. "I did better than I ever imagined," he said on the show. ..."
"... It wasn't a pipe dream, he says. Working with a colleague with years of experience at Catholic colleges, Jack P. Calareso, president of Anna Maria College, he had identified 25 Catholic colleges, with enrollments ranging in size from 400 to 3,000, as acquisition targets. ..."
"... Two East Coast private-equity investors, he says, "committed more resources than I could spend"-about $500-million over four years. And he says they weren't the sort of investors looking for a fast buck. (The investors asked him not to reveal their identities; Mr. Calareso, who sat in on some of the meetings with investors and colleges, confirmed the details of the venture in an interview.) ..."
"... The idea, Mr. DeFusco says, was to operate the colleges with "a portfolio view," taking advantage of their strengths and economies of scale on things like marketing and student recruiting, keeping their Catholic mission, investing in new programs and facilities where it made sense, and eventually scrapping some programs that underperformed. ..."
Courtesy of Frontline, (c) 1995-2010 WGBH Educational Foundation
Mark DeFusco has worked with an investment bank and was a top manager at the U. of Phoenix.
Mark DeFusco has a new gig, and it may speak volumes about the evolving higher-education landscape and the fate of financially struggling
private colleges.
Until a few months ago, Mr. DeFusco was working with major investors on plans to buy and bundle up ailing regionally accredited colleges.
Now, believing that the once-friendly climate for such nonprofit conversions has grown chilly, he's shifted gears. Instead of buying
up troubled colleges, he's going to work with two veteran academics at the University of Southern California to form a consultancy focused
on saving them.
"I've been very busy these last five years telling for-profit businesses what's valuable" about themselves, says Mr. DeFusco. The
goal of the consultancy is to help nonprofits capitalize on their most valuable traits, too.
"We don't want to see potentially good assets fail," says Mr. DeFusco of the new venture, which will be run out of Southern Cal's
Center for Higher Education Policy Analysis and headed by Mr. DeFusco and the professors Guilbert C. Hentschke and William G. Tierney.
Considering how Mr. DeFusco has been in the thick of the education industry's most important trends for two decades, this latest
move is worth watching.
Mr. DeFusco, 51, is a veteran of the for-profit-college industry. For the past five years, he's been a deal maker with Berkery
Noyes, an investment bank that handles many mergers and acquisitions of education and information companies that often don't get publicized.
From 2002 to 2005, as a new wave of private-equity investors came onto the scene, he was president of Vatterott College, a privately
held institution based in St. Louis. He was a top manager at the University of Phoenix for 10 years before that, at a time when it was
broadening its footprint and becoming the national powerhouse it is today.
Voluble and refreshingly unslick, Mr. DeFusco was the guy on the PBS Frontline documentary College Inc. who, with just
a little coaxing, memorably discussed how "very, very well" he and his University of Phoenix colleagues made out financially as the
university expanded. "I did better than I ever imagined," he said on the show.
Until a few months ago, he thought he might have found another gold mine of a business, one that would be not only lucrative for
him and his enthusiastic investors, but also, he says, beneficial to higher education writ large.
His plan was to form an investor-backed "roll-up"-a company comprising several small nonprofit colleges that it would buy, and then
continue to operate, but with a single back-office operation for administrative functions.
"You could really have efficiencies" without each college having its own bursar, its own registrar, he says, replaying a theme that
many higher-education reformers before him have espoused.
It wasn't a pipe dream, he says. Working with a colleague with years of experience at Catholic colleges, Jack P. Calareso, president
of Anna Maria College, he had identified 25 Catholic colleges, with enrollments ranging in size from 400 to 3,000, as acquisition targets.
"I wanted to get to them before they got onto your list," he says, referring to
the list published in The Chronicle
last year citing the 100-plus nonprofit colleges that had failed the Department of Education's financial-responsibility test.
On Second Thought
Two East Coast private-equity investors, he says, "committed more resources than I could spend"-about $500-million over four
years. And he says they weren't the sort of investors looking for a fast buck. (The investors asked him not to reveal their identities;
Mr. Calareso, who sat in on some of the meetings with investors and colleges, confirmed the details of the venture in an interview.)
The idea, Mr. DeFusco says, was to operate the colleges with "a portfolio view," taking advantage of their strengths and economies
of scale on things like marketing and student recruiting, keeping their Catholic mission, investing in new programs and facilities where
it made sense, and eventually scrapping some programs that underperformed.
"I really wanted to get into heaven," he says. And the moves might have helped keep some traditional colleges alive, along with the
values they perpetuate. "When my kids go to college, I hope there is still tenure and there's still academic freedom."
Mr. DeFusco says he had support from two bishops and actually had in hand three letters of intent from colleges willing to be acquired.
(He wouldn't name them.) Then his lawyers advised him in early spring that the Higher Learning Commission of the North Central Association
of Colleges and Schools, a regional accreditor that had been known for allowing such conversions over the past five years, had begun
to take a tougher line. Eighteen of his 25 targets were in that accreditors' region.
The Higher Learning Commission rejected the conversion of nonprofit Dana College in July and of Rochester College in February, based
on new policies it adopted in June 2009 and toughened in February.
Mr. DeFusco says he got the message. Before that commission approves another conversion, he believes, "it's going to be a couple
of years-guaranteed."
Sylvia Manning, president of the commission since June 2008, says the new policy does not ban nonprofit-to-for-profit conversions-in
fact the continued reaccreditation of two converted institutions, Waldorf College in January and the College of Santa Fe in October,
came after the policy was adopted in June.
It was under her predecessor Steven D. Crow that institutions including the American College of Education (formerly Barat College),
Grand Canyon University, and Ashford University (formerly the Franciscan University of the Prairies) were acquired by companies and
allowed to significantly shift their emphasis to online education while keeping their accreditation.
She allows that in general, the new policy creates a much higher bar than what existed under her predecessor.
"It's quite possible people are reading this and are saying, 'Oh my God,'" Ms. Manning says, The new standards are not intended to
block purchases or keep new owners from introducing new styles of management and curricula to the institutions they're acquiring, she
says. "We're not saying you can't change them," she says of the colleges. But for colleges' accreditation to transfer upon a sale, "you
can't transform them."
Ms. Manning says she never spoke with Mr. DeFusco and declined to comment on his assessment of her commission's stance, or of his
sense that other regional accreditors are following suit. "My guess is that he's doing his own reading of tea leaves," says Ms. Manning.
A New Deal
Mr. DeFusco says many of the forces that would have made his roll-up venture a success lead him to believe that his shift in gears
toward a hands-on consulting project focused on struggling colleges will also keep him very busy, albeit probably with a smaller payday.
"A lot of schools are in trouble," says Mr. DeFusco. In the course of his research for his new venture, he and his team estimated
that 15 to 45 colleges could fail each year for the next five years.
Too many colleges are discounting their tuition too heavily in pursuit of students, needlessly holding onto underutilized property
that could better used to raise capital ("In this climate, those buildings are an anchor that drown you," he says), and maintaining
administrative functions that could be better handled through outsourcing or collaboration.
Worse, he says, many boards of trustees are unaware of the severity of their institutions' problems. If you were on the board of
a for-profit company operating like that, "you'd be sued," he says.
A tad less bluntly, Southern Cal's Mr. Tierney, a professor of higher education, echoes much of Mr. DeFusco's concern about the prospects
for higher education, especially in the near term. "Some of us are getting very sober about a rebound," he says. The policy-analysis
center has had a long interest in business-focused approaches and the role of markets in higher education. Mr. Tierney and Mr. Hentschke
have written or co-edited two books on for-profit colleges.
So the idea of teaming up with Mr. DeFusco (who himself received a Ph.D. from Southern Cal) to work as turnaround consultants and
help some colleges "stop the bleeding" was appealing, says Mr. Tierney. This month Mr. DeFusco will join the university as a senior
research associate at the center.
Although there is no shortage of consultants already mining this territory-Bain, Huron, the Education Advisory Board, and advisers
organized by the Association of Governing Boards, to name just a few-Mr. Tierney says the combination of Mr. DeFusco's business experience
and his and Mr. Hentschke's understanding of academic culture and the role of shared governance gives their venture a niche. Also, he
notes, it may be the first such higher-education consulting group to operate from within a university.
The consultants will help with short-term strategies, governance, and operational audits. They will also offer "workout" expertise;
workout is the term used when companies go out of business. As a university effort, the consultancy can also call upon the expertise
of other academics in the School of Education and the rest of the university. The consulting entity will pay a portion of its earnings
as overhead to Southern Cal in return for administrative support.
Mr. Tierney says he hopes to begin signing up clients by Labor Day. "If nobody calls by January 1, well, then this was an interesting
idea."
It all seems pretty fast-paced to Mr. Tierney. But that's been a lesson in itself for Mr. DeFusco, as he prepares to immerse himself
more directly in traditional academe. "August off?" he responded incredulously when Mr. Tierney told him the schedule. August is when
colleges are sweating the most over whether enough students will show up to cover the budget. "This is your most important month," he
says.
For higher education, this new gig may or may not be a bellwether. For Mr. DeFusco, it will certainly require some adjusting.
"... Despite somewhat different tactics, both the Republicans and the Democrats, as parties of Wall Street, aim to impose austerity on the working class in order to deal with the fiscal crisis of the state. The aim is to cut domestic programs and public services, and teacher unions are a prime target. Merit pay for teachers and union "flexibility" is a part of the Obama administration's education program. From this perspective, compliant union officials are a means to instruct teachers and other public employees to make concessions "voluntarily." This approach was articulated by a Wisconsin public official who defended teacher and other public unions' right to exist because unions have been a means to negotiate concessions in wages and benefits peacefully. But some ideologically driven Republican legislators want to go further to make deep cuts in the education budget and break teacher unions and organized labor entirely. This would eliminate the remaining organized working-class resistance against the attempt to make workers pay for the crisis, and would undermine a key support for the Democratic Party. ..."
Jammed into a thundering crowd of thousands of chanting people in Madison, Wisconsin, it looks
like a dam has broken. The new Wisconsin Tea Party governor brazenly accelerated what has been a
bipartisan agenda to undermine public education and weaken teacher and other public employee unions.
His "budget repair bill"-an assault on public employee unions, schools, and low-income health care-was
met with immediate, massive, determined resistance that began with a walkout by Madison public school
teachers.
Over three weeks, thousands of teachers, social workers, firefighters, and public and private
sector workers of every stripe have demonstrated in communities across the state and piled into busses
headed to the state capital. Protesters occupied the capital building for more than two weeks. Two
of the rallies were estimated at over one hundred thousand people. There were many signs, such as
"Recall Walker," "If you can read this, thank a teacher," and "Stop the War on Workers," but also
something more: handmade signs saying "This is Class War" and "End Corporate Greed." A young woman
at the rally on March 11 after the state legislature passed the governor's union-busting bill, held
up a placard proclaiming, "Teacher by Day, Freedom Fighter by Night."
As I write this, in March 2011, a sleeping giant is stirring. The broad U.S. working class has
absorbed blow after blow, concessions and job losses one after the other, stagnating wages for thirty
years, and two wars costing trillions of dollars. The greatest capitalist crisis since the Great
Depression brought a trillion-dollar bailout of the biggest banks and investment houses, the loss
of ten million homes to foreclosure by the banks, and 10 percent official unemployment. A broad process
of structural adjustment is under way to make the working and middle classes pay for the crisis created
by Wall Street. But recent attempts at the state level to impose austerity measures may be just too
much for people to take. The attack on public workers and sell-off of public assets-from schools,
to municipal utilities, to bridges and roads-may go too far. This is a watershed moment.
Despite somewhat different tactics, both the Republicans and the Democrats, as parties of
Wall Street, aim to impose austerity on the working class in order to deal with the fiscal crisis
of the state. The aim is to cut domestic programs and public services, and teacher unions are a prime
target. Merit pay for teachers and union "flexibility" is a part of the Obama administration's education
program. From this perspective, compliant union officials are a means to instruct teachers and other
public employees to make concessions "voluntarily." This approach was articulated by a Wisconsin
public official who defended teacher and other public unions' right to exist because unions have
been a means to negotiate concessions in wages and benefits peacefully. But some ideologically driven
Republican legislators want to go further to make deep cuts in the education budget and break teacher
unions and organized labor entirely. This would eliminate the remaining organized working-class resistance
against the attempt to make workers pay for the crisis, and would undermine a key support for the
Democratic Party.
In Wisconsin, union responses to the Tea Party agenda were mixed. Despite the fact that their
own data show real earnings for Wisconsin teachers declined by 2.3 percent over the last decade,1
the leadership of the Wisconsin Education Association Council and some other unions gave in to Walker's
demand for financial concessions early on. They drew the line, however, at automatic union dues collection
and the right to bargain collectively over working conditions such as class size, that affect children's
learning. Their slogan was "It's not about the money, it's about our rights [to bargain collectively]."
Other labor organizations, notably the South Central Federation of Labor in Wisconsin and the National
Nurses United, put the blame on Wall Street and called for closing corporate tax loopholes. The nurses
union said, "Working people did not create the recession or the budgetary crisis facing federal,
state and local governments-and there can be NO more concessions, period."2
There is a long and complex road ahead with no clear outcome. But education is the frontline in
class warfare by the rich against the working class. The assault on public education, teachers, and
their unions has been evolving over the past thirty years as part of the neoliberal restructuring
of the global capitalist economy, but the current crisis of capitalism has accelerated this assault.3
Education has been a key sector in the neoliberalization of social policy and the neoliberal political
economy of cities. The resistance to these policies has been broad at classroom and school levels
and in a growing movement of education activists allied with parents and students. Education, for
those in power, plays a key role in social reproduction of the labor force and in ideological legitimation
of the social order. Those who, conversely, have seen education as a way to strengthen democratic
participation in society and human liberation have always contested these goals. There is a rich
history of people of color, women, workers, educators, and social movements fighting for democratic,
inclusive, liberatory education. The crisis and the accelerated assault on teachers and public education
are sharpening the contest over the right to public education and the role of education in society.
In this article, I review the neoliberal project to restructure education, particularly its relationship
to neoliberal urban development, and responses to it. I discuss implications of privatization and
austerity measures for public education and its function in social reproduction. I argue that this
crisis is a moment of danger but also opportunity, not only to defend public education, but also
to reshape it as part of the struggle for a new social order based on human liberation.
Neoliberal Restructuring of Public Education
When President Obama appointed Arne Duncan, former-CEO of Chicago Public Schools, to head the
U.S. Department of Education in 2008, he signaled an intention to accelerate a neoliberal education
program that has been unfolding over the past two decades. This agenda calls for expanding education
markets and employing market principles across school systems. It features mayoral control of school
districts, closing "failing" public schools or handing them over to corporate-style "turnaround"
organizations, expanding school "choice" and privately run but publicly funded charter schools, weakening
teacher unions, and enforcing top-down accountability and incentivized performance targets on schools,
classrooms, and teachers (e.g., merit pay based on students' standardized test scores). To spur this
agenda, the Obama administration offered cash-strapped states $4.35 billion in federal stimulus dollars
to "reform" their school systems. Competition for these "Race to the Top" funds favored states that
passed legislation to enable education markets.
Race to the Top, although originating in U.S. government, is actually part of a global neoliberal
thrust toward the commodification of all realms of existence. In a new round of accumulation by dispossession,
liberalization of trade has opened up education, along with other public sectors, to capital accumulation,
and particularly to penetration of the education sectors of the periphery (e.g., Latin America, parts
of Asia, Africa). Under the Global Agreement on Trade in Services, all aspects of education and education
services are subject to global trade.4
The result is the global marketing of schooling from primary school through higher education. Schools,
education management organizations, tutoring services, teacher training, tests, curricula online
classes, and franchises of branded universities are now part of a global education market. Education
markets are one facet of the neoliberal strategy to manage the structural crisis of capitalism by
opening the public sector to capital accumulation. The roughly $2.5 trillion global market in education
is a rich new arena for capital investment.5
In the United States, charter schools are a vehicle to commodify and marketize education. Charter
schools are publicly funded but privately operated. They eliminate democratic governance, and, although
they may be run by nonprofit community organizations or groups of teachers or parents, the market
favors scaling up franchises of charter school management organizations or contracting out to for-profit
education management organizations that get management fees to run schools and education programs.6
For example, EdisonLearning, a transnational for-profit management organization, claims it serves
nearly one-half million students in twenty-five states in the United States, the United Kingdom,
and Dubai.7
The market mechanisms and business management discourses and practices that are saturating public
education in the United States are all too familiar to teachers and students worldwide. Globally,
nations are restructuring their education systems for "human capital" development to prepare students
for new types of work and labor relations.8
This policy agenda has been aggressively pushed by transnational organizations such as the World
Bank, International Monetary Fund, and Organization for Economic Cooperation and Development. Objectives
and performance targets are the order of the day, and testing is a prominent mechanism to steer curriculum
and instruction to meet these goals efficiently and effectively.
In the United States, the neoliberal restructuring of education is deeply racialized. It is centered
particularly on urban African American, Latino, and other communities of color, where public schools,
subject to being closed or privatized, are driven by a minimalist curriculum of preparing for standardized
tests. The cultural politics of race is also central to constructing consent for this agenda. As
Stephen Haymes argues, the "concepts 'public' and 'private' are racialized metaphors. Private is
equated with being 'good' and 'white' and public with being 'bad' and 'Black.'"9
Disinvesting in public schools, closing them, and opening privately operated charter schools in African-American
and Latino communities is facilitated by a racist discourse that pathologizes these communities and
their public institutions. But "failing" schools are the product of a legacy of educational, economic,
and social inequities experienced by African Americans, Latinos/as, and Native Americans.10
Schools serving these communities continue to face deeply inequitable opportunities to learn, including
unequal funding, curriculum, educational resources, facilities, and teacher experience. High stakes
accountability has often compounded these inequities by narrowing the curriculum to test preparation-producing
an exodus of some of the strongest teachers from schools in low-income communities of color.11
Neoliberalization of public education is also an ideological project, as Margaret Thatcher famously
said, to "change the soul," redefining the purpose of education and what it means to teach, learn,
and participate in schooling. Tensions between democratic purposes of education and education to
serve the needs of the workforce are longstanding. But in the neoliberal framework, teaching is driven
by standardized tests and performance outcomes; principals are managers, and school superintendents
are CEOs; and learning equals performance on the tests with teachers, students, and parents held
responsible for "failure." Education, which is properly seen as a public good, is being converted
into a private good, an investment one makes in one's child or oneself to "add value" in order better
to compete in the labor market. It is no longer seen as part of the larger end of promoting individual
and social development, but is merely the means to rise above others. Democratic participation in
local schools is rearticulated to individual "empowerment" of education consumers-as parents compete
for slots in an array of charter and specialty schools. In Chicago, twelve thousand parents and students
attended the 2010 "High School Fair" sponsored by Chicago Public Schools, and six thousand attended
the "New Schools Expo" of charter and school choice options. The political significance of this neoliberal
shift stretches beyond schools to legitimize marketing the public sector, particularly in cities,
and to infuse market ideologies into everyday life.
Nowhere did the rollback of social welfare policies and public institutions occur with greater
force than in hurricane-devastated New Orleans. In the words of George Lipsitz, the aftermath of
hurricane Katrina ushered in an orgy of "legalized looting to enable corporations to profit from
the misfortunes of poor people."13
Education was at the leading edge. The state at all levels, in alliance with local and national capital
and neoliberal think tanks, took advantage of the chaos wreaked by Katrina and the exodus of low-income
working-class African Americans from the city to dismantle their public schools. This was a strategic
move to exclude low-income African Americans from the city altogether. They not only had no homes
to return to, they had no schools. Before Katrina hit in August 2005, there were sixty-three thousand
students in New Orleans public schools; about twenty-four thousand began classes there in the fall
of 2008.14
Just weeks after the hurricane, the state of Louisiana took over one hundred public schools and
began turning over millions of dollars of taxpayer money to private organizations to run them. The
state dismissed all forty-five hundred public school teachers, broke the city's powerful black-led
teachers' union, and dismantled the school system's administrative infrastructure.15
Right-wing foundations quickly issued reports calling for vouchers, and President Bush proposed $1.9
billion for K-12 students with $488 million targeted for vouchers to be used in schools anywhere
in the country. An influential report by the Urban Institute hailed New Orleans as an opportunity
for a grand experiment to decentralize and privatize the public school system through vouchers and
charter schools.16
Less than a month after the hurricane devastated the city, the U.S. Department of Education gave
the state of Louisiana $20.9 million to reopen existing charter schools and open new ones, and nine
months later, the department gave the state an additional $23.9 million for new charter schools,
most in New Orleans. Prior to Katrina, there were five charter schools in the city. After the hurricane,
the state took over most of the schools and established the Recovery School District, an open arena
for charter schools. Of the fifty-five schools opened in New Orleans in 2006-2007, thirty-one were
public charter schools.17
In 2010, out of eighty-eight public schools in New Orleans, sixty-one were charters run by a variety
of operators.18
The pro-market Fordham Foundation judged New Orleans the best city in the United States for charter
school expansion.19
All this was done by government fiat guided by think tanks such as the Urban Institute, and backed
by corporate foundations such as the Gates Foundation. Excluded were the working-class African American
and Latino/a parents, students, teachers, and community members, many of whom had been literally
excluded from the city itself by redevelopment policies that made it impossible to return.20
It would be hard to deny that New Orleans's schools were in bad shape before the hurricane. In
1997 per-pupil school funding was 16 percent lower than the average of poorly funded urban districts
nationally.21
The New Orleans situation reflects a long-term pattern of disinvestment in inner-city areas, beginning
with cuts in federal funding to cities in the 1980s, followed by the shift to an entrepreneurial
model of urban governance that prioritizes attracting private investment, tourism, and real estate
investment.22
Today charter schools in New Orleans are part of creating a "good business climate" in a "revitalized"
(gentrified) whiter New Orleans.
Chicago–Disinvestment, Privatization, and Gentrification
Chicago is another exemplar of the logic of disinvestment and privatization that is playing out
in urban school districts.23
Chicago's Renaissance 2010 education plan was carried out in partnership with the state and the Commercial
Club of Chicago, an organization of the powerful corporate and financial interests in the city. The
object was to close public schools and expand charter schools. It has become a national model enshrined
in the propagandistic claim of "the Chicago Miracle." Across African-American communities, the mayoral-appointed
school board has closed schools on the grounds of low achievement. Others, particularly in gentrifying
Latino/a communities, have been closed for low enrollment, despite evidence to the contrary. The
board has replaced neighborhood schools with charter schools or selective enrollment schools that
most neighborhood children are unable to attend. School closings have resulted in increased mobility,
spikes in violence, and neighborhood instability as children are transferred to schools out of their
neighborhoods.24
Moreover, Renaissance 2010 has not increased educational opportunities for most students, with 80
percent of displaced students attending schools no better than the ones that were closed.25
This policy eliminates schools that are anchors in their communities, contributing to further
disinvestment. In gentrifying areas, closing neighborhood schools and replacing them with schools
branded for the middle class facilitates the displacement of working-class families. Chicago, like
New Orleans, is an example of the intertwining of education policy and neoliberal urban development.
Real estate development is a pivotal sector in urban economies, and closing neighborhood public schools
in disinvested areas to open up elite, selective-enrollment public schools or prestigious charter
schools is part of the neoliberal restructuring of urban space.26
This nexus of education policy and real estate development is located in the spatial logics of capital-the
physical location of production facilities, the built environment of cities, and places of consumption
are devalued and selectively rebuilt in order to establish a "new locational grid" for capital accumulation.27
In other disinvested, low-income neighborhoods, students attending under-resourced and struggling
public schools are a ready consumer base for the proliferation of charter schools, particularly large
charter school chains that target these areas.
In response, parents, teachers, and students are challenging school closings and market solutions,
and are demanding democratic participation and community-driven processes to improve public schools
and increase resources. In fall 2010, parents at an elementary school in a Mexican immigrant community
in Chicago occupied a school field house for forty-three days to force the school board to agree
to construct a school library. In 2001 parents in another working-class Mexican neighborhood were
compelled to conduct a nineteen-day hunger strike to get a new high school in their community, after
the school board had used funds allocated for their school to build two state-of-the-art, selective-enrollment
high schools in gentrifying areas of the city. Both of these actions followed years of petitioning
the mayor-appointed board of education with no results. Organized resistance to neoliberal policies
has prevented some school closings and, most significantly, also spawned a progressive caucus that
won the leadership of the Chicago Teachers Union, the third largest teachers' union local in the
country.
The "Good Sense" in Neoliberal Education Policy
Yet some measures to reign in teacher unions have support on the ground, as teachers and parents
have gravitated to privately run charter schools and vouchers. Certainly venture philanthropists
(such as the Gates and Fordham Foundations), charter school operators, business federations (such
as Chicago's Commercial Club), and politicians of both parties have deployed enormous economic, political,
and symbolic resources to promote education markets and performance pay for teachers as the only
alternative to struggling neighborhood public schools and "bad" teaching.28
They have raised the cap on charter school expansion, funded charter school ventures, and established
policies like those in New Orleans and Chicago to expand education markets. However, neoliberal policies
are not simply imposed from above. They also materialize through the actions of parents and teachers
navigating a disinvested, degraded, and often racist public school system. Looked at this way, neoliberalism
is a process that works its way into the discourses and practices of schools, through the actions
of not only elites, but also marginalized and oppressed people acting in conditions not of their
own making.
Tom Pedroni demonstrates this in his study of African-American parents' participation in the Milwaukee
voucher movement.29
Pedroni interprets the participation of African-American parents in the voucher program against a
background of prolonged struggles and failures to win a modicum of educational equity and respect
for their children and themselves as public school parents. Pedroni argues that, for these parents,
the identity of educational consumer offers greater dignity and agency than that of citizen-supplicant
to an unresponsive and racist public school system that has never fully included African-American
children. Like charter school parents and teachers I interviewed in Chicago, Pedroni proposes that
parents see themselves as education consumers in the face of a post-welfare state that offers no
real alternative.30
Drawing on Gramsci's theory of "good sense" in the ideological construction of hegemonic social alliances,
this insight is an opening to reframe the struggle to defend public education by drawing on the real
concerns of parents who ally themselves with education markets.
There is no point in romanticizing public schools (or other welfare state institutions). While
they have provided free universal education and spaces where people can make claims for justice,
and are sometimes empowering and liberating, they have historically been saturated with inequalities
and exclusions.31
The benefits the white middle class has had from public schools have often been allowed it to ignore
a thoroughly inequitable public school system. Critical education scholars have long criticized public
schools for reproducing a stratified labor force and the dispositions and ideologies that support
capitalism, racism, and gender oppression. Exclusionary, paternalistic, disrespectful, even brutal
treatment of African American, Latino/a, and other people of color and women at the hands of public
housing authorities, public hospitals, the police and judicial systems, public welfare agencies,
elected officials, city agencies, and schools make existing public institutions deeply problematic
places. And teacher union leaders have too often failed to take up progressive causes and ally themselves
with working-class parents and communities of color.32
Understanding the appeal of charter schools, choice, and teacher accountability is essential to
build alliances not only to defend public education in this period but to develop a program for democratic
and just public schools, as well. Resisting predatory neoliberal policies requires acknowledging
and grappling with the exclusions and inequities of public institutions.33
This raises the questions: What of public education do we wish to defend; what must be reconstructed,
and how can it fulfill its democratic potential?34
Structural Adjustment and Education
As the Great Financial Crisis of 2007-08 hit, the Bush and Obama administrations, in league with
Wall Street, moved swiftly to socialize the losses of investors through massive taxpayer funded bailouts.
This was followed by furloughs (wages cuts) for public workers and worker concessions in the bailed-out
private sector (e.g., auto) under the rationale that "there is no alternative" and "we all have to
sacrifice."
As the crisis continues to reverberate, states and municipalities face fiscal crises of monumental
proportions. The loss of tax revenues combined with government losses in the financial markets have
thrown state budgets across the country into massive debt. Public worker pension funds, health insurance
benefits, and funding for public services are in real trouble. At the time of this writing, California
has a projected budget deficit of $28 billion over the next eighteen months.35
Instead of raising taxes on the rich and corporations, state governments are selling off public assets
and imposing austerity measures on the poor, workers, and the middle class, with public-sector workers
an immediate target. The state of California is instituting draconian cuts in education, health,
and programs for youth and the elderly. This scenario is repeated in state legislatures and city
halls across the country. In Wisconsin, Walker pushed through $100 million in tax cuts to corporations,
while his bill would cut over $800 million for education alone.36
The broad working class is expected to endure repeated reductions in wages, pensions, and hard-won
benefits, drastic cuts in public services, and further loss of personal assets, particularly homes,
while municipal services and infrastructure such as bridges and roads are sold off to investors.
City governments are particularly hard hit by the crisis because of their reliance on real estate
taxes, housing markets, and investments in financial markets. Urban school districts have already
laid off thousands of teachers, increased class sizes, pushed to reduce teacher pensions, and cut
out music, gym, kindergarten, bilingual programs, after-school and youth programs, and more. These
austerity measures are certain to hit hardest those least able to bear them, low-income schools of
color, where these are the very programs that offer some hope.37
Dangers and Opportunities of the Present Moment
Social austerity ultimately creates contradictions for capital as well. As capital continues to
flow into the inflated financial sector at the expense of the productive sector, and as the state
pays for the crisis with cuts in education and general social welfare, there is an unfolding crisis
of social reproduction.38
Public education plays an important role in the reproduction of the labor force, political legitimation,
and social stability. The problem with franchising and contracting out schools to an assortment of
private operators is that the state has less control over these functions of schools. Inflated class
sizes, cuts in education programs, and teachers' eroding salaries and working conditions can only
degrade public education, particularly in low-income schools. This will exacerbate an already two-tiered
education system. Detroit's Emergency Financial Manager Robert Bobb (a graduate of the Broad Foundation's
Superintendent Academy) has proposed closing half the district's schools and putting up to sixty
students in a classroom.39
Under Governor Walker's plan, two thousand Wisconsin teachers and school staff would lose their
jobs, and the average teacher would lose $5500 to $7000 in net compensation. The average 2011 teacher
salary in Wisconsin is $50,627.40
According to a new report by the OECD (Paine & Schleicher, 2011), the pay, working conditions, and
qualifications of U.S. teachers are already low in comparison with those of teachers in other advanced
economies.41
From the standpoint of capital, serious disinvestment in public education has consequences for the
preparation of its workforce. It also has implications for social stability, with more students in
affected schools dropping out. The security state is a looming presence in this scenario.
Wisconsin foreshadows the political cost of undermining the living standards and expectations
of those who have come to be defined as "middle class," such as teachers. The Tea Party agenda is
laying bare the capitalist offensive against the working class. A twenty-foot long banner proclaiming,
"Tax the Rich" hung from the third floor of the Wisconsin State Capitol rotunda throughout the people's
occupation. With leaflets and treatises plastering the walls of the capitol, rallies filled with
home-made placards, and hours of conversation between unlikely allies, the three-week-long Wisconsin
occupation and rallies were a giant democratic political forum. And this was replicated in town squares
throughout the state. For many, this was their first political protest.
The results of this politicization are yet to be seen, but the budget bills themselves are making
connections for people between cuts in education and the assault on teacher unions with those of
other public- and private-sector workers and farmers. Legions of firefighters and their families
from towns around the state marched militantly through the capitol building, fists pumping the air
as they chanted, "The workers united will never be defeated."
In addition to slashing state aid to public schools by nearly $834 million, Walker has proposed
sweeping changes to Medicaid-funded programs including BadgerCare, which provides health coverage
to low-income Wisconsin families, and a $96 million cut in aid to local governments, including cities,
towns, and counties. At the rally of over one hundred thousand on March 12, farmers, in a show of
"Farm Labor Unity," drove their tractors to Madison for a "tractorcade" around the capitol building.
Roughly eleven thousand farmers receive BadgerCare. This is a compelling moment to connect attacks
on education to the capitalist crisis, particularly the parasitic financialization, war spending,
and tax cuts for the rich that have looted the public coffers, bankrupted states, and threaten our
schools. This is, moreover, an opportunity to expose the crisis-ridden logic of capitalism itself
and to engage in serious discussion about the world we wish to see.
The Potential of an Education Movement
In the past few years, a multifaceted education movement in and outside classrooms has emerged
against neoliberal education restructuring and in resistance to racism, gender and heterosexist oppression,
and militarization of schools. Liberatory education projects and social-justice-oriented schools
have sprouted up in cracks in the public system. There are freedom schools and popular education
projects outside public schools, and community-based youth activist organizations across the country.
The immigrant rights movement and organized opposition to the criminalization of youth through the
"school to prison pipeline" have begun to link political and educational issues. Organizations of
activist teachers and community educators in a number of cities have joined together to form national
networks. (The Education for Liberation Network and Teacher Activist Groups are examples.) These
groups have joined parents and students in community coalitions to stop school closings and privatization,
prevent mayoral takeovers of urban school districts, defend undocumented students, and challenge
high-stakes testing. With the victory of a progressive caucus to lead the Chicago Teachers Union,
there is also a significant progressive force in the heart of the American Federation of Teachers.
Although there is some overlap, these various streams are not yet organized around a coherent program
or analysis of the problem.42
The outpouring of teachers and other workers against union busting and austerity budgets has changed
the terrain. Thousands of people who have never attended a protest before are in the streets and
engaged politically. So far, this motion is mainly defensive, and some are willing to make concessions
to help capitalism extricate itself from the crisis.43
On the one hand, there is the possibility that the protests will be subsumed by the electoral politics
of the Democratic Party, much like the current focus in Wisconsin on recalling Republican legislators,
or diverted to scapegoating people of color and immigrants. On the other hand, the challenge to taken-for-granted
living standards opens a space to see social arrangements differently. This is a moment that can
reveal the systemic connections between the bailout of Wall Street and social privations, a moment
to connect attacks on workers with other social struggles-particularly to see the common threads
between wars for domination, oppression of people of color, and the unfolding austerity regime.44
Buried in Governor Walker's proposed 2012-2013 budget is a measure to repeal access to in-state
tuition for undocumented students and eliminate Food Share benefits (food stamps) for documented
("legal")immigrants.45
How Wisconsin's majority white teachers, union members, and farmers will respond will be important.
Bridging deep divisions along lines of race, ethnicity, and immigrant status, and challenging racial
oppression are central to building a counter-hegemonic alliance with the power to defeat austerity
measures and move toward a proactive politics that challenges capitalism itself. Although it is only
now coalescing, a movement that links education with immigrant rights and other social struggles
can play an important role in teacher unions and in student community, and parent organizations.
In classrooms, critical educators are positioned to help young people understand why their schools
are under attack and to "connect the dots" to the structural crisis of capitalism. Revitalized teacher
unions are in a strategic position to insist that Wall Street pay for the crisis. Although the U.S.
context is different, there is much to learn from social movement teacher unionism outside the United
States (e.g., in Oaxaca, Honduras, and South Africa) and its central role in social struggles for
democracy, against neoliberalism, and for social liberation.46
This is a moment not simply to defend the public education we have, but to advocate for a just, inclusive,
democratic, humanizing education that prefigures the society we wish to have-one premised not on
exploitation but on the full development of human beings in social solidarity.
Pauline Lipman (plipman [at] uic.edu) is an education activist and professor of educational
policy studies at University of Illinois at Chicago. Her latest book is The New Political Economy
of Urban Education: Neoliberalism, Race, and the Right to the City (2011).
"... Well, we all know thats ********. The real unemployment rate is 21.2% (shadow stats). ..."
"... Fields of occupation that do make money are saturated. You get your foot in the door via 2 ways: sheer luck or you know someone in that field. ..."
"... Most jobs offered are at minimum wage. Another big secret that is never told. The average hours worked in the US is 34.5. Part time. Also, missing here is what kind of degree students in the study are graduating with. So I assume this is bachelor degrees. Something looked upon today as increasingly like an associate's degree, meaning if you really want to risk more debt & RISK that you MIGHT find a job when you graduate, you will need a Masters or a doctorate. This increases your loan burden to 60,000 for your average masters or more. 100,000+ for a doctorate. ..."
"... Student loans and the increasing need for a Masters degree is a major scam to accrue more debt slavery. A Masters DOES NOT increase your chances Today of a job in your field of study. Ten years ago my daughter graduated with 8 friends and only 2 got jobs in their chosen fields of study, one a teacher who doesn't make much at 37,000 a year and the other went on to get a doctorate and did get a job in her chosen field of study at great pay but with nearly 200,000 in student loan debt ..."
"... Parents need to get involved in all facets of determining aptitude and major selection that can pay dividends in the job market. Too many kids just go to college as an extension of high school with the "I'll figure it out later" attitude. These are also the ones you see working as cashiers ..."
American students carry an aggregate pile of student loan debt equivalent to roughly $1.5 trillion,
a
generational burden
that has helped contribute to plunging birth rates, lower home-ownership rates among young
people, and even lower rates of stock ownership, as more young people dedicate more financial resources to paying down
debt.
But to gauge
exactly
how much a students' finances factor into their decisions
about which school to attend and which majors to choose,
MidAmerica Nazarene University surveyed 2,000 recent graduates from around the country to learn more about how they
financed their degrees, and how much they will owe after graduation.
Given the cost of higher education in the US, the majority of students answered that post-grad job prospects influenced the
major they selected (those who answered 'no' either really enjoy studying STEM, or majored in gender studies).
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It might seem surprising given the financial stakes, but the survey also showed that more than 60% of recent grads didn't
have jobs lined up when they received their diplomas.
For those who did choose their careers based on financial considerations, a majority said they would have picked another
line of work if finances weren't a consideration (but hey, we can't all be artists).
Once upon a time, there wasn't as much of a correlation between a students' field of study and their eventual chosen career
(investment bankers who studied English at Middlebury College wound up on Wall Street thanks to 'Uncle Jim's' connections).
But as the world of higher education becomes increasingly costly and cut throat, situations like this are becoming
increasingly rare.
One of the more telling data points in the study was the gauge of graduates' feelings about the job market.
Even
with unemployment at multi-decade lows, a majority of graduates had a negative outlook on the job market.
PhD Millionaire who called Dotcom crash, housing bust, and market's surge since '09 is now predicting a 'cash
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The overwhelming majority of students took out loans to pay for some or all of college, with 71% taking out loans and the
average amount borrowed equivalent to just over $25,000.
In addition to taking on loans, most college students receive at least some help from family members or other sources, as
only one-quarter of respondents said they completely self-financed their degree.
On average, students expect to pay off their loans in 9.5 years, meaning that most of these students will be in their
mid-30s when they finally reach a zero balance.
Imagine what that number would be if students had no help from their families?
Even with unemployment at multi-decade lows, a majority of
graduates had a negative outlook on the job market."
Well, we
all know thats ********. The real unemployment rate is 21.2% (shadow
stats).
There is a gap here as to why these graduates don't have jobs
lined up when they graduate, which is not mentioned in the article.
1. Fields of occupation that do make money are saturated. You get
your foot in the door via 2 ways: sheer luck or you know someone in
that field.
2. Most jobs offered are at minimum wage. Another big secret that
is never told. The average hours worked in the US is 34.5. Part time.
Also, missing here is what kind of degree students in the study are
graduating with. So I assume this is bachelor degrees. Something
looked upon today as increasingly like an associate's degree, meaning
if you really want to risk more debt & RISK that you MIGHT find a job
when you graduate, you will need a Masters or a doctorate. This
increases your loan burden to 60,000 for your average masters or
more. 100,000+ for a doctorate.
3. Student loans and the increasing need for a Masters degree is a
major scam to accrue more debt slavery. A Masters DOES NOT increase
your chances Today of a job in your field of study. Ten years ago my
daughter graduated with 8 friends and only 2 got jobs in their chosen
fields of study, one a teacher who doesn't make much at 37,000 a year
and the other went on to get a doctorate and did get a job in her
chosen field of study at great pay but with nearly 200,000 in student
loan debt.
Before offshoring Americans not cut out for college went to work
at the local plants like their parents did. The propaganda ever since
has been you're a nobody and has been, only to attend college
accruing tens of thousands of debt, to wind up in some **** minimum
wage job because you can't find one in YOUR field of study or you can
and learn that starting pay is minimum wage but you take whatever is
offered because if you don't you're in trouble when loans come due 6
months later.
And that right there turns promising young people into debt
slaves. Just as is planned by *** oligarchs at the FED RESERVE.
Parents need to get involved in all facets of determining aptitude
and major selection that can pay dividends in the job market. Too
many kids just go to college as an extension of high school with the
"I'll figure it out later" attitude. These are also the ones you see
working as cashiers who damn near have a **** hemorrhage when they
have to make change without the help of the register. Do your kids a
solid and work with them in their career quests and by all means, get
involved with their education and most important, read to them when
they're young. It is ******* criminal to charge tremendous
tuition and graduate students ill prepared for the challenges of
life. Then again if you got the cash, you can probably buy a degree
from some Cuck in the Dean's office!
when I graduated College (Cumlaude btw) nobody lined up to hand me
decent job with nice salary. AND we didn't have Lyft or Uber back
then. so what's changed besides the fact that we have Uber and
Lyft?
Here in shitinois, there is harper college, which is free if you pay
your real estate taxes and maintain good grades. Why the **** would
anyone pay for a university to bend you over.
Because the economy never recovered from 2008-2009. The only thing
that came out of that crisis is cheaper and easier debt.
People
bash millennials but then neglect to acknowledge the generation that
raised them. This **** storm started with the Baby Boomers and has
only gotten worse.
Here's things most millennials weren't doing in 2008/2009:
1.) Buying more house than they could afford with those great
teaser rates
2.) Selling mortgages for houses people couldn't afford.
3.) Running TBTF banks.
4.) Using derivatives to hedge derivatives to hedge derivatives.
5.) Working in Washington, voting to bail out said TBTF banks,
even though we operate in a "capitalist" country.
I'm not making up excuses for my situation because I'm not saddled
with loan debt, have a good job, and am self-supporting. But let's
lay the blame where it should be. On the Boomers. The generation
that had it the easiest out of all of them and basically contributed
nothing positive to society other than piling up debt.
What should be pointed out imo, is that a major amounts of Graduates
have just went thru 4-6 years of a Liberal Borg.
They are
un-hire-able, brain washed, worthless air breathing parasites.
Those who have interned or worked at firms within their chosen
profession, built relationship's, showed ability to perform and
contribute, will be hired if not already.
Those Libtard Borg stooges will have to go back to Mom's Basement
for further instruction..............
very wrong. american engineers and computer science graduates stay
jobless while corps hire from india and china. look at youtube
vids of google staff meetings...
Not wrong at all, I have worked with freshly graduated
Mechanical and Electrical Engineers. For years they were
actually put with me once per month for a full 5 days. 3 at a
time usually for training.
Everything I stated above is 100
% spot on, Fact. They usually are complete idiots. Not worth
having around, at all.
There is nothing more useless than a newly graduated
engineer. I was useless when I graduated with my BSCHE 40+
years ago. It takes around five to ten years before an
engineer is really contributing.
I actually had a few but each and everyone of them grew
up within family trades, or worked at a trade so they had
great hands on experience way prior to going to College.
Most put their way through school or contributed at
similar trades to sharpen their skills.
I was very
similar and was lucky to have some guide me in the
correct direction at that age imo. It did help, a
lot...........
So social justice gender studies doesn't have a real job? Well No
****!!!!
These universities aren't teaching these kids ANYTHING of
any use for the real world and employers know that! Within the next
few years, a liberal degree in whatever will be completely useless.
Enjoying payback your loans dumbasses
The next generation better be taking notes and looking at a trade
for high school!
I have a a job for a fresh college grad. If you are cute, haven't
slept with all the college athletes, have a non-land-whale decent
body and can cook a meal that doesn't taste like crap.
Reply to my comment here and I have an opening for a sugar bay - aka
sexy college girl wifey ;)
In return I will provide you with a free place to live, feed you,
take care of you and this will be a temporary arrangement until you
can prove that you won't leave me with 50% of my life savings by
going to court.
Roomate prenup shall be signed electronically before you move in with
me.
They don't have jobs lined up because the want ads aren't hiring
300lb, green and purple haired, nose ring wearing, transgendered
justice warrior promoting, half-vegan, pedo, ***, basket weavers for
their company.
I didn't either. Took the whole summer off to party. Sometime
around September I started looking for a job. Not one God damned job
offered for an economist (that was my major). What a rip, I
thought. So I ended up where everyone else ends up- sales. It was
at that job I actually got an education.
Most college grads had no buisness going to college in the first
place.
Some of the dumbest people got into these colleges. Then
they took out loans so they could get a job to pay off their student
loan debt. Congratulations, you played yourselves.
Out of high school they would have had the ability to dig
ditches. But after 4 years of liberal arts and feminism
training, they aren't even capable of stringing together a
coherent sentence.
How about showing WHICH majors these idiots went for and then
correlate that to the jobs and salaries that are ACTUALLY available
for those majors......a major in Art History WON"T FIND A JOB... .a
Engineering major is ALREADY GETTING OFFERS, their junior year. QUIT
WASTING MONEY ON WORTHLESS DEGREES. That alone solves EVERY problem
in this article
In this article, we explore commodities and consumption , two concepts that
are central to critiques of the neoliberal university. By engaging with these concepts, we
explore the limits of neoliberal logic. We ground this conceptual entanglement in Marxist and
post-Marxist traditions given our understanding of neoliberalism both as an extension of and as
a meaningfully different form of capitalism. As colleges and universities enact neoliberal
economic assumptions by focusing on revenue generation, understanding students as customers,
and construing their faculty as temporary service providers, the terms commodity and
consumption have become commonplace in critical higher education literature. When
critiques concerning the commodification and consumption of higher education are connected with
these theoretical and conceptual foundations, they not only become more effective but also
provide a more meaningful guide upon which current and future scholars can build.
"... The solution is the privatization of everything (hence the slogan "let's get governments off our backs"), which would include social security, health care, K-12 education, the ownership and maintenance of toll–roads, railways, airlines, energy production, communication systems and the flow of money. (This list, far from exhaustive, should alert us to the extent to which the neoliberal agenda has already succeeded.) ..."
"... The assumption is that if free enterprise is allowed to make its way into every corner of human existence, the results will be better overall for everyone, even for those who are temporarily disadvantaged, let's say by being deprived of their fish. ..."
"... the passage from a state in which actions are guided by an overarching notion of the public good to a state in which individual entrepreneurs "freely" pursue their private goods, values like morality, justice, fairness, empathy, nobility and love are either abandoned or redefined in market terms. ..."
"... Neoliberalism, David Harvey explains, delivers a "world of pseudo-satisfactions that is superficially exciting but hollow at its core." ("A Brief History of Neoliberalism.") ..."
"... Harvey and the other critics of neoliberalism explain that once neoliberal goals and priorities become embedded in a culture's way of thinking, institutions that don't regard themselves as neoliberal will nevertheless engage in practices that mime and extend neoliberal principles -- privatization, untrammeled competition, the retreat from social engineering, the proliferation of markets. These are exactly the principles and practices these critics find in the 21st century university, where (according to Henry Giroux) the "historical legacy" of the university conceived "as a crucial public sphere" has given way to a university "that now narrates itself in terms that are more instrumental, commercial and practical." ("Academic Unfreedom in America," in Works and Days.) ..."
"... This new narrative has been produced (and necessitated) by the withdrawal of the state from the funding of its so-called public universities. If the percentage of a state's contribution to a college's operating expenses falls from 80 to 10 and less (this has been the relentless trajectory of the past 40 years) and if, at the same time, demand for the "product" of higher education rises and the cost of delivering that product (the cost of supplies, personnel, information systems, maintenance, construction, insurance, security) skyrockets, a huge gap opens up that will have to be filled somehow. ..."
"... Faced with this situation universities have responded by (1) raising tuition, in effect passing the burden of costs to the students who now become consumers and debt-holders rather than beneficiaries of enlightenment (2) entering into research partnerships with industry and thus courting the danger of turning the pursuit of truth into the pursuit of profits and (3) hiring a larger and larger number of short-term, part-time adjuncts who as members of a transient and disposable workforce are in no position to challenge the university's practices or agitate for an academy more committed to the realization of democratic rather than monetary goals. In short , universities have embraced neoliberalism. ..."
Here is an often cited definition by Paul Treanor: "Neoliberalism is a philosophy in which
the existence and operation of a market are valued in themselves, separately from any previous
relationship with the production of goods and services . . . and where the operation of a
market or market-like structure is seen as an ethic in itself, capable of acting as a guide for
all human action, and substituting for all previously existing ethical beliefs."
("Neoliberalism: Origins, Theory, Definition.")
In a neoliberal world, for example, tort questions -- questions of negligence law -- are
thought of not as ethical questions of blame and restitution (who did the injury and how can
the injured party be made whole?), but as economic questions about the value to someone of an
injury-producing action relative to the cost to someone else adversely affected by that same
action. It may be the case that run-off from my factory kills the fish in your stream; but
rather than asking the government to stop my polluting activity (which would involve the loss
of jobs and the diminishing of the number of market transactions), why don't you and I sit down
and figure out if more wealth is created by my factory's operations than is lost as a
consequence of their effects?
As Ronald Coase put it in his classic article, "The Problem of Social Cost" (Journal of Law
and Economics, 1960): "The question to be decided is: is the value of the fish lost greater or
less than the value of the product which the contamination of the stream makes possible?" If
the answer is more value would be lost if my factory were closed, then the principle of the
maximization of wealth and efficiency directs us to a negotiated solution: you allow my factory
to continue to pollute your stream and I will compensate you or underwrite the costs of your
moving the stream elsewhere on your property, provided of course that the price I pay for the
right to pollute is not greater than the value produced by my being permitted to continue.
Notice that "value" in this example (which is an extremely simplified stand-in for
infinitely more complex transactions) is an economic, not an ethical word, or, rather, that in
the neoliberal universe, ethics reduces to calculations of wealth and productivity. Notice too
that if you and I proceed (as market ethics dictate) to work things out between us -- to come
to a private agreement -- there will be no need for action by either the government or the
courts, each of which is likely to muddy the waters (in which the fish will still be dying) by
introducing distracting moral or philosophical concerns, sometimes referred to as "market
distortions."
Whereas in other theories, the achieving of a better life for all requires a measure of
state intervention, in the polemics of neoliberalism (elaborated by Milton Friedman and
Friedrich von Hayek and put into practice by Ronald Reagan and Margaret Thatcher), state
interventions -- governmental policies of social engineering -- are "presented as the problem
rather than the solution" (Chris Harman, "Theorising Neoliberalism," International Socialism
Journal, December 2007).
The solution is the privatization of everything (hence the slogan "let's get governments off
our backs"), which would include social security, health care, K-12 education, the ownership
and maintenance of toll–roads, railways, airlines, energy production, communication
systems and the flow of money. (This list, far from exhaustive, should alert us to the extent
to which the neoliberal agenda has already succeeded.)
The assumption is that if free enterprise is allowed to make its way into every corner of
human existence, the results will be better overall for everyone, even for those who are
temporarily disadvantaged, let's say by being deprived of their fish.
The objection (which I am reporting, not making) is that in the passage from a state in
which actions are guided by an overarching notion of the public good to a state in which
individual entrepreneurs "freely" pursue their private goods, values like morality, justice,
fairness, empathy, nobility and love are either abandoned or redefined in market terms.
Short-term transactions-for-profit replace long-term planning designed to produce a more
just and equitable society. Everyone is always running around doing and acquiring things, but
the things done and acquired provide only momentary and empty pleasures (shopping, trophy
houses, designer clothing and jewelry), which in the end amount to nothing. Neoliberalism,
David Harvey explains, delivers a "world of pseudo-satisfactions that is superficially exciting
but hollow at its core." ("A Brief History of Neoliberalism.")
Harvey and the other critics of neoliberalism explain that once neoliberal goals and
priorities become embedded in a culture's way of thinking, institutions that don't regard
themselves as neoliberal will nevertheless engage in practices that mime and extend neoliberal
principles -- privatization, untrammeled competition, the retreat from social engineering, the
proliferation of markets. These are exactly the principles and practices these critics find in
the 21st century university, where (according to Henry Giroux) the "historical legacy" of the
university conceived "as a crucial public sphere" has given way to a university "that now
narrates itself in terms that are more instrumental, commercial and practical." ("Academic
Unfreedom in America," in Works and Days.)
This new narrative has been produced (and necessitated) by the withdrawal of the state from
the funding of its so-called public universities. If the percentage of a state's contribution
to a college's operating expenses falls from 80 to 10 and less (this has been the relentless
trajectory of the past 40 years) and if, at the same time, demand for the "product" of higher
education rises and the cost of delivering that product (the cost of supplies, personnel,
information systems, maintenance, construction, insurance, security) skyrockets, a huge gap
opens up that will have to be filled somehow.
Faced with this situation universities have responded by (1) raising tuition, in effect
passing the burden of costs to the students who now become consumers and debt-holders rather
than beneficiaries of enlightenment (2) entering into research partnerships with industry and
thus courting the danger of turning the pursuit of truth into the pursuit of profits and (3)
hiring a larger and larger number of short-term, part-time adjuncts who as members of a
transient and disposable workforce are in no position to challenge the university's practices
or agitate for an academy more committed to the realization of democratic rather than monetary
goals. In short , universities have embraced neoliberalism.
Meanwhile, even those few faculty members with security of employment do their bit for
neoliberalism when they retire to their professional enclaves and churn out reams of
scholarship (their equivalent of capital) that is increasingly specialized and without a clear
connection to the public interest: "[F]aculty have progressively . . . favored professionalism
over social responsibility and have . . . refused to take positions on controversial issues";
as a result they have "become disconnected from political agency and thereby incapable of
taking a political stand" (McClennen, Works and Days).
... ... ...
Stanley Fish is a professor of humanities and law at Florida International University, in Miami. In the Fall of 2012,
he will be Floersheimer Distinguished Visiting Professor at the Benjamin N. Cardozo School of Law. He has also taught at the
University of California at Berkeley, Johns Hopkins, Duke University and the University of Illinois, Chicago. He is the author
of 15 books, most recently “Versions of Antihumanism: Milton and Others”; “How to Write a Sentence”; “Save the World On Your Own
Time”; and “The Fugitive in Flight,” a study of the 1960s TV drama. “Versions of Academic Freedom: From Professionalism to
Revolution” will be published in 2014.
Ignored says: 05/07/2019 at 5:04
pm Attached are the changing monthly STEO projections for February, March and April for the
lower 48 production. Today's projection, April, has added 230 kb/d day by year end 2019 to the
March projection and close to 300 kb/d in 2020. The April projection also shows an increase of
960 kb/d from Dec 18 to Dec 19. For Dec 19 to Dec 20, the increase is only 420 kb/d, less than
half of the 18 to 19 increase. Any speculation/ideas for the lower increase for 19 to 20. The G
of M drops by 70 kb/d from Dec 19 to Dec 20.
You notice that the April 19 STEO has the lowest production numbers for Jan. Feb. and
April 2019 but the highest numbers as they move into the second half of 2019 and all of
2020.
I don't know what to make of this except that I find it rather amusing.
I found it insulting to my intelligence (not an exceptionally difficult task), but now that
you mention it, I can imagine some Lewis Carroll feel to it.
An increase of $5/hr x 30hrs/wk x 52wks/yr = $7,800 per employee. They've got 2.2M
employees. Let's say 2M of those 2.2M are in dire need of a raise.
That's a bit over $15bn a year in cost to the company. $114bn in annual profit, instead of
$129bn sounds like plenty to me. How about a little shared sacrifice?
I doubt it would actually require such a big hit, because an across the board hike in
wages would probably partially boomerang back into revenues for Walmart as employees and
their families/dependents had more to spend in Walmart's stores.
No. The payroll tax is the one tax I absolutely do not want reduced as those taxes are
dedicated to Social Security and Medicare.
The raise should come from the companies that strategically and callously refuse to raise
wages unless forced to. In point of fact the abuse of the independent contractor position AND
the increased use of unpaid interns are good examples of how wide spread the idea is that you
shouldn't actually pay the labor costs involved in your business.
Yes, I do get that some small businesses have problems with payroll that are not the
result of the greed of the owners. But seriously using Wal-Mart's cheap ass wages to put
forth a plan that supposedly helps workers while actually harming them (as Social Security is
absolutely necessary for most workers to even consider retirement even if they are physically
unable to work any longer shortchanging it is most definitely not worker friendly) and leaves
WalMart with even higher obscenely high profits is well .despicable.
Oh, and just for the record a lot of those small businesses would do better with a higher
minimum wage as more people would have more disposable income to make use of those small
businesses. Underpaid people don't shop or use services unless they absolutely have to
for the record: all of the small business would be better off if you cut the payroll tax
as more people would have more money to spend. (and businesses too, as their tax burden would
go down)
Small businesses would be better off But Social Security and Medicare would be gutted?
No thanks. Besides, I doubt that alone would stop the trends of small businesses becoming
more and more irrelevant against the forces of monopolization. A 'magic bullet' fix like this
won't be enough even if it didn't have obvious downsides. Which it does.
But why fund SS and Medicare regressively/flat? The money winds up in the same bucket that
ought to be offset by greater amounts of progressively-incurred income taxes.
If the bucket has to be filled (but I'm not sure it does – Doesn't MMT say to some
extent it doesn't, particularly when we're in what's effectively a disinflationary
environment) please let it be filled in a progressive way. We can start by inverting the cap
gains preferences and advantaging earned income while restoring additional tiers until we get
back to the 90% marginal rates that correlated with the post-war boom times.
In a world where the Waltons and the Bezos and the Kochs do not have the means of buying
elected officials you might have a point. But we do not live in that world nor do we live in
the world where MMT exists for more than the MIC and Corporate welfare.
Unless and until those two things change we cannot even consider eliminating the dedicated
taxes for SS and Medicare. Even with them we are constantly faced with threats to their
existence. Without them they wouldn't last past lunch.
there are other ways to cut businesses costs like healthcare costs, but don't cut payroll
taxes now or anytime soon, we don't live in the kind of world where it could work at this
point. And what's so horrible about businesses paying their fair share in taxes anyway? If
they can't be profitable and do that, maybe they need to close up shop.
In principle, I'm opposed to payroll taxes because they penalize hiring people. The chief
exception, in my mind, is directly employment-related programs – like Social Security,
but not Medicare so much. There is also a small unemployment tax, at least in Oregon.
A basic principle is to tax things you want less of, not things you want more of. A
partial exception is income taxes or profit taxes, because they're supposed to be fairly
neutral and not influence economic decisions. People are unlikely to want less income because
it's taxed.
This is a long-running issue here, because proposals for state-level Medicare4All tend to
rely on a payroll tax. Health is only very partly employment-related; we already have decent
Workmen's Comp system (state operated). Either that or a sales tax, a certain deal killer in
Oregon – the whole thing has to get past the voters. I advocate a dedicated surtax on
the business and income taxes. Corporate taxes are much too low in Oregon.
He's right about small businesses, which I once had (now it's even smaller). Payroll taxes
are a significant burden, in part just for the accountants. It's easier for large businesses
to absorb, so gives them an advantage. Not good.
People on the left tend to see payroll taxes as a free lunch of sorts; they're actually
quite costly.
Because it's the one that allows people to claim they earned SS and Medicare, whether it's
true or not, it's a powerful argument.
Employers want to get rid of it, well if it comes down to them or workers, I don't
prioritize them. These same employers complain about raising the minimum wage. I prioritize
workers, and whether they can survive the present and retirement (already iffy of
course).
I just assume the 10Y yield is reverting to trend – the trend downward it has had
since 1982. The counter trend move upward in 2018 assumed the fiscal spigots were going to be
turned on, that the deficit was no longer a dirty word and therefore inflation was no longer
a dirty word. It's just taken til now to capitulate that none of that's going to happen.
Seems the Federal Reserve was caught by surprise by this too. Otherwise I don't think they
would have raised their Fed Funds rate to where it is. Because now that the 10Y yield has
capitulated, it's actually lower than the Fed Funds rate, creating an inverted yield curve.
Which is unusual because normally an inverted yield curve is created on purpose by the
Federal Reserve – they raise their rate above the 10Y yield rather than wait for the
10Y yield to drop below their rate. Still, every good trader knows an inverted yield curve is
bad juju. So what's the Fed Reserve to do? Sit on its hands and let the inverted yield curve
work its magic and create a recession?
Seems to me that the Federal Reserve doesn't want the market to crash on Trump's watch. At
least not until after the 2020 election. So the Fed Reserve is signaling to the traders, "we
feel your pain", they'll lower their rate to bring it back below the 10Y yield. They just
need a pretext on why they're doing so, something that doesn't simply smack of the Fed
Reserve propping up the stock market. "It's the PMI, it's the employment report, it's trade,
it's one of those, yeah that's the ticket."
Anyways, even if the fiscal spigots get turned on, I don't see the 10Y yield reversing
trend until spiraling wage inflation is a thing again. I.e. when people aren't worried about
their exposure to inflating prices as long as their wages are increasing / tracking with
inflation. Making it safe for them to take on debt at increasing interest rates – i.e.
generating inflation. And I don't see that happening anytime soon unless there's some kind of
JG program.
Until then, the trend line of the 10Y yield is downwards. Giving the Federal Reserve less
and less room for their Fed Funds rate to operate in without inverting the yield curve. Seems
like that won't be able to continue at some point. Interesting years ahead.
"... finance...is not value added....it is value SUBTRACTED! ..."
"... A job at McDonald's then was merely a job you had to make a little money on the side while attending colleges that were FREE to very low cost. Now, McDonald's is one of many low wage jobs in this GIG economy that are utilized as life sustaining. ..."
"... Production of debt instead of production of things. US is one of the largest producers of debt. Financialization as planned by the bankers. ..."
when you can create $10 Trillion out of thin air and then give it to a select few...what
did you think would happen. Instead of arresting the criminal bankers....we rescued them!
They are criminal by nature and are programmed to steal ever more! I know hundreds of NYC
bankers and lawyers.....they are NOT NICE PEOPLE!
This is one time that a ZH headline was not click bait. Not only is FIRE bigger than manufacturing, even .GOV is bigger than manufacturing now
too. We're fucked, big time.
Another boomer who lives in a state of alternate reality. Boomers were privy to government jobs and manufacturing in the US aplenty. They also were
privy to government subsidies that don't exist today.
A job at McDonald's then was merely a job you had to make a little money on the side while
attending colleges that were FREE to very low cost. Now, McDonald's is one of many low wage
jobs in this GIG economy that are utilized as life sustaining.
Offshoring, the disappearance of government subsidies and social programs (thanks to
boomers love for BILL CLINTON), wealth inequality (See the FED/Obama bank bailout/QE),
stagnant wages, student loan debt, 22 TRILLION US DEBT, & 9/11 & 17 years of WAR
& MORE WAR, has caused this country to become BANKRUPT.
Living in your parents basement, or with roommates, one paycheck from the streets to
living on the streets is how it is for that kid YOU destroyed through your voting for
sociopaths who took away the very jobs and entitlements YOU were privy to that no longer
exist.
I like your sarcasm, but the truth is something different entirely. Median home in 2000 - 164K. Now - 313K. Median income during the same period rose 3k. Clarified.
Bs. If they feared that then they wouldn't have ever raised rates effectively killing the
refi market and putting downward pressure on prices for the past 2 years.
Yeah it is. I wouldn't have a kid and raise it in this country today if my life depended on it. May be
that's why birth rates in the US are at historic lows.
if the country was run by shoe shine boys there would be shoe shine palaces on every
corner and a law requiring everyone to get a shoeshine 3 times/day. the usa is run by
banksters. you get the result described.
Curse of consumerist car-focussed societies everywhere. Same for Japan, China. Don't think
that skin pigments will protect against it, though.
The only counter-trends are societies like the Amish, or maybe orthodox Jews. Their
inoculation against most aspects of consumer society has the side effect of exponential
population growth.
We originally posted this chart in February 2011 ,
which we just updated also breaking out the real estate industry from FIRE (finance,
insurance, and real estate). It is still just as shocking as it was back when we first
produced it.
Economy Jumps The Shark. The U.S. economy jumped the shark in 1990 when FIRE overtook the manufacturing sector in
terms of its contribution to GDP.
This is similar to renaming "French fries" to "freedom fries" after 9/11. You can't overestimate stupidity of government
bureaucrats. They now exceeded the USSR level.
"... In a market outlook released earlier by Pimco, the Newport Beach-based firm warned that global growth is expected to be lackluster with low inflation before a recession occurs in advanced economies likely within five years. Financial market vulnerability, following the recent Federal Reserve pivot away from tightening, "has the potential to lead to greater excess in valuations, particularly in credit", the report warmed. ..."
"... Well, if he is right and central banks are indeed about to lose control, then investors have far greater things to worry about than whether their paper gains will turn to paper losses overnight - one worry would be whether investors have enough guns and ammo, for example ..."
"... Mather's conclusionL: "I think that's what you're seeing now in markets. People are starting to come to a more realistic outlook about the forward-looking growth prospects, as well as the power of central banks to pump up asset prices. " ..."
The world's largest bond manager is getting extremely worried about two things that it
knows a lot about i) the overall market and ii) the bond market in particular.
Speaking to Bloomberg TV, Scott Mather, chief investment officer of U.S. core strategies
at Pimco, joined a bevy of other money managers and warned, in no uncertain terms, that
the credit market is heading for a crash the likes of which have never before
been seen.
"We have probably the riskiest credit market that we have ever had
"
in terms of size, duration, quality and lack of liquidity, Mather said, adding that
the current situation compares risk to mid-2000s, just before the global
financial crisis.
"We see it in the build up in corporate leverage, the decline in credit quality, and
declining underwriting standards - all this late-cycle credit behavior we began to see
in 2005 and 2006." One way of visualizing what Mather was referring to is the following
chart of corporate debt to GDP which has never been higher. As for the lack of creditor
protections, well, just wait until the screams of fury begin after the next wave of
bankruptcies.
There was a silver lining, with the PIMCO CIO noting that credit is "not at the point
where it will fall of its own weight",
yet,
"but it certainly
is a vulnerability today and all the ingredients are there for that vulnerability to
grow" he added, referring to record stock buybacks this year, much of it financed with
leverage, and almost all of which has been used to boost stock prices and shrink shares
outstanding.
In response, Mather said that Pimco is "much more defensive," up in quality in
credit, and prefers asset backed securities - i.e., leveraged loans which themselves are
a pandora's box just waiting to be opened - to corporate credit.
So is all credit doomed? No: apparently the three-decade long bond bull market which
so many experts saw as dead just one year ago, is quite safe now according to Pimco,
with the 10Y approaching a 1-handle again: "The U.S. Treasury market is about the only
place you could look for large capital gains as we're seeing in the markets today,
versus the rest of the world", Mather said, why? Because "there's no hedge to risky
assets other than U.S. high-quality bonds, Treasuries." A handful of gold or bitcoin
fans would disagree.
Still, this to Mather is a unique situation and unlike the last recession, when there
was a variety of negatively- correlated assets to buy for protection. "People are
probably too optimistic about the growth outlook in the US" he concluded.
In a
market outlook
released earlier by Pimco, the Newport Beach-based firm warned that
global growth is expected to be lackluster with low inflation before a recession occurs
in advanced economies likely within five years. Financial market vulnerability,
following the recent Federal Reserve pivot away from tightening, "has the potential to
lead to greater excess in valuations, particularly in credit", the report warmed.
But wait, there's more, because if Mather is right, not even bonds will be risk-free
soon, as the era where central banks are "
powerful in terms of taking volatility
out of the market and pumping asset prices up
" is coming to an end, Matther
warned: "The U.S. is about the only central bank that was able to normalize policy
rates, but elsewhere,
there is basically no monetary firepower left."
Well, if he is right and central banks are indeed about to lose control, then
investors have far greater things to worry about than whether their paper gains will
turn to paper losses overnight - one worry would be whether investors have enough guns
and ammo, for example.
Mather's conclusionL: "I think that's what you're seeing now in markets.
People are starting to come to a more realistic outlook about the forward-looking growth
prospects, as well as the power of central banks to pump up asset prices.
"
Considering that the S&P is about a few hundred percent higher than where it would be
without central banks "pumping up prices", the market is about to go through a lot of
pain in the near future if the world's largest bond manager is correct.
"The U.S. Treasury market is about the only place you could look for large capital gains as we're seeing in the markets today, versus the rest of the world", Mather said, why? Because "there's no hedge to risky assets other than U.S. high-quality bonds, Treasuries."
Translated:
"Please
don't
forget
to
bail
us
out,
too,
when
the
time
comes!"
"Considering
that
the
S&P
is
about
a
few
hundred
percent
higher
than
where
it
would
be
without
central
banks
"pumping
up
prices","
A
"few
hundred
percent
higher"?
I
figured
he
meant
a
few
hundred
points,
but
I
think
he
made
a
Freudian
Slip
and
called
it
like
it
is.
It
really
is a
few
hundred
percent
higher.
Inversion of yield curve means that people do not trust the market.
Looks like by initiating trade war with China Trump sealed his fate and also the fate of the
current expansion. The idea of neoliberalism without globalization or "national neoliberalism"
which Trump promotes can well be "waiving a dead chicken" as neoliberalism (with it s ideology
dead so dead chicken is an appropriated metaphor) and globalization are almost synonyms.
Replacing globalization with regional trade blocks hostile to each other is a death sentence to
the neoliberalism, as we understand it. Add to this the collapse neoliberal ideology in 2008 and
the USA is headed to real troubles.
Notable quotes:
"... But right now investors are far more spooked about what is going on in the bond market. According to Mish Shedlock , we haven't seen this many yield curve inversions "since the start of the Great Recession" In so many ways, what we are witnessing at this moment is very reminiscent of the conditions that prevailed just prior to the last financial crisis. ..."
"... Back then, the economic numbers were definitely starting to slide, but most Americans didn't think that we were heading toward big trouble. But those that understood what was happening were sounding the alarm, and the same thing is happening today. ..."
"... In addition to disappointing manufacturing numbers, we also just learned that orders for capital goods were down significantly during the month of April ..."
"... A resolution to our trade war with China would be a huge economic boost in the short-term, but that is not likely to happen for the foreseeable future. ..."
"... A deteriorating relationship with China is part of the scenario that we have been anticipating , and events are definitely starting to accelerate now. ..."
"... recent survey discovered that 59 percent of all Americans are currently living paycheck to paycheck. ..."
Yesterday, I was greeted by this jarring headline when I visited the Drudge Report : "BONDS FLASH RECESSION WARNING" . These
days, it seems like the "R word" is being thrown around constantly, but at this time last year
everyone was celebrating how well the economy was doing. Unfortunately, we have witnessed a
dramatic shift in recent months, and we just got some more really bad economic numbers. Thanks
to those bad numbers and an increasing amount of anxiety about the trade war, the Dow Jones
Industrial Average fell another 237 points on Tuesday, extending those losses even more (down
400) today. That means that we are on pace to potentially see the Dow fall for a sixth week in
a row, and that is something that hasn't happened since the last recession.
But right now investors are far more spooked about what is going on in the bond market.
According to
Mish Shedlock , we haven't seen this many yield curve inversions "since the start of the
Great Recession" In so many ways, what we are witnessing at this moment is very reminiscent of
the conditions that prevailed just prior to the last financial crisis.
Back then, the economic numbers were definitely starting to slide, but most Americans
didn't think that we were heading toward big trouble. But those that understood what was
happening were sounding the alarm, and the same thing is happening today. For example, the
following comes from a CNBC article entitled
"Morgan Stanley says economy is on 'recession watch' as bond market flashes warning"
"Recent data points suggest US earnings and economic risk is greater than most investors
may think," wrote Michael Wilson, the firm's chief U.S. equity strategist.
Specifically, the stock strategist highlighted a recent survey from financial data firm
IHS Markit that showed manufacturing activity fell to a nine-year low in May. That report
also revealed a "notable slowdown" in the U.S. services sector, a key area for an American
economy characterized by huge job gains in health care and business services.
In addition to disappointing manufacturing numbers, we also just learned that orders for
capital goods were down
significantly during the month of April
The Commerce Department said on Friday orders for non-defense capital goods excluding
aircraft, a closely watched proxy for business spending plans, dropped 0.9% last month as
demand weakened almost across the board. Data for March was revised down to show these
so-called core capital goods orders rising 0.3% instead of increasing 1.0% as previously
reported.
The U.S. economy is heading in the wrong direction, and things are steadily getting
worse.
A resolution to our trade war with China would be a huge economic boost in the
short-term, but that is not likely to happen for the foreseeable future. In fact, on
Monday President Trump stated that he is "not ready"
to make a deal with China
Bank shares fell broadly amid the lower interest rates. Goldman Sachs dropped 1.8% while
Citigroup and J.P. Morgan Chase fell 0.9% and 1.1%, respectively. Morgan Stanley and Wells
Fargo also slipped.
The drop in bank shares and rates come after President Donald Trump said on Monday the
U.S. was "not ready" to make a deal with China, before adding he expected one in the future.
Trump also said tariffs on Chinese imports could go up "substantially."
[ZH: China is 'winning' in the last few days, if markets are any forecast of that]
And the Chinese are clearly digging in as well. The chief editor of the Global Times, Hu
Xijin, has a very close relationship with top Chinese officials, and he just warned that China
"is seriously considering restricting rare earth exports" to the United States
While the official at China's national planning body did not directly answer whether
Beijing would restrict rare earth exports to the United States, Global Times Editor-in-chief
Hu Xijin wrote on Twitter: 'Based on what I know, China is seriously considering restricting
rare earth exports to the U.S. China may also take other countermeasures in the future.'
Although the tabloid Global Times is not one of China's official media, it is widely read
and is published by the ruling Communist Party's People's Party newspaper.
Just a few days ago I published
an entire article about the impact that such a move would have on the U.S. economy, and I
won't reproduce all of that information here.
But the bottom line is this – the U.S. economy would be in a massive amount of trouble
if that happened.
A deteriorating relationship with China is part of the scenario that we have been anticipating , and events are definitely
starting to accelerate now.
For most Americans, however, there is no reason to be concerned. Most of us simply trust
that our leaders in Washington have things under control and that everything will work out just
fine somehow.
But if we do plunge into another deep economic crisis, many Americans will be in enormous
trouble right away. According to one recent survey, 45 percent of us rate our financial
situations
as either "fair" or "poor"
Nearly 30% of respondents rate their financial situation as "only fair" and 15% say it's
"poor." Meanwhile, 25%
worry "all" or "most" of the time that their household income won't be enough to cover
their expenses.
Nonsense. Snyder has called every single market crash, asteroid impact, cauldera eruption,
pandemic, drought, famine, locust horde, tornado cluster, widespread flood, forest fire,
magnetic pole shift, solar flare, major earthquake, tsunami, killer bee invasion, and ebola
outbreak for the past 20 years.
Anyone following Snyder is well prepared for any catastrophe
except growing old gracefully.
Trump is
sign of degeneration of the US political elite. Much like Pompeo and Bolton.
But his hostility to Iran is just desire to please people who control him and finance his re-election bid .
Notable quotes:
"... ran sees no prospect of negotiations with the United States, a foreign ministry spokesman said on Tuesday ..."
"... Iranian officials have repeatedly stated that there won't be any talks with the U.S. until our government rejoins the JCPOA. ..."
"... I don't see how Iranians could view Trump as anything other than a menace when one of his first acts as president was to declare all of them to be potential security threats with the unnecessary and cruel travel ban. His hostility to and contempt for Iran and its people have been intense and consistent for more than two years. ..."
"... When the president veers between "genocidal tweets" and disingenuous offers to talk, this doesn't come across as the work of a master negotiator but rather the impulsive babbling of a leader who can be easily enraged by the smallest and most inconsequential things that he happens to see on television ..."
"... Trump is not talking to Iran but his lackies in the U.S. MSM. They are seeing Iran as being fanatic and unreasonable in refusing to talk. This will be one of the justifications for war and permanent hostilities. ..."
"... I think you're wrong here. Trump doesn't hate or have contempt for Iranians. He's supremely indifferent to them. The hostility and contempt he has shown Iran and Iranians is meant to keep his major Israel and Saudi Arabia donors happy. That's been true from the beginning. Scores of millions in campaign contributions are riding on it. ..."
"... Increasingly, Donaldius Iohannes Trumpius reminds me of some latter day Roman emperor like Caligula or Nero. Absolute power, depravity, insatiable appetites for everything from power to money and women, a pathological lack of empathy, fawning courtiers – it's all there. ..."
In case there was any doubt, the Iranian government
made clear that they were not interested in talking to Trump:
I ran sees no prospect of negotiations with the United States, a foreign ministry
spokesman said on Tuesday , a day after U.S. President Donald Trump said a deal with
Tehran on its nuclear program was possible.
Iranian officials have repeatedly stated that there won't be any talks with the U.S.
until our government rejoins the JCPOA. That definitely won't happen under the current
administration, so there has never been a realistic chance of starting up U.S.-Iranian
negotiations in the near term. Everyone understands that, and that makes the president's random
"offers" to talk all the more ridiculous. Iran has already been burned by Trump's decision to
renege on the nuclear deal and wage economic war on the entire country, so there would have to
be a major effort on the U.S. side to regain Iranian trust. The Trump administration would have
to reverse course and undo every anti-Iranian thing that it has done over the last two years,
and even then that would barely get the U.S. and Iran back to where they had been in 2017.
Trump wouldn't ever do that because it would require him to admit being completely wrong.
Najmeh Bozorgmehr reports on how Iranians
are adapting to life under U.S. economic warfare against them:
Iranian analysts tell me the US made one big mistake this time. It used almost all its
non-military leverage against Iran over the wrong issue, because the country was not
violating the 2015 nuclear accord. Iranians may despise their rulers but they are aware that
the US is not righteous, either. How can they see Mr Trump as a saviour when he calls Iran "a
nation of terror" and promises "the official end of Iran"?
I don't see how Iranians could view Trump as anything other than a menace when one of
his first acts as president was to declare all of them to be potential security threats with
the unnecessary and cruel travel ban. His hostility to and contempt for Iran and its people
have been intense and consistent for more than two years. The complete lack of respect
that Trump has shown to Iranian leaders and the Iranian people alike stands in sharp contrast
to his fawning praise for the North Korean leader, and they cannot help but take that as an
insult. It also isn't lost on the people being strangled by Trump's sanctions that they are
being punished for abiding by an international agreement backed by the world's major powers
while North Korea is celebrated after successfully defying the rest of the world by building up
their nuclear arsenal and long-range missiles. Iran is being penalized because they trusted the
U.S., and Trump has proven to them that this was a foolish thing for them to do. Why would they
reward Trump's aggression and make the same mistake twice?
When the president veers between "genocidal tweets" and disingenuous offers to talk,
this doesn't come across as the work of a master negotiator but rather the impulsive babbling
of a leader who can be easily enraged by the smallest and most inconsequential things that he
happens to see on television . As the North Koreans have also learned, no one can
successfully negotiate with a person as unreliable and moody as Trump. No one in Iran's
government is going to go out on a limb and take the political risk of engaging with the U.S.
again after the last effort blew up in their faces, and Trump's mercurial instability
guarantees that it would be a waste of everyone's time.
Trump is not talking to Iran but his lackies in the U.S. MSM. They are seeing Iran as
being fanatic and unreasonable in refusing to talk. This will be one of the justifications
for war and permanent hostilities.
Our own acts of aggression are completely ignored.
"His hostility to and contempt for Iran and its people have been intense and consistent
for more than two years. "
I think you're wrong here. Trump doesn't hate or have contempt for Iranians. He's
supremely indifferent to them. The hostility and contempt he has shown Iran and Iranians is
meant to keep his major Israel and Saudi Arabia donors happy. That's been true from the
beginning. Scores of millions in campaign contributions are riding on it.
Increasingly, Donaldius Iohannes Trumpius reminds me of some latter day Roman emperor like
Caligula or Nero. Absolute power, depravity, insatiable appetites for everything from power
to money and women, a pathological lack of empathy, fawning courtiers – it's all
there.
As economist Russ Roberts once wrote in the
Wall Street Journal,
"The economy is a complex system, our data are imperfect and our models inevitably fail to
account for all the interactions. The bottom line is that we should expect less of
economists. Economics is a powerful tool, a lens for organizing one's thinking about the
complexity of the world around us. That should be enough. We should be honest about what we
know, what we don't know and what we may never know. Admitting that publicly is the first
step toward respectability."
In the same vein, I would urge new graduates to be skeptical of those in power who flatter
them with the lie that they can, if only they are sufficiently resolute, solve big social
problems through government interventions. The truth is that even the best-intentioned
government officials do not -- indeed, cannot possibly -- have the knowledge necessary to
deliver on any grand promises.
Sadly, this lack of knowledge never stops politicians from spending all of their time
pretending that they know it all and none of their time humbly reflecting on the arrogance of
attempts to boss the rest of us around. Making matters worse is the fact that the
decision-making process in government is not conducive to the best policies. Quite the
opposite, in fact. See, politicians spend other people's money and are unduly influenced by
special interests. As such, their interests are never served by their taking account of the
true costs of their programs, or acknowledging the (too-often invisible) victims of their
interventions.
"Mueller supposedly has forwarded
some material to federal and New York State prosecutors who have clear legal authority in those domains.
It has been known for at least two years, though, that substantial grounds (and evidence) already
existed to bring several cases to a grand jury.
That suggests that serious action never will be taken.
For one things, a number of prominent people would be exposed: e.g. Bibi Netanyahu, the heads of the
Russo-Israeli mafias, Felix Sater, the twice convicted felon and Trump 'counsellor' who avoided a second
prison term by agreeing to inform for the FBI and CIA but in fact worked both sides of the street, and
God knows who else.
Just as the Panama Papers scandal disappeared over the horizon, and the big 5
financial families got away with massive money-laundering for the drug cartels, and Deutsche Bank was
granted immunity by Angela Merkel despite their multiple criminal activities, so will the Trump affair
die out in obscurity."
In this interview we discuss
Trump-Russia and the deep state, disagree about 9/11, but agree that high-level corruption is out of
control.
Michael Brenner is Professor of
International Affairs at the University of Pittsburgh; a Senior Fellow at the Center for Transatlantic
Relations, SAIS-Johns Hopkins (Washington, D.C.), contributor to research and consulting projects on
Euro-American security and economic issues. He publishes and teaches in the fields of American foreign
policy, Euro-American relations, and the European Union.
Trump did business with cement companies run by mafioso thugs because they also controlled the unions
and would call strikes if crossed. He was basically a target for shakedowns, and Trump knew those people
were not anyone to profitably do business with. I am sure Russian-Israeli organised crime would be the
same.
Anything to do with the Mafia back in the days of Gotti was massively investigated Trump is too
wary and careful with his money to get burned that way.
As Halifax observed, men often mistake
themselves but they never forget themselves, so I would think it is neither conspiracy as Barrett says
or the incompetence which Brenner suggests.
You did not need to be in the CIA to have an inkling. In
fact the whole plan was virtually public knowledge beforehand. It was broadcast on the BBC well before
9/11 that mullahs in London mosques were advocating the highjacking of airplanes and crashing them into
American skyscrapers. This fact was subsequently alluded to by BBC reporters in the aftermath of 9/11.
I think it is becoming clear that a disproportionate amount of FBI and NY DA's resources were put
into chasing the Mafia instead of Muslim terrorism.
Giuliani made such a reputation on the back of
prosecuting the Mafia, and then the FBI had a household name like Gotti to go after, that the careerists
in law enforcement doubled down on a bunch of low level racketeers, even after the first WTC attack.
The belief that somehow the Mafia was more of a threat to New York than al Qaeda -- that caused
the FBI to let their guard down on the bin Laden threat. [ ]
There is now little doubt that if the Feds had devoted as much energy to a surveillance of Sphinx
as they had to the Ravenite Social Club, they would have been in the middle of the 9/11 plot months
before Black Tuesday. Because in July of 2001, Khalid al-Midhar and Salem al-Hazmi got their fake
I.D.'s delivered to them in a mailbox at the identical location the FBI had been onto in the decade
since El Sayyid Nosair had killed Meier Kahane. The man who supplied those fake ID's that allowed
al-Midhar and al-Hazmi to board A.A. Flight #77 that hit the Pentagon, was none other than Mohammed
El-Attriss the co-incorporator of Sphinx with Waleed al-Noor – whom Patrick Fitzgerald had put on
the unindicted co-conspirators list along with bin Laden and Ali Mohamed in 1995.
@anon26_
that, and the fact that it's race-realist throughout. Note, for instance, the early juxtaposition of the
2 rich "Russian" mafia Jew sisters (played to the hilt by 2 Jewesses, Gal Gadot and Kate Winslett)
reading to the half-'groid kid (while getting their feet manicured) with the elementally poor-but-good,
White cop's wife reading to their White kid. It's full of subtle stuff like this, but you have to see it
a few times to pick it all out. I also like the way they got actual spic 'bangers playing spic 'bangers.
That worked.
@Haxo Angmark
I saw this film a year ago and I can tell you exectly why it got no distribution:
It was a shitty,
mean-spirited story of horrible people robbing, stealing, killing for no good reasons. Yeah there were
reasons but none of them were good ones.
Furthermore the tragic ending made absoutely no sense and was just a stupid contrivance. Despite good
acting from Gal Gadot, Woody and Alfeck, nothing could save this movie.
I needed to shower and scrub myself 10 times after watching this horrible nonsense.
Horrible in every respect.
I know that wasn't what you were expecting. It's because of the Jews. Ugh. Had nothing to do with
that, but a lot to do with how the movie tested and it tested poorly because if you watch it, you hate
humanity and yourself just from this movie.
DETROIT (WWJ) – According to a new report, 47 percent of Detroiters are
"functionally illiterate." The alarming new statistics were released by the Detroit Regional
Workforce Fund on Wednesday.
WWJ Newsradio 950 spoke with the Fund's Director, Karen Tyler-Ruiz, who explained exactly
what this means.
"Not able to fill out basic forms, for getting a job -- those types of basic everyday
(things). Reading a prescription; what's on the bottle, how many you should take just your
basic everyday tasks," she said.
"I don't really know how they get by, but they do. Are they getting by well? Well, that's
another question," Tyler-Ruiz said.
Some of the Detroit suburbs also have high numbers of functionally illiterate: 34 percent
in Pontiac and 24 percent in Southfield.
"For other major urban areas, we are a little bit on the high side We compare, slightly
higher, to Washington D.C.'s urban population, in certain *** codes in Washington D.C. and in
Cleveland," she said.
Tyler-Ruiz said only 10 percent of those who can't read have gotten any help to resolve
it.
The report will be used to provide better training for local workers.
May 20, 2019
Private Equity is a Driving Force Behind Devious Surprise Billings by Eileen Appelbaum Surprise medical bills are in the news almost daily. Last Thursday, the
White House called for legislation to protect patients from getting surprise doctor bills
when they are rushed to the emergency room and receive care from doctors not covered by
insurance at an in-network hospital.
The financial burden on patients can be substantial -- these doctor charges can amount to
hundreds or even thousands of dollars.
What's behind this explosion of outrageous charges and surprise medical bills? Physicians'
groups, it turns out, can opt out of a contract with insurers even if the hospital has such a
contract. The doctors are then free to charge patients, who desperately need care, however much
they want.
This has made physicians' practices in specialties such as emergency care, neonatal
intensive care and anesthesiology attractive takeover targets for private equity firms.
As health reporter Bob Herman observed , acquisition of these health services "exemplifies
private equity firms' appetite for buying health care providers that wield a lot of market
power."
Emergency rooms, neonatal intensive care units and anesthesiologists' practices do not
operate like an ordinary marketplace. Physicians' practices in these specialties do not need to
worry that they will lose patients because their prices are too high.
Patients can go to a hospital in their network, but if they have an emergency, have a baby
in the neonatal intensive care unit or have surgery scheduled with an in-network surgeon, they
are stuck with the out-of-network doctors the hospital has outsourced these services to.
This stands in stark contrast to other health-care providers, such as primary-care
physicians, who will lose patients if they are not in insurers' networks.
It's not only patients that are victimized by unscrupulous physicians' groups. These
doctors' groups are able to coerce health insurance companies into agreeing to pay them very
high fees in order to have them in their networks.
They do this by threatening to charge high out-of-network bills to the insurers' covered
patients if they don't go along with these demands. High payments to these unethical doctors
raise hospitals' costs and everyone's insurance premiums.
That's what happened when private equity-owned physician staffing firms took over hospital
emergency rooms.
A 2018
study by Yale health economists looked at what happened when the two largest emergency room
outsourcing companies -- EmCare and TeamHealth -- took over hospital ERs. They found:
" that after EmCare took over the management of emergency services at hospitals with
previously low out-of-network rates, they raised out-of-network rates by over 81 percentage
points. In addition, the firm raised its charges by 96 percent relative to the charges billed
by the physician groups they succeeded."
TeamHealth used the threat of sending high out-of-network bills to the insurance company's
covered patients to gain high fees as in-network doctors. The researchers found:
" in most instances, several months after going out-of-network, TeamHealth physicians
rejoined the network and received in-network payment rates that were 68 percent higher than
previous in-network rates."
What the Yale study failed to note, however, is that EmCare has been in and out of PE hands
since 2005 and is currently owned by KKR. Blackstone is the once and current owner of
TeamHealth, having held it from 2005 to 2009 before buying it again in 2016.
Private equity has shaped how these companies do business. In the health-care settings where
they operate, market forces do not constrain the raw pursuit of profit. People desperate for
care are in no position to reject over-priced medical services or shop for in-network
doctors.
Private equity firms are attracted by this opportunity to reap above-market returns for
themselves and their investors.
Patients hate surprise medical bills, but they are very profitable for the private equity
owners of companies like EmCare (now called Envision) and TeamHealth. Fixing this problem may
be more difficult than the White House imagines.
"... three major headwinds facing the global economy: Trump's protectionism, stagnation in the Eurozone, and potentially unstable growth in China. ..."
"... He talks about crypto currencies as well, offering his concerns on how they facilitate illegal activities and suggesting authorities ban them altogether. ..."
Noble Prize-winning economist Joseph Stiglitz offers his thoughts on what might cause the next recession from the floor of the
New York Stock Exchange.
He dives into three major headwinds facing the global economy: Trump's protectionism, stagnation in the Eurozone, and potentially
unstable growth in China.
Stiglitz also chimes in on Universal Basic Income, saying he's not "a big UBI guy". He talks about crypto
currencies as well, offering
his concerns on how they facilitate illegal activities and suggesting authorities ban them altogether.
For the 19th consecutive quarter, household debt increased to $13.67 trillion, according
to a new report from the New York Fed. Yahoo Finance's Aarthi Swaminathan joins The Final
Round to discuss.
"... The neocon faction in the US is usually (and reasonably) regarded as the motivator behind much of the western aggression in the Middle East. ..."
"... Granted the US has been looking for excuses to intervene ever more overtly in Syria since 2013, and in that sense this Douma "initiative" is a continuation of their longterm policy. It's also true Russia was warning just such a false flag would be attempted in early March. But in the intervening month the situation on the ground has changed so radically that such an attempt no longer made any sense. ..."
"... A false flag in early March, while pockets of the US proxy army were still holding ground in Ghouta would have enabled a possible offensive in their support which would prevent Ghouta falling entirely into government hands and thereby also maintain the pressure on Damascus. A false flag in early April is all but useless because the US proxy army in the region was completely vanquished and nothing would be gained by an offensive in that place at that time. ..."
"... The US media has been similarly, and uncharacteristically divided and apparently unsure. Tucker Carlson railed against the stupidity of attacking Syria. Commentators on MSNBC were also expressing intense scepticism of the US intent and fear about possible escalation. ..."
"... The official story is a hot mess of proven falsehoods, contradictions, implausible conspiracy theories, more falsehoods and inexplicable silences were cricket chirps tell us all we need to know. ..."
"... The UK government has lied and evaded on every key aspect. ..."
"... Indeed if current claims by Russian FM Lavrov turn out to be true, a "novichok" (whatever that precisely means in this case) may not have been the only substance found in those samples, and a compound called "BZ", a non-lethal agent developed in Europe and America, has been discovered and suppressed in the OPCW report (more about that later). ..."
"... The Skripals themselves were announced to be alive and out of danger mere days after claims they were all but certain to die. Yulia, soon thereafter, apparently called her cousin Viktoria only to subsequently announce, indirectly through the helpful agency of the Metropolitan Police, that she didn't want to talk to her cousin – or anyone else – at all. ..."
"... She is now allegedly discharged from hospital and has "specially trained officers helping to take care of" her in an undisclosed location. A form or words so creepily sinister it's hard to imagine how they were ever permitted the light of day. ..."
"... If a false flag chemical attack had taken place in Syria at the time Russia predicted, just a week or two after the Skripal poisoning, a lot of the attention that's been paid to the Skripals over the last month would likely have been diverted. Many of the questions being asked by Russia and in the alt media may never have been asked as the focus of the world turned to a possible superpower stand-off in the Middle East. ..."
"... So, could it be the Skripal event was never intended to last so long in the public eye? Could it be that it was indeed a false flag, or a fake event, as many have alleged, planned as a sketchy prelude to, or warm up act for a bigger chemical attack in Syria, scheduled for a week or so later in mid-March – just around the time Russia was warning of such a possibility? ..."
"... This would explain why the UK may have been pushing for the false flag to happen (as claimed by Russia) even after it could no longer serve much useful purpose on the ground, and why the Douma "attack" seems to have been so sketchily done by a gang on the run. The UK needed the second part to happen in order to distract from the first. ..."
"... If this is true, Theresa May and her cabinet are currently way out on a limb even by cynical UK standards. Not only have they lied about the Skripal event, but in order to cover up that lie they have promoted a false flag in Syria, and "responded" to it by a flagrant breach of international and domestic law. Worst of all, if the Russians aren't bluffing, they have some evidence to prove some of the most egregious parts of this. ..."
"... But even if some or all of our speculation proves false, and even if the Russian claims of UK collusion with terrorists in Syria prove unfounded, May is still guilty of multiple lies and has still waged war without parliamentary approval. ..."
"... The UK were the most vocal about Syria, and desperately tried to drum up support over Skripal, but it all came to nothing much in the end. ..."
"... Theresa May's political career still hangs by a thread, and her "Falklands moment", at best, staved off the inevitable for a few months. A washout in the EU elections, a very real threat from Farage's Brexit party, and rumblings inside her own party, make her position as unstable as ever. ..."
"... In the US, generally speaking, it seems that the Trump admin – or at least whichever interested parties currently have control of the wheels of government – have called time on war in Syria. Instead, they've moved on to projects in Venezuela and North Korea, and even war with Iran. ..."
"... The failure of the Douma false flag to cause the war it was meant to cause, and the vast collection of evidence that suggests it was a false flag, should be spread far and wide. Not just because it's a truth which vindicates the smeared minority in the alternate media. ..."
In view of the latest revelations from the leaked report, which seem to prove that at least some elements of the Douma "chemical
attack" were entirely staged, we want to take look back at the chaotic events of Spring 2018.
What was the agenda behind the Douma false flag?
Why was the US response seemingly token and ineffective?
Why was the Secretary of State Rex Tillerson fired?
What agenda tied the Skripal case to the Douma attack?
The following is an extract from an article by Catte originally published April 14th last year, which takes on a greater weight
in light of certain evidence – not only that the Douma attack was faked, but that the OPCW is compromised.
The neocon faction in the US is usually (and reasonably) regarded as the motivator behind much of the western aggression
in the Middle East.
Since at least 2001 and the launch of the "War on Terror" the US has led the way in finding or creating facile excuses to fight
oil wars and hegemonic wars and proxy wars in the region. But this time the dynamics look a little different.
This time it really looks as if the UK has been setting the pace of the "response".
The fact (as stated above) that Mattis was apparently telegraphing his own private doubts a)about the verifiability of the
attacks, and b)about the dangers of a military response suggests he was a far from enthusiastic partaker in this adventure.
Trump's attitude is harder to gauge. His tweets veered wildly between unhinged threats and apparent efforts at conciliation.
But he must have known he would lose (and seemingly has lost) a great part of his natural voter base (who elected him on a no-more-war
mandate) by an act of open aggression that threatened confrontation with Russia on the flimsiest of pretexts.
Granted the US has been looking for excuses to intervene ever more overtly in Syria since 2013, and in that sense this
Douma "initiative" is a continuation of their longterm policy. It's also true Russia was warning just such a false flag would
be attempted in early March. But in the intervening month the situation on the ground has changed so radically that such an attempt
no longer made any sense.
A false flag in early March, while pockets of the US proxy army were still holding ground in Ghouta would have enabled
a possible offensive in their support which would prevent Ghouta falling entirely into government hands and thereby also maintain
the pressure on Damascus. A false flag in early April is all but useless because the US proxy army in the region was completely
vanquished and nothing would be gained by an offensive in that place at that time.
You can see why Mattis and others in the administration might be reluctant to take part in the false flag/punitive air strike
narrative if they saw nothing currently to be gained to repay the risk. They may have preferred to wait for developments and plan
for a more productive way of playing the R2P card in the future.
The US media has been similarly, and uncharacteristically divided and apparently unsure. Tucker Carlson railed against
the stupidity of attacking Syria. Commentators on MSNBC were also expressing intense scepticism of the US intent and fear about
possible escalation.
The UK govt and media on the other hand has been much more homogeneous in advocating for action. No doubts of the type expressed
by Mattis have been heard from the lips of an UK government minister. Even May, a cowardly PM, has been (under how much pressure?)
voicing sterling certitude in public that action HAD to be taken.
Couple this with the – as yet unverified – claims by Russia of direct UK involvement in arranging the Douma "attack", and the
claims by Syria that the perps are in their custody, and a tentative storyline emerges. It's possible this time there were other
considerations in the mix beside the usual need to "be seen to do something" and Trump's perpetual requirement to appease the
liberal Russiagaters and lunatic warmongers at home. Maybe this time it was also about helping the UK out of a sticky problem.
THE SKRIPAL CONSIDERATION
Probably the only thing we can all broadly agree on about the Skripal narrative is that it manifestly did not go according
to plan. However it was intended to play out, it wasn't this way. Since some time in mid to late March it's been clear the entire
thing has become little more than an exercise in damage-limitation, leak-plugging and general containment.
The official story is a hot mess of proven falsehoods, contradictions, implausible conspiracy theories, more falsehoods
and inexplicable silences were cricket chirps tell us all we need to know.
The UK government has lied and evaded on every key aspect.
It lied again and again about the information Porton Down had given it
Its lawyers all but lied to Mr Justice Robinson about whether or not the Skripals had relatives in Russia in an unscrupulous
attempt to maintain total control of them, or at least of the narrative.
It is not publishing the OPCW report on the chemical analyses, and the summary of that report reads like an exercise in
allusion and weasel-wording. Even the name of the "toxic substance" found in the Skripals' blood is omitted, and the only thing
tying it to the UK government's public claims of "novichok" is association by inference and proximity.
Indeed if current claims by Russian FM Lavrov turn out to be true, a "novichok" (whatever that precisely means in this
case) may not have been the only substance found in those samples, and a compound called "BZ", a non-lethal agent developed in
Europe and America, has been discovered and suppressed in the OPCW report (more about that later).
None of the alleged victims of this alleged attack has been seen in public even in passing since the event. There is no film
or photographs of DS Bailey leaving the hospital, no film or photographs of his wife or family members doing the same. No interviews
with Bailey, no interviews with his wife, family, distant relatives, work colleagues.
The Skripals themselves were announced to be alive and out of danger mere days after claims they were all but certain to
die. Yulia, soon thereafter, apparently called her cousin Viktoria only to subsequently announce, indirectly through the helpful
agency of the Metropolitan Police, that she didn't want to talk to her cousin – or anyone else – at all.
She is now allegedly discharged from hospital and has "specially trained officers helping to take care of" her in an undisclosed
location. A form or words so creepily sinister it's hard to imagine how they were ever permitted the light of day.
Very little of this bizarre, self-defeating, embarrassing, hysterical story makes any sense other than as a random narrative,
snaking wildly in response to events the narrative-makers can't completely control.
Why? What went wrong? Why has the UK government got itself into this mess? And how much did the Douma "gas attack" and subsequent
drive for a concerted western "response" have to do with trying to fix that?
IS THIS WHAT HAPPENED?
If a false flag chemical attack had taken place in Syria at the time Russia predicted, just a week or two after the Skripal
poisoning, a lot of the attention that's been paid to the Skripals over the last month would likely have been diverted. Many of
the questions being asked by Russia and in the alt media may never have been asked as the focus of the world turned to a possible
superpower stand-off in the Middle East.
So, could it be the Skripal event was never intended to last so long in the public eye? Could it be that it was indeed
a false flag, or a fake event, as many have alleged, planned as a sketchy prelude to, or warm up act for a bigger chemical attack
in Syria, scheduled for a week or so later in mid-March – just around the time Russia was warning of such a possibility?
Could it be this planned event was unexpectedly canceled by the leading players in the drama (the US) when the Russians called
them out and the rapid and unexpected fall of Ghouta meant any such intervention became pointless at least for the moment?
Did this cancelation leave the UK swinging in the wind, with a fantastical story that was never intended to withstand close
scrutiny, and no second act for distraction?
So, did they push on with the now virtually useless "chemical attack", botch it (again), leaving a clear evidence trail leading
back to them? Did they then further insist on an allied "response" to their botched false flag in order to provide yet more distraction
and hopefully destroy some of that evidence?
This would explain why the UK may have been pushing for the false flag to happen (as claimed by Russia) even after it could
no longer serve much useful purpose on the ground, and why the Douma "attack" seems to have been so sketchily done by a gang on
the run. The UK needed the second part to happen in order to distract from the first.
It would explain why the US has been less than enthused by the idea of reprisals. Because while killing Syrians to further
geo-strategic interests is not a problem, killing Syrians (and risking escalation with Russia) in order to rescue an embarrassed
UK government is less appealing.
And it would explain why the "reprisals" when they came were so half-hearted.
If this is true, Theresa May and her cabinet are currently way out on a limb even by cynical UK standards. Not only have
they lied about the Skripal event, but in order to cover up that lie they have promoted a false flag in Syria, and "responded"
to it by a flagrant breach of international and domestic law. Worst of all, if the Russians aren't bluffing, they have some evidence
to prove some of the most egregious parts of this.
This is very bad.
But even if some or all of our speculation proves false, and even if the Russian claims of UK collusion with terrorists
in Syria prove unfounded, May is still guilty of multiple lies and has still waged war without parliamentary approval.
This is a major issue. She and her government should resign. But it's unlikely that will happen.
So what next? There is a sense this is a watershed for many of the parties involved and for the citizens of the countries drawn
into this.
Will the usual suspects try to avoid paying for their crimes and misadventures by more rhetoric, more false flags, more "reprisals"?
Or will this signal some other change in direction?
We'll all know soon enough.
* * *
Back to today...
...and while things have moved on, we're still puzzling over all the same issues.
What was the purpose of the Skripal attack?
What was the original plan of the Douma attack?
Is there, as it appears, an internal power struggle in the Trump administration?
Has that resolved? Who is running the United States?
Seeing as the OPCW has been shown to cover-up evidence in Douma, can we trust them on Skripal? Or anything else?
Speaking of which, where on Earth IS Sergei Skripal?
All these questions stand, and are important, but more important than all of that is the lesson: They tried it before, and just
because it didn't work doesn't mean they won't try it again.
Last spring, the Western powers showed they will deploy a false flag if they need too, for domestic or international motives.
And they have the motives right now.
The UK were the most vocal about Syria, and desperately tried to drum up support over Skripal, but it all came to nothing
much in the end.
Theresa May's political career still hangs by a thread, and her "Falklands moment", at best, staved off the inevitable for
a few months. A washout in the EU elections, a very real threat from Farage's Brexit party, and rumblings inside her own party, make
her position as unstable as ever.
Britain had the most to gain, of all NATO countries, and that is still true. We don't know what they might do.
This time they might even receive greater support from France this time around – since Macron is facing a revolution at home and
would kill (possibly literally) for a nice international distraction.
In the US, generally speaking, it seems that the Trump admin – or at least whichever interested parties currently have control
of the wheels of government – have called time on war in Syria. Instead, they've moved on to projects in Venezuela and North Korea,
and even war with Iran.
That's not to say Syria is safe, far from it. They are always just one carefully place false-flag away from all-out war. Last
year, Mattis (or whoever) decided war with Syria was not an option – that it was too risky or complicated. That might not happen
next time.
Clearly, the US hasn't totally seen sense in terms of stoking conflict with Russia – as seen by the decision to pull out of the
INF Treaty late last year. And further demonstrated by their attempts to overthrow Russia's ally Nicolas Maduro. Another ripe candidate
for a false flag.
The failure of the Douma false flag to cause the war it was meant to cause, and the vast collection of evidence that suggests
it was a false flag, should be spread far and wide. Not just because it's a truth which vindicates the smeared minority in the alternate
media.
But because recognising what they were trying to do last time , is the best defense when they try it again next time .
"If President Trump had ever read Mackinder -- and there's no evidence he did -- one might
assume that he's aiming at a new anti-Eurasia integration pivot centered on the Persian Gulf.
And energy would be at the heart of the pivot.
If Washington were able to control everything, including "Big Prize" Iran, it would be
able to dominate all Asian economies, especially China. Trump even said were that to happen,
"decisions on the GNP of China will be made in Washington."...
...Arguably the key (invisible) takeaway of the meetings this week between Foreign
Ministers Sergey Lavrov and Wang Yi, and then between Lavrov and Pompeo, is that Moscow made
it quite clear that Iran will be protected by Russia in the event of an American showdown.
Pompeo's body language showed how rattled he was.
What rattled Pomp: "Any use of nuclear weapons against Russia or its allies, be it
small-scale, medium-scale or any other scale, will be treated as a nuclear attack on our
country. The response will be instant and with all the relevant consequences,"
Trump may not have read Mackinder but Kissinger sure would have.
The fourth-quarter stock market rout that wiped out $12 trillion in shareholder value and
sparked a bout of
Christmas Eve panic may have quickly been forgotten by most Americans, but not by the
salespeople and financial engineers of Wall Street.
No, the selloff, it would appear, wound up triggering fears that time was running out on the
longest bull market in history. And so, when early 2019 delivered a miraculous rebound, they
wasted no time in peddling all sorts of deals and arrangements that test the limits of risk
tolerance: from health-food makers fast-tracked into public hands to stretched retailers wrung
for billions by private equity owners in the debt market.
Junk bonds are flying out the door once again. Deeply indebted companies are borrowing even
more to pay
equity holders . And while you can't say the megadeal IPOs got rushed to market, two that
were held up as heralding a return to IPO glory days have been flops. It's quickly turning
Uber and Lyft into poster children for Wall Street eagerness amid an equity-market bounce
that has all but banished memories of the worst fourth quarter in a decade.
"At some point, people are going to get burned," said Marshall Front, the chief investment
officer at Front Barnett Associates and 56-year Wall Street veteran. "People want to take their
companies public because they don't know what the next years hold, and there are people who
think we're close to the end of the cycle. If you're an investment banker, what do you do? You
keep dancing until the music stops."
As to their "cleverness", there was a time when UK politicians were known for their
slippery qualities and subtlety, but those days are long gone. What we have now is
barefaced lies, relying purely on repetition and monolithic corporate media ownership. They
are not winning arguments because they are clever, I have never seen such transparently
obvious bullshit before.
'Clever is as clever does' – once said with a snort – is a compliment too far
for the deeply corrupted, vulgar, mediocre nobodies who comprise the self-styled 'elites'. In
this group 'cleverness' simply means the lies they are paid to say repeated loudly and often.
And because they have the reins on power, the non-compliant are punished by thugs.
The key factor here is that the USA is a neoliberal state which means profits before people
and outsourcing to area with lower labor cost. Like leopard can't change its spots, neoliberalism
can't change it "free movement of goods and labor" principles, or it stop being
neoliberalism.
No jobs will come back to the USA as financial oligarchy is transnational body that uses the
USA military as an enforcer for their gang. It does not care one bit about the common people in
the USA.
Pause on the sound and fury for necessary precision. Even if the Trump administration slaps
25% tariffs on all Chinese exports to the US, the IMF has projected that would trim just a
meager slither – 0.55% – off China's GDP. And America is unlikely to profit,
because the extra tariffs won't bring back manufacturing jobs to the US – something that
Steve Jobs told Barack Obama eons ago.
What happens is that global supply chains will be redirected to economies that offer
comparative advantages in relation to China, such as Vietnam, Indonesia, Bangladesh, Cambodia
and Laos. And this redirection is already happening anyway – including by Chinese
companies.
BRI represents a massive geopolitical and financial investment by China, as well as its
partners; over 130 states and territories have signed on. Beijing is using its immense pool of
capital to make its own transition towards a consumer-based economy while advancing the
necessary pan-Eurasian infrastructure development – with all those ports, high-speed
rail, fiber optics, electrical grids expanding to most Global South latitudes.
The end result, up to 2049 – BRI's time span – will be the advent of an
integrated market of no less than 4.5 billion people, by that time with access to a Chinese
supply chain of high-tech exports as well as more prosaic consumer goods.
Anyone who has followed the nuts and bolts of the Chinese miracle launched by Little
Helmsman Deng Xiaoping in 1978 knows that Beijing is essentially exporting the mechanism that
led China's own 800 million citizens to, in a flash, become members of a global middle
class.
As much as the Trump administration may bet on "maximum pressure" to restrict or even block
Chinese access to whole sectors of the US market, what really matters is BRI's advance will be
able to generate multiple, extra US markets over the next two decades.
We don't do
'win-win'
There are no illusions in the Zhongnanhai, as there are no illusions in Tehran or in the
Kremlin. These three top actors of Eurasian integration have exhaustively studied how
Washington, in the 1990s, devastated Russia's post-USSR economy (until Putin engineered a
recovery) and how Washington has been trying to utterly destroy Iran for four decades.
Beijing, as well as Moscow and Tehran, know everything there is to know about Hybrid War,
which is an American intel concept. They know the ultimate strategic target of Hybrid War,
whatever the tactics, is social chaos and regime change.
The case of Brazil – a BRICS member like China and Russia – was even more
sophisticated: a Hybrid War initially crafted by NSA spying evolved into lawfare and regime
change via the ballot box. But it ended with mission accomplished – Brazil has been
reduced to the lowly status of an American neo-colony.
Let's remember an ancient mariner, the legendary Chinese Muslim Admiral Zheng He, who for
three decades, from 1405 to 1433, led seven expeditions across the seas all the way to Arabia
and Eastern Africa, reaching Champa, Borneo, Java, Malacca, Sumatra, Ceylon, Calicut, Hormuz,
Aden, Jeddah, Mogadiscio, Mombasa, bringing tons of goods to trade (silk, porcelain, silver,
cotton, iron tools, leather utensils).
That was the original Maritime Silk Road, progressing in parallel to Emperor Yong Le
establishing a Pax Sinica in Asia – with no need for colonies and religious proselytism.
But then the Ming dynasty retreated – and China was back to its agricultural vocation of
looking at itself.
They won't make the same mistake again. Even knowing that the current hegemon does not do
"win-win". Get ready for the real hardcore yet to come.
The Swine fever is sweeping china hog farms and since the start of 2019 200+ millions hogs
have been culled. Chinese hog production is down from 2016 high of 700 million to below 420
million by the end of the year. The fever is not under control.
Soybeans from Ukraine are unloaded at the port in Nantong, in eastern China. Imports of
soy used to come from the US, but have slumped since the trade war began. Should point out
that the Ukraine soy production matures at a different time of the year than the US soybean.
The USA planting season starts in Late april, may and june. Because of the harvest time
differences worldwide the USA supplies 80% of the late maturing soybeans needed by
October/Nov and December.
Perhaps this is one of the "casualties" ( https://www.rt.com/news/459355-us-austria-embassy-mcdonalds/
) of economic war given the significance of China and just how important it is to the U.S. in
it's purchases of $USD to maintain the illusion of it's reserve currency status and
"vigor"...
Surprised this didn't happen first at the U.S. Embassies in Russia and China?... Obviously
Ronald McDonald has turned into a charity of sorts helping out Uncle $am in his ailing
"health" these dayz!...
SUPER SIZE ME!... Cause I'm not lovin it anymore!... I'm needin it!!!!
I've never understood this "jobs aren't coming back" argument. Do you really think that it
will stop tariffs? They're happening. Better start preparing.
Oh, right, tariffs WILL bring back American jobs! Then why didn't the Administration
impose them fully in 2017? Why negotiate at all; just impose all the tariffs!?! lol
Pepe is correct as usual. Even if America tariffs the world the jobs aren't coming back as
corporations will be unable to turn profits in such a highly taxed country like America would
be. What could happen however is America can form an internal free market again going
isolationist with new home grown manufacturing.
You VERY obviously have ZERO knowledge of Chinas history and its discoveries/inventions
etc USED BY THE WEST.
I suggest that you keep your eyes open for "History Erased-China" on Y Tube. The series
shows what would happen in todays world if countries and their contributions to the world did
not happen.
"... Trump is playing a high stakes game without any backup plan. Plus he has alienated our allies repeatedly. My guess is that many in the world would like to see the US taken down a peg or two. ..."
I'm a bit concerned that the stock market IS due for a crash. It is simply a fact that Bull
and Bear markets inevitably alternate. If anything, the severity of the next Bear Market
should be laid at the feet of the LONG period of "Quantitative Easing", but you can bet than
when the next Bear Market does begin, it will unfairly be pinned on Trump. I think Trump
understands all this and has tried to position the economy to best ride out the coming crash.
" you can bet than when the next Bear Market does begin, it will unfairly be pinned on
Trump. I think Trump understands all this and has tried to position the economy to best ride
out the coming crash."
And more than doubling the annual deficit by giving massive tax cuts to those that least
need the money will have nothing to do with it? Starting a trade war with China will have
nothing to do with it? Potentially clashing with Iran, with a subsequent stoppage of oil
through the Straits of Hormuz, followed by $120/bbl oil will have nothing to do with
it?
Trump is playing a high stakes game without any backup plan. Plus he has alienated
our allies repeatedly. My guess is that many in the world would like to see the US taken down a
peg or two.
But if anything goes wrong it will all be the Democrats fault. Life must be grand in
Trumpland where mistakes and bad outcomes are always the fault of somebody else.
The Tesla Model S had been been parked in San Po Kong Plaza for about half an hour on May 12
before the battery started emit to smoke and flames appeared, according to the report. There
were sounds of explosions and firefighters took about 45 minutes to extinguish the blaze, the
Economic Times reported.
It was the first fire of its kind in the city, the report said.
Tesla didn't have a comment on the matter, a Beijing-based spokeswoman for the company said.
Hong Kong's Fire Services Department is investigating the May 12 fire, a representative said,
declining to identify the make of the car.
Last month, videos on social media showed a car bearing a Tesla logo in Shanghai emitting
smoke before bursting into flames, while rival NIO Inc. said one of its ES8 electric vehicles
caught fire in the north-west Chinese city of Xi'an while being repaired. Tesla and NIO said
they were looking into the reports.
The incidents have fueled concern over the safety of EVs in China. In 2018, China recorded
at least 40 fire-related incidents involving new-energy vehicles, a fleet that includes pure
battery electric, hybrid plug-in and fuel-cell vehicles, according to the State Administration
for Market Regulation.
"Excessive zeal" is really a problem with people on their first job. But at the same the
companies try to pressure new hires to do more.
Notable quotes:
"... "Patience is the one word I would tell [new grads] to think about and remember," Wolfe says. "You're not going to know everything walking in the door, especially if you've just graduated college. Really be a sponge and ask tons of questions." ..."
A new pack of college grads are gearing up to enter the job market -- this year, 1.9 million people will
graduate with a bachelor's degree, and another 1 million will graduate with a master's or
doctorate degree, according to the National
Center for Education Statistics .
It's important to have
your resume ready and your interview skills polished as you start the application process.
It typically takes five months to find a job, according to a
study by Ranstad Recruiting . But once you secure a position, it's important to prepare for
the professional world by keeping your expectations in check, says Paul Wolfe , senior vice president at Indeed .
"Patience is the one word I would tell [new grads] to think about and remember," Wolfe
says. "You're not going to know everything walking in the door, especially if you've just
graduated college. Really be a sponge and ask tons of questions."
For more than a decade, income investors have been plagued by paucity wrapped in misery. The bellwether 10-year Treasury note has
doled out an average 2.6% interest since 2008. Although the Federal Reserve has nudged its target interest rate range to 2.25% to
2.50%, it has signaled that it's done raising rates for now. Even worse, the yield on the 10-year T-note briefly sank below the yield
on the three-month T-bill -- an unusual inversion that can sometimes herald a recession and lower yields ahead. The takeaway: Locking
your money up for longer periods is rarely worth the negligible increase in yield. What could increase your yield these days? Being
a little more adventurous when it comes to credit quality. When you're a bond investor, you're also a lender, and borrowers with
questionable credit must pay higher yields. Similarly, stocks with above-average yields probably have some skeletons in their balance
sheets.
You can ameliorate credit risk -- but not eliminate it -- through diversification. Invest in a mutual fund, say, rather than a
single issue. And invest in several different types of high-yielding investments -- for example, investment-grade bonds, preferred
stocks and real estate investment trusts -- rather than just one category. Despite such caveats, income investing is not as bad as
it was in 2015, when it was hard to milk even a penny's interest out of a money market. Now you can get 3.3% or more from no-risk
certificates of deposit at a bank. We'll show you 33 ways to find the best yields for the risk you're willing to take, ranging from
2% all the way up to 12%. Just remember that the higher the payout, the greater the potential for some rough waters.
Short-term interest rates largely follow the Fed's interest rate policy. Most observers in 2018 thought that would mean higher rates
in 2019. But slowing economic growth in the fourth quarter of 2018 and the near-death experience of the bull market in stocks changed
that. The Fed's rate-hiking
campaign is likely on hold for 2019. Still, money markets are good bets for money you can't stand to lose. Money market funds
are mutual funds that invest in very-short-term, interest-bearing securities. They pay out what they earn, less expenses. A bank
money market account's yield depends on the Fed's benchmark rate and the bank's need for deposits.
The risks: Money market mutual funds aren't insured, but they have a solid track record. The funds are designed to maintain a
$1 share value; only two have allowed their shares to slip below $1 since 1994. The biggest risk with a bank money market deposit
account is that your bank won't raise rates quickly when market interest rates rise but will be quick on the draw when rates fall.
MMDAs are insured up to $250,000 by the federal government. How to invest: The best MMDA yields are from online banks, which don't
have to pay to maintain brick-and-mortar branches. Currently, a top-yielding MMDA is from Investors eAccess , which is run by Investors
Bank in New Jersey. The account has no minimum, has an annual percentage yield of 2.5% and allows six withdrawals per month. You'll
get a bump from a short-term CD, provided you can keep your money locked up for a year. Merrick Bank , in Springfield, Mo., offers
a one-year CD yielding 2.9%, with a $25,000 minimum. The early-withdrawal penalty is 2% of the account balance or seven days' interest,
whichever is larger. The top five-year CD yield was recently 3.4%, from First National Bank of America in East Lansing, Mich.
Your primary concern in a money fund should be how much it charges in expenses. Vanguard
Prime Money Market Fund (symbol
VMMXX , yield 2.5%) charges an ultralow 0.16% a year and consistently sports above-average yields. Investors in high tax brackets
might consider a tax-free money fund, whose interest is free from federal (and some state) income taxes, such as Vanguard Municipal
Money Market Fund ( VMSXX 1.6%).
To someone paying the maximum 40.8% federal tax rate, which includes the 3.8% net investment income tax, the fund has the equivalent
of a 2.7% taxable yield. (To compute a muni's taxable-equivalent yield, subtract your tax bracket from 1, and divide the muni's yield
by that. In this case, divide 1.6% by 1 minus 40.8%, or 59.2%). The fund's expense ratio is 0.15%.
Muni bonds are IOUs issued by states, municipalities and counties. At first glance, muni yields look as exciting as a month in
traction. A 10-year, AAA-rated national muni yields 2.0%, on average, compared with 2.6% for a 10-year Treasury note. But the charm
of a muni bond isn't its yield; it's that the interest is free from federal taxes -- and, if the bond is issued by the state where
you live, from state and local taxes as well. As with tax-free money funds, investors should consider a muni fund's taxable equivalent
yield; in the case above, it would be 3.4% for someone paying the top 40.8% federal rate.
Yields get better as you go down in credit quality. An A-rated 10-year muni -- two notches down from AAA but still good -- yields
2.3%, on average, or 3.9% for someone paying the top rate. The risks: Munis are remarkably safe from a credit perspective, even considering
that defaults have inched up in recent years. But like all bonds, munis are subject to interest rate risk. If rates rise, your bond's
value will drop (and vice versa), because interest rates and bond prices typically move in opposite directions. If you own an individual
bond and hold it until it matures, you'll most likely get your full principal and interest. The value of muni funds, however, will
vary every day.
How to invest: Most investors should use a mutual fund or ETF, rather than pick their own individual bonds. Look for funds with
rock-bottom expenses, such as Vanguard Limited-Term Tax-Exempt (
VMLTX , 1.8%). The fund charges
just 0.17%, and yields the equivalent of 3% for someone paying the highest federal tax rate. It's a short-term fund, which means
it's less sensitive to interest rate swings. That means its share price would fall less than longer-term funds' prices if rates were
to rise. The average credit quality of the fund's holdings is a solid AA–. Fidelity Intermediate Municipal Income (
FLTMX , 2.0%), a member of
the
Kiplinger 25 , the list of our favorite no-load funds, gains a bit of yield (a taxable equivalent of 3.4% for those at the top
rate) by investing in slightly longer-term bonds. The fund's expense ratio is 0.37%; the largest percentage of assets, 39%, is in
AA bonds. Vanguard High-Yield Tax-Exempt Fund Investor Shares (
VWAHX , 2.9%) also charges
just 0.17% in fees and yields 4.9% on a taxable-equivalent basis for someone at the highest rate. The extra yield comes from investing
in a sampling of riskier bonds. But the fund's average BBB+ credit rating is still pretty good, and its return has beaten 96% of
high-yield muni funds over the past 15 years.
You get higher yields from corporate bonds than you do from government bonds because corporations are more likely to default. But
that risk is slim. The one-year average default rate for investment-grade bonds (those rated BBB– or higher), is just 0.09%, going
back to 1981, says Standard & Poor's. And corporate bonds rated AAA and maturing in 20 or more years recently yielded 3.7%, on average,
while 20-year Treasury bonds yielded 2.8% and 30-year T-bonds, 3.0%. You can earn even more with bonds from firms with lightly dinged
credit ratings. Bonds rated BBB yield an average 4.0%. The risks: The longer-term bond market moves independently of the Fed and
could nudge yields higher (and prices lower) if inflation worries pick up. Though corporate defaults are rare, they can be devastating.
Lehman Brothers, the brokerage firm whose bankruptcy helped fuel the Great Recession, once boasted an investment-grade credit rating.
How to invest: Active managers select the bonds at Dodge & Cox Income (
DODIX , 3.5%). This fund
has beaten 84% of its peers over the past 15 years, using a value-oriented approach. It holds relatively short-term bonds, giving
its portfolio a duration of 4.4 years, which means its share price would fall roughly 4.4% if interest rates rose by one percentage
point over 12 months. The fund's average credit quality is A, and it charges 0.42% in expenses. If you prefer to own a sampling of
the corporate bond market for a super-low fee, Vanguard Intermediate-Term Corporate Bond Index Fund Admiral Shares (
VICSX , 3.6%) is a good choice.
Vanguard recently lowered the minimum investment to $3,000, and the fund charges just 0.07%. Interest-rate risk is high with Vanguard
Long-Term Bond ETF ( BLV , $91,
3.8%). The exchange-traded fund has a duration of 15, which means fund shares would fall 15% if interest rates moved up by one percentage
point in a year's time. Still, the yield on this long-term bond offering is enticing, and the fund's expense ratio is just 0.07%.
SEE ALSO:
The 7 Best Bond Funds for Retirement Savers in 2019//www.dianomi.com/smartads.epl?id=4908
Dividend stocks have one advantage that bonds don't: They can, and often do, raise their payout. For example, Procter & Gamble (
PG , $106, 2.7%), a member of
the
Kiplinger Dividend 15 , the list of our favorite dividend-paying stocks, raised its dividend from $2.53 a share in 2014 to $2.84
in 2018, a 2.3% annualized increase. Preferred stocks, like bonds, pay a fixed dividend and typically offer higher yields than common
stocks. Banks and other financial services firms are the typical issuers, and, like most high-dividend investments, they are sensitive
to changes in interest rates. Yields for preferreds are in the 6% range, and a generous crop of new issues offers plenty of choices.
The risks: Dividend stocks are still stocks, and they will fall when the stock market does. Furthermore, Wall Street clobbers
companies that cut their dividend. General Electric slashed its dividend to a penny per share on December 7, 2018, and the stock
fell 4.7% that day. How to invest: Some slower-growing industries, such as utilities or telecommunications firms, tend to pay above-average
dividends. Verizon Communications (
VZ , $58, 4.2%), a Kip 15 dividend
stock, is the largest wireless carrier in the U.S. Its investment in Fios fiber-optic cable should pay off in coming years. SPDR
Portfolio S&P 500 High Dividend ETF (
SPYD , $39, 4.3%) tracks the
highest-yielding stocks in the S&P 500 index. The fund has 80 holdings and is sufficiently diversified to handle a clunker or two.
Utility PPL Corp. ( PPL , $31,
5.3%) derives more than 50% of its earnings from the United Kingdom. Worries that the U.K.'s departure from the European Union will
pressure PPL's earnings have weighed on the stock's price, boosting its yield. Nevertheless, PPL's U.S. operations provide strong
support for the company's generous payout. Ma Bell is a
Dividend Aristocrat , meaning that AT&T (
T , $32, 6.4%) has raised its dividend
for at least 25 consecutive years (35 straight years, in AT&T's case). The company has plenty of free cash flow to keep raising its
payout. SEE ALSO:
9 High-Yield Dividend Stocks That Deserve Your Attention//www.dianomi.com/smartads.epl?id=4908
You can invest in two types of REITs: those that invest in property and those that invest in mortgages. Both types must pass on at
least 90% of their revenue to investors, which is partly why they have such excellent yields. Typically, REITs that invest in income-producing
real estate have lower yields than those that invest in mortgages. The average property REIT yields 4.1%, compared with the average
mortgage REIT yield of 10.6%, according to the National Association of Real Estate Investment Trusts. Why the big difference? Property
REITs rack up expenses when they buy and sell income properties or lease them out as landlords. Mortgage REITs either buy mortgages
or originate them, using borrowed money or money raised through selling shares as their capital.
The risks: When the economy slows down, so does the real estate market, and most REITs will take a hit in a recession. Mortgage
REITs are exceptionally sensitive to interest rate increases, which squeeze their profit margins, and to recessions, which increase
the likelihood of loan defaults. REIT dividends are not qualified dividends for tax purposes and are taxed at your ordinary income
tax rate. How to invest: Realty Income Corp. (
O , $69, 4.0%) invests in property
and rents it to large, dependable corporations, such as Walgreens, 7-Eleven and Fed-Ex. It's a
Kiplinger 15 dividend stalwart and pays dividends monthly. Fidelity Real Estate Income (
FRIFX , 4.0%) isn't a REIT,
although it invests in them (among other things). The fund puts income first. It has 43% of its assets in bonds, most of them issued
by REITs. The fund lost 0.6% in 2018, compared with a 6% loss for other real estate funds. Investors will forgive a lot in exchange
for a high yield. In the case of iShares Mortgage Real Estate Capped ETF (
REM , $44, 8.2%), they're choosing
to accept a high degree of concentration: The top four holdings account for 44% of the ETF's portfolio. Although concentration can
increase risk, in this instance the fund's huge position in mortgage REITs has helped returns. Falling interest rates late in 2018
pushed up mortgage REITs, limiting the fund's losses to just 3% in 2018. Annaly Capital Management (
NLY , $10, 12%) is a REIT that
borrows cheaply to buy government-guaranteed mortgage securities. Most of those holdings are rated AA+ or better. Annaly boosts its
yield by investing in and originating commercial real estate loans and by making loans to private equity firms. Its 2018 purchase
of MTGE Investment, a mortgage REIT that specializes in skilled nursing and senior living facilities, will help diversify the firm's
portfolio. Annaly is the largest holding of iShares Mortgage Real Estate Capped ETF.
If you think interest rates are low in the U.S., note that most developed foreign countries have even lower rates because their economies
are growing slowly and inflation is low. The U.K.'s 10-year bond pays just 1.2%; Germany's 10-year bond yields 0.1%; Japan's yields
–0.03%. There's no reason to accept those yields for a day, much less a decade. You can, by contrast, find decent yields in some
emerging countries. Emerging-markets bonds typically yield roughly four to five percentage points more than comparable U.S. Treasury
bonds, which would put yields on some 10-year EM debt at about 7%, says Pramol Dhawan, emerging-markets portfolio manager at bond
fund giant Pimco.
The risks: You need a healthy tolerance for risk to invest in emerging-markets bonds. U.S. investors tend to be leery of them
because they remember massive defaults and currency devaluations, such as those that occurred in Asia in the late 1990s. But in the
wake of such debacles, many emerging countries have learned to manage their debt and their currencies better than in the past. But
currency is still a key consideration. When the U.S. dollar rises in value, overseas gains translate into fewer greenbacks. When
the dollar falls, however, you'll get a boost in your return. A higher dollar can also put pressure on foreign debt denominated in
dollars -- because as the dollar rises, so do interest payments. How to invest: Dodge & Cox Global Bond (
DODLX , 4.5%) can invest anywhere,
but lately it has favored U.S. bonds, which were recently 48% of the portfolio. The fund's major international holdings show that
it isn't afraid to invest in dicey areas -- it has 11% of its assets in Mexican bonds and 7% in United Kingdom bonds. Fidelity New
Markets Income ( FNMIX , 5.6%),
a
Kip 25 fund, has been run by John Carlson since 1995. That makes him one of the few emerging-markets debt managers who ran a
portfolio during the currency-triggered meltdown in 1997-98. He prefers debt denominated in dollars, which accounts for 94% of the
portfolio. But he can be adventurous: About 6.5% of the fund's assets are in Turkey, which is currently struggling with a 19% inflation
rate and a 14.7% unemployment rate. IShares Emerging Markets High Yield Bond ETF (
EMHY , $46, 6.2%) tracks emerging-markets
corporate and government bonds with above-average yields. The holdings are denominated in dollars, so there's less currency risk.
But this is not a low-risk holding. It's more than twice as volatile as the U.S. bond market, although still only half as volatile
as emerging-markets stocks. SEE ALSO:
39
European Dividend Aristocrats for International Income Growth
Junk bonds -- or high-yield bonds, in Wall Street parlance -- aren't trash to income investors. Such bonds, which are rated BB+ or
below, yield, on average, about 4.7 percentage points more than the 10-year T-note, says John Lonski, managing director for Moody's
Capital Markets Research Group. What makes a junk bond junky? Typical high-yield bond issuers are companies that have fallen on hard
times, or newer companies with problematic balance sheets. In good times, these companies can often make their payments in full and
on time and can even see their credit ratings improve. The risks: You're taking an above-average risk that your bond's issuer will
default. The median annual default rate for junk bonds since 1984 is 3.8%, according to Lonksi. In a recession, you could take a
big hit. In 2008, the average junk bond fund fell 26%, even with reinvested interest.
How to invest: RiverPark Strategic Income (
RSIVX , 4.8%) is a mix of cash
and short-term high-yield and investment-grade bonds. Managers choose bonds with a very low duration, to cut interest rate risk,
and a relatively low chance of default. Vanguard High-Yield Corporate (
VWEHX , 5.5%), a
Kip 25 fund, charges just 0.23% in expenses and invests mainly in the just-below-investment-grade arena, in issues from companies
such as Sprint and Univision Communications. SPDR Bloomberg Barclays High Yield Bond ETF (
JNK , $36, 5.8%) charges 0.40%
in expenses and tracks the Barclays High Yield Very Liquid index -- meaning that it invests only in easily traded bonds. That's a
comfort in a down market because when the junk market turns down, buyers tend to dry up. The fund may lag its peers in a hot market,
however, as some of the highest-yielding issues can also be the least liquid. Investors who are bullish on the economy might consider
Northern High Yield Fixed Income Fund (
NHFIX , 7.0%). The fund owns
a significant slice of the junkier corner of the bond market, with about 23% of its holdings rated below B by Standard & Poor's.
These bonds are especially vulnerable to economic downturns but compensate investors willing to take that risk with a generous yield.
You might be surprised to learn how much income you can generate from moving hydrocarbons from one place to another. Most MLPs are
spin-offs from energy firms and typically operate gas or oil pipelines. MLPs pay out most of their income to investors and don't
pay corporate income taxes on that income. Those who buy individual MLPs will receive a K-1 tax form, which spells out the income,
losses, deductions and credits that the business earned and your share of each. Most MLP ETFs and mutual funds don't have to issue
a K-1; you'll get a 1099 form reporting the income you received from the fund.
The risks: In theory, energy MLPs should be somewhat immune to changes in oil prices; they collect fees on the amount they move,
no matter what the price. In practice, when oil gets clobbered, so do MLPs -- as investors learned in 2015, when the price of West
Texas intermediate crude fell from $53 a barrel to a low of $35 and MLPs slid an average 35%. Oil prices should be relatively stable
this year, and high production levels should mean a good year for pipeline firms. How to invest: Magellan Midstream Partners (
MMP , $62, 6.5%) has a 9,700-mile
pipeline system for refined products, such as gasoline, and 2,200 miles of oil pipelines. The MLP has a solid history of raising
its payout (called a distribution) and expects a 5% annual increase in 2019. The giant of MLP ETFs, Alerian MLP ETF (
AMLP , $10, 7.2%), boasts $9
billion in assets and delivers a high yield with reasonable expenses of 0.85% a year. Structured as a C corporation, the fund must
pay taxes on its income and gains. That can be a drag on yields compared with MLPs that operate under the traditional partnership
structure. EQM Midstream Partners (
EQM , $46, 10.1%) is active in
the Appalachian Basin and has about 950 miles of interstate pipelines. The firm paid $4.40 in distributions per unit last year and
expects to boost that to $4.58 in 2019.
Closed-end funds (CEFs) are the forebears of mutual funds and ETFs. A closed-end fund raises money through an initial stock offering
and invests that money in stocks, bonds and other types of securities, says John Cole Scott, chief investment officer, Closed-End
Fund Advisors. The fund's share price depends on investors' opinion of how its picks will fare. Typically, the fund's share price
is less than the current, per-share value of its holdings -- meaning that the fund trades at a discount. In the best outcome, investors
will drive the price up to or beyond the market value of the fund's holdings. In the worst case, the fund's discount will steepen.
The risks: Many closed-end income funds borrow to invest, which can amplify their yields but increase their price sensitivity
to changes in interest rates. Most CEFs have higher expense ratios than mutual funds or ETFs, too.
How to invest: Ares Dynamic Credit Allocation Fund (
ARDC , $15, 8.5%) invests in
a mix of senior bank loans and corporate bonds, almost all of which are rated below investment grade. Borrowed money as a percentage
of assets -- an important indicator for closed-end funds known as the leverage ratio -- is 29.6%, which is a tad lower than the average
of 33% for closed-end funds overall. The fund's discount to the value of its holdings has been narrowing of late but still stands
at 12.1%, compared with 11.2%, on average, for the past three years.
Advent Claymore Convertible Securities and Income Fund (
AVK , $15, 9.4%), run by Guggenheim
Investments, specializes in convertible bonds, which can be exchanged for common stock under some conditions. The fund also holds
some high-yield bonds. Currently, it's goosing returns with 40% leverage, which means there's above-average risk if rates rise. For
intrepid investors, the fund is a bargain, selling at a discount of 10.6%, about average for the past three years.
Clearbridge Energy Midstream Opportunity (
EMO , $9, 9.7%) invests in energy
master limited partnerships. It sells at a 12.1% discount, compared with a 6.6% average discount for the past three years. Its leverage
ratio is 33% -- about average for similar closed-end funds.
Merely having a net worth of $1 million, it seems, doesn't mean you're wealthy. In Charles
Schwab's annual Modern Wealth Survey, the amount people said it took to be considered rich
averaged out to $2.3 million. That, the company said, is "more than 20 times the actual median
net worth of U.S. households."
It's also a very slight drop from the $2.4 million average in the two previous iterations of
the survey.The older one gets, the higher the bar goes, predictably. Among baby boomers
(roughly age 55 to 73), the average net worth you need to be considered wealthy is $2.6
million, 35% higher than what millennials envision as the admission price to the
plutocracy.
For someone to be deemed merely financially comfortable, the required net worth shrinks
significantly. The average amount was $1.1 million, and only Generation Z (about age 9 to age
22, though Schwab's sample was 18 to 22) cited a number below $1 million ($909,600, to be
exact.)
The Schwab survey, which took a national sample of 1,000 Americans between the ages of 21
and 75, also revealed that the majority of Americans really crave real estate. More than 50% of
respondents across generations said that if they got a $1 million windfall, they'd spend it,
and the most popular purchase would be a place to live -- particularly among millennials
(roughly age 22 to 37). Those millennials also took issue with the premise of the survey. More
than three-quarters of them said their personal definition of wealth was really about the way
they live their lives, rather than a discrete dollar amount.
Nevertheless, 60% of them aren't all that worried, since they plan to be wealthy within one
to 10 years. The survey results suggest an interesting strategy to help them get there --
ignore their friends' social media posts.
How's that? Well, it seems virtual covetousness has taken on a life of its own for the
digital generation. According to the survey, overspending because of what they see on social
media (in tandem with the ease with which it takes your cash) was the largest "bad" influence
on how they managed their money.
And the negative influence of social media on spending is only going to grow. In March,
Instagram announced that it's testing a shopping feature called Checkout that lets users buy
things directly within the app, rather than being directed to a retailer's website. So much for
one-stop shopping. Now you won't even have to stop.With 59% of the Americans surveyed saying
they live paycheck to paycheck, instant gratification comes with a high price. While a strong
economy and low unemployment are helping consumers stay current on their debt payments, the
largest U.S. banks are seeing losses on credit cards outpace those of auto and home loans at a
rate not seen in at least 10 years.And when the bottom does finally fall out, the last thing
most Americans will be thinking of is whether they qualify as wealthy.
To contact the author of this story: Suzanne Woolley in New York at
[email protected]
To contact the editor responsible for this story: David Rovella at
[email protected]
For more articles like this, please visit us at bloomberg.com
After vowing over the weekend to "never surrender to external pressure",
Beijing has defied President Trump's demands that it not resort to retaliatory tariffs and announced plans to slap new levies
on $60 billion in US goods.
CHINA SAYS TO RAISE TARIFFS ON SOME U.S. GOODS FROM JUNE 1
CHINA SAYS TO RAISE TARIFFS ON $60B OF U.S. GOODS
CHINA SAYS TO RAISE TARIFFS ON 2493 U.S. GOODS TO 25%
CHINA MAY STOP PURCHASING US AGRICULTURAL PRODUCTS:GLOBAL TIMES
CHINA MAY REDUCE BOEING ORDERS: GLOBAL TIMES
CHINA ADDITIONAL TARIFFS DO NOT INCLUDE U.S. CRUDE OIL
CHINA RAISES TARIFF ON U.S. LNG TO 25% EFFECTIVE JUNE 1
CHINA TO RAISE TARIFFS ON IMPORTS OF U.S. RARE EARTHS TO 25%
China's announcement comes after the White House raised tariffs on some $200 billion in Chinese goods to 25% from 10% on Friday
(however, the new rates will only apply to goods leaving Chinese ports on or after the date where the new tariffs took effect).
Here's a breakdown of how China will impose tariffs on 2,493 US goods. The new rates will take effect at the beginning of next
month.
2,493 items to be subjected to 25% tariffs.
1,078 items to be subject to 20% of tariffs
974 items subject to 10% of tariffs
595 items continue to be levied at 5% tariffs
In further bad news for American farmers, China might stop purchasing agricultural products from the US, reduce its orders for
Boeing planes and restrict service trade.
There has also been talk that the PBOC could start dumping Treasurys (which would, in addition to pushing US rates higher, could
also have the effect of strengthening the yuan). Though if China is going to dump Treasuries, will they also be dumping US stocks
and real estate?
China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China.
Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.
Neoliberal corruption in full display. As we see forms of nepotism evolve with time...
Notable quotes:
"... Two years of investigations by journalist Peter Schweizer has revealed that Joe Biden may now have a serious China problem. And just like his Ukraine scandal , it involves actions which helped his son Hunter, who was making hand over fist in both countries. ..."
"... Schweizer, the author of Clinton Cash and now Secret Empires discovered that in 2013, then-Vice President Biden and his son Hunter flew together to China on Air Force Two - and two weeks later, Hunter's firm inked a private equity deal for $1 billion with a subsidiary of the Chinese government's Bank of China , which expanded to $1.5 billion, according to an article by Schweizer's in the New York Post . ..."
"... Hunter Biden and his partners created several LLCs involved in multibillion-dollar private equity deals with Chinese government-owned entities. ..."
"... Perhaps most damning in terms of timing and optics, just twelve days after Hunter and Joe Biden flew on Air Force Two to Beijing, Hunter's company signed a "historic deal with the Bank of China ," described by Schweizer as "the state-owned financial behemoth often used as a tool of the Chinese government." To accommodate the deal, the Bank of China created a unique type of investment fund called Bohai Harvest RST (BHR). According to BHR, Rosemont Seneca Partners is a founding partner ..."
"... It was an unprecedented arrangement: the government of one of America's fiercest competitors going into business with the son of one of America's most powerful decisionmakers . ..."
"... It doesn't stop there. While Hunter Biden had "no experience in China, and little in private equity," the Chinese government for some reason thought it would be a great idea to give his firm business opportunities instead of established global banks such as Morgan Stanley or Goldman Sachs. ..."
"... The following August, Rosemont Realty, another sister company of Rosemont Seneca, announced that Gemini Investments was buying a 75 percent stake in the company. The terms of the deal included a $3 billion commitment from the Chinese, who were eager to purchase new US properties. Shortly after the sale, Rosemont Realty was rechristened Gemini Rosemont. ..."
"... "We see great opportunities to continue acquiring high-quality real estate in the US market," said one company executive, who added: "The possibilities for this venture are tremendous." ..."
"... Then, in 2015, BHR partnered with a subsidiary of Chinese state-owned military aviation contractor Aviation Industry Corporation of China (AVIC) in order to purchase American precision-parts maker Henniges - a transaction which required approval from the Committee of Foreign Investment in the United States (CFIUS), the same rubber-stamp committee that approved the Uranium One deal. ..."
"... The vice president was bringing with him highly welcomed terms of a United States Agency for International Development program to assist the Ukrainian natural-gas industry and promises of more US financial assistance and loans. Soon the United States and the International Monetary Fund would be pumping more than $1 billion into the Ukrainian economy. ..."
"... The next day, there was a public announcement that Archer had been asked to join the board of Burisma, a Ukrainian natural-gas company. Three weeks after that, on May 13, it was announced that Hunter Biden would join, too. Neither Biden nor Archer had any background or experience in the energy sector. - New York Post ..."
"... Then Joe Biden threatened to withhold $1 billion in US loan guarantees to Ukraine unless President Petro Poroshenko fired his head prosecutor, General Viktor Shokin, who was leading a wide-ranging corruption investigation into natural gas firm Burisma Holdings. ..."
"... Biden bragged about the threat last year, telling an audience at the Council on Foreign Relations: "I said, ' You're not getting the billion .' I'm going to be leaving here in, I think it was about six hours. I looked at them and said: ' I'm leaving in six hours. If the prosecutor is not fired, you're not getting the money, '" bragged Biden, recalling the conversation with Poroshenko. ..."
"... As we head into the 2020 elections, it will be interesting to see how Joe Biden dances around his son's lucrative - and very potentially daddy-assisted deals around the world. ..."
Two years of investigations by journalist Peter Schweizer has revealed that Joe Biden may now have a serious China problem.
And just like his
Ukraine scandal
, it involves actions which helped his son Hunter, who was making hand over fist in both countries.
Schweizer, the author of Clinton Cash and now
Secret Empires discovered
that in 2013, then-Vice President Biden and his son Hunter flew together to China on Air Force Two - and two weeks later, Hunter's
firm inked a private equity deal for $1 billion with a subsidiary of the Chinese government's Bank of China , which expanded to $1.5
billion, according to an article by Schweizer's in the
New York Post .
" If it sounds shocking that a vice president would shape US-China policy as his son -- who has scant experience in private
equity -- clinched a coveted billion-dollar deal with an arm of the Chinese government, that's because it is " -
Peter Schweizer
Perhaps this is why Joe Biden - now on the 2020 campaign trail - said last week that China wasn't a threat.
Secretary of State Mike Pompeo took a shot at Biden's comment during a speech at the Claremont Institute's 40th anniversary gala,
saying "Look how both parties now are on guard against the threat that China presents to America -- maybe except Joe Biden."
Back to Hunter...
Schweizer connects the dots, writing that "without the aid of subpoena power, here's what we know :"
Hunter Biden and his partners created several LLCs involved in multibillion-dollar private equity deals with Chinese government-owned
entities.
The primary operation was Rosemont Seneca Partners - an investment firm founded in 2009 and controlled by Hunter Biden, John
Kerry's stepson Chris Heinz, and Heniz's longtime associate Devon Archer. The trio began making deals "through a series of overlapping
entities" under Rosemont.
In less than a year, Hunter Biden and Archer met with top Chinese officials in China , and partnered with the Thornton Group
- a Massachusetts-based consultancy headed by James Bulger - son of famed mob hitman James "Whitey" Bulger.
According to the Thornton Group's Chinese-language website, Chinese executives "extended their warm welcome" to the "Thornton
Group, with its US partner Rosemont Seneca chairman Hunter Biden (second son of the now Vice President Joe Biden."
Officially, the China meets were to "explore the possibility of commercial cooperation and opportunity," however details of
the meeting were not published to the English-language version of the website.
"The timing of this meeting was also notable. It occurred just hours before Hunter Biden's father, the vice president, met
with Chinese President Hu Jintao in Washington as part of the Nuclear Security Summit ," according to Schweizer.
Perhaps most damning in terms of timing and optics, just twelve days after Hunter and Joe Biden flew on Air Force Two
to Beijing, Hunter's company signed a "historic deal with the Bank of China ," described by Schweizer as "the state-owned financial
behemoth often used as a tool of the Chinese government." To accommodate the deal, the Bank of China created a unique type of
investment fund called Bohai Harvest RST (BHR). According to BHR, Rosemont Seneca Partners is a founding partner .
It was an unprecedented arrangement: the government of one of America's fiercest competitors going into business with the
son of one of America's most powerful decisionmakers .
Chris Heinz claims neither he nor Rosemont Seneca Partners, the firm he had part ownership of, had any role in the deal with
Bohai Harvest. Nonetheless, Biden, Archer and the Rosemont name became increasingly involved with China.
Archer became the vice chairman of Bohai Harvest, helping oversee some of the fund's investments. -
New York Post
National Security implications
As Schweizer also notes, BHR became an "anchor investor" in the IPO of China General Nuclear Power Corp (CGN) in December 2014.
The state-owned energy company is involved with the construction of nuclear reactors.
In April 2016, CGN was charged by the US Justice Department with stealing nuclear secrets from the United States , which prosecutors
warned could cause "significant damage to our national security." CNG was interested in sensitive, American-made nuclear components
that resembled those used on US nuclear submarines, according to experts.
More China dealings
It doesn't stop there. While Hunter Biden had "no experience in China, and little in private equity," the Chinese government
for some reason thought it would be a great idea to give his firm business opportunities instead of established global banks such
as Morgan Stanley or Goldman Sachs.
Also in December 2014, a Chinese state-backed conglomerate called Gemini Investments Limited was negotiating and sealing deals
with Hunter Biden's Rosemont on several fronts. That month, it made a $34 million investment into a fund managed by Rosemont.
The following August, Rosemont Realty, another sister company of Rosemont Seneca, announced that Gemini Investments was
buying a 75 percent stake in the company. The terms of the deal included a $3 billion commitment from the Chinese, who were eager
to purchase new US properties. Shortly after the sale, Rosemont Realty was rechristened Gemini Rosemont.
"Rosemont, with its comprehensive real-estate platform and superior performance history, was precisely the investment opportunity
Gemini Investments was looking for in order to invest in the US real estate market," said Li Ming, chairman of Sino-Ocean Land Holdings
Limited and Gemini Investments. "We look forward to a strong and successful partnership."
That partnership planned to use Chinese money to scoop up US properties.
"We see great opportunities to continue acquiring high-quality real estate in the US market," said one company executive,
who added: "The possibilities for this venture are tremendous."
Then, in 2015, BHR partnered with a subsidiary of Chinese state-owned military aviation contractor Aviation Industry Corporation
of China (AVIC) in order to purchase American precision-parts maker Henniges - a transaction which required approval from the Committee
of Foreign Investment in the United States (CFIUS), the same rubber-stamp committee that approved the Uranium One deal.
Tying it back to Ukraine
While we have previously reported on the Bidens' adventures in Ukraine, Schweizer connects the dots rather well here ...
Consider the facts. On April 16, 2014, White House records show that Devon Archer, Hunter Biden's business partner in the Rosemont
Seneca deals, made a private visit to the White House for a meeting with Vice President Biden. Five days later, on April 21, Joe
Biden landed in Kiev for a series of high-level meetings with Ukrainian officials . The vice president was bringing with him
highly welcomed terms of a United States Agency for International Development program to assist the Ukrainian natural-gas industry
and promises of more US financial assistance and loans. Soon the United States and the International Monetary Fund would be pumping
more than $1 billion into the Ukrainian economy.
The next day, there was a public announcement that Archer had been asked to join the board of Burisma, a Ukrainian natural-gas
company. Three weeks after that, on May 13, it was announced that Hunter Biden would join, too. Neither Biden nor Archer had any
background or experience in the energy sector. -
New York Post
Hunter was paid as much as $50,000 per month while Burisma was under investigation by officials in both Ukraine and elsewhere.
Then Joe Biden threatened to withhold $1 billion in US loan guarantees to Ukraine unless President Petro Poroshenko fired
his head prosecutor, General Viktor Shokin, who was leading a wide-ranging corruption investigation into natural gas firm Burisma
Holdings.
Biden bragged about the threat last year, telling an audience at the Council on Foreign Relations: "I said, ' You're not getting
the billion .' I'm going to be leaving here in, I think it was about six hours. I looked at them and said: ' I'm leaving in six hours.
If the prosecutor is not fired, you're not getting the money, '" bragged Biden, recalling the conversation with Poroshenko.
" Well, son of a bitch, he got fired. And they put in place someone who was solid at the time."
Joe Biden says that he had no idea Hunter was on the board of Burisma (for two years after he joined), and that the two never
spoke about the Burisma investigation. The former VP claims that Shokin's removal was required due to his mishandling of several
cases in Ukraine.
As we head into the 2020 elections, it will be interesting to see how Joe Biden dances around his son's lucrative - and very
potentially daddy-assisted deals around the world.
Biden is another scumbag Democrat Lawyer who's the original 'pay for play' politician...A 40+ year history in Political Office
with Zero accomplishments except enriching himself and his family...A complete fraud and hypocrite liar.....Lawyers should have
never been allowed to run for Office at any level.....Look at all the corruption that has been and is being exposed at the different
bureaucracies...Virtually all the corruption has been willfully committed by Lawyers....Pathetic....
Interesting.... I put: "The Steele Dossier has so many British agents involved it sounds like a British failed coup to overthrow
an elected President because he stands in " the way of "profiting goals of " international goals" of global monopoly run by unelected
councils and retired instigators as facilitators of discord.
But came out:The Steele Dossier has so many British agents involved it sounds like a British failed coup to overthrow an elected
President because he stands in the profiting goals of " international goals" of global monopoly run by unelected councils and
retired instigators as facilitators of discord.
To make it sound as if it is Trump profiting.... By no means is that true... Its the " long term" Washington officals that
have been profiting. Not a possible 8 year President.
My phone also wont let me thumbs up people i would like to but only a few and also replying is " verboten".
These algorhythms and blocks and censorship is an abuse of constitutional rights which is bad enough, but even worse is that
these rights got monopolized by various corporations who bought stock in facebook/ googles options that was stolen from Leader
technologies source code ( which Mark zukerberg couldnt write on a good day... He is a front guy and again we have British privy
council involed with Clegg head of facebook now voice for Mark... Because Mark is a cut out).
This whole social media internet thing has been hijacked and weaponized by Washingtons same people as Dossier scandel... James
Chandeler attorney and backstaber of Leader technology.
See leader technology vs facebook..... But i digress.
Michael T. McKibben's career spans two phases: international Christian music ministry, and technology innovation. In 2006,
he was awarded U.S. Patent No. 7,139,761 for what is now called "social networking."
Biden & Kerry aren't the only ones with a China problem. "Secret Empires" also listed Mitch McConnell having a huge China problem
through his wife's shipping company. I bet he doesn't run for re-election. Winning.
they all own one another - that's the essence of the problem in politics. and why they have tried so hard to get that outsider,
trump, out of the country club.
China funded Bill Clinton's election campaigns through James Riady, an Indonesian Chinese man involved in hard drug smuggling
and arms trafficking. The money was laundered through Little Rock banks and corporations. (See Victor Thorn's Hillary and Bill
, all three volumes.)
"Come on man! This is a joke! He's my son and he's a great buddy. I mean yeah he was drummed out of the Naval Reserve because
of his cocaine habit, but come on man, you know, everybody does it! Just ask my good friend Barack, he's a clean, good looking
darkie whose done his share of blow. And yeah Hunter fucked his dead brother's widow, but come on man! Have you seen her ****
and ***. I might have made a move on her myself, but hey man I'm married."
Joe Biden, From the endless Fear and Mongering Presidential campaign of 2020.
IRS/SEC/FBI are not investigatory agencies. They are barrier agencies. They protect the anointed, letting them do as they wish,
and stomp on anyone else who tries to get in on the gravy train.
Sociopaths are the reason all governments, regardless of the particular 'ism', eventually fail...
Looking at human history, fascism is the most common form of government for humans. At least it is the most honest - that the
sociopaths are ******* everyone else.... These days we try to hide it by lofty idealism that is incompatible with a predator/prey
real world.....
Representative democracy, socialism and communism all fail and all fail for the same reason - sociopaths...
We should be honest with ourselves that there is a small, but statistically significant percentage of the human population
that are sociopaths (and more are being born every generation). We can call them predators and we are the prey...any concentration
of power attracts sociopaths regardless of the fancy label we put on the political system. Within a short time the system is inundated
with sociopaths who invariably game the system to death for their own individual benefit....
Don't like the reality in which you find yourself? Stop voting for sociopaths, stop giving them power...
What political party or system even acknowledge the sociopath problem? That's right, none...so don't expect anything to change
after the reset...the pleubs will chose a new sociopath for their leader, who will **** them, and things will go on as they always
have...
Only way to combat this is to decentralize power as much as possible...this doesn't solve the sociopath problem, but it does
spread them out and keeps them from ganging up together to **** over the peasants...but I won't hold my breath....
Is this a good time to take a look at 1) Front Men 2) Front Companies 3) Shell Companies 4) Special Purpose Vehicles (SPV/SPE)
5) Offshore Accounts, Offshore Donations, Offshore Campaign or PAC or Party Contributions, Paradise Papers, Panama Papers 6) USA
as Tax Haven for foreign accounts 7) USA as an Empire 8) The Rise Of The Fourth Reich notes in book by Jim Marrs
Buffett put it very simply. If oil prices go up OXY can make a lot of money.
$100 oil they will make a lot, especially on their CO2 projects in the Permian, and in
Oman, where they own a decent chunk of flowing BOPD.
It's a bet on oil going up, plus getting 8% interest for loaning them $10 billion. They go
with preferred stock for the favorable dividend tax treatment.
It is only a bad deal if oil stays here or below long term. Assuming a 10-15 year cycle,
by 2025-2030 oil will surely rocket up.
It's a good deal for Berkshire, but not a good deal for Occidental.
"The 8 percent yield on the preferreds is way above Oxy's pre-bidding dividend yield of
4.7 percent and equivalent to a pre-tax cost of debt of about 10 percent, roughly triple the
company's bond yield. That's before counting the warrants, equivalent to 9 percent dilution
on the pro forma share count, plus the redemption premium.
This wasn't a bet on Oxy, the Permian shale basin or even oil prices; Buffett could have
just bought stock in the open market for that. This was about extracting as much as possible
from a company that really needed the promise of a big slug of cash."
According to Buffett, he is betting on oil prices and the Permian.
Also, Berkshire might have bought Anadarko directly, if asked. Which seems odd.
"Asked why Berkshire wouldn't just buy Anadarko itself, Buffett said, 'That might have
happened if Anadarko came to us, but we wouldn't jump into some other deal that we heard
about from somebody else coming to us seeking financing.'
Later in the interview, longtime investing partner and vice chairman Charlie Munger
responded to the question as well, saying, 'Nobody asked us to.'"
currently they are forecasting about a 750 kb/d increase annually from Dec 2018 to Dec
2020.
Yes, but they are predicting the lions share of that gain in 2019. That is they are
predicting a US increase in production of 1,200 kb/d in 2019 and a gain of 350 kb/d in 2020.
(Dec. to Dec. in each case.)
Note: This is C+C, not Total Liquids.
Obviously, they are expecting a slowdown in the oil patch in 2020. That slowdown just may
come about a year earlier than expected.
I agree, 2019 is too high, but I still think the overall change from Dec 2018 to Dec 2020
will be about right (2019 increase will be less than STEO, but 2020 increase will be
greater).
It is doubtful their forecast will be precisely correct, nor will anyone's, but the
overall increase from Dec 2018 to Dec 2020 seems pretty reasonable. I agree that the expected
increase in 2019 will be less than the 1.2 Mb/d the EIA currently forecasts, about 700 kb/d
this year and 850 kb/d next year seems more reasonable if Brent oil prices gradually rise to
$85/b (2018$) over the May 2019 to Dec 2020 period as I expect (with lots of volatility along
the way). Basically I expect the centered average 5 week Brent spot price may reach $85/b
some time before Dec 31, 2020.
Dennis, the EIA clearly sees the slowdown in the shale oil patch coming. They think it will
hit next year, 2020. The EIA has a history of being overly optimistic. Yet yet, in this case,
you think they are being pessimistic. You see shale production increasing in 2020 over 2019.
That just seems very strange to me.
However, I will just have to leave it at that. We will both just have to wait and see.
I expect oil prices will be higher towards the end of 2019, profits for tight oil
producers will be higher, there will be a higher well completion rates (higher capital
spending budgets) in 2020 as a result and the rate of increase in tight oil output will
increase a bit (I am assuming 700 kb/d in 2019 and 800 kb/d in 2020, this is essentially no
change in the rate of increase). In the end we don't know as we don't know future oil prices
and how they will affect investment decisions. The main point is that in the end the output
in Dec 2020 may be pretty close to the EIA estimate. That estimate is neither pessimistic or
optimistic, it is realistic. The path that output will take from March 2019 to Dec 2020 is
impossible to predict, a straight line guess is as good as any.
I understand Dennis, hope springs eternal in the shale oil patch, for some folks anyway.
I agree that oil prices are about to spike. World oil production is currently falling like
a rock. Brent prices are in backwardation, meaning traders also expect prices to rise.
However, I do not believe, as you do, that this will automatically cause a dramatic increase
in oil production. The effect will be feeble at best. Well, in my opinion anyway.
I also do not expect a dramatic increase, I actually expect the recent rate of annual
increase of 1.6 Mb/d to slow to about half of the previous rate (0.8 Mb/d) and continue to
slow over time to near zero by 2024.
Attached are the changing monthly STEO projections for February, March and April for the
lower 48 production. Today's projection, April, has added 230 kb/d day by year end 2019 to
the March projection and close to 300 kb/d in 2020. The April projection also shows an
increase of 960 kb/d from Dec 18 to Dec 19. For Dec 19 to Dec 20, the increase is only 420
kb/d, less than half of the 18 to 19 increase. Any speculation/ideas for the lower increase
for 19 to 20. The G of M drops by 70 kb/d from Dec 19 to Dec 20.
You notice that the April 19 STEO has the lowest production numbers for Jan. Feb. and
April 2019 but the highest numbers as they move into the second half of 2019 and all of
2020.
I don't know what to make of this except that I find it rather amusing.
I found it insulting to my intelligence (not an exceptionally difficult task), but now that
you mention it, I can imagine some Lewis Carroll feel to it.
How are they adding 100k+ net non-Gulf when their own drilling productivity reports have the
Permian at less than half that growth? With Eagle Ford and Bakken not growing. Doesn't add up
even before taking out legacy decline elsewhere.
"... A word about the LTO metric of the month, free cash flow. Cash flow ain't "free" if one is still in debt. IMO, 1Q19 was awful for the US shale oil industry. It used cash flow for buy backs, to meet dividend demands by pissed off investors, to pay absurd prices for undeveloped acreage in the Permian, for reserve replacement (75% of ALL wells now drilled in America's shale basins simply offset last year's annualized decline) and still eked out a little growth. Nothing to very little went of nothing went to voluntary deleveraging. At less than $75-80, it can't be done. ..."
Dennis. Things were going good until 11/18, when the price started to crater. Thankfully we
are back up. However, our price for December through March averaged $48 and change, which is
making money, but not much.
Expenses have stayed relatively stable. Labor goes up a little each year. Electricity has
actually dropped a few percent. Chemicals have stayed the same since we received a 10% cut in
2016. Steel is up some, so rods and tubing are a little higher.
$55-65 WTI would still be ok. Liked $70s last fall, before the Donald got involved with
Iran waivers and tweets.
My comment was poking at the Donald, et al, who think that since $25 was a great price in
1990 it should still be ok today.
Clearly, although $55-65 is good for us, maybe not good enough for others. In particular,
the service companies who continue to lay bleeding to death on the side of the road.
We still have no plans to drill. Have five workovers planned for summer to fight the
decline.
Dennis, you are kind; thank you. My belief is that if one can't make money at $50/2.50, and
cope with 30% price swings for months at a time, one should be in the lawn mowing business
instead. The US shale oil industry could therefore keep most of America looking like Augusta
National.
A word about the LTO metric of the month, free cash flow. Cash flow ain't "free" if one is
still in debt. IMO, 1Q19 was awful for the US shale oil industry. It used cash flow for buy
backs, to meet dividend demands by pissed off investors, to pay absurd prices for undeveloped
acreage in the Permian, for reserve replacement (75% of ALL wells now drilled in America's
shale basins simply offset last year's annualized decline) and still eked out a little
growth. Nothing to very little went of nothing went to voluntary deleveraging. At less than
$75-80, it can't be done.
Hughes has a new report out clearly showing Mother Nature is having Her say in the shale
oil phenomena. Nobody messes with Mother Nature.
Agree higher oil prices are needed for tight oil producers to reduce their debt. If long
term oil prices remain $50/b, they are toast.
I read a blurb on the new Hughes paper, but I am a bit of a cheapskate and was not willing
to put down $250 for the report so I have not read it.
From your perspective, do you think oil prices are likely to remain $50/b long term? (lets
call it the 52 week average oil price). It seems to me there will not be adequate supply on
the World oil market at $50/b, perhaps $65 or $70/b (in 2019 US$) would do it.
You know infinitely more than me about the oil business and you have been in it for a
while (40+ years as an owner I believe), so your take would be of interest to me and I
imagine everyone who reads this blog.
As many of you, I don't expect business as usual to continue. We get projections based on
past trends, but with oil being finite and the globe already showing the effects of climate
change, I think we are in for a tumultuous future.
In this case he looks like Bill Clinton impersonalization ;-) That's probably how Adelson controls Bolton ;-)
Notable quotes:
"... Larry Flint had offered a Million dollars to anyone who had proof of republican sexual exploits. He was quickly fingered by someone who attended those clubs. He was forced to accept a temporary position and quietly resigned after a few months so as to avoid facing questions. ..."
@FB Yeah brother,
that POS was called out during his confirmation hearings during baby Bush's presidency. Larry Flint had offered a Million
dollars to anyone who had proof of republican sexual exploits. He was quickly fingered by someone who attended those clubs. He
was forced to accept a temporary position and quietly resigned after a few months so as to avoid facing questions.
Someone said they saw him proposition a teenage girl outside one of the swinger clubs he frequented.
"... And if we don't protect manufacturing jobs in the US the whole damned car will be made in China and there won't be decent paying jobs here manufacturing them. ..."
"... I have worked with Chinese auto parts suppliers. They run from OK to horrible. ..."
"... In reality, the tariffs are 'cash in the bank' for the U.S. Treasury. If nothing else, tariffs will allow our politicians to spend more each year - perhaps we might even get to the point that our nation avoids 'deficit spending' for at least one year. ..."
John Murphy of Bank of America joins CNBC's "Closing Bell" to discuss the impact of new tariffs on the auto industry.
William 23 hours ago
And if we don't protect manufacturing jobs in the US the whole damned car will be made in China and there won't be decent paying
jobs here manufacturing them.
c craig f 21 hours ago
Cars that do not use Chinese parts will sell better and the world it will keep turning
P Park Slope 23 hours ago
Great. I'll keep my old one. Thanks for the savings.
BobBob, yesterday
I have worked with Chinese auto parts suppliers. They run from OK to horrible. I'd never buy from them - maybe as a LAST option
to avoid going belly up. The problem then becomes losing repeat customers due to quality and reliability problems....
GeorgeGeorge, 10 hours ago
Do not understand how the anti-Trump politicians and the media can be against these tariffs. In reality, the tariffs are
'cash in the bank' for the U.S. Treasury. If nothing else, tariffs will allow our politicians to spend more each year -
perhaps we might even get to the point that our nation avoids 'deficit spending' for at least one year.
Access to the college is a privilege that typically is granted to children with high IQ. In
europlpe that is doene via entrance exams. If you pass you are in, if not, so be it. So the very
notion of college is discriminative in this sense, as it should be. All this posturing about
neighborhoods with bad schools does not change the fact that individual with high IQ can prosper
and pass entrance earn to the college even graduating from "bad schools", so mostly marginal
individual are affected.
But if you need to pay for the college that poor kids with high IQ are cut out. Forever. and
that's grossly unfair (as many things under neoliberalism)
Notable quotes:
"... As a matter of principle, an egalitarian society of the future that I'd want to help building would in fact contain free or inexpensive access to any level of education, at a high base standard of quality. Like, every school is a good school, there is a mechanism for tackling exceptions, and everyone can access whatever level of basic education or fundamental vocational training without having to pay for it in major financial hardship. (There are of course many ways to implement such a system.) ..."
"... I'm surprised at the number of people on this thread who seem to think the purpose of free university education is to help lift people out of poverty. How many times do you have to be shown that this upward mobility thing is a Ponzi scheme? The goal of free education is to ensure that poor people can get access to the same things rich people can, so that everyone is able to live a fulfilling life. ..."
"... Harry @82 -- my understanding is that while the NHS has improved health outcomes for everyone, it has also (counter-intuitively) increased health inequality. More affluent people are better able to take advantage of healthcare. The interventions which tend to reduce health inequality are things like clean water and closing the sewers, not universal access to care. ..."
"... (*) Under German law, students can sue their parents if they have the means but refuse to fund an adequate education. But of course you would rather not sue your parents. ..."
"... Poor children should be able to go to university. That's a simple statement of what is right. Warrens offering a fix for ONE of the two big barriers to doing that. Her fix also helps middle class kids. Lucky them! Why should a poor kid care? ..."
"... I think focusing on high income parents is a bit misleading. Yes the very poorest don't go to college, but plenty of kids from median income, and sub-median income, households do. And plenty of kids are graduating from college and getting jobs that don't pay particularly well, and probably will never pay brilliantly. ..."
"... Also once again: we target income inequality, not variation. We don't oppose a program because 30% of the population won't use it. If you're going to make that your yardstick for public investment then you should at least try to address the consequences for public funding of women's health, childcare, and indeed universal health coverage! ..."
@Christina.H
"Having grown up and gone to university in Germany it is simply incomprehensible to me that
there is tuition supporters on the political left in the U.S".
"Having grown up in the US, Italy and Germany and gone to university in Germany -(for
FREE) I very well understand -- that there are tuition supporters on the so called political
left in the U.S. -- as firstly -- if you ever have grown up in a family where most of the
members have such a emotional -(and funny) attachment to "their schools" -(and universities)
-- as "them Anglo-Saxons" you very well understand that:
2. -- how far the so called "left" in the U.S. is -- concerning "being progressive" -- so
"many moons" behind the European Left -- which get's illustrated by this what did Nia Psaka
write: "one of those supposedly-left-but-actually-right arguments that I get so tired
of."
"Opportunity cost" is bearing a huge load in the argument, and it can't take the weight
Is there an opportunity cost in the sense that the US can't afford to do Warren's plan and
also spend the same amount on prek-12 ? No.
Is there an opportunity cost politically? Also no. An administration that can create a new
wealth tax ex nihilio to free wage slaves from debt bondage -- for this what this is -- is
also an administration that can spend huge sums on prek-12 at the same time
We're left with an opportunity cost for airing policy ideas during a campaign. Here there
*are* actual trade offs involved; attention / time is limited etc.
What we're left with is an argument that "Warren's proposal for universal prek and writing
down college debt / cheap state college is crowding out talk during the campaign for
increased k-12 spending"
Which rests on the assumptions 1) "a campaign which talks about universal prek / fixing
college debt won't increase k-12 spending on the same scale once in power unless it's talked
about during the campaign"
and
2) "the best way to get k-12 spending talked about during the campaign is to denigrate the
fixing college debt proposal"
Neither of which, at least to me, is obvious or that coherent.
Contrast this with a shrewd political calculation for *not* mentioning massive k-12
funding increases during the campaign. It's a charged issue which cuts across usual
infra-coalition groups, so the effect of bringing it up is complex and the positives are
mitigated more than prek / college. And, as explored above, an admin which can do prek /
college can also do k-12. (The Arne Duncan example cuts both ways; the 08 campaign wasn't
caught over massive changes in fed education policy, but it still happened.)
Lastly, prek/fixing college debt are *overwhelmingly popular*. It's *tremendous political
terrain to occupy*. It gets people used to spending huge sums of money on education, and it
does so in a way that even non-brain-worked Republicans have to nod in agreement makes good
fiscal sense.
Muddying those waters based on the dubious assumptions above, and ignoring the other
political dynamics, seems unwise.
Somehow I thought the main topic of the OP was how Warren's plan would increase
inequality, which still strikes me as highly dubious, especially as argued in the link.
Apparently the real topic is supposed to be how funding public college tuition for all
students increases inequality by diverting funds from primary education (and maybe
secondary?)
I'm not convinced the implicit premise that a poor education is the main generator of
inequality. I rather think lack of high-paying jobs, unemployment, inordinate rewards to
owners of property, a multitude of secondary forms of exploitation such as higher prices for
necessities in poor neighborhoods and so on, endlessly, have much more to do with that.
Improvements to primary and secondary education like Warren's improvements to tertiary
education, are a reform, of minor effect in the end as regards to reducing inequality.
Insofar as some colleges and universities graduate credentials more acceptable to the
bosses, credentialism is not to be reformed by increasing funding to preK12 schooling. The
fact that you can't say "a degree from a comprehensive regional university is worth as much
as a degree from a public flagship" also reduces all benefit of education to simple monetary
returns. Further, it abstracts from the benefits to social mobility in the lower ranks of
society. Personally I think economic anxiety fuels status anxiety, that the prospect of no
change or even descent goads people into seeking scapegoats who will be the historical
ones.
In short, I tend to think the primary inequality in other words is in property.
Further the massive funding increases imagined as the alternative excluded by Warren will
still have their effects undercut but a multitude of structural deficits. The lesser revenues
from the poor districts are bad enough. Any reform that could help that would be desirable.
But in the long run the suburbs need to be reintegrated into urban life, the elite need to be
reintegrated into common life and those areas where social decay has rotted the fabric of
society need to be rebuilt. And by the way, those rotted areas also include rural ones and
deindustrialized ones as well as inner cities.
The break in the pipeline comes well before college. Poor neighborhoods have bad schools
and rich neighborhoods have good schools, because they're locally funded. This is not to
say that the cost of education from a state college is not a problem, but rather that there
is a bigger problem which might be easily solved with a lot of money.
I think it's even harder than equalizing funding. According to Ballotpedia's
analysis of spending in America's largest school districts , the Baltimore City Public
School System actually spends more per student than the Palo Alto Unified School District.
But it has a lower graduation rate and I suspect that their graduates would not fare well
against the Palo Alto graduates on measures of academic skills. Comparisons like this are a
right-wing favorite for showing that the "real" problem is not insufficient spending on
students but actually unions, or bureaucracy, or big city corruption
I think that the problem is that some school districts have much harder jobs than others,
because some students live desperate lives outside of school. Desperation among students is
not uniformly distributed across school districts.
Some students start the school year prepared to acquire and apply academic knowledge from
day 1. Some students start with a raft of unmet basic needs. Like food, shelter, and
safety.
You can deliver more education-per-dollar if the schools just focus on education and
medical services/psychological counseling/basic nutrition/law enforcement are well-handled
elsewhere. That seems to me the greatest advantage of affluent school districts, charter
schools, and schools in other developed nations: they don't have to compensate as often for
overwhelming problems in their students' lives that come from outside the campus. Affluent
districts also having newer books, more electives, and less crowded classrooms is just
the icing on the cake.
Ben2@72 writes of "tools to resist " This would be one of the nonmonetary benefits to
Warren's college reform excluded from Baum and Turner's presentation. It's one reason why I
think the benefit of the college education to the lower income families isn't measured by the
extra $7 700 higher (not highest, though,) income families would receive. But even solely in
money terms, I still fancy that most under $35 000 families will find $2 300 makes a bigger
difference in meeting necessities than the over $120 000 families will get from $11 000.
To quote from the link, again:
""'Free tuition' is the opposite of progressive policymaking
It's presented as leveling the playing field. It would worsen economic inequality."
Baum and Turner's essential criticism is about the money payments, discussed in a
misleading way. Two working parents, both with an income about $60 000, would get maybe, at
most, $11 000 in a year. IN US politics this is supposed to be middle class, but I think real
middle class people own property (not a mortgage.) No, I don't think we're talking about
Warren making the world more unequal.
Most of the other thrown in criticisms, like the different monetary values of credentials
from regional comprehensive vs. public flagship, do indeed implicitly assume that educational
inequality is a prime cause, if not the cause, of inequality. I still haven't followed the
logic of how Warren's college reform makes this worse.
Warren's plan is a school voucher plan for that part of the school system that isn't free.
Extra subsidies to some parents when there is a publicly provided alternative, as in primary
and secondary education, does actually have the regressive effects wrongly claimed by Baum
and Turner. Doing away with this bug in Warren's proposed college system could be resolved by
price controls to equalize college tuitions, which requires public provision of schools in
the long run to keep the system from collapsing, which to be effective would probably require
in the long run some sort of industrial policy giving a better idea of labor needs. And that
might end up giving students stipends to go into areas where anticipated needs are highest.
Etc. Etc.
I think one of the reasons this policy proposal isn't discussed in these terms, and comes
across as progressive, is that it is being framed not as higher education funding, but as
debt relief.
And I think that the levels of debt that people get themselves into just for wanting an
education in line with their interests and talents (even leaving aside the whole aspects of
preparing for certain types of jobs) is, to me, a problem. As a first generation higher
education graduate (from Europe, now living in the US) with no family money this sort of
situation would have put me into even more of a state of permanent anxiety. College graduates
of not even very long ago talk of times where you could finance a year of tuition at a solid
state school by working through the summer. This time is very far from the realities of
today, even in places where in-state tuition is considered "affordable" (as in the
institution I consider my home).
As a matter of principle, an egalitarian society of the future that I'd want to help
building would in fact contain free or inexpensive access to any level of education, at a
high base standard of quality. Like, every school is a good school, there is a mechanism for
tackling exceptions, and everyone can access whatever level of basic education or fundamental
vocational training without having to pay for it in major financial hardship. (There are of
course many ways to implement such a system.)
I'm not really fundamentally feeling much in conflict with Harry's argument, though,
because OF COURSE PreK-12 has the bigger impact for fighting inequality. So we'd disagree
about priorities, mostly. (I hope, because I hope that inexpensive access to tertiary and
non-tertiary post-secondary education is also something Harry subscribes to.)
A twist, though, is that I'm not sure it's only money that K-12 is missing. Sure, there
are means-starved districts that first and foremost need MONEY. But others have, at least on
an international scale, a lot of funding, but it doesn't lead to good educational outcomes.
The reasons for this are myriad: For good outcome, you also need high-quality curricula,
teaching being a valued profession, and students who are psychologically and physically in a
position to focus on learning. Schools alone can't heal traumatized communities. So much as I
will always join the cries for more funds for education, it would be a mistake to think you
can just throw money at the problem, at least not through the channels that money has been
used traditionally.
I'm surprised at the number of people on this thread who seem to think the purpose of free
university education is to help lift people out of poverty. How many times do you have to be
shown that this upward mobility thing is a Ponzi scheme? The goal of free education is to
ensure that poor people can get access to the same things rich people can, so that everyone
is able to live a fulfilling life.
Also I'm surprised at the number of people who, after the last 30 years of vicious
anti-poor rhetoric from the right and from "centrists" (i.e. crypto-rightists), still think
it's a good idea to propose programs that target only the very poor through tight means
testing. Yes, they are ultimately more "progressive" since they definitely help the poor more
than those on middle incomes. They are also extremely vulnerable to political attack because
the majority of the population doesn't benefit from them.
I mean, does anyone on here seriously think that if the UK National Health Service (NHS)
were designed only to benefit people on welfare, it would still be around now after Thatcher?
The only thing that stopped her from completely killing it was the fact that her own
constituency depended on it.
Also, imagine someone in the Labour left in 1944, talking like Harry (and others) about
the NHS: saying that this universal health coverage thing is not progressive because middle
class people would also benefit. They would be laughed out of the party room. It's madness to
talk this way. If something -- education, healthcare, transportation, environmental
protection -- is a public good you fund it publicly so everyone can afford it and access it,
and then no matter how much the rich and their centrist shills may hate it, they'll never be
able to cancel it.
Harry @82 -- my understanding is that while the NHS has improved health outcomes for
everyone, it has also (counter-intuitively) increased health inequality. More affluent people
are better able to take advantage of healthcare. The interventions which tend to reduce
health inequality are things like clean water and closing the sewers, not universal access to
care.
This is also part of why I think an absolute prioritarian/progressivism is misguided.
Beyond the working poor who were helped by the NHS, just less than the middle and upper
classes were, the genuinely worst off people are another group entirely: the mentally ill,
homeless, addicted, those trapped in domestic violence and sex trafficking, etc. They will
often fail to benefit from even generally downward distribution programs because the problems
with reaching and helping them are technical and complex. But we should not wait on the
problems resolution or, worse yet, political resolution before pursuing other moderate forms
of downward distribution aimed at helping eg the working poor.
With respect to Warren's proposal, it is not maximally progressive but is more progressive
than the status quo and additionally strikes me as an excellent way to convince lower middle
through upper class people that they, too, are part of the Great Society, which is important
given that their political influence is considerable. People still wax nostalgic about the
days that a tradesman's kid could go to a flagship state school on summer job money and enter
into the professional world -- despite the fact that a tradesman's kid, and presumably
bright, is far from the worst off, that still seems worth bringing back.
Isn't it true that the wealthy can get substantial tax reductions by deducting educational
expenses, and those deductions are higher the wealthier the parents and the more expenses
their education? If I understand correctly, those tax savings need to be counted against the
benefits that would accrue to the wealthy.
I studied at University in Germany on a means tested benefit (for living expenses --
remember there was and is no tuition) which unfortunately was converted to a repayable grant
in the 1980s and later to 50% repayable. Wealthy parents of students could actually get
higher benefits from tax deductions than the poor students could get from this program. I
wouldn't have begrudged the affluent kids the same benefit that I enjoyed -- in fact I felt
it was unfair that they had to depend on their parents while I was entitled to my own money
(*). But I think it exceedingly unfair that their parents could get those tax deductions.
Best would be to raise the taxes and fund a living wage for all.
(*) Under German law, students can sue their parents if they have the means but refuse to
fund an adequate education. But of course you would rather not sue your parents.
Mrmister is wrong, the NHS helped all people in Britain including the very poor.
Harry, I don't get your response. Are you trying to say that free education only helps the
most educated? This is true in the trivial sense that it only helps people who can qualify
for university. Similarly free cancer care only helps those with cancer! What of it? Unless
you think anyone who wants to go to university should be allowed in, this is irrelevant.
Perhaps you're trying to imply that warrens proposal only helps the wealthy because only the
wealthy get good high school? Well yes, and the nhs gave better health outcomes to wealthier
people and non-smokers, so what? That's not an argument against making it universal, it's an
argument for banning smoking. You shouldn't conflate the problems in high school funding with
university funding, because the upshot of that is that the few poor kids (of whom I am one)
who manage to fight free of our shit high school education have done it for nothing because
we can't get into uni because it's too expensive. Yes it's better to do both! But as people
above have observed it's hard for the federal govt to fix secondary education (fuck, they
can't even stop school shootings!) So fix what you can and come back to the next stages
later. America has sooooo many problems that it's madness to oppose fixing the ones you can
because some people who are benefiting from an inequality the federal govt can't fix will
benefit a little more from its efforts to fix the ones it can fix.
Poor children should be able to go to university. That's a simple statement of what is
right. Warrens offering a fix for ONE of the two big barriers to doing that. Her fix also
helps middle class kids. Lucky them! Why should a poor kid care?
I think focusing on high income parents is a bit misleading. Yes the very poorest don't go to
college, but plenty of kids from median income, and sub-median income, households do. And
plenty of kids are graduating from college and getting jobs that don't pay particularly well,
and probably will never pay brilliantly.
Secondly there is the way that college has increased very rapidly in the past 10 years,
mostly at the state level. There are a range of reasons for this, but a generation of
students have been forced to pay more money than previous generations for higher education,
during a period when college education is becoming necessary for a wider range of jobs.
Thirdly there is the debt element. Not only is student debt becoming a more and more
significant problem (affecting career choices and the economy), but the way that students are
unable to escape it even into bankruptcy is an outrage.
I don't particularly care if wealthier parents also benefit from this. The solution would
seem to be to tax them more. And one could also craft this in ways which would be less
helpful to them (for example focus solely on state colleges and remove tax savings for
education).
I also think we should spend more on K-12 schooling, preschool and a range of other
things. I don't see these two things as particularly incompatible. The advantage of this
policy is (like healthcare) is that it is good politics as it would have a quick and
measurable impact, which would build political credibility (which could then be used for
tougher fights, like increased taxation for education, infrastructure, transport, etc). There
was an interesting interview with one of Corbyn's ex-advisors recently, who pointed out that
you can't just raise taxes immediately. Instead you have to build people's trust that taxes
will be used in ways that benefit them, and that will then change the way people think about
taxes. This is one way to change that conversation.
You also need to be careful interpreting recent studies like those by Dixon et al (I used
to work with Anna and I know the context of her studies). The NHS has gone backward since the
end of the Labour government, and a lot of studies published in the last 10 years are
actually showing the consequence of Tory attacks on the system, not the long-term outcomes of
the NHS as a whole. Also the NHS was massively underfunded relative to European systems
during the Thatcher era, and that has long-term implications for the structure of the system
and its effects on inequality, which New Labour was not in power long enough to reverse.
Harry I think this is important:
Warren or any other President in the near future is going to do more than one big thing
altogether, let alone in education, and I want people to take seriously the opportunity
cost of this being the one big thing in education.
But I think you're underestimating how transformative the end of student debt will be for
a lot of poor people. And given that a lot of the other strategies you identify are not
feasible for the federal government (due to the states), I think you overstate this issue in
this case.
The problem with "vouchers" in a K-12 context is that they are used to steal funding from
public schools and give it to private and/or religious schools. They're a scam. If you are
doing vouchers for public college, they don't have that problem. (Leo Casey has this right.)
Also, on means testing. I think that means testing is largely a bad idea. If you are
funding things from a progressive income tax, then the very rich are getting much less back
than they are putting in, and that's fine. Also, it's easy for means testing to be made
demeaning to recipients of the aid. If everyone gets and has to use vouchers*, that can't
happen. Also, implementing means testing isn't free, and a lot of the time, it'll cost as
much as it saves. And finally, if you can force rich folks to declare the benefit as income,
you can tame much of it back in taxes (this works great for the sort of childbearing
encouragement programs the Japanese ought to be implementing, i.e. direct, generous, flat
rate (same amount for any child) child support payments to everyone who has a child.)
*: In my fantasy world here, the vouchers are more of payments to the schools for
educating people than benefits to the students. Sort of like how Obamacare only pays insurers
if they actually pay for medical care. (Obamacare is way more wonderful than you think.)
TJ 93: "There are some tax breaks available, but these income out for a couple at earned
income of around $230,000"
Can you tell us how much in annual college cost an affluent family could at the most
deduct? And is it restricted to tuition? Until what age do the parents get a dependent
deduction for a child in college and how much does it save them in taxes?
I don't know the details of the plan discussed here but if it is true that the parents can
save taxes by having a child in college/uni (as is the case in Germany) then it would seem
fair to me to publicly fund the college expenses for everybody while at the same time denying
affluent parents the deduction (as is not the case in Germany).
Also, on means testing. I think that means testing is largely a bad idea.
Means testing for education specifically is a problem because basically nobody has "means"
when they're twenty. [and absolutely nobody has means when they're fifteen]. Practically when
people say means-testing here they mean -- although they may not recognise it or admit it --
parental means testing, and
Remember: the core of opposition to welfare is that it weakens dependence on rich
relatives and other patronage networks, and thus reduces the ability of abusers to find
people willing to subject themselves to abuse. Because education and student means-testing
effectively means parental means-testing, a means-testing framework basically eliminates the
children-of-the-rich -- a-fortiori the children-of-rich-abusers -- from protection. Of
course the abusers are OK with means-tested welfare here, it leaves their targets
unprotected. [see slavery: more expensive and lower productivity than free labour, but you
can rape people and beat them to death, which some find more attractive than money, enough to
fight a war over.]
[which is to say: if you make a model of right-wing thinking that supposes the sole
motivation of right-wingers is to emotionally and physically abuse people and to create
spaces and situations where that can happen, you get something that's like 90% accurate to
what the actual right actually propose and implement. I mean, slavery! Free workers are more
productive and cost about the same or less [lower overheads through savings in chains] but
you can't rape them or beat them to death and that was worth fighting a war over.]
[I did once consider an education voucher that was structured with a taper like some
welfare payments: for every extra dollar put in by the parents/holder, the voucher goes down
fifty cents ]
[vouchers rely on individual selection, of course, and there are well-known problems with
quality guarantees here with education, given the long timeframes and &c]
[the thought just struck me that the education and professional-development elements of
employment -- which have to be hugely important if we're not doing lifetime jobs -- are also
underserved by market self-regulation ]
Harry, what is this? You say it's means tested and you also say it doesn't help the poor. Are
you saying warrens plan is means tested to ensure it only goes to the wealthy? Because that
doesn't seem likely to me.
Also once again: we target income inequality, not variation. We don't oppose a program
because 30% of the population won't use it. If you're going to make that your yardstick for
public investment then you should at least try to address the consequences for public funding
of women's health, childcare, and indeed universal health coverage!
@
"I want the most talented kids taking the course they're most suited for."
Me too -- and as "Free Public Education" in "Civilised Western Democracies" wants exactly
the same thing -- there is no reason -- for anybody -- to support any kind of educational
system which depends on "privatized" -- aka "privately financed" education" -- as it allows
"Rich kids --
even if they are NOT the most talented --
to become doctors and vets".
So "the most talented kids" should become doctors and vets --
Right? --
And they only can become doctors and vets -- if they don't have to buy themselves into
becoming doctors and vets.
Right?
As buying yourself -(without talent) into "better education" --
(of whatever level) --
is only possible in a society where school kids and students have to pay for their
education.
Right?
It's like currently trying to get a Green Card for my homeland -(or a permit to reside in
the UK)
You can buy it with absolutely NO talent.
Or in other words:
That's why (civilised and social) countries like France -(or Germany) never will go back to
any type of education where -- YOUR -(or your families) dough matters MORE -- than your
talent.
One of the major ("policies"?) in fighting inequality!
"... It's not obvious to me that universal access to college education is a progressive goal. ..."
"... I think it is extremely important to understand where Warren is coming from on this. Warren initially became active in politics because she recognized the pernicious nature of debt and the impact it had on well-being. I ..."
"... Warren's emphasis in this particular initiative, it seems to me, is to alleviate debt so that individuals can pursue more advanced functionings/capabilities. ..."
"... The more a college degree is the norm, the worse things are for people without one. Making it easier to get a college degree increases the degree to which its the norm, and will almost inevitably have the same impact on the value of a college degree as the growth in high-school attendance (noted by Sam Tobin-Hochstadt above) had on the value of a high school degree. ..."
"... The debate on this subject strikes me as misguided because it says nothing about what students learn. A good high school education should be enough to prepare young people for most kinds of work. In most jobs, even those allegedly requiring college degrees, the way people learn most of what they need to know is through on the job training. Many high school graduates have not received a good education, though, and go to college as, in effect, remedial high school. ..."
by Harry on May 6, 2019 Ganesh Sitaraman argues in
the Garun that, contrary to appearances, and contrary to the criticism that it has earned,
Elizabeth Warren's college plan really is progressive, because it is funded by taxation that
comes exclusively from a wealth tax on those with more than $50 million in assets. Its
progressive, he says, because it redistributes down. In some technical sense perhaps he's
right.
But this, quite odd, argument caught my eye:
But the critics at times also suggest that if any significant amount of benefits go to
middle-class or upper-middle class people, then the plan is also not progressive. This is
where things get confusing. The critics can't mean this in a specific sense because the plan
is, as I have said, extremely progressive in the distribution of costs. They must mean that
for any policy to be progressive that it must benefit the poor and working class more than it
benefits the middle and upper classes. T his is a bizarre and, I think, fundamentally
incorrect use of the term progressive .
The logic of the critics' position is that public investments in programs that help
everyone, including middle- and upper-class people, aren't progressive. This means that the
critics would have to oppose public parks and public K-12 education, public swimming pools
and public basketball courts, even public libraries. These are all public options that offer
universal access at a low (or free) price to everyone.
But the problem isn't that the wealthy get to benefit from tuition free college. I don't
think anyone objects to that. Rather, the more affluent someone is, on average, the more they
benefit from the plan. This is a general feature of tuition-free college plans and it is built
into the design.
Sandy Baum and Sarah Turner explain:
But in general, the plans make up the difference between financial aid -- such as the Pell
Grant and need-based aid provided by states -- and the published price of public colleges.
This means the largest rewards go to students who do not qualify for financial aid. In plans
that include four-year colleges, the largest benefits go to students at the most expensive
four-year institutions. Such schools enroll a greater proportion of well-heeled students, who
have had better opportunities at the K-12 level than their peers at either two-year colleges
or less-selective four-year schools. (Flagship institutions have more resources per student,
too.) .
For a clearer picture of how regressive these policies are, consider how net tuition --
again, that's what most free-tuition plans cover -- varies among students at different income
levels at four-year institutions. For those with incomes less than $35,000, average net
tuition was $2,300 in 2015-16; for students from families with incomes between $35,000 and
$70,000, it was $4,800; for those between $70,000 and $120,000, it was $8,100; and finally,
for families with incomes higher than $120,000, it was more than $11,000. (These figures
don't include living expenses.)
Many low-income students receive enough aid from sources like the Pell Grant to cover
their tuition and fees. At community colleges nationally, for example, among students from
families with incomes less than $35,000, 81 percent already pay no net tuition after
accounting for federal, state and institutional grant aid, according to survey data for
2015-16. At four-year publics, almost 60 percent of these low-income students pay
nothing.
If you take progressivism to mean "improvement of society by reform", Warren's plan is
clearly progressive. It reduces the pie going to the rich, greatly improves the lot of
students who are less than rich, and doesn't harm the poor.
Who cares – as long as this plan -(and hopefully an even more extended plan) puts an
end to a big part of the insanity of the (stupid and greedy) US education system?
In other words – let's call it "conservative" that might help to have it passed!
The difficulty with the plan as proposed is not whether it is progressive or not but that it
targets the wrong behavior – borrowing for education. If the goal is to make education
more accessible – subsidize the university directly to either facilitate point of
admission grants in the first place or simply bring down tuition cost to all attendees.
Under this proposal (assuming one thinks Warren would win and it could get passed) the
maximizing strategy is to borrow as much as one possibly can with the hope/expectation that
it would ultimately be forgiven. If that's the "right" strategy, then it would benefit those
with the greatest borrowing capacity which most certainly is not students from low income
families but is in fact families which could probably pay most of the cost themselves but
would choose not to in order to capture a benefit they couldn't access directly by virtue of
being 'too rich' for grants or other direct aid.
"Rather, the more affluent someone is, on average, the more they benefit from the plan. "
This doesn't seem like a fair description of what's going on. If Starbucks gives a free muffin to everyone who buys a latte, it's theoretically helping
the rich more than the poor under this way of looking at things. The rich can afford the
muffin; the poor can't. So the rich will get more free muffins. But the rich don't give a
crap. They can easily just buy the damn muffin in the first place. They're not really being
helped, because the whole damn system helps them already. They're just about as well off with
or without the free muffin.
Same here. My kid's going to Stanford. I'm effin rich and I don't give a crap about
financial aid. If it was free I'd have an extra 75k a year, but how many Tesla's do I need
really? How many houses in Hawaii do I need? But when I was a kid I was lower middle class. I
didn't even apply to Stanford because it was just too much. Yeah, I could have gone rotc or
gotten aid, but my parents just couldn't bust out their contribution. Stanford just wasn't in
the cards. And Stanford's a terrible example, it had needs blind admissions and can afford
to just give money away if it wants.
I don't understand the fear, in certain areas of what's apparently the left, of giving
benefits to people in the middle of the income/wealth curve.
The expansion of the term "middle class" doesn't help with this, nor does the expansion of
education. These debates often sound as if some of the participants think of "middle class"
as the children of physicians and attorneys, who moreover are compensated the way they were
in the 1950s.
The ability to switch between "it's reasonable to have 100% college attendance within 5
years from now" and "of course college is only for the elite classes" is not reassuring to
the average more or less educated observer (who may or may not be satisfied, depending on
temperament and so on, with the answer that of course such matters are above her head).
The actual plan is for free tuition at public colleges. So not "the most expensive
four-year institutions" that Baum and Turner discuss. [HB: they're referring to the most
expensive 4-year public institutions]
There's also expanded support for non-tuition expenses, means-tested debt cancellation,
and a fund for historically black universities, all of which make the plan more progressive.
And beyond that, I could argue that, for lower-income students on the margin of being able to
attend and complete school, we should count not only the direct financial aid granted, but
also the lifetime benefits of the education the aid enables. But suffice it to say, I think
you're attacking a caricature.
the college plan does not actually offer 'universal access'
Given that something like one third of Americans gets a college degree, Warren's plan
seems good enough. It's not obvious to me that universal access to college education is a
progressive goal.
I think it is extremely important to understand where Warren is coming from on this. Warren
initially became active in politics because she recognized the pernicious nature of debt and
the impact it had on well-being. If you are trying to get out from under the burden of debt
your capabilities for flourishing are severely restricted, and these restrictions can easily
become generational. One of the more difficult debts that people are facing are student
debts. This was made especially difficult by the 2005 bankruptcy bill which made it close to
impossible for individuals to get out from under student debt by entering in to Chapter 7
bankruptcy.
Warren's emphasis in this particular initiative, it seems to me, is to alleviate debt so
that individuals can pursue more advanced functionings/capabilities. So if you think that the
definition of progressive is creating situations where more individuals in a society are
given greater opportunities for flourishing then the plan does strike me as progressive (an
Aristotelian interpretation of Dewey such as promoted by Nussbaum might fall in this
direction). There is another issue however that might be closer to the idea of helping those
from lowest social strata, something that is not being discussed near enough. Internet
technologies helped to promote online for profit universities which has (and I suppose
continues to) prey and those most desperate to escape poverty with limited resources. The
largest part of their organizations are administrators who help students to secure loans with
promises of high paying jobs once they complete their degrees. These places really do prey on
the most vulnerable (homeless youth for instance) and they bait individuals with hope in to
incurring extremely high debt. The loan companies are fine with this I am guess because of
the bankruptcy act (they can follow them for life). This is also not regulated (I think you
can thank Kaplan/Washington Post for that). Warren's initiative would help them get out from
under debt immediately and kick start their life.
I agree k-12 is more important, but it is also far more complicated. This plan is like a
shot of adrenaline into the social blood stream and it might not even be necessary in a few
years. I think it dangerous to make the good the enemy or the perfect, or the perfect the
critic of the good.
– and how cynical does one have to be – to redefine a plan canceling the vast
majority of outstanding student loan debt – as some kind of ("NON-progressive") present
for "the rich"?
But even apart from that, the argument of the post seems like it would suggest that many
things that we currently fund publicly are not progressive in a problematic way. Everything
from arts to national parks to math research "benefits" the rich more than the poor. There's
possibly a case that public provision of these goods is problematic when we as a society
could spend that money on those who are more disadvantaged. But that's a very strong claim
and implicates far more than free college.
Finally, it's worth comparing the previous major expansion of education in the US. The
point at which high school attendance was as widespread as college attendance is now (about
70% of high school graduates enroll in college of some form right away) was around 1930, well
after universal free high school was available. I think moving to universal free college is
an important step to raise those rates, just as free high school was.
It strikes me that the argument made here against a universal program of tuition free college
is not all that different than an argument made against social security -- that the benefits
go disproportionately to middle class and professional class individuals. Since in the case
of Social Security, one has to be in gainfully employed to participate and one's benefits
are, up to a cap, based on one's contributions, middle class and professional class
individuals receive greater benefits. Poor individuals, including those who have not been
employed for long periods of time, receive less benefits. (There are quirks in this 10 second
summary, such as disability benefits, but not so much as to alter this basic functioning.)
Every now and again, there are proposals to "means test" social security, using this
functioning as the reasoning. A couple of points are worth considering.
First, it is the universality of social security that makes it a political 'third rail,'
such that no matter how it would like to do away with such a 'socialist' program, the GOP
never acts on proposals to privatize it, even when they have the Presidency and the
majorities that would allow it to get through Congress. The universality thus provides a
vital security to the benefits that poor and working people receive from the program, since
it makes it politically impossible to take it away. Since social security is often the only
pension that many poor and working people get (unlike middle class and professional class
individuals who have other sources of retirement income), the loss of it would be far more
devastating to them. There is an important way, therefore, that they are served by the
current configuration of the system, even given its skewing.
Second, and following from the above, it is important to recognize that the great bulk of
proposals to "means test" Social Security come from the libertarian right, not the left, and
that they are designed to undercut the support for Social Security, in order to make its
privatization politically viable.
Most colleges and universities "means test" financial aid for their students, which is one
of the reasons why it is generally inadequate and heavily weighted toward loans as opposed to
grants. I think it is a fair generalization of American social welfare experience history to
say that "means tested" programs are both more vulnerable politically (think of the Reagan
'welfare queen' narrative) and more poorly funded than universal programs.
There are additional argument about the skewing of Social Security benefits, such as the
fact that they go disproportionately to the elderly, while those currently living in poverty
are disproportionately children. This argument mistakes the positive effects of the program
-- before Social Security and Medicare the elderly were the most impoverished -- for an
inegalitarian design element.
The solution to the fact that children bear the brunt of poverty in the US is not to
undermine the program that has lifted the elderly out of poverty but to institute programs
that address the problem of childhood poverty. Universal quality day care, for example,
provides the greatest immediate economic benefits to middle class and professional class
families who are now paying for such services, but it provides poor and working class kids
with an education 'head start' that would otherwise go only to the children of those families
that could afford to pay for it. And insofar as day care is provided, it makes it easier for
poor and working class parents (often in one parent households) to obtain decent
employment.
So the failings of universal programs are best addressed, I would argue, by filling in the
gaps with more universal programs, not 'means testing' them.
To the extent that Warren's 'free tuition' proposal addresses only some of the financial
disadvantages of poor and working people obtaining a college education, the response should
not be "oh, this is not progressive," but what do we do to address the other issues, such as
living expenses. It is not as if there are no models on how to do this. All we need to do is
look at Nordic countries that provide post-secondary students both free tuition and living
expenses.
Having grown up and gone to university in Germany it is simply incomprehensible to me that
there is tuition supporters on the political left in the U.S. It's true that free college
isn't universal in the same sense free K-12 education is. But neither are libraries (they
exclude those who are functionally illiterate completely, and their services surely go mostly
to upper middle class people who have opportunity and education to read regularly), for
example. Neither are roads – the poor overwhelmingly live in inner cities, often take
public transport – it's middle class suburbanites that mostly profit. Speaking of
public transport, I assume Henry opposes rail; it is very middle class, the poor use buses.
(The last argument actually has considerable traction in Los Angeles, it's not completely far
fetched.)
I agree that Warren's free college and debt forgiveness plans would not be very progressive,
but I'd propose that I think the dynamic mechanism built in would make it worse than a static
analysis shows.
(Note that most of my siblings and in-laws do not have college degrees; this perspective
is based on my own observations.)
The more a college degree is the norm, the worse things are for people without one. Making
it easier to get a college degree increases the degree to which its the norm, and will almost
inevitably have the same impact on the value of a college degree as the growth in high-school
attendance (noted by Sam Tobin-Hochstadt above) had on the value of a high school degree.
(We're already seeing this: many positions that used to require a college degree now require
a specific degree, or a masters degree.) This will increase age discrimination, and further
worsen the position of the people for whom college is unattractive for reasons other than
money.
To give a particular example of a mechanism (idiosyncratic, but one I know specifically).
Until a couple decades ago, getting a KY electrician's license required 4 years experience
under a licensed electrician, and passing the code test. Then the system changed; now it
requires a 2-year degree and 2 years experience, OR 8 years experience. This was great for
colleges. The working electricians don't think the new electricians are better prepared as
they used to be, but all of a sudden people who don't find sitting in a classroom for an
additional 2 years attractive are hugely disadvantaged. Another example would be nursing
licenses; talk to any older LPN and you'll get an earful about how LPN's are devalued as RNs
and BSNs have become the norm.
I suspect tuition reform will be complex, difficult and subject to gaming. Being simple
minded I offer an inadequate but simple palliative. Make student loan debt dischargeable in
bankruptcy. You can max out your credit cards on cars, clothes, booze or whatever and be able
to discharge these debts but not for higher education.
The inability to even threaten bankruptcy gives all the power to collection companies.
Students have no leverage at all. The threat of bankruptcy would allow for negotiated
reductions in principal as well as payments.
Bankruptcy does carry a lot of negative consequences so it would offset the likely
objections about moral hazards, blah, blah. I would also favor an additional method of
discharging student debt. If your debt is to a for-profit school that can't meet some minimum
standards for student employment in their field of study then total discharge without the
need for bankruptcy. For-profit vocational schools intensively target low income and minority
students without providing significant value for money.
Progressivity looks much better if the program sticks to free community college, at least
until there is universal access to 4-year schools. That's what Tennessee did (IIRC the only
example that is actually operational).
Harry: it doesn't seem as if you responded to my comment. I'll try again.
1. A policy is progressive if it is redistributive.
2. Warren's plan is redistributive.
3. Thus, Warren's plan is progressive.
Comments about how effective the redistribution is are fine, but to claim a non-ideal
distribution framework invalidates the program's claims to being progressive seems spurious.
And I don't think this definition of progressive is somehow wildly ideosyncratic.
To whine that free college is somehow not progressive because not everyone will go to college
is a ridiculous argument, one of those supposedly-left-but-actually-right arguments that I
get so tired of. To assume that the class makeup of matriculators will be unchanged with free
college is to discount knock-on effects. This is a weird, weird post. I guess I'm going back to ignoring this site.
The debate on this subject strikes me as misguided because it says nothing about what
students learn. A good high school education should be enough to prepare young people for
most kinds of work. In most jobs, even those allegedly requiring college degrees, the way
people learn most of what they need to know is through on the job training. Many high school
graduates have not received a good education, though, and go to college as, in effect,
remedial high school.
Readers who attended an average American high school, as I did long ago, will know that
there are certain students, especially boys, who are itching to be done with school. It is
far more productive to give them a decent high school education and have them start working
than to tell them they need another two to four years of what to them is pointless
rigamarole.
Rather than extending the years of education, I would reduce the high school graduation
age to 17 and reduce summer vacations by four weeks, so that a 17 year old would graduate
with as many weeks of schooling as an 18 year old now. (Teachers would get correspondingly
higher pay, which should make them happy.)
Harry Truman never went to college. John Major became a banker and later prime minister of
Britain without doing so. Neither performed noticeably worse than their college-educated
peers. If a college education is not necessary to rise to the highest office in the land, why
is it necessary for lesser employment except in a few specialized areas?
An experiment that I would like to see tried is to bring back the federal civil service
exam, allowing applicants without college degrees who score high enough to enter U.S.
government jobs currently reserved for those with college degrees.
America's revolution to a socialist, government-planned society complete with reserve currency helicopter money also known as
"MMT", may or may not be successful but it certainly will be attempted, and every moment will be not only televised but also tweeted.
On Thursday morning, Visa and MasterCard tumbled after the democratic party's "progressive" socialist wing consisting of Bernie
Sanders and Alexandria Ocasio-Cortez, announced they would introduce legislation on Thursday to cap credit card interest rates at
15%, a sharp drop from current levels . The proposal follows not long after AOC also proposed the "Green New Deal" - which among
its various policy proposals urged to give a generous and recurring cash handout to any and every American, regardless if they work
or not, and which according to analysts would cost the US as much as $100 trillion over the next several years.
In addition to a 15% federal cap on interest rates, states could establish their own lower limits, under the legislation.
Sanders, the socialist Vermont senator running for the Democratic nomination for president, told the WaPo in an interview that
a decade after taxpayers bailed out big banks, the industry is taking advantage of the public by charging exorbitant rates. " Wall
Street today makes tens of billions from people at outrageous interest rates," he said.
Ocasio-Cortez, the socialist New York representative who is expected to run for the Democratic nomination for president as soon
as she is eligible, will introduce the House version of the bill.
According to some, the proposal is quite timely, and comes just as credit card rates recently hit an all time high despite artificially
low interest rates, according to Creditcards.com, which has been tracking the data since 2007 and compiles data from 100 popular
cards. The median interest rate was 21.36% last week compared with 20.24% about a year ago and 12.62% about a decade ago, according
to the website.
Rates have been rising fastest for those with the lowest credit scores , said Ted Rossman, an industry analyst for Creditcards.com.
"Issuers are taking an opportunity to charge people with lesser credit a bit more," he said.
https://www.dianomi.com/smartads.epl?id=4855
For borrowers with high credit scores the average rate was 17.73 percent last week compared with 16.71 percent a year ago. For
those with poor credit scores, the average is now about 24.99 percent compared with 23.77 percent a year ago. The difference in the
increase is about 20 basis points higher for customers with a low credit score. A basis point is a common way to measure changes
in percentages.
"It may not sound like that much, but that is just in one year," Rossman said. And even small increases in rates can be crippling
to a cash strapped borrower, he said. "It is the ultimate slap in the face when you're already down."
That may well be, but we wonder what Sanders and AOC will do when the bulk of their supporters, those with the lowest credit rating
and by implication paying the highest interest rates - are de-carded as credit card companies tighten standards "just enough" to
eliminate all those who would be in the 15%+ interest universe anyway . Will they then force credit card companies to issue cheap
(or free) debt to anyone? Inquiring minds want to know...
Meanwhile, considering that in a time of inverted yield curves banks are scrambling for every dollar in interest income, the proposal
is expected to meet stern resistance from the banking industry, which brought in $113 billion in interest and fees from credit cards
last year, up 35 percent since 2012, according to S&P Global Market Intelligence. It also has zero chance of passing the Senate for
at least the next two years, where Republicans hold the majority.
"I am sure it will be criticized," Sanders said of the legislation. "I have a radical idea: Maybe Congress should stand up for
ordinary people."
Quoted
by the WaPo , the 15 percent cap would be the same as the one Congress imposed on credit unions in 1980, Sanders said. (The National
Credit Union Administration, the industry's regulator, raised that cap to 18 percent in 1987 and has repeatedly renewed it at that
higher level.)
Subprime consumers would discover their credit lines would be eliminated overnight. Could create a wave of bankruptcies in
short order. If they really want to crack down they need to start tinkering with the rates these payday loan companies charge.
Interest rate reflects that credit card debt is unsecured. If you cap it, most people will simply not have access to credit
cards as the banks won't take the risk. Next, there will be a bill that ensures everyone has a credit card. Going into debt is
an American past time, right?
Sure, lowering the interest rates banks can charge on credit cards is a good idea - at first glance - but, in reality, it is
simply another "gatekeeper" move. That means addressing a symptom of an issue, rather than it's real causative reason for existing.
The central banking system, and the banks it controls internationally, including the Fed and headquartered in Basil, Switzerland
- is a criminal enterprise designed to transfer the wealth of sovereign nations into the pockets of a tiny minority of fiends,
and in the process, handing over all power to govern victim nations - through the influence of money in politics. This tiny group
of very sick people are behind 90% of the misery and death in this world - including all wars and profits derived therein. Since
they also control the media they have also foisted an incredibly successful mind control program on their victims. Here in the
US, people run around after whatever the latest "big story" is purported to be - always making sure to box themselves into their
manufactured personalities, repeating what they have been programmed to say. Everyone is watching the giant circus, and misses
the machinations of profound evil - resulting in horrific consequences for all life on Earth.
The Fed and the banks need to exposed for what they are and destroyed, and the fiends behind them exposed, stripped of all
assets, and sentenced to hard labor. Unfortunately, the US government and it's various branches of "justice" is owned by said
fiends and would have to be overthrown to do what needs to be done.
Not all specialties are created equal. It is clear that a person who take loan to became
obtain a degree in communications is deeply misguided as chances to get a well paying job with
this specially are close to zero. Many "humanitarian" specialties are similar -- unemployment is
almost guaranteed and if a person was misled we should prosecute greedy university administrators
and jail some of them. Such specialties should have a disclaimer: employment is difficult to
obtain. Unemployment is almost garanteed. Take the courses at your own risk.
At the same time for STEM degrees Warren proposal makes more sense as people who enrolled
into those specialties tried a more realistic approach, but probably job market turned bad or
level of talent is not enough or both. while people in this specialties are needed but their
chances for employment are crippled by the flow of H1B applicants so part of those costs should
be subsidized by fees for large H1B employers, such as Microsoft and Google. Or something like
that.
At the same time why we should forgive a person the debt if the particular person specialized
in, say, dance? What is the social value of oversupply of dancers? So probably subsidies should
be selective and limited to STEM specialties and selected "high social value" humanitarian
specialties.
So the loan forgiveness is a crippled, somewhat unfair but still a reasonable approach.
But the key problem is not loads but greed of neoliberal educational institutions. Cost of
tuition skyrocketed after 1980 and that's not accidental: this is drect result of neoliberalism
corruption of higher education. The ability of government to prosecute "too greedy" colleges is
important. Limits of salary of administrators and especially president and vice president and
deens are critical.
Notable quotes:
"... The total cost of Warren's plan would be $1.25 trillion over 10 years, with the debt forgiveness portion consisting of a one-time cost of $640 billion. Warren plans to pay for her plan by imposing an annual tax of 2 percent on all families that have $50 million or more in wealth. ..."
"... Warren is right to focus attention on the matter of student loans. This is a major issue for young people and experts have been warning of a crisis for years. ..."
"... After all, they are victims of a scam perpetrated by the education cartel and the federal government. ..."
"... Here's how it works: the education cartel sells the lie that only those with four-year college degrees can succeed in life. Then they steer everyone with a pulse towards a university. ..."
"... The government steps in and subsidizes student loans that allow almost anyone to go to college, regardless of their ability to pay the loans back. ..."
"... College is not for everyone and there's no reason to keep promoting that idea. ..."
"... Reduce the overabundance of administrators. The number has exploded since the 1990s. ..."
"... A lot of required courses are just padding to make the experience drag on for four years. That creates unneeded expenditures of time and money. ..."
"... several nations currently do offer virtually free college educations & I don’t believe their diplomas are of less value for it. ..."
Massachusetts Senator Elizabeth Warren recently jolted the Democratic presidential primary
race by tackling one of the most important issues of our time: student loans and the cost of
higher education. Warren called for
canceling up to $50,000 of student loan debt for every American making under $100,000 a
year. In addition, she would make two- and four-year public college tuitions free for all new
students.
The total cost of Warren's plan would be $1.25 trillion over 10 years, with the debt
forgiveness portion consisting of a one-time cost of $640 billion. Warren plans to pay for her
plan by imposing an annual tax of 2 percent on all families that have $50 million or more in
wealth.
Warren is right to focus attention on the matter of student loans. This is a major issue
for young people and experts have been warning of a crisis for
years.
But in most cases, it isn't right to blame student loan borrowers for their predicaments.
After all, they are victims of a scam perpetrated by the education cartel and the federal
government.
Here's how it works: the education cartel sells the lie that only those with four-year
college degrees can succeed in life. Then they steer everyone with a pulse towards a
university.
The government steps in and subsidizes student loans that allow almost anyone to go to
college, regardless of their ability to pay the loans back. These loans are a trap, and
not just with regard to their cost. The government, which
took over the student loan industry , forbids borrowers from discharging that debt in
bankruptcy proceedings.
How do such cheap and easy student loans affect universities? For starters, they have caused
a proliferation of degrees that offer poor returns on
investment . In addition, they have led to the dilution of the value of previously
marketable degrees such as those in the humanities and international relations, as more
students enter those programs than could ever hope to work in their respective fields. For
example, in 2013, half of all those who had graduated from college were working in jobs that
did not require degrees .
But worst of all, the easy access to student loans has destroyed the price mechanism, which
is so important for determining the real supply and demand of a product. Since government is
the ultimate payer, tuition has been pushed sky high. The rate of tuition increase has
actually
outpaced inflation threefold .
Is Elizabeth Warren's plan the solution? No! It will only make things worse.
For starters, the wealth tax that she would use to fund her plan is likely
unconstitutional . But even if it was upheld by the Supreme Court, it would still be bad
policy. Countries that have imposed wealth taxes like France and Sweden have found that the
rich simply
leave and take their assets with them rather than pay more.
As for the idea of universal student loan debt forgiveness, it is a bad policy on the
merits. For starters, it does not make economic sense to forgive the debts of those who will
earn at least $17,500 more a year than those who don't go to college.
Also, although the student loan bubble has been inflated by the actions of both the
education cartel and government, at the end of the day, loans are a contract. Those who are
able to pay them down should and not be bailed out.
... ... ...
Finally, we need to promote alternatives to college. There are many well-paying jobs out
there that
don't require degrees . There are also apprentice programs offered by organizations like
Praxis . We should encourage
entrepreneurship, which is how so many in this country have lifted themselves out of poverty.
College is not for everyone and there's no reason to keep promoting that idea.
Kevin Boyd is a freelance writer based in Louisiana. He is a contributor to The
Hayride, a southern news and politics site. He has also been published in , The Federalist, The
Atlanta Journal-Constitution , and The New York Observer among other publications.
How to make college cost effective. Two major reforms
1. Reduce the overabundance of administrators. The number has exploded since the
1990s.
2. Restructure college. Most programs don’t need to be four years long. Most can be
cut to 2 1/2 – 3 years. A chemistry student should be taking courses required for a
chemistry degree, nothing more (unless he/she wants to). A lot of required courses are just
padding to make the experience drag on for four years. That creates unneeded expenditures of
time and money.
After doing the above, then maybe we can talk about “free” college.
I personally believe that we should each pay our own way through life as much as possible,
but several nations currently do offer virtually free college educations & I don’t
believe their diplomas are of less value for it.
I agree with you that other avenues like trades should be encouraged. A four year degree
isn’t necessary for everyone.
"... Current Establishment Survey (CES) Report ..."
"... Current Population Survey (CPS ..."
"... The much hyped 3.6% unemployment (U-3) rate for April refers only to full time jobs (35 hrs. or more worked in a week). And these jobs are declining by 191,000 while part time jobs are growing by 155,000. So which report is accurate? How can full time jobs be declining by 191,000, while the U-3 unemployment rate (covering full time only) is falling? The answer: full time jobs disappearing result in an unemployment rate for full time (U-3)jobs falling. A small number of full time jobs as a share of the total labor force appears as a fall in the unemployment rate for full time workers. Looked at another way, employers may be converting full time to part time and temp work, as 191,000 full time jobs disappear and 155,000 part time jobs increase. ..."
"... The April selective numbers of 263,000 jobs and 3.6% unemployment rate is further questionable by yet another statistic by the Labor Dept.: It is contradicted by a surge of 646,000 in April in the category, 'Not in the Labor Force', reported each month. That 646,000 suggests large numbers of workers are dropping out of the labor force (a technicality that actually also lowers the U-3 unemployment rate). 'Not in the Labor Force' for March, the previous month Report, revealed an increase of an additional 350,000 added to 'Not in the Labor Force' totals. In other words, a million–or at least a large percentage of a million–workers have left the labor force. This too is not an indication of a strong labor market and contradicts the 263,000 and U-3 3.6% unemployment rate. ..."
"... Whether jobs, wages or GDP stats, the message here is that official US economic stats, especially labor market stats, should be read critically and not taken for face value, especially when hyped by the media and press. The media pumps selective indicators that make the economy appear better than it actually is. Labor Dept. methods and data used today have not caught up with the various fundamental changes in the labor markets, and are therefore increasingly suspect. It is not a question of outright falsification of stats. It's about failure to evolve data and methodologies to reflect the real changes in the economy. ..."
"... Government stats are as much an 'art' (of obfuscation) as they are a science. They produce often contradictory indication of the true state of the economy, jobs and wages. Readers need to look at the 'whole picture', not just the convenient, selective media reported data like Establishment survey job creation and U-3 unemployment rates. ..."
The recently released report on April jobs on first appearance, heavily reported by the
media, shows a record low 3.6% unemployment rate and another month of 263,000 new jobs created.
But there are two official US Labor dept. jobs reports, and the second shows a jobs market much
weaker than the selective, 'cherry picked' indicators on unemployment and jobs creation noted
above that are typically featured by the press.
Problems with the April Jobs Report
While the Current Establishment Survey (CES) Report (covering large businesses)
shows 263,000 jobs created last month, the Current Population Survey (CPS ) second
Labor Dept. report (that covers smaller businesses) shows 155,000 of these jobs were
involuntary part time. This high proportion (155,000 of 263,000) suggests the job creation
number is likely second and third jobs being created. Nor does it reflect actual new workers
being newly employed. The number is for new jobs, not newly employed workers. Moreover, it's
mostly part time and temp or low paid jobs, likely workers taking on second and third jobs.
Even more contradictory, the second CPS report shows that full time work jobs actually
declined last month by 191,000. (And the month before, March, by an even more 228,000 full time
jobs decline).
The much hyped 3.6% unemployment (U-3) rate for April refers only to full time jobs (35
hrs. or more worked in a week). And these jobs are declining by 191,000 while part time jobs
are growing by 155,000. So which report is accurate? How can full time jobs be declining by
191,000, while the U-3 unemployment rate (covering full time only) is falling? The answer: full
time jobs disappearing result in an unemployment rate for full time (U-3)jobs falling. A small
number of full time jobs as a share of the total labor force appears as a fall in the
unemployment rate for full time workers. Looked at another way, employers may be converting
full time to part time and temp work, as 191,000 full time jobs disappear and 155,000 part time
jobs increase.
And there's a further problem with the part time jobs being created: It also appears that
the 155,000 part time jobs created last month may be heavily weighted with the government
hiring part timers to start the work on the 2020 census–typically hiring of which starts
in April of the preceding year of the census. (Check out the Labor Dept. numbers preceding the
prior 2010 census, for April 2009, for the same development a decade ago).
Another partial explanation is that the 155,000 part time job gains last month (and in prior
months in 2019) reflect tens of thousands of workers a month who are being forced onto the
labor market now every month, as a result of US courts recent decisions now forcing workers who
were formerly receiving social security disability benefits (1 million more since 2010) back
into the labor market.
The April selective numbers of 263,000 jobs and 3.6% unemployment rate is further
questionable by yet another statistic by the Labor Dept.: It is contradicted by a surge of
646,000 in April in the category, 'Not in the Labor Force', reported each month. That 646,000
suggests large numbers of workers are dropping out of the labor force (a technicality that
actually also lowers the U-3 unemployment rate). 'Not in the Labor Force' for March, the
previous month Report, revealed an increase of an additional 350,000 added to 'Not in the Labor
Force' totals. In other words, a million–or at least a large percentage of a
million–workers have left the labor force. This too is not an indication of a strong
labor market and contradicts the 263,000 and U-3 3.6% unemployment rate.
Bottom line, the U-3 unemployment rate is basically a worthless indicator of the condition
of the US jobs market; and the 263,000 CES (Establishment Survey) jobs is contradicted by the
Labor Dept's second CPS survey (Population Survey).
GDP & Rising Wages Revisited
In two previous shows, the limits and contradictions (and thus a deeper explanations) of US
government GDP and wage statistics were featured: See the immediate April 26, 2019 Alternative
Visions show on preliminary US GDP numbers for the 1st quarter 2019, where it was shown how the
Trump trade war with China, soon coming to an end, is largely behind the GDP latest numbers;
and that the more fundamental forces underlying the US economy involving household consumption
and real business investment are actually slowing and stagnating. Or listen to my prior radio
show earlier this year where media claims that US wages are now rising is debunked as well.
Claims of wages rising are similarly misrepresented when a deeper analysis shows the
proclaimed wage gains are, once again, skewed to the high end of the wage structure and reflect
wages for salaried managers and high end professionals by estimating 'averages' and limiting
data analysis to full time workers once again; not covering wages for part time and temp
workers; not counting collapse of deferred and social wages (pension and social security
payments); and underestimating inflation so that real wages appear larger than otherwise.
Independent sources estimate more than half of all US workers received no wage increase
whatsoever in 2018–suggesting once again the gains are being driven by the top 10% and
assumptions of averages that distort the actual wage gains that are much more modest, if at
all.
Ditto for GDP analysis and inflation underestimation using the special price index for GDP
(the GDP deflator), and the various re-definitions of GDP categories made in recent years and
questionable on-going GDP assumptions, such as including in GDP calculation the questionable
inclusion of 50 million homeowners supposedly paying themselves a 'rent equivalent'.
A more accurate 'truth' about jobs, wages, and GDP stats is found in the 'fine print' of
definitions and understanding the weak statistical methodologies that change the raw economic
data on wages, jobs, and economic output (GDP) into acceptable numbers for media promotion.
Whether jobs, wages or GDP stats, the message here is that official US economic stats,
especially labor market stats, should be read critically and not taken for face value,
especially when hyped by the media and press. The media pumps selective indicators that make
the economy appear better than it actually is. Labor Dept. methods and data used today have not
caught up with the various fundamental changes in the labor markets, and are therefore
increasingly suspect. It is not a question of outright falsification of stats. It's about
failure to evolve data and methodologies to reflect the real changes in the economy.
Government stats are as much an 'art' (of obfuscation) as they are a science. They
produce often contradictory indication of the true state of the economy, jobs and wages.
Readers need to look at the 'whole picture', not just the convenient, selective media reported
data like Establishment survey job creation and U-3 unemployment rates.
When so doing, the bigger picture is an US economy being held up by temporary factors (trade
war) soon to dissipate; jobs creation driven by part time work as full time jobs continue
structurally to disappear; and wages that are being driven by certain industries (tech, etc.),
high end employment (managers, professionals), occasional low end minimum wage hikes in select
geographies, and broad categories of 'wages' ignored.
Jack Rasmus is author of the recently published book, 'Central Bankers at the
End of Their Ropes: Monetary Policy and the Coming Depression', Clarity Press, August 2017. He
blogs at jackrasmus.com and his twitter
handle is @drjackrasmus. His website is http://kyklosproductions.com .
trucks vs rail vs pipeline vs tanker
Regarding using trucks via an overland route, that is extremely expensive and asking a lot of
Iran. The most efficient means to transport oil is by pipeline, less than 50 cents per barrel
of oil, tanker is almost but not quite as good, when you get to truck and rail we get into
the $5 - $10 range. Even with the differential in labor it would still be expensive for Iran
to use trucks, assuming they have that many.
Can't stand our politicians or our newspeople, they talk about the U.S. as being the most
generous country on earth when we are the most mean spirited, petty and vicious but we cannot
salute ourselves enough.
There used to be a pipeline between Iraq and Syria but it has fallen into disrepair and if
it was repaired I'd bet my last dollar the Israeli's or even the U.S. would find an excuse to
bomb it.
Half of the Syrian-Iraq border is South of Deir ez Zur and Al Bukamal and is completely
controlled by Syrian and Iraqi troops/paramilitaries. The old oil pipeline runs along the
highway and the Syrian Army controls the critical T4 pumping station and the Tiyas airbase
just South of the highway. https://www.globalsecurity.org/military/world/syria/tiyas.htm
You will recall the Paveway4 first brought the importance of this T4 pumping station about
a year ago.
Unfortunately ISIS still has forces in the desert just North of the highway. Time for some
Russian Night Hunter search and destroy missions!
The US and Great Britain are trying to economically cripple Syria via cutoff of oil
supplies as "The Syrian government is scrambling to deal with its worst fuel crisis since
the war began in 2011, aggravated by U.S. sanctions targeting oil shipments to
Damascus." https://www.apnews.com/a99a22ad2598474ca39a7d8cde560c31
"Under the sanctions imposed by the U.S. and Great Britain, no Iranian oil tankers are
allowed to transit the Suez Canal if they are destined for a Syrian port, a Syrian military
source told Al-Masdar News this morning."
Thus the Egyptian government is apparently technically lying about their role in the
sanction when they state "Egypt's government denied Wednesday banning the passage of oil
tankers to Syria through the Suez Canal. Navigation in the canal is going according to
international conventions and treaties that guarantee the right of safe navigation to all
tankers without discrimination."
https://syrianobserver.com/EN/news/49720/cairo-denies-syrian-accusations-on-banning-iranian-oil-tanker-passage.html
Consequently, Iran is shipping Syria oil via tanker trucks.
"1200 Iranian tankers loaded with oil products reached Syria through Iraq in the past
week," Al- Iraqia reports, adding, "The number of Iranian oil tankers are expected to reach
1500 per week, and after providing current Syrian needs, they will be fixed at 500 tankers
per week."
Those that oppose US and Israeli world domination has to buy time and promote economic
collapse within the Empire. Eventually the Sparta like militarism will bankrupt both
countries. The wild card is Venezuela - if they can get their hands on this oil they, and
their allies, can continue to spread chaos for a couple more decades. As it now stands the US
proven oil reserves are between 36-39 billion barrels and the US is consuming that oil at a
rate of about 4.3 billion barrels/year.
The US is also putting pressure on Turkey in hopes of deposing the current government that
supports the GNA in Libya and opposes the gulf states and Saudi Arabia. Turkey needs the
Iranian heavy crude for its Tupras refinery. Substituting heavy crude from Russia is an issue
as Russia has already contracted with Italy and Greece to supply heavy crude to their
refineries. https://www.al-monitor.com/pulse/originals/2019/04/turkey-iran-usa-ankara-seeks-alternative-sources-iranian-oil.html
B wrote "The Syrian oilfields, which could produce enough to keep the country running, are under
control of the U.S. proxy forces. The U.S. prohibited to sell that oil to the Syrian
government."
It is about the money. It is another spinning plate trying to be war just like Iran,
Venezuela, etc. And when the money music stops (which is only when enough nations stop buying
US Treasuries) the elite are going to say that the poor should pay for those attempts at
war.
I like the comment by frances above about the drunk on the canal boat and China/Russia/et
al are trying to keep us alive, hoping the drunk passes out.....and we all get to watch and
learn how not to run a world where the drunk owns the punch bowl.
"... Most student debt is held by people with balances on the lower end of the scale, with only 0.8 percent of the U.S. population owing more than $100,000, according to Deutsche Bank economists. They have labeled the issue as a "micro problem" for individuals, rather than a macro problem for the economy. ..."
"... Yet that still equates to 2.8 million people with around $495 billion in debt as of March, according to Department of Education data. Even more worrying is that it's an increase of almost $61 billion since the end of 2017. ..."
"... In the second scenario, loans are shown over a 20-year term with rates at 7 percent. Monthly payments are smaller but the overall burden is bigger, with total interest payments on $100,000 of debt rising above $86,000. ..."
The $1.6 trillion in U.S. student debt may not pose a direct threat to the economy, but it's causing anguish that goes far beyond
financial concerns for the people who owe it.
One in 15 borrowers has considered suicide due to their school loans, according to a survey of 829 people conducted last month
by Student Loan Planner, a debt advisory group.
Most student debt is held by people with balances on the lower end of the scale, with only 0.8 percent of the U.S. population
owing more than $100,000, according to Deutsche Bank economists. They have labeled the issue as a "micro problem" for individuals,
rather than a macro problem for the economy.
Yet that still equates to 2.8 million people with around $495 billion in debt as of March, according to Department of Education
data. Even more worrying is that it's an increase of almost $61 billion since the end of 2017.
Student loans are the second-biggest kind of debt in America behind home mortgages and often more expensive to service relative
to the amount owed because interest rates are generally higher. Not to mention that unlike buying a home, an education isn't a tangible
asset that can be sold.
It's also turning into a hot political issue as next year's presidential election approaches. Sen. Elizabeth Warren has proposed
a plan to cancel loans for many borrowers, while former Colorado Gov. John Hickenlooper addressed some of the knock-on effects for
the economy in a presentation at the Milken Institute conference earlier this week.
"Of course millennials would love to buy a house," Hickenlooper said April 30 in Los Angeles. But, "they're buried in debt!"
The following scenarios show the monthly costs associated with different levels of student debt. The first envisages a 10-year
loan at 6 percent. To put the figures into perspective, a 30-year mortgage of $400,000 at current interest rates would cost about
$2,000 per month.
In the second scenario, loans are shown over a 20-year term with rates at 7 percent. Monthly payments are smaller but the
overall burden is bigger, with total interest payments on $100,000 of debt rising above $86,000.
Lobbying and campaign finance are two forms of legalized bribery. Citizens United
legalized political corruption for corporations and showed the complete corruption of the
Supreme Court which decided it. Astroturfed political organizations, the manufacture of
"popular consent", are another form of corruption in politics. The hiding of contributors to
these and other groups gives cover to their corruption.
The media are corrupt, even a lot of the blogosphere is. It is all propaganda all the
time, just segmented and tailored to different audiences of rubes.
Universities are corrupt. They no longer fulfill an educational mission rather they are
purveyors of the status quo. They are corrupt in their corporate structure, in their
alliances with other corporations, and in their foisting of debt on to their
students.
Academia is corrupt. There is the whole publish or perish thing that results in most of
academia's research product being worthless and useless. This is even before we get to the
quack sciences like economics. Academic economics is completely corrupt. The dominant
politico-economic system of our times is kleptocracy. Yet almost no academic economist will
acknowledge it let alone make it central to their point of view.
The judicial system and the judiciary are corrupt. How else to explain our two-tiered
justice system? The great criminals of our times, the largest frauds in human history, are
not only not prosecuted, they are not even investigated. And how can anyone take the Supreme
Court to be anything but corrupt? This is an institution that except for a couple of decades
around the Warren Court has, for more than 200 years, always been on the side of the haves
against the have-nots, for the powerful, against the powerless, pro-slavery, pro-segregation,
and anti-worker. How can anyone take decisions like Bush v. Gore or Citizens United to be
anything other than corrupt, politics dressed up as legal thinking?
In a kleptocracy, all the institutions, at least those controlled by the rich and elites,
are put into the service of the kleptocrats to loot or justify and defend looting and the
looters. So corruption is endemic and systemic.
Warren Buffett, who has long slammed the hedge fund industry for charging high fees,
escalated his criticism of private-equity firms that have been raising record sums of money in
recent years.
"We have seen a number of proposals from private equity funds where the returns are really
not calculated in a manner that I would regard as honest," Buffett said Saturday at Berkshire
Hathaway Inc.'s annual meeting. "If I were running a pension fund, I would be very careful
about what was being offered to me."
Buffett has a consistent history of blasting asset managers for charging high management
fees and collecting performance fees on gains that sometimes don't beat broader markets. The
presence of private-equity firms looking for leveraged buyouts of companies has also made it
tougher in recent years for Buffett to find large acquisitions for Berkshire.
"We're not going to leverage up Berkshire," Buffett said.
Buffett and Berkshire Vice Chairman Charles Munger criticized how some private equity firms
portray performance. Firms will include money that's sitting in Treasury bills waiting to be
deployed when charging management fees, but will exclude it when calculating a so-called
internal rate of return, the performance measure in which most funds are judged, Buffett
said.
"It makes their return look better if you sit there a long time in Treasury bills," Buffett
said. "It's not as good as it looks."
Munger described the practice as "lying a little bit to make the money come in." He added
that many pensions are picking private equity because they don't have to mark down the value of
the assets as steeply in a downturn, saying that this was "a silly reason to buy
something."
Buffett has previously criticized the use of debt by private equity funds, saying in his
2014 letter
to shareholders that Berkshire offers another, more permanent buyer, when people are looking to
sell their businesses. He acknowledged on Saturday that leveraged investments would outperform
in good environments, but he cited the 1998 collapse of hedge fund Long-Term Capital Management
as an example of the downside.
While some have argued that Berkshire has embedded leverage by being able to use cash flows from
its insurance businesses in acquisitions, Buffett said he wouldn't be adding debt to chase
deals.
"Covenants to protect debt holders have really deteriorated," Buffett said. "I would not get
excited about so-called alternative investments."
-- With assistance by Katherine Chiglinsky, and Hannah Levitt
"... Trump may actually have been ordered to out the neocons in the way this is playing out as part of the world wide deals made behind the scenes as set up to this public kabuki transition to the "New Order" that leaves global private finance some niche. ..."
So the financial markets are already tanking as expected. Empire is cranking the FEAR dial
to max and will take advantage of any opportunity to keep it there.
Its interesting that it
will only have "domestic" effect and be seen as just more bullying and brinksmanship by
others.
I have come to see the inter-elite cat fight as a conscious culling of the rich in
preparation for the "New Order" that will evolve from these coming events.
Trump may actually
have been ordered to out the neocons in the way this is playing out as part of the world wide
deals made behind the scenes as set up to this public kabuki transition to the "New Order"
that leaves global private finance some niche.
Brain Drain and the Polarization of America
The highly educated are concentrating together, depriving struggling communities and dividing the country.
By
Rachel Sheffield and Scott Winship
•
May 3, 2019
Detroit, Michigan | Credit:
Hotforphotog; Shutterstock
Are we more divided as a nation today than we were before? Our
new
research
within the Joint Economic Committee's Social Capital Project suggests that we are. The findings indicate
that Americans are more frequently dividing themselves geographically and along lines of education. Highly educated
Americans have increasingly moved to a handful of states over the last several decades, leaving other places behind.
This "brain drain" has clear economic implications. Beyond economics though, it's also likely draining social capital
from many places, as communities lose talent and resources that would help support civic institutions. Brain drain and
educational sorting exacerbate political and cultural divides as well: Americans segregate themselves into communities
where they more frequently reside near those similar to themselves, decreasing the likelihood of rubbing shoulders with
those who see the world differently.
The Rust Belt, the Plains, and some states in New England are experiencing high levels of brain drain.
It's not news that highly educated Americans are more likely to move. America's highly educated have consistently
been more prone to pack up their bags and seek opportunity outside their hometowns. But surprisingly, there have been
few attempts to quantify the magnitude of the problem and assess whether it is getting worse. To rectify that, we
created brain drain measures that compare the share of people leaving their birth states who are highly educated to
either the highly educated share of people staying in their birth states or the share entering the states who are highly
educated. We found that today, highly educated movers in the U.S. tend to leave certain states and regions of the
country at higher rates than in the past and concentrate in a smaller group of states that are home to booming
metropolitan areas. This leads to growing geographic divides between areas that are thriving and places that struggle.
With fewer states retaining and attracting talent, more areas are left behind.
A handful of states have become exclusive destinations for the highly educated. They not only hold onto more of their
homegrown talent, but they also gain more highly educated adults than they lose. These talent-magnet states are along
the West Coast, as well as the Boston-Washington corridor.
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Beyond the coasts, a few other states, like Texas, are retaining their homegrown talent while simultaneously winning
a balance of talent from elsewhere.
These "brain gain" states are like an elite club whose members trade among themselves. For example, California draws
the greatest share of its highly educated entrants from other brain gain states: New York, Illinois, and Texas, which
are ranked third, fourth, and eighth, respectively, on net brain gain. New York pulls in highly educated entrants
primarily from New Jersey (ranked sixth on net brain gain) and California. Massachusetts (ranked second) is also among
its top five sending states. The most common origins of Texas's entrants include California, Illinois, and New York. New
Jersey draws its highly educated from the likes of New York, Massachusetts, California, and Illinois. New York and New
Jersey are among Massachusetts' most common sending states. New York, New Jersey, California, and Virginia (ranked
seventh) are among the top states sending highly educated natives to Maryland.
On the opposite side of the coin are the many states that are not only bleeding highly educated adults but failing to
attract others to replace them. Rust Belt states -- Pennsylvania, Ohio, Indiana, Michigan, Wisconsin, and Missouri -- are
particularly plagued by brain drain. Several Plains states -- Iowa and the Dakotas -- as well as states in New England -- Vermont
and New Hampshire -- are also experiencing high levels of brain drain. Although this is hardly a new phenomenon for the
Rust Belt, it's become a worsening problem over the last 50 years for the other high brain-drain states mentioned.
Brain drain's effects on state economies are obvious. Places that lose more of their highly educated adults are
likely going to be economically worse off than those that retain or attract highly educated adults. And if the highly
educated are concentrating in fewer areas, then more parts of the country will be prone to economic stagnation. But
beyond the economic implications, brain drain also has an impact on social capital. If areas are drained of their most
highly educated, those left behind may struggle to support churches, athletic leagues, parent-teacher associations,
scouting groups, and so forth. These institutions matter for the well-being of communities, as they bring people
together in purposeful relationships, ultimately creating the social fabric of our nation.
Another way that brain drain's educational divides can deplete social capital is by creating deeper political and
cultural divides between Americans. The highly educated more often hold liberal political views compared to those with
less than a college education. America's major metropolitan areas (many of the states that win the highly educated are
home to thriving cities) tend to
vote Democratic
,
while most other areas of the country
vote Republican
. Those living in urban areas are also more likely to hold
liberal
political views
, whereas those living in rural areas are more commonly conservative.
Thus, as a result of brain drain and self-sorting, Americans are now more likely to live in communities where they
are isolated from people who hold different ideologies and values. Less association between people of different
viewpoints can exacerbate political divides, as people become more steeped in their own beliefs. When those who are
different are further away, it is easier to cast them as a faceless group of opponents upon whom all blame for America's
problems belongs, rather than as neighbors with whom to find common ground. Ultimately, social segregation weakens the
idea that, as Americans, we share something important in common with one another.
A growing federal government only adds to the problem of geographic divide. Naturally, neither heartland
traditionalists nor coastal cosmopolitans want to be ruled by the other camp. However, with more power at the national
level, national elections have higher stakes for everyone. Each camp feels threatened when its party loses control. With
less association among those with different viewpoints, political discourse turns into fever-pitched discord.
The strength of our relationships is crucial to the strength of our nation. Americans will have to work to make their
communities places in which not only the most highly educated benefit, but others as well. We must find ways to reach
across the divides that separate us.
Rachel Sheffield is a senior policy advisor in the chairman's office of the Joint Economic Committee of Congress,
and Scott Winship is the executive director of the committee.
When you hear the same cue words you know exactly where it comes from.
Peace as its goal through staged wars ( undeclared since WW11).
"
February 9, 1950 -- The Senate Foreign Relations Subcommittee introduces Senate Concurrent
Resolution 66 which begins:
"Whereas, in order to achieve universal peace and justice, the present Charter of the
United Nations should be changed to provide a true world government constitution."
The resolution was first introduced in the Senate on September 13, 1949 by Senator Glen
Taylor (D-Idaho). Senator Alexander Wiley (R-Wisconsin) called it "a consummation devoutly to
be wished for" and said, "I understand your proposition is either change the United Nations,
or change or create, by a separate convention, a world order." Senator Taylor later
stated:
"We would have to sacrifice considerable sovereignty to the world organization to enable
them to levy taxes in their own right to support themselves."
Me**** the problem with this draft of war plan is that if you are pointing fingers of a
" Presidential coup" at home and expect the Treasonous culprits to do time, you can't
purpose the same scheme in a foreign country without reprecusions.
And I think that is the Traitors in the White House plan to save their slimy asses....
Expose the undeclared coup through media ( weaponized as usual) and bring down Barrs
attempts to clean up our own swamp.
As commander in chief Trump has a n op problem.
Whoever inititated this because of ecconomic warefare ( bankers... How the web catches
you at every corner) both at home ( USA) and world.
War, undeclared, declared, either way and use universal peace as goal equals profits for
the war machine and depopulation for the world.
Win win situation for the original planers of one world govetnment.
You remember Dulles don't you ( Dulles airport).
New plan same as the old plan:
April 12, 1952 -- John Foster Dulles, later to become Secretary of State, says in a
speech to the American Bar Association in Louisville, Kentucky, that "treaty laws can
override the Constitution." He says treaties can take power away from Congress and give
them to the President. They can take powers from the States and give them to the Federal
Government or to some international body and they can cut across the rights given to the
people by their constitutional Bill of Rights.
A Senate amendment, proposed by GOP Senator John Bricker, would have provided that no
treaty could supersede the Constitution, but it fails to pass by one vote."
So far those who predicted that recession will start in the first half of 2019 proved to be
wrong. Now it is postponed till 2020. We will see ;-)
Many people predicted massive "Trump's recession" from 2017. It did not materialize... So
there are chances that Trump administration would be able able to kick the can down the road 2020
elections.
" We have a recession in place. It's just a matter of playing out in some of these other
funny numbers. The reality is on the downside, where you have mixed pressures right now.
People who are really concerned about the economy right now, and that includes President
Trump looking at re-election, he's been arguing that the Fed should lower rates, and I am
with him. The Fed created this circumstance. They are pushing for the economy on the upside
because they want to continue to keep raising rates. Banks make more money with higher rates,
and they are still trying to liquidate the problems they created when they bailed out the
banking system back in 2008."
Williams strips out all the financial gimmicks in his work that make things look better than
they really are to give a true picture of the real financial health. Take for example the
recent reportedly good news of the trade deficit narrowing. Williams says,
"What we saw was the very unusual narrowing of the deficit . . . that's generally good
news . . . but if you look at why the trade deficit was narrowing, it wasn't that we were
having new surging exports . . . instead, we were having collapsing domestic consumption.
People weren't buying things. People were not buying goods. So, the imports were falling off,
and that narrowed the deficit. That is not a healthy sign. The last time you saw something
like that was the beginning of the Great Recession (2008–2009). . . . We still haven't
recovered from the Great Recession."
If rate cuts don't happen soon, is the economy going to tank? Williams says,
Greg Hunter is a no nonsense reporter. He has his nuts in a vise to report no ********
news. Williams is old school. The guy you always went to for a solution to a complex problem.
God bless them both.
Questioning the whole "Trump Economy" may seem in poor taste to those who have benefited
so much but it is something we should do. What is being ignored is the structural issues that
haunt America's competitiveness and far outweigh the benefits of lower taxes.
We must also face the fact that deficit spending can only take the economy so far and
carries with it a fair amount of negatives. The article below explores Trumponomics in all
its glory and why this won't end well.
John Williams also claims inflation is either 5% or 10% (depending on what method you
use). How can he reasonably ask for interest rates to be lowered if he believes inflation is
5% at a minimum? Or does he not believe his own data and methods?
Greg Hunter asks him what he thinks the inflation rate is in the interview. He says 8-9%
if remember correctly. His numbers and commentary are obviously using old school methods back
when they did not attempt to mask the bad numbers.
Yes. And so thinking real inflation is 8-9%, how can he then reasonably turn around and
ask that interest rates be lowered (driving up inflation even more)? That's insanity.
Stocks are soaring to highs. Or as Bloomberg noted today,
stock buybacks from corporations flush with tax cut money are fueling an 'endless rally.'
"If individuals aren't enthusiastic, who's buying stock and pushing prices up? It's
impossible to know precisely, but one set of usual suspects is clearly doing a lot of the
heavy lifting: corporations themselves. They've had plenty of profits in recent years,
which have been boosted by federal tax cuts, and have used a chunk of them to buy back
their own stock. Share repurchases rose 22 percent in the first quarter, to an estimated
$270 billion, according to Bank of America Corp., easily eclipsing the amount of money
withdrawn from mutual funds. That companies don't see more opportunities to invest in
their actual businesses -- say, in factories and research and development -- instead of shares
may be a bad omen for growth, but for now it's keeping the party going."
Michael Regan,
The U.S. Stock Market Can't Stop, Won't Stop Its Endless Rally
This could be quite impressive, both in the extent of the high, and in the ferocity of its
descent.
As I seem to recall, those who bought and held stocks in 1929 did not break even again until
most of their life was past, in the 1950's.
Have we truly given ourselves and our childrens' futures over to such reckless and arrogant
characters? It appears to be so.
Sooner or later a crash is coming. And it may be terrific.
What has been hidden wll be revealed. What is secret will be made known.
"You have to hear all the truth,
Even if they do not like it."
Sebastian Brant,
Ship of Fools
"Now in vessels which are in a state of mutiny and by sailors who are mutineers, how will
the true pilot be regarded? Will he not be called by them a star-gazer, someone who
speaks foolishness, and a good-for-nothing?"
Plato,
Republic
"Well I don't know why I came here tonight,
I got the feeling that something ain't right...
Clowns to the left of me, jokers to the right,
Here I am, stuck in the middle with you."
Stealers Wheel,
Stuck in the Middle with You
"You'll never find the solution if you don't see the problem."
Gilbert K. Chesterton
And if you don't see any of the problems, well, then all must be well.
The problems are ignored by the many, who lose themselves in distractions and animated
outrage and madness. And reform is ridiculed, cheated, and spurned by the comfortable few,
who do not care if the ship is sinking as long as they have first class seats.
The registered, or deliverable gold at these current prices in the Comex warehouses has
fallen back to historic lows. I have included a chart below that is current as of Thursday
of last week. We had a further decline reported today. I have included that clearing report
below as well.
US stocks plunged today as Jay Powell spoke glowingly about the strong economy.
This sort of skittishness is typically seen in markets that are topping, because of thinly
justified, and rather high, valuations that make it difficult for people to be 'investors'
rather than speculators for the moment.
This is what the Fed and our regulatory system have created and nutured: not an efficient
capital allocation system, but a casino, and a dodgy one at that.
"People say, what is the sense of our small effort? They cannot see that we must lay one
brick at a time, take one step at a time. A pebble cast into a pond causes ripples that
spread in all directions. Each one of our thoughts, words and deeds is like that. No one
has a right to sit down and feel hopeless. There is too much work to do.
What we would like to do is change the world: make it a little simpler for people to feed,
clothe, and shelter themselves as God intended for them to do. We can, to a certain
extent, change the world; we can work for the oasis, the little cell of joy and peace in a
harried world.
We can throw our pebble in the pond and be confident that its ever widening circle will
reach around the world. There is nothing that we can do but love, and, dear God, please
enlarge our hearts to love each other, to love our neighbor, to love our enemy as well as
our friend.
I am sure that God did not intend that there be so many poor. The class structure is of
our making and our consent, not His. It is the way we have arranged it, and it is up to
us to change it.
Turn off your radio. Put away your daily paper. Read one review of events a week and spend
some time reading good books. They tell too of days of striving and of strife. They are of
other centuries and also of our own. They make us realize that all times are perilous,
that men live in a dangerous world, in peril constantly of losing or maiming soul and
body. We get some sense of perspective reading such books. Renewed courage and faith and
even joy to live.
Do what comes to hand. Whatsoever your hand finds to do, do it with all your might. After
all, God is with us. It shows too much conceit to trust to ourselves, to be discouraged
at what we ourselves can accomplish. It is lacking in faith in God to be discouraged.
After all, we are going to proceed with His help. We offer Him what we are going to do.
If He wishes it to prosper, it will. We must depend solely on Him. Work as though
everything depended on ourselves, and pray as though everything depended on God."
We are now in a great falling away, a time when the gospel of prosperity and a false,
ostentatious, and hypocritical observance of the self causes many to lose themselves -- and
their hearts harden, and the love of most grows cold.
"Not everyone who calls out to me, 'Lord! Lord!' will enter the Kingdom of Heaven, but
only those who actually do the will of my Father in heaven."
Matt 7:21
"They do not see the image of Almighty God before them, and ask themselves what He wishes:
if once they did this they would begin to see how much He requires, and they would
earnestly come to Him, both to be pardoned for what they do wrong, and for the power to do
better.
And, for the same reason that they do not please Him, they succeed in pleasing themselves.
For that contracted, defective range of duties, which falls so short of God's law, is just
what they can fulfill; or rather they choose it, and keep to it, because they can fulfill
it.
Hence, they become both self-satisfied and self-sufficient; – they think they know just
what they ought to do, and that they do it all; and in consequence they are very well
content with themselves, and rate their merit very high, and have no fear at all of any
future scrutiny into their conduct, which may befall them.
And such, I say, is the religion of the natural man in every age and place; – often very
beautiful on the surface, but worthless in God's sight; good, as far as it goes, but
worthless and hopeless, because it does not go further, because it is based on
self-sufficiency, and results in self-satisfaction...
Yes, it is the ignorance of our understanding, it is our spiritual blindness, it is our
banishment from the presence of Him, who is the source and the standard of all Truth,
which is the cause of this meagre, heartless religion of which men are commonly so proud.
In the last days perilous times shall come. For men shall be lovers of their own selves,
covetous, boasters, traitors, heady, high-minded having a form of godliness, but denying
the power thereof. Evil men and seducers shall wax worse and worse, deceiving and being
deceived."
John Henry Newman\
"Though I speak with the tongues of men and of angels, and have not love, I am become as
sounding brass, or a tinkling cymbal."
1 Cor. xiii
"Beware the leaven of the Pharisees, which is a pious, hollow hypocrisy."
Luke 12:1
"Woe to you, scribes and Pharisees -- hypocrites! For you are like whitewashed tombs which
appear beautiful, but inside are full of dead men's bones and all uncleanness. You
outwardly appear righteous, but inside you are full of hypocrisy and lawlessness."
Matthew 23:27-28
"And they took offense at him."
Matthew 13:57
"When the Son of Man comes in his glory, and all the angels with him, then he will sit
upon his glorious throne. All the nations will be gathered in his presence, and he will
separate the people as a shepherd separates the sheep from the goats. He will place the
sheep at his right hand and the goats at his left.
Then the King will say to those on his right, 'Come, you who are blessed by my Father,
inherit the Kingdom prepared for you from the creation of the world. For I was hungry, and
you fed me. I was thirsty, and you gave me a drink. I was a stranger, and you invited me
into your home. I was naked, and you gave me clothing. I was sick, and you cared for me. I
was in prison, and you visited me.'
Then these righteous ones will reply, 'Lord, when did we ever see you hungry and feed you?
Or thirsty and give you something to drink? Or a stranger and show you hospitality? Or
naked and give you clothing? When did we ever see you sick or in prison and visit you?'
And the King will say, 'I tell you the truth, when you did it to one of the least of these
my brothers and sisters, you were doing it to me.'
Then the King will turn to those on the left and say, 'Away with you, you cursed ones,
into the eternal consumption prepared for the devil and his demons. For I was hungry, and
you didn't feed me. I was thirsty, and you didn't give me a drink. I was a stranger, and
you didn't invite me into your home. I was naked, and you didn't give me clothing. I was
sick and in prison, and you didn't visit me.'
Then they will reply, 'Lord, when did we ever see you hungry or thirsty or a stranger or
naked or sick or in prison, and not help you?'
And he will answer, 'I tell you the truth, when you refused to help the least of these my
brothers and sisters, you were refusing to help me.'
And they will go away into eternal darkness without hope, but the righteous will go into
eternal life."
The jobs reports are fabrications and that the jobs that do exist are lowly paid domestic
service jobs such as waitresses and bartenders and health care and social assistance. What has
kept the American economy going is the expansion of consumer debt, not higher pay from higher
productivity. The reported low unemployment rate is obtained by not counting discouraged workers
who have given up on finding a job.
I was listening while driving to rightwing talk radio. It is BS just like NPR. It was about
the great Trump economy compared to the terrible Obama one. The US hasn't had a great economy
since jobs offshoring began in the 1990s, and with robotics about to launch Americans are
unlikely ever again to experience a good economy.
The latest jobs report released today claims 236,000 new private sector jobs. Where are the
jobs, if they in fact exist?
Manufacturing, that is making things, produced a mere 4,000 jobs.
The jobs are in domestic services. There are 54,800 jobs in "administrative and waste
services." This category includes things such as employment services, temporary help
services, and building services such as janitor services.
"Health care and social assistance" accounts for 52,600 jobs. This category includes
things such as ambulatory health care services and individual and family services.
There are a few other jobs scattered about. Warehousing and storage had 5,400 new
jobs.
Real estate rental and leasing hired 7,800.
Legal services laid off 700 people.
Architectural and engineering services lost 1,700 jobs.
There were 6,800 new managers.
The new jobs are not high value-added, high productivity jobs that provide middle class
incomes.
In the 21st century the US economy has only served those who own stocks. The liquidity that
the Federal Reserve has pumped into the economy has driven up stock prices, and the Trump tax
cut has left corporations with more money for stock buybacks and dividend payments. The
institute on Taxation and Economic Policy reports that 60 Fortune 500 companies paid no taxes
on $79 billion in income, instead receiving a rebate of $4.3 billion. https://itep.org/notadime/
The sign of a good economy is when companies are reinvesting their profits and borrowed
money in new plant and equipment to meet rising demand. Instead, US companies are spending more
on buybacks and dividends than the total of their profits. In other words, the companies are
going into debt in order to drive up their share prices by purchasing their own shares. The
executives and shareholders are looting their own companies, leaving the companies less
capitalized and deeper in debt. https://systemicdisorder.wordpress.com/2016/10/26/work-harder-for-speculators/
Meanwhile, for the American people the Trump regime's budget for 2020 delivers $845 billion
in cuts to Medicare, $1.5 trillion in cuts to Medicaid, and $84 billion in cuts to Social
Security disability benefits.
History is repeating itself: Let them eat cake. After me the deluge.
Business economists argue that the length of an expansion is a good indicator of when a
recession will hit. Using both parametric and non-parametric measures, this column finds strong
support for the theory from post-WWII data on the US economy. The findings suggest there is
good reason to expect a US recession in the next two years.
This summer, the current US expansion, which started in June 2009, is likely to break the
historical post-WWII record of 120 months long, which is currently held by the March 1991-March
2001 expansion. It is already longer than the post-WWII average of 58 months. Should we be
worried? Is the next recession around the corner?
Yes, according to business economists. For example, according to the semi-annual National
Association for Business Economics survey released last February, three-quarters of the
panellists expect an economic recession by the end of 2021. While only 10% of panellists expect
a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021.
No, according to the conventional wisdom among more academic-oriented economists, who
believe that "expansions, like Peter Pan, endure but never seem to grow old", as Rudebusch
(2016) recently argued. As he wrote, "based only on age, an 80-month-old expansion has
effectively the same chance of ending as a 40-month-old expansion". This view was also
forcefully expressed last December by the (now ex-) Federal Reserve Board Chair Janet Yellen,
who said " I think it's a myth that expansions die of old age. I do not think they die of old
age. So the fact that this has been quite a long expansion doesn't lead me to believe that its
days are numbered".
My research with Paul Beaudry and Dana Galizia tends to favour the former view, that we
should be worried about a recession hitting the US economy in the next 18 months.
There are two reasons why we reach this conclusion. The first relies on a statistical
analysis that uses only the age of an expansion to predict the probability of a recession. The
second digs deeper into the very functioning of market economies.
First, we estimate in Beaudry and Portier (2019) the probability of the US economy entering
a recession in the following year (or following two years), conditional on the expansion having
lasted q quarters. This can be done in a parametric way based on the Weibull distribution, or
non-parametrically using Kaplan and Meier's estimator of the survival function. Regardless of
the method, and using post-WW2 US data, there is consistent evidence of age-dependence, as
shown in Figure 1. For an expansion that has lasted only five quarters, the probability of
entering a recession in the next year is around 10%, while this increases to 30-40% if the
expansion has lasted over 35 quarters. Similarly, if looking at a two years window, we find the
probability of entering a recession in the next two years raises from 25-30% to around 50-80%
as the expansion extends from five quarters to 32 quarters (the exact probability depends on
whether we use a parametric or a non-parametric approach).
Figure 1 Probability of an expansion ending in the next year, next year and a half, or next
two years (parametric and non-parametric approach)
Notes : the dots are the non-parametric estimates. The thick lines are smoothed
version of the dots. The dashed lines are the parametric estimates. Estimation is done using
quarterly NBER data for expansions and recessions for the post-war sample (September 1945 to
January 2019). The age of the expansion is in quarters.
The non-parametric estimates suggest that duration dependence is minimal for expansions
lasting up to 25 quarters. But after 25 quarters, the duration becomes very apparent. For
example, when an expansion ages from six years to nine years, the non-parametric estimates
suggest that the probability of a recession within a year almost triples. If one looks in more
detail at the initial phase of an expansion – up to eight quarters – there is also
some evidence of positive duration dependence, reflecting the possible occurrence of double-dip
recessions. Then from eight to 25 quarters, there appears instead to be negative duration
dependence as the expansion takes hold, that is, during this phase the probability of entering
a recession appears to decrease as the expansion ages. Finally, after 25 quarters the
probability of entering a recession increases rapidly as the expansion gets old. This suggests
that, when they are older than six years, expansions may be favouring the growth of certain
vulnerabilities that may make the onset of a recession more likely. In other work (Beaudry et
al. 2016), we have shown that US real and financial series tend to follow a cycle of length
about ten years. Of course, this does not mean that there are deterministic cycles of ten
years, but such a statistical regularity makes a recession all the more probable when the
expansion reaches ten years of age. Obviously, we recognise that all our calculations are based
on a small sample of data since recessions are rather rare. Our results are the best inference
possible given this limited data.
Second, our recent work (Beaudry et al. 2016, 2017) has shown that a market economy, by its
very nature, may create recurrent boom and bust independently of outside disturbances. This
idea is well captured by the statement that "a bust sows the seed of the next boom". Although,
such an idea has a long tradition in the economics literature (e.g. Kalecki 1937 or Hicks
1950), it is not present in most modern macro-models. According to this view, the economy
builds up sources of vulnerabilities in expansions. Those vulnerabilities could be of a
financial nature (for example the accumulation of debt/leverage or the concentration of risk or
collateral among small sets of agents) or of a real nature (for example the excessive
accumulation of durable goods or investment in housing). Because of such a build-up, one need
not expect a bad shock to trigger a recession. Such a mechanism creates the type of duration
dependence we have seen in the data, namely that as an expansion grows old, eventually the
probability of a recession should increase.
To conclude, let us emphasise that the evidence and theory we are bringing forward do not
imply a deterministic view of the business cycle. We shall not expect a recession to happen
with probability one when the expansion reaches ten years of age. Analysts might find reasons
to be concerned (Chinese slowdown, yield curve inversion, etc.). What we suggest is that, even
in the absence of a sudden adverse shock, a recession is most likely to happen in the next one
to two years, and that this risk is higher than what it was two years ago.
Come on Lambert, the next recession is always just around the corner. But this one isn't
ready to manifest in my opinion. Money is too cheap, employment is too strong, and the vested
interests aren't setting conditions for it yet. Is it coming? You betcha, you're right to
bring this up. Before 2020 voting? I doubt it. Democrats are going to have to win on the
strength of their ideas.
The definition of "employment" has changed since the end of WW-2.
Secondly, "money is too cheap" for only a small set of 'economic actors.' Here on "the
Street,' money is as hard to find as it has ever been. Go to a bank and ask for a small loan.
You'll get the eternal reply; "You can get a loan from us only if you don't need it."
Thirdly, remember "stagflation?" Watch out for the neo version.
Sequentially, "the next recession is always just around the corner." Well, the corollary is;
"Good times are just around the corner." That corner gets a lot of traffic, going in both
directions.
Finally, the Economic Boffins have staked out a position based on the premise that Macro
drives Micro. From my degraded perspective, the opposite has just as much of a chance of
being true.
Democrats are going to have to win on the strength of their ideas.
Pretty sure that's snark but I'll fix it anyway
Democrats are going to have to win on another epic bait and switch
Hi, ambrit. Excellent debunking of the previous comment.
Your last paragraph warrants a discussion, but this might not be the right place.
However, just consider that in mainstream academic economics, it's the "rational actor"
with rational expectations and full knowledge of the future making decisions to maximize his
marginal utility that drives the overall economy.
re your last para: I think in MBA school "rational actor" means "if you find a goose that
lays golden eggs then kill it to get all the eggs inside it for yourself." /s
Hi John, how're you handling the inundation bands there? I see tons of rain moving through
your area with great regularity. It doesn't rise to the level of a true monsoon, but it's
pretty close for my taste.
I will steal the line from Lambert and say that the word 'rational' is carrying a lot of the
load with mainstream economics. (I'd go so far as to characterize 'bubbles' of all sorts as
examples of 'irrational expectations.') If the preceding were even somewhat true, then the
"movers and shakers" of the economy would be essentially trying to manage a semi chaotic
process. That prompts me to characterize the Fed as a national level "Economic Emergency
Room," or EER. Alas for many of us, this EER has adopted the tried old casualty management
technique of 'Triage.'
Hope your tax season treated you well.
ambrit and Phyl
I think non-recession could ride for awhile, wages haven't increased much, even if
employment, by some definitions of employment (with a proliferation of contract and gig work,
low labor force participation etc.), is strong.
Again: since Clinton, the "major" parties have a deal: they take turns in the Presidency,
2 full terms at a time. I thought 2016 would be an exception, but no. Do you see anything to
indicate that deal has been revoked?
Realistically, the "next" recession, (given that many of the people I meet every day 'on
the Street' haven't recovered from the last one,) can start say, six months before the
election proper and still not rise to political prominence by election day. The real killer
here is the extent of this next recession. All the 'usual suspects' are lined up, but the
underlying economy has suffered from some significant damages that haven't been repaired yet,
if they ever will. With the 'extractive economic model' being applied to the socio-economic
sphere, the changes will be pronounced and dire.
Short term thinking results in long term damage.
Wonder if the ramp up in the US push against Venezuela is designed to create the
"socialism is bad" meme in the US news ahead of the coming US election.
Yes, I've recently had two NeoLib acquaintances try to argue there is no space,
institutionally, between extractive NeoLib financial capitalism as practiced at present in
the US and Bolshevism/Venezuela: it's either this or that.
It's absurdly brittle, but maybe plausible on social media, of which I'm totally ignorant
except for what Lambert shares.
I've been thinking about recession for a few days now and I must agree with Summer that in
the current framework bernie style social democracy is the big fear, and the PTB, such as
they are able, and I think it's safe to say when it comes to control fraud they are pretty
able, will stave off a recession if it looks like a bernie style candidate is likely to win
and dump it on their doorstep as they enter office. If they can find legs for a centrist dem,
the recession will be dumped on trump. It must be an uncomfortable time in the halls of
power. In the end, committed as they are to being moderate republicans, the pelosi dems would
rather have trump, and the coming recession, which on the ground here I see little evidence
of, will be saved for a reformer. That said I don't think the country can handle more
homeless people it starts to look like the army at valley forge after a while. We'll see I
guess
Sorry I got the culprit wrong. But one implication is that FDR, by the time he took
office, had literally been read the riot act. At least he was rational enough to respond
accordingly.
The bonus was due in 1945 – the end of WWII (and my year of birth)? Weird
coincidence.
Another thing about the 'Bonus Army' of 1932 was that it was violently 'put down' by the
Army, under the command of Douglass MacArthur, with D D Eisenhower an aide to MacArthur and G
S Patton in charge of the cavalry contingent of the troops.
MacArthur was generally described by his contemporaries as a quintessential 'American
Patrician.'
I am growing very wary of economic and other analysis that draw sweeping inferences using
statistical tools and data like " age of an expansion to predict the probability of a
recession." I far prefer analysis that " digs deeper into the very functioning of market
economies." However, I'm not sure the observation:
" the economy builds up sources of vulnerabilities in expansions. Those vulnerabilities could
be of a financial nature (for example the accumulation of debt/leverage or the concentration
of risk or collateral among small sets of agents) or of a real nature (for example the
excessive accumulation of durable goods or investment in housing."
quite captures digging deeper into the "very functioning of market economies."
The current US economic 'expansion' seems an odd kind of expansion. Sitting at the side of
this 'expansion' I am confused. What expanded? Looking in the local neighborhood, and in the
side streets and at the centers of nearby cities, the expansion I see has a strange shape. I
see homeless. I see harried faces rushing to unpleasant destinations. I see empty
storefronts. And I see monstrous constructions of new buildings for the taste and grandeur
pleasing a very few with monstrous taste. What kind of expansion is characterized by what
appears to me like a growing market for used cars, used clothing, cheap easily discarded or
dismantled furniture.
To me, this expansion appears an expansion based on returns extracted by reducing wages,
leveraging corporate income streams to drive stock prices, and monopoly price gouging as
markets are consolidated. I don't see any of the 'innovations' and increased productivity or
increased affluence that drove some earlier 'expansions'. Through my lens this expansion
appears one-sided and increasingly unstable. The processes driving the 'expansion' have a
finite extent -- wages, income streams, and markets can only be squeezed so far before they
can be squeezed no further. The economy has been restructured in ways that complicate
monetary and fiscal policy blunting and redirecting their effects, when they are applied. I
believe this further adds to the instability. The structure and processes of this expansion
really do seem different this time. I suspect the crash will also be different this time.
I'll tell you what 'expanded' .. Out of Business sales, for rent or lease, mucho garage/
yard sales .. selling mucho junk ! , vagrancy × ratty tents, panhandlers , "Will _ _ _ _
(pick a desperation !) for _ _ _ _ ( pick a need, real or otherwise), crowded Dollar Stores,
fewer WallyWorlders, fewer farmer's market patrons, scummy vigiante types routing the
homeless, increase in desperate food-bank recipients .. with children no less ! , savings
dwindling whilst EVERY municiple tick and Corpserate Conenose sucks the lowly pleb to a dry
husk while, conisidentally, always GETTING THEIRS' !!!! , BS politicians campaigning
predicated on srcewing the commons, polecat doing what he can for self and family .. on the
wing, because he sure as Hades ain't gonna start that small business he once desired, due to
a GFC that NEVER REALLY ENDED !!! .. and has much fewer quatloos to hand over to the Man, be
they local .. or those at the pinnacle of Empire !
I'm ready for the appearance of a benevolent dictator -- someone who'll ACTUALLY GET
THINGS DONE for me and mine, for a change !
For me de question is what will be the canary in the coalmine next time. Are industrial
new orders in Germany indicating a global slowdown or will prove temporary? Boeing? Oil?
I'm looking toward some large municipal debt defaults. Much of the recent infrastructure
repair and replacement looks to be fuelled by municipal bonds, yet the underlying local
economies are degrading. Already, the 'breaking point' for average people's ability to pay
local taxes and fees is being reached. A cascade of defaults and 'restructurings' looks
inevitable.
Gravel roads will once again become popular along with the requisite amounts of choking
dust and attendent potholes ! .. but hey at least it's a permeable membrane .. and mules can
still navigate on, around, and through it
I wouldn't be surprised if the more than the occasional bureaucrat gets 'restructured' as
a result of increased rent/fee/assessment/tax skullduggery in a rather diminshed fiscal
environment .
They will try and probably succeed, but like in 2008, the system is such that it
will soon crash, and if those conditions, like last time, happen there is nothing they
can do.
Out here in retail land business is tough. We are still not back to 2006 sales levels. 13
years of rising costs, property taxes, etc. but still the same size sales pie to carve it all
out of.
The big town put computerized parking boxes in and took out the old meters. You have to
climb over snow drifts to start the process, then run back to car to try to get your license
plate number, then use your credit card. Too complex for suburban punters. Now even in spring
weather customers are voting with their feet.
The town has put a $1.50 per hour toll booth in front of our stores and the software
vendor is getting a $.35 convenience for every credit card used.
"I just want to dip my hand in the money stream that flows outside my window"
Ha!! That's exactly why I no longer go to our large nearby city to shop anymore and the
same with the mid size town close by. Nice shops, great prices but messing around with the
new central box parking is a no go for me if it isn't '70F and clear and I am not In a hurry.
And that occurs here In the NE like twice a year public transport is not nearby to my home
and would take me an extra 11/2 hr minimum to even try to use it. I know because I tried
several times. It's also creepy filthy and chronically late
Exactly why most of our friends in San Francisco boycott the city for commercial reasons.
They time their drive over to California's wealthiest, healthiest and most educated county,
Marin, to shop and spend the day avoiding rush hour or weekends. Unlimited free parking, far
better weather, no car break ins, no piles of steaming human feces on the sidewalks, nor
raving street crazies like in the city.
In addition, people are nicer and it's less crowded, with higher quality and less
expensive stores than the city. Also, one is not handing their sales taxes to the city
government that has, is and will continue to destroy San Francisco. Vote with your
wallet.
Ten bucks in gas and the bridge toll for a delightful day and personal safety is worth it,
versus paying upwards of six bucks an hour at parking meters in the city, if you can find
parking then coming back and finding your are one of the 36,000 (per year) victims of a car
break in.
Mixed bag out here in our little town of Medford OR. The chances of getting a job are
clearly better than at any time under Blessed Obama. Almost every store and fast food joint
has a "help wanted" sign. I even hear help wanted ads on commercial radio.
OTOH, lots of store fronts and houses are still boarded up, and the cardboard sign army
gets bigger each year. Tons of trashy encampments around and through the local Bear Creek
parkway.
"There's a Vietnam Vet with a cardboard sign, sitting there next to the left turn line
Flag on his wheelchair flapping in the breeze, one leg missing, both hands free
We can't make it here any more"
James McMurtry, Bard of the lost deplorables in middle America.
I cannot understand why people are believing the employment numbers as meaning things are
great. We are solidly upper middle class living in a solidly middle class area (Philadelphia
western burbs). Within a couple of mile radius of my home just in the people we know their
are 22 people, aged 59 to 19 (most with a college degree if they are over 22/23 or so) who
are working part time or two or three part time jobs. Some lost really good professional type
positions in downsizing ( a couple of engineers, a biologist and some computer geeks etc).
Others are new grads who cannot get. Full time secure job( ie not on commission) , others had
your old fashioned white collar jobs in finance, communications, marketing ,health and
safety, Human Resources, insurance industry and on and on and were let go also in downsizing,
moving jobs to cheAper places in the world and companies just cutting back
None of these part time pieces of garbage jobs come with any benefits whatsoever. They also
do not allow people to work regularly scheduled hours so planning anything like a family
outing or picnic or even a trip to the dentist is super difficult. Some weeks they get lots
of hours some hardly any. Many are on Medicaid expansion now for their healthcare. God knows
what will happen to them if some idiot gets in and does away with it.. I shudder to think
Is this really what America has become now going forward? If this is considered full
employment by anyone in any profession of any party affiliation I would say we are now in the
movie Idiocracy for real .. and we are in an ocean liner full of trouble going forward.
This is a strange article about a very strange world. There are no observations or data
but it seems to be simply say that if the past is any guide to the future maybe hold onto
your hat. NBC news last night had a glowing segment on how great the economy is doing and how
unemployment is the lowest level since 1969 and wages are starting to raise. I remember 1969,
besides flying off to Vietnam, there was no homelessness, education and healthcare were
affordable and I easily got a summer job the year before working at the Seattle USDA lab. For
the working middle class, it was a hell of lot better than today. The only way I can
reconcile the cognitive dissidence between NC and NBC is that corporate media has gone
completely over to the dark side and there is no correlation with state propaganda and
reality. The scary part is that this is the exact same reason why the Soviet Union collapsed.
There is no planning for the future. "Trust the invisible hand". But, it isn't a recession
that we should worry about; it is the collapse of Empire and the global economy when the
dollar stops being a world's reserve currency and the huge pile of debt that can't be paid
off. Not to mention, in addition, blowback from the new Cold War with Russia, climate change,
and the psychotic response of the elite to any loss of their wealth.
"... As much as Trump has proven to be a disaster with his appointments of Bolton/Pompeo/E Abrams, things could still be worse. We could have wound up with Little Marco, the John McCain of his generation. All praise to Tucker for having the guts to go against the grain. ..."
"... The answer here is simple. When the President of of the US stated that he believed Russia under the instructions of Pres. Putin attempted to sabotage the democratic process, and from the mouths many of our leadership -- was successful he made a major power on the world stage a targeted enemy of the US. When that same president accused Pres. Putin of plotting the same in Europe and ordered the murders inside those sovereign states -- ..."
"... He essentially stated that our global strategic interests include challenging the Russian influence anywhere and everywhere on the planet as they are active enemies of the US and our European allies. What ever democratic global strategic ambitions previous to the least election were stifled until that moment. ..."
"... Sanctions and blockades are acts of war. Try doing it to Washington or one of its vassals, and watch the guns come out. ..."
"... Historically, sanctions are not an alternative to war; they are a prelude to it. Sanctions are how Uncle Scam generally softens up foreign countries in preparation for an invasion or some sort of 'régime-change' operation. ..."
"... All of this is smoke in mirrors. The real story is that Washington is headed for default on it's 22 trillion dollar debt and the Beltway Elites are losing it. They are desperate to start a conflict anywhere, but especially with an oil rich nation like Venezuela or Iran install their own puppets and keep this petro-dollar scam running a little while longer. ..."
"... Syria, Iraq and Libya were not destroyed for oil. Oil provided cover for the real reason. In fact, oil companies opposed war for oil. It doesn't benefit the US or those companies. Those three countries were and are Israel's primary enemies and neighbors and that is why they were destroyed. Only if you stick your head in the sand and ignore the enormous power of Israel and their Jewish supporters which is constantly on full display constantly can someone not see that. ..."
"... Venezuela has one of the highest murder rates in the world. I'm pretty sure there are still lots of guns around. They're not using rocks to kill one another. The U.S. military richly deserves to get itself trapped in a Gaza type situation of house to house fighting in the favellas above Caracas. ..."
"... Trump is a Trojan horse under zionist control who had 5 draft deferments but now is the zionists war lord sending Americans to fight and die in the mideast for Israel just like obama and bush jr. , same bullshit different puppet! ..."
"... America is Oceania , war is peace, freedom is slavery, ignorance is strength and I would add to what Orwell said, war in the zio/US is perpetual for our zionist overlords. ..."
"... Imperialists always see themselves as spreading good things to people who will benefit from them. And imperialists necessarily always dilute their own culture. ..."
"... If the imperialist culture is already rootless cosmopolitan, it will see no downside to the above. If the Elites of a culture have become cosmopolitans divorced from any meaningful contact with their own people (i.e. those of their own blood and history), then they will lead their people into ever more cultural pollution and perversion. ..."
"... Remember. The choice was between Trump and Clinton. Not Trump and Jesus. ..."
"... The funny thing is, the Alt-Right or the 2.0 movement is united to a man on opposing the Trump administration's military interventions in Syria, Iran and Venezuela, but has failed at articulating its own ardent opposition to imperialism and its commitment to humanity and international peace. No one in American politics is more opposed to destructive regime change wars. ..."
"... I'm not sure what "Alt-Right" or "2.0 movement" really means in the current shills-vs-people wars but all the best and the brightest in our ranks are clearly against the globalists. ..."
Venezuela illustrates why a 3.0 movement is necessary.
The funny thing is, the Alt-Right or the 2.0 movement is united to a man on opposing the
Trump administration's military interventions in Syria, Iran and Venezuela, but has failed at
articulating its own ardent opposition to imperialism and its commitment to humanity and
international peace. No one in American politics is more opposed to destructive regime change
wars.
The Trump administration's interventions in Syria and Venezuela are victimizing mainly poor
brown people in Third World countries. And yet, the Alt-Right or the 2.0 movement is extremely
animated and stirred up in a rage at the neocons who are currently running Blompf's foreign
policy. Similarly, it has cheered on the peace talks between North Korea and South Korea.
Isn't it the supreme irony that the "racists" in American politics are the real
humanitarians
while the so-called "humanitarians" like Sen. Marco Rubio and Bill Kristol are less adverse
to bloodshed and destructive wars in which hundreds of thousands of people die than the
"racists"?
It is ironic. There is also the issue of economic-based US interventionism, particularly in
the oil-gifted nations mentioned. It's their oil. Since the US economy is oil-dependent --
and since fracking is a short-lived "miracle" of unprofitable companies that have already
extracted the easy pickings -- it is the role of US leaders to make sure that we can buy oil
from nations like Venezuela, keeping relations as good as possible for those means. But US
leaders have no business telling them who should rule their country, much less stirring up
trouble that can end up in bloodshed.
There's a comment on here about US forces and the Kurds in Syria, helping themselves to
oil, while Syrians wait in long lines for gas in a country that is an oil fountain. I have no
idea whether or not it is true, and since the US press would rather gossip than report, we'll
probably never know. But since oil prices have gone up recently in the USA, it might be true,
especially since politicians always want to pacify the serfs facing other unaffordable
expenses, like rent. If true you can see how that would make the people in an oil-rich
country mad.
Isn't it the supreme irony that the "racists" in American politics are the real
humanitarians while the so-called "humanitarians" like Sen. Marco Rubio and Bill Kristol
are less adverse to bloodshed and destructive wars in which hundreds of thousands of people
die than the "racists"?
There is nothing ironic about your simple statement of fact. The humanitarians you mention
are about as much interested in human rights as John Wayne Gacy. There is gold in them there
hills, and their "friends" no longer control that gold. So we must go to war.
Rubio is running neck and neck in my mind as one of the most disgusting political whores
of all time.
As much as Trump has proven to be a disaster with his appointments of Bolton/Pompeo/E Abrams,
things could still be worse. We could have wound up with Little Marco, the John McCain of his
generation. All praise to Tucker for having the guts to go against the grain.
How is that working out now?
Those are rocks those guys are throwing..right?
Why not let THEM do the fighting and keep the guys from Ohio and Alabama here?
The funny thing is, the Alt-Right or the 2.0 movement is united to a man on opposing the
Trump administration's military interventions in Syria, Iran and Venezuela
What Trump administration military intervention? Number of Boots on the ground:
Syria -- Reduced vs. Obama, at most a few thousand
Iran -- ZERO
Venezuela -- Again ZERO
It is quite amazing that Trump Derangement Syndrome [TDS] can take ZERO troops and falsely
portray that as military intervention. In the real, non-deranged world -- Rational thought
shows ZERO troops as the absence of military intervention.
Trying to use non-military sanctions to convince nations to behave better is indeed the
exact opposite of military intervention. If the NeoConDem Hillary Clinton was President. Would the U.S. have boots on the ground in
Iran And Venezuela?
Why is the Trump Derangement Syndrome [TDS] crowd so willing to go to war for Hillary
while misrepresenting TRUMP's non-intervention?
Those who pathologicially hate Trump are simply not rational.
The answer here is simple.
When the President of of the US stated that he believed Russia under the instructions of
Pres. Putin attempted to sabotage the democratic process, and from the mouths many of our
leadership -- was successful he made a major power on the world stage a targeted enemy of the
US. When that same president accused Pres. Putin of plotting the same in Europe and ordered
the murders inside those sovereign states --
He essentially stated that our global strategic interests include challenging the Russian
influence anywhere and everywhere on the planet as they are active enemies of the US and our
European allies. What ever democratic global strategic ambitions previous to the least
election were stifled until that moment.
Until that moment foreign policy could have been shifted, but after that moment
Don't forget the genocide in Yemen. Wanting to exclude Yemenis from the USA means you're an
evil racist, but turning a blind eye to mass murder is A-OK.
Gold, Black Gold and Pirates : all about wealth and people getting in the way of the 21st
Century Privateers who will stop at nothing including overthrowing governments in Syria,
Libya, Iraq and elsewhere.
@A123Historically, sanctions are not an alternative to war; they are a prelude to it.
Sanctions are how Uncle Scam generally softens up foreign countries in preparation for an
invasion or some sort of 'régime-change' operation.
I appreciate the fact that Team Trump has not actually sent in the tanks yet, whereas
Hellary probably would have by now. Believe me, that is probably one of the very few good
arguments in favor of Trump at this point. But if we want to make sure that he never does
attack, then now is the time to make some noise– before the war starts.
All of this is smoke in mirrors. The real story is that Washington is headed for default on
it's 22 trillion dollar debt and the Beltway Elites are losing it. They are desperate to
start a conflict anywhere, but especially with an oil rich nation like Venezuela or Iran
install their own puppets and keep this petro-dollar scam running a little while longer.
If we weren't on the brink of economic collapse I could never see the Washington Elites
risking it all with a game of nuclear chicken with Russia and China over Ukraine and
Taiwan.
This commentator lost me when he decided Guaido was as socialist as Maduro. Nope. He would
not have US backing were that the case.
I checked out Telesur on Youtube on April 30 – its continued functioning was one sign
the coup attempt had failed. The comments section was full of Guaido supporters ranting about
how much they hated Chavistas and socialists and some were asking where Maduro was, probably
trying to sustain the myth that he had fled.
"When was the last time we successfully meddled in the political life of another country" The
answer to that, Tucker, depends on who you ask. While Syria, Iraq and Libya were "failures"
because we were told we would bring peace and prosperity to those countries, that was not the
goal of the architects of those wars, neither was it oil. The primary goal was to pacify
these countries and neuter them so they would not stand up to their neighbor and enemy
Israel. And if they had to be destroyed to accomplish that, that's fine. Minus Egypt, those
three countries were Israel's primary enemies in the three Arab-Israeli wars. Venezuela is
not "another" war for oil, but it might be the first.
Syria, Iraq and Libya were not destroyed for oil. Oil provided cover for the
real reason. In fact, oil companies opposed war for oil. It doesn't benefit the US or those
companies. Those three countries were and are Israel's primary enemies and neighbors and that
is why they were destroyed. Only if you stick your head in the sand and ignore the enormous
power of Israel and their Jewish supporters which is constantly on full display constantly
can someone not see that.
@EliteCommInc.
The russians are not the ennemies of the europeans , the russians are europeans , the yankees
are nor european .
If the yankees were the allies of the europeans , why they should need hundreds of
military occupation bases in Europe ? why they should impose on europeans self defeating
trade sanctions against Russia ? , strange " allies " .
@conatus
you are late conatus , the russians are building in Venezuela a factory of Kalasnikov rifles
, and Maduro is traing a militia of two million men , to help the army .
@conatusVenezuela has one of the highest murder rates in the world. I'm pretty sure there are still
lots of guns around. They're not using rocks to kill one another.
The U.S. military richly deserves to get itself trapped in a Gaza type situation of house
to house fighting in the favellas above Caracas.
@War
for Blair Mountain{If JFK were alive ..and POTUS in 2019 he would give the order to
overthrow the Maduro Goverment .}
JFK was alive way back then, when he gave the order to overthrow Castro and the result was
the Bay of Pigs disaster. And – for better or worse – Cubans are still running
their own country, not some foreign installed puppet.
'The order to overthrow Maduro' today would have the same disasterous end.
It should be obvious by now, that despite all the hardships, majority of Venezuelans don't
want a foreign installed puppet.
Carlson is right on Venezuela but was wrong on 911 truthers which he said back in September
2017, that 911 truthers were nuts! 911 which was done by Israel and the zionist controlled
deep state lead to the destruction of the mideast for Israel and the zionist NWO!
Trump is a Trojan horse under zionist control who had 5 draft deferments but now is the
zionists war lord sending Americans to fight and die in the mideast for Israel just like
obama and bush jr. , same bullshit different puppet!
America is Oceania , war is peace, freedom is slavery, ignorance is strength and I would
add to what Orwell said, war in the zio/US is perpetual for our zionist overlords.
One more thing, if Venezuela did not have oil the zio/US would not give a damn about
it!
Imperialists always see themselves as spreading good things to people who will benefit from
them. And imperialists necessarily always dilute their own culture.
If the imperialist culture is already rootless cosmopolitan, it will see no downside to
the above. If the Elites of a culture have become cosmopolitans divorced from any meaningful
contact with their own people (i.e. those of their own blood and history), then they will
lead their people into ever more cultural pollution and perversion.
Jews are a people who fit the opening sentence of the preceding paragraph. The WASP Elites
fit the second sentence.
If "no one is more opposed to destructive regime-change wars than the Alt-Right", it means
that the Alt-Right are traditional conservatives, paleo-(as opposed to neo)conservatives.
Real conservatives have always opposed getting into foreign wars that posed no threat to the
U.S. They opposed Wilson lying us into WW1, Roosevelt lying us into WW2. When the
neo-conservatives (American Jews loyal to Israel) got Washington under their thumb, we
started our decades of disastrous regime-change wars based on lies, starting with the
invasion of Iraq. Those neocon mf ers are still in charge.
An Alt Right 2.0 concept that is compassionate with the damage done by US war and economic
exploitation against the poorest people of the world who are mostly brown people is an
interesting concept.
But I think it will ultimately fail, since so many of the white people who make up the Alt
Right are angry with minorities and see them as a lower race. And these white people are more
interested in playing the victim card anyways.
@A123
You speak truth and cite facts, these loons go bananas.
Thank God they have no real power.
Hopefully they don't even own a hamster . probably would make the little fella read Mien
Kempf.
Because a hamster reading is just as cogent and linear as their arguments.
They are frustrated they cannot find a way to blame the Jews! for Maduro being a greedy
murdering sweathog who lets zoo animals starve while he looks like animated male
cellulite.
Funny- in their prostrations to dictators ( these retards actually defend and admire
Jong-Un) they conveniently have omitted Putin is cutting Russia from the WWW- the
Internet.
They will have a Russia intranet.
Pointing out to the obtuse daily commenters that under the tyrants that practically
fellate- they would be arrested and tortured for their Unz hissy fits and word diarrhea
Nationwide radio talk show? Wow! What's the station name, number and air time?
If you listen to people with actual media shows, they don't call people TROLL just because
they have a different opinion. They don't engage in female hysterical ranting because someone
has a different idea about the mechanics of the world.
Who are your sponsors? I can't imagine you would not want the free publicity .
I agree, there is irony in labels, in trying to tell who is more disposed towards 'bloodshed
and destructive wars in which hundreds of thousands of people die'. Why do we fight? It is
for power. Power (manifested as interest) has been present in every conflict of the past
– no exception. It is the underlying motivation for war. Other cultural factors might
change, but not power. Interest cuts across all apparently unifying principles: family, kin,
nation, religion, ideology, politics – everything. We unite with the enemies of our
principles, because that is what serves our interest. It is power, not any of the above
concepts, that is the cause of war. And that is what is leading the world to nuclear
Armageddon. https://www.ghostsofhistory.wordpress.com/
@TKK
My sponsors are truth and America first. All Zionist hucksters are on my hit list. Again, I
suggest you and yours consider "making aliyah". https://www.nbn.org.il/
Number of Boots on the ground:
-- Syria -- Reduced vs. Obama, at most a few thousand
-- Iran -- ZERO
-- Venezuela -- Again ZERO
We will see in the future. Trump has to stir the pot. The foaming at the mouth media and his political opposition, in
both parties, need something to blather on about. Jus like rasslin'. Remember. The choice was between Trump and Clinton. Not Trump and Jesus.
@TKK
Oh, I see a point there, and it's an interesting one – openly Christian presidents
discredit their Christianity by engaging in non-righteous wars. After contemplating the
point, I don't think the foreign policy of W or Trump is anywhere close to being the primary
factor in the decline in church attendance. After all, the Catholic Church and other
denominations are mired in myriad sex scandals, the internet pulls people from God with
private depravity, science offers compelling hows if not whys, entertainment options abound,
and so on. Nonetheless, an orthodox and faithful Christian president committed to peace and
not fighting for oil or foreign interests would be a thing to behold. With caveats relating
to perceived sanity, that person would get my vote.
"The russians are not the ennemies of the europeans , the russians are europeans , the
yankees are nor european . "
These comments don't make any sense to me based on what I wrote. My comments have no
bearing on whether the Russians are an actual threat or not. I see them as competitors with
whom there are some places to come to some agreements. They doesn't mean I truth them.
Furthermore, my comments have no bearing on the territorial nature of Russian ethos.
That's not the point. Europeans have been at each other since there were Europeans. From the
Vikings and before to Serbia and Georgian conflicts. But none of that has anything to do with
my comments.
You might want to read them for what they do say as opposed to what you would like them to
say.
Jul 26, 2017 CIA director hints US is working to topple Venezuela's elected government
CIA Director Mike Pompeo indirectly admitted that the US is pushing for a new government
in Venezuela, in collaboration with Colombia and Mexico.
Feb 22, 2019 An Ocean of Lies on Venezuela: Abby Martin & UN Rapporteur Expose
Coup
On the eve of another US war for oil, Abby Martin debunks the most repeated myths about
Venezuela and uncovers how US sanctions are crimes against humanity with UN investigator and
human rights Rapporteur Alfred De Zayas.
"After all, the Catholic Church and other denominations are mired in myriad sex scandals . .
."
Not even to the tune of 4%, and I am being generous. The liberals have managed to make the
Church look a den of NAMBLA worshipers -- hardly. In the west the Churches are under pressure
from the same sex practitioners to reject scriptural teachings on the behavior, but elsewhere
around the world, Catholic institutions, such as in Africa -- reject the notion.
@TKK
Thanks. Ignoring mindless trolls is a necessary skill for the site.
____
Given the end of the Mueller exoneration, both Trump and Putin are looking to strengthen
ties. Thus it is:
-- Unlikely that Putin is heavily committed to helping Maduro. The numbers are too small
for that. Also, what would Putin do with Maduro? The last thing Putin needs is a spoiler to
the developing detente.
-- Much more likely the troops have a straightforward purpose. Brazilian
military/aerospace technology would jump ahead 20 years if they could grab an intact S-300
system. Russia doesn't want a competitor in that market, so they have a deep interest in
reclaiming or destroying S-300 equipment as Maduro goes down.
@EliteCommInc.
You are certainly right. I have no doubt that the vast majority of priests are good men
innocent of these charges, and that there are more public school sex scandals (by both raw
numbers and percentage) then similar Church scandals. The scandals do have public currency
and legs, though, and are one reason often cited as to why the pews are empty. I am at fault
for helping to keep this ruinous perception alive with my online rhetoric, and thank you for
pointing it out.
' It's the oil ' canard has always been the excuse cultivated for suckers, and boy
do suckers fall for it.
US oil companies have not received the big oil deals in countries where the US, at the
behest of "that shitty little country", have interfered militarily. However, Russia, China,
& to a limited degree, a few European companies have.
@PeterMX
Bibi's biggest enemy, his main prize, has always been Iran. He is afraid that, if Trump
refuses to do his bidding now, it may well be too late in an election year. One way or
another Bolton and Pompeo are going to convince their token boss to green light a massive
bombing campaign, especially if Iran attempts to shut down the Straits of Hormuz. It will
happen this year if Trump fails to come to his senses.
@Scalper
In the first place, your bizarre partisan rant is a little out of place. There aren't too
many QAnons here at Unz, and there are probably a fair number of regulars here who wouldn't
even identify as Republicans or 'conservatives' (whatever that term means today).
Secondly, some of your talking points aren't even accurate:
Trump administration will declare Muslim Brotherhood a terrorist organisation,
increasing the animosity from Arab countries in the ME to unbelievable levels. This
includes non Arab country Turkey also, a traditional ally until neocon Trump took
power.
If Trump were truly to declare the Brotherhood to be a terrorist organization, a lot of
Arab rulers would actually thank him. You see, the Brotherhood is actually illegal in
most Arab countries today, precisely because it has a history of collaborating with foreign
intelligence services such as MI6, the CIA and Mossad. More recently, it was strongly
associated with failed régime-change projects in countries like Egypt and Syria; so
with a few exceptions (like Qatar), the Brotherhood is not well liked by Arab rulers.
Immigration restrictionism is a traditional pro working class, leftist policy.
Traditionally leftist? Sure up until the Hart-Celler Act of 1965! The sad fact is,
we don't an anti-immigration party in the US at all today. Neither the Republicans nor the
Democrats have any interest whatsoever in halting–or even just slowing
down–immigration.
@PeterMX
It's obvious that FOX is giving Tucker a lot of latitude. They continued to support him when
advertisers left, and when accusations of racism emerged from a radio interview he'd done
years ago with a shock jock. They dare not fire him as he has the largest and most fervent
base of supporters on cable news. But Tucker knows that there is one big issue, the Elephant
in the room, of which he dare not speak. It's that shitty little country calling the shots,
whose name begins with an I.
@Anonymous
I think there may be more alt-righters opposed to foreign wars and exploitative 'free' trade
treaties than you assume. Most of the alt-righters I know oppose the current régime's
"invade the world, invite the world" policies (to borrow a phrase from our own Steve Sailer).
But unlike the anti-imperialist left (with whom they often do ally), they usually argue
against such policies based on popular self-interest rather than abstract universal morality.
They usually choose to argue that being a mighty world empire has worked to the
detriment of the majority of people in America; that the whole thing is just a scam to
enrich and empower a small, corrupt élite.
what goes unremarked here and elsewhere is the ethnic composition of Venezuela. From a few
searches, Whites are only about one-third of V.
The Tipping Point for chaos is clear. Brazil is half White, Argentina is near 100 % White,
ditto Chile.
(Argentina ca. 1900 exterminated a large number its "Indigenous." )
The most stable of Latin America is Costa Rica, which is apparently about three quarters
White.
Meanwhile the jewyorktimes reports the narco-traffickers in the Maduro administration.
Hopeless. Any Brown or Black Country is doomed. Brazil works cuz Whites know how to
control the 45% mulattos and 5 % Blacks. For now anyway. Mexico is a narco-state with the
only 9% Whites able to control the half breeds and Indigenous thru co-option. Wait for Mexico
to blow up.
The funny thing is, the Alt-Right or the 2.0 movement is united to a man on opposing the
Trump administration's military interventions in Syria, Iran and Venezuela, but has failed
at articulating its own ardent opposition to imperialism and its commitment to humanity and
international peace. No one in American politics is more opposed to destructive regime
change wars.
That's an amazing point. I'm not sure what "Alt-Right" or "2.0 movement" really means in the current
shills-vs-people wars but all the best and the brightest in our ranks are clearly against the
globalists.
@Avery
The Deep state/CIA did the Bay of Pigs. JFK was not informed about it before it happened. JFK
was fighting the CIA and deep state throughout his presidency. He wanted to shatter the CIA
into a million pieces. Read "JFK and the Unspeakable" by James W. Douglass. His peace speech
on June 10, 1963 was too much for our deep state. That speech was the biggest triggers that
set the motion for his assassination.
Whatever anyone thinks about the Alt-Right it did expose a lot of things about our current
era, our history, our politics, and power paradigms that once seen can not be unseen.
And what are you going to do about it? What can anyone really do, honestly?
Not too much at least in America. Eastern Europe still has a good chance.
In America, the trajectory and machinations of power have been set for a long time and
revolutionary romanticism tends to work better for the Left than the Right. A quick look at
the data easily reveals this.
So what do you do when you realize how so much of everything that's presented as real and
true isn't real or true? And there are so many truly bad human beings with major power over
our culture, politics, and society?
Well, when has that not been the case in human history? At some point, acknowledging all
the black pills is sort of like accepting your human limits, your finitude, your genetics,
the unanswered mysteries of existence, the nothingness of Earth in the grand scheme, and just
basic gravity.
You could become a courageous online revolutionary and eventually trigger some unstable
person to get things shut down and deplatformed.
Or you could organize with socially and psychologically healthy and mature adults who try
to prioritize attainable and realistic goals and gain some moralizing victories that can
buffer against the demoralizing defeats.
Luckily, out of the winter of our discontent have emerged many healthy tendrils of new
growth.
Millennial and generation Z workers are becoming increasingly miserable with their jobs and careers. Since we are told several
times a day by the media that the economy is booming, why are so many young workers so disastrously melancholy all the time?
"When you're struggling with your mental health it can be much harder to stay in work or manage your spending, while being
in debt can cause huge stress and anxiety – so the two issues feed off each other, creating a vicious cycle which can destroy
lives," said Helen Undy the institute's chief executive.
"Yet despite how connected these problems are, financial services rarely think about our mental health, and mental health
services rarely consider what is happening with our money."
So why are we constantly being told everything is fine? The mainstream media loves to say that the U.S. is nearly ten years into
one of the longest economic expansions in history, unemployment is the lowest it's been in almost half a century, and employees have
more job choices than they've had in years. But there's just one problem. That's not actual truthful when taking all of the data
into consideration. Sure, unemployment is low the way the government calculates it, but there's a reason for that.
102 million Americans are no longer "in the workforce" and therefore, unaccounted for.
When a working-age American does not have a job, the federal number crunchers put them into one of two different categories.
Either they are categorized as "unemployed" or they are categorized as "not in the labor force".
But you have to add both of those categories together to get the total number of Americans that are not working.
Over the last decade, the number of Americans that are in the "unemployed" category has been steadily going down, but the number
of Americans "not in the labor force" has been rapidly going up.
In both cases we are talking about Americans that do not have a job. It is just a matter of how the federal government chooses
to categorize those individuals. –
Michael Snyder, The Economic Collapse Blog
That could partially explain the misery some are feeling, but those who have jobs aren't happy either. They are often reeling
from student loan and credit card debt. Being depressed makes shopping feel like a solution, but when the bill comes, the depression
once again sets in making this a difficult cycle to break for so many just trying to scrape by.
Depression and suicide rates are rising sharply
and other than putting the blame on superficial issues, researchers are at a loss as to the real reason why. But could it possibly
be that as the elite globalists continue to take over the world and enslave mankind, people are realizing that they aren't meant
to be controlled or manipulated, but meant to be free?
There's something we are all missing all around the globe. Could it possibly be free will and a life of freedom from theft and
violent coercion and force that's missing?
When even your own article lies to everyone... so the modern person that does well are those who lie the best and are the best
con artists. Trump is an example. Low talent High con.
Example the US unemployment number.
Only the pool of unemployed that is Presently eligible for unemployment benefits is counted in the Unemployment number. That
means self employed, commissioned workers, contractors etc are not included in the pool of unemployment even if they are out of
work because they are unemployment ineligible.
Thus, over time, as unemployment benefits are lost, the unemployment pool shrinks. This is called a mathematical regression.
How far does it shrink? To the point of equilibrium which is roughly 4% in which new persons enter the work force to the same
extent of those losing benefits and being removed and become invisible.
Thus, Unemployment is a bogus number grossly understating truthful Unemployment. This method was first used under Obama and
persists today under the Orange poser.
Nepotism and Affirmative action
Why would this make people unhappy? Chronic underemployment. Advancement is mostly by nepotism or affirmative action the flip
side of the same coin. The incoming Harvard Class this year was 30% legacy student... and 30% affirmative action and the rest
be damned. Happy?
Feminism has gripped the workplace.
Men hate working for female bosses. They don't trust them, they don't trust their judgment which often looks political and
never logical. Men feel those women were promoted because of gender.
I saw this years ago in a clean room at National Semiconductor. A woman was put in charge of a team of roughly 30 white nerd
males. She was at them constantly for not locking doors behind them and other menial infractions. She could not comprehend the
complexity of the work or how inspiration operates but she would nag them and bully them.
At another facility there was a genius that would come to work and set up a sleeping bag and go to sleep under his desk. He
was a Unix programmer and system engineer. So when something went wrong they would wake him and he would get up, solve the problem
and go back to sleep.
Then the overstuffed string of pearls showed up as the new unit boss. She was infuriated that somebody would dare sleep on
the clock and so blatantly. So she would harass him and wake him. Then one day she got so mad she started kicking him while he
was sleeping. He grabbed his sleeping bag and briefcase and stormed out.
Ultimately the woman's boss took her to task and explained to her that it didn't matter if that employee slept under his desk
because when he worked to solve problems only he could solve he saved the company millions. She was fired. As a token stipulation
the sleeping genius came back and a sign was posted on his desk. "Kicking this employee is grounds for immediate dismissal."
Usually the nerd walks and just gets replaced by some diversity politician and string of pearls then sets the tone by making
the workplace ****. Women simply are not as intelligent as men and pretending they are just wrecks morale of the people who are
really intelligent. The rise of the shoulder padded woman string of pearls bully is a scourge to one and all.
Simple answer: because people are spineless and terrible negotiators.
Long answer: for years the adage has been "do what you love and you'll never work a day in your life" or "find a good job and
never leave" or "work your way to the top" or "be a hard worker, trust your leadership, keep your head down, and don't make waves."
********.
If you do what you love, you'll learn to hate it. Welcome to misery.
Upward mobility doesn't happen unless you leave. If you're a good little productive worker drone, management has no incentive
to give you more than 1-3% raises every year to keep you 'loyal.' Once you've wasted 20 or so years being a robot, welcome to
misery.
Nobody gets promoted unless you're a useless ***-kisser who fails to be productive and hasn't done anything egregious enough
to get canned. Once you've been passed by for that promotion you want enough times, welcome to misery.
The people making the decisions at the top are the useless ***-kissers that can't do what you do but they talk a good game.
Most of them are case studies in the Peter Principle. Once you realize that the 'top' consists of nothing but fuckwads, welcome
to misery.
The only way to get ahead and get what you want out of a career is to develop the skills you need and market yourself top someone
who'll pay you what you're worth.
Develop strong negotiation skills early, know your market value, and don't be afraid of change.
Employer loyalty is a farce; if you think your employer is loyal to you, I've got some oceanfront property in New Mexico to
sell you.
Less than a month ago, Bridgewater founder Ray Dalio was
warning the world that there would be a "revolution" unless the country could fix its
income inequality problem. He's also been repeatedly claiming that capitalism is broken.
Broken, that is, for everyone other than Ray Dalio , who was last year's best paid hedge
fund manager, according to DealBook ; and
since hedge funders generate the highest current income of all "workers", he was effectively
the highest paid American in 2018 (this, of course, excludes capital gains and other
non-current income), when it is estimated that Dalio earned $2 billion over the last 12 months
, up from a reported $1.3 billion in 2017.
Dalio beat out other big names like Jim Simons of Renaissance Technologies, who earned $1.5
billion, Ken Griffin of Citadel, who earned $870 million, David Shaw of D.E. Shaw, who earned
$500 million, Chase Coleman of Tiger Global Management, who earned $465 million and Steve Cohen
of Point72, who earned a tiny, by his standards, $70 million.
Of course, this raises the obvious question of whether or not Dalio is doing enough to
reform a system that he rails against. "As most of you know, I'm a capitalist, and even I think
capitalism is broken," Dalio wrote on Twitter in early April.
He then defended the hedge fund business model to NPR last week, stating: "If you were to ask
the pensioners and you were to ask our clients, who are teachers or firemen, whether we've
contributed to their well-being, they would say that they, we, contribute."
Andrew Ross Sorkin questioned whether or not Dalio is putting his money where his mouth is:
"...the magnitude of the hedge fund managers' compensation raises a very basic question about
whether capitalism is 'broken'. Even if Mr. Dalio took home $500 million, the rest of his
income could pay 10,000 families $150,000 each. "
For a little over a year now, Dalio has been warning any journalist who will listen that the
looming market crash and economic downturn, which always seems to be between a year or two
years away, will stress the fraying fabric of our disintegrating capitalist system to the point
where it simply breaks apart. Central banks, already out of ammo from their pre-crisis stimulus
programs will be powerless to pull us back from the precipice, and with our federal debt burden
already so heavy, Congress will have little wiggle room to spend us out of the mess (that is,
unless they finally cave to the MMTers).
But in his latest 18-page treatise entitled "Why
and How Capitalism Needs To Be Reformed (Part 1)" , published - as per usual - on LinkedIn,
Dalio kicks his fearmongering approach up to '11', surpassing redistributive rhetoric of Bernie
Sanders and Alexandria Ocasio-Cortez and going straight for Vladimir Lenin.
According to Dalio, the flaws in the American capitalist system are breeding such horrific
inequality between the wealthy and the poor that at some point in the not-too-distant future,
the only sensible recourse for the unwashed masses will be a bloody revolution.
To support this theory, Dalio points to statistics showing that the bottom 60% of Americans
are lagging further and further behind the top 40% in the areas of education, social mobility,
assets, income and - crucially - health. American men earning the least will likely die ten
years earlier than those making the most.
In previous essays, Dalio has
warned about the threat of economic populism (the anti-establishment trend that helped
deliver both Brexit and President Trump's stunning upset victory over Hillary Clinton). Now,
he's apparently identifying with populists of a different stripe (namely, those on the left).
All of these sources of inequality, Dalio argues, represent an "existential threat" to the
American economy, that will only be exacerbated by falling competitiveness relative to other
nations and the "high risk of bad conflict."
Conveniently absolving himself and his fellow billionaires of any blame for this sad state
of affairs, Dalio claimed that the cause of this sad state of affairs was simply a poorly
designed system that can, with a little effort, be corrected.
"These unacceptable outcomes aren't due to either a) evil rich people doing bad things to
poor people or b) lazy poor people and bureaucratic inefficiencies, as much as they are due
to how the capitalist system is now working," Dalio said.
Maybe we're just conservative old fashioned pragmatists, but isn't there a bit of extremely
convenient hypocrisy in calling for socialism in the year that capitalism made you the
best paid person in America? And, if we're mistaken, why isn't Dalio shelling out his billions
for the cause he so loudly has been advocating for?
That's brilliant. The middle class is getting blown away like dust in the wind, and one
dude makes an estimated $2 Billion in 12 months betting on a rigged game. It this what has
become of the American dream?
"... Currently the only countries on Earth with production capacity above their production is Iran, Libya, Venezuela, Nigeria, Canada, and possibly Russia. The rest are producing at their capacity. ..."
"... Russia is within 100,000 barrels per day of their peak possible production. ..."
"... Sending troops into Venezuela in the 2020's might be the coup de grace to both our budget and sense of unity as a nation. Here's hoping the politicians don't go there. ..."
"... For years and years Ukraine paid GAZPROM a price for natural gas roughly 1/3 what the EU was paying. But heavens, that must never actually have happened because no one would ever price things lower than the "free market". Coup actions were then taken to put a stop to this, because of the evils of Ukraine paying a lower price. ..."
"... And, is that Brent or WTI, not that it makes that much of a difference. I don't think it will ever get close to the $50 range in my limited lifetime. ..."
"... The law of supply and demand is an example of a perfectly useless law. It can be used neither to predict future prices nor supply. What is it good for? I think it much more instructive to think about feedback cycles. ..."
"The OPEC nations are not philanthropists. They don't give a shit about what Trump wants.
They are laughing at him."
I don't believe they are laughing at him at all. All they need to do is recall what
happened in Iraq and Libya to know the US controls them. KSA, Kuwait, Iraq, etc are all
puppet states of the US. To believe otherwise is just folly. The USA seeks to control all of
the remaining independent Oil producers. This is why the US is in Syria, and is working on
controlling Venzeula via a political Coup. If the Coup fails in VZ, it will eventually send
in Troops (probably by the early 2020s)
It does not matter who the President it is, Obama followed the path after Bush with Wars
in Syria & Libya. if Hillary won, she would be doing the same thing as Trump. Who ever
wins in 2020 will continue the same long term plan to control as much foreign oil as they
can.
Just what would be the definition of a "Puppet State"? That would be someone who does the
bidding of the puppeteer. No OPEC state does the bidding of Trump, or did the bidding of any
previous president. Yes, we played havoc with their people and sometimes their economy. But
the King of Saudi Arabia or the Emir of any of the other OPEC states are not at the beck and
call of Trump.
And yes they are laughing at him. Trump actually thinks he could pick up the phone and
tell the King of Saudi Arabia, or the director of OPEC, to do what is necessary to lower the
price of oil. That is laughable. Trump is an embarrassment to all the people of the United
States.
On Wednesday Saudi Arabia's energy minister Khalid al-Falih said that the kingdom will
not be taking any immediate action to increase oil production, ..
"Inventories are actually continuing to rise despite what is happening in Venezuela and
despite the tightening of sanctions on Iran. I don't see the need to do anything
immediately," Falih was quoted by CNBC in Riyadh. "Our intent is to remain within our
voluntary (OPEC) production limit."
One major group, however, seems surprisingly unruffled. Even after Trump mentioned the
Organization of the Petroleum Exporting Countries by name, suggesting that they will be
stepping up to fill in any supply gaps once Tehran is edged out, members from OPEC themselves
have remained extremely measured on the issue, saying that they will not be rushing to ramp
up production.
They are saying, "screw you, Trump, we are not raising production."
On Wednesday Saudi Arabia's energy minister Khalid al-Falih said that the kingdom will
not be taking any immediate action to increase oil production, adding that they respond to
market fundamentals as opposed to pricing and that the nation, the top oil exporter in the
world, will remain focused on maintaining a balanced global oil market above all other
concerns.
"Other concerns", meaning doing Trump's bidding. Or more correctly, not doing Trump's
bidding.
In my opinion, if there's no sustained output increase before the end of the year from the
big OPEC producers Saudi Arabia, Kuwait, UAE, and Iraq, it's because these countries have
peaked. And I don't count emptying storage tanks as output increase.
Currently the only countries on Earth with production capacity above their production is
Iran, Libya, Venezuela, Nigeria, Canada, and possibly Russia. The rest are producing at their
capacity.
They are in the driver's seat now. Of course they are not going to ramp up production. They
are going to make a nice profit, before doing anything. By then, it will be far, far too
late. But, it's already too late, anyway. I don't even think reversing directions on Iran
would stop the slide.
Sending troops into Venezuela in the 2020's might be the coup de grace to both our budget and
sense of unity as a nation. Here's hoping the politicians don't go there.
Let's examine this absurdity of pricing oil lower, because this would ignore the "free
market." Imagine how absurd it is to think anyone would do such a thing.
My God, if you did that then Iran would not ship oil to Syria, knowing Syria cannot pay
for it. They would never do such a thing. And if you dared to laugh at the concept of free
market, my God, then Saudi citizens from 2000-2006 would have had to endure the horrors of
paying $1/gallon for gasoline while the rest of the world paid double or triple that. No one
would ever do such a thing.
Argentina's Vaca Muerta is going to flow about a 50% increase in shale oil and gas this
year over last year, because they, too, would never dare to declare a price to be something
other than what this "free market" says.
For years and years Ukraine paid GAZPROM a price for natural gas roughly 1/3 what the EU
was paying. But heavens, that must never actually have happened because no one would ever
price things lower than the "free market". Coup actions were then taken to put a stop to
this, because of the evils of Ukraine paying a lower price.
Of course, if you owe $22 Trillion and are absolutely desperate to have inflation cheapen
that debt, maybe lower prices for anyone for anything becomes, indeed, the horror of
horrors.
Watcher, of course, nations often subsidize their products to their own citizens. They
sacrifice the price they could get on the open world market in order to keep their citizens
happy and supporting the status quo. That doesn't prove a goddamn thing as far as the free
market goes.
Bottom Line: People, companies, and nations sell their product for the highest price they can get.
People, companies. and nations buy products for the lowest price they can find.
That is just common sense. You arguing against supply and demand reminds me of people who
still argue that the earth is flat.
Never paid any attention to the technicals. Only fundamentals. Made some good money on calls
over the past year, but I don't see it in puts for a good while. Only short term swings, and
I don't have the nerve for those. And, is that Brent or WTI, not that it makes that much of a
difference. I don't think it will ever get close to the $50 range in my limited lifetime.
The Earth is measurably not flat. Curvature is a physical parameter. It can be measured from
orbit. It has been measured from orbit.
The number of occasions when a transaction takes place with a price determined by
something other than this alleged psychological behavior derived from supply and demand
almost certainly far exceeds the number of occasions when such a thing might determine price.
We've done this before. Through all history, every item ever stolen, every item ever acquired
via conquest, every item ever acquired via donation, every item ever acquired via
inheritance, via Royal award -- these far, far exceed the number of, and certainly the value
of, transactions in a marketplace.
So why aren't these methodologies considered the definitive pricing technique for
transactions in general, and simply accept that only the most rare and quaint of transactions
take place via a marketplace.
Oh and by the way, since this pricing process is psychological, determined by the minds of
buyer and seller, you do realize you are saying that the price is determined by something
imagined by both parties, meaning their presumption of supply and demand. You do realize this
means that the actual supply and the actual demand does not determine the price, even for
these rare transactions.
You are saying that reality doesn't determine the price. Only imagination. How can anyone
think this is a science or a law of nature.
Watcher, you've likely seen the following scenario. Two service stations kitty corner to each
other. One sells gas for a few pennies less than the other one and has way more people
filling up than the more expensive one. This is a real life example of demand driven by lower
cost.
The law of supply and demand is an example of a perfectly useless law. It can be used
neither to predict future prices nor supply. What is it good for? I think it much more
instructive to think about feedback cycles.
A couple of other examples off the top of my head:
A school, I believe in Israel, experimented with charging parents for bringing their
children to school late. The result was more late children when the parents were charged. The
explanation was that parents felt less guilty for bringing children to school late if they
could pay off the school.
Paying people to give blood can reduce the number of donors. Giving blood for a cause can
make people feel good, if they get paid to give the blood they lose the good feeling. The
hospital taking the blood decided to give an option to have the payment go to a charity.
During times of famine, farmers do not make more money (this is a comment in Graeber's
book). For example in Venezuela where food security is currently very critical the government
is forcing farmers to sell their production below cost.
It seems that there are 230 legacy rigs still working in the USA. These are the less
efficient & slower rigs. And so there is still some room for efficiency gains when those
legacy rigs are replaced.
It reads like he is saying that 600 to 700 legacy rigs have gone since 2014
2019-04-25 (Seeking Alpha) Helmerich & Payne, Inc. (HP) CEO John Lindsay on Q1 2019
Results – Earnings Call Transcript
I think it's also important when we have this conversation that we also mentioned that
there's still about 230 legacy rigs, mostly SCR but even some mechanical rigs that have been
upgraded in some capacity or another to do some of this more challenging horizontal work. And
those rigs are out there working today, obviously, much fewer SCR rigs working today than
what you saw in 2014.
Seeking Alpha ->
https://seekingalpha.com/article/4256850-helmerich-and-payne-inc-hp-ceo-john-lindsay-q1-2019-results-earnings-call-transcript?part=single
She rips the Obama White House for its allegiance to Citibank. But she does nto understadn that the problem is not with
Citibank, but with the neoliberalism as the social system. Sad...
Democrats and Republicans are just two sides of the same coin as for neoliberalism. Which presuppose protecting banks, like
Citigroup, and other big corporations. The USA political system is not a Democracy, we have become an Oligarchy with a two Party
twist (Poliarchy) in whihc ordinary voters are just statists who have No voice for anyone except approving one of the two
preselected by big money candidates. It's time we put a stop to this nonsense or we'll all go down with ship.
Anyway, on a positive note
"Each time a person stands up for an ideal to improve the lot of others, they send forth a current that can sweep down the mightiest walls of oppression and resistence." RFK
This budget deal is absolutely disgusting. More financial deregulation, the potential for
a second TARP, cuts to pensions, and cuts to funding for Pell Grants to help out students.
Once again, the people lose.
So tough, so strong, and so right. And I love that she's not afraid to rip into Democrats
and the White House for their complicity in selling out our country and tax dollars to the
big banks. We need more strong politicians on both sides of the aisle like this.
It's not party specific, though the Republicans are the worst. Both parties are to be
blame. The biggest blame goes to the Americans who do not vote and those who have no clue who
or what they are voting for. The government is the way it is, it's because of the attitude of
Americans towards politics. Majority do not give a shit and hence you have that pile up in
Washington and states legislature.
Elizabeth Warren is like a fictional do gooder character from Hollywood. No one take her
seriously.
Blame all the politicians you want, you Americans voting or not voting are the lousiest
employers in the world, because you hire a bunch of corruptors into your government. These
corruptors in fact control your lives.
They abuse your money, spending every penny on everything but on you. You would not hand
over your wallet or bank accounts to a strangers, yet are precisely doing that by putting
these corruptors in the government.
This speech encapsulates and exposes all that is wrong with America in general and with
our governance in particular. Taking the heinous provision out of the bill would be a great
first baby step toward cleaning up our politics, economy and collective spirit as a nation.
All the "smart money" says that Warren is engaged in a Quixotic attempt to do something good
in a system that is irredeemably corrupted by money and the lust for power. The cynics may be
right, perhaps America is doomed to be consumed by the parasites to the last drop of
blood...but maybe not. Maybe this ugly indefensibly corrupt malevolent move to put the
taxpayers back on the hook for the next trillion dollar bail out theft will be sufficient to
wake up hundreds of millions of us. When the people wake up and turn on the lights, the
crooks and the legally corrupt will slither away back into their hole...and many may just
wind up in prison, where they belong. But so long as corrupt dirty dastardly interests can
keepAmerica deceived and asleep, they will continue to drain our nation's life's blood dry.
Please share this video widely. If half as many folks watch this speech as watched the Miley
Cyrus "Wrecking Ball" YouTube, the provision to which Warren is objecting will be taken out
very quickly indeed.
As George Carlin said a decade ago,who are we going to replace these politicians with?
They did not fall out of the sky or come from a distant planet. They are US. You can vote all
you want and replace every last one of them but nothing will change. It is human nature.
Besides the road from being on the local town council, to the mayor,Gov then into the Capital
is littered with test to weed out anyone who might really pose a danger to the system. The
occasional odd one that does make it to power is castrated or there simply to give the
illusion that elections matter. Unless you can eliminate the attraction of greed,ego and
power nothing will ever change. Just a quick look back at history tells you what is happening
now and what will be going on in our future. The only difference is there are more zeros.
"... In a properly accounted world all of those wells from 2 years ago which cannot be repay their debt should have that debt apply to the new wells that are drilled now -- and erase their profit. This is forever, by the way. Anytime oil drops below whatever 60, or 55 or 50, the wells drilled then and the money borrowed to drill them is essentially guaranteed to get applied to future wells. ..."
"... But this won't happen. When you have to have the oil you get the oil. ..."
Not going to scroll up for the spreadsheet above, not easy where I am sitting right now.
Concerning net revenue and production. The problem is not future price of oil. The problem
is the past price of oil. Two-thirds of the total lifetime production of one of these shale
wells comes out of the ground in the first two years. The price was sub-60 a couple of years
back and that oil flowed and generated only that much money. That well's debt is not going to
get repaid by that well. The oil came out at a lower price and that deal is done.
This means that the month number where revenue becomes negative is much sooner. And if
things were logical and money was not created from thin air, the fact that the well in
question cannot repay its debt does not make the debt go away.
In a properly accounted world
all of those wells from 2 years ago which cannot be repay their debt should have that debt
apply to the new wells that are drilled now -- and erase their profit. This is forever, by
the way. Anytime oil drops below whatever 60, or 55 or 50, the wells drilled then and the
money borrowed to drill them is essentially guaranteed to get applied to future wells.
But this won't happen. When you have to have the oil you get the oil.
Why The Tax Cuts And Jobs Act (TCJA) Led To
Buybacks Rather Than Investment
Anne Marie Knott
Contributor
Opinions expressed by Forbes Contributors are their own.
Manufacturing
The Tax Cut and Jobs Act (TCJA) of December 2017 had two main provisions affecting
corporate taxes. First, it reduced corporate taxes, changing them from a graduated structure with a maximum rate of
35% to a flat rate of 21%. Second, it changed taxation of foreign profits. Previously these profits weren't taxed
until repatriated, so companies kept their profits abroad. In fact, an
estimated $2.8 trillion of foreign profits had been accumulated
. The TJCA changed the law such that profits are
taxed only where earned. To facilitate the transition between the two systems, the TJCA offered a tax "holiday" on
pre-2018 foreign profits at a reduced rate of 15.5% on liquid assets (and 8% percent on other assets). The underlying
logic for the TCJA was that allowing companies to keep a greater share of profits, would stimulate investments in
long term growth. Instead, the dominant company response to the TCJA was stock buybacks. For the first three quarters
of 2018,
buybacks were $583.4 billion
(up up 52.6% from 2017). In contrast,
aggregate capital investment
increased 8.8% over 2017, while R&D investment growth at US public companies
increased 12.5% over 2017 growth.
What are buybacks
Stock buybacks (also known as share repurchases) refer to company purchases of stock from its existing
shareholders. These shares are purchased at the market price, then returned to the treasury, thereby reducing the
number of shares outstanding. Because there are fewer shares, earnings per share (EPS) goes up, and because stock
price is based on multiples of EPS, stock price typically goes up as well.
Accordingly, buybacks are a way of returning excess cash to shareholders. The other way to return cash to
shareholders is by paying dividends. The advantage of buybacks over dividends, is they are more flexible, in that
they don't imply a permanent commitment to return cash to shareholders. Prior to a 1982 rule change by the SEC,
dividends were the most common means of returning cash to shareholders. Since that time, buybacks have risen
steadily, such that by 1997 buybacks exceeded dividends, as shown in the figure below. The figure shows the trend
toward buybacks was in effect long before the TCJA. The TJCA merely put more cash in the hands of companies,
triggering a surge in buybacks.
Buybacks Have Grown Since 1982
MSCI
This surge created a backlash culminating in the The Accountable Capitalism Act, a federal bill introduced by
Senator Elizabeth Warren in August 2018.
"The surge in corporate buybacks is driving wealth inequality and wage
stagnation in our country by hurting long-term economic growth and shared prosperity for workers," said Sen Tammy
Baldwin (D-Wis.) one of the bill's co-sponsors, in a
news release
.
The record on buybacks and growth
Is Senator Baldwin right that the surge in buybacks is hurting economic growth? The short answer is, no. A
study by MSCI
looking at the impact of buybacks on long-term growth, concluded, "Contrary to concerns expressed
by many observers, we found no compelling evidence of a negative impact from share buybacks on long-term value
creation for investors overall. In each of the areas we examined, beginning with MSCI ESG Ratings but also including
CAPEX, R&D, new debt issues, and, most importantly, value creation, the companies that were most actively
distributing cash to their investors were also the strongest companies."
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Why did the TCJA trigger buybacks rather than investment?
To answer the question of why buybacks, it's helpful to focus on R&D, because R&D is a leading investment -- it
creates opportunities. Capital investment then follows to exploit those opportunities. In short, the reason the
TCJA didn't increase R&D investment is that most companies were already
over-investing
in R&D.
Companies who conduct R&D, can be characterized by how productive their R&D is, using a
measure called RQ
. Because RQ is based on simple economic principles relating a company's R&D to its revenue
growth, it can be used to compute the optimal level of R&D spending for each company. This is the level of investment
that generates the maximum profits. The calculation involves a standard piece of math called a partial derivative.
In essence, it's an exercise in marginal returns -- determining the point at which an additional dollar spent on R&D
begins to reduce profits.
RQ is estimated from financial data, so it's possible to compute the optimal R&D investment for all public
companies, and compare it to companies' actual investment. The comparison is captured in the figure below. The
horizontal axis captures companies' optimal R&D, while the vertical axis captures their actual investment. Each
company is represented by a dot. If companies are spending optimally, they should line up on the diagonal. What you
can see however, is that very few companies are spending optimally. In fact, fewer than 4% of companies are within
plus or minus 10% of their optimum.
Most Companies Overinvest In R&D
Author
Most people complain that companies are under-investing in R&D, but in fact, that's true for only 33% of
companies. On average, those companies are leaving $36 million on the table each year in foregone profits. This is
the amount their profits would increase if they increased their R&D investment 10%. They might be able to invest even
more over time, but typically a 10% increase is what a company can comfortably absorb in one year.
The more common problem is actually over-investment. Fully 63% of companies are spending beyond optimal levels.
Not only are there more of these companies -- almost twice as many, but their mistake is far more costly. On average
these
companies are leaving $258 million of foregone profits on the table. This is the amount they could
increase profits by cutting R&D to the optimal level.
This is why the TCJA hasn't increased growth. Providing companies with more cash will only lead to investment and
growth if companies have profitable investment opportunities, and lack cash to exploit them. The fact buybacks were
growing before the TJCA was implemented, is evidence they lacked these opportunities.
Given that companies are already investing R&D at optimal levels, if we want to stimulate growth, companies first
need to become more productive with their R&D. Increasing their RQ packs two growth punches: it increases growth
from each dollar of R&D at current investment levels, and it increases the level of optimal R&D investment. Once
companies generate greater growth from their R&D, capital investment can follow.
Anne Marie Knott is the Robert and Barbara Frick Professor in Business at Washington University in St. Louis, founder
and Chief Scientist at
amkANALYTICS
, and author of
How Innovation Really Works
.
He called OPEC? Just whom at OPEC did he speak with? OPEC is a group of oil exporting
nations. They meet once every six months or so to decide what they will do, if anything.
No one can just call OPEC and OPEC will decide to produce more oil. They have to meet, talk
it over, and decide what to do.
This just shows what a fucking liar Trump really is.
Looking for a risk-free place to park some savings? You could open a
garden-variety savings account, but your interest might be microscopic. A
high-interest or high-yield savings account
is smarter, but an even better
option is a certificate of deposit, or CD.
While the top rates on high-yield savings accounts are currently topping 2%, you
can find CDs paying more than 3%. But to earn that kind of interest, you better
believe that you're going to have to give the bank something in return.
How CDs work
When you put your money into a CD, you agree to let the bank hold it for a
certain period of time.
So, here's the not-so-fine print with CDs: You'll have to agree to let the bank
hold on to your money for months or years. That's called the CD's term.
You might choose to stash your money away in six-month, two-year or five-year
CDs. Normally, the longer the term, the higher the interest rate.
The potential payout from a long-term CD might be very enticing. Who doesn't want
to earn better returns?
But you may have to lock your money away for a loooooooong time.
If some
financial emergency
comes along and you need to get at your money, tapping
your CDs could be costly.
You'll face penalties if you try to withdraw money from your CDs too early.
Yeah, we know -- we said at the beginning that CDs were
risk-free.
That's
true in one sense: You can put up to $250,000 in CDs and will never lose that
money as long as your account is with a bank insured by FDIC or a credit union
insured by NCUA.
But if you go back on your bargain with the institution and need to withdraw your
money early, you'll face the risk of penalties. The rules vary, but generally
you'll have to give up a chunk of your interest.
For example, if you close out a one-year CD too soon, you could say goodbye to
six months' worth of interest. If you've had the CD only two months, the penalty
would eat into your original deposit amount. Ouch!
The early withdrawal penalty for a five-year CD might be a
full year
of
interest.
Another risk is that
interest rates might rise
while you've got your money locked up, and your
savings will miss out on the opportunity to earn better returns.
A CD ladder can help you take advantage of rising interest rates.
All of that describes the workings of a traditional CD. There are other
varieties that allow you to make withdrawals more easily ("liquid" CDs) or
take advantage of rising interest rates ("bump-up" CDs).
To get some of that flexibility, you might have to accept a lower interest
rate when you open the account.
But there is a trick that can allow you to grab onto rising rates using just
plain-vanilla, regular CDs. It's called
laddering
.
You divide your investment across staggered CDs so that every year you have
CDs that are maturing.
This way, you can enjoy the higher initial interest rates from longer-term
CDs, and also have regular opportunities to invest in new CDs at even better
rates.
You can open a CD at your nearest bank or credit union.
Opening a CD is as simple as visiting your nearest bank or credit union, or
just going online.
Smaller, local banks or credit unions will give you better rates than the big
national institutions, and online-only banks can offer great deals because of
their lower expenses.
You may need to fund your CD with a minimum deposit of $500 or $1,000,
although some banks have CDs with no minimum opening requirements.
You'll want to comparison-shop for the best rates and find CDs at your sweet
spot, with a good yield and a term that's doable. How long will you want to
lock away your money?
Putting cash out of reach for years may be tough -- unless you've just got it
languishing in a low-rate savings account that you never touch. In that case,
put that money into CDs pronto!
Rising gasoline prices is what Bolton and Pompeo essentially prepared for Trump in 2020.
Notable quotes:
"... So while Trump cheerleads more oil production through fracking and deregulation, he also implores Saudi to keep production up for the same reason. ..."
"... No one, including Trump, is very worried about the financial health of the US oil oligarchy. ..."
...falling oil prices benefit US consumers more than consumers anywhere else. In fact, one
of Trump's biggest domestic political vulnerabilities going into 2020 is rising retail
gasoline prices.
The other oil producing countries are more dependent on petroleum exports than the US
where the energy sector, while huge, has a smaller impact on the health of the overall
economy.
So while Trump cheerleads more oil production through fracking and deregulation, he also
implores Saudi to keep production up for the same reason. He's more concerned with lowering
oil prices than he is with supporting the profits of US petroleum companies.
No one, including Trump, is very worried about the financial health of the US oil
oligarchy.
That such pieces as Bugajski's article and the RAND Corporation report have appeared
about the same time is in itself a suggestion that the US Deep State truly exists on another
plane of unreality. I wouldn't be surprised if a third hit-piece advocating regime change in
Russia were to come out soon, either in the US or in the UK, but if that happens then we'll
know we're really on a path to self-destruction.
Posted by: Jen | Apr 27, 2019 5:38:18 PM | 19
It's easy to be mesmerised into focusing on Fink Tank drivel instead of the stuff
happening outside the stale atmosphere of their unventilated tanks. The French peasants seem
to have woken up to the fact that the Macron NeoLib govt has betrayed them and is only
pretending to listen. It's only a matter of time until the Gillet Jaunes remember the words
of jocular Neoliberal poster-boy Grover Norquist about "government small enough to drown in
the bathtub."
Of course, when funny-man Grover said that he meant govt too small to responsibly oversee
and administer all of its obligations to The People, thereby necessitating the 'outsourcing'
of the juiciest govt obligations to Private Profiteers. Unfortunately, when a govt becomes
too small and pompous to listen and respond to the legitimate concerns of The People, it runs
the risk of having its size compared with the size of the Disenchanted demographic and,
eventually, drowned. Hopefully metaphorically, although History says that when the French
neglect reform for too long, metaphorical solutions tend to be neglected too.
And France is just the tip of the iceberg. Again.
"... Amen. This attitude of fearing speech reflects a deeper problem which is valuing fear and cowardice as a virtue. ..."
"... The "fight" against "Hate Speech" is a cunning maneuver of Our Ivy-League overlords. They are materialists , living A Bucket List existence. Their lives are "felt" as a succession of positive and negative experiences. "God is dead. We are gods!" ..."
"... Thus if someone says for instance "migrants come to steal your job or reduce your salary" this is not purely hate as it has a persuasive intent so it can pass. Then if you "say migrants are ugly thieves" it has more hate content but still a persuasive intent so it can pass under this free speech rule. If you finally say "migrants are ugly" it is pure hate and forbidden. Did I get it? ..."
"... Slightly sideways, but another indication that neo-liberalism is just another religion: ..."
"... So when we come to considering the social environment inside a bourgeois institution like a university, we must consider it from a certain point of view, a certain framing, connected to its purposes and performance from the point of view of those who have relevant power. The primary purposes of most such institutions currently seem to be class filtering, indoctrination, and vocational training. ..."
"... This post makes an interesting encapsulation of Neoliberalism: "life is an accumulation of moments of utility and disutility". I am not convinced this formulation is sufficient to characterize Neoliberalism. How well would this formulation distinguish between Neoliberals and Epicures? ..."
"... All about the motive, eh? That is neoliberal–i.e. sure we wrecked the economy and bombed the smithereens out of some foreign countries but we meant well. ..."
"... Shutting off debate is the worst way to prepare for a society that is undergoing undying stresses and even deformations of freedoms plastered over the word democracy. ..."
"... The neoliberal preference for comparing measurable effects, scoring them as costs or benefits, is the standard MBA religion. Why if you can't measure it, it mustn't exist! ..."
"... The problem is just about anything "becomes" "hate speach" as a means of censorship. Calling out Isrial's influence on US politics becomes antisimitism. Being critical of Hillary is misogany. Hell, not liking Campain Marvel is an example of hate speach. Recently negative reviews of the movie were removed from Rotten Tomatos as an example. ..."
"... An example of how this plays out mentioned in comments is about the conflating of anti-Israel and antisemitic being the one and the same ..."
From this jaundiced perspective, what makes the proposed "neo-liberal speech"
Marketplace(TM) inauthentic is that it bases it's existence upon the realm of 'social
ephemera.'
If the long run winners in the hurly burly of ideological struggle are at present unknown,
then it behooves us to place no limits upon the nature of the originating "entry level"
concepts, memes, etc. Such early selection is a purely serendipitous process. Then, not
reason, nor "utility" determines the eventual outcome, but chance. Now there's a philosophy
for you. Chaos Theory as Political determinate.
Sorry, no. How we feel is up to us. We are not machines and we are not robots. We are in
charge of our emotions and our reactions.
What I find astonishing about this line of argument is that it completely ignores thousands
of years of wisdom literature, from ancient India through Greece and Rome to the mystics of
different traditions up to today's Cognitive Behavior Therapies , all of which remind us' in
different ways, that whilst we cannot control the outer world, we can control our reactions
to it. If I didn't know better I would think that the current ´don't say that it makes
me unhappy' movement was a Russian plot to destroy the West by promoting a epidemic of mental
illness.
Amen. This attitude of fearing speech reflects a deeper problem which is valuing fear and
cowardice as a virtue. It reminds me of the male attitude towards upper class women in
Victorian times as hopelessly in need of protection from crude language and the dirt from the
hoi poloi.
Sometimes I feel like being part of the alt-right because this perverse form of
political correctness is way too Maoist for my taste.
The "fight" against "Hate Speech" is a cunning maneuver of Our Ivy-League overlords. They
are materialists , living A Bucket List existence. Their lives are "felt" as a succession of
positive and negative experiences. "God is dead. We are gods!"
"The decor is fabulous. The waiters hair is unkempt. We had to wait to be seated. My fork
was not polished. The soup was delicious. The crab was over salted "
The empty lives of "the feelers".
The People of the Land watch incredulously; this slow motion train wreck.
'we can control our reactions to it.' – Indeed we can with training and with that on
occasion it's good to listen to those that are [family blog] because it's good to know what's
going on inside their heads. It also good to know where they are. Hate to say it but the
founders of this country really encouraged free speech and then all loyalists were rounded
out of it or made extremely miserable.
Thus if someone says for instance "migrants come to steal your job or reduce your salary"
this is not purely hate as it has a persuasive intent so it can pass. Then if you "say
migrants are ugly thieves" it has more hate content but still a persuasive intent so it can
pass under this free speech rule. If you finally say "migrants are ugly" it is pure hate and
forbidden. Did I get it?
Ya, but its all free speech. You'd need to say a lot more than 'ugly'. The whole notion of
'hate speech' is problematic. As it usually is associated with illegal actions, i.e., crimes
it has not become a first amendment issue but it should be. Historically, one had a right to
say what one wanted and historically, the people often did everything, up to and including,
killing one for doing it. The question then becomes what speech is tolerated in what manner.
There are no absolute answers, just absolute people.
Slightly sideways, but another indication that neo-liberalism is just another
religion:
>what affect does salmon restoration have on your sense of preference satisfaction, on
your utility or disutility?
What affect does it have on the salmon, (family blog) what *I* feel, is my reaction. And
saying that, I do notice the further hogwash where "utility" which sounds all manly and
right-thinking is actually all about our tender feelings.
'What affect does it have on the salmon, (family blog) what *I* feel, is my
reaction. '
That's what 'utility' means: 'stuff I like', such as getting basic survival needs met, and
so on up. Most people don't care about the utility of the salmon because the salmon have no
power, not because they lack feelings. So generally we only consider people's feelings
about the salmon.
So when we come to considering the social environment inside a bourgeois institution like
a university, we must consider it from a certain point of view, a certain framing, connected
to its purposes and performance from the point of view of those who have relevant power. The
primary purposes of most such institutions currently seem to be class filtering,
indoctrination, and vocational training.
These purposes (utilities) seem to be damaged or
impeded by certain kinds of speech and other social practices, so those forms of speech and
practice are likely to be restrained or forbidden on the institution's turf. I don't see how
the ruling class and other elites can do otherwise if they want to preserve their system as
it stands, which of course most of them do because it is the system which supports their way
of life and privileges.
Few are able to have their errors explained without feeling bad about being wrong. I hate
being wrong, don't you? And yet I'd rather learn of, and from, my mistakes than cheerfully
continue being wrong.
Therefore, in the spirit of the Golden rule, I have to say "no one should have the right
to make us feel bad." is WRONG. If that means I am speaking hate, and need to be ignored and
de-platformed and possibly further censured by society I've never been that social anyway.
Fuck 'em.
I tend to think it would always be better if people just said what they were really
thinking, instead of trying to figure out what they can say that will be politically
correct.
If what they have to say is hateful, at least you know where they are really coming from,
and you can treat them accordingly going forward.
This post makes an interesting encapsulation of Neoliberalism: "life is an accumulation of
moments of utility and disutility". I am not convinced this formulation is sufficient to
characterize Neoliberalism. How well would this formulation distinguish between Neoliberals
and Epicures?
"Although Epicureanism is a form of hedonism insofar as it declares pleasure to be its sole
intrinsic goal, the concept that the absence of pain and fear constitutes the greatest
pleasure, and its advocacy of a simple life, make it very different from "hedonism" as
colloquially understood."
Is 'utility' greatly different than 'pleasure' as Epicures frame that word?
I do like the last sentence of the post: "It's the greatest power of an ideology that it
can seep into the worldview of those who claim to oppose it." I think that applies to all too
many of those debating about how to deal with Climate Chaos in terms of the economic costs,
price per kilowatt, carbon taxes, or jobs lost or created. Economic issues are not
unimportant but some of the consequences of Climate Chaos are clearly "priceless" to ape a
recent credit card commercial.
I think Peter Dorman is being coy. In 2017 at his college there was the "Day of Absence"
Controversy. A biology professor refused to cancel his classes on the Day of Absence and
became the subject of much rage. He and his wife left the college and taught else where.
I
remember the Free Speech movement of the earl 60s. At some public universities, members of
the communist party were banned from speaking on campus. We protested this ban. Eventually
the bans were lifted. Nobody cared whose feeling were hurt.
The topic of free speech per se free speech was excellently covered by Howard Zinn in his
talk "Second Thoughts on the First Amendment". [I received a copy of the mp3 of this speech
as a premium from my contribution to Pacifica Radio WBAI. The lowest price mp3 or written
transcript for the speech was at https://www.alternativeradio.org/products/zinh006/
transcript for $3 or mp3 download for $5.]
Zinn's speech made it clear that free speech was no simple matter contained within the
meaning of the words 'free speech'. There are questions of the intent of speech -- the
effects of a speech bad feelings? inciting a riot -- capacity for speech that spreads fear
spreading unwarranted panic the classic yelling "Fire" in a crowded building -- questions of
the forum? There is free speech on a street corner and free speech on television, and they
differ greatly in kind, and there is defamatory and slanderous speech.
I am open to allowing any speech. I heard enough unpleasant and upsetting speech from my
ex-wife to last several lifetimes but my ears grew deaf to the sounds she made and remained
acute to other speech, even became more acute. The equation between speech and money our
'Supremes' made is little short of the complete debasement of the Supreme Court as a forum of
jurisprudence. The 'prudence' must be expunges from any characterizations of their judgments
FAVORABLE or otherwise. The Supreme Court does not interpret the laws of the land. Like our
Legislatures they are 'bought' and 'bot' to the whims of money.
All about the motive, eh? That is neoliberal–i.e. sure we wrecked the economy and
bombed the smithereens out of some foreign countries but we meant well.
My library just put a sign next to the entrance saying "This is a safe space–no
racism or sexism allowed." I haven't bothered to object to what was doubtless considered
boilerplate–nor will I–but that's a highly political statement and especially for
a library where free speech should be paramount. For example some claim that Huckleberry Finn
is racist (and it is a bit). Off the shelves? Once you start judging motives then the slope
is quite slippery.
IMHO we should be worrying about the real dangers and abuses and not the imagined ones.
Those college students need thicker skins.
Unfortunately death is guaranteed. It is unavoidable. We all try to avoid it. And most of
us try to not be responsible for causing it (in humans). But there are systemic ills that
magnify the risks of mortality (lead in water supply etc). And the limits to "paying
attention" are part of those systemic ills. Deliberately ignoring someone, of course, is
callous.
Think for yourselves and let others enjoy the privilege to do so too. A translation of the famed passage by Voltaire, Essay on Tolerance
In college, an antidote to what is called "hate speech" used to be teach-ins. Setting
these up could be an exercise in arguments or debates, depending on the vehemence and
sanctimony of participants, and taking part in the selection of moderators and agendas, but
it could be done so long as there were those dedicated to hearing, sharing and holding onto
the value of information and debate.
Shutting off debate is the worst way to prepare for a society that is undergoing undying
stresses and even deformations of freedoms plastered over the word democracy.
Heard on Democracy Now this afternoon, that U Mass Amherst will be allowing an
appearance/discussion re Palestine with Roger Waters and others, to go on regardless of
protests against.
I'd suggest the dispute is theological. Everyone wants a "higher power" to bless their
particular approach. The neoliberal preference for comparing measurable effects, scoring them
as costs or benefits, is the standard MBA religion. Why if you can't measure it, it mustn't
exist!
The whole approach doesn't require too much thinking, and has the imprimatur of "science"
and "reason" both Excellent gods, all. Graeber's Debt: The First 5,000 Years makes a
good case for the way our confusion of monetary with ethical comparisons has managed to
bamboozle humanity for literally thousands of years. You see rich people deserve their
wealth. They are good , and you can tell by the amount of money they have. See!
Some speech has as its primary purpose making others suffer, through insult or
instigating fear, and has little or no persuasive intent. That's hate speech, and I don't
see a problem with curtailing it.
The problem is just about anything "becomes" "hate speach" as a means of censorship.
Calling out Isrial's influence on US politics becomes antisimitism. Being critical of Hillary
is misogany. Hell, not liking Campain Marvel is an example of hate speach. Recently negative
reviews of the movie were removed from Rotten Tomatos as an example.
You might imagin that a line could be drawn some where. But when ever you draw that line,
it always migrates over time.
Isn't part of the question what intellectually backs up drone strikes that demonstrably
cause innocent casualties along with the various physical aggressions against the enemy by
the empire.
Mirror shot time with Nuremberg principles in the background for the now grizzled
neo leaders one hopes.
I can imagine a professor at Evergreen State College having firm views of freedom of
speech after what has been happening to that place over the past coupla years. Last year it
ranked as one of the worst colleges in the US for free speech-
A college tailored to the demands of these extremist students would be a very sterile
place indeed for original thinking. In college, ideas are supposed to undergo savage debate
and examination to sort out the wheat from the chaff. Of course at this point I will not
bring up the fact that CalPERS's Marcie Frost is a graduate from here as being an example of
what is being produced.
Those more recent students will find themselves in a radically new environment when they
graduate. It will be called the real world. But I have no doubt that many of them will be
able to junk their ideas when it comes to earning a living as those ideas would have served
their purpose of giving them power while in college.
An example of how this plays out mentioned in comments is about the conflating of anti-Israel
and antisemitic being the one and the same. But if you give this idea a pass, who is to say
that in a generation's time that a new wave of students may define pro-Israeli as being
anti-American? It could happen you know. Until a few years ago the obvious flaw of conflating
two such different identities would have been taken down promptly but no longer. And why?
Because it has been found to be an expedient tactic, especially by politicians. A way of
shutting down critics and right-thinkers. But there will be blowback for making this part of
the norm and I predict that it will be massive.
Of course at this point I will not bring up the fact that CalPERS's Marcie Frost is a
graduate from here as being an example of what is being produced.
A point to remember is that to obtain a conscientious objector status (which I had in
1971) one had to object to ALL war as a pacifist and not just the Vietnam War
Try telling that to a bunch of WW2 vets on your draft board!
"The sense of responsibility in the financial community for the community as a whole is
not small. It is nearly nil. Perhaps this is inherent. In a community where the
primary concern is making money, one of the necessary rules is to live and let live.
To speak out against madness may be to ruin those who have succumbed to it. So the
wise in Wall Street are nearly always silent. The foolish thus have the field to
themselves. None rebukes them."
John Kenneth Galbraith,
The Great Crash of 1929
"Surprising real GDP growth rate of 3.18% is a contrived illusion. - BEA used a
unique
inflation deflator of 0.64%! More commonly used deflator BLS CPI-U
inflation rate 2.27%. If BLS deflator used, GDP growth rate 1.56% (Half BEA #).
Setting aside trade and inventory build (goods produced but not bought), BEA says
growth rate of real final sales of domestic products was 2.53%, but if BLS CPI-U
deflator used real final sales was 1.0%. "Goldilocks" moment was achieved through
growing inventories, increased governmental outlays, crashing import values and
materially understated inflation."
It can manipulate short term trading because that's driven by headline reading computers and
other algos. Anything longer than that, talking price doesn't work if there's a serious
supply or demand issue. It's a near-zero elasticity industrial commodity.
He called OPEC? Just whom at OPEC did he speak with? OPEC is a group of oil exporting
nations. They meet once every six months or so to decide what they will do, if anything.
No one can just call OPEC and OPEC will decide to produce more oil. They have to meet, talk
it over, and decide what to do.
The price of oil slipped on Friday, more than offsetting Thursday's gains on a
"knee-jerk" reaction to the suspension of some Russian exports on quality concerns.
Brent crude, the international oil benchmark, on Thursday rose above $75 a barrel for
the first time in six months as Germany and Poland halted imports from Russia because of
contamination in the Druzhba pipeline.
But analysts said the market had over reacted and Brent pared its gains later in the
day, with the slip in price continuing into Friday as the marker fell 1.3 per cent to
$73.39.
"Fears of a supply shock were greatly exaggerated," said Stephen Brennock, an analyst
at PVM. "After all, refineries usually hold ample crude stockpiles to guard against such
disruptions. Little wonder then that the initial knee-jerk price reaction petered
out."
Damn, and all along I thought Trump got the credit. :-)
Well, I wouldn't classify the loss of one million barrels a day as exactly a knee jerk
reaction. We are supposed to have a 1.3 million barrel a day increase in demand. Ok, that's
2.3 more we need. Oops, US can't supply that, Canada is down, and Brazil and Argentina will
be essentially flat. Oh, oh, we need to add another 600k loss from Venezuela, and probably
another million from Iran, making about 3.9 million more needed. Other depletion .3 to .6
million? Spare capacity from OPEC is 3 million? Or, that's the fairy tale. Yeah, it's ok to
dream.
Just pay attention to how fast the ship is sinking.
It should, don't you think? Ninety nine out of 100 people in America believe the USGS
"discovered" 50 billion more barrels of oil last year in West Texas. Neither it nor the EIA
go to near enough lengths to qualify these type of "surveys;" accordingly they are misleading
and confusing to an uneducated public, including but not limited to, politicians in charge of
implementing America's energy policies.
The USGS mean average EUR in the Delaware Basin does not come close to paying out a $9MM
well. How then can operators drill 244K more wells in the Delaware costing nearly $2.4
trillion dollars to recover 46.2 billion more barrels of oil? What earthly good does it do
anybody to make an assessment of remaining resources over 8,000 square miles "if economics
are not considered?" As stupid as the shale oil industry is, even its smart enough to know
better than that.
My comment was directed at using so called unlimited, cheap shale oil resources as a
foreign policy tool, not getting in a pissing match about the USGS.
Almost 10 years after the Great Recession ended, the growing threat of a new economic
slowdown raises a troubling question: When the next recession strikes, what can the world's
central banks do?
With interest rates low and their balance sheets still loaded with assets bought to fight
the 2008 crisis, do they have the tools to respond? This column is one of six looking at that
question.
... ... ...
The Fed will have arguably less firepower than in any previous recession. Consider its
ability to stimulate growth by lowering interest rates. In the early 2000s, when the tech
bubble burst, it had to lower rates more than 5 percentage points to keep the unemployment rate
from rising much above 6 percent. In the last recession, amid the severe shock delivered by the
financial crisis, even that wasn't enough: Unemployment rose into the double digits despite
interest-rate cuts of more than 5 percentage points. Now, it looks like the neutral interest
rate over the next few years -- the central bank's starting point when the next downturn comes
-- could be as low is 2.5 percent. So unless it takes rates into negative territory, which
seems unlikely, its response can be only about half as large as in the last two recessions.
He called OPEC? Just whom at OPEC did he speak with? OPEC is a group of oil exporting
nations. They meet once every six months or so to decide what they will do, if anything.
No one can just call OPEC and OPEC will decide to produce more oil. They have to meet, talk
it over, and decide what to do.
This just shows what a fucking liar Trump really is.
He probably did call someone, and the conversation went kinda like this:
This is Donald Trump.
Aren't you the guy who owns all those hotels?
Yes, but I am also the President of the United States.
I'm sorry to hear that, what can I do for you?
We need for you to pump more oil, and lower gasoline prices.
Why? They are not high enough, yet.
We think they are, and if you don't get pumping I will agree to Nopec.
Then, we will no longer use the dollar to trade with, and you can watch the value of your
currency plummet.
Don't you realize who you are talking to? I am the President of the United States!
Oh yeah. The US, we used to trade with you. Good luck, and good bye!
President Trump didn't say who he had spoken to. Various OPEC officials say that they haven't
spoken to him
Wall Street Journal: OPEC Chief Barkindo Has Not Spoken to President Trump -- Source
Saudi officials: President Trump Has Not Discussed Lowering Oil Prices With Saudis
Trump said he called OPEC
One of the reasons oil prices sank today was because Trump said he "called OPEC" and asked
them to lower oil prices.
OPEC Chief Barkindo said he hasn't spoke with Trump, according to a report. Saudi
officials also say they haven't discussed lowering oil prices with Trump.
Update: Trump is now back and saying he spoke to Saudi Arabia and others about oil
prices.
Lies just roll off Trump's tongue. He thinks people will believe everything he says
without checking anything. What a blooming idiot.
OPEC must have put Trump on hold as gas price is still the same in my neck of the woods.
Laughed like hell when I saw the headline earlier today. Probably eighty percent of folks
believe he can actually do that. The heads of the OPEC countries probably laughed so hard
they spit out their dentures. Difficult to satirize this guy as he does a stellar job of it
himself!
"Middle class" households (in the 61 st to 99 th
percentiles of the size distribution) rely mainly on
wage incomes.
Bottom 60% households rely roughly equally on
wages and fiscal transfers net of taxes. They
appear to have negative saving and negligible
wealth.
After transfers and capital gains, the share of the
top 1% has risen, while the bottom 60% income
share has been stable. Hence the middle class
has been squeezed.
As has been mentioned at NC before, historian Walter Scheidel did not find prior eras when
lessening income equality occurred peacefully.
I find it noteworthy that Scheidel is an historian, not an economist or political science
professor, so he is somewhat outside the normally viewed expert classes quoted in
op-eds/media.
Scheidel sees violent transformations and demographic contractions as, historically, the
only drivers to lessen inequality.
"Development tends to increase resource inequality (Agrarianism; Industrialism)"
"Violent shocks are the only factors capable of significantly reducing resource inequality
(for a while)"
"Violence: Mass-mobilization wars, Transformative revolutions, State collapse"
"Demographic contraction: Pandemics"
"Other factors are exotic or ineffective (abolition of slavery, migration, financial
crises)"
Sheidel has that financial crises CAN lessen inequality, at least temporarily.
In the USA, in 2008 crisis, the political class prevented this from happening as they
"avoided a new great depression"
When one looks at the current political system and control of the media in the USA, it can
be postulated that the small rays of hope (such as Bernie, AOC or liberal economists) may be
tolerated by those in control because they offer some cheap palliative "hope" to the
masses.
Yves closing comment " I would not give self-reform much hope." may be an excellent
prediction.
I believe the extremely wealthy are looking to game the system, keeping the rabble at bay
as inexpensively as possible, using the top 10% as buffers.
This is a very
difficult article for me to write.
As a young child I was a member of the Cub Scouts, and
I still have very fond memories from those days.
Throughout my life I always had a
tremendous amount of respect for the Boy Scouts, and so it greatly saddened me to learn about the
abuse that has been running rampant in that organization. Of course
this is just a very
small part of a much larger trend that is plaguing our society
, but if this kind of abuse
is pervasive even among the Boy Scouts,
what organization is truly safe for America's
kids?
Have we gotten to the point as a society where our children are literally not safe
anywhere?
According to
ABC
News
, court documents that were just released indicate that 12,254 victims were abused by 7,819
Boy Scout troop leaders over the years
An expert who has been working with the Boy Scouts revealed that there may have been as many
as 7,819 allegedly sexually abusive troop leaders and volunteers in the storied organization,
according to newly released court documents.
More than 7,800 individuals allegedly abused 12,254 victims, according to the court
testimony.
This is what can happen when a society has absolutely no moral foundation whatsoever.
These days, many Americans seem to believe that our country will be turned in the right direction
if we can just get the correct political leaders into place, but that is not true at all.
No political solution is going to fix this kind of evil.
Our core problems are
moral and spiritual in nature, and most people don't seem to understand that.
A lawyer named Jeff Anderson is searching for even more Boy Scout victims, and he says that his
firm has already identified
130
perpetrators in New York and 50 in New Jersey
According to
ABC
News
, court documents that were just released indicate that 12,254 victims were abused by 7,819
Boy Scout troop leaders over the years
An expert who has been working with the Boy Scouts revealed that there may have been as many
as 7,819 allegedly sexually abusive troop leaders and volunteers in the storied organization,
according to newly released court documents.
More than 7,800 individuals allegedly abused 12,254 victims, according to the court
testimony.
This is what can happen when a society has absolutely no moral foundation whatsoever.
These days, many Americans seem to believe that our country will be turned in the right direction
if we can just get the correct political leaders into place, but that is not true at all.
No political solution is going to fix this kind of evil.
Our core problems are
moral and spiritual in nature, and most people don't seem to understand that.
"Nothing is more important than the
safety and protection of children in
Scouting." The courts had to let the
fags in as Scout Masters, so who is
surprised?
Our handlers have romanticized
deviancy to the point that these
people cannot be called out. We
have been weighed in the balance
and found lacking. The good,
the bad and the ugly will be
swept away with what is coming.
Are you really stupid enough to
think that homosexual paedophiles
never got into positions of
authority in the scouts until the
scouts permitted openly gay scout
leaders?
You should be thankful
that you were an ugly kid -
that's the only way you would
have escaped their clutches, if
you're this naďve as an adult.
Paedophiles have always
been attracted to any job that
involves close unsupervised
contact with children
.
Anyone in that sort of job
should always be immediately
suspect: paedophiles are very
rare in the broad population,
but they're not rare in
professions that involve close,
unsupervised contact with kids.
52 years ago I went to Boy Scout
Camp outside of Rhinelander, WI.
On the third night a scoutmaster,
who I didn't know, woke me up around
11:30 pm to go to the Deer Field to
look at stars. Being a smart ***, I
said, "Oh, I went with the other
group and we just got back." The
next day I was on the next bus outta
there. Told 'em my brother was
coming back from Viet Nam ( which
was almost true).
So basically, no surprise. I
would've been safer and had more fun
with better stories to tell spending
the night with Harvey Weinstein.
Just like a spider builds his web around the light, the homosexual
infiltrates places where he can have private access to boys –
including the priesthood and the boy scouts.
This is similar to
the way the heterosexual gets a job as like, a lifeguard at a
beach in Miami, or joins a rock band.
I have no idea why people wouldn't simply assume that huge
numbers of homosexuals would be signing up for to be Boy Scout
Scout Masters, and why they didn't control for that – for
instance, not allowing them to join unless they were married with
kids, or had otherwise proved they were not faggots.
But then the decision to just allow open faggots – that is
just it is just unfathomable.
How did we create a society that puts political correctness and
the alleged emotions of pederasts above the safety of our
children?
Who is responsible for this?
MOST IMPORTANTLY
These faggots ARE NOT ******* PEDOPHILES!
THEY ARE HOMOSEXUALS!
"Pedophile" is a specific term that means sexual attraction to
prepubescent children. Boy Scouts are pubescent boys in their
early teens.
THIS IS NORMAL HOMOSEXUAL BEHAVIOR.
During the Catholic Church pederasty scandal, they started
talking about "pedophiles" instead of homosexuals, as an attempt
to distinguish between "good homos" and "bad homos."
BUT ALL HOMOSEXUAL HAVE A PREFERENCE FOR YOUNG TEENAGE BOYS!
THAT IS WHAT HOMOSEXUALITY IS!
THERE IS ONLY ONE KIND OF "GOOD HOMO" AND THAT IS THE KIND THAT
IS FLYING THROUGH THE AIR AFTER HAVING BEEN THROWN OFF A ROOF!
I wouldn't doubt Pres. Hump will start to drop bombs and missiles into Venezuela. He needs
the oil to be able to fully deal with the Persians on behest of King Bibi, let alone Israel.
With the likes of Bolton, Pompeo and VP Dunce egging him on, I wouldn't pass him starting
sooner than you think. Side note. The US economy is not as good as they are leading us to
believe. I work for a top Fortune company. The last three quarters were dismal and many
predict this final fourth quarter will be just as bad or even worst. And our great MAGA man
feels that lower oil prices will fuel the economy to new heights. Well, I'll just leave it at
that.
@ 8 Dan
Yes, I mourn the dimming of Pepe Escobar's brilliance as he churns out article after article
about the fucking silk or belt road, but I guess we have to live and to eat and in Pepe's
case to travel.
Trump was bought by the Zionists a long time ago. He had to go cap in hand to Carl Icahn
in the early 1990s to get bailed out. That's Carl Icahn the famous greenmail crook of the
1980s. Greenmail consisted in buying a large stake in a company and making demands.
Management would then make a very generous offer to just go away, much like the mafia
operate. When greenmail was banned, Icahn carried on terrorizing companies by buying a hefty
stake and demanding a seat on the board. From there he would insist on the sale of a
subsidiary, the proceeds from which would swell his coffers. The company, now reduced in
size, would then be attacked by another hedge fund in the form of a hostile takeover. Icahn
and others, such as Nelson Pelz, were just two of a vast number of Jewish financiers who took
full advantage of the liberalization of financial markets begun by Reagan and Thatcher and
masterminded by Milton Friedman. The huge sums of money gained by private equity/hedge funds
could now be used to finance the political campaigns of those supportive of Zionism, buy up
media and a long etc.
Where I disagree with many on the right and some on the left is in the extent of Jewish
power before this period. It is a tremendously complex area which I try to approach in my
research without prejudice, more like a detective than a historian. I found out surprising
things, such as Jewish people were not allowed into the top gentlemen's clubs in the US until
the 1960s. The whole narrative about the Russian revolution being a totally Jewish conspiracy
is also open to question. Lord Salisbury, three times British Prime Minister and of good
English aristocratic stock (The Cecil family) was talking about fomenting revolution in
Russia as early as 1888.
@TomSchmidt
Social Security is not an entitlement. You pay into it, and receive a benefit. Social
Security was established as a Trust. There are legal requirements on those who manage a trust
– the trustees. Social Security has been mismanaged intentionally. There are people
receiving benefits who are not entitled to them. The US Government has raided the fund by
making it part of general revenue, instead of the Trust that it is supposed to be.
The "problems" of Social Security are a side show distraction to keep the focus away from the
real problem: the politicians and their Wall Street paymasters.
"... The report found that the agreement would increase gross domestic product by 0.35 percent after inflation, or $68.2 billion, and create 175,700 jobs -- fewer than the economy has recently produced in a single month, on average. It would increase United States trade with Canada and Mexico by about 5 percent, as well as provide a modest lift to agriculture, services and manufacturing activity. ..."
In Search for Leverage, Trump May Be Undercutting His Own Trade Deals
By Ana Swanson
President Trump has argued that this aggressive and unpredictable negotiating style brings
countries to the table and allows him to extract concessions.
But his approach is causing concern among businesses and foreign officials, who say the
uncertainty could undermine the United States's global role.
Trump's Nafta Revisions Offer Modest Economic Benefits, Report Finds
By Ana Swanson
WASHINGTON -- A government report has concluded that the Trump administration's revised
North American trade agreement would offer modest benefits to the economy, challenging the
president's claims that the accord would make far-reaching changes.
Mr. Trump has reviled the quarter-century-old North American Free Trade Agreement as the
worst trade pact in existence and blamed it for pushing up the trade deficit, or the gap
between what the country imports and what it exports. Over the past year and a half, he gave
his administration a mandate to improve the pact. In November, Canada, Mexico and the United
States signed an updated accord, which the president rebranded as the United
States-Mexico-Canada Agreement, and the new deal is awaiting ratification from legislators in
all three countries.
On Thursday, the United States International Trade Commission, a government body, released
an independent analysis of the accord's potential effects on the country's economy, a report
required by law before Congress votes on the deal.
The report found that the agreement would increase gross domestic product by 0.35 percent
after inflation, or $68.2 billion, and create 175,700 jobs -- fewer than the economy has
recently produced in a single month, on average. It would increase United States trade with
Canada and Mexico by about 5 percent, as well as provide a modest lift to agriculture,
services and manufacturing activity.
"In light of the size of the U.S. economy relative to the size of the Mexican and Canadian
economies, as well as the reduction in tariff and nontariff barriers that has already taken
place among the three countries under Nafta, the impact of the agreement on the U.S. economy
is likely to be moderate," the commission .
"... Al Gore is worth half a billion from a net worth of 2.5 million when he left office. The Clintons control a $2.5 billion fortune much of it protected by the paper thin veneer of a "foundation" from the tax man. ..."
"... Because when they ran on higher taxes on the rich, they meant thee, not themselves. It's going to take awhile to figure out how Paul Ryan was bought off, but bought off he was. In some ways, the biggest tragedy of 9/11 was that flight 93 couldn't find Congress. ..."
"... The reality is most people in this world, regardless of political belief, are worker bees. As it should be. This doesn't mean they are unthinking automatons. Too many Chiefs and not enough Indians makes for a bad organization. ..."
We don't really have a two party system in this country. There's only the party of incumbency, then wealthy retirement as "lobbyist"
or "consultant". We see Obama on billionaires' yachts and don't blink an eye.
Al Gore is worth half a billion from a net worth of 2.5 million when he left office. The Clintons control a $2.5 billion fortune
much of it protected by the paper thin veneer of a "foundation" from the tax man.
Because when they ran on higher taxes on the rich, they meant thee, not themselves. It's going to take awhile to figure out
how Paul Ryan was bought off, but bought off he was. In some ways, the biggest tragedy of 9/11 was that flight 93 couldn't find Congress.
Shuffling the deck might have been the best thing for the country. Politicians aren't our friends
On 4/10/2019 at 1:16 AM,
Ward Smith
said: We don't really have a two party system in this country. There's only the party of incumbency, then wealthy retirement
as "lobbyist" or "consultant". We see Obama on billionaires' yachts and don't blink an eye. Al Gore is worth half a billion
from a net worth of 2.5 million when he left office. The Clintons control a $2.5 billion fortune much of it protected by the
paper thin veneer of a "foundation" from the tax man. Because when they ran on higher taxes on the rich, they meant thee, not
themselves. It's going to take awhile to figure out how Paul Ryan was bought off, but bought off he was. In some ways, the
biggest tragedy of 9/11 was that flight 93 couldn't find Congress. Shuffling the deck might have been the best thing for the
country. Politicians aren't our friends
You are correct. This is what I meant but I was not very clear. Unfortunately most people think there are 2 parties in the
US but there is really just one and they cooperate to enrich themselves, their families, and their friends at the expense of everyone
else.
I think the public gets confused because their rhetoric can be different but the way they behave once in office is very different.
On 4/9/2019 at 9:49 PM,
shadowkin
said: The irony of the Mueller investigation that was demanded by Democrats because they thought it would show Trump colluded
with Russia to win the Presidency is that it has blown up in their faces by exposing in greater detail how Obama and the Deep
State attempted first, to throw an election in favor of one candidate, Hillary Clinton, and second, attempted a coup once Trump
was elected via investigations and false claims.
Once Trump won the election, the Deep State used their accomplices in the msm to convince the American public that Donald
J Trump stole the election with the collaboration of the Russians. In this way they sought to remove him by impeachment.
It turns out the Deep State were the ones who were acting as agents of Russia seeking to tear America apart.
Consider:
John Brennan, Obama's CIA director, by his own admission, played a key role in instigating the investigation of Trump before
the election. In the aftermath of the election Brennan has repeatedly called Trump a traitor on social media and old media.
We now know in August 2016 Brennan gave a private briefing to Sen. Harry Reid. Subsequently, Reid sent a letter to the FBI
which included info that clearly came from the now infamous dossier, manufactured by ex-British spy Christopher Steele and
Fusion GPS contractor. This dossier would later be included in the Foreign Intelligence Surveillance Act (FISA) warrant application
that was used to justify investigations into Trump, his campaign, and his family. It now appears very likely Brennan later
lied under oath that he did not know who commissioned the dossier.
This dossier was originally funded by none other than Hillary Clinton and the Democratic Party.
Since the conclusion of the Mueller report has come out Brennan, probably fearing an investigation into his actions pre/post
election, now says he had "bad information". A more accurate description might be that he was willfully spreading disinformation
to bring down a President.
James Comey himself described this dossier as "salacious" and "unverified" yet he did not bother to have the FBI attempt
to verify the contents of the dossier.
This didn't stop Comey from lying 4 times to the FISA court that ex-British spy Steele was the source of an article by "journalist"
Isikoff, which was used to corroborate claims in his own dossier.
So Comey, in essence, told the FISA court that the Steele dossier had been corroborated by Steele.
Some background: Steele also worked for Russian oligarch Oleg Deripaska. So the only person who had any verifiable evidence
of working with the Russians in any capacity is an ex-British spy, contracted to manufacture a false dossier on behalf of Hillary
Clinton to smear Trump and later weaponized to impeach Trump after he won the election.
Comey lied to the FISA court so he could obtain, as he did, a warrant to spy on Carter Page (Trump staffer) and the Trump
family during the election.
Moreover, in addition to Comey, Deputy Attorney General Rod Rosenstein, former Deputy Director of the FBI Andrew McCabe,
and former Attorney General Sally Yates were required to sign off on the FISA warrant application. They are either incompetent
or were engaged in a conspiracy but regardless, this was a fraud on the FISA court.
Bruce Ohr, a senior official at the time at the Justice Department, acted as a middleman between the FBI and Steele. He
passed along information from his wife Nellie Ohr, also a Fusion GPS contractor like Steele , with, presumably, unverified
and false info regarding Trump and his campaign.
The FBI later terminated Steele's relationship as a confidential informant with them after he revealed this relationship
to the press. However, for up to 1.5 years after, Bruce Ohr continued to act as middleman between Steele and the FBI, even
after Mueller took over the investigation .
Americans should be marching in the streets at this attempted coup but we are so doped with mindless entertainment that
we no longer care. We are becoming a system where as long as you don't challenge the 2 party system you are allowed your freedom
to make money and to say whatever you want so long as it doesn't have consequences.
Any more details of Mueller's report due to be released by AG Barr are likely to reveal more of the rotted core of the Deep
State and their machinations and not, as Democrats think, damaging info about Trump.
In my opinion, Russiagate was a fraud and a hoax. However, I do not view "the Deep State" is a monolithic entity. I believe
there are various factions and interests, some more in common with others, and it's never clear in the shadowy netherworld of
intelligence and intrigue. What we see on the media are the figureheads and cartoon cutouts - the Ted Lieus, the Adam Schiffs,
the Muellers, the Maddows, etc.
In my opinion, the Trump election reflects a slight conflict precisely within the 'Deep State' factions. The neoliberal establishment
that has long since reigned does not like Trump for various reasons, including likely his geopolitical opinions. The Russiagate
narrative served to vilify Russia has the number enemy. Unfortunately, most in the American ruling class were and still are asleep
to the fact that the greatest geopolitical rival and threat to the U.S. actually comes from China, not Russia. Former candidates
like Mitt Romney are completely oblivious to the geopolitical tectonic shifts that are currently underway that will determine
the fate of the 21st century.
Russiagate did a whole lot of nothing, but the lasting effect of Russiagate has been online censorship of mostly right-leaning
personalities who dare questioned the official media narrative. Social media sites have largely silenced or banned those who did
not necessarily tow the main line. Russiagate will soon be in the public memoryhole, but you can bet the censorship tactics of
most of the social media corporations will remain intact.
Although I do not agree with Trump on most items, he was correct to see China as the true geopolitical rival to the U.S. and
his (at least) verbal overtures to woo Russia could be viewed as an attempt to mend ties with Russia. If the U.S. has any hope
of trying to stay relevant not just as a superpower but as a country, it will need to realize the reality and court proper alliances
on the grand chessboard, especially Russia.
We need a grassroots, bipartisan groundswell for term limits. Otherwise, in my opinion, we are doomed. The Swamp controls everything.
Unfortunately, half the population has Trump Derangement Syndrome, and aren't willing to focus on anything else.
On 4/10/2019 at 10:07 PM,
AncientEyes
said: In my opinion, Russiagate was a fraud and a hoax. However, I do not view "the Deep State" is a monolithic entity.
I believe there are various factions and interests, some more in common with others, and it's never clear in the shadowy netherworld
of intelligence and intrigue. What we see on the media are the figureheads and cartoon cutouts - the Ted Lieus, the Adam Schiffs,
the Muellers, the Maddows, etc.
In my opinion, the Trump election reflects a slight conflict precisely within the 'Deep State' factions. The neoliberal
establishment that has long since reigned does not like Trump for various reasons, including likely his geopolitical opinions.
The Russiagate narrative served to vilify Russia has the number enemy. Unfortunately, most in the American ruling class were
and still are asleep to the fact that the greatest geopolitical rival and threat to the U.S. actually comes from China, not
Russia. Former candidates like Mitt Romney are completely oblivious to the geopolitical tectonic shifts that are currently
underway that will determine the fate of the 21st century.
Russiagate did a whole lot of nothing, but the lasting effect of Russiagate has been online censorship of mostly right-leaning
personalities who dare questioned the official media narrative. Social media sites have largely silenced or banned those who
did not necessarily tow the main line. Russiagate will soon be in the public memoryhole, but you can bet the censorship tactics
of most of the social media corporations will remain intact.
Although I do not agree with Trump on most items, he was correct to see China as the true geopolitical rival to the U.S.
and his (at least) verbal overtures to woo Russia could be viewed as an attempt to mend ties with Russia. If the U.S. has any
hope of trying to stay relevant not just as a superpower but as a country, it will need to realize the reality and court proper
alliances on the grand chessboard, especially Russia.
Agree about China and censorship.
I also agree the Deep State isn't monolithic which is true of just about every large bureaucracy. There are definitely government
officials sympathetic to Trump.
But based on the high-level government officials involved and the intelligence agencies they represented I think what was done
to Trump can only be described as an attempted coup.
Further, I think we've crossed the Rubicon in terms of American democracy; what it means and where it goes from here.
The rabbit hole goes deep. They never thought Hillary would lose. Here's just one of the many reasons why I use
DuckDuckGo for my research searches rather than Google:
"... Americans should be marching in the streets at this attempted coup but we are so doped with mindless entertainment that we no longer care. We are becoming a system where as long as you don't challenge the 2 party system you are allowed your freedom to make money and to say whatever you want so long as it doesn't have consequences. ..."
The irony of the Mueller investigation that was demanded by Democrats because they thought it would show Trump colluded with Russia
to win the Presidency is that it has blown up in their faces by exposing in greater detail how Obama and the Deep State attempted
first, to throw an election in favor of one candidate, Hillary Clinton, and second, attempted a coup once Trump was elected via
investigations and false claims.
Once Trump won the election, the Deep State used their accomplices in the msm to convince the American public that Donald J
Trump stole the election with the collaboration of the Russians. In this way they sought to remove him by impeachment.
It turns out the Deep State were the ones who were acting as agents of Russia seeking to tear America apart.
Consider:
John Brennan, Obama's CIA director, by his own admission, played a key role in instigating the investigation of Trump before the
election. In the aftermath of the election Brennan has repeatedly called Trump a traitor on social media and old media.
We now know in August 2016 Brennan gave a private briefing to Sen. Harry Reid. Subsequently, Reid sent a letter to the FBI
which included info that clearly came from the now infamous dossier, manufactured by ex-British spy Christopher Steele and Fusion
GPS contractor. This dossier would later be included in the Foreign Intelligence Surveillance Act (FISA) warrant application that
was used to justify investigations into Trump, his campaign, and his family. It now appears very likely Brennan later lied under
oath that he did not know who commissioned the dossier.
This dossier was originally funded by none other than Hillary Clinton and the Democratic Party.
Since the conclusion of the Mueller report has come out Brennan, probably fearing an investigation into his actions pre/post
election, now says he had "bad information". A more accurate description might be that he was willfully spreading disinformation
to bring down a President.
James Comey himself described this dossier as "salacious" and "unverified" yet he did not bother to have the FBI attempt to
verify the contents of the dossier.
This didn't stop Comey from lying 4 times to the FISA court that ex-British spy Steele was the source of an article by "journalist"
Isikoff, which was used to corroborate claims in his own dossier. So Comey, in essence, told the FISA court that the Steele dossier had been corroborated by Steele.
Some background: Steele also worked for Russian oligarch Oleg Deripaska. So the only person who had any verifiable evidence
of working with the Russians in any capacity is an ex-British spy, contracted to manufacture a false dossier on behalf of Hillary
Clinton to smear Trump and later weaponized to impeach Trump after he won the election.
Comey lied to the FISA court so he could obtain, as he did, a warrant to spy on Carter Page (Trump staffer) and the Trump family
during the election. Moreover, in addition to Comey, Deputy Attorney General Rod Rosenstein, former Deputy Director of the FBI Andrew McCabe, and
former Attorney General Sally Yates were required to sign off on the FISA warrant application. They are either incompetent or
were engaged in a conspiracy but regardless, this was a fraud on the FISA court.
Bruce Ohr, a senior official at the time at the Justice Department, acted as a middleman between the FBI and Steele. He passed
along information from his wife Nellie Ohr, also a Fusion GPS contractor like Steele , with, presumably, unverified and false
info regarding Trump and his campaign.
The FBI later terminated Steele's relationship as a confidential informant with them after he revealed this relationship to
the press. However, for up to 1.5 years after, Bruce Ohr continued to act as middleman between Steele and the FBI, even after
Mueller took over the investigation .
Americans should be marching in the streets at this attempted coup but we are so doped with mindless entertainment that
we no longer care. We are becoming a system where as long as you don't challenge the 2 party system you are allowed your freedom
to make money and to say whatever you want so long as it doesn't have consequences.
Any more details of Mueller's report due to be released by AG Barr are likely to reveal more of the rotted core of the Deep
State and their machinations and not, as Democrats think, damaging info about Trump.
World Economic Outlook: Growth Slowdown, Precarious Recovery
After strong growth in 2017 and early 2018, global economic activity slowed notably in the
second half of last year, reflecting a confluence of factors affecting major economies.
China's growth declined following a combination of needed regulatory tightening to rein in
shadow banking and an increase in trade tensions with the United States. The euro area
economy lost more momentum than expected as consumer and business confidence weakened and car
production in Germany was disrupted by the introduction of new emission standards; investment
dropped in Italy as sovereign spreads widened; and external demand, especially from emerging
Asia, softened. Elsewhere, natural disasters hurt activity in Japan. Trade tensions
increasingly took a toll on business confidence and, so, financial market sentiment worsened,
with financial conditions tightening for vulnerable emerging markets in the spring of 2018
and then in advanced economies later in the year, weighing on global demand. Conditions have
eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance
and markets became more optimistic about a US–China trade deal, but they remain
slightly more restrictive than in the fall.
Private Equity Pillage: Grocery Stores and Workers At Risk
By Eileen Appelbaum & Rosemary Batt
The private equity business model is to strip assets from companies that they acquire. The
latest victims: retail grocery chains.
Since 2015 seven major grocery chains, employing more than 125,000 workers, have filed for
bankruptcy. The media has blamed "disruptors" -- low-cost competitors like Walmart and
high-end markets like Whole Foods, now owned by Amazon. But the real disruptors in this
industry are the private equity (PE) owners who were behind all seven bankruptcies. They have
extracted millions from grocery stores in the last five years -- funds that could have been
used to upgrade stores, enhance products and services, and invest in employee training and
higher wages. As with the bankruptcies of common household names like Toys "R" Us, PE owners
throw companies they own into unsustainable debt in order to capture high returns for
themselves and their investors. If the company they have starved of resources goes broke,
they've already made their bundle.
This is all perfectly legal. It should not be.
The media has blamed "disruptors" like Walmart, Whole Foods, and Amazon for grocery
store bankruptcies. But the real disruptors in this industry are the private equity
owners.
The bankrupted PE-owned grocery chains include East Coast chains A&P/Pathmark,
Fairway, and Tops; West Coast chains Fresh & Easy and Haggen; the Southeastern Grocers
chains (BI-LO, Bruno's, Winn-Dixie, Fresco y Más, and Harveys); and in the Midwest,
Marsh Supermarkets. We could find no comparable publicly traded grocery chains that went
bankrupt during this period....
[ This report is excellent, important but complex and long. A careful reading is warranted
for those interested. ]
THREAD: The retail apocalypse in full swing: Gymboree closes 800 stores, Shopko 105,
Payless 2300, Charlotte Russe 400. What's behind it? Some blame Amazon or changing taste, but
the real culprit is private equity. We'll explain how PE makes money as these businesses
fail. 1/12
Looting: The Economic Underworld of Bankruptcy for Profit
By George A. Akerlof and Paul M. Romer
DURING THE 1980s, a number of unusual financial crises occurred. In Chile, for example,
the financial sector collapsed, leaving the government with responsibility for extensive
foreign debts. In the United States, large numbers of government-insured savings and loans
became insolvent-and the government picked up the tab. In Dallas, Texas, real estate prices
and construction continued to boom even after vacancies had skyrocketed, and then suffered a
dramatic collapse. Also in the United States, the junk bond market, which fueled the takeover
wave, had a similar boom and bust.
In this paper, we use simple theory and direct evidence to highlight a common thread that
runs through these four episodes. The theory suggests that this common thread may be relevant
to other cases in which countries took on excessive foreign debt, governments had to bail out
insolvent financial institutions, real estate prices increased dramatically and then fell, or
new financial markets experienced a boom and bust. We describe the evidence, however, only
for the cases of financial crisis in Chile, the thrift crisis in the United States, Dallas
real estate and thrifts, and junk bonds.
Our theoretical analysis shows that an economic underground can come to life if firms have
an incentive to go broke for profit at society's expense (to loot) instead of to go for broke
(to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation,
or low penalties for abuse give owners an incentive to pay themselves more than their firms
are worth and then default on their debt obligations....
THREAD: The retail apocalypse in full swing: Gymboree closes 800 stores, Shopko 105,
Payless 2300, Charlotte Russe 400. What's behind it? Some blame Amazon or changing taste, but
the real culprit is private equity. We'll explain how PE makes money as these businesses
fail. 1/12
11:31 AM - 19 Apr 2019
Private Equity Pillage details the business model that allows private equity firms to
bankrupt chains, throw workers out of jobs, stiff vendors and still make a profit, in the
context of grocery stores. 2/12
Here's an overview of the business model. Private equity firms have rigged the process so
they can extract profits not only from their investors (often public pension funds) but also
from the companies that it "invests" in. Here's how: 3/12
Investors, using money from public employees' pensions for example, put their $$$ in a
particular private equity fund. Right off the bat, the private equity firm makes a profit
because they collect management fees for just accepting the money. 4/12
The traditional story is that private equity firms invest in already distressed companies.
Yet more and more they are healthy, proven companies that the PE firm then forces to take on
debt (which the company now pays interest on). This erodes its ability to stay competitive.
5/12
On top of the new financial pressures a company faces from this debt, it *also* pays
monitoring fees to the PE firm. It may need to sell assets too, like real estate, and then
pay rent to occupy the buildings it once owned. Where do the proceeds go? Usually, the PE
firm. 6/12
With all this money being siphoned off from the company, it is in a much more difficult
position to compete. 7/12
Case in point: Albertsons, the 2nd largest grocer, struggles to compete, unlike Kroger's
(the largest). The difference? Albertsons is owned by PE firm Cerberus and lacks $$$ to
invest in multi-modal retailing. Kroger's can do all that Amazon-owned Whole Foods does &
more. 8/12
Now in a precarious situation, the company might liquidate, restructure, or be sold. None
might be the PE firm's most desirable outcome, but financial engineering usually ensures that
it comes out on top (and it might be first in line to divvy up assets). 9/12
Even if the PE firm doesn't make money from the bankruptcy, it has made money throughout
the entire process via fees on its investors and the company it acquired, as well as from the
assets the company sold off. The losers? Workers, investors like pension funds, vendors.
10/12
But common sense reforms can help. These could be limiting the debt an acquired company
can take on, being transparent about fees, limiting payments to PE firms in the aftermath of
a buyout, making PE firms joint employers, and protecting workers if a company goes bust.
11/12
Private equity gets away with all of this because of loopholes in current law. But that
doesn't mean what they are doing makes sense for either workers or the economy. We need
reforms that center workers and others taken advantage of in the current PE model. 12/12
The work by Rosemary Batt and Eileen Appelbaum is thorough and important, explaining an
institutionally provoked struggle of traditional retailers to survive that is misunderstood
by economics reporters and seldom understood by economists. That Amazon is not a treat to
traditional retailers needs to be realized. Traditional retailers in China by contrast are
faring well, with Alibaba.
Despite the lowest unemployment rates since the late 1960s, the American economy is failing
its citizens. Some 90 percent have seen their incomes stagnate or decline in the past 30
years. This is not surprising, given that the United States has the highest level of
inequality among the advanced countries and one of the lowest levels of opportunity -- with
the fortunes of young Americans more dependent on the income and education of their parents
than elsewhere.
But things don't have to be that way. There is an alternative: progressive capitalism.
Progressive capitalism is not an oxymoron; we can indeed channel the power of the market to
serve society.
In the 1980s, Ronald Reagan's regulatory "reforms," which reduced the ability of
government to curb the excesses of the market, were sold as great energizers of the economy.
But just the opposite happened: Growth slowed, and weirder still, this happened in the
innovation capital of the world.
The sugar rush produced by President Trump's largess to corporations in the 2017 tax law
didn't deal with any of these long-run problems, and is already fading. Growth is expected to
be a little under 2 percent next year.
This is where we've descended to, but not where we have to stay. A progressive capitalism
based on an understanding of what gives rise to growth and societal well-being gives us a way
out of this quagmire and a way up for our living standards.
Standards of living began to improve in the late 18th century for two reasons: the
development of science (we learned how to learn about nature and used that knowledge to
increase productivity and longevity) and developments in social organization (as a society,
we learned how to work together, through institutions like the rule of law, and democracies
with checks and balances).
Key to both were systems of assessing and verifying the truth. The real and long-lasting
danger of the Trump presidency is the risk it poses to these pillars of our economy and
society, its attack on the very idea of knowledge and expertise, and its hostility to
institutions that help us discover and assess the truth.
There is a broader social compact that allows a society to work and prosper together, and
that, too, has been fraying. America created the first truly middle-class society; now, a
middle-class life is increasingly out of reach for its citizens.
America arrived at this sorry state of affairs because we forgot that the true source of
the wealth of a nation is the creativity and innovation of its people. One can get rich
either by adding to the nation's economic pie or by grabbing a larger share of the pie by
exploiting others -- abusing, for instance, market power or informational advantages. We
confused the hard work of wealth creation with wealth-grabbing (or, as economists call it,
rent-seeking), and too many of our talented young people followed the siren call of getting
rich quickly.
Beginning with the Reagan era, economic policy played a key role in this dystopia: Just as
forces of globalization and technological change were contributing to growing inequality, we
adopted policies that worsened societal inequities. Even as economic theories like
information economics (dealing with the ever-present situation where information is
imperfect), behavioral economics and game theory arose to explain why markets on their own
are often not efficient, fair, stable or seemingly rational, we relied more on markets and
scaled back social protections.
The result is an economy with more exploitation -- whether it's abusive practices in the
financial sector or the technology sector using our own data to take advantage of us at the
cost of our privacy. The weakening of antitrust enforcement, and the failure of regulation to
keep up with changes in our economy and the innovations in creating and leveraging market
power, meant that markets became more concentrated and less competitive.
Politics has played a big role in the increase in corporate rent-seeking and the
accompanying inequality. Markets don't exist in a vacuum; they have to be structured by rules
and regulations, and those rules and regulations must be enforced. Deregulation of the
financial sector allowed bankers to engage in both excessively risky activities and more
exploitive ones. Many economists understood that trade with developing countries would drive
down American wages, especially for those with limited skills, and destroy jobs. We could and
should have provided more assistance to affected workers (just as we should provide
assistance to workers who lose their jobs as a result of technological change), but corporate
interests opposed it. A weaker labor market conveniently meant lower labor costs at home to
complement the cheap labor businesses employed abroad.
We are now in a vicious cycle: Greater economic inequality is leading, in our money-driven
political system, to more political inequality, with weaker rules and deregulation causing
still more economic inequality.
If we don't change course matters will likely grow worse, as machines (artificial
intelligence and robots) replace an increasing fraction of routine labor, including many of
the jobs of the several million Americans making their living by driving.
The prescription follows from the diagnosis: It begins by recognizing the vital role that
the state plays in making markets serve society. We need regulations that ensure strong
competition without abusive exploitation, realigning the relationship between corporations
and the workers they employ and the customers they are supposed to serve. We must be as
resolute in combating market power as the corporate sector is in increasing it.
If we had curbed exploitation in all of its forms and encouraged wealth creation, we would
have had a more dynamic economy with less inequality. We might have curbed the opioid crisis
and avoided the 2008 financial crisis. If we had done more to blunt the power of oligopolies
and strengthen the power of workers, and if we had held our banks accountable, the sense of
powerlessness might not be so pervasive and Americans might have greater trust in our
institutions.
There are many other areas in which government action is required. Markets on their own
won't provide insurance against some of the most important risks we face, such as
unemployment and disability. They won't efficiently provide pensions with low administrative
costs and insurance against inflation. And they won't provide an adequate infrastructure or a
decent education for everyone or engage in sufficient basic research.
Progressive capitalism is based on a new social contract between voters and elected
officials, between workers and corporations, between rich and poor, and between those with
jobs and those who are un- or underemployed.
Part of this new social contract is an expanded public option for many programs now
provided by private entities or not at all. It was a mistake not to include the public option
in Obamacare: It would have enriched choice and enhanced competition, lowering prices. But
one can design public options in other arenas as well, for instance for retirement and
mortgages. This new social contract will enable most Americans to once again have a
middle-class life.
As an economist, I am always asked: Can we afford to provide this middle-class life for
most, let alone all, Americans? Somehow, we did when we were a much poorer country in the
years after World War II. In our politics, in our labor-market participation, and in our
health we are already paying the price for our failures.
The neoliberal fantasy that unfettered markets will deliver prosperity to everyone should
be put to rest. It is as fatally flawed as the notion after the fall of the Iron Curtain that
we were seeing "the end of history" and that we would all soon be liberal democracies with
capitalist economies.
Most important, our exploitive capitalism has shaped who we are as individuals and as a
society. The rampant dishonesty we've seen from Wells Fargo and Volkswagen or from members of
the Sackler family as they promoted drugs they knew were addictive -- this is what is to be
expected in a society that lauds the pursuit of profits as leading, to quote Adam Smith, "as
if by an invisible hand," to the well-being of society, with no regard to whether those
profits derive from exploitation or wealth creation.
In the 1980s, Ronald Reagan's regulatory "reforms," which reduced the ability of government
to curb the excesses of the market, were sold as great energizers of the economy. But just
the opposite happened: Growth slowed, and weirder still, this happened in the innovation
capital of the world....
Part of this new social contract is an expanded public option for many programs now provided
by private entities or not at all. It was a mistake not to include the public option in
Obamacare: It would have enriched choice and enhanced competition, lowering prices. But one
can design public options in other arenas as well, for instance for retirement and mortgages.
This new social contract will enable most Americans to once again have a middle-class
life....
Very good and smart from one of our greatest economists. (I don't think laypeople fully
appreciate Joe Stiglitz's greatness as a theorist) "Progressive capitalism" is a good phrase,
in part because it does involve reviving a lot of the original progressive agenda
Socialist! Capitalist! Economic Systems as Weapons
in a War of Words https://nyti.ms/2ZncMwz
NYT - Andrew Ross Sorkin - April 19, 2019
The economist Joseph Stiglitz discusses Bernie Sanders, social policy and how we define
ourselves -- and one another.
Joseph Stiglitz settled into a booth at his favorite diner on the Upper West Side last
week with a curious, almost satisfied smile on his face.
He won a Nobel Prize nearly two decades ago for identifying the inequities and
imperfections in market economies and has spent a career warning of the perils of wealth
concentration, railing against monopoly power and championing higher taxes.
At last, a lot of people seem to be listening.
"It's been a long fight," he said.
The cause has been taken up by the new stars of the left, like Representative Alexandria
Ocasio-Cortez, and can trace much of its current momentum to the rumpled rabble-rousing of
Senator Bernie Sanders. The policy points Mr. Stiglitz talks about -- a higher minimum wage,
a public option for health insurance and more -- could just as easily come from the mouths of
any of those seeking to unseat President Trump in 2020.
And yet they demonstrate how the words we choose to talk about our economic priorities are
almost as important as the priorities themselves.
Last year, for the first time in a decade, a Gallup poll showed that Democrats had a more
positive view of socialism than they did of capitalism. Those two words may play a pivotal
role in our next election: Some Democrats have embraced the label of socialist, one long
attacked by Republicans. And even some of those who have profited most from American-style
free markets have worried about their sustainability, with the billionaire investor Ray Dalio
going so far as to say that "capitalism is broken."
Mr. Stiglitz, stabbing his fork into his salad, said he believed there had been a critical
misunderstanding of the terms themselves -- and the economic theories behind them -- that had
allowed for their weaponization.
"The meanings of the words have changed over time," said Mr. Stiglitz, the chairman of the
Council of Economic Advisers under President Bill Clinton and a former chief economist of the
World Bank. And the words have become the subject of a branding battle crossing political and
generational divides.
The professor in Mr. Stiglitz shared a history lesson that reached back to the early 20th
century, about how socialism and communism became linked. And he made the case that Mr.
Sanders, a self-described democratic socialist, wasn't actually a socialist -- at least as
the identity has long been defined.
Mr. Sanders's agenda -- which drew a fair share of cheers during a Fox News
town-hall-style meeting this week -- is not focused on "ownership of the means of production"
or a statist system, Mr. Stiglitz said. "He's really concerned about the social contract of
health, education," he added.
It is not surprising that Mr. Sanders's supporters trend young, a group for which the word
"socialism" holds no fears of conflict with the Soviets or baggage associated with the Berlin
Wall.
"Some people are trying to attach more emotions to the historical legacy of socialism
, which was never the same as communism, but in the United States those distinctions have
gotten blurred," Mr. Stiglitz said.
The attacks from the right have been anything but subtle. Just this month, Mr. Trump
declared, "We're going into the war with some socialists." And Republicans have posited that
Venezuela's challenged economy is the inevitable result of any movement in the policy
directions embraced by the left.
The word leaves a bad taste even in the mouths of many on the left, including Nancy
Pelosi, the speaker of the House, who lived through the height of the Cold War. "I do reject
socialism as an economic system," she said on "60 Minutes" last weekend. "If people have that
view, that's their view. That is not the view of the Democratic Party."
(In Europe, Mr. Stiglitz said, similarly minded politicians might rightly be called social
democrats. A simple switch in word order emphasizes the "social" instead of "socialist.")
It all comes back to semantics, Mr. Stiglitz said. And perception was on his mind when
titling his new book, "People, Power and Profits: Progressive Capitalism for an Age of
Discontent," which is to be published next week.
In it, he maps out a plan that he calls a "social contract" to improve jobs, health,
education, housing and retirement. In fact, it wouldn't be surprising if it turned into the
economic platform for a presidential candidate.
Mr. Stiglitz proposes using a combination of market forces and government nudges -- a
higher minimum wage and an expanded earned-income tax credit, for example -- to help the
poorest among us. He also supports a "public option" to improve competition in the private
sector in areas like health care and even retirement savings.
That's not to say he views government as a panacea. For example, he wants to see the
mortgage industry privatized. "In a private-sector economy, to have this huge piece of the
economy that's not run by the private sector is odd," he said. Still, he also recommends a
public option so that the government could support the mortgage market in certain cases.
Mr. Stiglitz said he had chosen "progressive capitalism" for his book's title because he
worried about triggering a visceral reaction to the word "socialism."
"I'm trying to avoid some of the emotions that are still attached," he said. "I try in my
title to use progressive capitalism to try to say I believe in a market economy, but I also
believe in government regulation."
Even as popular figures on the left have embraced the label of socialist -- Ms.
Ocasio-Cortez is a member of the Democratic Socialists of America -- others have sought, like
Mr. Stiglitz, to underscore their capitalist views. Pete Buttigieg, the mayor of South Bend,
Ind., who formally announced his candidacy for president this week, calls himself a proponent
of "democratic capitalism."
If the evolving meaning of socialism strikes you as an inventive bit of rebranding, Mr.
Stiglitz believes the conservative idea of American capitalism as an unfettered free-market
system is itself a myth.
"There is no Darwinian capitalism," he said. "Everybody would say you need some degree of
regulation of banks. I mean, no one is talking about real laissez-faire banking."
Even the word "capitalist" has evolved, Mr. Stiglitz said. It is only since the late 20th
century and the rise of the economist Milton Friedman, he contends, that "capitalist" stopped
being a dirty word. It was once used in what he called "a pejorative way."
Capitalists were "people who were exploiting workers," he said.
That is an opinion, of course. And it is a view that is not hard to come by in some
circles now, either.
Language changes, and as convenient as it can be to use linguistic shorthand, it's
important to remember that beneath the words are ideas -- the things we should be talking
about.
Event Location:
Fordham University – Lincoln Center Campus
140 West 62 Street, McNally Amphitheatre | Ground Floor
... Stiglitz has long sounded the alarm about growing economic inequality in the United
States. As chief economist of the World Bank and Chairman of Clinton's Council of Economic
Advisors, he saw first-hand the toll that financial deregulation, globalization and
government inaction can take on a community. This has played out over and over again in
cities and towns across the United States, feeding into the resentment that fueled Donald
Trump's election in 2016. The question we should ask ourselves today, Stiglitz says, is "What
can we do about it?"
In his new book, People, Power and Profits: Progressive Capitalism for an Age of
Discontent, Stiglitz answers that question by laying out a 21st Century Social Contract to
rebuild the American middle class and reinvigorate the American economy. Many candidates will
likely use Stiglitz's timely advice in their 2020 presidential campaigns.
Prof. Stiglitz will be interviewed by Bruce Greenwald, the Robert Heilbrunn Professor of
Finance and Asset Management at Columbia Business School and the academic co-director of the
Heilbrunn Center for Graham & Dodd Investing. Described by The New York Times as "a guru
to Wall Street's gurus," Greenwald is an authority on value investing with additional
expertise in productivity and the economics of information.
"... Sadly, Brennan's propaganda coup only works on what the Bell Curve crowd up there would call the dumbest and most technologically helpless 1.2σ. Here is how people with half a brain interpret the latest CIA whoppers. ..."
"... Convincing Americans in Russia's influence or Russia collusion with Trump was only a tool that would create pressure on Trump that together with the fear of paralysis of his administration and impeachment would push Trump into the corner from which the only thing he could do was to worsen relations with Russia. What American people believe or not is really secondary. With firing of Gen. Flynn Trump acted exactly as they wanted him to act. This was the beginning of downward slope. ..."
"... Anyway, the mission was accomplished and the relations with Russia are worse now than during Obama administration. Trump can concentrate on Iran in which he will be supported by all sides and factions including the media. Even Larry David will approve not only the zionist harpies like Pam Geller, Rita Katz and Ilana Mercer. ..."
"... The only part that is absurd is that Russia posed a bona fide threat to the US. I'm fine with the idea that he ruined Brennen's plans in Syria. But thats just ego we shouldn't have been there anyway. ..."
"... No one really cares about Ukraine. And the European/Russian trade zone? No one cares. The Eurozone has its hands full with Greece and the rest of the old EU. I have a feeling they have already gone way too far and are more likely to shrink than expand in any meaningful way ..."
"... " ..factions within the state whose interests do not coincide with those of the American people." ..."
"... All the more powerfully put because of its recognisably comical. understatement. Thank you Mr Whitney. Brilliant article that would be all over the mainstream media were the US MSM an instrument of American rather than globalist interests. ..."
"... A sad story, how the USA always was a police state, where the two percent rich manipulated the 98% poor, to stay rich. When there were insurrections federal troops restored order. Also FDR put down strikes with troops. ..."
"... The elephant in the room is Israel and the neocons , this is the force that controls America and Americas foreign policy , Brennan and the 17 intel agencies are puppets of the mossad and Israel, that is the brutal fact of the matter. ..."
"... "The absence of evidence suggests that Russia hacking narrative is a sloppy and unprofessional disinformation campaign that was hastily slapped together by over confident Intelligence officials who believed that saturating the public airwaves with one absurd story after another would achieve the desired result " ..."
"... But it DID achieve the desired result! Trump folded under the pressure, and went full out neoliberal. Starting with his missile attack on Syria, he is now OK with spending trillions fighting pointless endless foreign wars on the other side of the world. ..."
"... I think maybe half the US population does believe the Russian hacking thing, but that's not really the issue. I think that the pre-Syrian attack media blitz was more a statement of brute power to Trump: WE are in charge here, and WE can take you down and impeach you, and facts don't matter! ..."
"... Sometimes propaganda is about persuading people. And sometimes, I think, it is about intimidating them. ..."
"... The Brit secret service, in effect, created and trained not merely the CIA but also the Mossad and Saudi Arabia's General Intelligence Presidency. All four are defined by endless lies, endless acts of utterly amoral savagery. All 4 are at least as bad as the KGB ever was, and that means as bad as Hell itself. ..."
"... Traditional triumphalist American narrative history, as taught in schools up through the 60s or so, portrayed America as "wart-free." Since then, with Zinn's book playing a major role, it has increasingly been portrayed as "warts-only," which is of course at least equally flawed. I would say more so. ..."
"... Anyway, the mission was accomplished and the relations with Russia are worse now than during Obama administration. ..."
"... That pre-9/11 "cooperation" nearly destroyed Russia. Nobody in Russia (except, perhaps, for Pussy Riot) wants a return to the Yeltsin era. ..."
"... The CIA is the world largest criminal and terrorist organization. With Brennan the worst has come to the worst. The whole Russian meddling affair was initiated by the Obama/Clinton gang in cooperation with 95 percent of the media. Nothing will come out of it. ..."
"... [The key figures who had primary influence on both Trump's and Bush's Iran policies held views close to those of Israel's right-wing Likud Party. The main conduit for the Likudist line in the Trump White House is Jared Kushner, the president's son-in-law, primary foreign policy advisor, and longtime friend and supporter of Netanyahu. Kushner's parents are also long-time supporters of Israeli settlements on the occupied West Bank. ..."
"... Another figure to whom the Trump White House has turned is John Bolton, undersecretary of state and a key policymaker on Iran in the Bush administration. Although Bolton was not appointed Trump's secretary of state, as he'd hoped, he suddenly reemerged as a player on Iran policy thanks to his relationship with Kushner. Politico reports that Bolton met with Kushner a few days before the final policy statement was released and urged a complete withdrawal from the deal in favor of his own plan for containing Iran. ..."
"... Putin's dream of Greater Europe is the death knell for the unipolar world order. It means the economic center of the world will shift to Central Asia where abundant resources and cheap labor of the east will be linked to the technological advances and the Capital the of the west eliminating the need to trade in dollars or recycle profits into US debt. The US economy will slip into irreversible decline, and the global hegemon will steadily lose its grip on power. That's why it is imperative for the US prevail in Ukraine– a critical land bridge connecting the two continents– and to topple Assad in Syria in order to control vital resources and pipeline corridors. Washington must be in a position where it can continue to force its trading partners to denominate their resources in dollars and recycle the proceeds into US Treasuries if it is to maintain its global primacy. The main problem is that Russia is blocking Uncle Sam's path to success which is roiling the political establishment in Washington. ..."
"... Second, Zakharova confirms that the western media is not an independent news gathering organization, but a propaganda organ for the foreign policy establishment who dictates what they can and can't say. ..."
"... Such a truthful portrait of reality ! The ruling elite is indeed massively corrupt, compromised, and controlled by dark forces. And the police state is already here. For most people, so far, in the form of massive collection of personal data and increasing number of mandatory regulations. But just one or two big false-flags away from progressing into something much worse. ..."
"... Clearly the CIA was making war on Syria. Is secret coercive covert action against sovereign nations Ok? Is it legal? When was the CIA designated a war making entity – what part of the constitution OK's that? Isn't the congress obliged by constitutional law to declare war? (These are NOT six month actions – they go on and on.) ..."
"... Syria is only one of many nations that the CIA is attacking – how many countries are we attacking with drones? Where is congress? ..."
"... Close the CIA – give the spying to the 16 other agencies. ..."
Sadly, Brennan's propaganda coup only works on what the Bell Curve crowd up there would call
the dumbest and most technologically helpless 1.2σ. Here is how people with half a
brain interpret the latest CIA whoppers.
Again Mike Whitney does not get it. Though in the first part of the article I thought he
would. He was almost getting there. The objective was to push new administration into the
corner from which it could not improve relations with Russia as Trump indicated that he
wanted to during the campaign.
Convincing Americans in Russia's influence or Russia collusion
with Trump was only a tool that would create pressure on Trump that together with the fear of
paralysis of his administration and impeachment would push Trump into the corner from which
the only thing he could do was to worsen relations with Russia. What American people believe
or not is really secondary. With firing of Gen. Flynn Trump acted exactly as they wanted him
to act. This was the beginning of downward slope.
Anyway, the mission was accomplished and the relations with Russia are worse now than
during Obama administration. Trump can concentrate on Iran in which he will be supported by
all sides and factions including the media. Even Larry David will approve not only the
zionist harpies like Pam Geller, Rita Katz and Ilana Mercer.
The only part that is absurd is that Russia posed a bona fide threat to the US. I'm fine
with the idea that he ruined Brennen's plans in Syria. But thats just ego we shouldn't have
been there anyway.
No one really cares about Ukraine. And the European/Russian trade zone? No one cares. The
Eurozone has its hands full with Greece and the rest of the old EU. I have a feeling they
have already gone way too far and are more likely to shrink than expand in any meaningful
way
The one thing I am not positive about. If the elite really believe that Russia is a
threat, then Americans have done psych ops on themselves.
The US was only interested in Ukraine because it was there. Next in line on a map. The
rather shocking disinterest in investing money -- on both sides -- is inexplicable if it was
really important. Most of it would be a waste -- but still. The US stupidly spent $5 billion
on something -- getting duped by politicians and got theoretical regime change, but it was
hell to pry even $1 billion for real economic aid.
" ..factions within the state whose interests do not coincide with those of the American
people."
All the more powerfully put because of its recognisably comical. understatement. Thank you Mr Whitney. Brilliant article that would be all over the mainstream media were
the US MSM an instrument of American rather than globalist interests.
I am reading Howard Zinn, A Peoples History of the USA, 1492 to the Present.
A sad story, how the USA always was a police state, where the two percent rich manipulated
the 98% poor, to stay rich.
When there were insurrections federal troops restored order.
Also FDR put down strikes with troops.
You should be aware that Zinn's book is not, IMO, an honest attempt at writing history. It
is conscious propaganda intended to make Americans believe exactly what you are taking from
it.
The elephant in the room is Israel and the neocons , this is the force that controls America
and Americas foreign policy , Brennan and the 17 intel agencies are puppets of the mossad and
Israel, that is the brutal fact of the matter.
Until that fact changes Americans will continue to fight and die for Israel.
"The absence of evidence suggests that Russia hacking narrative is a sloppy and
unprofessional disinformation campaign that was hastily slapped together by over confident
Intelligence officials who believed that saturating the public airwaves with one absurd story
after another would achieve the desired result "
But it DID achieve the desired result! Trump folded under the pressure, and went full out
neoliberal. Starting with his missile attack on Syria, he is now OK with spending trillions
fighting pointless endless foreign wars on the other side of the world.
I think maybe half the US population does believe the Russian hacking thing, but that's
not really the issue. I think that the pre-Syrian attack media blitz was more a statement of
brute power to Trump: WE are in charge here, and WE can take you down and impeach you, and
facts don't matter!
Sometimes propaganda is about persuading people. And sometimes, I think, it is about
intimidating them.
Whitney is another author who declares the "Russians did it" narrative a psyop. He then
devotes entire columns to the psyop, "naww Russia didn't do it". There could be plenty to write about – recent laws that do undercut liberty, but no,
the Washington Post needs fake opposition to its fake news so you have guys like Whitney in
the less-mainstream fake news media.
So Brennan wanted revenge? Well that's simple enough to understand, without being too
stupid. But Whitney's whopper of a lie is what you're supposed to unquestionably believe. The
US has "rival political parties". Did you miss it?
The US is doing nothing more than acting as the British Empire 2.0. WASP culture was born of a Judaizing heresy: Anglo-Saxon Puritanism. That meant that the
WASP Elites of every are pro-Jewish, especially in order to wage war, physical and/or
cultural, against the vast majority of white Christians they rule.
By the early 19th century, The Brit Empire's Elites also had a strong, and growing, dose
of pro-Arabic/pro-Islamic philoSemitism. Most of that group became ardently pro-Sunni, and
most of the pro-Sunni ones eventually coalescing around promotion of the House of Saud, which
means being pro-Wahhabi and permanently desirous of killing or enslaving virtually all Shiite
Mohammedans.
So, by the time of Victoria's high reign, the Brit WASP Elites were a strange brew of
hardcoree pro-Jewish and hardcore pro-Arabic/islamic. The US foreign policy of today is an
attempt to put those two together and force it on everyone and make it work.
The Brit secret service, in effect, created and trained not merely the CIA but also the
Mossad and Saudi Arabia's General Intelligence Presidency. All four are defined by endless
lies, endless acts of utterly amoral savagery. All 4 are at least as bad as the KGB ever was,
and that means as bad as Hell itself.
Fair enough. I didn't know that about the foreword. If accurate, that's a reasonable
approach for a book.
Here's the problem.
Back when O. Cromwell was the dictator of England, he retained an artist to paint him. The
custom of the time was for artists to "clean up" their subjects, in a primitive form of
photoshopping.
OC being a religious fanatic, he informed the artist he wished to be portrayed as God had
made him, "warts and all." (Ollie had a bunch of unattractive facial warts.) Or the artist
wouldn't be paid.
Traditional triumphalist American narrative history, as taught in schools up through the
60s or so, portrayed America as "wart-free." Since then, with Zinn's book playing a major
role, it has increasingly been portrayed as "warts-only," which is of course at least equally
flawed. I would say more so.
All I am asking is that American (and other) history be written "warts and all." The
triumphalist version is true, largely, and so is the Zinn version. Gone With the Wind
and Roots both portray certain aspects of the pre-war south fairly accurately..
America has been, and is, both evil and good. As is/was true of every human institution
and government in history. Personally, I believe America, net/net, has been one of the
greatest forces for human good ever. But nobody will realize that if only the negative side
of American history is taught.
"There must be something really dirty in Russigate that hasn't yet come out to generate
this level of panic."
You continue to claim what you cannot prove.
But then you are a Jews First Zionist.
Russia-Gate Jumps the Shark
Russia-gate has jumped the shark with laughable new claims about a tiny number of
"Russia-linked" social media ads, but the US mainstream media is determined to keep a
straight face
Most of that group became ardently pro-Sunni, and most of the pro-Sunni ones eventually
coalescing around promotion of the House of Saud, which means being pro-Wahhabi and
permanently desirous of killing or enslaving virtually all Shiite Mohammedans.
Thanks for the laugh. During the 19th century, the Sauds were toothless, dirt-poor hicks
from the deep desert of zero importance on the world stage.
The Brits were not Saudi proponents, in fact promoting the Husseins of Hejaz, the guys
Lawrence of Arabia worked with. The Husseins, the Sharifs of Mecca and rulers of Hejaz, were
the hereditary enemies of the Sauds of Nejd.
After WWI, the Brits installed Husseins as rulers of both Transjordan and Iraq, which with
the Hejaz meant the Sauds were pretty much surrounded. The Sauds conquered the Hejaz in 1924,
despite lukewarm British support for the Hejaz.
Nobody in the world cared much about the Saudis one way or another until massive oil
fields were discovered, by Americans not Brits, starting in 1938. There was no reason they
should. Prior to that Saudi prominence in world affairs was about equal to that of Chad
today, and for much the same reason. Chad (and Saudi Arabia) had nothing anybody else
wanted.
'Putin stopped talking about the "Lisbon to Vladivostok" free trade area long ago" --
Michael Kenney
Putin was simply trying to sell Russia's application for EU membership with the
catch-phrase "Lisbon to Vladivostok". He continued that until the issue was triply mooted (1)
by implosion of EU growth and boosterism, (2) by NATO's aggressive stance, in effect taken by
NATO in Ukraine events and in the Baltics, and, (3) Russia's alliance with China.
It is surely still true that Russians think of themselves, categorically, as Europeans.
OTOH, we can easily imagine that Russians in Vladivostok look at things differently than do
Russians in St. Petersburg. Then again, Vladivostok only goes back about a century and a
half.
Anyway, the mission was accomplished and the relations with Russia are worse now than
during Obama administration.
I generally agree with your comment, but that part strikes me as a bit of an exaggeration.
While relations with Russia certainly haven't improved, how have they really worsened? The
second round of sanctions that Trump reluctantly approved have yet to be implemented by
Europe, which was the goal. And apart from that, what of substance has changed?
It's not surprising that 57 percent of the American people believe in Russian meddling.
Didn't two-thirds of the same crowd believe that Saddam was behind 9/11, too? The American
public is being brainwashed 24 hours a day all year long.
The CIA is the world largest criminal and terrorist organization. With Brennan the worst
has come to the worst. The whole Russian meddling affair was initiated by the Obama/Clinton
gang in cooperation with 95 percent of the media. Nothing will come out of it.
This disinformation campaign might be the prelude to an upcoming war.
Right now, the US is run by jerks and idiots. Watch the video.
Only dumb people does not know that TRUMP IS NETANYAHU'S PUPPET.
The fifth column zionist jews are running the albino stooge and foreign policy in the
Middle East to expand Israel's interest against American interest that is TREASON. One of
these FIFTH COLUMNISTS is Jared Kushner. He should be arrested.
[The key figures who had primary influence on both Trump's and Bush's Iran policies held
views close to those of Israel's right-wing Likud Party. The main conduit for the Likudist
line in the Trump White House is Jared Kushner, the president's son-in-law, primary foreign
policy advisor, and longtime friend and supporter of Netanyahu. Kushner's parents are also
long-time supporters of Israeli settlements on the occupied West Bank.
Another figure to whom the Trump White House has turned is John Bolton, undersecretary of
state and a key policymaker on Iran in the Bush administration. Although Bolton was not
appointed Trump's secretary of state, as he'd hoped, he suddenly reemerged as a player on
Iran policy thanks to his relationship with Kushner. Politico reports that Bolton met with
Kushner a few days before the final policy statement was released and urged a complete
withdrawal from the deal in favor of his own plan for containing Iran.
Bolton spoke with Trump by phone on Thursday about the paragraph in the deal that vowed it
would be "terminated" if there was any renegotiation, according to Politico. He was calling
Trump from Las Vegas, where he'd been meeting with casino magnate Sheldon Adelson, the third
major figure behind Trump's shift towards Israeli issues. Adelson is a Likud supporter who
has long been a close friend of Netanyahu's and has used his Israeli tabloid newspaper Israel
Hayomto support Netanyahu's campaigns. He was Trump's main campaign contributor in 2016,
donating $100 million. Adelson's real interest has been in supporting Israel's interests in
Washington -- especially with regard to Iran.]
Putin's dream of Greater Europe is the death knell for the unipolar world order. It
means the economic center of the world will shift to Central Asia where abundant resources
and cheap labor of the east will be linked to the technological advances and the Capital
the of the west eliminating the need to trade in dollars or recycle profits into US
debt. The US economy will slip into irreversible decline, and the global hegemon will
steadily lose its grip on power. That's why it is imperative for the US prevail in
Ukraine– a critical land bridge connecting the two continents– and to topple
Assad in Syria in order to control vital resources and pipeline corridors. Washington
must be in a position where it can continue to force its trading partners to denominate
their resources in dollars and recycle the proceeds into US Treasuries if it is to maintain
its global primacy. The main problem is that Russia is blocking Uncle Sam's path to
success which is roiling the political establishment in Washington.
American dominance is very much tied to the dollar's role as the world's reserve currency,
and the rest of the world no longer want to fund this bankrupt, warlike state –
particularly the Chinese.
First, it confirms that the US did not want to see the jihadist extremists
defeated by Russia. These mainly-Sunni militias served as Washington's proxy-army
conducting an ambitious regime change operation which coincided with US strategic
ambitions.
The CIA run US/Israeli/ISIS alliance.
Second, Zakharova confirms that the western media is not an independent news
gathering organization, but a propaganda organ for the foreign policy establishment who
dictates what they can and can't say.
They are given the political line and they broadcast it.
The loosening of rules governing the dissemination of domestic propaganda coupled with
the extraordinary advances in surveillance technology, create the perfect conditions for
the full implementation of an American police state. But what is more concerning, is
that the primary levers of state power are no longer controlled by elected officials but by
factions within the state whose interests do not coincide with those of the American
people. That can only lead to trouble.
At some point Americans are going to get a "War on Domestic Terror" cheered along by the
media. More or less the arrest and incarceration of any opposition following the Soviet
Bolshevik model.
On the plus side, everyone now knows that the Anglo-US media from the NY Times to the
Economist, from WaPo to the Gruniard, and from the BBC to CNN, the CBC and Weinstein's
Hollywood are a worthless bunch of depraved lying bastards.
Such a truthful portrait of reality ! The ruling elite is indeed massively corrupt,
compromised, and controlled by dark forces. And the police state is already here. For most
people, so far, in the form of massive collection of personal data and increasing number of
mandatory regulations. But just one or two big false-flags away from progressing into
something much worse.
The thing is, no matter how thick the mental cages are, and how carefully they are
maintained by the daily massive injections of "certified" truth (via MSM), along with
neutralizing or compromising of "troublemakers", the presence of multiple alternative sources
in the age of Internet makes people to slip out of these cages one by one, and as the last
events show – with acceleration.
It means that there's a fast approaching tipping point after which it'd be impossible for
those in power both to keep a nice "civilized" face and to control the "cage-free"
population. So, no matter how the next war will be called, it will be the war against the
free Internet and free people. That's probably why N. Korean leader has no fear to start
one.
All government secrecy is a curse on mankind. Trump is releasing the JFK murder files to the public. Kudos! Let us hope he will follow up with a full 9/11 investigation.
The objective was to push new administration into the corner from which it could not
improve relations with Russia as Trump indicated that he wanted to during the campaign.
Good point. That was probably one of the objectives (and from the point of view of the
deep-state, perhaps the most important objective) of the "Russia hacked our democracy"
narrative, in addition to the general deligitimization of the Trump administration.
And, keep in mind, Washington's Sunni proxies were not a division of the Pentagon; they
were entirely a CIA confection: CIA recruited, CIA-armed, CIA-funded and
CIA-trained.
Clearly the CIA was making war on Syria. Is secret coercive covert action against sovereign
nations Ok? Is it legal? When was the CIA designated a war making entity – what part of the constitution OK's
that? Isn't the congress obliged by constitutional law to declare war? (These are NOT six
month actions – they go on and on.)
Are committees of six congressman and six senators, who meet in secret, just avoiding the
grave constitutional questions of war? We the People cannot even interrogate these
politicians. (These politicians make big money in the secrecy swamp when they leave
office.)
Syria is only one of many nations that the CIA is attacking – how many countries are
we attacking with drones? Where is congress?
Spying is one thing – covert action is another – covert is wrong – it
goes against world order. Every year after 9/11 they say things are worse – give them
more money more power and they will make things safe. That is BS!
9/11 has opened the flood gates to the US government attacking at will, the various
peoples of this Earth. That is NOT our prerogative.
We are being exceptionally arrogant.
Close the CIA – give the spying to the 16 other agencies.
I know: who cares about the education of our kids as the redacted Mueller Report dominates the airwaves on CNN, MSNBC, and similar
cable "news" networks?
I care. I spent fifteen years as a history professor, teaching mostly undergraduates at technically-oriented colleges (the
Air Force Academy
; the Pennsylvania College of Technology). What I experienced was the slow death of education in America. The decline of the ideal
of fostering creative and critical
thinking ; the abandonment of the notion of developing and challenging young people to participate intelligently and passionately
in the American democratic experiment. Instead, education is often a form of
social control , or merely
a means to an end, purely
instrumental rather than inspirational.
Zombie education .
Nowadays, education in America is about training for a vocation, at least for some. It's about learning for the sake of earning,
i.e. developing so-called marketable skills that end (one hopes) in a respectable paycheck. At Penn College, I was encouraged to
meet my students "at their point of need." I was told they were my "customers" and I was their "
provider ." Education,
in sum, was transactional rather than transformational. Keep students in class (and paying tuition) and pray you can inspire them
to see that the humanities are something more than "filler" to their schedules -- and their lives.
As a college professor, I was lucky. I taught five classes a semester (a typical teaching load at community colleges), often in
two or three subjects. Class sizes averaged 25-30 students, so I got to know some of my students; I had the equivalent of tenure,
with good pay and decent benefits, unlike the adjunct professors of today who suffer from low pay and few if any benefits. I liked
my students and tried to challenge and inspire them to the best of my ability.
All this is a preface to Belle Chesler's stunning article at
TomDispatch.com , "Making American Schools Less Great Again: A Lesson in Educational Nihilism on a Grand Scale." A high school
visual arts teacher, Chesler writes from the heart about the chronic underfunding of education and how it is constricting democracy
in America. Here she talks about the frustrations of classes that are simply too big to teach:
[ Class sizes grew so large ] I couldn't remember my students' names, was unable to keep up with the usual grading and assessments
we're supposed to do, and was overwhelmed by stress and anxiety. Worst of all, I was unable to provide the emotional support I
normally try to give my students. I couldn't listen because there wasn't time.
On the drive to work, I was paralyzed by dread; on the drive home, cowed by feelings of failure. The experience of that year
was demoralizing and humiliating. My love for my students, my passion for the subjects I teach, and ultimately my professional
identity were all stripped from me. And what was lost for the students? Quality instruction and adult mentorship, as well as access
to vital resources -- not to mention a loss of faith in one of America's supposedly bedrock institutions, the public school
The truth of the matter is that a society that refuses to adequately invest in the education of its children is refusing to
invest in the future. Think of it as nihilism on a grand scale.
Nihilism, indeed. Why believe in anything? Talk about zombie education!
What America is witnessing, she writes, is nothing short of a national tragedy:
Public schools represent one of the bedrock institutions of American democracy. Yet as a society we've stood aside as the very
institutions that actually made America great were gutted and undermined by short-term thinking, corporate greed, and unconscionable
disrespect for our collective future.
The truth is that there is money for education, for schools, for teachers, and for students. We just don't choose to prioritize
education spending and so send a loud-and-clear message to students that education doesn't truly matter. And when you essentially
defund education for more than 40 years, you leave kids with
ever less faith in American
institutions, which is a genuine tragedy.
Please read all of her article here at
TomDispatch.com . And ask yourself, Why are we shortchanging our children's future? Why are we graduating gormless zombies rather
than mindful citizens?
Perhaps Trump does have some relevance to this article after all: "I love the poorly educated,"
sayeth Trump . Who says Trump always lies?
Now if these six words "gainful employment in a
recognized occupation" magically disappeared (psst and they did), what would it take for a
career
education program to lose its eligibility for federal student aid under DeVos? . . . a
for-profit institution could not lose its financial lifeline or federal student aid no matter
how poorly it performed its mission as spelled out in a statute to prepare students for
"gainful employment in a recognized occupation" resulting from that education as stipulated
previously.
One hundred percent of students could be dropped from their career program with all of them
deeply in debt, or perhaps no single graduate landing a job in their field of training, and
still . . . still the federal government would keep the pipeline of guaranteed federal student
loans and Pell Grants flowing in to the school.
With DeVos's reversal, the NYT surmised: "Executives in the for-profit education industry
would be sleeping better, secure in the knowledge that even the worst schools and programs were
no longer at risk of "magically" being thrown off the taxpayer-backed gravy train, no matter
how epically they failed and robbed their students." This AB author took liberty and added
words to make his point.
Under Obama, "the Job Training industry was on its heels. Under DeVos, they had been given a
magical new life, a second chance by the department," said Eileen Connor, the director of
litigation at Harvard Law School's Project on Predatory Student Lending.
Ms. DeVos, who invested in companies with ties to for-profit colleges before taking office,
has made it an agency priority to unfetter schools offering training in professional jobs and
trades by eliminating restrictions on them and also nonprofits. She also allowed a growing
number of for-profit schools to magically evade those loosened rules by converting to
nonprofits.
That is what the Los Angeles Pentecostal megachurch's affiliate Dream Center wanted to do in
2017 when it asked to buy the remains of Education Management Corporation . . . change it from
for-profit to nonprofit and use the profits to fund its other programs. One year after taking
over a chain of for-profit schools, dozens of Dream Center schools are near bankruptcy and
others have been sold with a hope they can survive.
Collectively
Argosy University, South University and the Art Institutes have ~26,000 students in
programs resulting in associate degrees in dental hygiene and doctoral programs in law and
psychology. Fourteen campuses of mostly Art Institute schools have a new owner after an
arranged transfer involving private equity. Another 40 or so others are now under the control
of a court-appointed receiver who has accused school officials of trying to keep the doors open
by taking millions of dollars earmarked for students to pay operating expenses.
Federal funding for Argosy ceased from the Department of Education when the court-appointed
receiver discovered school officials had taken about $13 million owed to students at 22
campuses and used it for payroll expenses, etc. Lauren Jackson seeking a doctorate at Argosy's
Illinois School of Professional Psychology in Chicago did not receive the $10,000 she was due
in January. She was paying expenses for herself and her 6-year-old daughter with borrowed money
and GoFundMe donations.
26,000 students being defrauded by schools offering programs meant to teach them a skill
leading to "gainful employment in a recognized occupation" is only a start to which DeVos has
failed to account for in the Department of Education. DeVos does profit by this failure due to
her own dabbling in areas feeding off of these failures. There is money to be made in preying
on defrauded students, so many of them, and larger than the baby boomer generation. The most
tragic consequence of conservatives'
abandonment of federal accountability of career programs is just that and the devastating
personal toll it will take on hundreds of thousands of hopelessly indebted students" for whom
there is no relief.
For Western world, especially people of the USA, the collapse of the USSR was really geopolitical catastrophe, as Putin
once put it. It unleaseshed cannibalistic instincts of neoliberal elite.
" "Can you imagine what the world would be like today if there was still a Soviet Union?"
remarked Zbigniew Bzezinski "
Yeah, I can.
There never would have been a war on Iraq in 1991 nor an obliteration of Iraq in 2003,
which has lasted until the present day. The destruction of Yugoslavia never would have taken
place and the wars and proxy wars on Syria and Libya would have only existed in the twisted
and depraved imaginations of the Zionist and militarist psychos in our midst.
TINA never would have been an imperative and the working people of the Western world
(primarily the U.S.) wouldn't be in a race to the bottom as it comes to wages, healthcare
insurance, poverty levels, infant mortality, life-expectancy, union power in the workplace,
secure retirements, and outlandish housing costs. With the demise of the USSR the millionaire
capitalist-investor class really took the gloves off and saw no reason to provide the working
masses with certain life-affirming policies, it was time to really sock it to the bottom
90%.
Despite some its faults, the world's people have been paying dearly for the demise of the
USSR.
For further reading on what I've outlined above:
"Blood Lies" by Grover Furr
"Blackshirts and Reds" by Michael Parenti
"Fool's Crusade" by Diana Johnstone
"Against Empire" by Michael Parenti
essays and articles by Paul Craig Roberts
essays and articles by Andre Vltchek
Al Pinto , April 18, 2019 at 13:31
In short, without an antidote, the US does what the neocons and Israel decide to do.
Welcome to the world of "my way, or the highway" cowboy mentality
Actually, people in the USSR lived lives of constant fear (they call it the “Time of
Terror”) that their friends, relatives, neighbors, strangers, even their children,
would “tattle” on them and they would wind up in the torture chambers. They lived
in stark, nearly unbearable poverty; the only comfort was that they all were in the same
godforsaken boat. Communism might be a good idea on paper, but in reality, because of the
ignorance of the bureaucratic leadership, it was a dismal failure.
The demise of the USSR would have no effect whatsoever on the hegemonic madness of the US
which, under the guiding light of the Monroe Doctrine (established way before the USSR),
carries on destroying one country after another. I would ask, “What would the world do
without the USA?” Live in a much more peaceful world for sure. As for Omar, I wish her
the fortitude to continue telling the truth. Again, Max Blumenthal proves himself one of the
world’s best reporters.
OlyaPola , April 19, 2019 at 05:33
“constant fear”
The years of 1928 to 1953 were not constant since there were the years 1954 and
subsequent.
That’s not true Rob Roy. You’re parroting Western capitalist talking points. A whole host of brand new scholarly literature
has hit the shelves in just the last few years proving the USSR was nowhere near as horrible as the Washington imperialist
media made it out to be. In fact, under Stalin the Soviet Union made substantial gains in women’s rights, literacy, healthcare
and industrial wages. Also, had it not been for Stalin’s agrarian plan there would have been more famines and more severe
famines.
And as everyone knows, if
Stalin never crash course industrialized the country they never would have defeated Nazi
Germany.
Far from the USSR being a police-state it was often seen as a giant trough in which, for
example, rent wouldn’t be paid and no one would come around to collect it.
Please see the following books for a truth trip: “Blood Lies” by Grover Furr and
“Stalin, Waiting for the Truth” by Grover Furr. Also, Michael Parenti’s
“Blackshirts and Reds is excellent.
Dump Pelousy , April 18, 2019 at 20:52
Micheal Perenti is the best. He was the Truth To Power voice before 9/11, before all the
yuppie reporters sold their souls for “access” and a talking heads show. I
watched it happen in slow motion with great dismay.
mp66 , April 18, 2019 at 22:23
Spot on. The western owner class was forced to share at least one plate with the rest of
the population to make the west appear superior in material terms, and with that incentive or
threat gone, there is no more need for a plate, few crumbs under the table should be
sufficient. But as usual, greed goes along with stupidity, they forgot that doing so for
decades undermines the stability of the system. Trump, Brexit, trade wars, abrogations of
treaties, blatant disregard for bare basics of international law etc. are just symptoms of
deeper discontent across the globe.
For Western world, especially people of the USA, the collapse of the USSR was really geopolitical catastrophe, as Putin
once put it. It unleashed cannibalistic instincts of neoliberal elite.
" "Can you imagine what the world would be like today if there was still a Soviet Union?"
remarked Zbigniew Bzezinski "
Yeah, I can.
There never would have been a war on Iraq in 1991 nor an obliteration of Iraq in 2003,
which has lasted until the present day. The destruction of Yugoslavia never would have taken
place and the wars and proxy wars on Syria and Libya would have only existed in the twisted
and depraved imaginations of the Zionist and militarist psychos in our midst.
TINA never would have been an imperative and the working people of the Western world
(primarily the U.S.) wouldn't be in a race to the bottom as it comes to wages, healthcare
insurance, poverty levels, infant mortality, life-expectancy, union power in the workplace,
secure retirements, and outlandish housing costs. With the demise of the USSR the millionaire
capitalist-investor class really took the gloves off and saw no reason to provide the working
masses with certain life-affirming policies, it was time to really sock it to the bottom
90%.
Despite some its faults, the world's people have been paying dearly for the demise of the
USSR.
For further reading on what I've outlined above:
"Blood Lies" by Grover Furr
"Blackshirts and Reds" by Michael Parenti
"Fool's Crusade" by Diana Johnstone
"Against Empire" by Michael Parenti
essays and articles by Paul Craig Roberts
essays and articles by Andre Vltchek
Al Pinto , April 18, 2019 at 13:31
In short, without an antidote, the US does what the neocons and Israel decide to do.
Welcome to the world of "my way, or the highway" cowboy mentality
Actually, people in the USSR lived lives of constant fear (they call it the “Time of
Terror”) that their friends, relatives, neighbors, strangers, even their children,
would “tattle” on them and they would wind up in the torture chambers. They lived
in stark, nearly unbearable poverty; the only comfort was that they all were in the same
godforsaken boat. Communism might be a good idea on paper, but in reality, because of the
ignorance of the bureaucratic leadership, it was a dismal failure.
The demise of the USSR would have no effect whatsoever on the hegemonic madness of the US
which, under the guiding light of the Monroe Doctrine (established way before the USSR),
carries on destroying one country after another. I would ask, “What would the world do
without the USA?” Live in a much more peaceful world for sure. As for Omar, I wish her
the fortitude to continue telling the truth. Again, Max Blumenthal proves himself one of the
world’s best reporters.
OlyaPola , April 19, 2019 at 05:33
“constant fear”
The years of 1928 to 1953 were not constant since there were the years 1954 and
subsequent.
That’s not true Rob Roy. You’re parroting Western capitalist talking points. A whole host of brand new scholarly literature
has hit the shelves in just the last few years proving the USSR was nowhere near as horrible as the Washington imperialist
media made it out to be. In fact, under Stalin the Soviet Union made substantial gains in women’s rights, literacy, healthcare
and industrial wages. Also, had it not been for Stalin’s agrarian plan there would have been more famines and more severe
famines.
And as everyone knows, if
Stalin never crash course industrialized the country they never would have defeated Nazi
Germany.
Far from the USSR being a police-state it was often seen as a giant trough in which, for
example, rent wouldn’t be paid and no one would come around to collect it.
Please see the following books for a truth trip: “Blood Lies” by Grover Furr and
“Stalin, Waiting for the Truth” by Grover Furr. Also, Michael Parenti’s
“Blackshirts and Reds is excellent.
Dump Pelousy , April 18, 2019 at 20:52
Micheal Perenti is the best. He was the Truth To Power voice before 9/11, before all the
yuppie reporters sold their souls for “access” and a talking heads show. I
watched it happen in slow motion with great dismay.
mp66 , April 18, 2019 at 22:23
Spot on. The western owner class was forced to share at least one plate with the rest of
the population to make the west appear superior in material terms, and with that incentive or
threat gone, there is no more need for a plate, few crumbs under the table should be
sufficient. But as usual, greed goes along with stupidity, they forgot that doing so for
decades undermines the stability of the system. Trump, Brexit, trade wars, abrogations of
treaties, blatant disregard for bare basics of international law etc. are just symptoms of
deeper discontent across the globe.
"Over the last thirty years, the United States has been taken over by an amoral financial
oligarchy, and the American dream of opportunity, education, and upward mobility is now
largely confined to the top few percent of the population. Federal policy is increasingly
dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly
mismanaged) industries such as telecommunications, health care, automobiles, and energy.
These policies are implemented and praised by these groups' willing servants, namely the
increasingly bought-and-paid-for leadership of America's political parties, academia, and
lobbying industry.
If allowed to continue, this process will turn the United States into a declining, unfair
society with an impoverished, angry, uneducated population under the control of a small,
ultrawealthy elite. Such a society would be not only immoral but also eventually unstable,
dangerously ripe for religious and political extremism."
Charles Ferguson,
Predator Nation
, 2012
"For what does it profit a man, to gain the whole world, but lose their life?"
Mark 8:36
Poverty wants -- but greed wants everything, and more. They can never have enough, because
their acquisition is driven by an overpowering lust for more, and not by need.
This is why our financial and political system can never be effectively self-regulated or
even reformed from within...
...We are building a blow off top. There is not much doubt in my mind. Don't get in front of
this, however, since as long as the Fed keeps providing hot money the wiseguys will keep
dancing.
Six companies represent 37% of all the S&P 500's value creation over the last 5 years:
Amazon (10.1%), Apple (6.5%), Facebook (4.7%), Google (6.4%), Microsoft (7.8%), and Netflix
(1.8%). And even though NFLX may look small, its increase in market value over the last 5 years
is essentially the same as JP Morgan's. US equity valuations reflect present and future Tech
disruption. No other narrative need apply.
* * *
In our Markets section 2 nights ago we mentioned that Amazon is responsible for 6.7% of the
S&P 500's market value gain since November 2005. Amazon was added to the index in the that
month, and since then:
The value of the companies in the S&P 500 has risen by $13,161 billion.
Amazon's market cap has increased by $886 billion
Divide the two figures and you get 6.7%
That got us to thinking: how much have large Tech companies influenced the S&P 500 over
just the last 5 years? Here are a few baseline numbers to start the analysis:
At the end of March 2014, the S&P 500 had a total value of $17,206,453 million.
At the end of March 2019, it was $24,760,982 million
The difference: $7,554.5 billion, or 43.9% higher
One technical note: the S&P 500 is +51.3% over this period with the difference due to
stock buybacks.
So how much of that $7.6 trillion comes from Apple, Amazon, Facebook, Google, Microsoft and
Netflix? Here are the numbers:
Amazon: 10.1% of the market's value gain over the last 5 years:
Market cap Q1 2014: $157.4 billion
Market cap now: $917.6 billion
Difference: $760.2 billion
Apple: 6.5% of the market's gains over the last 5 years:
Market cap Q1 2014: $472.1 billion
Market cap now: $963.9 billion
Difference: $491.8 billion
Facebook: 4.7% of the market's gains over the past 5 years:
Market cap Q1 2014: $157.2 billion
Market cap now: $510.5 billion
Difference: $353.3 billion
Google: 6.4% of the market's gains over the last 5 years:
Market cap Q1 2014: $375.6 billion
Market cap now: $859.5 billion
Difference: $483.9 billion
Microsoft: 7.8% of the market's gains over the last 5 years:
Market cap Q1 2014: $343.0 billion
Market cap now: $934.2 billion
Difference: $591.2 billion
Netflix: 1.8% of the market's total gains over the last 5 years:
In my 2014 book, The Death of Money , I wrote, "The United States is Japan on a larger
scale." That was five years ago.
Last week, prominent economist Mohamed A. El-Erian, formerly CEO of PIMCO and now with
Allianz, wrote, "With the return of Europe's economic doldrums and signs of a coming growth
slowdown in the United States, advanced economies could be at risk of falling into the same
kind of long-term rut that has captured Japan."
Better late than never! Welcome to the club, Mohamed.
Relative to my @2, Prof Richard Wolff linked to this
AXIOS Newsletter via tweet with points 1,3 and 5 buttressing my point about the US Dollar
and its economic health due to Trump's Trade War. Prof Wolff's thoughts he tweeted:
"Trump/GOP's desperate pandering to political base incurs big long-term costs. Trade wars,
tariffs, etc. accelerate post-08 decline of USD as world currency. Its share of global
reserves has fallen in 9 of last 11 quarters. US capitalism self-destructs."
I always thought genuine conservatives were against incurring "big long-term costs."
My advice is to drop the idea of acquiring gold. There are just too many issues for the
small buyer to safely overcome.
1) If gold prices ever shoot through the roof (as the seller sites keep hinting at) I'd
expect the US government to politely invite you to sell them your stocks. This happened in
the Thirties, and can certainly happen again. It is probably impossible to accumulate
anything more than a few pieces of jewelry without being put on somebody's list. The Feds
closely monitor virtually every financial transaction made in this country.
2) How will you know you're getting pure 24k gold vs 23 or 18k stuff? Worse than that, the
Chinese have become VERY good at gilding Tungsten bars or disks. Even central Banks have
been taken in by this scam, and what do you suppose your chances are? The 19.25 gm/cubic
cm. density of Tungsten is very, very close to the 19.3 density of Gold. I'd imagine with a
bit of powder metallurgy work involving a speck of 22.5 Osmium, the numbers could be exactly
matched. There are a few other tests, but nobody outside of the huge dealers or central banks
can afford to do them.
3) come the financial disaster, how will you "spend" your gold? Even if you're certain you
have the genuine product, how will you convince me? Or anybody else, for that matter.
It'll come down to what the guy at the pawn shop will give you for it, and that'll probably
be on the order of 1/3 the value. (there is always the Official Government purchasers, and at
their price and their penalties for holding out)
I'd suggest you buy US "junk silver" in small cash deals - the old silver coins minted up
to 1964. The odds are much higher somebody will understand these have a superior value, and
they're in sizes suitable for small purchases. Even so, would you reasonably expect anybody
to accept a couple Ben Franklin half dollars in exchange for a sack of food - especially
if there is a severe food shortage going on? If your kids know about this acquisition,
you'd better prepare for the burglars - they talk about everything to everybody. Come to
think of it, I know of an adult who lost tens of thousands worth of silver because he was
motor mouth about it. Total loss. BTW, telling your insurance guy is the same as putting it
on a billboard - this information gets shared!
Do as Karlof1 suggested - find a reputable coin dealer in your vicinity. Don't buy at
Amazon, Ebay et al..
Also, if manageable buy 1 ounce coins only as this will save you surcharge that always
comes with the smaller ones. Stick with well known brands - Canadian Maple Leaf, Austrian
Philharmonics, Australian Kangaroo, Britannia, American Eagle - and stay away from collector
items.
Notional value of the coins:
Britannia 100 GBP, Philharmonics 100 Euro, Maple Leaf 50 CAD, American Eagle 50 US, Kangaroo
50 AUS.
Watch Gold spot price prior to any purchase at barchart.com (ticker ^XAUUSD - ^XAUCAD),
stockcharts.com (ticker $Gold), investing.com etc (ticker XAU/CAD - XAU/US).
"... The Organization for Economic Cooperation and Development said: "The middle class is increasingly only a dream for many. This bedrock of our democracies and economic growth is not as stable as in the past." ..."
"... Only incomes in the top 25% were able to outpace this rate on an annual basis, according to the Atlanta Fed. For everyone else, a greater share of income must be allocated to property taxes, leaving less to spend on everything else. ..."
"... Equity ownership in companies, both public and private, is also sliding for the upper middle class. The share of equity ownership for citizens in the 50th to 90th percentile of net worth has fallen and the top 1% of Americans still own the majority of shares. ..."
"... By the end of 2018, net worth as a share of the U.S. total had shrunk considerably for the upper middle class. During the course of just one generation, U.S. wealth held by households from the 50th to the 90th percentile fell from 35.2% of the total to 29.1%. Most of this wealth has been transferred to the top 1% of U.S. households. ..."
"... Stefano Scarpetta, OECD director of employment, labor and social affairs said: "There is a risk of a spiral to the extent that the middle class is the one main sources of political and economic stability." ..."
New data from the Federal Reserve detailing citizens' net worth shows that the issue of being "left behind" has now spread to
all Americans aside from the top 10%, according to
Bloomberg . This means that even the upper middle class is starting to feel the pain of income stagnation. The growth of upper
middle class income continues to lag behind that of those both lower and higher than them on the socioeconomic ladder, according
to the data.
The cost of many items purchased by the upper middle class, including things like college education and cars, is outpacing inflation.
That is causing upper middle class households to tap into more expensive forms of debt. The debt these households is taking on is
shifting from mortgages to credit with higher financing costs.
In addition, the overall middle class' share of total income is
falling while home prices have increased faster than median incomes.
The Organization for Economic Cooperation and Development said: "The middle class is increasingly only a dream for many. This
bedrock of our democracies and economic growth is not as stable as in the past."
Credit card rates recently hit a "generational high" despite the low prime rate. The spread between the prime rate and credit
card interest rates is at its highest point in almost 10 years.
2018 property taxes rose by 4% annually, on average, according to an analysis of more than 87 million U.S. single family homes
by ATTOM Data Solutions.
Todd Teta, chief product officer for ATTOM Data Solutions
said
: "Property taxes levied on homeowners rose again in 2018 across most of the country. While many states across the country have imposed
caps on how much taxes can go up, which probably contributed to a slower increase in 2018 versus 2017. There are still many factors
at play that can contribute to local property tax hikes, and without major changes in the way a community runs public services, tax
rates must rise to pay for them."
Only incomes in the top 25% were able to outpace this rate on an annual basis, according to the Atlanta Fed. For everyone
else, a greater share of income must be allocated to property taxes, leaving less to spend on everything else.
Equity ownership in companies, both public and private, is also sliding for the upper middle class. The share of equity ownership
for citizens in the 50th to 90th percentile of net worth has fallen and the top 1% of Americans still own the majority of shares.
By the end of 2018, net worth as a share of the U.S. total had shrunk considerably for the upper middle class. During the
course of just one generation, U.S. wealth held by households from the 50th to the 90th percentile fell from 35.2% of the total to
29.1%. Most of this wealth has been transferred to the top 1% of U.S. households.
The Organization for Economic Cooperation and Development has said that the middle class is "essential" for growth and countries
where it thrives are healthier, more stable, better educated and have lower crime rates while boasting higher life satisfaction.
The OECD defines middle class as households with incomes between 75% and and 200% of the national median. Over the last 3 decades,
incomes have increased 33% less than the average of the richest 10%, according to the OECD. Real income of the middle class has grown
only 0.3% a year since the financial crisis.
Stefano Scarpetta, OECD director of employment, labor and social affairs said: "There is a risk of a spiral to the extent
that the middle class is the one main sources of political and economic stability."
Rising to the middle class is also getting tougher. More skills are needed, as more than 50% of middle income workers are
now in high skilled occupations, up from about 33% two decades ago.
"It's a wake up call. Overall there is a need to really focus on targeted policy intervention for those with specific problems.
General policies may not work very well," Scarpetta concluded.
Work 12 hours a day, 6 days a week: Jack Ma demands of his staff at Alibaba
Welcome to Globalism, you are now seeing managers from non-western countries bringing their values into the western organizations
as they climb the ladder. Not all countries share the same cultural values and work ethics.
7 Signs that you may have become a Corporate Slave
1. You sleep less than an average of 6 hours every night.
2. Part of your daily routine involves turning the floor lights on, when you arrive, and off, when you leave.
3. You have never attended your daughter's dance recital.
4. You can't remember the last time you had a day off, let alone a vacation with your family.
5. You are constantly anxious about your performance, or rather the way it is perceived by your manager.
6. You feel you cannot talk to your manager, your HR or your colleagues about your grievances.
Our political whores...******* us into poverty, day after day, year after year. I hope I am alive to see (and take part in)
the day people get fed up enough to actually reach critical mass and DO something about it.
It used to be easy to buy subservience with bread & circuses, but now even those things are growing out of reach. Hopefully
we reach critical mass breaking point and the political whores' minions (the boys in blue, etc..) don't have the capacity to stop
what transpires. Nothing less than a cathartic release of blood will do for me personally speaking.
What is mind boggling is that one sees how Republicans and Democrats caused this by deregulating (finance, trade, immigration,
etc) and allowing multinationals free reign and yet...you have Trump supporting assholes blaming "communist democrats" when this
is all a result of the private sector running wild.
This is an interesting but probably way too simplistic view. The USA as a neoliberal
superpower can't change its course. It now depends and it turn needs to support all the
neoliberal empire superstructure no matter what. Or vanish as en empire. Which is not in
Washington and MIC or Wall Street interests.
So "Empire Uber Alles" is the current policy which will remain in place. Even a slight
deviation triggers the reaction of the imperial caste (Mueller witch hunt is one example,
although I do not understand why it lasted so long, as Trump folded almost instantly and became
just Bush III with the same set of neocons driving the USA foreign policy )
The internal logic of neoliberal empire is globalization -- enforcing opening of internal
markets of other countries for the US multinationals and banks. So the conflict with the
"nationalist" (as as neocon slur them "autocratic") states, which does not want to became the USA
vassals ( like the Russia and China ) is not the anomaly, but the logical consequence of the USA
status and pretenses as imperial center. Putin tried to establish some kind of détente
several time. He failed: "Carnage needs to be destroyed" is the only possible attitude and it
naturally created strong defensive reaction which in turn strains the USA resources.
Meantime the standard of living of workers and middle class dropped. While most of the drop
is attributable to neoliberalism redistribution of wealth up, part of it is probably is
attributable to the imperial status of the USA.
The USA neoliberal elite after 1991 became completely detached from reality (aka infected
with imperil hubris) and we have what we have.
Those 700 billions that went to Pentagon speak for themselves.
And in turn create the caste of imperial servants that are strongly interested in maintaining
the status quo and quite capable to cut short any attempts to change it. The dominance of neocons
(who are essentially lobbyists of MIC) in the Department of State is a nice illustration of this
mouse trap.
So the core reason of the USA current neocon foreign policy is demands and internal dynamics
of neoliberal globalization and MIC.
In other words, as Dani Rodik said "...today's Sino-American impasse is rooted in
"hyper-globalism," under which countries must open their economies to foreign companies,
regardless of the consequences for their growth strategies or social models."
The American foreign policy Blob's latest worry is that Venezuela's radical leftist
government is
reaching out to the Middle East for support against growing pressure from Washington.
Specifically, President Nicolás Maduro is reportedly trying to establish extensive
political and financial links with Syrian President Bashar al-Assad and his ally in Lebanon,
Hezbollah . The
latter has repeatedly condemned
U.S. policy towards Maduro , and already appears to have
shadowy economic ties to Caracas. There are indications that Maduro's regime may be
utilizing Hezbollah to launder funds from the illegal drug trade.
Washington's fear is that lurking behind an Assad-Hezbollah-Maduro alliance is America's
arch-nemesis, Iran, which has close relations with both Assad and Hezbollah. Tehran's apparent
objective would be to strengthen the Venezuelan regime, boost anti-U.S. sentiment in the
Western Hemisphere, and perhaps acquire some laundered money
from a joint Maduro-Hezbollah operation to ease the pain of U.S. economic sanctions
re-imposed following the Trump administration's repudiation of the nuclear deal.
Although Iran, Assad, and Hezbollah remain primarily concerned with developments in their
own region, the fear that they want to undermine Washington's power in its own backyard is not
unfounded. But U.S. leaders should ask themselves why such diverse factions would coalesce
behind that objective.
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It is hardly the only example of this to emerge in recent years, and the principal cause
appears to be Washington's own excessively belligerent policies. That approach is driving
together regimes that have little in common except the need to resist U.S. pressure.
Washington's menacing posture undermines rather than enhances American security, and especially
in one case -- provoking an expanding entente between Russia and China -- it poses a grave
danger.
The current flirtation between Caracas and anti-American factions in the Middle East is not
the first time that American leaders have worried about collaboration among heterogeneous
adversaries. U.S. intelligence agencies and much of the foreign policy community warned for
years about cooperation between Iran
and North Korea over
both nuclear and ballistic missiletechnology
. During the Cold War, a succession of U.S. administrations expressed frustration and anger at
the de facto alliance between the totalitarian Soviet Union and democratic India. Yet the
underlying cause for that association was not hard to fathom. Both countries opposed U.S.
global primacy. India was especially uneasy about Washington's knee-jerk diplomatic and military support for
Pakistan , despite that country's history of dictatorial rule and aggression.
Alienating India was a profoundly unwise policy. So, too, has been Washington's longstanding
obsession with weakening and isolating Iran and North Korea. Those two countries have almost
nothing in common, ideologically, politically, geographically, or economically. One is a weird
East Asian regime based on dynastic Stalinism, while the other is a reactionary Middle East
Muslim theocracy. Without the incentive that unrelenting U.S. hostility provides, there is
little reason to believe that Tehran and Pyongyang would be allies. But Washington's vehemently
anti-nuclear policy towards both regimes, and the brutal economic sanctions that followed, have
helped cement a de facto alliance between two very strange bedfellows.
Iranian and North Korean leaders have apparently reached the logical conclusion that the
best way to discourage U.S. leaders from considering forcible regime change towards either of
their countries was to cooperate in strengthening their respective nuclear and missile
programs. Washington's
regime change wars , which ousted Iraq's Saddam Hussein and Libya's Moammar Gaddafi -- and
the unsuccessful attempt to overthrow Syria's Assad -- reinforced such fears.
The most worrisome and potentially deadly case in which abrasive U.S. behavior has driven
together two unlikely allies is the deepening relationship between Russia and China.
Washington's
"freedom of navigation" patrols in the South China Sea have antagonized Beijing, which has
extensive territorial claims in and around that body of water. Chinese protests have grown in
both number and intensity. Bilateral relations have also deteriorated because of Beijing's
increasingly aggressive posture toward Taiwan and
Washington's growing support for the island's de facto independence. The ongoing trade war
between the United States and China has only added to the animosity. Chinese leaders see
American policy as evidence of Washington's determination to continue
its status of primacy in East Asia, and they seek ways to undermine it.
Russia's grievances against the United States are even more pronounced. The expansion of
NATO to the borders of the Russian Federation, Washington's repeated trampling of Russian
interests in the Balkans and the Middle East, the imposition of economic sanctions in response
to the Crimea incident, the Trump administration's withdrawal from the Intermediate Nuclear
Forces treaty,
U.S. arms sales to Ukraine , and other provocations have led to a new
cold war . Russia has moved to increase diplomatic,
economic, and even military cooperation with China. Beijing and Moscow appear to be
coordinating
policies on an array of issues,
complicating Washington's options .
Close cooperation between Russia and China is all the more remarkable given the extent of
their bitterly competing interests in Central Asia and elsewhere. A mutual fear of and anger
toward the United States, however, seems to have overshadowed such potential quarrels -- at
least for now.
There even appears to be a "grand collusion" of multiple U.S. adversaries forming. Both
Russia and China are increasing their economic links with
Venezuela , and Russia's military involvement with the Maduro regime is also on the rise.
Last month, Moscow dispatched two nuclear-capable bombers to Caracas
along with approximately 100 military personnel. The latter contingent's mission was to
repair and refurbish Venezuela's air defense system in light of Washington's menacing rhetoric.
That move drew a
sharp response from President Trump.
Moscow's policy toward the Assad government, Tehran, and Hezbollah has also become more
active and supportive. Indeed, Russia's military intervention in Syria, beginning in 2015, was
a
crucial factor in tilting the war in favor of Assad's forces, which have now regained
control over most of Syria. Washington is thus witnessing Russia getting behind two of its
major adversaries: Venezuela and an Iran-led coalition in the Middle East.
This is a classic example of
balancing behavior on the part of countries worried about a stronger power that pursues
aggression. Historically, weaker competitors face a choice when confronting such a power:
bandwagon or attempt to balance against that would-be hegemon. Some very weak nations may
have little choice but to cower and accept dependent status, but most midsize powers (and even
some small ones) will choose the path of defiance. As part of that balancing strategy, they
tend to seek any allies that might prove useful, regardless of differences. When the perceived
threat is great enough, such factors are ignored or submerged. The United States and Britain
did so when they formed the Grand Alliance with the totalitarian Soviet Union in World War II
to defeat Nazi Germany. Indeed, the American revolutionaries made common cause with two
reactionary autocracies, France and Spain, to win independence from Britain.
The current U.S. policy has produced an array of unpleasant results, and cries out for
reassessment. Washington has created needless grief for itself. It entails considerable
ineptitude to foster collaboration between Iran and North Korea, to say nothing of adding
Assad's secular government and Maduro's quasi-communist regime to the mix. Even worse are the
policy blunders that have driven Russia to support such motley clients and forge ever-closer
economic and military links with a natural rival like China. It is extremely unwise for any
country, even a superpower, to multiply the number of its adversaries needlessly and drive them
together into a common front. Yet that is the blunder the United States is busily
committing.
Ted Galen Carpenter, a senior fellow in security studies at the Cato Institute and a
contributing editor at , is the author of 12 books and more than 800 articles. His latest book
is Gullible Superpower: U.S. Support for Bogus Foreign Democratic Movements (2019).
"I never thought I'd be saying this, but if the Soviet Union still existed, the United States
would not dare to do what it is doing now" – said to me by an anti-Communist Romanian
who had fled Romania when it was still Communist ruled. We were attending a demonstration
against the Clinton air war which was the final death blow to Yugoslavia.
The emergence of a powerful anti-American world coalition is a good thing; US world
hegemony has been good neither for the US nor for the world. The main danger is that the US,
seeing its power slip away, will resort to all out war, even nuclear war. I pray that the US
rulers are at least sane even if they are quite evil and over-bearing.
Current US foreign policy, set by the White House and Commander-in-Chief, reflects the beliefs
of the Deplorables who put Trump into office: sadly, most of these dupes believe the myth of
American Exceptionalism [copyright Sarah Palin]. The nexus of confusing social media and
reality TV with genuine reality, and 1950s Hollywood jingoism, has them waiting for a crisis
[possibly a gay Star Wars/Kardashian-type monster] that can only be saved before the final
commercial by their 'Hero'.
Hello,
Let's see here.
It's gotten to the point where the great United States is ruled by Trump and the strangest of
people, like freak Bolton and Pompeo and the Presidents son in law?
Are the voters nuts? The lousy choices of war mongers Hillary and Trump?
Look at the foreign leaders in the pictures.
Then look at the nasty hate filled, historically ignorant bums I named above.
The difference?
They, the leaders of those four nations threaten no one and no other nation, but clown Trump
and his advisers do every day.
Take away any power from Trump and his advisers, yeah, wishful thinking, I know, and read a
book by Noam Chomsky or an article or three by Bernie Sanders and maybe you will see what a
circus the white house is, of this nation. Ironically, America has never been LESS great. What
a damn crying shame, know what I mean?
There is a diverse coalition of weaker countries opposing the U.S. because
A. Each have been the target of regime change and figure they they better pool their resources
and help each other when they can 'the axis of resistance'.
or
B. The wolves are waiting at the wood's edge just waiting to humiliate the United States, the
last flickering light of all that is good.
Well since we are a nation of narcissists we believe B because we cannot fathom that other
countries act in their own interests.
You're right. I see people like Robert Kagan's opinions being respectfully asked on foreign affairs, John Bolton and Elliott Abrams
being hired to direct our foreign policy.
The incompetent, the corrupt, the treacherous -- not just walking free, but with reputations intact, fat bank balances, and
flourishing careers. Now they're angling for war with Iran.
It's preposterous and sickening. And it can't be allowed to stand, so you can't just stand off and say you're "wrecked". Keep
fighting, as you're doing. I will fight it until I can't fight anymore.
Fact-bedeviled JohnT: “McCain was a problem for this nation? Sweet Jesus! There quite simply is no rational adult on the planet
who buys that nonsense.”
McCain had close ties to the military-industrial complex. He was a backer of post-Cold War NATO. He was a neoconservative darling.
He never heard of a dictator that he didn’t want to depose with boots on the ground, with the possible exception of various Saudi
dictators (the oil-weaponry-torture nexus). He promoted pseudo-accountability of government in campaign finance but blocked accountability
for the Pentagon and State Department when he co-chaired the United States Senate Select Committee on POW/MIA Affairs with John
Kerry.
And, perhaps partly because of the head trauma and/or emotional wounds he suffered at the hands of Chinese-backed Commies,
it’s plausible to think he was regarded by the willy-nilly plotters of the deep state as a manipulable, and thus useful, conduit
of domestic subversion via the bogus Steele dossier.
Unfortunately, the episode that most defines McCain’s life is the very last one–his being a pawn of M-16 in the the deep state’s
years-long attempt to derail the presidency of Donald Trump.
Measuring success means determining goals. The goals of most wars is to enrich the people in charge. So, by this metric, the war
was a success. The rest of it is just props and propaganda.
“Pyrrhic Victory” look it up the Roman Empire Won but lost if the US is invaded and the government does not defend it I would
like to start my own defense: But the knee jerk politics that stirs America’s cannon fodder citizens is a painful reminder of
a history of jingoist lies where at times some left and right agree at least for a short moment before the rich and powerful push
their weight to have their way.
If All politics is relative Right wingers are the the left of what? Nuclear destruction? or Slavery?
My goodness! I am also a veteran, but of the Vietnam war, and my father was a career officer from 1939-1961 as a paratrooper first,
and later as an intelligence officer. He argued vigorously against our Vietnam involvement, and was cashiered for his intellectual
honesty. A combat veteran’s views are meaningless when the political winds are blowing.
Simply put, we have killed thousands of our kids in service of the colonial empires left to us by the British and the French
after WWII. More practice at incompetent strategies and tactics does not make us more competent–it merely extends the blunders
and pain; viz the French for two CENTURIES against the Britsh during the battles over Normandy while the Planagenet kings worked
to hold their viking-won inheritance.
At least then, kings risked their own lives. Generals fight because the LIKE it…a lot. Prior failures are only practice to
the, regardless of the cost in lives of the kids we tried to raise well, and who were slaughtered for no gain.
We don’t need the empire, and we certainly shouldn’t fight for the corrupt businessmen who have profited from the never-ending
conflicts. Let’s spend those trillions at home, so long as we also police our government to keep both Democrat and Republican
politicians from feathering their own nests. Term limits and prosecutions will help us, but only if we are vigilant. Wars distract
our attention while corruption is rampant at home.
Thanks, I appreciate this article.
I’ll make two points, my own opinion:
it’s the same story as Vietnam, the bull about how the politicians or anti-war demonstrators tied the military ‘hand,’ blah, blah.
Nonsense. Invading a nation and slaughtering people in their towns, houses…gee…what’s wrong with that, eh?
The average American has a primitive mind when it comes to such matters.
Second point I have, is that both Bushes, Clinton, Obama, Hillary and Trump should be dragged to a world court, given a fair trial
and locked up for life with hard labor… oh, and Cheney too,for all those families, in half a dozen nations, especially the children
overseas that suffered/died from these creeps.
And, the families of dead or maimed American troops should be apologized to and compensation paid by several million dollars to
each.
The people I named above make me sick, because I have feelings and a conscience. Can you dig?
Though there is a worldly justification for killing to obtain or maintain freedoms, there is no Christian justification for it.
Which suggests that Christians who die while doing it, die in vain.
America’s wars are prosecuted by a military that includes Christians. They seldom question the killing their country orders
them to do, as though the will of the government is that of the will of God. Is that a safe assumption for them to make? German
Christian soldiers made that assumption regarding their government in 1939. Who was there to tell them otherwise? The Church failed,
including the chaplains. (The Southern Baptist Convention declared the invasion of Iraq a just war in 2003.) These wars need to
be assessed by Just War criteria. Christian soldiers need to know when to exercise selective conscientious objection, for it is
better to go to prison than to kill without God’s approval. If Just War theory is irrelevant, the default response is Christian
Pacifism.
“Iraq Wrecked” a lot of innocent people. Millions are dead, cities reduced to rubble, homes and businesses destroyed and it was
all a damned lie. And the perpetrators are Free.
Now there is sectarian violence too, where once there was a semblance of harmony amongst various denominations. See article link
below.
“Are The Christians Slaughtered in The Middle East Victims of the Actions of Western War Criminals and Their Terrorist Supporting
NATO ‘Allies’”?
We are a globalist open borders and mass immigration nation. We stand for nothing. To serve in this nation’s military is very
stupid. You aren’t defending anything. You are just a tool of globalism. Again, we don’t secure our borders. That’s a very big
give away to what’s going on.
If our nation’s military really was an American military concerned with our security we would have secured our border after 9/11,
reduced all immigration, deported ALL muslims, and that’s it. Just secure the borders and expel Muslims! That’s all we needed
to do.
Instead we killed so many people and imported many many more Muslims! And we call this compassion. Its insane.
Maybe if Talibans get back in power they will destroy the opium. You know, like they did when they were first in power…. It seems
that wherever Americans get involved, drugs follow…
“Yet, we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved. So is the very
structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether
sought or unsought, by the military-industrial complex.” In Eisenhower’s televised farewell address January 17, 1961.
Rational thought would lead one to believe such words from a fellow with his credentials would have had a useful effect. But it
didn’t. In point of fact, in the likes of Eric Prince and his supporters the notion of war as a profit center is quite literally
a family affair.
The military-industrial complex couldn’t accomplish this all by its lonesome self. The deep state was doing its thing. The two
things overlap but aren’t the same. The deep state is not only or mainly about business profits, but about power. Power in the
world means empire, which requires a military-industrial complex but is not reducible to it.
We now have a rare opportunity to unveil the workings of the deep state, but it will require a special counsel, and a lengthy
written report, on the doings in the 2016 election of the FBI (Comey, Strzok, et. al.), and collaterally the CIA and DIA (Brennan
and Clapper). Also the British government (M-16), John McCain, and maybe Bush and Obama judges on the FISA courts.
To understand how such total control is done, one has to look at the role of banking serfdom,
led by the FED and the central bankers, and media brainwash, run by Hollywood and mainstream
media.
In terms of banking, here is a great explanation, including The City of London that owns
UK:
Prof. Werner brilliantly explains how the banking system and financial sector really
work.
402,668 views
The workings of the monetary system have been a mystery throughout globalisation, which is
why we have had so many financial crises.
The central banks were charged with bringing financial stability, but they didn't
understand it either, so they didn't stand a chance.
The BIS is just as bad and Richard Werner points out the Basel regulations are based on
the assumption that banks are financial intermediaries, but they are not.
The central banks know a bit, but obviously not enough.
Financial stability is a lot easier than it looks when you know what you are doing.
Richard Werner was in Japan in the 1980s when it went from a very stable economy and
turned into a debt fuelled monster. He worked out what happened and had all the clues
necessary to point him in the right direction.
The three types of bank lending:
1) Into business and industry – gives a good return in GDP and doesn't lead to
inflation
2) To consumers – leads to consumer price inflation
3) Into real estate and financial speculation – leads to asset price inflation and
gives a poor return in GDP and shows up in the graph of debt-to-GDP
Bank credit has been used for all the wrong things during globalisation and the bankers
have just been inflating asset prices, not creating real wealth as measured by GDP and this
has caused nearly all the financial crises.
1929 and 2008 stick out like sore thumbs when you know where to look, but the FED
didn't.
i) If gentiles are so smart, why are Jews, whom gentiles outnumber 40:1 across the
combined Western World, able to control everything?
If you're so smart, then what makes you think it has much to do with smarts? Violence may
trump intelligence in the likely event you haven't figured that out.
@jacques
sheete Please do not try to teach dishonest person about honesty. Dishonest person know
about honesty. He only did figure out that being dishonest is more rewarding than being
honest.
@Thomm Posing
a question without giving it a thought first will backfire. The same question could be asked
of Whites in the Western world: if they are so smart, why are >99% of them totally
controlled by <1%? It is that <1% that is the dog wagged by the Zio-tail.
"... In SUPERCLASS we learn that this class of people actually own and control the three largest Western religions and many of the secondary ones - they all preach obedience to authority as paramount. They also own the drugs trade around the world. 95% of the world supply of opium comes out of Afghanistan under the watchful eye of the Elite through use of the US military. ..."
"... And just as an aside to any historians out there, Thomas Piketty's book Capital in the Twenty-first Century shows how a critical mass of capital was had formed 500 years ago and has grown consistently at a rate greater than the general economy ever sense. He showed that before, during and after the French Revolution and later the US "revolution" the core capital of the west made profits. These revolutions, like government today, were pantomimes whilew the real power profited from the slaughter. The Elite prosper from war that is why there has been continual war and slaughter on their behalf sinse August 6, 1945. The nuclear weapons belong to them. ..."
You ask a question about European political class's perception and defence of European
interests that is as perplexing here as it is in regard to Libya and Syria, to name just
these. There was at least some coherent defence of international law and principle during
Bush II's lead up to the Iraq war, but Europe's defence of law and Europe's common interests
seem to have ceased at some point since then.
Because, like the US European government is a tool of the Global Power Elite, it is
nothing more than pantomime. The West is fully owned and operated by the global elite.
In books going back to C Wright Mills' The Power Elite in 1956 to SUPERCLASS by David
Rothkopf, and GIANTS: The Global Power Elite by Peter Phillips clearly outline just how
powerful the Global Elites really are.
In SUPERCLASS we learn that this class of people actually own and control the three
largest Western religions and many of the secondary ones - they all preach obedience to
authority as paramount. They also own the drugs trade around the world. 95% of the world
supply of opium comes out of Afghanistan under the watchful eye of the Elite through use of
the US military.
There is one and only one Western empire - that of the Global Elites.
85% of the valuable assets in the world are controlled by the Global Elites.
There is no offsetting force against them, there simply does not exist today a force
capable of challenging their ownership of the world.
And just as an aside to any historians out there, Thomas Piketty's book Capital in the
Twenty-first Century shows how a critical mass of capital was had formed 500 years ago and
has grown consistently at a rate greater than the general economy ever sense. He showed that
before, during and after the French Revolution and later the US "revolution" the core capital
of the west made profits. These revolutions, like government today, were pantomimes whilew
the real power profited from the slaughter. The Elite prosper from war that is why there has
been continual war and slaughter on their behalf sinse August 6, 1945. The nuclear weapons
belong to them.
This slur "authoritarian state" is now peddled by neocons as synonym for the "countries we do not like"
This neocons in not very inventive... We already saw this line from Robert Kagan, who
actually is a better writer. This neocon/neolib pressitute can't even use proper terms such as
"neoliberalism" and "Washington consensus"
And slide to far-right nationalism and neo-fascism is direct result of neoliberalism
dominance for the last 40 years (since Carter) and sliding of the standard of living of workers
and the middle class.
Notable quotes:
"... Both countries have touted the virtues of their systems, while arguing that Western values are a source of decadence, amorality and disorder in the Western world. ..."
As international rivalry intensifies, the core strategic task for the U.S.-led democratic
community is to contain the geopolitical influence and political disruption caused by
authoritarian great powers, namely China and Russia. Yet that task is made all the harder
because illiberalism -- and sympathy for those illiberal powers -- is simultaneously surging
among key actors on the political right. If the U.S. and its allies are to succeed in the great
global rivalry of the 21st century, the right must confront the threat of illiberalism within
its ranks -- just as the left did during a previous twilight struggle in the 20th century.
... ... ...
This time, the threat is not expansionist communism, but a combination of autocracy and
geopolitical revisionism. China has been moving toward a dystopian future of high-tech
authoritarianism, as it pushes for greater power and influence overseas. Putin's Russia has
consolidated an illiberal oligarchy, while using information warfare, political meddling and
other tools to subvert liberal democracies in Europe, the U.S. and beyond.
Both countries have touted the virtues of their systems, while arguing that Western
values are a source of decadence, amorality and disorder in the Western world.
... ... ...
It is not for nothing that the political scientist Marc Plattner has
written that the gravest threat to liberal democracy today is “that it will end up
being abandoned by substantial segments of the right.” And even in the U.S., there are
alarming signs that conservative commitment to the norms of liberal democracy is under
strain.
Communism was not a threat, but actually benefited the world in many ways.
It was communism that put pressure on capitalism to provide labor a fair share of wealth and
income. As soon as Soviet communism collapsed, capitalism returned to its avaricious roots,
resulting in stagnant wages for the working class. And the pauperization of the working class
in recent decades is the cause for the current revolt against liberal capitalism.
So it was the competition from communism that was helping capitalism to stay healthy. Without
it capitalism has degenerated into a Dickensian dystopia. We should therefore welcome any
alternative socio-economic models to liberal capitalism.
It was communism that put pressure on capitalism to provide labor a fair
share of wealth and income. As soon as Soviet communism collapsed,
capitalism returned to
Thats a great point Che.
I have never ever looked at it from that angle.
Interesting.
Robert Kagan of the Brookings Institution, who has long been a leading conservative
intellectual, warns that this disillusion with liberal democracy “is clearly present
among American conservatives, and not just among the ‘alt-right.’
Honest and real conservatives are far and fewer in today's MAGA/tea party infested GOP.
Forget career politicians like Ted Cruz or McConnell, even the previously decent conservative
think tanks/pundits like from NR or Erik Erickson or others have all given up on any
principles and just bow at the altar of Trump now.
No they haven’t, Trump decided to put McConnell in charge so of course the
#neverTrumpers like the McConnell presidency...which consists of appointing Republican judges
at record pace and little else.
The biggest need is to resist holy warriors like Hal Brands who want to destroy the world
if it resists their version of revealed truth. They are the biggest threat to the human
future. The United States has to learn to live in a world that it cannot control. The
American goal should be to work towards a constructive human future not some kind of holy war
to impose American control on the rest of the world. The United States is the biggest
military spender. In recent history, It has been the world's global aggressor.
It has an
history of wars that have made little difference whether America won or lost them. Perhaps
the United States could succeed with some kind of genocide that wiped out all of the parts of
the world that refuse to accept American supremacy. But, short of that kind of disgrace, the
United States is not going to succeed in achieving any meaningful goal through war. As long
as America does not destroy the world, the future is going to be determined by economic
competition and the destinies that the people of different parts of the world choose for
themselves.
I had wondered if it was noticed the Liberalism was dying. The world has turned hard
right, with all the anger, nationalism, do-as-I-say, and social intolerance.
I don't even the children of today.
I might suggest that liberals themselves are destroying their freedoms with illogical
illiberal liberalism.
YOU can't do that, say that, act like that, think like that...no no no...we must act and
be correct, nice, polite, all forgiving and never critical.
Huh?
The freedoms that so many of us marched for, fought for, voted for, sang about (thank gawd
the music still lives), got bloody for, even died for, are slipping away quicker than you can
say me, me, me...it's all about me.
Maybe...small maybe...our youth can once again awaken America and the world's conscience.
Maybe? Maybe not!
Wha? It seems our LIttle Cultural Revolution is just warming up. Wait till AOC et al are
all growed up.
"This is a moment when the “free world” needs to be strong and united."
Is this the same "free" world that jails grandmothers over contested historical views?
That has reneged on free speech?
Thanks to a truly ethnomasochistic immigration policy, I assure you that this will not
happen. The West will be lucky if squeaks through this period without a civil war.
"... Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot accommodate the world's largest trading economy is a regime in urgent need of repair. ..."
"... Today's impasse between the US and China is rooted in the faulty economic paradigm I have called "hyper-globalism," under which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers" in the language of trade economists and lawyers. ..."
Today's Sino-American impasse is rooted in "hyper-globalism," under which countries must open their economies to
foreign companies, regardless of the consequences for their growth strategies or social models. But a global trade regime that cannot
accommodate the world's largest trading economy is a regime in urgent need of repair.
CAMBRIDGE – The world economy desperately needs a plan for "peaceful coexistence" between the United States and China. Both sides
need to accept the other's right to develop under its own terms. The US must not try to reshape the Chinese economy in its image
of a capitalist market economy, and China must recognize America's concerns regarding employment and technology leakages, and accept
the occasional limits on access to US markets implied by these concerns.
The term "peaceful coexistence" evokes the Cold War between the US and the Soviet Union. Soviet leader Nikita Khrushchev understood
that the communist doctrine of eternal conflict between socialist and capitalist systems had outlived its usefulness. The US and
other Western countries would not be ripe for communist revolutions anytime soon, and they were unlikely to dislodge the Communist
regimes in the Soviet bloc. Communist and capitalist regimes had to live side by side.
Peaceful coexistence during the Cold War may not have looked pretty; there was plenty of friction, with each side sponsoring its
own set of proxies in a battle for global influence. But it was successful in preventing direct military conflict between two superpowers
armed to the hilt with nuclear weapons. Similarly, peaceful economic coexistence between the US and China is the only way
to prevent costly trade wars between the world's two economic giants
Today's impasse between the US and China is rooted in the faulty economic paradigm I have
called "hyper-globalism," under
which countries must open their economies to foreign companies maximally, regardless of the consequences for their growth strategies
or social models. This requires that national economic models – the domestic rules governing markets –converge considerably. Without
such convergence, national regulations and standards will appear to impede market access. They are treated as "non-tariff trade barriers"
in the language of trade economists and lawyers.
Thus, the main US complaint against China is that Chinese industrial policies make it difficult for US companies to do business
there. Credit subsidies keep state companies afloat and allow them to overproduce. Intellectual property rules make it easier for
copyrights and patents to be overridden and new technologies to be copied by competitors. Technology-transfer requirements force
foreign investors into joint ventures with domestic firms. Restrictive regulations prevent US financial firms from serving Chinese
customers. President Donald Trump is apparently ready to carry out his threat of slapping additional punitive tariffs on $200 billion
of Chinese exports if China does not yield to US demands in these areas.
For its part, China has little patience for arguments that its exports have been responsible for significant whiplash in US labor
markets or that some of its firms are stealing technological secrets. It would like the US to remain open to Chinese exports and
investment. Yet China's own opening to world trade was carefully managed and sequenced, to avoid adverse impacts on employment and
technological progress.
Peaceful coexistence would require that US and China allow each other greater policy space, with international economic integration
yielding priority to domestic economic and social objectives in both countries (as well as in others). China would have a free hand
to conduct its industrial policies and financial regulations, in order to build a market economy with distinctive Chinese characteristics.
The US would be free to protect its labor markets from
social dumping and to exercise greater oversight over Chinese investments that threaten technological or national security objectives.
The objection that such an approach would open the floodgates of protectionism, bringing world trade to a halt, is based on a
misunderstanding of what drives open trade policies. As the principle of comparative advantage indicates, countries trade because
it is in their own interest. When they undertake policies that restrict trade, it is either because they reap compensating benefits
elsewhere or because of domestic political failures (for example, an inability to compensate the losers).
In the first instance, freer trade is not warranted because it would leave society worse off. In the second case, freer trade
may be warranted, but only to the extent that the political failure is addressed (and compensation is provided). International agreements
and trade partners cannot reliably discriminate between these two cases. And even if they could, it is not clear they can provide
the adequate remedy (enable compensation, to continue the example) or avoid additional political problems (capture by other special
interests such as big banks or multinational firms).
Consider China in this light. Many analysts believe that China's industrial policies have played a key role in its transformation
into an economic powerhouse. If so, it would be neither in China's interests, nor in the interest of the world economy, to curb such
practices. Alternatively, it could be that these policies are economically harmful on balance, as others have argued. Even in that
case, however, the bulk of the costs are borne by the Chinese themselves. Either way, it makes little sense to empower trade negotiators
– and the special interests lurking behind them – to resolve fundamental questions of economic policy on which there is little agreement
even among economists.
Those who worry about the slippery slope of protectionism should take heart from the experience under the General Agreement on
Tariffs and Trade prior to the establishment of the World Trade Organization. Under the GATT regime, countries had much greater freedom
to pursue their own economic strategies. Trade rules were both weaker and less encompassing. Yet world trade expanded (relative to
global output) at a more rapid clip in the three and a half decades after World War II than it has under the post-1990 hyper-globalist
regime. Similarly, one can make a convincing case that, thanks to its unorthodox growth policies, China today is a larger market
for foreign exporters and investors than if it had stuck to WTO-compliant policies.
Finally, some may say that these considerations are irrelevant, because China has acceded to the WTO and must play by its rules.
But China's entry into the WTO was predicated on the idea that it had become a Western-style market economy, or would become one
soon. This has not happened, and there is no good reason to expect that it will (or should). A mistake cannot be fixed by compounding
it.
A global trade regime that cannot accommodate the world's largest trading economy – China – is a regime in urgent need of repair.
-- The gang is also very stupid. From Halper-the-spy and his incompetent handler Brennan
to the obnoxious zionists of Ledeen kind they, the members of the "gang", show incompetence
and the self-endangering and stupid amorality.
By destroying whatever decent has been in the western civilization so far, and by
spreading the rot around, the gangsters have been destroying their children's &
grandchildren's future.
Not to mention more than a few paedo-grooming ring members who are still awaiting
deportation
How convenient these immigrants are when a good smokescreen is needed.
And how about a paedophile UK Prime Minister never investigated ?
"Sir Edward Heath WAS a paedophile, says police chief: Astonishing claim is made
that the former PM is guilty of vile crimes 'covered up by the Establishment'"
"... "The Western liberal model of development, which particularly stipulates a partial loss of national sovereignty – this is what our Western colleagues aimed at when they invented what they called globalization – is losing its attractiveness and is no more viewed as a perfect model for all. Moreover, many people in the very western countries are skeptical about it," Lavrov said. ..."
"... "The US and its allies are trying to impose their approaches on others," Lavrov noted. ..."
"... "They are guided by a clear desire to preserve their centuries-long dominance in global affairs although from the economic and financial standpoint, the US – alone or with its allies – can no longer resolve all global economic and political issues," he said. ..."
"... "In order to preserve their dominance and recover their indisputable authority, they use blackmail and pressure. They don't hesitate to blatantly interfere in the affairs of sovereign states." ..."
"... Agree with the assessment other than the claim the US has had centuries long global dominance, or even influence. ..."
Russian Foreign Minister Sergei Lavrov declared today that the Western, liberal model of society is dying, and a new world order
is taking its place.
Lavrov made the comments at his annual meeting with students and professors at the Foreign Ministry's Diplomatic Academy, reported
Russian state news agency TASS.
"The Western liberal model of development, which particularly stipulates a partial loss of national sovereignty – this
is what our Western colleagues aimed at when they invented what they called globalization – is losing its attractiveness and is
no more viewed as a perfect model for all. Moreover, many people in the very western countries are skeptical about it," Lavrov
said.
According to him, global development is guided "by processes aimed at boosting multipolarity and what we call a polycentric world
order."
"Clearly, multipolarity and the emergence of new centers of power in every way requires efforts to maintain global stability
and search for a balance of interests and compromises, so diplomacy should play a leading role here," Lavrov went on to say.
"Particularly because there are a lot of issues that require generally acceptable solutions."
These include regional conflicts, international terrorism, food security and environmental protection. This is why we believe
that only diplomacy can help make agreements and reach sustainable decisions that will be accepted by all.
"The US and its allies are trying to impose their approaches on others," Lavrov noted.
"They are guided by a clear desire to preserve their centuries-long dominance in global affairs although from the economic
and financial standpoint, the US – alone or with its allies – can no longer resolve all global economic and political issues,"
he said.
"In order to preserve their dominance and recover their indisputable authority, they use blackmail and pressure. They don't
hesitate to blatantly interfere in the affairs of sovereign states."
Perry Colace
When I was a kid, the Soviet Union was the enemy. Now Russia (with an economy, population, military and world influence the
fraction of the United States) seems to be one of the few places in the world that makes any bit of sense and ACTUALLY cares a
little bit about its culture and people.
Fluff The Cat
"The Western liberal model of development, which particularly stipulates a partial loss of national sovereignty – this is
what our Western colleagues aimed at when they invented what they called globalization – is losing its attractiveness and is
no more viewed as a perfect model for all.Moreover, many people in the very western countries are skeptical about it," Lavrov
said.
A Judaic-Masonic world order is the end goal. It entails the complete loss of sovereignty for all Western nations and the slow
genocide of white Christians via miscegnation and displacement by third-worlders.
lnardozi
I can't think of a man more American than Putin.
Sell the bases, come home, stop bothering others and trying to run world affairs.
Then we can spend a nice nice century or so rebuilding our infrastructure and trimming our out-of-control federal government.
The clue is right there in the name - the united STATES of America. A state is a sovereign country with its own laws - except
for those powers enumerated in the Constitution which the federal government should have.
That's the whole point - competition in government. You don't like the state you're in - you're guaranteed the choice of 49
others, along with all your possessions.
notfeelinthebern
Agree with the assessment other than the claim the US has had centuries long global dominance, or even influence.
johnnycanuck
Western global dominance, US took over from the British Empire with the assistance of the banksters class. It's all there in
the history books, you just need to spend time
consider me gone
As much as I hate to say it, this was Winston Churchill's idea. Even as the war was just starting, he was a major advocate
for the West controlling the globe after WWII.
But I'll bet he had no idea that the West would abandon traditional Western values in the process. He wouldn't watch TV and
predicted it would turn society into unthinking idiots. He nailed that one anyhow.
The Alliance
"...many people in the very western countries are skeptical about it," Lavrov said.
Skeptical?
I, for one, would show up early and highly motivated to march against, and to destroy, these treasonous, malevolent, collectivist
Globalists.
The Globalists within the United States government are traitors--traitors, by definition. They have declared war on our republic.
CDN_Rebel
Russia works because they have a ruthless tyrant who happens to be incredibly competent. That same system with a weak ruler
will collapse entirely in a matter of months. I like Putin, but he needs to groom an ironfisted successor pronto.
As for the chows - they need to print half a trillion a month to stay afloat and that's your model?
The west is only fucked because the sleeping masses refuse to acknowledge that Marxists have undermined our institutions...
It would take only a few years to scrub these subversive ***** from our society if we had the balls to do it
johnnycanuck
yadda yadda yadda.. marxists, subversives, commies, all the catch phrases of ye old Joe McCarthy. Russia works because Russians
have a history of enduring adversity. Unlike Americans.
Moribundus
It is eventually end of era of western imperialism, era that lasted 900 years. Game is over
"... On June 12, 2018 The Washington Post ran an overlooked story where they disclosed that National Security Advisor John Bolton had accepted money from the Victor Pinchuk Foundation, Deutsche Bank and HSBC to return for his participation in speeches and panel discussions ..."
"... John Bolton accepted $115,000 from the Victor Pinchuk Foundation to speak at multiple events hosted by the Foundation including one in September 2017 where Bolton assured his audience that President Donald Trump would not radically change US foreign policy despite his explicit campaign promises to do so. ..."
"... More broadly, John Bolton's work for the Victor Pinchuk Foundation, HSBC and Deutsche Bank shows that while he preaches hardline foreign policy approaches towards nations such as Iran and North Korea he has no issue tying himself to those who openly flaunt American sanctions and diplomatic attempts to pressure these states. For an individual who is the President's National Security Advisor to have taken money from banks who provide financial services to terror groups who have murdered thousands of Americans is totally unacceptable. ..."
On June 12, 2018 The Washington Post ran an overlooked story where they
disclosed that National Security Advisor John Bolton had accepted money from the Victor Pinchuk Foundation, Deutsche Bank and HSBC
to return for his participation in speeches and panel discussions. These three entities have been linked to various kinds of corruption
including sanctions evasion for Iran, money laundering on behalf of drug cartels, provision of banking services to backers of Islamic
terror organizations and controversial donations to the Clinton Foundation.
The financial ties between Bolton and these institutions highlight serious ethical concerns about his suitability for the position
of National Security Advisor.
I. Victor Pinchuk Foundation
John Bolton accepted $115,000 from the Victor Pinchuk Foundation to speak at multiple events hosted by the Foundation including
one in September 2017 where Bolton assured his audience that President Donald Trump would not radically change US foreign policy
despite his explicit campaign promises to do so.
The Victor Pinchuk Foundation was blasted in 2016 over their donation of $10 to $25 million to the
Clinton Foundation between 1994 and 2005. The donations lead to accusations
of influence peddling after it emerged that Victor Pinchuk had been invited
to Hillary Clinton's home during the final year of her tenure as Secretary of State.
Even more damning was Victor Pinchuk's participation in activities that constituted evasions of sanctions levied against Iran
by the American government. A 2015 exposé by Newsweek highlighted the fact
that Pinchuk owned Interpipe Group, a Cyprus-incorporated manufacturer of seamless pipes used in oil and gas sectors. A now-removed
statement on Interpipe's website showed that they
were doing business in Iran despite US sanctions aimed to prevent this kind of activity.
Why John Bolton, a notorious war hawk who has called for a hardline approach to Iran, would take money from an entity who was
evading sanctions against the country is not clear. It does however, raise serious questions about whether or not Bolton should
be employed by Donald Trump, who made attacks on the Clinton Foundation's questionable donations a cornerstone of his 2016 campaign.
II. HSBC Group
British bank HSBC paid Bolton $46,500 in June and August 2017 to speak at two gatherings of hedge fund managers and investors.
HSBC is notorious for its extensive ties to criminal and terror organizations for whom it has provided illegal financial services.
Clients that HSBC have laundered money for include Colombian drug traffickers
and Mexican cartels who have terrorized the country and recently
raised murder rates to the highest levels in Mexico's history . They have
also offered banking services to Chinese individuals
who sourced chemicals and other materials used by cartels to produce methamphetamine and heroin that is then sold in the United
States. China's Triads have helped open financial markets in Asia to cartels
seeking to launder their profits derived from the drug trade.
In 2012, HSBC was blasted by the US Senate for for allowing money from
Russian and Latin American criminal networks as well as Middle Eastern terror groups to enter the US. The banking group ultimately
agreed to pay a $1.9 billion fine for this misconduct as well as their involvement
in processing sanctions-prohibited transactions on behalf of Iran, Libya, Sudan and Burma.
Some of the terror groups assisted by HSBC include the notorious Al Qaeda. During the 2012 scrutiny of HSBC, outlets such as
Le Monde , Business Insider
and the New York Times revealed that HSBC had maintained ties to Saudi
Arabia's Al Rajhi Bank. Al Rajhi Bank was one of Osama Bin Ladin's "Golden Chain" of Al Qaeda's most important financiers. Even
though HSBC's own internal compliance offices asked for the bank to terminate their relationship with Al Rajhi Bank, it continued
until 2010.
More recently in 2018, reports have claimed that HSBC was used for illicit
transactions between Iran and Chinese technology conglomerate Huawei. The US is currently seeking to extradite Huawei CFO Meng
Wanzhou after bringing charges against Huawei related to sanctions evasion
and theft of intellectual property. The company has been described as a "backdoor" for elements of the Chinese government by certain
US authorities.
Bolton's decision to accept money from HSBC given their well-known reputation is deeply hypocritical. HSBC's connection to
terror organizations such as Al Qaeda in particular is damning for Bolton due to the fact that he formerly served as the chairman
of the Gatestone Institute , a New York-based advocacy group that purports
to oppose terrorism. These financial ties are absolutely improper for an individual acting as National Security Advisor.
III. Deutsche Bank
John Bolton accepted $72,000 from German Deutsche Bank to speak at an event in May 2017.
Deutsche Bank has for decades engaged in questionable behavior. During World War II, they
provided financial services to the Nazi Gestapo and financed construction
of the infamous Auschwitz as well as an adjacent plant for chemical company IG Farben.
Like HSBC, Deutsche Bank has provided illicit services to international criminal organizations. In 2014
court filings showed that Deutsche Bank, Citi and Bank of America had all
acted as channels for drug money sent to Colombian security currency brokerages suspected of acting on behalf of traffickers.
In 2017, Deutsche Bank agreed to pay a $630 million fine after working with
a Danish bank in Estonia to launder over $10 billion through London and
Moscow on behalf of Russian entities. The UK's financial regulatory watchdog
has said that Deutsche Bank is failing to prevent its accounts from being used to launder money, circumvent sanctions and
finance terrorism. In November 2018, Deutsche Bank's headquarters was raided
by German authorities as part of an investigation sparked by 2016 revelations in the "Panama Papers" leak from Panama's Mossack
Fonseca.
Two weeks after the 9/11 terror attacks, the Bush administration signed
an executive order linking a company owned by German national Mamoun Darkazanli to Al Qaeda. In 1995,
Darkazanli co-signed the opening of a Deutsche Bank account for Mamdouh
Mahmud Salim. Salim was identified by the CIA as the chief of bin Laden's computer operations and weapons procurement. He was
ultimately arrested in Munich, extradited to the United States and
charged
with participation in the 1998 US embassy bombings.
In 2017, the Office of the New York State Comptroller opened an investigation into accounts that Deutsche Bank was operating
on behalf of the Popular Front for the Liberation of Palestine. The PFLP is defined by both the United States and the European
Union as a terrorist organization. It is ironic that Bolton, who is a past recipient of the "Guardian of Zion Award" would accept
money from an entity who provided services to Palestinian groups that Israel considers to be terror related.
IV. Clinton-esque Financial Ties Unbecoming To Trump Administration
Bolton's engagement in paid speeches, in some cases with well-known donors to the Clinton Foundation, paints the Trump administration
in a very bad light. Donald Trump criticized Hillary Clinton during his
2016 Presidential campaign for speeches she gave to Goldman Sachs that were
labeled by her detractors as "pay to play" behavior. John Bolton's acceptance of money from similar entities, especially the Victor
Pinchuk Foundation, are exactly the same kind of activity and are an embarrassment for a President who claims to be against corruption.
More broadly, John Bolton's work for the Victor Pinchuk Foundation, HSBC and Deutsche Bank shows that while he preaches
hardline foreign policy approaches towards nations such as Iran and North Korea he has no issue tying himself to those who openly
flaunt American sanctions and diplomatic attempts to pressure these states. For an individual who is the President's National
Security Advisor to have taken money from banks who provide financial services to terror groups who have murdered thousands of
Americans is totally unacceptable.
It is embarrassing enough that Donald Trump hired Bolton in the first place. The next best remedy is to let him go as soon
as possible.
"... Trump's failure here is his alone. Closing the border could be accomplished with a simple executive order. It has happened before: Reagan ordered the closing of the border when DEA agent Enrique "Kiki" Camarena was murdered on assignment in Mexico in 1985, for instance. ..."
"... Trump's empty threats over the past two years have had real-world consequences, prompting waves of migrants trying to sneak into the country while they still have the chance. His recent move to cut all foreign aid to Guatemala, Honduras, and El Salvador is another empty gesture that will probably have similar consequences. The funds directed to those countries were used for programs that provided citizens with incentives not to migrate elsewhere. (The situation was not ideal from an isolationist point of view, but a wiser man would have built the wall before cutting off the aid.) ..."
"... Trump's betrayal of American workers is perhaps best encapsulated by the fact that one of the members of the advisory board of his National Council for the American Worker (which claims to "enhance employment opportunities for Americans of all ages") is the CEO of IBM, a company that has expressed a preference for F-1 and H-1B visa holders in its job postings. ..."
"... There are more former Goldman Sachs employees in the Trump White House than in the Obama and Bush administrations combined. ..."
"... It is hard to escape the conclusion that Trump is not actually interested in curbing immigration and reversing America's demographic decline. He is a con artist and a coward who is willing to betray millions of white Americans so that he can remain in the good graces of establishment neoconservatives ..."
"... As Ann Coulter has put it, "He's like a waiter who compliments us for ordering the hamburger, but keeps bringing us fish. The hamburger is our signature dish, juicy and grilled to perfection, you've made a brilliant choice . . . now here's your salmon. " ..."
"... Third, he put an end to American funding for Palestinians. This coincided with the passing of a bill that codified a $38 billion, ten-year foreign aid package for Israel. Trump also authorized an act allocating an additional $550 million toward US-Israel missile and tunnel defense cooperation. ..."
"... Trump's track record on Israel shows that he is capable of exercising agency and getting things done. But he has failed to address the most pressing issue that America currently faces: mass immigration and the displacement of white Americans. The most credible explanation for his incompetence is that he has no intention of delivering on his promises. There is no "Plan," no 4-D chess game. The sooner white Americans realize this, the better. ..."
"... We elected America's first Jewish president, nothing more" ..."
"Unlike other presidents, I keep my promises," Trump boasted in a
speech delivered on Saturday to the Republican Jewish Congress
at a luxury hotel in Las Vegas. Many in the audience wore red yarmulkes emblazoned with his name. In his speech, Trump condemned
Democrats for allowing "the terrible scourge of anti-Semitism to take root in their party" and emphasized his loyalty to Israel.
Trump has kept some of his promises. So far, he has kept every promise that he made to the Jewish community. Yet he has reneged
on his promises to white America – the promises that got him elected in the first place. It is a betrayal of the highest order: millions
of white Americans placed their hopes in Trump and wholeheartedly believed that he would be the one to make America great again.
They were willing to endure social ostracism and imperil their livelihoods by supporting him. In return, Trump has turned his back
on them and rendered his promises void.
The most recent example of this is Trump's failure to keep his promise to close the border. On March 29, Trump threatened to close
the border if Mexico did not stop all illegal immigration into the US. This would likely have been a highly effective measure given
Mexico's dependence on cross-border trade. Five days later, he suddenly retracted this threat and said that he would give Mexico
a " one-year warning
" before taking drastic action. He further claimed that closing the border would not be necessary and that he planned to establish
a twenty-five percent
tariff on cars
entering the US instead.
Trump's failure here is his alone. Closing the border could be accomplished with a simple executive order. It has happened
before: Reagan ordered the closing of the border when DEA agent Enrique "Kiki" Camarena was murdered on assignment in Mexico in 1985,
for instance.
Trump's empty threats over the past two years have had real-world consequences, prompting waves of migrants trying to sneak
into the country while they still have the chance. His recent move to cut all foreign aid to Guatemala, Honduras, and El Salvador
is another empty gesture that will probably have similar consequences. The funds directed to those countries were used for programs
that provided citizens with incentives not to migrate elsewhere. (The situation was not ideal from an isolationist point of view,
but a wiser man would have built the wall before cutting off the aid.)
The past two years have seen a surge in illegal immigration without precedent in the past decade. Since late December, the Department
of Homeland Security has released 125,565 illegal aliens into the country. In the past two weeks alone,
6,000 have been admitted. According to current projections, 2019 will witness around 500,000 to 775,000 border crossings. Additionally,
about 630,000 illegal aliens will be added to the population after having overstayed their visas. By the end of the year,
more than one million illegal aliens will have been added to the population:
These projections put the number of illegal aliens added to the U.S. population at around one to 1.5 million, on top of the
11 to
22 million illegal aliens who are already living across the country. This finding does not factor in the illegal aliens who
will be deported, die over the next year, or leave the U.S. of their own will. As DHS data has revealed, once border crossers
and illegal aliens are released into the country, the overwhelming majority are never deported.
In February, Trump signed a
bill allowing the DHS
secretary to add another 69,320 spots to the current H-2B cap of 66,000. On March 29, DHS began this process by announcing that it
would issue an additional
30,000 H-2B visas this year. The H-2B visa program allows foreign workers to come to the US and work in non-agricultural occupations.
Unlike the H-1B program, a Bachelor's degree is not required; most H-2B workers are employed in construction, maintenance, landscaping,
and so on. The demographic most affected by the expansion of the H-2B program will be unemployed working-class Americans. This flies
in the face of Trump's promise to protect American workers and stop importing foreigners.
Trump has indicated that he has plans to expand the H-1B visa program as well. "We want to encourage talented and highly skilled
people to pursue career options in the U.S.," he said in a
tweet in January.
Trump's betrayal of American workers is perhaps best encapsulated by the fact that one of the members of the advisory board
of his National Council for the American Worker
(which claims to "enhance employment opportunities for Americans of all ages") is the CEO of IBM, a company that has
expressed a preference for F-1 and H-1B visa holders
in its job postings.
Trump has been working on legal immigration with Jared Kushner, who has quietly been crafting a
plan to grant
citizenship to more "low- and high-skilled workers, as well as permanent and temporary workers" (so, just about everyone). Kushner's
plan proves the folly of the typical Republican line that legal immigration is fine and that only illegal immigration should be opposed.
Under his plan, thousands of illegal aliens will become "legal" with the stroke of a pen.
There is a paucity of anti-immigration hardliners in Trump's inner circle (though Stephen Miller is a notable exception). Trump
has surrounded himself with moderates: the Kushners, Mick Mulvaney, Alex Acosta, and others. There are more former Goldman Sachs
employees in the Trump White House than in the Obama and Bush administrations combined.
The new DHS secretary, Kevin McAleenan, who was appointed yesterday following Kirstjen Nielsen's resignation, is a middle-of-the-road
law enforcement official who served under Obama and Bush and is responsible for the revival of the "
catch-and-release " policy, whereby
illegal aliens are released upon being apprehended. It was reported last week that Trump was thinking of appointing either Kris Kobach
or Ken Cuccinelli to a position of prominence (as an "
immigration czar "),
but this appears to have been another lie.
Trump's failure to deliver on his promises cannot be chalked up to congressional obstruction. Congress. As Kobach said in a recent
interview , "It's not like we're powerless and it's not like we have to wait for Congress to do something. . . . No, we can actually
solve the immediate crisis without Congress acting." Solving the border crisis would simply demand "leadership in the executive branch
willing to act decisively." Kobach recently outlined an intelligent
three-point plan that Trump could implement:
Publish the final version of the regulation that would supersede the Flores Settlement. The initial regulation was
published by the Department of Homeland
Security in September 2018. DHS could have published the final regulation in December. Inexplicably, DHS has dragged its feet. Finalizing
that regulation would allow the United States to detain entire families together, and it would stop illegal aliens from exploiting
children as get-out-of-jail free cards. Set up processing centers at the border to house the migrants and hold the hearings in one
place. The Department of Justice should deploy dozens of immigration judges to hear the asylum claims at the border without releasing
the migrants into the country. FEMA already owns
thousands of travel trailers and mobile homes that it has used to address past hurricane disasters. Instead of selling them (which
FEMA is currently doing), FEMA should ship them to the processing centers to provide comfortable housing for the migrants. In addition,
a fleet of passenger planes should deployed to the processing centers. Anyone who fails in his or her asylum claim, or who is not
seeking asylum and is inadmissible, should be flown home immediately. It would be possible to fly most migrants home within a few
weeks of their arrival. Word would get out quickly in their home countries that entry into the United States is not as easy as advertised.
The incentive to join future caravans would dissipate quickly. Publish a proposed Treasury regulation that prohibits the sending
home of remittances by people who cannot document lawful presence in the United States. This will hit Mexico in the pocketbook: Mexico
typically brings in well over $20 billion a year in
remittances , raking in
more than $26 billion in 2017. Then, tell the government of Mexico that we will finalize the Treasury regulation unless they do two
things to help us address the border crisis: (1) Mexico immediately signs a "safe third country agreement" similar to our agreement
with Canada. This would require asylum applicants to file their asylum application in the first safe country they set foot in (so
applicants in the caravans from Central America would have to seek asylum in Mexico, rather than Canada); and (2) Mexico chips in
$5 billion to help us build the wall. The threat of ending remittances from illegal aliens is a far more powerful one than threatening
to close the border. Ending such remittances doesn't hurt the U.S. economy; indeed, it helps the economy by making it more likely
that such capital will be spent and circulate in our own country. We can follow through easily if Mexico doesn't cooperate.
It would not be all that difficult for Trump to implement these proposals. Kobach still has faith in Trump, but his assessment
of him appears increasingly to be too generous. It is hard to escape the conclusion that Trump is not actually interested in
curbing immigration and reversing America's demographic decline. He is a con artist and a coward who is willing to betray millions
of white Americans so that he can remain in the good graces of establishment neoconservatives . At the same time, he wants to
maintain the illusion that he cares about his base.
As Ann Coulter has put it, "He's like a waiter who compliments us for ordering the hamburger, but keeps bringing us fish.
The hamburger is our signature dish, juicy and grilled to perfection, you've made a brilliant choice . . . now here's your salmon.
"
Nearly everything Trump has done in the name of restricting immigration has turned out to be an empty gesture and mere theatrics:
threatening to close the border, offering protections to "Dreamers" in exchange for funding for the ever-elusive wall, threatening
to end the "anchor baby" phenomenon with an executive order (which never came to pass), cutting off aid to Central American countries,
claiming that he will appoint an "immigration czar" (and then proceeding to appoint McAleenan instead of Kobach as DHS secretary),
and on and on.
While Trump has failed to keep the promises that got him elected, he has fulfilled a number of major promises that he made to
Israel and the Jewish community.
First, he moved the American embassy from Tel Aviv to Jerusalem. Trump claimed that the move would only cost $200,000, but in
reality it will end up being more than
$20 million . The construction
of the embassy also led to a series of bloody protests; it is located in East Jerusalem, which is generally acknowledged to be Palestinian
territory.
Second, he pulled the US out of the Iran nuclear deal. Netanyahu
claimed on Israeli TV that Israel was responsible for convincing him to exit the deal and reimpose sanctions on Iran. (Both Trump
and Netanyahu falsely alleged that Iran lied about the extent of its nuclear program; meanwhile, Israel's large arsenal of chemical
and biological weapons has escaped mention.) Third, he put an end to American funding for Palestinians. This coincided with the
passing of a
bill that codified a $38 billion, ten-year foreign aid package for Israel. Trump also authorized an act allocating an additional
$550 million toward US-Israel missile and tunnel defense cooperation.
Fourth, he recognized Israel's sovereignty over the Golan Heights (in defiance of the rest of the world, which recognizes the
Golan Heights as Syrian territory under Israeli occupation). Trump's Golan Heights proclamation was issued on March 21 and was celebrated
by Israel. Trump's track record on Israel shows that he is capable of exercising agency and getting things done. But he has failed
to address the most pressing issue that America currently faces: mass immigration and the displacement of white Americans. The most
credible explanation for his incompetence is that he has no intention of delivering on his promises. There is no "Plan," no 4-D chess
game. The sooner white Americans realize this, the better.
If you haven't picked up a copy of Vicky Ward's book, Kushner, Inc.: Greed. Ambition. Corruption. The Extraordinary Story
of Jared Kushner and Ivanka Trump , you really should.
I haven't read Mr. Graham's essay yet, but I thought those two links would fit in nicely. I stay in a low boil, like it is,
and having plodded through both those reviews, I can't stand reading too much on this topic at once.
Something's gotta give. Or are the brainless goy just going to let themselves be led off a cliff?
Oh, yes. There's an interview with Ward on
BookTV .
Yep. Trump's a lying POS pond scum like the rest of the DC swamp that he said he was going to drain, turns out he is one of them
all along. We elected America's first Jewish president, nothing more. He needs to change his campaign slogan to MIGA, Make Israel
Great Again, that was the plan of his handlers all along.
What I want to know is, who are those idiots who still keep showing up at his rallies? Are they really that dumb?
Even Sanders came out and said we can't have open borders. I've also heard him said back in 2015 that the H1b visa program
is a replacement program for American workers. If he grows a pair and reverts back to that stance, teams up with Tulsi Gabbard,
I'll vote for them 2020. Fuck Trump! Time for him and his whole treasonous rat family to move to Israel where they belong.
His "implicitly white" supporters would have abandoned him in droves, not wanting to be associated with a racist, thus pointing
up the weakness of implicit whiteness as a survival strategy. And is it actually a survival strategy? A closer look at it makes
me think it's more of a racial self-extermination strategy. After all, what kind of a survival strategy is it that can't even
admit its goals to itself? And it's exactly this refusal of whites to explicitly state that they collectively want to continue
to exist as a race that is the greatest impediment to their doing so. It's an interesting problem with no easy solution. How
do you restore the will to live to a race that seems to have lost it? And not only lost its will to live, but actually prides
itself on doing so? Accordingly, this "betrayal" isn't a betrayal at all. It's what American whites voted for and want. Giving
their country away and accepting their own demographic demise is proof of their virtue; proof of their Christian love for all
mankind.
You are definitely onto something here.
Still, I feel it's not that deep and complicated. It could be that they simply don't believe that the danger is closing in.
Boils down to wrong judgment. People who haven't had the need to think hard about serious things tend to develop that weakness.
I guess that boils down to "good times make weak men."
Hard times are coming and they'll make hard men.
The catch is simple: will be enough of them in time ?
Switching to the Democrats is no solution. The DNC has proven itself to be a criminal organization through sabotaging Sander's
campaign and then being instrumental in creating Russophobia, in collusion with Obama, the CIA, the FBI, and the DoJ. The DNC
has rules in place stating that super delegates – elitists aligned with the DNC – can vote if one nominee does not win on the
first ballot at the National Convention.
Because we have a HUGE number of hats in the Democratic ring, the chances that the nomination
will not be decided on a first vote are extremely high, with the result being that the Democratic nominee is not going to be decided
by voters in the primaries but by super delegates, i.e., the elitists and plutocrats.
Democracy exists when we vote to support
candidates chosen by the elites for the elites; when we stop doing that, the elites turn on democracy. It is a sham; we will have
a choice in 2020: between Pepsi and Coke. You are free to choose which one you prefer, because you live in a democracy. For more
on the rigging of the democratic primaries for 2020, see
"... We can, however, demand reserve transparency in our own country and that we are NOT getting. In essence the lies being said about "economically" recoverable shale oil reserves in America are way bigger whoppers than any lies the Middle East has ever told. ..."
"... U.S. shale drillers have run into a series of problems that have resulted in increased scrutiny on their operations. The difficulties span their operations – production issues, poor financials and less love from Wall Street. ..."
"... Even as WTI has moved solidly above $60 per barrel, the U.S. shale industry is trying to find ways to right the ship. As Reuters reports, a series of drillers, even prominent ones, are laying off workers. Pioneer Natural Resources – often held up as one of the better of the bunch – and Laredo Petroleum announced just this week that they will be cutting staff. As Jennifer Hiller of Reuters points out, Pioneer has not laid off workers since 1998. ..."
"... In March, Devon Energy eliminated 200 jobs. ..."
"... According to a report from Tudor, Pickering, Holt & Co., the recent layoffs may not be the end of the story. Everyone should expect more job cuts "over the coming quarters as companies address right-sizing the corporate cost structures," the firm said in its report. ..."
Hello Dennis. Have you ever really thought about why the Saudi's would keep their
production info as a state secret? I think it has much less to do about quotas than maintaining
the status quo of a country and society much different than our western norms.
I have guessed their remaining reserves around 80 gb before, and still believe its in that
area. Of course ANYONE without actual production and reservoir info is also guessing whether
they are economists, engineers, geologists, or whoever.
If my guess is correct, we will see KSA production declining on a accelerating rate within a
few years. Kuwait will not be far behind. North American shale will likely be topped out by
then. Gee, that might be post peak.
I hope they have more recoverable oil than my guess, because its going to be a difficult
transition.
Mr. Patterson, thanks for the article. You have defended it quite well, this in spite of
Dennis Coyne's constant interjections.
Estimating remaining reserves from mature fields is not difficult from an engineering
standpoint and how one tinkers with known reservoirs in that field (stuffing gas back into
them, HZ laterals above O/W contacts, etc.) does not magically create "new" reserves, it
simply speeds up the rate of extraction (arrests natural decline rates). The Saudis lie about
their sovereign wealth and it's their right to lie, I suppose; all we can do is try to
outsmart them, as you have. America cannot control the Saudi's, regardless of tweets.
We can, however, demand reserve transparency in our own country and that we are NOT
getting. In essence the lies being said about "economically" recoverable shale oil reserves
in America are way bigger whoppers than any lies the Middle East has ever told.
Mike, thanks for the kind words. I am quite used to Dennis' interjections. They don't bother
me. In fact, I enjoy the dialogue with him. It keeps me on my toes.
I can feel the tide turning concerning peak oil. I think OPEC peaked in 2016, politically
suppressed production notwithstanding. However, the bigger surprise may be right here in the
good old USA. The shale bubble could be bursting a lot sooner than a lot of people think.
U.S. shale drillers have run into a series of problems that have resulted in increased
scrutiny on their operations. The difficulties span their operations – production
issues, poor financials and less love from Wall Street.
Even as WTI has moved solidly above $60 per barrel, the U.S. shale industry is trying
to find ways to right the ship. As Reuters reports, a series of drillers, even prominent
ones, are laying off workers. Pioneer Natural Resources – often held up as one of the
better of the bunch – and Laredo Petroleum announced just this week that they will be
cutting staff. As Jennifer Hiller of Reuters points out, Pioneer has not laid off workers
since 1998.
In March, Devon Energy eliminated 200 jobs.
According to a report from Tudor, Pickering, Holt & Co., the recent layoffs may not
be the end of the story. Everyone should expect more job cuts "over the coming quarters as
companies address right-sizing the corporate cost structures," the firm said in its
report.
Nevertheless, the EIA still expects the boom to continue for years and years. We shall
see.
Nice summary, Ron. Brought to mind the old Oil Drum days. Thanks for taking the time to
provide this information. Given the admittedly not high-confidence prognostications in
Saudi/world oil production, it looks to me like the global economy may be in for at least one
serious oil shock in the 2020s.
"... add to that the usual woes of increasing internal oil consumption (3 mbd and rising fast) and the need to try and build their way out of their demise (requiring more oil and money), and the usual predictions of the 'export land model' look very reasonable, and disastrous for the House of Saud. There will be a tapered end, but the potential for acute instability in production and the in political and social environments of the country within the next decade is real. ..."
A great article that offers a more realistic view of the very old giant oil fields. It is
very obvious that what they are doing to maintain production will result in a more rapid
decline in the future. When that happens KSA will be in a lot of hurt, and the world will
have an abrupt awakening.
So my simple math says: 256 URR was to last 53 years, 74 URR at the same production rate will
last 15 years. Seneca with a vengeance! Rite? EOLAWKI here we come!
add to that the usual woes of increasing internal oil consumption (3 mbd and rising fast)
and the need to try and build their way out of their demise (requiring more oil and money),
and the usual predictions of the 'export land model' look very reasonable, and disastrous for
the House of Saud. There will be a tapered end, but the potential for acute instability in
production and the in political and social environments of the country within the next decade
is real.
"... Oil consumption has been increasing in all sectors and the growing global economy will require more oil in industry. You seem to think oil is just used in transportation. NOT true. ..."
"... Imagine oil production peaked today. In order for aviation to continue to grow, along with other industries that use oil. How many of the 98 million vehicles sold this year would need to be electric cars? How many electric motorcycles would have to be sold? ..."
"... I believe a Seneca cliff scenario would be a catastrophic one hence the reaction to such a scenario would also be catastrophic. ..."
"... World demand is currently over 100 mb/day, while production is at about 99 mb/day. Does that mean we are using up the already produced reserves? ..."
At some point the Seneca Cliff will be hit. If they are doing all this advanced recovery to to keep flow rates up then fields
will probably hit a wall and crash rather than slow decline. Is my thinking correct on that? Karen
Oil consumption has been increasing in all sectors and the growing global economy will require more oil in industry. You seem
to think oil is just used in transportation. NOT true.
Imagine oil production peaked today. In order for aviation to continue to grow, along with other industries that use oil. How many of the 98 million vehicles sold
this year would need to be electric cars? How many electric motorcycles would have to be sold?
The Seneca cliff for World output requires heroic assumptions which are unlikely to be true in practice.
I strongly disagree with that assessment. I believe the probability of a Seneca cliff is increasing. I think oil extraction is an economic phenomena, not a geological phenomena. During economic expansion, a positive feedback loop is in place: oil extraction produces economic growth which encourages investment in oil extraction producing more economic growth. Once peak oil occurs, I anticipate that this feedback loop will go into reverse: decreased oil production will produce economic contraction which will discourage investment in oil extraction reducing extraction rates leading to economic collapse.
Without investment the IEA estimates that production would fall by 50% in 2025 and by 80% in 2040.
I actually think economic collapse is a great opportunity to introduce a new economic system. The one we have is not only unfair, it encourages environmental devastation.
David Graebner asks rhetorically how a theory such as neoclassic economics based on false hypotheses perdures. His answer is that you teach the biggest lies in the first year. That's why false preconceptions about the economy are so common. I think neoclassical economics chose the wrong mathematical tool to analyse the economy, they chose optimisation. I don't see anything optimal in the economy, I think differential systems would be a much more appropriate mathematical tool with which to analyse the economy, keeping track of money flows.
I assume a Seneca cliff scenario would imply rapid economic collapse, as a result i think there will be war over resources.
Between which countries i don't know, but i assume U.S will go to war with Russia and or China, via direct war or proxy wars in
regions were the countries national security depends on specific resources. So the middle east would as usual be a key area of
conflict.
I believe a Seneca cliff scenario would be a catastrophic one hence the reaction to such a scenario would also be catastrophic.
U.S will go to war with Russia and or China, via direct war or proxy wars in regions were the countries national security depends
on specific resources.
Perhaps! However modern warfare tends to be very energy intensive. It seems to me a rather safe bet that in a post peak oil
world, mostly running on renewables, it might be more likely that societies will be trying to conserve their energy resources
and not waste it on war.
But the verdict is not yet in, on whether or not humans are smarter than yeast!
It simply means we are using oil that is being stored, the so-called oil stocks, eventually as these are reduced, oil prices
start to rise and demand (consumption) decreases while supply (production) increases in response to the change in oil price.
Well, no, Ghawar is not declining at 2% per year. Ghawar did not start declining in 2004. And
the southern two fields are not declining at all. The northern three fields reached their
Seneca Cliff somewhere around 2010 and began declining at several times 2%. They will decline
to near nothing in the next few years. Then Ghawar will have level production at somewhere
around 2 million barrels per day and hold that level for a decade or two.
Ghawar cannot possibly be adequately described as one field. It is five different fields
with five different decline and depletion rates.
When Saudi said, in 2006, that their average decline rate was down to almost 2%, that was
the average for all their fields. Some fields were declining at a much faster rate and some
fields were not declining at all. Khurais and Manifa were still to be ramped up. Those fields
had been in mothballs and would be brought back on line. Now they are likely not declining at
all but other fields are declining at a much faster rate than 2%.
But here is the important point. The depletion rate is another matter altogether. That
figure is likely above 8% per year.
Do you have production data for the various fields from 2006 to 2018?
Dennis, you know better than ask such a silly question. Saudi production of individual
fields is a closely guarded secret.
Dennis, have you ever wondered why the Saudis keep all this data such a secret? Why don't
they just let the actual data known to the world? What was the production data from Safaniya
in 2018? Or what was the production data from Manifa in 2018? Or what was the production data
from Khurais in 2018, or from Berri, or from all their other fields? And how did that compare
to the production in 2017, or 2016?
Dennis, we don't know shit about any of this. We don't know because it is a closely
guarded secret. Why, Dennis, Why?
They know Dennis, they know and they don't want you to know. Why?
I know why Dennis. Because what they actually report, which is almost nothing, is a lie.
You simply choose to believe it. I do not. I choose to believe the analysis who try to figure
out why they are lying. You choose to simply believe the Saudis.
Dennis, the idea that Saudi Arabia has 266 billion barrels of reserves is preposterous
beyond belief. Even the Saudis realize that now are trying to slowly reduce that figure. Yet
some people, like you, Robert Rapier and Michael Lynch, seemed perfectly ready to believe
such an absurd figure. That just floored me. Goddammit, have some people gone insane?
Okay, I have said my peace here and showed my ignorance as to what Saudi Arabia actually
can produce for the next 50 years. But you know, it is what they say they can produce.
You believe them. I don't. And neither of us can prove our case. And there it must rest
until the actual production data comes in next year and next year and ..
When this is true, that's the reason China is pushing electric travel as hard as they
can.
They have more possibilites to know the truth (secret service) than we reading reports.
And with SA and Russia having only round about 80 GB left, and producing each round about 10
mbpd, there are not many years left before a major oil incident.
I wonder why oil prices are that stable at the moment. Oil production fell hard this year
so far, down everywhere except USA. And there the growth is decelerated.
And demand is still climbing, it will use up all the US growth projected by the optimistic
EIA.
A 500 kbpd decline from OPEC is not included here, they still calculate with an increase from
opec.
Last question: Where is Russia standing at the moment?
"... Saudi Arabia, in 2018 produced approximately 3.76 billion barrels of crude only. Their BOE produced was approximately 4.75 billion barrels. That would account for the revenue is they sold every barrel of it. But they consumed a lot themselves. So other than that I have no explanation. Do they count their own consumption as revenue? ..."
In the bond prospectus SA revealed their financials. Puzzling to me was the claim of
revenue of $356 billion.
Why puzzling?
Because Brent averaged ~$75/bbl in 2018. Divide $356 by $75 and you come up with 4.75
Gbbl, which when we divide by 365 days in a year, we get 13 million barrels per day
production.
???
I can't get their numbers to work. Even with a 10% premium on their grades of crude
(generous), that leaves 11.7 mbd of production . I can't get anything to line up here.
They also produce NGL and natural gas, in 2016 it was about 1.94 Mb/d or 708 MMb of NGL, I
have no idea what the average selling price is for NGL on World markets, it would depend on
the mix of NGL of course.
Saudi Arabia, in 2018 produced approximately 3.76 billion barrels of crude only. Their BOE
produced was approximately 4.75 billion barrels. That would account for the revenue is they
sold every barrel of it. But they consumed a lot themselves. So other than that I have no
explanation. Do they count their own consumption as revenue?
EIA's projections can be taken with a grain of salt. What is happening in the US shale is
becoming more apparent. Exxon and Chevron plan to gear up to supply the new additions that
they will supply to their new refinery additions that will accept LTO. However, I do not see
them in a massive growth campaign that will increase exports.
That leaves the independents who are very much under the gun to fix financials per
investors, investments firms, and the press.
I read EOG's fourth quarter discussion with the public, which was cut short due to
repetitive questions on whether EOG will increase dividends.
Prices will probably rise, but I don't expect much growth, this year, from the majority of
the producers, which are the independents.
At least, for this year. As the years go by, more will be gobbled up by the majors, thus
providing more limits in growth.
Money quote: "The Russian collusion investigation was based solely on the dodgy Steele Dossier that was discredited here from
the get-go. This was a product of British Intelligence Community. The intent was to keep and then to get Donald Trump out of the White
House. It failed but they did succeed in turning him into a neo-lib-con fellow traveler. There are clear parallels between the end stages
of the Soviet Union and the American Empire. My take since the Iraq Invasion is that they are insane. The ruling elite is detached from
reality, incompetent and arrogant. Sooner or later someone with their facilities still intact will lead a middle-class revolt against
the global plutocracy to restore democracy and reverse the rising inequality. We were lucky that the fall of the Soviet Union did not
lead to a nuclear war. The next time a nuclear armed Empire crashes we may not be so fortunate."
Notable quotes:
"... Among interesting dates, it appears that Stefan Halper was already trying to reach out to Lokhova in January-February 2016 – a lot earlier than his approaches to Papadopoulo s and Page. This was done through Professor Christopher Andrew, co-convenor with Halper and the former MI6 had Sir Richard Dearlove of the ‘Cambridge Intelligence Seminar.’ ..."
"... Meanwhile, Lokhova has set up a blog on which she has posted a some interesting relevant material, with perhaps more to come. It is very well worth a look.(See https://www.russiagate.co.uk .) ..."
"... Of particular interest, to my mind, is the full text of her – unpublished – May 2017 interview with the ‘New York Times.’ This points us back to is the fact – of which Lokhova shows no signs of awareness – that the idea that the Western powers and the Russians might have a common interest in fighting jihadist terrorism has been absolute anathema to many key figures on both sides of the Atlantic, with Dearlove certainly among them. ..."
"... ‘AN APOLOGY: Yesterday, I compared @nytimes journalists, who smeared @GenFlynn and accused me of being a Russian spy, to cockroaches. In good conscience, I must apologize to the cockroaches for the distress caused to them for being compared to @nytimes #Russiagate hoaxers. Sorry!’ ..."
"... The centerpiece of this is a proposal submitted to the FCO in August last year by what seems to be essentially the same consortium whose existence as a government contractor has now been made public. The ‘Institute for Statecraft’ has vanished, and one consortium member, ‘Aktis Strategy’, has gone into liquidation. But other key members are the same. ..."
"... A central underlying premise is that if anyone has any doubts as to whether the ‘White Helmets’ are a benevolent humanitarian organisation, or the Russians were responsible for the poisoning of the Skripals or the shooting down of MH17, the only possible explanation is that their minds have been poisoned by disinformation. ..."
"... In fact, what is at issue an ambitious project to co-ordinate and strengthen a very large number of organisations in different countries which are committed to a relentlessly Russophobic line on everything. (The possibility that it might not be very bright to push Russia into the arms of China, the obviously rising power, does not seem to have occurred to these people – perhaps they need less ons from Sir Halford Mackinder, or indeed Niccolò Machiavelli, on ‘statecraft.’) ..."
"... The clear close integration of other cyber people from the ‘Atlantic Council’ into Orwellian ‘information operations’ sponsored by the British Government simply puts these facts into sharp relief. ..."
"... There has to be a strong possible ‘prima facie’ case that anyone in authority prepared to accept the ‘digital forensics’ from ‘CrowdStrike’ is complicit in the conspiracy against the constitution, and/or the conspiracy to cover-up that conspiracy. This certainly goes for Comey, and I think it also goes for Mueller." ..."
"... I'd recommend for reading Alexei Yurchak's "Everything Was Forever, Until It was No More: The Last Soviet Generation." Its about a class of apparatchiks and bureaucrats and hangers on who spoke this arcane, abstract dogmatic language that anyone normal had long since given up trying to understand. It had long ceased to have any relevance or attachment to the lives lived by ordinary, increasingly suffering people, who started talking to each other in practical and direct language. ..."
"... The Russian collusion investigation was based solely on the dodgy Steele Dossier that was discredited here from the get-go. This was a product of British Intelligence Community. The intent was to keep and then to get Donald Trump out of the White House. It failed but they did succeed in turning him into a neo-lib-con fellow traveler. ..."
"... There are clear parallels between the end stages of the Soviet Union and the American Empire. My take since the Iraq Invasion is that they are insane. The ruling elite is detached from reality, incompetent and arrogant. Sooner or later someone with their facilities still intact will lead a middle-class revolt against the global plutocracy to restore democracy and reverse the rising inequality. We were lucky that the fall of the Soviet Union did not lead to a nuclear war. The next time a nuclear armed Empire crashes we may not be so fortunate. ..."
"Dan, Thanks for the reference, which I will follow up. Unfortunately, although Bongino has produced a lot of extremely valuable
material, a lot of it is buried in the 'postcasts', searching through which is harder than with printed materials. It would greatly
help if there were transcripts, but of course those cost money.
I am still trying to fit the exploding mass of information which has been coming out into a coherent timeline. Part of the
problem is that there is so much appearing in so many different places. In addition to trying to think through the implications
of the information in this post and the subsequent exchanges of comments, I have been trying to make sense of evidence coming
out about the British end of the conspiracy.
An important development here has been rather well covered by Chuck Ross, in a recent ‘Daily Caller’ piece headlined ‘Cambridge
Academic Reflects On Interactions With 'Spygate’ Figure’ and one on ‘Fox’ by Catherine Herridge and Cyd Upson, entitled ‘Russian
academic linked to Flynn denies being spy, says her past contact was “used” to smear him.’ However, the evidence involved has ramifications
which they cannot be expected to understand, as yet at least.
At issue is the attempt to use the – apparently casual – encounter between Lieutenant-General Flynn and Svetlana Lokhova at a
dinner in Cambridge (U.K.) in February 2016 to smear him by, among other things, portraying her as some kind of ‘Mata Hari’ figure.
Among interesting dates, it appears that Stefan Halper was already trying to reach out to Lokhova in January-February 2016
– a lot earlier than his approaches to Papadopoulo s and Page. This was done through Professor Christopher Andrew, co-convenor with
Halper and the former MI6 had Sir Richard Dearlove of the ‘Cambridge Intelligence Seminar.’
This suggests that this was not simply a case Halper acting on his own. It also I think brings us back to the central importance
of Flynn’s visit to Moscow in December 2015.
Meanwhile, Lokhova has set up a blog on which she has posted a some interesting relevant material, with perhaps more to come.
It is very well worth a look.(See https://www.russiagate.co.uk
.)
Of particular interest, to my mind, is the full text of her – unpublished – May 2017 interview with the ‘New York Times.’ This
points us back to is the fact – of which Lokhova shows no signs of awareness – that the idea that the Western powers and the Russians
might have a common interest in fighting jihadist terrorism has been absolute anathema to many key figures on both sides of the Atlantic,
with Dearlove certainly among them.
Some of Lokhova’s comments on ‘twitter’ are extremely entertaining. An example, with which I have much sympathy:
‘AN APOLOGY: Yesterday, I compared @nytimes journalists, who smeared @GenFlynn and accused me of being a Russian spy, to
cockroaches. In good conscience, I must apologize to the cockroaches for the distress caused to them for being compared to @nytimes
#Russiagate hoaxers. Sorry!’
Meanwhile, another interesting recent ‘tweet’ comes from Eliot Higgins, of ‘Bellingcat’ fame. He is known to some skeptics as
‘the couch potato’ – perhaps he should be rechristened ‘king cockroach.’ It reads:
‘Looking forward to gettin g things rolling with the Open Information Partnership, with @bellingcat, @MDI_UK, @DFRLab, and @This_Is_Zinc
https://www.openinformation...’
There is an interesting ‘backstory’ to this. The announcement of an FCO-supported ‘Open Information Partnership of European Non-Governmental
Organisations, charities, academics, think-tanks and journalists’, supposedly to counter ‘disinformation’ from Russia, came in a
written answer from the Minister of State, Sir Alan Duncan, on 3 April.
In turn this followed the latest in a series of releases of material either leaked or hacked from the organisations calling themselves
‘Institute for Statecraft’ and ‘Integrity Initiative’ by the group calling themselves ‘Anonymous’ on 25 March.
The centerpiece of this is a proposal submitted to the FCO in August last year by what seems to be essentially the same consortium
whose existence as a government contractor has now been made public. The ‘Institute for Statecraft’ has vanished, and one consortium
member, ‘Aktis Strategy’, has gone into liquidation. But other key members are the same.
A central underlying premise is that if anyone has any doubts as to whether the ‘White Helmets’ are a benevolent humanitarian
organisation, or the Russians were responsible for the poisoning of the Skripals or the shooting down of MH17, the only possible
explanation is that their minds have been poisoned by disinformation.
An interesting paragraph reads as follows:
‘An expanded research component could generate better understanding of the drivers (psychological, sociopolitical, cultural
and environmental) of those who are susceptible to disinformation. This will allow us to map vulnerable audiences, and build scenario
planning models to test the efficiency of different activities to build resilience of those populations over time.’
They have not yet got to the point of recommending psychiatic treatment for ‘dissidents’, but these are still early days. The
‘Sovietisation’ of Western life proceeds apace.
In fact, what is at issue an ambitious project to co-ordinate and strengthen a very large number of organisations in different
countries which are committed to a relentlessly Russophobic line on everything. (The possibility that it might not be very bright
to push Russia into the arms of China, the obviously rising power, does not seem to have occurred to these people – perhaps they
need less ons from Sir Halford Mackinder, or indeed Niccolò Machiavelli, on ‘statecraft.’)
Study of the proposal hacked/leaked by ‘Anonymous’ bring out both the ‘boondoggle’ element – there is a lot of state funding available
for people happy to play these games – and also the strong transatlantic links.
A particularly significant presence, here, is the ‘DFRLab’. This is the ‘Digital Forensic Research Lab’ at the ‘Atlantic Council’,
where Eliot Higgins is a ‘nonresident senior fellow.’ The same organisation has a ‘Cyber Statecraft Initiative’ where Dmitri Alperovitch
is a ‘nonresident senior fellow.’
It cannot be repeated often enough that it is difficult to see any conceivable excuse for the FBI to fail to secure access to
the DNC servers. One would normally moreover expect that, on an issue of this sensitivity, they would have the ‘digital forensics’
done by their own people.
There can be no conceivable excuse for relying on a contractor selected by the organisation which is claiming that there has been
a hack, when an alternative possibility is a leak: and the implications of the alternative possibility could be devastating for that
organisation.
To rely on a contractor linked to the notoriously Russophobic ‘Atlantic Council’ is even more preposterous.
The clear close integration of other cyber people from the ‘Atlantic Council’ into Orwellian ‘information operations’ sponsored
by the British Government simply puts these facts into sharp relief.
There has to be a strong possible ‘prima facie’ case that anyone in authority prepared to accept the ‘digital forensics’ from
‘CrowdStrike’ is complicit in the conspiracy against the constitution, and/or the conspiracy to cover-up that conspiracy. This certainly
goes for Comey, and I think it also goes for Mueller."
OT but related, just watched a former naval Intelligence officer, now working for the Hoover Institute interviewed on FOX about
the Rooshins in Venezuela. Said, the 100 Russians are there to protect Maduro because he cannot trust his own army. Maduro's days
are numbered because he is toxically unpopular.
Got me thinking, our Intelligence services are good at psy-ops and keeping our gullible MSM in line but God help us if we ever
actually needed real Intelligence about a country. I remember about a month ago how all of these 'Think Tank Guys' were predicting
how the only people loyal to Maduro were a few of his crony Generals, that the rank and file military hated him and there were
going to be mass defections.
It didn't happen and we are all just supposed to forget that.
[not a socialist, don't have any love for Maduro, I just know that I will never learn anything of about Venezuela from these think
tank dudes, we are just getting groomed]
Venezuela isn't about "socialism," or even Maduro--it's about the oil. They have the largest proven reserves in the world, though
much of it is non-conventional and would need a ton of investment to exploit. But it's their oil, not ours, and we have no right
to meddle in their internal affairs.
Venezuela is neither about socialism nor oil in my opinion. It is everything to do with the neocons. And Trump buying into their
hegemonic dreams. Notice the resurrection of Elliott Abrams of Iran-Contra fame as the man spearheading this in a triumvirate
with Bolton & Pompeo. IMO, a perfect foil for Putin & Xi to embroil the US in another regime change quagmire that further weakens
the US.
"There can be no conceivable excuse for relying on a contractor selected by the organisation which is claiming that there has
been a hack, when an alternative possibility is a leak: and the implications of the alternative possibility could be devastating
for that organisation.
To rely on a contractor linked to the notoriously Russophobic 'Atlantic Council' is even more preposterous."
True; and true. It is also true that the Clinton e-mail investigation was faux, a limp caricature of what an investigation
would look like when it is designed to uncover the truth. Allowing a subject's law firm to review the subject's e-mails from when
she was in government for relevancy is beyond preposterous. An investigation conducted in the normal way by apolitical Agents
in a field office would not walk away from a trove of evidence empty handed.
The inter-relatedness and overlapping of DoJ, CIA, and FBI personnel assigned to the Clinton e-mail case, the Russophobic nightmare
of a 'case' targeting Carter Page, and by extension, the Trump presidential campaign, and yes, the Mueller political op, all reek
of political bias and ineptitude followed by more political bias; and then culmination in a scorched earth investigation more
characteristic of something the STASI might have undertaken than American justice.
Early morning raids, gag orders, solitary confinements, show indictments that will never see adjudication in a court room - truly
unbelievable.
In your opinion was this surveillance, criminal & counter-intelligence investigation as well as information operations against
Trump centrally orchestrated or was it more reactive & decentralized?
There are so many facets. Fusion GPS & Nellie Ohr with her previous CIA connection. Her husband Bruce at the DOJ stovepiping
the dossier to the FBI. Brennan and his EC. Clapper and his intelligence assessment. Halper, Mifsud, Steele along with Hannigan
and the MI6 + GCHQ connection. Downer and the Aussies. FISA warrants on Page & Papadopolous. The whole Strzok & Page texting.
Comey, Lynch & the Hillary exoneration. McCabe. Then all the Russians. And the media leaks to generate hysteria.
I'd recommend for reading Alexei Yurchak's "Everything Was Forever, Until It was No More: The Last Soviet Generation." Its
about a class of apparatchiks and bureaucrats and hangers on who spoke this arcane, abstract dogmatic language that anyone normal
had long since given up trying to understand. It had long ceased to have any relevance or attachment to the lives lived by ordinary,
increasingly suffering people, who started talking to each other in practical and direct language.
And yet the chatterati
continued to chatter and invent ludicrously unreal worlds and analyses of the actual world they lived in until... bang... it was
no more.
I'd skip the first few chapters which are full of impenetrable marxist jargon.
The Russian collusion investigation was based solely on the dodgy Steele Dossier that was discredited here from the get-go.
This was a product of British Intelligence Community. The intent was to keep and then to get Donald Trump out of the White House.
It failed but they did succeed in turning him into a neo-lib-con fellow traveler.
There are clear parallels between the end stages of the Soviet Union and the American Empire. My take since the Iraq Invasion
is that they are insane. The ruling elite is detached from reality, incompetent and arrogant. Sooner or later someone with their
facilities still intact will lead a middle-class revolt against the global plutocracy to restore democracy and reverse the rising
inequality. We were lucky that the fall of the Soviet Union did not lead to a nuclear war. The next time a nuclear armed Empire
crashes we may not be so fortunate.
The decline is likely to be less steep than the increase
Have you heard about a Seneca cliff? It is called that way because Seneca in his letter
number 91 to Lucillius (Epistulae Morales ad Lucilium), written towards the end of the year
AD 64, a year before he died, refers to the fire that destroyed Lugdunum (Lyon) the summer of
that year in the following terms:
It would be some consolation for the feebleness of our selves and our works, if all
things should perish as slowly as they come into being; but as it is, increases are of
sluggish growth, but the way to ruin is rapid.
It appears he knew almost two thousand years ago what you don't.
I expect that a long slow declining tail of production will have some abrupt
jolts downward along the way, and end up lower quicker as a result.
The jolts downward will come as producing countries become failed states and the chaos
disrupts operations.
For examples of how this comes to be, just look at the past 5 yrs of Venez and Libya as
examples. Sure they may pick back up at some point, but overall effect is diminished global
production, well below a theoretically well managed industry.
Secondly, (and likely a smaller effect) some deposits will likely be kept in the ground
because of choices some cultures make. For example, I could see the USA deciding to keep its
large remaining coal deposits largely in the ground after 2030. Canada could decide to put a
big constraint on oil sand production, keeping just enough for domestic use, if they so
desired.
Why you think such scenario is so improbable?
Venezuela is living a Seneca cliff in its oil production right now. Did anybody predicted it
before it took place?
We have no idea of what will happen after Peak Oil. Some people assume nothing, while
others think it will be the end of our civilization. Somewhere in between probably. But I
fail to see how the economy can take it well if for most applications we can't substitute
oil. The globalization is run on oil and its derivatives.
Your assumptions can only be valid at this side of the peak. If you think otherwise you
fool yourself.
"... "If the bully gets close, I'll punch the bully in the mouth," Rosselló said when asked about a tense meeting Wednesday between members of the Trump administration and Puerto Rican officials. "It would be a mistake to confuse courtesy with [lack of] courage." ..."
Puerto Rico Gov. Ricardo Rosselló is through playing nice with President Trump.
After months of soft-pedaling his criticism of the president as Puerto Rico struggles to
recover from Hurricane Maria in 2017, Rosselló voiced his frustration with the White
House in a Thursday interview
with CNN .
"If the bully gets close, I'll punch the bully in the mouth," Rosselló said when
asked about a tense meeting Wednesday between members of the Trump administration and Puerto
Rican officials. "It would be a mistake to confuse courtesy with [lack of] courage."
Part of the problem may be that the American oligarchy is now believing its own bullshit,
or put another way, has descended into decadence.
The United States has morphed stories many times - from a land of opportunity via theft from
Natives/occupying new land, to jobs and growth opportunities via the Industrial Revolution,
to economic prosperity through rebuilding other nations torn apart by war.
Under these lenses - particularly the last one - the Ukraine, Libya, Syria and other "freedom
and nation building" exercises make sense.
The problem is that it is still unclear that the other major nations are willing to get
themselves into another major war with each other - from which the US can sell into, both
during and after.
Another way to look at it is the Dr. Michael Hudson model: that any economy which permits
interest bearing debt to, by natural law, greatly exceed organic economic capability to repay
and is thus doomed to cataclysm - the increase of the FIRE sector (Finance, Insurance and
Real Estate) from 12% in the 80s to well over 40%, maybe 50% or 60% today, would be a good
indicator.
Under the Dr. Michael Hudson model - the "western" tradition is the abolishing of the debt
jubilee, replaced by the Roman looting of foreign lands model.
Note that the debt jubilee model can still work: a 100% or 150% inflation over a 1-3 year
period would do it, accompanied and followed by policies which restrain FIRE going forward.
However, the unwillingness of the oligarchy to accept/understand/implement is very clear.
Interesting times.
Since the 1971 floating of the US dollar onto the global markets, and 1973 creation of the
Petro dollar, the world has experienced a consistent collapse of productive manufacturing jobs,
infrastructure investment, long term planning on the one hand and a simultaneous increase of
de-regulation, short term speculation, financial services, and low wage retail jobs. During
this post 1971 process of decline, debt slavery became a norm both in developed countries and
developing sector nations alike, while outsourcing caused the castration of national
sovereignty and an ever greater reliance on "cheap labor" and "cheap resources" from abroad. It
was even called the
"controlled disintegration" policy of Federal Reserve Chairman Paul Volcker in 1978 as he
was preparing to raise interest rates to levels that made it impossible for a majority of small
and medium agro-industrial enterprises to compete against corporate monoliths. The most
concrete model of this collapse was unveiled to the world in 1996 by the late American
economist Lyndon LaRouche known as the Triple Curve Collapse Function.
Some have called this collapse "a failure of globalization". Executive Intelligence Review's
Dennis Small has
repeatedly stated over many years that this is characterization is false. Globalization
should rather be seen as a complete success- in that when looked at from a top down
perspective, it becomes increasingly clear that the architects of this policy achieved exactly
what they set out to do. That intention was to impose an artificial closed/zero-sum game
paradigm upon a species whose distinguishing characteristic is its creative reason and capacity
constantly grow and self-perfect both on the surface of the earth and beyond. A primary figure
in the oligarchy's tool box of sociopathic agents who shaped this program for depopulation and
zero sum thinking over the years is a Canadian-born operative by the name of Maurice Strong.
Although having died in 2015, Strong's life and legacy are worth revisiting as it provides the
modern reader a powerful, albeit ugly insight into the methods and actions of the British-Deep
State agenda that so mis-shaped world history through the latter half of the 20 th
century.
While this exercise will have value for all truth seekers, this story should carry
additional weight for Canadians currently witnessing
their own government collapsing under the weight of the contradictions built into a system
which Strong led in shaping (i.e.: the need for nuclear and industrial productive potential
embodied by SNC Lavalin and the obedience to a "green" post-industrial paradigm antagonistic to
such productive capacity).
Journalist Elaine Dewar's groundbreaking 1994 book "Cloak of Green" which every
truth-seeker should read, dealt rigorously with Strong's role as a recruit of Rockefeller
assets in the 1950s, an oil baron, vice president of Power Corporation by 30, Liberal Party
controller, Privy Councilor, and founder of Canada's neo-colonial external aid policy towards
Africa which tied Africa into IMF debt slaves, we will focus here on the role Strong has played
since 1968 in subverting the anti-entropic potential of both his native Canada and the world at
large. It was through this post-1968 role that Strong performed his most valued work for the
genocidal agenda of his British masters who seek to reduce the world population to a "carrying capacity"
of less than a billion .
RIO and Global Governance
In 1992, Maurice Strong had been assigned to head the second Earth Summit (the first having
been the 1972 Stockholm Conference on the Human Environment also chaired by Strong). The Rio
Summit had established a new era in the consolidation of NGOs and corporations under the
genocidal green agenda of controlled starvation masquerading behind the dogma of
"sustainability'. This doctrine was formalized with Agenda 21 and the Earth
Charter , which Strong co-authored with his collaborated Jim Macneil during the 1990s. At
the opening of the Rio Summit, Strong announced that industrialized countries had "developed
and benefited from the unsustainable patterns of production and consumption which have produced
our present dilemma. It is clear that current lifestyles and consumption patterns of the
affluent middle class, involving high meat intake, consumption of large amounts of frozen and
convenience foods, use of fossil fuels, appliances, home and work-place air-conditioning, and
suburban housing- are not sustainable. A shift is necessary toward lifestyles less geared to
environmentally damaging consumption patterns."
"The concept of national sovereignty has been an immutable, indeed sacred, principle of
international relations. It is a principle which will yield only slowly and reluctantly to the
new imperatives of global environmental cooperation. What is needed is recognition of the
reality that in so many fields, and this is particularly true of environmental issues, it is
simply not feasible for sovereignty to be exercised unilaterally by individual nation-states,
however powerful. The global community must be assured of environmental security."
Two years earlier, Strong gave an interview
wherein he described a "fiction book" he was fantasizing about writing which he described in
the following manner:
" What if a small group of world leaders were to conclude that the principal risk to the
Earth comes from the actions of the rich countries? And if the world is to survive, those rich
countries would have to sign an agreement reducing their impact on the environment. Will they
do it? The group's conclusion is 'no'. The rich countries won't do it. They won't change. So,
in order to save the planet, the group decides: Isn't the only hope for the planet that the
industrialized civilizations collapse? Isn't it our responsibility to bring that
about?"
When this statement is held up parallel to this man's peculiar life, we quickly come to see
that the barrier between reality and fiction is more than a little blurry.
The Destruction of Nuclear Power
It is vital to examine Strong's role in crippling Canada's potential to make use of nuclear
power, one of the greatest beacons of hope mankind has ever had to break out of the current
"fixed" boundaries to humanity's development. Indeed, the controlled use of the atom, along
with the necessary discovery of new universal principles associated with this endeavor, have
always represented one of the greatest strategic threats to the oligarchic system, which
depends on a closed system of fixed resources in order to both manage current populations and
justify global governance under "objective" frameworks of logic. Fission and fusion processes
exist on a level far beyond those fixed parameters that assume the earth's "carrying capacity"
is no greater than the 2 billion souls envisioned by today's London-centered oligarchy. If
mankind were to recognize his unique creative potential to continuously transcend his
limitations by discovering and creating new resources, no empire could long exist. With Canada
as the second nation to have civilian nuclear power, and a frontier science culture in physics
and chemistry, the need to destroy this potential in the mind of the British Deep State of
Canada was great indeed.
To get a better sense of the anti-nuclear role Strong has played in Canadian science policy,
we must actually go back once again to Strong's reign at the Department of External Aid in
1966.
Humanity's trend towards utilizing ever more dense forms of fire was always driven by a
commitment to scientific and technological progress. The realization that this process drives
the increase of human potential population density (both in quantity and quality of life) was
recognized at the turn of the 20th century and serves as the foundation for American economist
Lyndon LaRouche's method of economic forecasting. The graph above features American per capita
access to energy and the post-1975 sabotage of the expected transition to nuclear fission and
fusion
Technological Apartheid for Africa
A key reason that Strong had been brought into Canada's Civil Service to head up the
External Aid office in 1966 was to sabotage the international efforts leading scientists and
statesmen had achieved in making Canada an exporter of its original CANDU reactors. Since 1955,
leading patriots within Atomic Energy Canada Ltd. (AECL) and the National Research Council such
as C.D. Howe and his collaborator C.W. Mackenzie, ensured that the export of advanced nuclear
technology was made available to developing countries such as India and Pakistan. In Canada
this policy was advanced vigorously by Prime
Minister John Diefenbaker, who also saw atomic power as the key to world peace.
The banners under which this advanced technology transfer occurred were both the Columbo Plan and President
Dwight Eisenhower's
Atoms for Peace . This progressive approach to international development defined "external
aid" not around IMF conditionalities, or simply money for its own sake, but rather as the
transfer of the most advanced science and technology to poor countries with the explicit
intention that all nations would attain true sovereignty. This is the model that China has
adopted today under the
Belt and Road Initiative.
When Strong got to work in External Aid, and later formed the Canadian International
Development Agency, Canada's relationship to "LDCs" (lesser developed countries) became reduced
to advancing "appropriate technologies" under the framework of monetarism and a perverse form
of systems analysis. After JFK's assassination, a parallel operation was conducted in America's
USAid. No technology or advanced infrastructure policy necessary for the independence of former
colonies were permitted under this precursor to what later became known as "sustainability" and
"zero growth". Under Strong's influence, Canada's role became perverted into inducing LDCs to
become obedient to IMF/World Bank "conditionalities" and the reforms of their bureaucracies
demanded by the OECD in order to receive money. Both in Canada and in developing countries,
Strong was among the key agents who oversaw the implementation of the OECD's strategy of
"closed systems analysis" for national policy management.
Petrol and Pandas
In his role as President of Petro Canada (1976-78), Strong endorsed the national call to create a nuclear moratorium for
Canada which had been carried out by the Canadian Coalition for Nuclear Responsibility in
1977. This document not only demanded an immediate halt to the continuation of all reactors
then under construction, but also made the sophistical argument that more jobs could be created
if "ecologically friendly" energy sources and conservation methods were developed instead of
nuclear and fossil fuels. Strange desires coming from an oil executive, but not so strange
considering Strong's 1978-1981 role as Vice-President of the World Wildlife Fund (WWF), an
organization founded by the British and Dutch monarchies as a Royal Dutch Shell initiative in
1963. Strong was Vice President during the same interval that WWF co-founder Prince Philip was
its President.
In 1971, while still heading up the External Aid Department, Strong was a founding member of
the 1001 Club, which was an elite international organization created by Prince Bernhard of the
Netherlands created to finance the emerging green agenda for world governance. The 1001 Club
worked in tandem with Prince Bernhard's other secretive club known as the "Bilderberg Group"
which he founded in 1954. In this position, Strong helped to recruit 80 Canadian "initiates" to
this elite society otherwise known as "Strong's Kindergarten", the most prominent being Lord
Conrad Black, Barrick Gold's Peter Munk (1927-2018) and Permindex's late Sir Louis Mortimer
Bloomfield (1906-1984). As documented elsewhere, the latter was discovered to be at the heart
of the plot to
assassinate President John F. Kennedy by New Orleans District Attorney Jim Garrison.
Strong Decapitates Ontario Nuclear Energy
By 1992, Strong had completed his role heading the Rio Earth Summit in Brazil and had
returned to his native land to attempt to finalize the dismantling of Canada's nuclear program
in his new assignment as President of Ontario Hydro, a position he held from 1992 to 1995 under
the formal invitation of Bob Rae, then-NDP Premier of Ontario and brother of Power Corp.'s John
Rae. Bob Rae later served as the leader of the Liberal Party from 2011-2013 in preparation for
Justin Trudeau's appointment to become the party's new figurehead in April of 2013.
Strong was brought in to this position at the time that Ontario had the most ambitious
nuclear program in North America and was proving to be a thorn in the side of the zero-growth
agenda demanded by the British Empire. The completion of the massive Darlington system in
Ontario had demonstrated what successful long-term science planning could accomplish, although
the utility found itself running far over budget. The budgetary problems (which occurred during
a deep recession in 1992) were used by Strong to "restructure" the provincial energy
utility.
The "remedies" chosen by Strong to solve Ontario Hydro's financial woes involved immediately
canceling all new planned nuclear energy development, firing 8 of the 14 directors, and
downsizing the utility by laying off 14 000 employees, many of whom were the most specialized
and experienced nuclear technicians in Canada.
Before leaving his post in 1995 with the fall of Bob Rae's government, Strong ensured that
his work would continue with his replacement Jim MacNeill who headed Ontario Hydro from 1994 to
1997. MacNeill was co-architect of both the Earth Charter and the genocidal Agenda 21 during
the Rio Summit and a long time Deep State agent. Under MacNeill, Strong's mandate to
unnecessarily shut down eight reactors for refurbishment and one permanently was effected in
1997, while Ontario Hydro itself was broken up into three separate entities. With the
irreparable loss of specialized manpower and skills Strong and MacNeill left Ontario Hydro and
AECL mortally wounded for years to come.
Surprising all observers, AECL and the Ontario utilities were able to remobilize their
remaining forces to pull together the successful refurbishment of all reactors– the last
of which came back online in October 2012. While Canada's moratorium on nuclear power
continued, with SNC Lavelin's 2011 takeover, an approach for cooperation on international
nuclear construction in
partnership with China began in July 2014, much to Strong's chagrin.
Strong's Failed Attempt to Infiltrate China
For much of the 21 st century, Strong's talents were put to use in an attempt to
subvert the aspirations of Asian development, and of a Eurasian alliance formed around the
driving economic grand design of the emerging Belt and Road Initiative. Strong was deployed to
Beijing University where he acted as Honorary Professor and Chairman of its Environmental
Foundation and Chairman of the Advisory Board of the Institute for Research on Security and
Sustainability for Northwest Asia.
In the face of the meltdown of the Trans-Atlantic economy, the Chinese have successfully
resisted the Green New Deal agenda that demanded the submission of their national sovereignty
to the "New World Order" of zero-growth and depopulation. In spite of this pressure, a powerful
tradition of Confucianism and its commitment to progress has demonstrated its powerful
influence in the various branches of the Chinese establishment who see China's only hope for
survival located in its strategic partnership with Russia and long term mega projects to lift
its people out of poverty and into the 22nd Century. This was made fully clear when China
rejected the "special relationship" with Canada in December 2017 .
Speaking of the importance of the Belt and Road Initiative which had combined with the
Eurasian Economic Union and BRICS, President Xi Jinping stated in 2017: "We should foster a
new type of international relations featuring win-win cooperation; and we should forge
partnerships of dialogue with no confrontation and of friendship rather than alliance. All
countries should respect each other's sovereignty, dignity and territorial integrity, each
other's development paths and social systems, and each other's core interests and major
concerns In pursuing the Belt and Road Initiative, we will not resort to outdated geopolitical
maneuvering. What we hope to achieve is a new model of win-win cooperation. We have no
intention to form a small group detrimental to stability, what we hope to create is a big
family of harmonious co-existence."
The Belt and
Road Initiative has arisen as a true opposition to the bipolar insanity of western right
wing militarism/monetarism on the one side and left wing depopulation under "
Green New Deals " on the other. Trillions of dollars of credit in great infrastructure
projects across Eurasia, Africa and Latin America have resulted in the greatest burst of
cultural optimism, productivity and if the population and leadership of the west act with the
proper passion and wisdom, there is a very good opportunity to rid humanity of the legacy of
Maurice Strong.
Trump's Kakistocracy Is Also a Hackistocracy: The invasion of hucksters has reached the
Federal Reserve.
By Paul Krugman
It's no secret that Donald Trump has appointed a lot of partisan, unqualified hacks to key
policy positions. A few months ago my colleague Gail Collins asked readers to help her select
Trump's worst cabinet member. It was a hard choice, because there were so many qualified
applicants.
The winner, by the way, was Wilbur Ross, the commerce secretary. That looks like an even
better call now: Ross's department has reportedly prepared a report declaring that imports of
European cars threaten U.S. national security. This is both ludicrous and dangerous. It gives
Trump the right to start a new phase in his trade war that would inflict severe economic
damage while alienating our allies -- and, as a result, undermine national security.
Until recently, however, one agency had seemed immune to the continuing hack invasion: the
Federal Reserve, the single institution most crucial to economic policymaking. Trump's Fed
nominees, have, by and large, been sensible, respected economists. But that all changed last
week, when Trump said he planned to nominate Stephen Moore for the Fed's Board of
Governors.
Moore is manifestly, flamboyantly unqualified for the position. But there's a story here
that goes deeper than Moore, or even Trump; it's about the whole G.O.P.'s preference for
hucksters over experts, even partisan experts.
About Moore: It goes almost without saying that he has been wrong about everything. I
don't mean the occasional bad call, which all of us make. I mean a track record that includes
predicting that George W. Bush's policies would produce a magnificent boom, Barack Obama's
policies would lead to runaway inflation, tax cuts in Kansas would produce a "near immediate"
boost to the state's economy, and much more. And, of course, never an acknowledgment of error
or reflection on why he got it wrong.
Beyond that, Moore has a problem with facts. After printing a Moore op-ed in which all the
key numbers were wrong, one editor vowed never to publish the man's work again. And a
blizzard of factual errors is standard practice in his writing and speaking. It's actually
hard to find cases where Moore got a fact right.
Yet Moore isn't some random guy who caught Trump's eye. He has long been a prominent
figure in the conservative movement: a writer for the Wall Street Journal editorial page,
chief economist of the Heritage Foundation, a fixture on the right-wing lecture circuit.
Why?
You might say that the G.O.P. values partisan loyalty above professional competence. But
that's only a partial explanation, because there are plenty of conservative economists with
solid professional credentials -- and some of them are pretty naked in their partisanship,
too. Thus, a who's who of well-known conservative economists rushed to endorse the Trump
administration's outlandish claims about the benefits from its tax cut, claims they knew full
well were unreasonable.
Nor has their partisanship been restrained and polite. Many of us are still mourning the
death of Alan Krueger, the Princeton economist best known for research -- since vindicated by
many other studies -- showing that increases in the minimum wage don't usually seem to reduce
employment. Well, the Nobel-winning conservative economist James Buchanan denounced those
pursuing that line of research as "a bevy of camp-following whores."
So conservatives could, if they wanted, turn for advice to highly partisan economists with
at least some idea of what they're doing. Yet these economists, despite what often seem like
pathetic attempts to curry favor with politicians, are routinely passed over for key
positions, which go to almost surreally unqualified figures like Moore or Larry Kudlow, the
Trump administration's chief economist.
Many people have described the Trump administration as a kakistocracy -- rule by the worst
-- which it is. But it's also a hackistocracy -- rule by the ignorant and incompetent. And in
this Trump is just following standard G.O.P. practice.
Why do hacks rule on the right? It may simply be that a party of apparatchiks feels
uncomfortable with people who have any real expertise or independent reputation, no matter
how loyal they may seem. After all, you never know when they might take a stand on
principle.
In any case, there will eventually be a price to pay. True, there is, wrote Adam Smith, "a
great deal of ruin in a nation." America isn't just an immensely powerful, wealthy,
technologically advanced, peaceful country. We're also a nation with a long tradition of
dedicated public service.
Even now -- as I can attest from personal interactions -- a great majority of those
working for the Treasury Department, the State Department and so on are competent,
hard-working people trying to do the best they can for their country.
But as top jobs systematically go to hacks, there is an inevitable process of corrosion.
We're already seeing a degradation of the way our government responds to things like natural
disasters. Well, there will be more and bigger disasters ahead. And the people in charge of
dealing with those disasters will be the worst of the worst.
Inequality of opportunity, income inequality, and economic growth - VoxEU: "Simon Kuznets
famously argued that inequality is beneficial for economic growth at an early stage of
development... but is harmful at a later stage."
Where did Kuznets say this? I find him saying inequality varies. I find other people
saying the benefit or harm from inequality varies.
Anybody got a link to Kuznets saying the benefit or harm varies?
If we can't have (and don't actually want) total equality or total inequality, what is the
right amount of inequality?
Anemic economic growth and the gutting of middle class jobs have given new impetus to a
debate over "optimal inequality," a concept dating back at least six decades to a legendary
speech given in 1954 at the annual meeting of the American Economic Association by Simon
Kuznets, a Nobel Prize-winning economist, who asked, "Does inequality in the distribution of
income increase or decrease in the course of a country's economic growth?"
Kuznets's research into the relationship between inequality and growth laid the foundation
for modern thinking about what has become a critical question: Has inequality in this country
reached a tipping point at which it no longer provides an incentive to strive and to
innovate, but has instead created a permanently disadvantaged class, as well as a continuing
threat of social instability? ...
Economic Growth and Income Inequality
By SIMON KUZNETS
The central theme of this paper is the character and causes of long-term changes in the
personal distribution of income. Does inequality in the distribution of income increase or
decrease in the course of a country's economic growth? What factors determine the secular
level and trends of income inequalities?
These are broad questions in a field of study that has been plagued by looseness in
definitions, unusual scarcity of data, and pressures of strongly held opinions. While we
cannot completely avoid the resulting difficulties, it may help to specify the
characteristics of the size-of-income distributions that we want to examine and the movements
of which we want to explain.
Five specifications may be listed. First, the units for which incomes are recorded and
grouped should be family-expenditure units, properly adjusted for the number of persons in
each-rather than income recipients for whom the relations between receipt and use of income
can be widely diverse. Second, the distribution should be complete, i.e., should cover all
units in a country rather than a segment either at the upper or lower tail. Third, if
possible we should segregate the units whose main income earners are either still in the
learning or already in the retired stages of their life cycle-to avoid complicating the
picture by including incomes not associated with full-time, full-fledged participation in
economic activity. Fourth, income should be defined as it is now for national income in this
country, i.e., received by individuals, including income in kind, before and after direct
taxes, excluding capital gains. Fifth, the units should be grouped by secular levels of
income, free of cyclical and other transient disturbances.
For such a distribution of mature expenditure units by secular levels of income per
capita, we should measure shares of some fixed ordinal groups-percentiles, deciles,
quintiles, etc. In the underlying array the units should be classified by average income
levels for a sufficiently long span so that they form income-status groups-say a generation
or about 25 years. Within such a period, even when classified by secular income levels, units
may shift from one ordinal group to another. It would, therefore, be necessary and useful to
study separately the relative share of units that, throughout the generation period of
reference, were continuously within a specific ordinal group, and the share of the units that
moved into that specific group; and this should be done for the shares of "residents" and
"migrants" within all ordinal groups. Without such a long period of reference and the
resulting separation between "resident" and "migrant" units at different relative income
levels, the very distinction between "low" and "high" income classes loses its meaning,
particularly in a study of long-term changes in shares and in inequalities in the
distribution. To say, for example, that the "lower" income classes gained or lost during the
last twenty years in that their share of total income increased or decreased has meaning only
if the units have been classified as members of the "lower" classes throughout those 20
years-and for those who have moved into or out of those classes recently such a statement has
no significance.
Furthermore, if one may add a final touch to what is beginning to look like a statistical
economist's pipe dream, we should be able to trace secular income levels not only through a
single generation but at least through two-connecting the incomes of a given generation with
those of its immediate descendants. We could then distinguish units that. throughout a given
generation, remain within one ordinal group and whose children-through their generation-are
also within that group, from units that remain within a group through their generation but
whose children move up or down on the relative economic scale in their time. The number of
possible combinations and permutations becomes large; but it should not obscure the main
design of the income structure called for-the classification by long-term income status of a
given generation and of its immediate descendants. If living members of society-as producers,
consumers, savers, decision-makers on secular problems-react to long-term changes in income
levels and shares, data on such an income structure are essential. An economic society can
then be judged by the secular level of the income share that it provides for a given
generation and for its children. The important corollary is that the study of long-term
changes in the income distribution must distinguish between changes in the shares of resident
groups-resident within either one or two generations-and changes in the income shares of
groups that, judged by their secular levels, migrate upward or downward on the income
scale.
Even if we had data to approximate the income structure just outlined, the broad question
posed at the start-how income inequality changes in the process of a country's economic
growth-could be answered only for growth under defined economic and social conditions. And,
in fact, we shall deal with this question in terms of the experience of the now developed
countries which grew under the aegis of the business enterprise. But even with this
limitation, there are no statistics that can be used directly for the purpose of measuring
the secular income structure. Indeed, I have difficulty in visualizing how such information
could practicably be collected-a difficulty that may be due to lack of familiarity with the
studies of our colleagues in demography and sociology who have concerned themselves with
problems of generation or intergeneration mobility and status. But although we now lack data
directly relevant to the secular income structure, the setting up of reasonably clear and yet
difficult specifications is not merely an exercise in perfectionism. For if these
specifications do approximate, and I trust that they do, the real core of our interest when
we talk about shares of economic classes or long-term changes in these shares, then proper
disclosure of our meaning and intentions is vitally useful. It forces us to examine and
evaluate critically the data that are available; it prevents us from jumping to conclusions
based on these inadequate data; it reduces the loss and waste of time involved in mechanical
manipulations of the type represented by Pareto-curve-fitting to groups of data whose
meaning, in terms of income concept, unit of observation, and proportion of the total
universe covered, remains distressingly vague; and most important of all, it propels us
toward a deliberate construction of testable bridges between the available data and the
income structure that is the real focus of our interest.
The working class' struggle to just survive while the very wealthy splurged on glitter during
the 'Gilded Age' brought Brandies to speak of 'involuntary servitude' and lead to Teddy
Roosevelt's 'trust busting' else there be 'a revolution'. During the Gilded, capitalism, a
creation of the capitalist, was touted by the capitalist gilded as essential to growth giving
them an excuse to use armies to bust anti-capitalist unions.
Teddy may have prevented a revolution, saved democracy, and capitalism; and Franklin may
have saved democracy and capitalism; both using most non-capitalistic means.
In economics, a Kuznets curve represents graphically the hypothesis advanced by Simon
Kuznets in the 1950s and 1960s that as an economy develops, a natural cycle of economic
inequality occurs, driven by market forces which at first increase inequality, and then
decrease it after a certain average income is attained.
Determinants of cross-country income inequality: an augmented Kuznets hypothesis
By Branko Milanovic
Summary
Why does income inequality differ among countries? Using a sample of 80 countries from the
1980s, the author shows that two types of factors explain variations in income inequality.
The first are factors that are, in the short term, independent of economic policies and are
included in the standard formulation of the Kuznets' curve: * the level of per capita income
and the country's regional heterogeneity. From the viewpoint of economic policy, these are
"given" factors, resulting in a "given inequality." The second group of factors are the
social-choice factors reflected in the size of social transfers and of state sector
employment, both of which reduce inequality. For this sample, the reduction amounts to about
a quarter of "given" inequality. The importance of social-choice factors rises as the level
of income rises. The divergence between actual inequality and the inequality predicted by the
standard Kuznets' curve therefore systematically widens as a society develops. This
discrepancy is systematic, the author contends. Inequality in richer societies decreases not
only because of economic factors but also because societies choose less inequalities as they
grow richer.
In economics, a Kuznets curve graphs the hypothesis that as an economy develops, market
forces first increase and then decrease economic inequality. The hypothesis was first
advanced by economist Simon Kuznets in the 1950s and '60s.
The East Asian miracle has been used to criticize the validity of the Kuznets curve
theory. The rapid economic growth of eight East Asian countries -- Japan, South Korea, Hong
Kong, Taiwan, Singapore (Four Asian Tigers), Indonesia, Thailand, and Malaysia -- between
1965 and 1990, was called the East Asian miracle (EAM). Manufacturing and export grew quickly
and powerfully. Yet simultaneously, life expectancy was found to increase and population
levels living in absolute poverty decreased. This development process was contrary to the
Kuznets curve theory. Many studies have been done to identify how the EAM was able to ensure
that the benefits of rapid economic growth were distributed broadly among the population,
because Kuznets' theory stated that rapid capital accumulation would lead to an initial
increase in inequality. Joseph Stiglitz argues the East Asian experience of an intensive and
successful economic development process along with an immediate decrease in population
inequality can be explained by the immediate re-investment of initial benefits into land
reform (increasing rural productivity, income, and savings), universal education (providing
greater equality and what Stiglitz calls an "intellectual infrastructure" for productivity),
and industrial policies that distributed income more equally through high and increasing
wages and limited the price increases of commodities. These factors increased the average
citizen's ability to consume and invest within the economy, further contributing to economic
growth. Stiglitz highlights that the high rates of growth provided the resources to promote
equality, which acted as a positive-feedback loop to support the high rates of growth. The
EAM defies the Kuznets curve, which insists growth produces inequality, and that inequality
is a necessity for overall growth.
Sometime neoliberal economics act as the Thought Police. Peddling neoclassic economy bullshit
create a dreadful environments of a cult and there are enforces on each corner to ensure students
indoctrination.
Economists are ideologically biased - finds a survey of their views on modern economies
conducted by Mark Horowitz, Associate Professor of Sociology at Seton Hall University, New
Jersey, entitled Political Identity and Economists' Perceptions of Capitalist Crises.
"Surveying academic economists in the United States, we find the field quite skeptical
of the prospects of capitalist crises. Despite considerable consensus, political orientation
is a highly significant predictor of respondents' outlooks."
"economists are generally skeptical of the prospects of capitalist crises. Very few see
mass structural unemployment on the horizon due to automation (Q2) or incompatibility between
capitalism and secure or meaningful employment (Q4, Q5). Only a third or so anticipates
global financial contagion (Q1), while even fewer affirm a systemic tendency toward monopoly
(Q11). Finally, at least two-thirds believe the global economy will likely be capitalist in
200 years (Q8)".
Marx on 'vulgar political economy': "It was henceforth no longer a question, whether
this theorem or that was true, but whether it was useful to capital or harmful, expedient or
inexpedient, politically dangerous or not. In place of disinterested enquirers, there were
hired prize-fighters; in place of genuine scientific research, the bad conscience and the
evil intent of apologetic"
Across the US, suicide rates, drug overdoses and other "deaths of despair" are soaring - and
recently contributed to the third-straight year of life-expectancy decline. Meanwhile,
millennials, saddled with debt and suffering with a paucity of marketable skills, are putting
off parenthood and homeownership as they toil away in expensive urban centers, surrendering
more than half of their monthly income to rent and debt service.
With the outlook on the future of American society as grim as it has ever been (thanks to
widening economic inequality, the dire warnings of climate alarmists, and the erosion of
confidence in American institutions, among other reasons), it shouldn't come as a surprise that
Americans - particularly young Americans - are extremely stressed out.
Though stress can be an amorphous concept, researchers at WalletHub have tried to quantify
stress-level trends across the US, incorporating data from average hours worked per week to
personal bankruptcy rate to share of adults getting adequate sleep and using these data to
assign a score to individual states.
Their study turned up an interesting result: It showed that states in the Deep South tended
to be the most stressed, followed by expensive coastal states like New York and California,
with the sleepy Midwest and plain states bringing up the rear.
"... Better propant , longer laterals , some improvement of fluid , improved rigs and pads enable to drill several laterals simultaneously have made the improvement they call shale revolution. ..."
There is no doubt the tight rock structures which are much more difficult to extract oil from
than sandstone reservoir can be stimulated in different ways with good result. But that costs
a lot of money.
As I read fracking uses a very high hydraulic pressure open up the tight rock layers and
until a few years ago the oil flow dropped at a very early stage because the overlaying
weight and beacuse the oil flow carries with with itself particles that block the fraction.
Later it followed a propant research that was done before but again this gave improvement
and could hold the fracs open for longer.
Than there was research on chemical injected that should reduce friction between oil flow
and rock. There is also lots of other factores like gazes, metal that in certain pressures, temperatures
might react and create pollutant as happened lately when oil cargo was sent back from
Asia.
Better propant , longer laterals , some improvement of fluid , improved rigs and pads
enable to drill several laterals simultaneously have made the improvement they call shale
revolution.
Still very few are able to earn money to pay dividend, loan, interest and finance expansion with
WTI 60 USD.
Now number of rigs increasing again, but why when there are so many DUCS? Probably because investors tells
the business shall be cash neutral. Could it be the DUCS are so closely spaced that using along with the existing wells might
be not
profitable because of interference with nearby wells.
If markets were truly free and there was real capitalism then airlines would be looking at
the new and excellent Russian MC-21 which does what Boeing was trying to do with the 737 Max.
The MC-21 will safely handle passengers in the 140 to 160 passengers and is a mid range plane
that can go as far as 4,000 miles.
Instead – Boeing lobbies the corrupt U.S. AIPAC Congress to keep a Boeing
monopoly of death traps like the 737 Max allowing some Airbus sales. They also blocked a nice
Bombardier mid range jet from Canada.
I've flown in the Bombardier in South America– it is a fine aircraft.
Donald Trump is ramping up his attack on oil prices as US crude hit a 5-month high today. While up to now the US president
has been focused on denouncing high energy costs via Twitter, it appears he now is looking to do more than merely bash OPEC online.
As CNBC reported, the US wants to ensure "dominance" in this sector through a blockbuster executive order designed to boost pipeline
infrastructure. In reality, Trump walks a dangerous tightrope when it comes to crude.
Of course the Saudis are laughing at Trump. The world is laughing at Trump. He is an ignorant baffoon.
Of course the Saudis are laughing at Trump. The world is laughing at Trump. He is an ignorant baffoon.
May be ignorant bully, not only (or so much) baffoon ? He practices what is called “gangster capitalism” on international arena
for some time. Totally ignores international law. Does not even use a fig leaf as previous administrations. Trump is “Full Spectrum
Dominance” in action
In view of the Saudi role of the guarantor of the “dollar as the reserve currency” system his behavior might well be a reckless
move, which totally contradicts Trump’s behavior in Khashoggi case. Kind of direct pressure is Soprano style: “Do what I want,
or…”
If Saudi stop selling oil for dollars that will be a very bad news for the USA. Hopefully they can’t do this being a Washington
vassal, but to insult a vassal is not the best diplomacy, anyway.
Why Trump can’t understand that oil is limited and higher prices might well be the best strategy as they helps to find alternatives,
develop infrastructure (for example for EV passenger cars) and prepare to inevitable shortages, or even the Seneca Cliff in oil
supply.
Why he wants to propel/sustain the US stock market at any cost?
Low oil prices can help to kick the neoliberal can down the road, but they can’t save the USA from the “secular stagnation”
and might not be able to save the USA from the recession too because consumption is low: credit card debt reached 0.87 trillion
in the fourth quarter of 2018 On other words the bottom 80% of the USA population might well be debt slaves of the US banks.
On March 25, 2019 yields curve inverted the first time since mid 2007: The yield on the U.S. 10-year Treasury note dipped below
the yield on the 3-month paper.
In other words secular stagnation is the result of the crisis of neoliberalism both as the ideology and as the social system
dominant in the world. Neoliberalism entered “zombie” stage in 2008 and it continues to exist (and even counterattack, as in Argentina
and Brazil) only due to the fact that there is no acceptable alternative and the return to the New Deal capitalism (which many
wish) is difficult or impossible because management now is allied with the capital owners, not with workers (as was temporary
the case after the Great Depression; that alliance ended in 70th).
Or he is a “naturally stupid” bully, who does not care to learn diplomatic etiquette and some elements of diplomacy, while
on the job.
In both cases he is a real embarrassment for the nation, is not he?
While I do not support Russiagate witch hunt, his behavior really raises questions about fitness for the office.
Also Bush II style (as in Iraq WDM fiasco ) bunch of crazy warmongers, neocons that control Trump administration foreign
policy (Haley in the past, Pompeo, Bolton now ) is not what his voters expected based on his election promises.
In a sense, he proved to be Republican Obama, another master of “bait and switch” maneuver.
Looks like we are living during what Chinese call “interesting times”, aren’t we ?
"... Hubbert wrote in 1948: "How soon the decline may set in is not possible to say, Nevertheless the higher the peak to which the production curve rises, the sooner and sharper will be the decline." ..."
"... In fact, Ghawar is not as resilient as we were led to believe. We just found out that its output has fallen substantially since Aramco previously came clean on its reserves and production. If Ghawar is losing momentum fast, peak oil – remember that theory? – might be closer than we had thought. And Ghawar is just one of dozens of enormous conventional-oil reservoirs scattered around the planet that are in various stages of decline. ..."
"... Those include the North Sea, Alaska's Prudhoe Bay, and Reguly reminds us that Mexico's Cantarell reservoir used to supply 2.1 million barrels a day and is now down to 135,000. ..."
It seems that the biggest Saudi field is losing its punch.
Years ago we used to talk a lot about peak oil, the prediction made by M. King Hubbert that
the easy oil was going to run out, that it was going to get harder and harder to find the
stuff, and it was going to get more and more expensive to get out of the ground.
Hubbert
wrote in 1948: "How soon the decline may set in is not possible to say, Nevertheless the
higher the peak to which the production curve rises, the sooner and sharper will be the
decline."
According to the predictions made back in 2005, right about now the Saudis are running
out and we are smack in the middle of confusion, heading for chaos. Of course we are not, we
are flooded with fossil fuels, thanks to the fracking boom.
But according to Eric Reguly, writing in the Globe and Mail, there is trouble ahead,
because that prediction about Saudi oil may not be that far off. He writes that the giant
Ghawar field used to produce ten percent of the world's oil, five million barrels a
day.
The US Permian shale basin now supplies 4.1 million barrels a day, but fracked wells
run out pretty quickly, and the fracking companies are all losing money. Better sell that
pickup truck; it may well cost a lot more to fill it. As Reguly concludes, the Ghawar field
is indeed in trouble,"and if it does collapse, peak oil will come a bit sooner."
In fact, Ghawar is not as resilient as we were led to believe. We just found out that its
output has fallen substantially since Aramco previously came clean on its reserves and
production. If Ghawar is losing momentum fast, peak oil – remember that theory? –
might be closer than we had thought. And Ghawar is just one of dozens of enormous
conventional-oil reservoirs scattered around the planet that are in various stages of
decline.
Those include the North Sea, Alaska's Prudhoe Bay, and Reguly reminds us that Mexico's
Cantarell reservoir used to supply 2.1 million barrels a day and is now down to
135,000.
If you listen to the interview he has lined up the 7 month lag time with Rig Count and
Lagged Production. If this ends up sticking then the production flattening should show up in
July. Just wanted to hear what you guys have to say about it.
Thanks! Karen
Despair about the state of our politics pervades the political spectrum, from left to right. One source of it, the narrative of fairness
offered in basic civics textbooks -- we all have an equal opportunity to succeed if we work hard and play by the rules; citizens
can truly shape our politics -- no longer rings true to most Americans. Recent surveys indicate that substantial numbers of them
believe that the
economy and political
system are both rigged. They also think that money has an
outsized influence on
politics. Ninety percent of Democrats hold this view, but so do 80% of Republicans. And
careful studies confirm what the public believes.
None of this should be surprising given the stark economic inequality that now marks our society. The richest 1% of American households
currently account for
40% of the country's wealth, more than the bottom 90% of families possess. Worse yet, the top 0.1% has cornered about
20% of it, up from 7% in the
mid-1970s. By contrast, the share of the bottom 90% has since then fallen from 35% to 25%. To put such figures in a personal light,
in 2017,
three men -- Jeff Bezos, Warren Buffett, and Bill Gates -- possessed more wealth ($248.5 billion) than the bottom 50% of Americans.
Over the last four decades, economic disparities in the U.S.
increased substantially and are now greater
than those in other wealthy democracies. The political consequence has been that a tiny minority of extremely wealthy Americans wields
disproportionate influence, leaving so many others feeling disempowered.
What Money Sounds Like
Two recent headline-producing scandals highlight money's power in society and politics.
The first involved super-affluent
parents who used their wealth to get their manifestly unqualified children into highly selective colleges and universities that previously
had reputations (whatever the reality) for weighing the merits of applicants above their parents' wealth or influence.
The second concerned Texas Senator Ted Cruz's reported failure to reveal, as election laws require, more than
$1 million in low-interest loans that he received for his 2012 Senate campaign. (For that lapse, the Federal Election Commission
(FEC) fined Senator Cruz a modest
$35,000.) The funds came from Citibank and Goldman Sachs, the latter his wife's longtime employer. News of those undisclosed loans,
which also cast doubt on Cruz's claim that he had funded his campaign in part by liquidating the couple's assets, only added to the
sense that favoritism now suffuses the politics of a country that once prided itself on being the world's model democracy. (Journalists
covering the story couldn't resist pointing out that the senator had often lambasted Wall Street's "
crony capitalism
" and excessive political influence.)
The Cruz controversy is just one reflection of the coming of 1% politics and 1% elections to America at a moment when the first
billionaire has been ensconced in the Oval Office for more than two years, posing as a populist no less.
Since the Supreme Court's 2010 ruling in
Citizens
United v. Federal Election Commission , money has poured into politics as never before. That's because the Court
ruled that
no limits could be placed on corporate and union spending aimed at boosting or attacking candidates running for political office.
Doing so, the justices determined in a 5-4 vote, would be tantamount to restricting individuals' right to free speech, protected
by the First Amendment . Then came the Court's
2014 McCutcheon
v. Federal Election Commission decision (again 5-4), which only increased money's influence in politics by removing the aggregate
limit on an individual's contribution to candidates and to national party committees.
In an age when money drives politics, even ex-presidents are cashing in. Fifteen years after Bill Clinton departed the White House,
he and Hillary had amassed a net worth of $75 million -- a
6,150% increase in their wealth. Barack
and Michelle Obama's similarly soared from $1.3 million in 2000 to
$40 million last year
-- and they're just warming up. Key sources of these staggering increases include sky-high speaking fees (often paid by large corporations),
including
$153 million for the Clintons between February 2001 and May 2016. George W. Bush also made
tens of millions of dollars in this fashion and, in 2017, Obama received
$400,000 for a single
speech to a Wall Street firm.
No wonder average Americans believe that the political class is disconnected from their day-to-day lives and that ours is, in
practice, a democracy of the rich in which money counts (and counts and counts).
Cash for College
Now let's turn to what those two recent scandals tell us about the nexus between wealth and power in America.
First, the school scam. Parents have long hired pricey tutors to coach their children for the college admissions tests, sometimes
paying them hundreds of dollars an hour, even
$1,500 for 90 minutes of high-class prep. They've also long tapped their exclusive social and political
connections to gin up razzle-dazzle internships to embellish those college applications. Anyone who has spent as much time in
academia as I have knows that this sort of thing has been going on for a long time. So has the practice of "
legacy admissions " -- access to elite schools especially for the kids of alumni of substantial means who are, or might prove
to be,
donors . The same is true of privileged access to elite schools for the kids of mega-donors. Consider, for instance, that
$2.5
million donation Charles Kushner made to Harvard in 1998, not long before his son Jared applied. Some of the folks who ran Jared's
high school
noted
that he wasn't exactly a whiz-bang student or someone with sky-high SAT scores, but -- surprise! -- he was accepted anyway.
What's new about the recent revelations is that they show the extent to which today's deep-pocketed helicopter parents have gone
into overdrive, using brazen schemes to corrupt the college admissions process yet more. One unnamed parent spent a cool
$6.5 million to ensure
the right college admitted his or her child. Others paid hefty amounts to get their kids' college admissions test scores
falsified or even hired
proxies to take the tests for them.
Famous actors and financial
titans made huge payments
to university sports coaches, who then lied to admissions officers, claiming that the young applicants were champions they had recruited
in sports like water polo, crew, or tennis. (The kids may have known how to swim, row, or play tennis, but star athletes they
were not .)
Of course, as
figures on the growing economic inequality in this country since the 1970s indicate, the overwhelming majority of Americans lack
the connections or the cash to stack the deck in such ways, even assuming they would do so. Hence, the public outrage, even though
parents generally understand that not every aspirant can get into a top school -- there aren't enough spots -- just as many know
that their childrens' future happiness and sense of fulfillment won't depend on whether they attend a prestigious college or university.
Still, the unfairness and chicanery highlighted by the admissions scandal proved galling, the more so as the growing crew of fat
cats corrupting the admissions process doubtless also preach the gospel of American meritocracy. Worse, most of their kids will undoubtedly
present their fancy degrees as proof that quality wins out in our society, never mind that their starting blocks were placed so far
ahead of the competition.
To add insult to injury, the same parents and children may even portray admissions
policies designed to help students who lack wealth or come from underrepresented communities as violations of the principles
of equal opportunity and fairness, democracy's bedrock. In reality, students from low-income families, or even those of modest means,
are startlingly less likely to be admitted to top private universities than those from households in the top 10%. In fact, applicants
from families in the top 1% are now 77
times more likely than in the bottom 20% to land in an elite college, and
38 of those schools admit more kids from families in that top percentage than from the bottom 60%.
Buying Politics (and Politicians), American-Style
Now, let's return to the political version of the same -- the world in which Ted Cruz swims so comfortably. There, too, money
talks, which means that those wealthy enough to gain access to, and the attention of, lawmakers have huge advantages over others.
If you want political influence, whether as a person or a corporation, having the wealth needed to make big campaign contributions
-- to individuals or groups -- and to hire top-drawer lobbyists makes a world of difference.
Official data on the distribution of family income in the
United States show that the overwhelming majority of Americans can't play that game, which remains the preserve of a tiny super-rich
minority. In 2015, even with taxes and government-provided benefits included, households in the lowest 20% accounted for only about
5% of total income. Their average income -- not counting taxes and government-provided assistance -- was only $20,000. The share
of the bottom 50% -- families making
$61,372 or less --
dropped from 20% to 12% between 1978 and 2015. By contrast, families in the top 1% earned nearly 50% of total income, averaging
$215,000 a year -- and that's only income, not wealth. The super-rich have plenty of the latter, those in the bottom 20% next to
none.
Before we proceed, a couple of caveats about money and political clout. Money doesn't always prevail. Candidates with more campaign
funds aren't guaranteed victory, though the time politicians spend raising cash leaves no doubt that they believe it makes a striking
difference. In addition, money in politics doesn't operate the way simple bribery does. The use of it in pursuit of political influence
works more subtly, and often -- in the new era opened by the Supreme Court -- without the slightest need to violate the law.
Still, in Donald Trump's America, who would claim that money doesn't talk? If nothing else, from inaugural events -- for Trump's
inaugural
$107 million was raised from a host of wealthy
donors with no limits on individual payments, 30 of which totaled $1 million or more -- to gala fundraisers, big donors get numerous
opportunities to schmooze with those whose campaigns they've helped bankroll. Yes, there's a limit --
currently
$5,600 -- on how much any individual can officially give to a single election campaign, but the ultra-wealthy can simply put their
money
into organizations formed solely to influence elections as well as into various party committees.
Individuals, companies, and organizations can, for instance, give money to political action committees (PACs) and Super PACs.
Though bound by rules
, both entities still have lots of leeway. PACs face no monetary limits on their independent efforts to shape elections, though they
can't accept corporate or union money or take more than $5,000 from individuals. They can provide up to $5,000 to individual election
campaigns and $15,000 per party committee, but there's no limit on what they can contribute in the aggregate. Super PACs have far
more running room. They can rake in unlimited amounts from a variety of sources (as long as they're not foreign) and, like PACs,
can spend limitless sums to shape elections, providing they don't give money directly to candidates' campaigns.
Then there are the dark money groups, which can receive
financial contributions from any source, American or foreign. Though their primary purpose is to push policies, not individual campaigns,
they can engage in election-related work, provided that no more than half their funds are devoted to it. Though barred from donating
to individual campaigns, they can pour unlimited money into Super PACs and, unlike PACs and Super PACs, don't have to disclose who
gave them the money or how much. Between 2008 and 2018, dark money groups spent
$1 billion to influence elections.
In 2018 , 2,395 Super PACs were
working their magic in this country. They raised $1.6 billion and spent nearly $809 million. Nearly 78% of the money they received
came from 100 donors . They,
in turn, belonged to the wealthiest 1%, who provided 95% of what those Super PACs took in.
As the 2018 congressional elections kicked off, the four wealthiest Super PACs alone had
$113.4 million on hand to support candidates they favored, thanks in substantial measure to business world donors. In that election
cycle, 31 individuals ponied up more than $5 million
apiece, while contributions from the top four among them ranged from almost $40 million to $123 million.
The upshot: if you're running for office and advocate policies disliked by wealthy individuals or by companies and organizations
with lots of cash to drop into politics, you know from the get-go that you now have a problem.
Wealth also influences political outcomes through the lobbying industry. Here again, there are rules, but even so, vast numbers
of lobbyists and eye-popping amounts of lobbying money now are at the heart of the American political system. In
2018 alone , the 50 biggest lobbying outfits, largely representing big companies, business associations, and banks, spent $540
million, and the grand total for lobbying that year alone was $3.4 billion.
Nearly 350 of those lobbyists were
former legislators from Congress. Officials departing from senior positions in the executive branch have also found
artful ways to circumvent presidential directives that prohibit them from working as lobbyists for a certain number of years.
Do unions and public interest groups also lobby? Sure, but there's no contest between them and corporations.
Lee Drutman of the New America think tank notes that, for every dollar the former spent in 2015, corporate donors spent $34.
Unsurprisingly, only one of the top 20 spenders on lobbying
last year was a union or a public-interest
organization.
The sums spent by individual companies to gain political influence can be breathtaking. Take now-embattled
Boeing
. It devoted $15 million to lobbying in 2018 -- and that's not counting its campaign contributions, using various channels. Those
added another $8.4 million in the last two-and-a-half years. Yet Boeing only placed 11th among the
top 20 corporate spenders on lobbying
last year. Leading the pack: the U.S. Chamber of Commerce at $94.8 million.
Defenders of the status quo will warn that substantially reducing money's role in American politics is sure to threaten democracy
and civil liberties by ceding undue power to the state and, horror of horrors, putting us on the road to "socialism," the right wing's
bogeyman du jour . This is ludicrous.
Other democracies
have taken strong steps to prevent economic inequality from subverting their politics and haven't become less free as a result. Even
those democracies that don't limit political contributions have adopted measures to curb the power of money, including bans on television
ads (a huge expense for candidates in American elections:
$3 billion
in 2018 alone just for access to local stations), free airtime to allow competitors to disseminate their messages, and public funds
to ease the financial burden of election campaigns.
Compared to other democracies, the United States appears to be in a league of its own when it comes to money's prominence in
politics.
Those who favor continuing business as usual like to point out that federal "matching funds" exist to help presidential candidates
not be steamrolled by competitors who've raised mounds of money. Those funds, however, do no such thing because they come with
stringent limits on total spending. Candidates who accept matching funds for a general election cannot accept contributions from
individuals. Moreover, matching funds are capped at $20 million, which is a joke considering that Barack Obama and Mitt Romney spent
a combined
$1.2 billion in individual contributions alone during the 2012 presidential election. (
Super PACs spent another $350 million
to help Romney and $100 million to back Obama.)
A New American Tradition?
Rising
income inequality ,
wage stagnation , and
slowing social mobility
hurt ordinary Americans economically, even as they confer massive social and political advantages on the mega-rich -- and not just
when it comes to college admissions and politics either.
Even the Economist , a publication that can't be charged with sympathy for left-wing ideas,
warned recently of the threat economic inequality poses to the political agency of American citizens. The magazine cited studies
showing that, despite everything you've heard about the power of small donations in recent political campaigns, 1% of the population
actually provides a quarter of all the money spent on politics by individuals and 80% of what the two major political parties raise.
Thanks to their wealth, a minuscule economic elite as well as big corporations now shape policies, notably on taxation and expenditure,
to their advantage on an unprecedented scale.
Polls show that an overwhelming majority of Americans support stricter laws to prevent wealth from hijacking politics and want
the Citizens United ruling
overturned . But then just how much does the voice of the majority matter? Judging from the many failed efforts to pass such
laws, not much.
"Lying, deceiving, and manipulation are natural talents for psychopaths. When caught in
a lie or challenged with the truth, they are seldom perplexed or embarrassed -- they
simply change their stories or attempt to rework the facts so that they appear to be
consistent with the lie. The results are a series of contradictory statements and a
thoroughly confused listener.
Psychopaths have a grandiose self-structure which demands a scornful and detached
devaluation of others, in order to ward off their envy toward the good perceived in
other people.
Robert D. Hare,
Without Conscience
Stocks closed within 'spitting distance' of a new high today.
At least that is what the spokesmodels said.
Let's see if they can make it, and stick a close for a new high.
And how long after that it takes to set up and initiate a fourth 'blow off top.'
Tax reform debates have been transformed in recent weeks by a shift in emphasis from revenue
raising and progressivity to an emphasis on going after the rich for the sake of equality and
justice. Bold proposals from Representative Alexandria Ocasio-Cortez of New York, for a 70
percent marginal tax rate on top earners, and from Senator Elizabeth Warren of Massachusetts --
a 2020 Democratic presidential candidate -- for a wealth tax on those worth more than $50
million have attracted widespread attention.
Warren's proposal aspires to raise roughly 1 percent of GDP ($2.75 trillion in the next
decade). Ocasio-Cortez's proposal is estimated to generate around one-third of 1 percent ($720
billion in the next decade). By way of comparison, the Trump tax cuts will cost the federal
government about $2 trillion over the next decade. We agree with Ocasio-Cortez and Warren that
increases in tax revenue of at least this magnitude are necessary. We also agree that the way
forward is by generating more revenue from the most affluent Americans. Indeed, it may well be
necessary and appropriate to raise more than Warren's targeted 1 percent of GDP from those at
the top.
Where we differ from Warren and Ocasio-Cortez is in our belief that the best way to begin
raising additional revenue from highest income tax payers is with a traditional tax reform
approach of base broadening and loophole closing, improved compliance, and closing of shelters.
We show that these measures, along with partial repeal of the Trump tax cut, can raise far more
than recent proposals. These measures will increase economic efficiency, make our tax system
more fair, and are perhaps more politically feasible than a wealth tax or large hikes of top
rates. It may be that measures beyond base-broadening are appropriate and desirable given the
magnitude of the revenue challenge we face. But base-broadening is the right place to
begin.
Below we outline proposals for broadening the tax base that meet a stringent test: These are
measures that would be desirable even if we did not have revenue needs. They are progressive
and attack those who have received special breaks for too long. And together, the
revenue-raising potential of these measures exceeds that of the 70 percent top rate or the
wealth tax. We believe this is where the progressive tax policy debate should begin.
Emphasis on compliance and auditing of the rich. In 2017, the IRS had only 9,510 auditors --
down from over 14,000 in 2010. The last time the IRS had fewer than 10,000 auditors was in the
mid-1950s. Since 2010, the IRS budget has decreased by over 20 percent in real terms. The
result is that individuals and corporations are shirking their responsibilities: The most
recent estimate by the IRS suggests that taxpayers paid only around 82 percent of owed taxes,
losing the IRS over $400 billion a year.
The Congressional Budget Office estimates that spending an additional $20 billion on
enforcement in the next decade could bring in $55 billion in additional tax revenues. This
excludes the indirect deterrent effects of greater enforcement, which the Treasury Department
has estimated are three times higher. Outlays at this level would still leave the IRS operating
with budgets in real terms that were nearly 10 percent below peak levels, which themselves were
leaving large amounts of revenue on the table.
In addition to the level of investment in enforcement, there is the question of the
allocation of enforcement resources. It has been estimated that an extra hour spent auditing
someone who earns more than $1 million a year generates an extra $1,000 in revenue. And yet in
2017 the IRS audited only 4.4 percent of returns with income of $1 million or higher, less than
half the audit rate a decade prior. Remarkably, recipients of the earned income tax credit, who
never have incomes above $50,000, are twice as likely to be audited as those who make $500,000
annually.
No one can know exactly the potential for increased enforcement to raise revenue. Suppose
instead of investing an extra $20 billion over the next decade, we invested $40 billion and
focused on wealthy taxpayers, perhaps taking the audit rate for million-dollar earners up to 25
percent. Considering the direct benefits and the multiplier from deterrence, it is not
unreasonable to suppose that over a decade $300 billion to $400 billion could be raised.
This revenue increase -- unlike a revenue increase from new taxes or higher rates -- will
have favorable incentive effects. It will encourage people to participate in the above-ground
economy. And what could be more of a step toward fairness than collecting from wealthy
scofflaws?
Closing corporate tax shelters. All too often, corporations are able to make use of tax
havens, differences in accounting treatment across jurisdictions, and other devices to reduce
tax liabilities. Economist Kimberly Clausing estimates that profit-shifting to tax havens costs
the United States more than $100 billion a year. Although the Trump tax plan sought to reduce
the incentives for profit-shifting, various exemptions and design flaws mean that the new
system does little to deter shifting revenues to tax havens. Fairly incremental changes will
have a large impact: For example, a per-country corporate minimum tax rather than a global
minimum tax will increase tax revenues by nearly $170 billion in a decade.
But there is much more to be done. A robust attack on tax shelters -- that included, for
example, tariffs or penalties on tax havens as well as stricter penalties for lawyers and
accountants who sign off on dubious shelters -- could raise twice the revenue attainable from a
per-country minimum tax, or about 30 billion annually. It would also encourage the location of
economic activity in the United States and discourage the vast intellectual ingenuity that
currently goes into tax avoidance.
Closing individual tax shelters. Like the corporations they own, wealthy individuals make
use of myriad loopholes in the tax code to shelter their personal income from taxation. Most
high-income taxpayers pay a 3.8 percent tax that pays into entitlement programs like Social
Security and Medicare. However, some avoid these payroll taxes by setting up pass-through
businesses and re-characterizing large shares of their income as profits from business
ownership, rather than wage income. The Obama administration's proposals to close payroll tax
loopholes were estimated to generate $300 billion over a decade.
Another egregious loophole is 1031 exchanges, which allow real estate investors to sell
property, take a profit, and defer paying taxes on those profits so long as they reinvest them
in similar investments. There is no limit on the number of these exchanges that investors can
make. Consequently, the wealthy use 1031 exchanges to build up long-term tax-deferred wealth
that can eventually be passed down to their heirs without taxes ever being paid. Outright
repeal of 1031 exchanges were estimated in 2014 to raise around $40 billion in a decade and
would raise almost $50 billion today.
Another tool used to shelter individual income from taxation is carried interest. Income
that flows to partners of investment funds is often treated as capital gains and taxed at lower
rates than ordinary income. This creates a tax-planning opportunity for investors to convert
ordinary income into long-term capital gains that receive much more generous tax treatment.
President Trump repeatedly vowed that his signature tax cuts would eliminate the
carried-interest loophole, saying it was unfair that the ultra-wealthy were "getting away with
murder." However, in the face of significant lobbying pressure, the administration abandoned
these plans. The Joint Committee on Taxation estimates that taxing carried profits as ordinary
income would generate over $20 billion in a decade.
Other ways in which individuals can shelter income include misvaluing interests such as
shares in investment partnerships when putting them in retirement accounts as well as schemes
involving nonrecourse lending.
Closing tax shelters would level the playing field in favor of investments by companies that
create jobs and to the detriment of various kinds of financial operators. This would raise
employment and incomes as well as contributing to fairness.
Eliminating "stepped-up basis." Wealth tax advocates rightly point to an important gap in
our current system. An entrepreneur starts a company that turns out to be highly successful.
She pays herself only a small salary, and shares in the company do not pay dividends, so the
company can invest in growth. The entrepreneur becomes very wealthy without ever having paid
appreciable tax, as the income that made the wealth possible represents unrealized capital
gains.
Unrealized capital gains explain how Warren Buffett can pay only a few million dollars in
taxes in a year when his wealth goes up by billions. Astoundingly, no capital gains tax is ever
collected on appreciation of capital assets if they are passed on to heirs. Specifically: When
an investor buys a stock, the cost of that purchase is the tax basis. If the stock rises in
value and is then sold, the investor pays taxes on the gains. If an investor dies and leaves
stock to her heir, that cost basis is "stepped up" to its price at the time the stock is
inherited. The gain in value during the investor's life is never taxed.
Implementing the Obama administration's proposals for constructive realization of capital
gains at death would raise $250 billion in the next decade. This is a progressive change that
would impact only the very wealthy: Ninety-nine percent of the revenue from ending stepped-up
basis will be collected from the top 1 percent of filers.
Eliminating stepped-up basis will also make the economy function better and so would be
desirable even if it did not raise revenue. The fact that capital gains passed on to children
entirely escape taxation provides aging small-business owners or real estate owners a strong
incentive not to sell them to those who could operate them better while they are alive. It also
makes it much more expensive to realize capital gains and use the proceeds to make new
investments than it would be if the capital gains tax was inescapable.
Capping tax deductions for the wealthy. Today, a homeowner in the top tax bracket
(post-Trump tax cuts, 37 percent) who makes a $1,000 mortgage payment saves $370 on her tax
bill. Under an Obama administration proposal to limit the value of itemized deductions to 28
percent for all earners, that same write-off would save this wealthy taxpayer just $280.
Importantly, such a cap would raise tax burdens only for the rich: Those with marginal rates
under the cap would still be able to claim the full value of their itemized deductions. The
plan to cap top-earners' itemized deductions was estimated to raise nearly $650 billion in a
decade. Recognizing that the Trump tax plan scaled back the mortgage interest deduction and
state and local tax deductions, we estimate that additional limits on top-earner deductions
could generate around $250 billion in a decade.
As with the elimination of stepped-up basis, the distributional case for capping tax
deductions is strong. The mortgage interest deduction provides a tax advantage to homeowners;
promoting homeownership is a worthy goal. But there is little rationale for subsidizing home
ownership at higher rates for richer rather than poorer taxpayers.
End the 20 percent pass-through deduction. Perhaps the most notorious of the Trump tax
changes, the pass-through deduction provides a 20 percent deduction for certain qualified
business income. This exacerbated the tax code's existing bias in favor of noncorporate
business income and so reduces economic efficiency. And the complex maze of eligibility is
arbitrary, foolish, and a drain on government resources: The Joint Committee on Taxation
estimates that this provision will reduce federal revenues by $430 billion in the next decade.
Eliminating the pass-through deduction will reduce incentives for tax gaming and raise revenue
primarily from taxpayers making more than $1 million annually.
Broaden the estate tax base. Prior to the Trump tax reform, only 5,000 Americans were liable
for estate taxes. The recent changes more than halved that small share by doubling the estate
tax exemption to $22.4 million per couple. The Joint Committee on Taxation estimates that this
change costs around $85 billion, with the benefits accruing entirely to 3,200 of the wealthiest
American households. Repealing the Trump administration's changes and applying estate taxes
even more broadly -- for example, as the Obama administration proposed, by lowering the
threshold to $7 million for couples -- would raise around $320 billion in a decade. The estate
tax would still only impact 0.3 percent of decedents.
In addition to the question of the appropriate floor on estates, there is also ample room to
attack the many loopholes that enable wealthy families to largely avoid paying taxes when
transferring wealth to their progeny during their lifetimes. This happens through a mix of
trust arrangements, intra-family loans, and dubious valuation practices to evade gift-tax
liability. Strengthening the taxation of estates would raise revenue and be efficient,
diverting resources from tax planning and increasing work incentives for the children of the
wealthy. We are enthusiastic about proposals, notably by Lily Batchelder, that call for the
conversion of the estate tax into an inheritance tax, to appropriately tax inherited privilege
and discourage large concentrations of wealth.
Increasing the corporate tax rate to 25 percent. When corporations began lobbying efforts on
corporate tax reform, their stated objective was a 25 percent corporate rate. Business leaders
produced estimates showing how this 25 percent rate would have prevented foreign purchases of
thousands of companies and shifted billions in corporate taxable income to the United States.
The Trump tax cuts delivered more than the business community asked, slashing the corporate
rate to 21 percent. The CBO estimates that a 1 percentage point increase in the corporate tax
rate will generate $100 billion in the next decade. Based on this estimate, a 4 percentage
point increase to 25 percent will generate an additional $400 billion in revenue.
Raising the corporate tax rate would not increase the tax burden on most new investment,
because it would raise in equal measure the value of the depreciation deductions that
corporations could take when they undertook investments. The principle losers from an increase
in the rate would be those earning economic rents in the form of monopoly profits and those who
had received enormous windfalls from the Trump tax cut.
Closing tax shelters used by the wealthy alone raises more revenue than Ocasio-Cortez's
proposal. And together, the reforms we propose raise far more than a 70 percent top tax rate,
and more too than Warren claims her wealth tax will generate. These base-broadening,
efficiency-enhancing reforms are the best way to start raising revenue as progressively and
efficiently as possible. To be sure, it may well be that wealth taxation or large increases in
top rates are necessary to adequately fund government activities. But we advocate these
approaches only after the revenue-raising potential of base-broadening is exhausted.
Tomorrow: The challenges in the rate hike and wealth tax proposals.
The empirical evidence is similarly mixed. Barro (2000) finds that for developed economies
income inequality raises growth. On the other hand, Berg et al. (2012, 2018) find that income
inequality tends to reduce the duration of growth spells. Forbes (2000) and Panizza (2002) find
no systematic effect.
The missing link: Inequality of opportunity
In recent work (Aiyar and Ebeke 2018), we point to the neglected role of equality of
opportunity in mediating this relationship. Our hypothesis is simple. In societies where
opportunities are unequally distributed – where the material circumstances of parents act
as binding constraints on the opportunities available to their children – income
inequality exerts a greater drag on growth. Any increase in income inequality tends to become
entrenched, limiting the investment opportunities – broadly defined to include investment
in children – available to low-income earners, thereby retarding long-term aggregate
growth. On the other hand, in societies with a more equal distribution of opportunities, an
increase in income inequality can be more easily reversed and need not constrain investment
opportunities and growth. To the extent that inequality of opportunity matters in this way, its
omission from standard regressions of growth on income inequality leads to misspecification,
which can help explain the inconclusive nature of the empirical literature to date.
... ... ...
...we can think of at least three lines of enquiry for future research, which
our results suggest might be of first order importance.
First, unequal access to education can limit low-income children from realising their
full capabilities. This is clearly a tragedy for reasons that extend far beyond mere
economics, but by permanently reducing the productivity of a segment of society it can also
retard economic growth.
Second, unequal access to labour markets is often seen between amply protected 'insiders'
and unemployed or precariously employed 'outsiders'. An increase in income inequality will
tend to most strongly affect those on the wrong side of this barrier, with hysteresis effects
translating this into a permanent output loss.
Third, unequal access to finance can prevent low-income people from entrepreneurship
opportunities and human capital investment, with an obvious retarding impact on growth.
Citigroup researchers point out Tesla's stock has long been valued as if it's selling a look
into the future of driving. Hence, investors have usually been willing to overlook Tesla's
sales stumbles as it works to ramp production and stoke demand.
But Tesla's disastrous first quarter (which includes mixed messages around store closures
and profitability) suggests consumers think Tesla's electric cars are overpriced versus their
utility. In other words, they are more carefully weighing the options of going fully electric
via Tesla versus a range of more affordable options in the category (including hybrids).
While there are some Tesla specific factors in play here such as its ongoing production
problems, the steep fall-off in demand to kick off 2019 is likely to be a greater weight to
Tesla's stock near-term. Without steady demand for Tesla's cars, it could set off a host of
negatives for Tesla such as debt raises and more price cuts on its cars.
Essentially the central banks admitted that virtually every policy that they've forced on
societies has been destructive, self-defeating, and the harm was primarily directed at the poor
and working class. Since the 2008 crash, the harm that the bankers are inflicting on society
has been magnified through
Quantitative Easing (QE).
Indeed, it is time to start calling QE what it is: a hidden tax on the wealth of middle-class
savers and pensioners which, on the one hand, the government can use to finance the deficits
associated with a large, modern welfare state and, on the other, redistribute wealth to the
top 5% of households.
"It is hardly a stretch to conclude that QE exacerbated America's already severe income
disparities."
- economist Stephen Roach
However, if you thought these multiple mea culpa's would change central bank policies, think
again. A better way to think of it is a banker telling you that they had to "destroy an economy
in order to save it." It's unfortunate, but necessary to enrich the wealthy at the expense of
the poor.
Just like when we bailed out the crooked bankers in 2008-2009 after they robbed the working
class blind. We couldn't make the rich people responsible for the disaster suffer. The
consequence of that decision is a massive
increase in inequality .
if you really want to grasp what's been happening, consider that, between 2009 and 2017, the
number of billionaires whose combined wealth was greater than that of the world's poorest 50
percent fell from 380 to just eight. And by the way, despite claims by the president that
every other country is screwing America, the US leads the pack when it comes to the growth of
inequality. As Inequality.org notes, it has "much greater shares of national wealth and
income going to the richest 1 percent than any other country."
That, in part, is due to an institution many in the United States normally pay little
attention to: the US central bank, the Federal Reserve.
We are now arriving at the end of another business/credit cycle. Translation: a recession is near . In a
healthy and somewhat fair economy, a recession works to cleans the economy of inefficient
businesses and bad debts. Those that made bad decisions would suffer. We don't have a healthy
and fair economy, and those that made bad decisions will be protected.
You see, the Federal Reserve is going to combat the effects of too much accumulated debt
caused by too many years of artificially low interest rates, that the Federal Reserve
intentionally made happen, which encouraged companies and wealthy people to
borrow too much money .
The real reason the world is in this predicament is the failure to deal with unsustainable
debt levels.
Debt can only be reduced in one of four ways: through strong growth, inflation, currency
devaluation (where the borrowing is from foreigners) or default....
Growth and inflation are weak. Devaluation is difficult if every nation tries to reduce
the value of its currency at the same time.
Debt defaults on the scale required would destroy a large portion of the world's savings,
not to mention affect the solvency of the financial system, triggering a collapse of economic
activity. That's why policymakers resist write-downs of trillions of dollars' worth of debt
that cannot be paid back.
All of these decisions are hard because someone must lose.
Will it be the wealthy bankers that made the bad loans who lose?
Will it be the wealthy capitalist that made the bad investments?
Will it be the wealthy people who borrowed too much money?
Or will the pain be spread out through the economy and society in general? (i.e. what
usually happens)
"... This entire article fleshes out one central truth – capitalism as practiced by the US Government inevitably involves war by any and all means, seeking total domination of every human being on the planet, foriegn or native to the US Hegemon. It seeks total rule of the rich and powerful over everyone else. ..."
"Russia is an inalienable and organic part of Greater Europe and European civilization. Our citizens think of themselves as
European. That's why Russia proposes moving towards the creation of a common economic space from the Atlantic to the Pacific Ocean,
a community referred to by Russian experts as 'the Union of Europe' which will strengthen Russia's potential in its economic pivot
toward the 'New Asia.'" Vladimir Putin, President of the Russian Federation, February 2012
The allegations of 'Russian meddling' only make sense if they're put into a broader geopolitical context. Once we realize that
Washington is implementing an aggressive "containment" strategy to militarily encircle Russia and China in order to spread its tentacles
across Central Asian, then we begin to understand that Russia is not the perpetrator of the hostilities and propaganda, but the victim.
The Russia hacking allegations are part of a larger asymmetrical-information war that has been joined by the entire Washington political
establishment. The objective is to methodically weaken an emerging rival while reinforcing US global hegemony.
Try to imagine for a minute, that the hacking claims were not part of a sinister plan by Vladimir Putin "to sow discord and division"
in the United States, but were conjured up to create an external threat that would justify an aggressive response from Washington.
That's what Russiagate is really all about.
US policymakers and their allies in the military and Intelligence agencies, know that relations with Russia are bound to get increasingly
confrontational, mainly because Washington is determined to pursue its ambitious "pivot" to Asia plan. This new regional strategy
focuses on "strengthening bilateral security alliances, expanding trade and investment, and forging a broad-based military presence."
In short, the US is determined to maintain its global supremacy by establishing military outposts across Eurasia, continuing to tighten
the noose around Russia and China, and reinforcing its position as the dominant player in the most populous and prosperous region
in the world. The plan was first presented in its skeletal form by the architect of Washington's plan to rule the world, Zbigniew
Brzezinski. Here's how Jimmy Carter's former national security advisor summed it up in his 1997 magnum opus, The Grand Chessboard:
American Primacy And Its Geostrategic Imperatives:
"For America, the chief geopolitical prize is Eurasia (p.30) .. Eurasia is the globe's largest continent and is geopolitically
axial. A power that dominates Eurasia would control two of the world's three most advanced and economically productive regions.
. About 75 per cent of the world's people live in Eurasia, and most of the world's physical wealth is there as well, both in its
enterprises and underneath its soil. Eurasia accounts for 60 per cent of the world's GNP and about three-fourths of the world's
known energy resources." ("The Grand Chessboard:American Primacy And Its Geostrategic Imperatives", Zbigniew Brzezinski, Basic
Books, page 31, 1997)
14 years after those words were written, former Secretary of State Hillary Clinton took up the banner of imperial expansion and
demanded a dramatic shift in US foreign policy that would focus primarily on increasing America's military footprint in Asia. It
was Clinton who first coined the term "pivot" in a speech she delivered in 2010 titled "America's Pacific Century". Here's an excerpt
from the speech:
"As the war in Iraq winds down and America begins to withdraw its forces from Afghanistan, the United States stands at a pivot
point. Over the last 10 years, we have allocated immense resources to those two theaters. In the next 10 years, we need to be
smart and systematic about where we invest time and energy, so that we put ourselves in the best position to sustain our leadership,
secure our interests, and advance our values. One of the most important tasks of American statecraft over the next decade will
therefore be to lock in a substantially increased investment -- diplomatic, economic, strategic, and otherwise -- in the Asia-Pacific
region
Open markets in Asia provide the United States with unprecedented opportunities for investment, trade, and access to cutting-edge
technology ..American firms (need) to tap into the vast and growing consumer base of Asia The region already generates more than
half of global output and nearly half of global trade. As we strive to meet President Obama's goal of doubling exports by 2015,
we are looking for opportunities to do even more business in Asia and our investment opportunities in Asia's dynamic markets."
("America's Pacific Century", Secretary of State Hillary Clinton", Foreign Policy Magazine, 2011)
The pivot strategy is not some trifling rehash of the 19th century "Great Game" promoted by think-tank fantasists and conspiracy
theorists. It is Washington's premier foreign policy doctrine, a 'rebalancing' theory that focuses on increasing US military and
diplomatic presence across the Asian landmass. Naturally, NATO's ominous troop movements on Russia's western flank and Washington's
provocative naval operations in the South China Sea have sent up red flags in Moscow and Beijing. Former Chinese President Hu Jintao
summed it up like this:
"The United States has strengthened its military deployments in the Asia-Pacific region, strengthened the US-Japan military
alliance, strengthened strategic cooperation with India, improved relations with Vietnam, inveigled Pakistan, established a pro-American
government in Afghanistan, increased arms sales to Taiwan, and so on. They have extended outposts and placed pressure points on
us from the east, south, and west."
Russian President Vladimir Putin has been equally critical of Washington's erratic behavior. NATO's eastward expansion has convinced
Putin that the US will continue to be a disruptive force on the continent for the foreseeable future. Both leaders worry that Washington's
relentless provocations will lead to an unexpected clash that will end in war.
Even so, the political class has fully embraced the pivot strategy as a last-gasp attempt to roll back the clock to the post war
era when the world's industrial centers were in ruins and America was the only game in town. Now the center of gravity has shifted
from west to east, leaving Washington with just two options: Allow the emerging giants in Asia to connect their high-speed rail and
gas pipelines to Europe creating the world's biggest free trade zone, or try to overturn the applecart by bullying allies and threatening
rivals, by implementing sanctions that slow growth and send currencies plunging, and by arming jihadist proxies to fuel ethnic hatred
and foment political unrest. Clearly, the choice has already been made. Uncle Sam has decided to fight til the bitter end.
Washington has many ways of dealing with its enemies, but none of these strategies have dampened the growth of its competitors
in the east. China is poised to overtake the US as the world's biggest economy sometime in the next 2 decades while Russia's intervention
in Syria has rolled back Washington's plan to topple Bashar al Assad and consolidate its grip on the resource-rich Middle East. That
plan has now collapsed forcing US policymakers to scrap the War on Terror altogether and switch to a "great power competition" which
acknowledges that the US can no longer unilaterally impose its will wherever it goes. Challenges to America's dominance are emerging
everywhere particularly in the region where the US hopes to reign supreme, Asia.
This is why the entire national security state now stands foursquare behind the improbable pivot plan. It's a desperate "Hail
Mary" attempt to preserve the decaying unipolar world order.
What does that mean in practical terms?
It means that the White House (the National Security Strategy) the Pentagon (National Defense Strategy) and the Intelligence Community
(The Worldwide Threat Assessment) have all drawn up their own respective analyses of the biggest threats the US currently faces.
Naturally, Russia is at the very top of those lists. Russia has derailed Washington's proxy war in Syria, frustrated US attempts
to establish itself across Central Asia, and strengthened ties with the EU hoping to "create a harmonious community of economies
from Lisbon to Vladivostok." (Putin)
Keep in mind, the US does not feel threatened by the possibility of a Russian attack, but by Russia's ability to thwart Washington's
grandiose imperial ambitions in Asia.
As we noted, the National Security Strategy (NSS) is a statutorily mandated document produced by the White House that explains
how the President intends to implement his national security vision. Not surprisingly, the document's main focus is Russia and China.
Here's an excerpt:
"China and Russia challenge American power, influence, and interests, attempting to erode American security and prosperity. They
are determined to make economies less free and less fair, to grow their militaries, and to control information and data to repress
their societies and expand their influence." (Neither Russia nor China are attempting to erode American security and prosperity."
They are merely growing their economies and expanding their markets. If US corporations reinvested their capital into factories,
employee training and R and D instead of stock buybacks and executive compensation, then they would be better able to complete globally.)
Here's more: "Through modernized forms of subversive tactics, Russia interferes in the domestic political affairs of countries
around the world." (This is a case of the 'pot calling the kettle black.')
"Today, actors such as Russia are using information tools in an attempt to undermine the legitimacy of democracies. Adversaries
target media, political processes, financial networks, and personal data." (The western media behemoth is the biggest disinformation
bullhorn the world has ever seen. RT and Sputnik don't hold a candle to the ginormous MSM 'Wurlitzer' that controls the cable news
stations, the newspapers and most of the print media. The Mueller Report proves beyond a doubt that the politically-motivated nonsense
one reads in the media is neither reliably sourced nor trustworthy.)
The Worldwide Threat Assessment of the US Intelligence Community is even more explicit in its attacks on Russia. Check it out:
"Threats to US national security will expand and diversify in the coming year, driven in part by China and Russia as they respectively
compete more intensely with the United States and its traditional allies and partners . We assess that Moscow will continue pursuing
a range of objectives to expand its reach, including undermining the US-led liberal international order, dividing Western political
and security institutions, demonstrating Russia's ability to shape global issues, and bolstering Putin's domestic legitimacy.
We assess that Moscow has heightened confidence, based on its success in helping restore the Asad regime's territorial control
in Syria, ·Russia seeks to boost its military presence and political influence in the Mediterranean and Red Seas mediate conflicts,
including engaging in the Middle East Peace Process and Afghanistan reconciliation .
Russia will continue pressing Central Asia's leaders to support Russian-led economic and security initiatives and reduce engagement
with Washington. Russia and China are likely to intensify efforts to build influence in Europe at the expense of US interests
" ("The Worldwide Threat Assessment of the US Intelligence Community",
USG )
Notice how the Intelligence Community summary does not suggest that Russia poses an imminent military threat to the US, only that
Russia has restored order in Syria, strengthened ties with China, emerged as an "honest broker" among countries in the Middle East,
and used the free market system to improve relations with its trading partners and grow its economy. The IC appears to find fault
with Russia because it is using the system the US created to better advantage than the US. This is entirely understandable given
Putin's determination to draw Europe and Asia closer together through a region-wide economic integration plan. Here's Putin:
"We must consider more extensive cooperation in the energy sphere, up to and including the formation of a common European energy
complex. The Nord Stream gas pipeline under the Baltic Sea and the South Stream pipeline under the Black Sea are important steps
in that direction. These projects have the support of many governments and involve major European energy companies. Once the pipelines
start operating at full capacity, Europe will have a reliable and flexible gas-supply system that does not depend on the political
whims of any nation. This will strengthen the continent's energy security not only in form but in substance. This is particularly
relevant in the light of the decision of some European states to reduce or renounce nuclear energy."
The gas pipelines and high-speed rail are the arteries that will bind the continents together and strengthen the new EU-Asia superstate.
This is Washington's greatest nightmare, a massive, thriving free trade zone beyond its reach and not subject to its rules. In 2012,
Hillary Clinton acknowledged this new threat and promised to do everything in her power to destroy it. Check out this excerpt:
"U.S. Secretary of State Hillary Clinton described efforts to promote greater economic integration in Eurasia as "a move to
re-Sovietize the region." . "We know what the goal is and we are trying to figure out effective ways to slow down or prevent it,"
she said at an international conference in Dublin on December 6, 2012, Radio Free Europe."
"Slow down or prevent it"?
Why? Because EU-Asia growth and prosperity will put pressure on US debt markets, US corporate interests, US (ballooning) national
debt, and the US Dollar? Is that why Hillary is so committed to sabotaging Putin's economic integration plan?
Indeed, it is. Washington wants to block progress and prosperity in the east in order to extend the lifespan of a doddering and
thoroughly-bankrupt state that is presently $22 trillion in the red but continues to write checks on an overdrawn account.
But Russia shouldn't be blamed for Washington's profligate behavior, that's not Putin's fault. Moscow is merely using the free
market system more effectively that the US.
Now consider the Pentagon's 2018 National Defense Strategy (NDS) which reiterates many of the same themes as the other two documents.
"Today, we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding. We
are facing increased global disorder, characterized by decline in the long-standing rules-based international order -- creating a
security environment more complex and volatile than any we have experienced in recent memory. Inter-state strategic competition,
not terrorism, is now the primary concern in U.S. national security."
(Naturally, the "security environment" is going to be more challenging when 'regime change' is the cornerstone of one's foreign
policy. Of course, the NDS glosses over that sad fact. Here's more:)
"Russia has violated the borders of nearby nations and pursues veto power over the economic, diplomatic, and security decisions
of its neighbors ..(Baloney. Russia has been a force for stability in Syria and Ukraine. If Obama had his way, Syria would have wound
up like Iraq, a hellish wastelands occupied by foreign mercenaries. Is that how the Pentagon measures success?) Here's more:
"China and Russia want to shape a world consistent with their authoritarian model
"China and Russia are now undermining the international order from within the system .
Get the picture? China and Russia, China and Russia, China and Russia. Bad, bad, bad.
Why? Because they are successfully implementing their own development model which is NOT programed to favor US financial institutions
and corporations. That's the whole thing in a nutshell. The only reason Russia and China are a threat to the "rules-based system",
is because Washington insists on being the only one who makes the rules. That's why foreign leaders are no longer falling in line,
because it's not a fair system.
These assessments represent the prevailing opinion of senior-level policymakers across the spectrum. (The White House, the Pentagon
and the Intelligence Community) The USG is unanimous in its judgement that a harsher more combative approach is needed to deal with
Russia and China. Foreign policy elites want to put the nation on the path to more confrontation, more conflict and more war. At
the same time, none of these three documents suggest that Russia has any intention of launching an attack on the United States. The
greatest concern is the effect that emerging competitors will have on Washington's provocative plan for military and economic expansion,
the threat that Russia and China pose to America's tenuous grip on global power. It is that fear that drives US foreign policy.
And this is broader context into which we must fit the Russia investigation. The reason the Russia hacking furor has been allowed
to flourish and spread despite the obvious lack of any supporting evidence, is because the vilifying of Russia segues perfectly with
the geopolitical interests of elites in the government. The USG now works collaboratively with the media to influence public attitudes
on issues that are important to the powerful foreign policy establishment. The ostensible goal of these psychological operations
(PSYOP) is to selectively use information on "audiences to influence their emotions, motives, objective reasoning, and ultimately
the behavior of organizations, groups, and individuals."
The USG now sees the minds of ordinary Americans as a legitimate target for their influence campaigns. They regard attitudes and
perceptions as "the cognitive domain of the
The emerging Euro-Asian power block is very heterogeneous. Russia, China, and the smaller affiliated players like Central Asia,
Iran, Syria, Turkey don't agree on almost anything. They have different cultures, religions, economies, demographic profiles,
even writing systems. The most rational strategy to prevent the Euro-Asian block from consolidating would be to get them to fight
each other. Alternatively, find the weakest link and attack it in an area where its reluctant allies don't share its interests.
Exactly the opposite has happened in the last 5-10 years: US has seemingly worked overtime to get China-Russia alliance of
the ground. They used to distrust each other, today, after Ukraine, South China See, etc they have become close allies. Same with
Iran and Syria: instead of letting them stew in their own internal problems – mostly religious and having a nepotistic elite –
US has managed to turn the fight into an external geo-political struggle, literally invited Russia to join in, and ended up losing.
Bush turned Iraq from a fanatically anti-Iran bastion to a reliable ally of Iran and started an un-winnable land war in Afghanistan
(incredible!). Obama turned Libya, the richest and most stable African country that threatened no-one and kept African migrants
far away, into a chaotic hellhole where slave trade flourishes and millions of Sub-Saharan Africans can use it to move on to Europe.
Then Obama tried to coup-de-etat Erdogan in Turkey, and – even worse – failed miserably. This gang can't shoot straight
– whatever they put in their position papers is meaningless drivel because they are too stupid to think. They have no patience
to wait for the right time to move, no ability to manage on the ground allies, and an aversion to casualties that makes winning
a war impossible. Today Trump threatens Germany over its energy security (pipelines), further antagonises Turkey and Erdogan,
watches helplessly as EU becomes the next UN (lame and irrelevant), and bets everything on a few small allies like Saudi Arabia
and Izrael that are of almost no use in Euro-Asia.
A guy who says about the Russia-gate collusion fiasco that ' maybe I had bad information ' is no master of the universe.
And he run the joint under Obama. Complaining about Russia saying bad stuff about you – or ' information warfare ' – is
a pathetic sign of weakness. Maybe the testosterone levels have dropped more than we have been told.
the russophobia is just drama to keep the MIC spending at $700+ billion per year
there is no way to justify that level of spending and pretend they don't have $25 billion one time to actually help solve the
real problem for the U.S.
"The USG now sees the minds of ordinary Americans as a legitimate target for their influence campaigns. They regard attitudes
and perceptions as "the cognitive domain of the battlespace" which they must exploit in order to build public support for their
vastly unpopular wars and interventions. "
Here is a short guide on how to detect subversion of the mind by the media and their handlers by a former military intelligence
officer.
If one recognizes that Brzezinski's "The Grand Chessboard, American Primacy & Its Geostrategic Imperatives (1997)" in replacing
"Lebensraum" with "control over Eurasia", "Tausendjähriges Reich" with "American Primacy" and providing our 'elite' with an "realist"
and "amoral" excuse to act completely and consistently immoral one has to recognize too that this "Grand Chessboard" is an amalgamation
of 'Mein Kampf' and 'Il Principe".
Reluctant to use that Hitler comparison one ought to read the Introduction of the "Grand Chessboard" in which Brzezinki himself
proudly refers to both Hitler and Stalin sharing his ideas about control over Eurasia as a prerequisite for that "American Primacy".
Recognizing this however one can't escape the conclusion that this "Grand Chessboard" with its consistent 'amoral realist imperatives'
is serving up inherently immoral 'imperatives' as inescapable options dressed up in academic language and with absolutely abhorrent
arrogance.
Stating that Brennan's Russophobia is somehow a degeneration of Brzezinki's "Grand Chessboard" is completely overlooking how
difficult it would be to outdo Brzezinki's own total moral degeneration.
One has to recognize that by now the only bipartisan aspect of US policy can be found in sharing these despicable and immoral
'imperatives' to maintain that "American Primacy" at all cost (of course to the rest of the world).
"The allegations of 'Russian meddling' only make sense if they're put into a broader geopolitical context. Once we realize that
Washington is implementing an aggressive "containment" strategy to militarily encircle Russia and China in order to spread its
tentacles across Central Asian, then we begin to understand that Russia is not the perpetrator of the hostilities and propaganda,
but the victim. The Russia hacking allegations are part of a larger asymmetrical-information war that has been joined by the entire
Washington political establishment. The objective is to methodically weaken an emerging rival while reinforcing US global hegemony."
TRUE!
I would suggest that the initials 'US' in the final sentence be changed to: Anglo-Zionist Empire.
"Now the center of gravity has shifted from west to east, leaving Washington with just two options: Allow the emerging giants
in Asia to connect their high-speed rail and gas pipelines to Europe creating the world's biggest free trade zone, or try to overturn
the applecart by bullying allies and threatening rivals, by implementing sanctions that slow growth and send currencies plunging,
and by arming jihadist proxies to fuel ethnic hatred and foment political unrest. Clearly, the choice has already been made. Uncle
Sam has decided to fight til the bitter end."
Just like the Brit Empire – of which the Yank Empire is merely Part 2, the part where it becomes obvious that it is the Anglo-Zionist
Empire, which, like a band of screeching Pharisees standing on the walls of Jerusalem hurling curses at the Romans they inform
that Jehovah will soon wipe out all Romans to save His Chosen Race, would choose utter destruction for all over any common sense
backing down to prevent mass slaughter.
Nothing harmed US more than Brzezinski's ideology. US did build up far east with their investments, while neglecting their own
backyard. US should have build up rather North and South America and make it the envy of the world. Neglecting particularly South
America now created Desperate south American people, who have no jobs and no future and these people are now invading US.
A guy who says about the Russia-gate collusion fiasco that 'maybe I had bad information' is no master of the universe. And
he run the joint under Obama. Complaining about Russia saying bad stuff about you – or 'information warfare' – is a pathetic
sign of weakness. Maybe the testosterone levels have dropped more than we have been told.
Testosterone plus steady, unrelenting decline and corruption of American "elites" most of who have no background in any fields
related to actual effective governance especially in national security (military) and diplomatic fields. Zbig's book is also nothing
more than doctrine-mongering based on complete lack of understanding of Russian history.
Reluctant to use that Hitler comparison one ought to read the Introduction of the "Grand Chessboard" in which Brzezinki
himself proudly refers to both Hitler and Stalin sharing his ideas about control over Eurasia as a prerequisite for that "American
Primacy".
Zbig was a political "scientist" (which is not a science) by education, fact aggravated by his Russophobia, and thus inability
to grasp fundamentals of military power and warfare–a defining characteristic of American "elites". He, obviously, missed on the
military-technological development of 1970s through 1990s, to arrive to the inevitable conclusion that classic "geopolitics" doesn't
apply anymore. Today we all can observe how it doesn't apply and is made obsolete.
(Jan.1998) US history – "How Jimmy Carter I Started the Mujahideen" – Zbigniew Brzezinski, National Security Advisor 1977-1981
"Q: The former director of the CIA, Robert Gates, stated in his memoirs ["From the Shadows"], that American intelligence services
began to aid the Mujahadeen in Afghanistan 6 months before the Soviet intervention. In this period you were the national security
adviser to President Carter.
Zbigniew Brzezinski Taliban Pakistan Afghanistan pep talk 1979
In 1979 Carters National Security Advisor, Zbigniew Brzezinski went into Pakistans border regions with Afghanistan to give
a little pep talk to some prospective majehadeen (Holy Warriors). In a 1997 interview for CNN's Cold War Series, Brzezinski hinted
about the Carter Administration's proactive Afghanistan policy before the Soviet invasion in 1979, that he had conceived.
@DESERT FOX Why was it that the Brit Empire kept acting throughout the later 18th, the 19th and early 20th centuries to harm
Russia, even when it technically was allied with Russia? Why the Crimean War, for example?
Why, for example, was Brit secret service all over the assassination of Rasputin and tied in multiple ways to most non-Marxist
revolutionary groups?
This entire article fleshes out one central truth – capitalism as practiced by the US Government inevitably involves war by
any and all means, seeking total domination of every human being on the planet, foriegn or native to the US Hegemon. It seeks
total rule of the rich and powerful over everyone else.
@anon Like the Ukranians, the 'Balts' virtually always are controlled by somebody else. When Russia does not control the Baltic
states, they are controlled by either Poles or Germans. Russians know what that means: the Baltic states are then used as weapons
to attack Russia.
The region is much calmer when Russia controls the Baltic states, and that is before taking into consideration how the Polish-Lithuanian
Empire turned its Jews lose to terrorize all Orthodox Christians and how Germanic states later used Lutheranism as a force in
the Baltics to ignite war with Russia and, under the queer Frederick the Great also used Jewish bankers to finance wars against
Russia.
@JR ssaid:
If one recognizes that Brzezinski's "The Grand Chessboard, American Primacy & Its
Geostrategic Imperatives (1997)" in replacing "Lebensraum" with "control over Eurasia",
"Tausendjähriges Reich" with "American Primacy" and providing our 'elite' with an
"realist" and "amoral" excuse to act completely and consistently immoral one has to recognize
too that this "Grand Chessboard" is an amalgamation of 'Mein Kampf' and 'Il Principe".
Except that Germany did not send Germans into the conquered territories during WWII,
though they wanted to do so.
"... I believe that the current GLOBAL elites do understand exactly what they are doing and the potential consequences to the ongoing existence of private finance. ..."
"... The war that is being waged is an attempt to keep private finance in charge of our world ..."
"But current American elites have no concept of own actions having consequences."
I believe that the current GLOBAL elites do understand exactly what they are doing and the
potential consequences to the ongoing existence of private finance.
The war that is being waged is an attempt to keep private finance in charge of our world
and they are losing I am pleased to report
The future of fiscal
policy was intensely debated in the FT last week. In this Exchange, I want to examine what
is going on in the US and, in
particular, what is going on inside the Republican party. This matters for the US and, because
the US remains the world's most important economy, it also matters greatly for the world.
My reading of contemporary Republican thinking is that there is no chance of any attempt to
arrest adverse long-term fiscal trends should they return to power. Moreover, since the
Republicans have no interest in doing anything sensible, the Democrats will gain nothing from
trying to do much either. That is the lesson Democrats have to draw from the Clinton era's
successful frugality, which merely gave George W. Bush the opportunity to make massive
(irresponsible and unsustainable) tax cuts. In practice, then, nothing will be done.
Indeed, nothing may be done even if a genuine fiscal crisis were to emerge. According to my
friend,
Bruce Bartlett , a highly informed, if jaundiced, observer, some "conservatives" (in truth,
extreme radicals) think a federal default would be an effective way to bring public spending
they detest under control. It should be noted, in passing, that a federal default would surely
create the biggest financial crisis in world economic history.
To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the
most politically brilliant (albeit economically unconvincing) idea in the history of fiscal
policy: "supply-side economics". Supply-side economics liberated conservatives from any need to
insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut
taxes and balance budgets, because incentive effects would generate new activity and so higher
revenue.
The political genius of this idea is evident. Supply-side economics transformed Republicans
from a minority party into a majority party. It allowed them to promise lower taxes, lower
deficits and, in effect, unchanged spending. Why should people not like this combination? Who
does not like a free lunch?
How did supply-side economics bring these benefits? First, it allowed conservatives to
ignore deficits. They could argue that, whatever the impact of the tax cuts in the short run,
they would bring the budget back into balance, in the longer run. Second, the theory gave an
economic justification – the argument from incentives - for lowering taxes on politically
important supporters. Finally, if deficits did not, in fact, disappear, conservatives could
fall back on the "starve the beast" theory: deficits would create a fiscal crisis that would
force the government to cut spending and even destroy the hated welfare state.
In this way, the Republicans were transformed from a balanced-budget party to a tax-cutting
party. This innovative stance proved highly politically effective, consistently putting the
Democrats at a political disadvantage. It also made the Republicans de facto Keynesians in a de
facto Keynesian nation. Whatever the rhetoric, I have long considered the US the advanced
world's most Keynesian nation – the one in which government (including the Federal
Reserve) is most expected to generate healthy demand at all times, largely because jobs are, in
the US, the only safety net for those of working age.
True, the theory that cuts would pay for themselves has proved altogether wrong. That this
might well be the case was evident: cutting tax rates from, say, 30 per cent to zero would
unambiguously reduce revenue to zero. This is not to argue there were no incentive effects. But
they were not large enough to offset the fiscal impact of the cuts (see, on this, Wikipedia and a nice
chart from Paul Krugman).
Indeed, Greg Mankiw, no less, chairman of the Council of Economic Advisers under George W.
Bush, has responded to the view that broad-based tax cuts would pay for themselves, as follows:
"I did not find such a claim credible, based on the available evidence. I never have, and I
still don't." Indeed, he has referred to those who believe this as " charlatans and
cranks ". Those are his words, not mine, though I agree. They apply, in force, to
contemporary Republicans, alas,
Since the fiscal theory of supply-side economics did not work, the tax-cutting eras of
Ronald Reagan and George H. Bush and again of George W. Bush saw very substantial rises in
ratios of federal debt to gross domestic product. Under Reagan and the first Bush, the ratio of
public debt to GDP went from 33 per cent to 64 per cent. It fell to 57 per cent under Bill
Clinton. It then rose to 69 per cent under
the second George Bush . Equally, tax cuts in the era of George W. Bush, wars and the
economic crisis account for almost all the dire fiscal outlook for the next ten years (
see the Center
on Budget and Policy Priorities ).
Today's extremely high deficits are also an inheritance from Bush-era tax-and-spending
policies and the financial crisis, also, of course, inherited by the present administration.
Thus, according to the International
Monetary Fund, the impact of discretionary stimulus on the US fiscal deficit amounts to a
cumulative total of 4.7 per cent of GDP in 2009 and 2010, while the cumulative deficit over these years is
forecast at 23.5 per cent of GDP . In any case, the stimulus was certainly too small, not
too large.
The evidence shows, then, that contemporary conservatives (unlike those of old) simply do
not think deficits matter, as former vice-president Richard Cheney is reported to have told
former treasury secretary Paul O'Neill . But this is not because the supply-side theory of
self-financing tax cuts, on which Reagan era tax cuts were justified, has worked, but despite
the fact it has not. The faith has outlived its economic (though not its political)
rationale.
So, when Republicans assail the deficits under President Obama , are they to be taken
seriously? Yes and no. Yes, they are politically interested in blaming Mr Obama for deficits,
since all is viewed fair in love and partisan politics. And yes, they are, indeed, rhetorically
opposed to deficits created by extra spending (although that did not prevent them from enacting
the unfunded prescription drug benefit, under President Bush). But no, it is not deficits
themselves that worry Republicans, but rather how they are caused: deficits caused by tax cuts
are fine; but spending increases brought in by Democrats are diabolical, unless on the
military.
"[Y]ou should never raise taxes in order to cut taxes. Surely Congress has the authority,
and it would be right to -- if we decide we want to cut taxes to spur the economy, not to
have to raise taxes in order to offset those costs. You do need to offset the cost of
increased spending, and that's what Republicans object to. But you should never have to
offset the cost of a deliberate decision to reduce tax rates on Americans"
What conclusions should outsiders draw about the likely future of US fiscal policy?
First, if Republicans win the mid-terms in November, as seems likely, they are surely going
to come up with huge tax cut proposals (probably well beyond extending the already unaffordable
Bush-era tax cuts).
Second, the White House will probably veto these cuts, making itself even more politically
unpopular.
Third, some additional fiscal stimulus is, in fact, what the US needs, in the short term,
even though across-the-board tax cuts are an extremely inefficient way of providing it.
Fourth, the Republican proposals would not, alas, be short term, but dangerously long term,
in their impact.
Finally, with one party indifferent to deficits, provided they are brought about by tax
cuts, and the other party relatively fiscally responsible (well, everything is relative, after
all), but opposed to spending cuts on core programmes, US fiscal policy is paralysed. I may
think the policies of the UK government dangerously austere, but at
least it can act.
This is extraordinarily dangerous. The danger does not arise from the fiscal deficits of
today, but the attitudes to fiscal policy, over the long run, of one of the two main parties.
Those radical conservatives (a small minority, I hope) who want to destroy the credit of the US
federal government may succeed. If so, that would be the end of the US era of global dominance.
The destruction of fiscal credibility could be the outcome of the policies of the party that
considers itself the most patriotic.
In sum, a great deal of trouble lies ahead, for the US and the world.
Bruce Bartlett writes "I think my friend
Martin is a bit too hard on Reagan, who did try to cut spending and signed 11 major tax
increases into law to bring down the deficit. And Bush 41 initiated a budget deal in 1990
that eventually led to budget surpluses. It was Bush 43 and his willing accomplices among
the Republicans who controlled Congress that deserve the vast bulk of the blame."
This is my response: "Fair comment. But, as you have often noted, his followers have
repudiated president Reagan's willingness to raise taxes. Nor are they making any credible
commitments to large-scale cuts in public spending. It is also the case that, despite a
boom in the 1980s, the end of the Reagan and George H. Bush era saw much higher public debt
ratios than the beginning. I think you have to recognise that today's Republicans are
Reagan's children and, as is often the case, are more uncompromising than their
parents."
Mr. Wolf - Your comment is entirely
correct though perhaps incomplete. Implicit, and sometimes explicit, in the supply-side
argument was that low taxes wouldn't involve any public sacrifices. The Republicans
promised the benefits of the liberal state while arguing that the needed tax revenues
wouldn't be needed. This is what made it and continues to make it a successful political
strategy. This is an actual Big Lie.
Its worth delineating the other Big Lie of Republican political strategy, the the USA is
so powerful that it can do anything it wants on the international stage. Add in consistent
appeals to racial and religious bigotry (from which the personally decent Mr. Reagan was
not immune) and you have almost the whole Republican political strategy of the last 30
years. Very successful and almost all of it based on deception and appeals to the
electorate's worst tendencies.
Running up the debt in order to default
and cut spending is like having a heart attack in order to get serious about diet and
exercise. It is crazy, but they will do it, and then blame it on someone else.
I think you're assuming a lot about the
results of the November elections that are far from certain. In fact, it's highly, highly
unlikely that the Republicans will win the Senate, and not particularly likely they'll win
the House. They will certainly pick up seats in the House, maybe a lot, but there are only
a handful of Dem-held Senate seats that I would say today are pretty much lost for the
Democrats (North Dakota, Arkansas), while there are also up to 8 Republican-held seats that
could be in play. Democrats would have to lose 10 seats that they currently hold and not
win any seats currently held by Republicans (even though 5 of those are open and Vitter in
Louisiana is so scandal-plagued he may not survive). It's just about implausible the
Democrats will lose a net of 10 or more seats.
Even in the House, Democrats will have to lose almost all the contested seats, at a time
when the most recent generic ballot from Gallup shows Democrats nationally with an 8 point
advantage and most of the vulnerable Democratic incumbents have huge cash advantages over
their Republican challengers.
I agree with your interpretation of the political appeal of supply side economics, but I
think you're greatly overestimating the ability of the Republicans to win enough seats in
November to fully enact their fiscal will on the White House.
"Second, the White House will probably
veto these cuts"
I wish I could agree. Given what we have seem from President Obama this past year and a
half, I think he is just as likely to go along with them as part of some nebulous plan to
angle for concessions from the other side, or simply to burnish his bipartisan
credentials.
Thanks for saying out loud what has been
apparent: that Republicanism has become fundamentally destructive. I don't think there's
any doubt that the empire is coming to an end, as all empires do, with the unwillingness of
the populace to bear the costs and burdens. The tax revolt is, at its heart, a cancer
destroying American power and prosperity.
This is doubly unhealthy because the United States needs a healthy opposition. In its
absence, the Democrats are also becoming corrupt. Their electoral appeal has increasingly
become: "Vote for us. We're not insane." That's necessary, of course, but hardly
sufficient. So we end up with a health care bill with no cost containment, a financial
regulatory bill that does not address the speculation and institutional giantism that was
at the heart of the collapse, and a stimulus bill half the size that it should have been
and heavily tilted against hiring the unemployed in favor of tax cuts. The Republicans
would have done worse, but that is small comfort.
Where are you wrong? If anywhere, in having any doubts that we are on the path to
destruction, will no reason to think that we will turn back.
A wild card in the events you outline
could be the report of the bipartisan commission on reducing the long-term budget deficit.
Larry Summers mentioned it in his contribution to the austerity debate. If, and it's a big
if, this report is substantive enough, it might provide cover for Republicans, Democrats,
and the White House to tackle long-term deficits.
In addition, I also feel you are a bit generous in labeling the Democrats relatively
fiscally responsible. Certainly, the president's budget had rather high projected deficits
over the next decade (and beyond).
Ultimately, according to the CBO a lot comes down to health care costs, particularly
Medicare. Reforming Medicare and controlling the explosion of costs currently projected for
it is the key. Everything else is secondary.
At last you have it spot on. There will
have to be a crisis because Weston democracies will not vote for wage cuts. May be it could
be done if the elite took a big cut first but that will not happen as most of the elite do
not see the problem as their fault.
You recently replied to one of my emails about thestateBritainis in with the words
"I also don't understand this masochism" Well you surely must now
"So long as U.S. banks are required to accept U.S. government checks -- which is to say
so long as the Republic exists -- then the government can and does spend without borrowing,
if it chooses to do so Insolvency, bankruptcy, or even higher real interest rates are not
among the actual risks to this system."
The only real risk to the system is inflation. The need for any sovereign government
that can issue its own currency to balance its budget is merely a useful fiction, of
political importance but not a real economic constraint.
' Those radical conservatives (a small
minority, I hope) who want to destroy the credit of the US federal government may succeed.
If so, that would be the end of the US era of global dominance. The destruction of fiscal
credibility could be the outcome of the policies of the party that considers itself the
most patriotic. '
That prospect holds no fear for the majority of contemporary Republican thinking in the
party and throughout the conservative base. Withdrawal from NATO, UN and the global stage
is precisely the plan. The contemporary Republican party is now more than ever aligned with
the populist, reactionary and isolationist sentiments of conservative small town America.
It will take many years, but I suspect America is on a long slide to an ungovernable failed
state and eventual break-up of the union.
"... The Trumpist theory -- which was, I'm sorry to say, endorsed by conservative economists who should have known better -- was that there was a huge pile of money sitting outside the U.S. that companies would bring back and invest productively if given the incentive of lower tax rates. But that pile of money was an accounting fiction. And the tax cut didn't give corporations an incentive to build new factories and so on; all it did was induce them to shift their tax-avoidance strategies. ..."
"... As Brad Setser of the Council on Foreign Relations points out , a casual glance at the data seems to suggest that American companies earn a lot of their profits at their overseas subsidiaries. But a closer look shows that the bulk of these reported profits are in a handful of small countries with low or zero tax rates, like Bermuda, Luxembourg and Ireland. The companies obviously aren't earning huge profits in these tiny economies; they're just using accounting gimmicks to assign profits earned elsewhere to subsidiaries that may have a few factories, but sometimes consist of little more than a small office, or even just a post-office box. ..."
"... These basically phony profits then accumulate on the books of the overseas subsidiaries, rather than the home company. But this doesn't affect their ability to invest in America: if Apple wants to spend a billion dollars here, it can always borrow the money using the assets of its Irish subsidiary as collateral. In other words, U.S. taxes weren't having any significant effect in deterring real investment in the U.S. economy. ..."
"... So the theory supposedly behind the Trump tax cut has turned out to be a complete bust. Corporate accountants got to have some fun exploring new frontiers in tax avoidance; the rest of us just ended up saddled with an extra $2 trillion or so in debt. ..."
"... Now, I'm not deeply worried about that debt. Given low borrowing costs , the costs and risks of federal debt are far less than the usual suspects -- again, the same people who cheered on the Trump tax cut -- have claimed. But think of all the other things we could have done with $2 trillion -- all the infrastructure we could have built and repaired, all the people who could have been given essential health care. ..."
So far, Donald Trump has passed only one significant piece of legislation: the 2017 tax cut.
It was, to be fair, a pretty big deal: corporations, the principal beneficiaries, have already
saved more than $150 billion, and over the course of a decade the tax cut will probably
increase the budget deficit by more than $2 trillion.
But the tax cut was supposed to do more than just give stockholders more money -- or at
least that's what its proponents claimed. It was also supposed to lead to many years of high
economic growth, 3 percent or more at an annual rate.
Independent observers were skeptical, to say the least. They conceded that the tax cut might
lead to a brief sugar high, because that's what big deficits do. But any favorable effects on
growth, they argued, would soon fade out. And they always insisted that it would take some time
to assess the tax cut's actual effects.
Nonetheless, when the economy grew pretty fast in the second quarter of last year, Trump and
his supporters cried vindication, and ridiculed the critics.
But a bit of time has passed since then. The chart shows the U.S. economy's growth rate by
quarter since the beginning of 2018. The last number isn't official; but there are a number of
independent observers, including both Federal Reserve banks and private financial institutions,
who produce "nowcasts" that estimate growth based on early data. At this point all of these
nowcasts show slowing growth, and most put the first quarter at around 1.5 percent.
So do the results so far look like the huge, sustained boom the Trump camp promised, or the
brief sugar high predicted by the critics?
But Donald Trump is a special kind of leader. When things don't go his way, when events fail
to turn out as he planned and promised, he always knows exactly what to do:
Blame someone else . Sure enough, he's now asserting that we'd be having a yuge economic
boom, 3 percent growth, all that, if only the Federal Reserve hadn't raised interest rates.
O. K., this is where you need to be able to hold two ideas in your head at the same time.
Was the Fed wrong to raise rates? Probably yes. Does this account for the failure of the Trump
tax cut? No.
The Fed was clearly overoptimistic about the economy's prospects, as it has pretty
consistently been for the past decade. It's worth noting that throughout that whole period
conservative critics of the Fed -- the same people now backing Trump -- attacked the
institution for keeping interest rates too low, not too high. Still, it's now clear that the
attempt to normalize monetary policy was premature.
But the Fed's premature rate hikes aren't why the Trump tax cut is failing. How do we know
that? Because all those boasts about why the tax cut would work miracles were based on a
specific story about what is holding the U.S. economy back. And that story was and is all
wrong.
The Trumpist theory -- which was, I'm sorry to say, endorsed by
conservative economists who should have known better -- was that there was a huge pile of
money sitting outside the U.S. that companies would bring back and invest productively if given
the incentive of lower tax rates. But that pile of money was an accounting fiction. And the tax
cut didn't give corporations an incentive to build new factories and so on; all it did was
induce them to shift their tax-avoidance strategies.
As Brad Setser of the Council on Foreign Relations
points out , a casual glance at the data seems to suggest that American companies earn a
lot of their profits at their overseas subsidiaries. But a closer look shows that the bulk of
these reported profits are in a handful of small countries with low or zero tax rates, like
Bermuda, Luxembourg and Ireland. The companies obviously aren't earning huge profits in these
tiny economies; they're just using accounting gimmicks to assign profits earned elsewhere to
subsidiaries that may have a few factories, but sometimes consist of little more than a small
office, or even just a post-office box.
These basically phony profits then accumulate on the books of the overseas subsidiaries,
rather than the home company. But this doesn't affect their ability to invest in America: if
Apple wants to spend a billion dollars here, it can always borrow the money using the assets of
its Irish subsidiary as collateral. In other words, U.S. taxes weren't having any significant
effect in deterring real investment in the U.S. economy.
When Trump cut the tax rate, some companies "brought money home." But for the most part this
had no economic significance. Here's how it works: Apple Ireland transfers some of its assets
to Apple U.S.A. Officially, Apple Ireland has reduced its investment spending, while paying a
dividend to U.S. investors. In reality, Apple as an entity has the same total profits and the
same total assets it did before; it hasn't devoted a single additional dollar to purchases of
equipment, R&D, or anything else for its U.S. operations.
Not surprisingly, then, the investment boom Trump economists promised has
never materialized . Companies didn't use their tax breaks to invest more; mainly they used
them to buy back their own stock. This in turn, put more money in the hands of investors, which
gave the economy a temporary boost -- although for 2018 as a whole, one of the biggest drivers
of faster growth was, believe it or not, higher
government spending .
So the theory supposedly behind the Trump tax cut has turned out to be a complete bust.
Corporate accountants got to have some fun exploring new frontiers in tax avoidance; the rest
of us just ended up saddled with an extra $2 trillion or so in debt.
Now, I'm not deeply worried about that debt. Given
low borrowing costs , the costs and risks of federal debt are far less than the usual
suspects -- again, the same people who cheered on the Trump tax cut -- have claimed. But think
of all the other things we could have done with $2 trillion -- all the infrastructure we could
have built and repaired, all the people who could have been given essential health
care.
What a colossal, corrupt waste.
Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished
Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial
Prize in Economic Sciences for his work on international trade and economic geography.
@ PaulKrugman
The GOP has announced a comprehensive bipartisan effort to reform our tax code, promote
fairness, and provide health coverage. APRIL FOOLS! The U.S. has put a tax evader in charge,
who has in turn named Sen. Scott, the former CEO who steered the largest Medicare fraud in
our history, to develop a health coverage plan. No, that's not April Fools, but reality.
I resent the Trump tax travesty being referred to as a "tax cut". For many middle class
homeowners, it was anything but. Just the elimination of personal exemptions for my family of
four cost us more in increased tax liability than the increase in the standard deduction.
Then there were tens of thousands of dollars' worth of deductions that we didn't get to take
under the new rules. Our tax liability went up by thousands.
I have not had any fun as corporate tax accountant from Trump's giveaway to the rich.
Firstly, the law was not planned out, so there is no guidance for any of the new laws. The
IRS is scrambling just to get new instructions and forms out. I'd bet that the confusion is
creating more opportunities to avoid taxes than there were before. Secondly, I get to deal
with the whining of the beneficiaries of the tax cut. Somehow they aren't satisfied with
paying 40% less. Corporations and the 1% have a criminally high sense of entitlement.
Supply side economics was, is, and always will be, almost a complete lie. Put simply, if
consumer spending doesn't increase, why would a company spend money to produce more products?
It is demand, not supply, that drives economic growth. And it should not come as a surprise
that government spending creates economic growth when so much of the economy is tied to
government spending. If you cut government spending, as Republicans wish, other than the
government employees suddenly out of work, there are all the private businesses that depend
on government contracts that will be laying off workers. So the economy contracts, other
businesses become pessimistic and the economy contracts even further. Where I disagree with
Paul is that we need the Fed to raise interest rates before the next recession hits. The
economy has been strong for a decade but when a recession comes around, we need the Fed's
ability to reduce rates and encourage borrowing.
@Bill The effects of government spending (or lack thereof) should be obvious to the
economics-challenged just by looking at what happened during Trump's government shutdown.
Hint: it wasn't just bad for the people who were directly not being paid for their government
jobs. And that was only a brief microcosm of the effect. What I don't get is why people
thought this time would be different, when it has never worked as advertised before. Did they
think Trump would make it work this time?
Krugman shows little caring about common people -- taxes or otherwise. He wants people to
have "healthcare," but what does he mean by that? He doesn't support Medicare for All he has
said. He doesn't seem to know that it would be paid for by US, not the government -- along
with our taxes, in the way that makes the most sense everywhere. We'd pay according to our
incomes; if you had NO income, you'd still have healthcare, birth to grave. Especially in
times of recession, let Krugman put that in his pipe and smoke it!
Medicare for All would not break the government; private insurance would still be allowed,
but more and more people would like a universal plan with the low rates it would bring --as
we get out from under the high prices we're paying for private health insurance, even the
Medicare Advantage run by companies like Aetna. Mine costs nearly $400 a month!
Money, power and greed is what the whole Trump presidency is about. A few people are getting
very rich. In the meantime, his base is fueled by diversionary red meat. I think every
American should get a cut of the ill-gotten gains. A monthly check for enduring this
presidency, and the stupid people who support him.
There is one point in Professor Krugman's article that needs to be highlighted; "although for
2018 as a whole, one of the biggest drivers of faster growth was, believe it or not, higher
government spending." Government spending, not tax cuts has fueled recoveries from recessions
caused by their policies from Reagan to Bush Jr. That is, if you look at what happened when
both Reagan and Bush Jr. first took office and began their policies those policies resulted
in recessions. Both Reagan and Bush Jr. got out of those recessions by going on huge spending
binges. The point being that well Republicans do cut taxes for the super rich and powerful,
the disguise the fact that those policies do not benefit America by going on huge deficit
spending binges that, to quote Lloyd Benson, "Create an illusion of prosperity". The fact
that Republicans use large increases in deficit Government spending for all of their economic
success is the most unreported fact in American politics.
I am not sure why I should put any stock in any of your opinions/predictions when you have
been so colossally wrong (e.g. "the stock market will crash if Trump gets elected") so often.
Nobel Laureate? You and Yasser Arafat - The Nobel Prize committee doesn't always get it right
@Randy Well, let's compare Dr. Krugman to the GOP: 1)Since the 1970's, they have claimed that
supply side economics ie cutting taxes, will 'float all boats', and since the 1980's the tax
rate on the most well off has plummeted..and since then? The top .5% have seen huge gains,
while the bottom 90% of Americans have seen their incomes and wealth fall. 2)The GOP under
Obama said the budget deficits caused by government spending were going to cause
hyperinflation and cause the dollar to become valueless, they screamed with the economic
bailouts and so forth. Yet the world didn't end, and now the GOP just added 2 trillion to our
debt, and saying "it is no big deal"..so who was right 3)Trump claimed the tax cut was going
to make the economy sing, that it was going to grow at 5% a year and that ordinary people
were going to see their decline in wages end.......fast forward 2 years, and wages have not
grown faster than inflation, and despite a supposedly tight labor market, wages are still not
growing...and the only people seeing increases in wealth and income are the top .5%, they saw
a huge increase last year thanks to the corporate tax cut. So whose predictions were wrong?
@music observer The working middle class has been shrinking since the supply side Reaganomics
started and it has never stopped since. There is not much of the Great Society left, the
Republicans are still cutting the benefits for Medicare and Medicaid and food stamps, Head
Start disappeared too as far as I can tell. The Republican party is morally and
intellectually bankrupt.
Americans comment about tax or not tax. Free market. But there is absolutely no precise
conscience of the numbers nor how the American economy works. Where the US corporations are
domiciliated . In Europe ? We don't care. No comment. We cheat ? we don't care. No comment .
Who are these people ?
Under neoliberalism any regime change is necessary followed by an economic rape. That was the case with the USSR in 1991,
that was the case in Ukraine in 2014. Only the size and length of the looting varies depending of the strength of new government.
Both the size and the length is maximal if in power are marionette like Yeltsin or Yatsenyuk/Poroshenko.
Saying "Beware of Greeks bearing gifts" now should sound as "Beware of Americans who bring you color revolutions." They bring the
economic rape (aka "Disaster
capitalism") as the second phase. That's the nature of neocolonialism -- now you do not need to occupy the country.
It's enough to make it a debt slave using IMF and install compradors to endure the low of money and continuing impoverishment of the
population.
With such crooked and greedy friends as Biden and Kerry and their narcoaddicts sons you do not need enemies. But the main
danger are not individual sharks but Western financial institutions like IMF and World bank. Those convert countries into debt slaves
and that means permanently low standard (Central African in case of Ukraine, something like $2 a day) of living for generations
to come.
What is interesting is that unlike say German nationalists in 30th, the Ukrainian nationalists proved to be completly
useless in defending the Ukraine from looting. They actually serves as supplementary tool of the same looting.
The standard of living of Ukrainians dropped 2-3 times since 2014. How pensioners survive, on $50 a month pension I simply do not
understand. In any case Neoliberalism proved to be very effecting is keeping "developing" nations economic growth down and converting
them into debt slaves. The fact that Biden use loans as a tool of extortion (as in threat to cancel one billion loan) to close criminal
investigation of his sons company is just an icing on the cake. Poroshenko and his camarilla should be tried in the court of law for
his corruption and pandering to the Western sharks, who were happy to steal from Ukraine as much as then can.
To pay $166K a month for Biden's son cocaine is way too much to such impoverished country as Ukraine.
Notable quotes:
"... "I said, ' You're not getting the billion .' I'm going to be leaving here in, I think it was about six hours. I looked at them and said: ' I'm leaving in six hours. If the prosecutor is not fired, you're not getting the money, '" bragged Biden, recalling the conversation with Poroshenko. ..."
"... " Well, son of a bitch, he got fired. And they put in place someone who was solid at the time," Biden said at the Council on Foreign Relations event - while insisting that former president Obama was complicit in the threat. ..."
"... The prosecutor he got fired was leading a wide-ranging corruption probe into the natural gas firm Burisma Holdings that employed Biden's younger son, Hunter, as a board member. ..."
"... U.S. banking records show Hunter Biden's American-based firm, Rosemont Seneca Partners LLC, received regular transfers into one of its accounts -- usually more than $166,000 a month -- from Burisma from spring 2014 through fall 2015, during a period when Vice President Biden was the main U.S. official dealing with Ukraine and its tense relations with Russia. - The Hill ..."
"... And before he was fired, Shokin says he had made "specific plans" for the investigation - including "interrogations and other crime-investigation procedures into all members of the executive board, including Hunter Biden." "I would like to emphasize the fact that presumption of innocence is a principle in Ukraine," added Shokin. Joe Biden "clearly had to know" about the probe before he insisted on Shokin's ouster . Via The Hill: ..."
"... The U.S. Embassy in Kiev that coordinated Biden's work in the country repeatedly and publicly discussed the general prosecutor's case against Burisma; ..."
"... President Obama named Biden the administration's point man on Ukraine in February 2014 ..."
"... Remember Victoria Nuland's famous phone recording of "**** the EU?" This was nothing more than another CIA destabilization campaign carried out of another Sovereign Country. With the goal of breaking the Bush Senior & Jim Baker agreement of not surrounding Russia with NATO countries after their Collapse. ..."
"... Let's face it. If Ukrainians loved it's Country, Joey, Hunter and the Choco-**** would have wound up like Mikhail Lesin during an all night party in an upscale grotto in Kiev by now! ..."
"... At last some questions for this dirt ball-burisma is tied in with one of the most if not the most corrupt oligarch, Koloimiski. Biden is up to his eyeballs in some dodgy deals in china as well-this guy and his son are walking corruption personified. ..."
"... Didn't Hillary teach Joe that a tax free foundation is better than using your son's LLC for laundering the bribes... This is basic stuff. ..."
"... Joe "the Conqueror" "Caesar Magnus" Biden. Joe of Ukraine, the best bud of $oro$. ..."
Originally from:
Forget 'Creepy'
- Biden Has A Major Ukraine Problem Joe Biden appears to have made a major tactical error last year when he bragged to an
audience of foreign policy experts how he threatened to hurl Ukraine into bankruptcy if their top prosecutor, General Viktor Shokin,
wasn't immediately fired, according to
The Hill 's John Solomon.
In his own words, with video cameras rolling,
Biden described
how he threatened Ukrainian President Petro Poroshenko in March 2016 that the Obama administration would pull $1 billion in
U.S. loan guarantees , sending the former Soviet republic toward insolvency, if it didn't immediately fire Prosecutor General
Viktor Shokin. -
The Hill
"I said, ' You're not getting the billion .' I'm going to be leaving here in, I think it was about six hours. I looked at
them and said: ' I'm leaving in six hours. If the prosecutor is not fired, you're not getting the money, '" bragged Biden, recalling
the conversation with Poroshenko.
" Well, son of a bitch, he got fired. And they put in place someone who was solid at the time," Biden said at the Council
on Foreign Relations event - while insisting that former president Obama was complicit in the threat.
Interviews with a half-dozen senior Ukrainian officials confirm Biden's account, though they claim the pressure was applied
over several months in late 2015 and early 2016, not just six hours of one dramatic day . Whatever the case, Poroshenko and Ukraine's
parliament obliged by
ending Shokin's tenure as prosecutor. Shokin was facing steep criticism in Ukraine, and among some U.S. officials, for not
bringing enough corruption prosecutions when he was fired. -
The Hill
And why would Biden want the "son of a bitch" fired?
In what must be an amazing coincidence, the prosecutor was leading a wide-ranging corruption investigation into a natural gas
firm - which Biden's son, Hunter, sat on the board of directors.
The prosecutor he got fired was leading a wide-ranging corruption probe into the natural gas firm
Burisma Holdings
that employed Biden's younger son, Hunter, as a board member.
U.S. banking records show Hunter Biden's American-based firm, Rosemont Seneca Partners LLC, received regular transfers
into one of its accounts -- usually more than $166,000 a month -- from Burisma from spring 2014 through fall 2015, during a period
when Vice President Biden was the main U.S. official dealing with Ukraine and its tense relations with Russia. -
The Hill
The Hill 's Solomon reviewed the general prosecutor's file for the Burisma probe - which he reports shows Hunter Biden, his business
partner Devon Archer and their firm, Rosemont Seneca, as potential recipients of money.
And before he was fired, Shokin says he had made "specific plans" for the investigation - including "interrogations and other
crime-investigation procedures into all members of the executive board, including Hunter Biden." "I would like to emphasize the fact
that presumption of innocence is a principle in Ukraine," added Shokin. Joe Biden "clearly had to know" about the probe before he
insisted on Shokin's ouster . Via The Hill:
Although Biden made no mention of his son in his 2018 speech, U.S. and Ukrainian authorities both told me Biden and his office
clearly had to know about the general prosecutor's probe of Burisma and his son's role. They noted that:
Hunter Biden's appointment to the board was widely reported in American media;
The U.S. Embassy in Kiev that coordinated Biden's work in the country repeatedly and publicly discussed the general prosecutor's
case against Burisma;
Great Britain took very public action against Burisma while Joe Biden was working with that government on Ukraine issues;
Biden's office was quoted, on the record, acknowledging Hunter Biden's role in Burisma in a New York Times article about the
general prosecutor's Burisma case that appeared four months before Biden forced the firing of Shokin. The vice president's office
suggested in that article that Hunter Biden was a lawyer free to pursue his own private business deals.
President Obama named Biden the administration's point man on Ukraine in February 2014 , after a popular revolution ousted
Russia-friendly President Viktor Yanukovych and as Moscow
sent military forces into Ukraine's Crimea territory.
***
Key questions for 'ol Joe:
Was it appropriate for your son and his firm to cash in on Ukraine while you served as point man for Ukraine policy? What work
was performed for the money Hunter Biden's firm received? Did you know about the Burisma probe? And when it was publicly announced
that your son worked for Burisma, should you have recused yourself from leveraging a U.S. policy to pressure the prosecutor who
very publicly pursued Burisma?
Remember Victoria Nuland's famous phone recording of "**** the EU?" This was nothing more than another CIA destabilization
campaign carried out of another Sovereign Country. With the goal of breaking the Bush Senior & Jim Baker agreement of not surrounding
Russia with NATO countries after their Collapse.
Let's face it. If Ukrainians loved it's Country, Joey, Hunter and the Choco-**** would have wound up like Mikhail Lesin
during an all night party in an upscale grotto in Kiev by now!
Amazing that all 3 of them are still alive and that "Song Bird" McCain (#4) was allowed to die from his brain cancer instead
of joining them or being dismembered and put on display when he made these visit(s) (
https://www.youtube.com/watch?v=IbfsTcJCKDE ) along
with General Vallely (#5)!!!
Taras Bulba , 1 hour ago
At last some questions for this dirt ball-burisma is tied in with one of the most if not the most corrupt oligarch, Koloimiski.
Biden is up to his eyeballs in some dodgy deals in china as well-this guy and his son are walking corruption personified.
CarifonianSeven, 2 hours ago
Didn't Hillary teach Joe that a tax free foundation is better than using your son's LLC for laundering the bribes... This
is basic stuff.
Pernicious Gold Phallusy, 1 hour ago
Joe cheated his way through undergrad and law school. He would be unable to understand any of that.
whittler, 1 hour ago
What? You mean folks will finally care about little Hunter hiring Azov neo-Nazi fighters (oops! security I mean) to protect
his fracking site just north of the 'troubles' in the eastern Ukraine? I'm sure they were working for free and that no Biden money
was ever used to payoff (oops again! I mean pay the wages of) a bunch of Nazis (dang it again, I mean neo-Nazis, it sounds so
much warmer and fuzzier when you add 'neo').
Creepy Joe and all D's agree, 'Nazi' = bad, neo-Nazi = warm, fuzzy and good; heck, they even like to kill Russians Russians
Russians!!!
Cracker 16 , 1 hour ago
Joe "the Conqueror" "Caesar Magnus" Biden. Joe of Ukraine, the best bud of $oro$.
Seems US oil production from shale now are declining, seems the growth based on lended money
now will stop.
https://oilprice.com/Energy/Crude-Oil/US-Oil-Production-Dips-For-First-Time-In-Nearly-Six-Months.html From the Rig Count we know this decrease will be strengthening the comming months until
the oil price increase to a level profit will be possible that can pay dividend and growth.
This might take time as soon Trump will tweet again as oil is to expensive and OPEC will be
forced to take action.
I'm sure that so long as the world wide economy remains on its feet that there will be huge
increases in demand for oil for transportation.
But nobody seems to give any thought here to things that will reduce demand. Cars will be
driving themselves soon. Think about trains. Before too much longer, railroaders will be able
to move stuff on trains almost as nimbly as truckers do today, at least on city to city basis
when the cities are at least a couple of hundred miles apart. Long distance trucking may be a
thing of the past within, like camera film and typewriters, within a couple of decades. These
possibilities are worthy of thought if you are in the oil biz for the long haul.
Every country that imports oil is going to have a powerful incentive to reduce demand for
it to the extent it can as depletion sooner or later pushes one exporting country after
another into the importer category. Countries in the Middle East with oil and gas to export
are going to find it so profitable to build wind and solar farms that they will be building
them like mushrooms popping up after a spring rain, because they can sell some or maybe even
most of the oil and gas they are burning now to generate electricity, thereby earning a big
profit on their solar and wind farm investment.
My thinking is that these changes will actually PROLONG our dependence on oil, taken all
around, by helping hold the price down so we can afford to run existing legacy equipment, and
have affordable petrol based chemicals, etc. I don't think anybody currently in the biz needs
to worry about selling out anytime soon, lol. But considerations such as these may have a
huge impact on exploration and development starting within a decade or so.
Times change. Doom doesn't necessarily have anything to do with it.
"... When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy. ..."
When the preferences of economic elites and the stands of organized interest groups are
controlled for, the preferences of the average American appear to have only a minuscule,
near-zero, statistically non-significant impact upon public policy.
"... "The decision to close our local stores is a difficult one," said Lifeway Chief Executive Officer Brad Waggoner. "While we had hoped to keep some stores open, current market projections show this is no longer a viable option." ..."
"... And yes, Internet retailing has been growing, but it still accounts for less than 10 percent of all U.S. retail sales. In addition, it is important to point out that Internet retailers had a very disappointing holiday season just like brick and mortar retailers did. ..."
"... Ultimately, the truth is that the U.S. economy has been steadily slowing down in recent months. During the months of December, January and February, the amount of stuff being moved around the country by truck, rail and air was lower than during all of those same months a year earlier. The following comes from Wolf Richter ..."
"... Unfortunately, it appears that things are only going to get rougher for the U.S. economy in the months ahead. So more retail workers are going to get laid off, more stores are going to close, and there are going to be a lot more stories about our ongoing "retail apocalypse" in the mainstream media. ..."
Just like we witnessed during the last recession, major retailers are laying off tens of
thousands of workers, and it looks like this will be the worst year for store closings in all
of U.S. history. Many are referring to this as
"the retail apocalypse" , and without a doubt this is one of the toughest stretches for
retailers that we have ever seen. But many believe that what we have witnessed so far is
just the beginning . After all, if
retailers are struggling this much now, how bad will things be once the next recession really
gets rolling? Of course the truth is that things have been rocky for the retail industry for
quite a few years, but the numbers are telling us that this crisis is really starting to
accelerate.
According to Challenger, Gray & Christmas, retail layoffs were up a whopping 92 percent
in January and February compared to the same period a year ago. The following comes from
NBC News
More than 41,000 people have lost their jobs in the retail industry so far this year -- a
92 percent spike in layoffs since the same time last year,
according to a new report.
And the layoffs continue to mount, with JCPenney announcing this week it would be closing
18 stores in addition to three previously announced closures, as part of a "standard annual
review."
Yes, competition from Internet commerce is hurting the traditional retail industry, but it
certainly doesn't explain a 92 percent increase.
And very few retailers have been able to avoid this downsizing trend. At this point, even
the largest retailer in the entire country has begun "quietly closing
stores"
Walmart is closing at least 11 US stores across eight states.
The stores include one Walmart Supercenter in Lafayette, Louisiana, and Walmart
Neighborhood Market stores in Arizona, California, Kansas, South Carolina, Tennessee,
Virginia, and Washington.
For decades, Wal-Mart has been expanding extremely aggressively.
They have plenty of cash, and so the only way that it would make sense for them to close
stores is if they anticipated that we are heading into a recession.
The company was unable to find a buyer for the retail business and will begin winding down
its operations beginning this week, the company said in statement released Monday. The
decision to liquidate will bring an end to the brick-and-mortar business that began in 1962
with one location in Green Bay, Wisconsin.
Lifeway Christian Bookstores announced last week it would be closing the doors of all 170
brick and mortar stores, in a pivot to focusing on digital and e-commerce.
"The decision to close our local stores is a difficult one," said Lifeway Chief Executive
Officer Brad Waggoner. "While we had hoped to keep some stores open, current market
projections show this is no longer a viable option."
Whenever I do an article like this, I always have some readers that try to convince me that
this is only happening because of the growth of Internet retailing.
And yes, Internet retailing has been growing, but it still accounts for less than 10 percent
of all U.S. retail sales. In addition, it is important to point out that Internet retailers had
a very disappointing holiday season just like brick and mortar retailers did.
Ultimately, the truth is that the U.S. economy has been steadily slowing down in recent
months. During the months of December, January and February, the amount of stuff being moved around
the country by truck, rail and air was lower than during all of those same months a year
earlier. The following comes from
Wolf Richter
Now it's the third month in a row, and the red flag is getting more visible and a little
harder to ignore about the goods-based economy: Freight shipment volume in the US across all
modes of transportation – truck, rail, air, and barge – in February fell 2.1%
from February a year ago, according to the
Cass Freight Index , released today. The three months in a row of year-over-year declines
are the first such declines since the transportation recession of 2015 and 2016.
I have a feeling that when we get the final numbers for March that they will show that this
streak has now extended to four months.
Right now, unsold goods
are starting to pile up in U.S. warehouses at a rate that we haven't seen since the last
recession. Many retailers that are barely clinging to life will simply not survive if economic
conditions continue to deteriorate.
Unfortunately, it appears that things are only going to get rougher for the U.S. economy in
the months ahead. So more retail workers are going to get laid off, more stores are going to close, and there
are going to be a lot more stories about our ongoing "retail apocalypse" in the mainstream
media.
The global bond market's soaring performance has left investors queasy about the ride
ahead.
The Bloomberg Barclays Global Aggregate index has earned 2.3 percent through March 28, its
best quarter since mid-2017. But with yields sinking across major sovereign markets, investors
now face a dilemma. Buying government bonds at these levels is perilous because economic data
may improve, while taking more risk could leave investors nastily exposed to a global
downturn.
"... By Thomas Ferguson, Director of Research for the Institute of New Economic Thinking; Professor Emeritus, University of Massachusetts, Boston. Originally published at the Institute of New Economic Thinking website ..."
"... Kane, who coined the term "zombie bank" and who famously raised early alarms about American savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them. ..."
"... We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues, state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing the financial system. ..."
"... In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk, in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion. Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge piece of any upside if they rescue two failing institutions? ..."
Running in the background, though, was a new, darker theme: That the post-2008 reforms had gone too far in restricting policymakers'
discretion in crises. The trio most responsible for making the post-Lehman bailout revolution -- Ben Bernanke, Timothy Geithner,
and Henry Paulson --
expressed their
misgivings in a joint op-ed :
But in its post-crisis reforms, Congress also took away some of the most powerful tools used by the FDIC, the Fed and the Treasury
the FDIC can no longer issue blanket guarantees of bank debt as it did in the crisis, the Fed's emergency lending powers have
been constrained, and the Treasury would not be able to repeat its guarantee of the money market funds.
These powers were critical in stopping the 2008 panic The paradox of any financial crisis is that the policies necessary to
stop it are always politically unpopular. But if that unpopularity delays or prevents a strong response, the costs to the economy
become greater.
We need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next
fire from becoming a conflagration.
Sotto voce fears of this sort go back to the earliest reform discussions. But the question surfaced dramatically in Timothy Geithner's
2016 Per Jacobsson Lecture, " Are We Safer? The Case for Strengthening
the Bagehot Arsenal ." More recently, the Group of Thirty
has advanced similar suggestions -- not too surprisingly, since Geithner was co-project manager of the report, along with Guillermo
Ortiz, the former Governor of the Mexican Central Bank, who introduced the former Treasury Secretary at the Per Jacobson lecture.
Aside from the financial collapse itself, probably nothing has so shaken public confidence in democratic institutions as the wave
of bailouts in the aftermath of the collapse. The redistribution of wealth and opportunity that the bailouts wrought surely helped
fuel the populist surges that have swept over Europe and the United States in the last decade. The spectacle of policymakers rubber
stamping literally unlimited sums for financial institutions while preaching the importance of austerity for everyone else has been
unbearable to millions of people.
Especially in money-driven political systems, affording policymakers unlimited discretion also plainly courts serious risks. Put
simply, too big to fail banks enjoy a uniquely splendid situation of "heads I win, tails you lose" when they take risks. Scholars
whose research INET has supported, notably
Edward Kane , have shown how the certainty of government bailouts advantages large financial institutions, directly affecting
prices of their bonds and stocks.
For these reasons INET convened a panel at a G20 preparatory meeting in Berlin on "
Moral Hazard Issues in Extended Financial Safety Nets ."
The Power Point presentations of the three panelists are presented in the order in which they gave them, since the latter ones sometimes
comment on Edward Kane
's analysis of the European banks. Kane, who coined the term "zombie bank" and who famously raised early alarms about American
savings and loans, analyzed European banks and how regulators, including the U.S. Federal Reserve, backstop them.
Peter Bofinger
, Professor of International and Monetary Economics at the University of Würzburg and an outgoing member of the German Economic Council,
followed with a discussion of how the system has changed since 2008.
Helene Schuberth
, Head of the Foreign Research Division of the Austrian National Bank, analyzed changes in the global financial governance system
since the collapse.
The panel took place as public discussion of a proposed merger between two giant German banks, the Deutsche Bank and Commerzbank,
reached fever pitch. The panelists explored issues directly relevant to such fusions, without necessarily agreeing among themselves
or with anyone at INET.
But the point Robert Johnson, INET's President, and I
made some years back , amid an earlier wave of talk about using public money to bail out European banks, remains on target:
We are only interested observers of the arm wrestling between the various EU countries over the costs of bank rescues,
state expenditures, and such. But we do think there is a clear lesson from the long history of how governments have dealt with
bank failures . [If] the European Union needs to step in to save banks, there is no reason why they have to do it for free best
practice in banking rescues is to save banks, but not bankers. That is, prevent the system from melting down with all the many
years of broad economic losses that would bring, but force out those responsible and make sure the public gets paid back for rescuing
the financial system.
The simplest way to do that is to have the state take equity in the banks it rescues and write down the equity of bank shareholders
in proportion. This can be done in several ways -- direct equity as a condition for bailout, requiring warrants that can be exercised
later, etc. The key points are for the state to take over the banks, get the bad loans rapidly out of those and into a "bad bank,"
and hold the junk for a decent interval so the rest of the market does not crater. When the banks come back to profitability,
you can cash in the warrants and sell the stock if you don't like state ownership. That way the public gets its money back .at
times states have even made a profit.
In 2019, another question, alas, is also piercing. In country after country, Social Democratic center-left parties have shrunk,
in many instances almost to nothingness. In Germany the SPD gives every sign of following the French Socialist Party into oblivion.
Would a government coalition in which the SPD holds the Finance Ministry even consider anything but guaranteeing the public a huge
piece of any upside if they rescue two failing institutions?
there needs to be an asset tax on/break up of the megas. End the hyper-agglomeration of deposits at the tail end.
not holding my breath though. (see NY state congressional delegation)
to be generous, tax starts at $300 billion. Even then it affects only a dozen or so US banks. But would be enough to clamp
down on the hyper-scale of the largest US/world banks.
The world would be better off with lot more mid-sized regional players.
Anyone who mentions Timmy Geithner without spitting did not pay attention during the Obama reign of terror. He and Obama crowed
about the Making Home Affordable Act, implying that it would save all homeowners in mortgage trouble, but conveniently neglected
to mention that less than 100 banks had signed up. The thousands of non-signatories simply continued to foreclose. Not to mention
Eric Holder's intentional non-prosecution of banksters. For these and many other reasons, especially his "Islamic State is only
the JV team" crack, Obama was one of our worst presidents.
Fergusons graph on DBK's default probabilities coincides with the ECB's ending its asset purchase programme and entering the
"reinvestment phase of the asset purchase programme". https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html
The worst of the euro zombie banks appear to be getting tense and nervous. https://www.youtube.com/watch?v=dKpzCCuHDVY
Maybe that is why Jerome Powell did his volte-face last month on gradually raising interest rates. Note that the Fed also reduced
its automatic asset roll-off. I'm curious if the other euro-zombies in the "peers" return on equity chart are are experiencing
volatility also.
Apparently the worst fate you can suffer as long as you don't go Madoff is Fuld. According to wikipedia his company manages
a hundred million which must be humiliating. It's not as humiliating as locking the guy up in prison would be by a very long stretch.
Greenspan famously lamented that there isn't anything the regulators can really do except make empty threats. This is dishonest.
The regulations are not carved in stone like the ten commandments. In China they execute incorrigible financiers all the time.
Everybody forgets (or at least does not mention) that Greenspan was a member of the Class of '43, the (mostly Canadian) earliest
members of the Objectivist Cult with guru Ayn Rand. Expecting him to act rationally is foolish. It may happen accidentally (we
do not know why he chose to let the economy expand unhindered in 1999), but you cannot count on it. In a world with information
asymmetry expecting markets to be concerned about reputation is ridiculous. To expect them to police themselves for long term
benefit is even more ridiculous.
I think Finance is currently about 13% of the S&P 500, down from the peak of about 18% or so in 2007. I think we will have
a healthy economy and improved political climate when Finance is about 8-10% of the S&P 500 which is about where I think finance
plays a healthy, but not overwhelming rentier role in the economy.
This article is a death sentence for Trump. Now he he win only on pure demagogy, which might not work.
Notable quotes:
"... Still, an extra $700 billion flowing into the economy in a year is hardly chicken feed. So, has the money being used to create more jobs as Trump hoped? Hardly. The evidence suggests that majority of that cash has simply found its way into buybacks with minimal discernible impact on investments. It's probably not a coincidence that the generous tax cut has been followed by record buybacks, with companies repurchasing more than a trillion dollars-worth of their own shares last year. ..."
"... Ironically, Congress now wants to tame the monster it has helped create by reining in on buybacks. But with fears that a market top could be near, the timing would be wrong since buybacks provide a large source of demand for shares. ..."
"... "Congress failed to anticipate a major loophole" Huh? Its not a bug, its a feature. ..."
"... "With their enormous complexity and high-stakes, tax issues are the buffet that keeps Washington's swamp creatures fed," Public Citizen said in the conclusion of its report. " ..."
"... "But the success of the nation's largest corporations and wealthiest interests in shaping the current tax legislation to suit their interests shows that bankrolling the lobbyists' unending feast is a small bill to pay in the big scheme of things -- because it is a very big scheme, indeed." ..."
"... How would an open, globalised world work against the West and in favor of the East? The 1% would get better returns from investing their capital in the rapidly growing Asian economies than the mature economies of the West. Multi-national corporations could make higher profits in Asia due to the low cost of living that they had to cover in wages. ..."
"... Richard Koo explains: https://www.youtube.com/watch?v=AtwxhT8e7xQ Higher returns on capital are affecting their economies as they off-shore to places where they can pay lower wages for higher profits. ..."
"... Richard Koo asked American firms where they are expanding their capacity. They said it was in Mexico as it's cheaper and they can make more profit. Do the maths. To maximise profit you need to minimise labour costs, i.e. wages. Disposable income = wages – (taxes + the cost of living). The minimum wage leaves no disposable income. Minimum wage = taxes + the cost of living ..."
"... The American people should be screaming about the fact most of these corporations barely pay any taxes at all to keep this country running. But silence. Why is there such slavish loyalty to corporations by Americans when most aren't even employed by them? ..."
"... Well that is twice now that corporate America has repatriated hundreds of billions from overseas and each time, so far as I know, it was used for stock buybacks, executive bonuses, vanity projects, etc. Not for investment, not for research, not for up-skilling their workforce or expanding their operations but just playing Wall Street games. ..."
"... By my calculations, Jeff Bezos thus owes the US government $2,352,000,000 in taxes. I'm sure that a cheque from him would do just fine. ..."
Last year, drugmaker Abbvie Inc. told shareholders that its tax rate would fall to just 9
percent from 22 percent previously due to a change in the territorial system. Abbvie happens to
be a grandmaster when it comes to shielding its profits in tax havens, routinely reporting zero
profits in the US despite most of its research facilities being based in the country.
Pfizer, Boston Scientific Corp. ,Microsoft Inc. Synopsis and Expedia Group are all pros at
the game, too.
This bunch, however, have nothing on Amazon Inc. The ecommerce giant not only
managed to pay zero tax on its massive $11.2 billion corporate income for 2018, but was
even able to claim $129 million in rebates thanks to loopholes in the new tax law. Video
streaming company, Netflix Inc ., also managed to get away scot free despite posting a record
profit of $858 million.
More Buybacks
Still, an extra $700 billion flowing into the economy in a year is hardly chicken feed.
So, has the money being used to create more jobs as Trump hoped? Hardly. The evidence suggests
that majority of that cash has simply found its way into buybacks with minimal discernible
impact on investments. It's probably not a coincidence that the generous tax cut has been
followed by record buybacks, with companies repurchasing more than a trillion dollars-worth of
their own shares last year.
Ironically, Congress now wants to tame the monster it has helped create by reining in on
buybacks. But with fears that a market top could be near, the timing would be wrong since
buybacks provide a large source of demand for shares.
In an article by Mehan R. Wislon in "The Hill" (12/01/17) one can read that:
"With their enormous complexity and high-stakes, tax issues are the buffet that keeps
Washington's swamp creatures fed," Public Citizen said in the conclusion of its report. "
"But the success of the nation's largest corporations and wealthiest interests in shaping
the current tax legislation to suit their interests shows that bankrolling the lobbyists'
unending feast is a small bill to pay in the big scheme of things -- because it is a very big
scheme, indeed."
American companies are trying to tell us they are demand driven and they won't invest in
expansion until they can see the demand in the system to make it worth their while.
How would an open, globalised world work against the West and in favor of the East? The 1% would get better returns from investing their capital in the rapidly growing Asian
economies than the mature economies of the West. Multi-national corporations could make higher profits in Asia due to the low cost of
living that they had to cover in wages.
(Employees get their money from wages, so the employer pays through wages.)
The West never did work out what was going on, but now the more developed Eastern
economies are seeing the same thing and are looking into it.
Richard Koo explains: https://www.youtube.com/watch?v=AtwxhT8e7xQ Higher returns on capital are affecting their economies as they off-shore to places where
they can pay lower wages for higher profits.
Richard Koo asked American firms where they are expanding their capacity.
They said it was in Mexico as it's cheaper and they can make more profit. Do the maths. To maximise profit you need to minimise labour costs, i.e. wages. Disposable income = wages – (taxes + the cost of living). The minimum wage leaves no disposable income. Minimum wage = taxes + the cost of living
The cost of living = housing costs + healthcare costs + student loan costs + food + other
costs of living
Employees get their money from wages and employers have to pay the US cost of living in
wages unless they off-shore to somewhere cheaper, like Mexico.
The developed Eastern economies are now finding they are in same situation as the West has
been for the last few decades and they are coming up with explanations and solutions, unlike
our own experts.
The American people should be screaming about the fact most of these corporations barely
pay any taxes at all to keep this country running. But silence. Why is there such slavish loyalty to corporations by Americans when most aren't even
employed by them?
Well that is twice now that corporate America has repatriated hundreds of billions from
overseas and each time, so far as I know, it was used for stock buybacks, executive bonuses,
vanity projects, etc. Not for investment, not for research, not for up-skilling their
workforce or expanding their operations but just playing Wall Street games.
I would judge
that before trying to go after all this money overseas, that it will be necessary to impose a
working taxation system on corporate America first. To earn over $11.2 billion in tax but to
not only not get taxed but to earn a rebate illustrates how broken the system is.
At the
moment, the corporate tax rate is supposed to be 21% so perhaps they can bring out a tax on
gross corporate income of 21% – but with no rebates or anything at all that can be
taken from this amount. Just a flat out tax.
By my calculations, Jeff Bezos thus owes the US
government $2,352,000,000 in taxes. I'm sure that a cheque from him would do just fine.
"... Russiagate became a convenient replacement explanation absolving an incompetent political establishment for its complicity in what happened in 2016, and not just the failure to see it coming. ..."
"... Because of the immediate arrival of the collusion theory, neither Wolf Blitzer nor any politician ever had to look into the camera and say, "I guess people hated us so much they were even willing to vote for Donald Trump ..."
" Russiagate became a convenient replacement explanation absolving an incompetent
political establishment for its complicity in what happened in 2016, and not just the failure
to see it coming.
Because of the immediate arrival of the collusion theory, neither Wolf
Blitzer nor any politician ever had to look into the camera and say, "I guess people hated us
so much they were even willing to vote for Donald Trump ."
As a peedupon all I can see is that the elite seem to be fighting amongst themselves or
(IMO) providing cover for ongoing elite power/control efforts. It might not be about
private/public finance in a bigger picture but I can't see anything else that makes sense
Thanks for the Taibbi link. I hadn't seen it, and found him to be in good form. I do think
he ought to have spoken more about how bad Trump's Primary opponents were.
Most of those reporters were going to slant their stories the way their bosses wanted.
Their jobs are just too nice to do otherwise. Getting Trump as Hillary's opponent had to have
been a goal for the majority of them. He was the patsy who would become squished roadkill in
the treads of The Most Experienced Presidential Candidate In History. More on that for people
with strong stomachs:
Hillary Clinton is a knowledgeable, well-prepared, reasonable, experienced, even-tempered,
hardworking candidate, while her opponent is a stubbornly uninformed demagogue who has been
proven again and again to be a liar on matters big and small. There is no objective basis
on which to equate Hillary Clinton to her opponent.
The author had it half right. Turns out the voters knew quite a bit about Trump,
and still preferred him to the Butcher of Libya.
"... Professor Weinstein is an avowed liberal with a long history of progressive thinking. As a young man, he was the center of another controversy when he blew the whistle regarding the exploitation of black strippers by a college fraternity. Regardless, his refusal to participate in what can be described as a "no-white-people-day" ironically earned him the brand "racist" by the student body. He was essentially removed from the campus on the threat of physical harm. ..."
"... Bret Weinstein is on the left, politically, but the leftist students and administration attacked him for not being left enough . Imagine now, how the college may have treated a person who leaned right. As it turns out, there are quite a few examples. ..."
"... Dr. Peterson is a psychology professor, clinician, and best-selling author. He is also, perhaps, today's most controversial academic. He burst into the public consciousness after he opposed bill C-16 in Canada. The bill added gender expression and gender identity to the various protections covered by the Canadian Human Rights Act. ..."
"... One example comes from Queens University. While Dr. Peterson gave a lecture, student protestors broke windows, tried to drown him out with noisemakers and drums, and one protestor told others to burn down the building with Dr. Peterson and the attendees locked inside. ..."
In March 2017, young people armed with baseball
bats prowled the parking lots of Evergreen State College. They hoped to find Bret Weinstein, a biology professor, and presumably
bash his brains in. Bret had caught the ire of the student body after he refused to participate in an unofficial "Day of Absence,"
in which white students and faculty were told to stay home, away from the campus, while teachers and students of color attended as
they normally would. In prior years, people of color voluntarily absented themselves to highlight their presence and importance on
campus. In 2017, the event's organizers decided to flip the event, and white people were pressured to stay away from the school.
In a letter to the school's administration, Bret explained why he opposed
the idea:
There is a huge difference between a group or coalition deciding to voluntarily absent themselves from a shared space in order
to highlight their vital and under-appreciated roles and a group or coalition encouraging another group to go away. The first
is a forceful call to consciousness which is, of course, crippling to the logic of oppression. The second is a show of force,
and an act of oppression in and of itself
On a college campus, one's right to speak -- or to be -- must never be based on skin color.
When word of Professor Weinstein's objection got out, enraged student activists began a hostile takeover of the school, and the
college president ordered the campus police force not to intervene. Professor Weinstein was told, in essence, that nobody would protect
him from young people with baseball bats. The police warned Professor Weinstein that their hands were tied and that he should stay
off campus for his own safety.
Professor Weinstein is an avowed liberal
with a long history of progressive thinking. As a young man, he was the center of another controversy when he
blew the whistle regarding the exploitation of black
strippers by a college fraternity. Regardless, his refusal to participate in what can be described as a "no-white-people-day" ironically
earned him the brand "racist" by the student body. He was essentially removed from the campus on the threat of physical harm.
And its core, the story of Bret Weinstein and Evergreen State College is about a college's descent into total chaos after someone
presented mild resistance to a political demonstration.
Bret Weinstein is on the left, politically, but the leftist students and administration attacked him for not being left enough
. Imagine now, how the college may have treated a person who leaned right. As it turns out, there are quite a few examples.
Before discussing what the Wilfrid Laurier University did to a woman named Lindsay Shepherd, it's important to know about Jordan
Peterson.
Dr. Peterson is a psychology professor, clinician, and best-selling author. He is also, perhaps, today's most controversial academic.
He burst into the public consciousness after he opposed bill C-16 in Canada. The bill added gender expression and gender identity
to the various protections covered by the Canadian Human Rights Act.
Dr. Peterson objected to the bill because it set a new precedent -- requiring citizens to use certain pronouns to address people
with non-traditional gender identities. Dr. Peterson calls transexual
people by whatever gender they project , as long as he feels like they're asking him to do so in good faith, but he's wary of
people playing power games with him, and he saw something dangerous about the government mandating which words he must use. He believed
that under C-16, misgendering a person could be classified as hate speech, even it was just an accident.
Having spent much of his life considering the dangers that exist at the furthest ends of the political spectrum -- Nazi Germany
on the far right, the Soviet Union on the far left -- Dr. Peterson has developed a tendency to see things in apocalyptic terms.
In bill C-16, he saw what he considered the seeds of a serious threat to the freedom of expression -- a list of government-approved
words -- and decided it was a hill worth dying on.
He's controversial, verbose, discursive, sometimes grouchy, and almost incapable of speaking the language of television sound-bites.
He makes it easy for critics to attack and misrepresent him -- and ever since he took a stance against C-16, he's been subjected
to student protests and journalistic hit-pieces.
One example comes from Queens University. While Dr. Peterson gave a lecture, student protestors broke windows, tried to drown
him out with noisemakers and drums, and one protestor told others to burn down the building with Dr. Peterson and the attendees locked
inside.
Regardless of whether one agrees or disagrees with his opinions, Dr. Peterson should have the right to express them without other
people suggesting that he be murdered with fire. Furthermore, people should be able to talk about what he says.
Enter the case of Lindsay Shepherd.
While working as a teacher's aid at Wilfrid Laurier University, Lindsay Shepherd showed students two clips from public access
television featuring Jordan Peterson debating someone over bill C-16. After showing the clips, she asked her students to share their
thoughts.
Days later, the school called her into a meeting with a panel of three superiors. They said that they had gotten a number of complaints
from students. Lindsay asked how many complaints they had received, and was told that the number was confidential.
The panel claimed that she had created a toxic environment by showing the clips and facilitating a discussion without taking a
side against Dr. Peterson's view. They said it was as if she had been completely neutral while showing one of Hitler's speeches.
The panel thought the clip probably violated the Human Rights Code, and they demanded Shepherd to submit all of her future lesson
plans ahead of time so that they could be vetted.
Although one student expressed some concern about the class, the number of formal complaints that the administrators had received
was actually zero.
During their discussion, Lindsay said:
The thing is, can you shield people from those ideas? Am I supposed to comfort them and make sure that they are insulated away
from this? Is that what the point of this is? Because to me that is against what a university is about.
Lindsay found herself at the mercy of school administrators whose brittle spirits couldn't bear to present students with opinions
that they might have found offensive. She had believed that universities were places where people could explore ideas. On that day,
the panel showed her just how wrong she'd been.
And she caught it all on tape.
Over the past few years, the news has become littered with stories of schools overrun by children while hand-wringing professors
and administrators do everything possible to placate them. Recently, a group called "The Diaspora Coalition"
staged a sit-in at Sarah Lawrence.
Their demands
included, among other things, that they get free fabric-softener. The origin of their grievance was an
op-ed published in the
New York Times about the imbalance between left-leaning and right-leaning school administrators.
Jonathan Haidt, social psychologist and Professor of Ethical Leadership at New York University's Stern School of Business,
sums the phenomenon up tidily :
You get kids who are much more anxious and fragile, much more depressed, coming onto campus at a time of much greater political
activism -- and now these grievance studies ideas about, 'America's a matrix of oppression,' and, 'look at the world in terms
of good versus evil.' it's much more appealing to them, and it's that minority of students, they're the ones who are initiating
a lot of the movements
Every day, or at least every week, I get an email from a professor saying, 'you know, I used a metaphor
in class and somebody reported me.' and once this happens to you, you pull back. You change your teaching style
What we're seeing
on campus is a spectacular collapse of trust between students and professors. And once we can't trust each other, we can't do
our job.
We can't risk being provocative, raising uncomfortable ideas. We have to play it safe, and then everybody suffers.
To understate it, President Donald Trump is a deeply troubling human being. However, he may have done a good thing on Thursday,
March 21st, when he signed an
executive order that requires public schools to "foster environments that promote open, intellectually engaging, and diverse
debate."
Schools that don't comply may lose government-funded research grants.
In theory, the order will compel colleges to prevent scenes like those at Evergreen State and Sarah Lawrence. Schools will have
serious financial incentives to protect their professors from mobs of unruly children. If all goes well, students will learn to engage
with controversial opinions without resorting to baseball bats or demanding Snuggle Plus fabric softener.
One would be remiss if they didn't consider the hidden or unintended consequences of the new policy, though. The executive order
is vague, and it gives no criteria for judging whether an institution complies with its requirements. Instead, the specific implementation
is left for structures lower on the hierarchy to decide. Hopefully, nobody decides that Young Earth theories must be taught alongside
evolution.
The policy could very well become a tool by which the dominant political party punishes schools that lean in the opposite direction.
Since there is a 12-to-1 imbalance between liberals and conservative college administrators right now, it would be a Republican administration
punishing liberal colleges.
This is hardly a perfect solution -- but at least it's an effort to address the problem. The stability of our society depends
on an endless balancing act between the left and the right. The political landscape of academia has tilted too far left, and it's
clearly becoming insular and unstable. Now it's necessary to push things back toward the center.
Hopefully, this recent executive order does more good than harm.
Postscript
After the events at Evergreen State College, the school was forced to settle with Bret Weinstein and his wife, who was also a
professor there. The college paid the couple $500,000. Enrollment at the college is said to have dropped "catastrophically."
After the events at Wilfrid Laurier University, the school released several letters of apology. It is being sued for millions
of dollars by Lindsay Shepherd and Jordan Peterson.
Forty professors endorsed the demands made by the Diaspora Coalition at Sarah Lawrence, and several others endorsed challenging
Samuel Abrams's tenure -- Abrams being the person who wrote the op-ed that appeared in the New York Times.
"... Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history. It's not only the fact that his administration has been literally taken over by Goldman Sachs, the top vampire-bank of the Wall Street mafia. ..."
"... The 'anti-establishment Trump' joke has already collapsed and the US middle class is about be eliminated by the syndicate of the united billionaires under Trump administration. ..."
"... Paul Singer whose nickname is "the vulture", he didn't get that nickname because he is a sweet an honest businessman. This is the guy who closed the Delphi auto plants in Ohio and sent them to China and also to Monterrey-Mexico. Donald Trump as a candidate, excoriated the billionaires who sent Delphi auto parts company down to Mexico ..."
"... Paul Singer has two concerns: one of them is that we eliminate the banking regulations known as Dodd–Frank. He is called 'the vulture' cause he eats companies that died. He has invested heavily in banks that died. He makes his billions from government bail-outs, he has never made a product in his life, it's all money and billions made from your money, out of the US treasury ..."
"... The Mercers are the real big money behind Donald Trump. When Trump was in trouble in the general election he was out of money and he was out of ideas and he was losing. It was the Mercers, Robert, who is the principal at the Renaissance Technologies, basically investment banking sharks, that's all they are. They are market gamblers and banking sharks, and that's how he made his billions, he hasn't created a single job as Donald Trump himself like to mention. ..."
"... Both the vulture and the Mercers, they don't pay the same taxes as the rest. They don't pay regular income taxes. They have a special billionaires loophole called 'carried interest'. ..."
"... They were two candidates who said that they would close that loophole: one was Bernie Sanders and the other, believe it or not, was Donald Trump, it was part of his populist movie, he said ' These Wall Street sharks, they don't build anything, they don't create a single job, when they lose we pay, when they win, they get a tax-break called carried interest. I will close that loophole. ' Has he said a word about that loophole? It passed away. ..."
Donald Trump is about to break the record of withdrawing his promises faster than any other US president in history. It's
not only the fact that his administration has been literally taken over by Goldman Sachs, the top vampire-bank of the Wall Street
mafia.
Recently, Trump announced another big alliance with the vulture billionaire, Paul Singer, who, initially, was supposedly against
him. It looks like the Trump big show continues.
The 'anti-establishment Trump' joke has already collapsed and the US middle class is about be eliminated by the syndicate of the
united billionaires under Trump administration.
As Greg Palast told to Thom Hartmann:
Paul Singer whose nickname is "the vulture", he didn't get that nickname because he is a sweet an honest businessman. This
is the guy who closed the Delphi auto plants in Ohio and sent them to China and also to Monterrey-Mexico. Donald Trump as a candidate,
excoriated the billionaires who sent Delphi auto parts company down to Mexico.
Paul Singer has two concerns: one of them is that we eliminate the banking regulations known as Dodd–Frank. He is called 'the
vulture' cause he eats companies that died. He has invested heavily in banks that died. He makes his billions from government bail-outs,
he has never made a product in his life, it's all money and billions made from your money, out of the US treasury.
He is against what Obama created, which is a system under Dodd–Frank, called 'living wills', where if a bank starts going bankrupt,
they don't call the US treasury for bail-out. These banks go out of business and they are broken up so we don't have to pay for the
bail-out. Singer wants to restore the system of bailouts because that's where he makes his money.
The Mercers are the real big money behind Donald Trump. When Trump was in trouble in the general election he was out of money
and he was out of ideas and he was losing. It was the Mercers, Robert, who is the principal at the Renaissance Technologies, basically
investment banking sharks, that's all they are. They are market gamblers and banking sharks, and that's how he made his billions,
he hasn't created a single job as Donald Trump himself like to mention.
Both the vulture and the Mercers, they don't pay the same taxes as the rest. They don't pay regular income taxes. They have a
special billionaires loophole called 'carried interest'.
They were two candidates who said that they would close that loophole: one
was Bernie Sanders and the other, believe it or not, was Donald Trump, it was part of his populist movie, he said ' These Wall
Street sharks, they don't build anything, they don't create a single job, when they lose we pay, when they win, they get a tax-break
called carried interest. I will close that loophole. ' Has he said a word about that loophole? It passed away.
His political activities include funding the Manhattan Institute for Policy Research and he has written against raising taxes
for the 1% and aspects of the Dodd-Frank Act. Singer is active in Republican Party politics and collectively, Singer and others affiliated
with Elliott Management are "the top source of contributions" to the National Republican Senatorial Committee.
A number of sources have branded him a "vulture capitalist", largely on account of his role at EMC, which has been called a vulture
fund. Elliott was termed by The Independent as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going
after countries for unpaid debts", and in 1996, Singer began using the strategy of purchasing sovereign debt from nations in or near
default-such as Argentina, ]- through his NML Capital Limited and Congo-Brazzaville through Kensington International Inc. Singer's
business model of purchasing distressed debt from companies and sovereign states and pursuing full payment through the courts has
led to criticism, while Singer and EMC defend their model as "a fight against charlatans who refuse to play by the market's rules."
In 1996, Elliott bought defaulted Peruvian debt for $11.4 million. Elliott won a $58 million judgment when the ruling was overturned
in 2000, and Peru had to repay the sum in full under the pari passu rule. When former president of Peru Alberto Fujimori was attempting
to flee the country due to facing legal proceedings over human rights abuses and corruption, Singer ordered the confiscation of his
jet and offered to let him leave the country in exchange for the $58 million payment from the treasury, an offer which Fujimori accepted.
A subsequent 2002 investigation by the Government of Peru into the incident and subsequent congressional report, uncovered instances
of corruption since Elliott was not legally authorized to purchase the Peruvian debt from Swiss Bank Corporation without the prior
approval of the Peruvian government, and thus the purchase had occurred in breach of contract. At the same time, Elliott's representative,
Jaime Pinto, had been formerly employed by the Peruvian Ministry of Economy and Finance and had contact with senior officials. According
to the Wall Street Journal, the Peruvian government paid Elliott $56 million to settle the case.
After Argentina defaulted on its debt in 2002, the Elliott-owned company NML Capital Limited refused to accept the Argentine offer
to pay less than 30 cents per dollar of debt. With a face value of $630 million, the bonds were reportedly bought by NML for $48
million, with Elliott assessing the bonds as worth $2.3 billion with accrued interest. Elliott sued Argentina for the debt's value,
and the lower UK courts found that Argentina had state immunity. Elliott successfully appealed the case to the UK Supreme Court,
which ruled that Elliott had the right to attempt to seize Argentine property in the United Kingdom. Alternatively, before 2011,
US courts ruled against allowing creditors to seize Argentine state assets in the United States. On October 2, 2012 Singer arranged
for a Ghanaian Court order to detain the Argentine naval training vessel ARA Libertad in a Ghanaian port, with the vessel to be used
as collateral in an effort to force Argentina to pay the debt. Refusing to pay, Argentina shortly thereafter regained control of
the ship after its seizure was deemed illegal by the International Tribunal for the Law of the Sea. Alleging the incident lost Tema
Harbour $7.6 million in lost revenue and unpaid docking fees, Ghana in 2012 was reportedly considering legal action against NML for
the amount.
His firm... is so influential that fear of its tactics helped shape the current 2012 Greek debt restructuring." Elliott was termed
by The Independent as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going after countries for unpaid
debts", and in 1996, Singer began using the strategy of purchasing sovereign debt from nations in or near default-such as Argentina,
Peru-through his NML Capital Limited and Congo-Brazzaville through Kensington International Inc. In 2004, then first deputy managing
director of the International Monetary Fund Anne Osborn Krueger denounced the strategy, alleging that it has "undermined the entire
structure of sovereign finance."
we wrote that " Trump's rhetoric is concentrated around a racist delirium. He avoids to take direct position
on social matters, issues about inequality, etc. Of course he does, he is a billionaire! Trump will follow the pro-establishment
agenda of protecting Wall Street and big businesses. And here is the fundamental difference with Bernie Sanders. Bernie says no more
war and he means it. He says more taxes for the super-rich and he means it. Free healthcare and education for all the Americans,
and he means it. In case that Bernie manage to beat Hillary, the establishment will definitely turn to Trump who will be supported
by all means until the US presidency. "
Yet, we would never expect that Trump would verify us, that fast.
Looks like most participants in the discussion viry form highly incompetent to delusional...
Notable quotes:
"... The oil companies sell the oil at cost to their offshore companies whose headquarters are a P.O Box in Bermuda, Cayman Islands or other low tax/no tax domicile , who in turn sells it to enduser. The US does not collect any Corporate tax. But the Trump friends get richer and the working class will be paying up for it. ..."
"... TRUMP 2020 has already raised $180 Million in donations. Take a look at the list of contributors. Surprise. . . . . Surprise. . . . . Surprise. ..."
"... Trump new slogan, " Make My Friends Richer Again .. .. .. .. .. and Again and Again." ..."
"... So you are saying that the little bait and switch with the Saudis to crash oil prices for the mid terms was selling out the public? LOL! Why don't you stick to oil instead of posting political crap? There was no Bait and Switch. To think that Saudi's/OPEC ever sacrificed for the benefit of the United Stated or world economy is dilutional. They tried to take out US oil enterprise in 1970's , 1985 -1986, 1998-1999 and recently 2015. ..."
Trump Whitehouse just released a report from Council of
Economic Advisors that said high oil prices are good for US economy. A little "wink and a nod" to oil.
Trump recently stated, " I'm comfortable with $65 oil." That's not
a free market pricing.
High oil prices for oil companies and their partners does not outright the
benefit to the consumer and economy . $50 to $55 oil would set the U.S. and world economy booming. Trump
wrote about OPEC INFLATED PRICES in his 2011 book. He campaigned to control OPEC IN 2016.
He sold out the working
class public to please buddies like Harold Hamm of Continental Energy, Oil Companies and the Wall street boys
that sat down with OPEC at Ceraweek for a nice dinner. It has been reported that about two dozen firms
attended.
One Houston Shale producer said the US Shale companies and Banks that finance
them threatened to ruin them.
Some (5) oil companies rightfully declined the invitation such as Conoco.
The CEO stated they are Market driven and will live with the volatility.
Sad. The oil found under the United States is a valuable "Natural Resource"
but it is also a valuable "National Resource" and should benefit all.
The oil companies sell the oil at cost to their offshore companies
whose headquarters are a P.O Box in Bermuda, Cayman Islands or other low tax/no tax domicile , who in turn sells
it to enduser. The US does not collect any Corporate tax. But the Trump friends get richer and the working
class will be paying up for it.
Just like Trump reneged on his campaign promise regard the HUGE Wallstreet
tax loophole "carried interest". He now does so oil as a favor to his buddies.
TRUMP 2020 has already raised $180 Million in donations. Take a look
at the list of contributors. Surprise. . . . . Surprise. . . . . Surprise.
When the traders see this oil will be up today. Need to wait for new
pipelines. . . . Q4.
Oil stabilized in the $50's would set both the US and World economies on
fire.
Trump new slogan, " Make My Friends Richer Again .. ..
.. .. .. and Again and Again."
So you are saying that the little bait
and switch with the Saudis to crash oil prices for the mid terms was selling out the public? LOL!
Why don't you stick to oil instead of posting political crap? There was no Bait and Switch. To think that Saudi's/OPEC ever sacrificed for the benefit of the
United Stated or world economy is dilutional. They tried to take out US oil enterprise in 1970's , 1985 -1986,
1998-1999 and recently 2015.
They do take care if the President wants low oil price or not . Going back to at least the
1980's after the US presidents term ended they were invited to Saudi Arabia or Kuwait to give a speech for $1
Million. Bubba liked the idea so much he started a whole new industry out of it. The Saudi's during
Obama Administration decide "why wait" and the King gave Michelle Obama two necklesses valued over $1.5
million.
As was stated on Bloomberg the major sell off in December was more a demand problem than a supply
problem..
As soon as Trump announced in May '18 that sanctions would go into
effect in November Saudi exports went straight up. Not because they were doing Trump a favor it was because
demand from their clients. They did very well May to Oct. If you are a major importer of OPEC oil
and you hear that sanction are going to effect in Nov what do you do ? ? ? You top off your tanks with
crude. . . . . . . you turn up the volume at your refineries to stock pile finished product of gas, diesel,
etc. (which all of Asia did) When sanctions had to be delayed and did not materialize the demand/price
dropped for a while.
Trump was under extreme pressure due to European and Asian economic downturns.
He didn't want to cause a recession . So he delayed the sanctions.
MONEY TALKS
During the 2016 election the big money from Oil and Wallstreet went to.Hillary.
She knew where her bread was buttered. Why do you think her State Department approved the Keystone XL.
The State Department had a study done on the Keystone XL . The consulting contract was awarded to a firm that
was run by two former Clinton Campaign workers. After her approval the Canadian Chamber of Commerce gave the
Clinton Foundation a large donation. Several large oil companies with interest in the Cd Tar Sand gave the Clinton
Foundation large donations. A setup.
Before she announced in 2016 Clintons personal Lawyer and Clinton Foundation
Lawyer was put on the Board of Blackrock the World's largest Hedgefund whose CEO Fink was an outspoken critic
of legislation to end carried interest.
During 2012 campaign Senator Chuck Schumer (D-NY) Insisted the carried interest
tax loophole had to be eliminated and attacked Romney for benefiting from carried interest. The next election
cycle guess who received the largest portion of the donations from Hedge Funds . . . . that's right
the good Senator Chucky Schumer. He never mentions Carried Interest again.
Democrat or Republican .. .. .. they're all
the same. Show me the Money.
Doesn't anyone believe in free markets anymore. I think Supply and
Demand economics prevails. JH and WS you might want to lighten up on your Shale equities holdings before
the three new pipelines start pumping by the end of year. Before then oil should continue to rise. lol
Yours is an interesting interpretation and conclusion, probably
from the Bloomberg article. Consider the following 4 excerpts from that same report.
"...increased production has undoubtedly served as a boon to the
American position internationally as well as a buffer for American consumers'
sensitivity to oil prices"
"As the United States continues to expand its position as an exporter in
global oil markets, it better insulates itself from the adverse welfare and GDP
consequences of high oil prices and price spikes"
"A second effect of the changing U.S. net petroleum position is that it
may increase protection from the business cycle that is exacerbated by high
oil prices"
"Kilian and Vigfusson (2017) observe that in the period since 1974,
U.S. economic recessions have been universally preceded by increases in the
price of oil"
These 4 quotes are consistent with more US oil on the market and lower prices.
The last quote especially indicates it's doubtful the Trump administration desires high oil prices and would
be contradictory to Mike Pompeo urging oil companies to continue pumping just 2 weeks ago. Not that it would
be unprecedented for government to say contradictory things but I think it's quite clear the US government wants
'low' oil prices.
Here is the quote Bloomberg extracts, leaving out the first sentence.
"The shrinking level of U.S. net imports of petroleum provides indirect
benefits through macroeconomic channels by reducing sensitivity to oil price
shocks. If the United States becomes an annual net exporter of petroleum,
higher oil prices would, on average, help the U.S. economy. In this case, the net
gains for producers, and to their private partners that own mineral deposits,
would outweigh the higher costs for consumers. Such a change would have a
number of important policy implications"
Granted the second to last sentence does seem to favor higher prices but
seems to be contradicted by the first and the above 4 quotes. And it then seems to stress, in the last sentence,
that it is not advocating for higher prices but that it is a consequence that must be considered when choosing
policies. It would not be unheard of for advisors to have conflicting views and is typical of bureaucratic infighting.
You can always count on Bloomberg, or most of the msm
for that matter, to write a clickbaity headline with no substance in the story and a questionable interpretation
(along with a twitter insert). I think the writer simply went to the conclusion of the report and pulled those
sentences out without reading anything else and put "Trump wrong" in the headline. She has a deadline to beat
after all.
Well if you have such a big shale oil industry and China = your
biggest geopolitical rival is also a biggest oil importer imho oil in the 70's is better than in
50's. Because today China imports something like 8 to10 times more oil than USA.
Trump Whitehouse just released a report from Council of Economic Advisors
that said high oil prices are good for US economy.
Not true . Trump wrote about OPEC INFLATED PRICES in his 2011
book. He campaigned to control OPEC IN 2016. He sold out the working class public to please buddies like
Harold Hamm of Continental Energy and the Wallstreet boys that sat down with OPEC at Ceraweek.
Sad. The oil found under the United States is a valuable "Natural
Resource" but it is also a valuable "National Resource" and should benefit all. The oil companies
sell the oil at cost to their offshore companies whose headquarters are a P.O Box in Bermuda, Cayman Islands
or other low tax/no tax domicile , who in turn sells it to enduser. The US does not collect any
Corporate tax. But the Trump friends get richer and the working class will be paying up for it.
Just like Trump reneged on his campaign promise regard the HUGE Wallstreet
tax loophole "carried interest".
TRUMP 2020 has already raised
$180 Million in donations. Take a look at the list of contributors. Surprise. . .
. . Surprise.
When the traders see this oil will be up today.
Need to wait for new pipelines. . . . Q4.
Oil stabilized in the $50's would set the US and World economies on
fire.
Trump new slogan, " Make My Friends Richer Again and Again and
Again."
Whether the US wants higher or lower prices depends on the immediate circumstances.
When Trump was first elected, lower prices may have been better. Now that unemployment has dropped, wages
are rising, and Trump's voters are more confident, slightly-elevated prices may be more advantageous.
Why? Because higher prices accelerate US oil production. This simultaneously improves our economy
and lowers our national defense expenses. Once we're a net exporter, we'll want even higher prices.
Then there's increased investment. When oil prices are higher, less
efficient vehicles get replaced faster, R&D for efficiency technologies takes off, and new companies are founded
to meet emerging needs. Remember: the US economy's greatest competitive advantage is innovation.
We
excel
at at. More so than any other country, we benefit from
stressors and rapid change. High oil prices are that stressor, and we've reached a point where we should
embrace it.
There's also the ever-improving fleet efficiency. As we squeeze more
from each barrel, the price of oil matters less to us. At some point, the price of fuel will be less important
to our economy than the profits we reap in world markets. If we haven't reached that point already, we
certainly will in the near future when electric vehicles will be offered in most market segments.
Finally, there's the COL differential between Trump Country and the People's
Republic of America. The Internet tells me gas is <$3.25/gallon in CA, and of course, everything is expensive
there. I can see how the good comrades of CA would be struggling. Then again, that's why I don't
live in CA. This morning, I drove past a local gas station at $2.40/gallon. When even luxury cars get
30+mpg and there are plenty of jobs near affordable housing, $2.40/gallon is irrelevant. Make it $3/gallon;
let's get this technology & profits show on the road!
Seriously though: the US economy is reaching a point
where consumers can survive higher oil prices, and we'll enjoy other benefits from those higher prices.
I would expect to see the US government progressively less concerned about this issue.
Whether the US wants higher or lower prices depends on the immediate
circumstances.
I make this short.
First when you say "Whether US wants higher or low prices . . . "
Whom are you referring to when you say " . . US . . " ? Trump
Administration ? US consumers ? US oil companies ? Politicians? What all of them should want is Free Market economics.
Supply and Demand Market.
Stabil $50 bbl
oil would create the world's largest economic boom ever. For ALL countries. Including emerging markets.
Why fill the 22,000 Saudi Prices pickets with cash. . . get a job.
First when you say "Wether US wants higher or low prices . . .
"
Whom are you referring to when you say " . . US . . " ?
Trump Administration ? US consumers ? US oil companies ? Politicians?
What all of them should want is Free Market economics.
Supply and Demand Market.
How ignorant to think the world runs on free market. Most of the world
is closed dictatorships/oligarchies whom we have STUPIDLY allowed into our free market and then this statement
is not true either, as the rest of "market driven economies", the EU have ~ no oil, so in effect would be a
monopoly and DID act this way as the USA was the #1 DOMINANT oil producer in the world for its first 50 years.
Oil has NEVER worked on free market principles.
For this reason it is one reason why Thorium salt water
thermal reactors can NOT get funding outside of China. If anyone can get them to work, Coal, oil, NG,
wind, solar, geothermal will disappear overnight. Why? EVERYONE has Thorium in their country.
It is a waste product from nearly every single mining operation around the world. We were very close to
getting them to work in the 70's but Nixon happened who hated any industry outside of S. California and cut
anyones funding outside of this region to zero.
How ignorant to think the world runs on free market. Most of
the world is closed dictatorships/oligarchies whom we have STUPIDLY allowed into our free market and then
this statement is not true either, as the rest of "market driven economies", the EU have ~ no oil, so
in effect would be a monopoly and DID act this way as the USA was the #1 DOMINANT oil producer in the
world for its first 50 years. Oil has NEVER worked on free market principles.
For this reason it is one reason why Thorium salt water thermal
reactors can NOT get funding outside of China. If anyone can get them to work, Coal, oil, NG, wind,
solar, geothermal will disappear overnight. Why? EVERYONE has Thorium in their country.
It is a waste product from nearly every single mining operation around the world. We were very close
to getting them to work in the 70's but Nixon happened who hated any industry outside of S. California
and cut anyones funding outside of this region to zero.
I agree the World doesn't run on a free market. SAUDI's sold US Refiners
$3.00 oil for $120.00 in 2006.
BUT THE U.S. RUNS ON A FREE MARKET ECONOMY.
PRICE FIXING IS AGAINST THE U.S. ANTI-TRUST LAWS AND SHOULD BE ENFORCED TO
THE FULLEST.
As to your other
point . . . . . I just bought a THORIUM SALT WATER THERMAL REACTOR AT HOME DEPOT LAST WEEK.
My other one just
went on me. I had to take cold showers for three days until I could replace it.
Hello JC ,,,, as far as I know one of
the leaders in the field of Thorium Reactor Technology is Moltex Energy. www.moltexenergy.com. it looks very
promising and the Canadian Government is reviewing this technology at this time.Conceptually it looks pretty
darn good.
Hello JC ,,,, as far as I know one of the leaders in the field of Thorium
Reactor Technology is Moltex Energy. www.moltexenergy.com. it looks very promising and the Canadian Government
is reviewing this technology at this time.Conceptually it looks pretty darn good.
Hello JC ,,,, as far as I know one of the leaders in the field of Thorium
Reactor Technology is Moltex Energy. www.moltexenergy.com. it looks very promising and the Canadian Government
is reviewing this technology at this time.Conceptually it looks pretty darn good.
A lot of things look good conceptually. They've been working on fusion reactors
forever. I'm all for new technology . . . . but I wouldn't hold your breath.
I used to be pissed off when GE wouldn't bring to market that light bulb
they invented that never burned out. . . . . Then there was the car Goodyear tire that lasted for 500,000
miles but never saw the light of day . . . Then . . .
I agree the World doesn't run on a free market. SAUDI's sold US Refiners
$3.00 oil for $120.00 in 2006.
BUT THE U.S. RUNS ON A FREE MARKET ECONOMY.
PRICE FIXING IS AGAINST THE U.S. ANTI-TRUST LAWS AND SHOULD BE ENFORCED
TO THE FULLEST.
As to your
other point . . . . . I just bought a THORIUM SALT WATER THERMAL REACTOR AT HOME DEPOT LAST WEEK.
My other
one just went on me. I had to take cold showers for three days until I could replace it.
If the USA cared about price fixing, I agree we should,
then we should be massively increasing tariffs on everyone.... actually I have argued for this, but for freedom
reasons. WTO is the dumbest thing ever as it ACTIVELY works against freedom as it gives power to greedy
power hungry oligarchs around the world.
The bad news is that almost half of Americans approaching retirement have nothing saved in a
401(k) or other individual account. The good news is that the new estimate, from the U.S.
Government Accountability Office, is slightly better than a few years earlier.
Of those 55 and older, 48 percent had nothing put away in a 401(k)-style defined
contribution plan or an individual retirement account, according to a GAO estimate for 2016 that was released
Tuesday. That's an improvement from the 52 percent without retirement money in 2013.
Two in five of such households did have access to a traditional pension, also known as a
defined benefit plan. However, 29 percent of older Americans had neither a pension nor any
assets in a 401(k) or IRA account.
The estimate from the GAO, the investigative arm of Congress, is a brief update to a more
comprehensive 2015 report
on retirement savings in the U.S. Both are based on the Federal Reserve's Survey of Consumer
Finances.
The previous report found the median household, age 65 to 74, had about $148,000 saved, the
equivalent of an inflation-protected annuity of $649 a month.
EIA projections are profoundly flawed, being the only question if they are aware of it or if
they actually believe their own shit.
Increased production is driven by relatively high or increasing oil prices that signal
increased demand, OR by the need of producers to maintain income at the expense of other
producers when prices fall as it happened between mid-2014 to late 2015.
The second case is difficult to take place when oil prices are relatively low, as now, and
when there are agreements between producers to limit production to sustain prices, as now.
Therefore EIA is projecting an oil price increase amid general economic weakness, a trade
war, Chinese ongoing slowdown, and so on. The economy is not signaling any urgency about oil
supply after the Iran sanctions have taken place without much effect. Prices are not going to
sustain an increase in oil production unless something unforeseen takes place, and such event
cannot be included in EIA forecast.
According to Art Berman presentation about the 2018 price collapse the markets are
signalling $60/b oil for 2019-2020 with $10 price excursions. If he is correct we will not
see an increase in oil production, and might even see a slight decrease as Venezuela
continues its fast descent to near zero oil production. Everybody knows that a country that
came to depend almost exclusively on oil will implode when its oil production collapses, the
only question being how the implosion will look and what will be the final death toll.
"... In the ongoing desire on their part to be transparent they have, until Wed., projected their expectations for increases to short-term rates over the next two years to be 4 increases this year and 4 next year. ..."
"... As of Wednesday, that's all gone. The new dot chart says zero increases this year and at most 1 next year. The 10-year treasury immediately cratered its yield to 2.5something percent. ..."
Re shale financing . . . Folks should go and read financial articles from Wednesday afternoon
of this week.
The Fed basically took a sledgehammer to their dot charts. In the ongoing desire on their
part to be transparent they have, until Wed., projected their expectations for increases to
short-term rates over the next two years to be 4 increases this year and 4 next year.
As of Wednesday, that's all gone. The new dot chart says zero increases this year and at
most 1 next year. The 10-year treasury immediately cratered its yield to 2.5something
percent. Still falling. Overseas we see Germany tracking, and Japan, and more and more
maturities on their yield curves return to negative. Not just real negative. Outright nominal
negative.
This is something that Financial media does not talk about. Negative nominal interest
rates from major country government bonds. How could they talk about it? It is utterly
obvious that this specific reality demonstrates that the entirety of all analyses has no
meaning. Their only defense is silence. Shale would prefer that it stay that way.
The Fed also announced an end to balance sheet normalization, which is euphemism for
trying to get rid of all of those bonds and MBS that were purchased as part of QE. They are
ending their purchases late this year. They dare not continue the move towards normal. I
believe that leaves their balance sheet still holding in excess of 3 trillion. That's not
normalization, sports fans. And it has been TEN YEARS.They havent been able to get to
"normal" in ten years, and as of Wed, they will stop trying.
The Treasury notes are the underlying basis for what shale companies have to pay to borrow
money. Thoughts by folks here that the monetary gravy train will shut off shale drilling need
rethinking. Bernanke changed everything. Forever.
These Fed actions are indistinguishable from whimsy. Imagining that Powell is Peak Oil
cognizant and is focused on shale is a tad extreme, but only a tad.
I recall a Bernanke quote during the crisis that made clear he knew what Peak would mean
-- at any price.
"When US Equities are well on their way south US treasury yields will also join the negative
club. But oil will also be $20"
I don't believe Oil will fall much anymore. Oil prices were kept in check by the rising
dollar. Now that the Fed is no longer hiking, and probably will be cutting rates soon, its
likely Oil prices will start rising again. I think we probably will see some short dips in
energy and Stocks, but once the Fed cuts or does more QE, prices will climb back.
I've also noticed that prices for everything are going up. We are back in stagflation with
falling labor demand, but rising costs: materials, Food, imports, etc. My wild ass guess is
that WTI will be higher in Dec 2019 than it is today.
Its possible that the Fed is now trapped: Rising inflation, but failing labor demand.
Prices will likely increase as unemployment increases. My guess is Fed will let Inflation go
unchecked in order to avoid another major recession. If this assessment turns out to be
correct, Holding cash in USD is going to losing strategy.
FWIW: I don't believe the number of job offerings reflect the real labor market. I think
companies are keeping a lot of filled jobs posted due to extreme employee turn over rates.
For instance retail job turnover rates are as high as 81% per year. Often worker quit after a
few months or weeks. Thus it just makes sense for employers to keep the same jobs permanently
listed, even if they have the position currently filled.
$20 oil will CRUSH any exploration and development and NOBODY will spend a dollar on
CAPEX.
No Questions Asked.
A short-term high for consumers but a worse cataclysm than 2015
I am in Central TX, (Bryan/College Station) and remember well the 1980's crash and of course
2015-18.
The offshore oil exploration company I work for here was saved by a TGS contract during that
sh+t show.
We are now so swamped with jobs it is stupid.
Not enough boats or people worldwide- (NEW , unused fleets were cut up for scrap) and
honestly a dozen people I personally know ( some family members) either retired or went to
other technical fields.
They have all refused offers to come back .
Please remember, we are already 3 years behind on Explorati0n and Development and we are just
starting to see the ramifications of that 3 year worldwide "vacation".
Oh, and IMO 2020 is rolling in. Not a problem for us as we have to use .5ppm diesel anyway
.
Plus all the other Producer Countries with their own personal problems .
Yessir, gonna be a wild show.
I was /am no fan of Jimmy Carter but the world should have listened to him back in 1977.
That old grasshopper/ant fable comes to mind
A lot of lost years since then, would have been nice to develop alternates before it got
scary.
But that is what Humans do
Silly creatures .
I started to pay attention to oil during the Carter years. We could have had a very
manageable transition to alternative options to oil if we had used those decades to plan for
it.
Instead, we're going to have significantly more disruption when we can't keep our
petroleum consumption at current levels.
"Bond markets globally, along with dovish central banks, have been telling us a slowdown is
on the way," said Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore. "Some
parts of the world will be better equipped than others to handle this. The U.S. can at least
cut rates and apply monetary tools, while things could be worse for Europe and Japan, where
they cannot."
"... Now, America's first professor of economics at the first business school, Simon Patten, said public infrastructure is a fourth factor of production, but unlike labor, land, and capital, the role of public infrastructure is not to make a profit. It's to provide public services that are basic for the economy's living standards and capacity to produce at a subsidized rate. So, America got rich and came to dominate the world industrial economy by subsidizing all of the basic costs. Low-cost roads, low-cost infrastructure. The government bore these costs so that, in effect, public infrastructure subsidizes the economy to lower the cost of production. ..."
"... Look at the, for instance, the Indiana Toll Road. That was done by a Trump-style private and public infrastructure and the toll roads are so high to try to pay off the hedge fund backers that people don't use them. They go on the free, slower internal roads. And that sort of is a horror story that anyone who's thinking of Trump's plan should be there. ..."
"... Well, under Trump's plan, the cities, in order to get federal funding, would have to help themselves by recapturing the real estate value created by this added transportation instead of leaving it in the hands of the landlords as the Second Avenue Subway extension was left or as the West Side extension to the Javits Center increased value of real estate all along there or the Wall Street luxurious restructuring at the subway, another 3 billion there. ..."
"... The government would finance it, and it would finance it by creating its own credit in the same way that it created the 4.6 trillion to bailout the banks on Wall Street. Instead of creating money to give to Wall Street, you'd spend money into the economy to build up the infrastructure. And ideally, you'd tax the rich for this, but now that Trump has untaxed the wealthy, the only way that you could possibly do it under his tax giveaway to Wall Street is for the government simply to print the money, create the money as the Federal Reserve or the Treasure can easily do, and finance it all public, and provide the basic infrastructure services at cost or freely. So, instead of tripling the cost of water, instead of tripling the cost of transportation, you'd actually reduce the cost of transportation, you'd reduce the cost of water, and you'd still get the value recapture tax but at least, the whole idea is you'd make it less expensive for the economy to produce and to live. ..."
MICHAEL HUDSON: Well, many states and localities have blocks to prevent privatization, and they want to prevent what's happening
to them from what happened in Indiana with the toll road. They say, "Wait a minute. Privatization is going to be a giveaway. It's
going to triple the costs of providing infrastructure services. It's going to price our cities and states out of the market if we
try to go along with this plan." And Trump says, "Well, in order to qualify for public funding, you have to abolish these restrictions
on private funding."
You have to let yourself be robbed blind by the hedge funds and Wall Street. That's basically what he said. He said just as the
hedge funds robbed Chicago blind on the parking meters getting a huge rate of return that probably will force Mayor Rahm out of office,
you have to let other privatizers come in and vastly increase your cost of living.
So, the infrastructure is going to really destroy America's competitiveness instead of contributing to it. It's going to vastly
raise the price of the cost of living rather than providing more resources and making things easier for the population.
SHARMINI PERIES: Michael, the American Society of Civil Engineers agrees with you that this is inadequate in terms of funding,
that the Trump plan is just not sufficient. In fact, it needs, they say, just to deal with the backlog a $4.6-trillion investment
by 2025 and Trump's plan doesn't even come close. What do you make of this?
MICHAEL HUDSON: Well, to begin with, Trump's plan would triple the cost of what the engineers say to $22 trillion and the reason
is that it's a Thatcherite privatization plan. Trump's plan reverses the last 150 years of public infrastructure. And in fact, it's
the biggest attack on industrial capitalism in over 100 years, more serious than a socialist attack.
Now, America's first professor of economics at the first business school, Simon Patten, said public infrastructure is a fourth
factor of production, but unlike labor, land, and capital, the role of public infrastructure is not to make a profit. It's to provide
public services that are basic for the economy's living standards and capacity to produce at a subsidized rate. So, America got rich
and came to dominate the world industrial economy by subsidizing all of the basic costs. Low-cost roads, low-cost infrastructure.
The government bore these costs so that, in effect, public infrastructure subsidizes the economy to lower the cost of production.
Trump's plan is to vastly increase it because he forces all of this into the marketplace. Instead of offering, say, roads at the
cost of production, he'd actually triple the cost of production by insisting that it be privately financed, probably by hedge funds
and by bank credit that would add the interest charges, the capital gains charges, the management fees, the oversight charges and
the fines for criminal fraud that goes with it by factoring all these prices into the cost.
Look at the, for instance, the Indiana Toll Road. That was done by a Trump-style private and public infrastructure and the
toll roads are so high to try to pay off the hedge fund backers that people don't use them. They go on the free, slower internal
roads. And that sort of is a horror story that anyone who's thinking of Trump's plan should be there.
Trump mentions, for instance, water privatization. All you have to do is look at Thatcher's water privatization in Britain, which
has vastly increased the price of water. The water companies have been bought out by hedge funds, registered abroad by foreign owners
that are opaque and it's become probably the most unpopular privatization plan of all. So that part's a disaster.
SHARMINI PERIES: Michael, another part of the plan is what is known as value capture financing in order to raise more funds. First
of all, what is value capture financing? And what are its implications for states and communities that apply this principle?
MICHAEL HUDSON: Value capture financing is a wonderful idea. It's so wonderful I don't know how it got into the plan. It says
that if you build transportation along a route, sort of like the Second Avenue Subway in New York, that transportation is going to
increase the value of land and real estate all along the route because now people are going to be closer in access to the subways,
to the roads, to the railroads. Many Hollywood movies in the 1930s were all about building roads up to politicians' houses.
So, the idea is that in the future, if New York City were to do something like build the Second Avenue Subway for $3 billion,
that this would raise the rental value, already has raised the rental value along the subway line by $6 billion because now, I'm
sorry, 6 trillion, I forget whether it's billion or trillion at this point. But at any rate, it's raised it by so much because now
people don't have to walk a mile to an overcrowded Lexington Subway.
Well, under Trump's plan, the cities, in order to get federal funding, would have to help themselves by recapturing the real
estate value created by this added transportation instead of leaving it in the hands of the landlords as the Second Avenue Subway
extension was left or as the West Side extension to the Javits Center increased value of real estate all along there or the Wall
Street luxurious restructuring at the subway, another 3 billion there.
This is the best idea of the plan and the one thing that should be kept, which is, of course, why the Democrats don't mention
it at all because they're backing the real estate and the financial interest in this. It's such a good idea, I don't know how, Rick
Rybeck has written a wonderful article on this recently. So, there are a lot of followers of Henry George that love this aspect of
the plan.
SHARMINI PERIES: All right, Michael, this is your opportunity to lay out a infrastructure plan that you think will work for this
country.
MICHAEL HUDSON: The government would finance it, and it would finance it by creating its own credit in the same way that it
created the 4.6 trillion to bailout the banks on Wall Street. Instead of creating money to give to Wall Street, you'd spend money
into the economy to build up the infrastructure. And ideally, you'd tax the rich for this, but now that Trump has untaxed the wealthy,
the only way that you could possibly do it under his tax giveaway to Wall Street is for the government simply to print the money,
create the money as the Federal Reserve or the Treasure can easily do, and finance it all public, and provide the basic infrastructure
services at cost or freely. So, instead of tripling the cost of water, instead of tripling the cost of transportation, you'd actually
reduce the cost of transportation, you'd reduce the cost of water, and you'd still get the value recapture tax but at least, the
whole idea is you'd make it less expensive for the economy to produce and to live.
SHARMINI PERIES: And Michael, much of this country doesn't believe that government is capable of doing this because they have
been given example after example of how government bureaucratic structures aren't working. And, of course, this deterioration of
the civil service, it plays a big role in all of this. How do you rebuild confidence in the state structures?
MICHAEL HUDSON: You write a history of America's success in doing this. You can look at Eisenhower's road building plan of the
1950s, for instance. You can look at the whole history of America's infrastructure spending and the whole logic that was spelled
out by Simon Patten at the Wharton School and by the economic theorists of industrial capitalism when America was really taking off
in the late 19th and early 20th century. The whole history of how America built its roads, how it built the communication system,
public health are examples of how governments make things work.
ORDER IT NOW
You can look at Germany, you can look at other successful economies. And you look at what went well, but you have to look at what
went wrong so you see how the financial interests can take over these plans, privatize them, and somehow gut them, and turn them
around and make them predatory instead of productive.
SHARMINI PERIES: All right, Michael. As always, great pleasure to have you on and thank you for joining us.
MICHAEL HUDSON: Thank you. It's good to be here, Sharmini.
SHARMINI PERIES: And thank you for joining us here on The Real News Network.
Michael Hudson is a Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He is the
author of many books, including The Bubble and Beyond, and Finance Capitalism and its Discontents,Killing the Host- How
Financial Parasites and Debt Destroy the Global Economy , and most recently J is for Junk Economics: A Survivor's Guide to
Economic Vocabulary in an Age of Deception .
"... The whole thing is classic Trumpian right move for the wrong reason ..."
"... IMO steel manufacturing in America became unsustainable because manufacturers chose not to reinvest in newer tech/newer processes that would make production more efficient. Plus the neolibs refused to force foreign manufacturers to wear a surcharge based upon the (at that time) superior working conditions of American steel workers. Anyone else conclude that the badly thought through 'plan' was to force American steel workers to give up their conditions? ..."
"... I suspect Trump will encourage the growth of non-union 'scab' steel plants to get around one issue while 'trusting' amerikan manufacturers to wake the fuck up amd modernise to cover the other. ..."
Just on a different note, we haven't discussed donny senior's somewhat limpwristed attempt to reintroduce protected markets into
the amerikan economy.
There is no doubt that 'something must be done' to provide a lifeline to the people of the Midwest aka 'the rustbelt'. I'm not
sure that resurrecting old programs is the best way forward; at least not solely. There must be more diversification if any resurrection
hopes to endure. The whole thing is classic Trumpian right move for the wrong reason
When I began thinking about this I had a quick scout of the web to try to find out which nation is the largest supplier of steel
to the US market. The financial times was about the only site which appeared to answer the query, but that was behind Murdoch's pay
wall.
I have watched mainstream US/Oz/englander & Aotearoa coverage since donny said he was gonna tax steel imports and to my knowledge
none of them have actually named the 'perps' aside from vague inferences vis a vis the People's Republic of China.
The allusions to China which is by far the
largest producer of steel on the planet
don't mention history. The Chinese did invent the steel-making process after all, but since 2007's allegations of dumping, China
has moved well down the hierarchy of amerikan steel suppliers to somewhere around #8.
I don't like to guess but I suspect South Korea is copping the rough end of the pineapple too. That leaves India, Mexico, Brazil
and Canada as the likely 'top 4'.
IMO steel manufacturing in America became unsustainable because manufacturers chose not to reinvest in newer tech/newer processes
that would make production more efficient. Plus the neolibs refused to force foreign manufacturers to wear a surcharge based upon
the (at that time) superior working conditions of American steel workers. Anyone else conclude that the badly thought through 'plan'
was to force American steel workers to give up their conditions?
I suspect Trump will encourage the growth of non-union 'scab' steel plants to get around one issue while 'trusting' amerikan
manufacturers to wake the fuck up amd modernise to cover the other.
I doubt the latter will eventuate to the point donny anticipates. Where new plants are constructed it will be in regions where
there wasn't a steel industry previously so as to make acceptance of non-union plants easier.
Nobody ever screwed up underestimating Wall St cupidity & where possible there will be little investment in new steel manufacturing
tech as that is akin to robbing stockholders as far as corporate capitalists believe.
Posted by: Debsisdead | Mar 5, 2018 9:19:41 PM |
87NemesisCalling , Mar 6, 2018 1:31:42 AM |
92
@87 deb
There is no doubt that 'something must be done' to provide a lifeline to the people of the midwest aka 'the rustbelt'. I'm
not sure that resurrecting old programs is the best way forward; at least not solely. There must be more diversification if
any resurrection hopes to endure. The whole thing is classic trumpian right move for the wrong reason.
This is the same logic that Obama used to defend neoliberalism: "those jobs aren't coming back." Oh yeah...Americans can't
make shoes and clothes anymore, huh? Too beneath us? Is that why the international intelligentsia rails against the ignorance
of the fly-over states? Same twisted logic...same obfuscation. So which is it? Is America still a potentially diverse working
force which needs a little help from combatting the hella-not-free-Chinese-protectionism and outright theft of intellectual property?
Or are those days over with so America really doesn't need market commodities like domestically-produced shoes, clothes, steel,
etc.? Did I miss something, because a lot of people feel like since the iPAD was created, we don't need a darn thing as long as
Foxconn over in China is holding a gun to their workers temple and keeping up with demand. Or making a pair of Nikes for a dollar
and selling it for $200.
But sophistication of intelligence agencies now reached very high level. Russiage was pretty dirty but pretty slick operation. British
thre letter againces were even more devious, if we view Skripals poisoning as MI5/Mi6 "witness protection" operation due to possible
Skripal role in creating Steele dossier. So let's keep wanting the evnet. The election 2020 might be event more interesting the Elections
of 2016. Who would suggest in 2015 that he/she elects man candidate from Israel lobby instead of a woman candidate from the same lobby?
Notable quotes:
"... The consistent derogation of Trump in the New York Times or on MSNBC may be helpful in keeping the resistance fired up, but it is counterproductive when it comes to breaking down the Trump coalition. His followers take every attack on their leader as an attack on them. ..."
"... Adorno also observed that demagoguery of this sort is a profession, a livelihood with well-tested methods. Trump is a far more familiar figure than may at first appear. The demagogue's appeals, Adorno wrote, 'have been standardised, similarly to the advertising slogans which proved to be most valuable in the promotion of business'. Trump's background in salesmanship and reality TV prepared him perfectly for his present role. ..."
"... the leader can guess the psychological wants and needs of those susceptible to his propaganda because he resembles them psychologically, and is distinguished from them by a capacity to express without inhibitions what is latent in them, rather than by any intrinsic superiority. ..."
"... The leaders are generally oral character types, with a compulsion to speak incessantly and to befool the others. The famous spell they exercise over their followers seems largely to depend on their orality: language itself, devoid of its rational significance, functions in a magical way and furthers those archaic regressions which reduce individuals to members of crowds. ..."
"... Since uninhibited associative speech presupposes at least a temporary lack of ego control, it can indicate weakness as well as strength. The agitators' boasting is frequently accompanied by hints of weakness, often merged with claims of strength. This was particularly striking, Adorno wrote, when the agitator begged for monetary contributions. ..."
"... Since 8 November 2016, many people have concluded that what they understandably view as a catastrophe was the result of the neglect by neoliberal elites of the white working class, simply put. Inspired by Bernie Sanders, they believe that the Democratic Party has to reorient its politics from the idea that 'a few get rich first' to protection for the least advantaged. ..."
"... Of those providing his roughly 40 per cent approval ratings, half say they 'strongly approve' and are probably lost to the Democrats. ..."
One might object that Trump, a billionaire TV star, does not resemble his followers. But this misses the powerful intimacy that he
establishes with them, at rallies, on TV and on Twitter. Part of his malicious genius lies in his ability to forge a bond with people
who are otherwise excluded from the world to which he belongs. Even as he cast Hillary Clinton as the tool of international finance,
he said:
I do deals – big deals – all the time. I know and work with all the toughest operators in the world of high-stakes global finance.
These are hard-driving, vicious cut-throat financial killers, the kind of people who leave blood all over the boardroom table
and fight to the bitter end to gain maximum advantage.
With these words he brought his followers into the boardroom with him and encouraged them to take part in a shared, cynical exposure
of the soiled motives and practices that lie behind wealth. His role in the Birther movement, the prelude to his successful presidential
campaign, was not only racist, but also showed that he was at home with the most ignorant, benighted, prejudiced people in America.
Who else but a complete loser would engage in Birtherism, so far from the Hollywood, Silicon Valley and Harvard aura that elevated
Obama, but also distanced him from the masses?
The consistent derogation of Trump in the New York Times or on MSNBC may be helpful in keeping the resistance fired up, but
it is counterproductive when it comes to breaking down the Trump coalition. His followers take every attack on their leader as an
attack on them. 'The fascist leader's startling symptoms of inferiority', Adorno wrote, 'his resemblance to ham actors and asocial
psychopaths', facilitates the identification, which is the basis of the ideal. On the Access Hollywood tape, which was widely assumed
would finish him, Trump was giving voice to a common enough daydream, but with 'greater force' and greater 'freedom of libido' than
his followers allow themselves. And he was bolstering the narcissism of the women who support him, too, by describing himself as
helpless in the grip of his desires for them.
Adorno also observed that demagoguery of this sort is a profession, a livelihood with well-tested methods. Trump is a far
more familiar figure than may at first appear. The demagogue's appeals, Adorno wrote, 'have been standardised, similarly to the advertising
slogans which proved to be most valuable in the promotion of business'. Trump's background in salesmanship and reality TV prepared
him perfectly for his present role. According to Adorno,
the leader can guess the psychological wants and needs of those susceptible to his propaganda because he resembles them
psychologically, and is distinguished from them by a capacity to express without inhibitions what is latent in them, rather than
by any intrinsic superiority.
To meet the unconscious wishes of his audience, the leader
simply turns his own unconscious outward Experience has taught him consciously to exploit this faculty, to make rational use
of his irrationality, similarly to the actor, or a certain type of journalist who knows how to sell their sensitivity.
All he has to do in order to make the sale, to get his TV audience to click, or to arouse a campaign rally, is exploit his own
psychology.
Using old-fashioned but still illuminating language, Adorno continued:
The leaders are generally oral character types, with a compulsion to speak incessantly and to befool the others. The famous
spell they exercise over their followers seems largely to depend on their orality: language itself, devoid of its rational significance,
functions in a magical way and furthers those archaic regressions which reduce individuals to members of crowds.
Since uninhibited associative speech presupposes at least a temporary lack of ego control, it can indicate weakness as well
as strength. The agitators' boasting is frequently accompanied by hints of weakness, often merged with claims of strength. This was
particularly striking, Adorno wrote, when the agitator begged for monetary contributions. As with the Birther movement or Access
Hollywood, Trump's self-debasement – pretending to sell steaks on the campaign trail – forges a bond that secures his idealised status.
Since 8 November 2016, many people have concluded that what they understandably view as a catastrophe was the result of the
neglect by neoliberal elites of the white working class, simply put. Inspired by Bernie Sanders, they believe that the Democratic
Party has to reorient its politics from the idea that 'a few get rich first' to protection for the least advantaged.
Yet no one who lived through the civil rights and feminist rebellions of recent decades can believe that an economic programme
per se is a sufficient basis for a Democratic-led politics.
This holds as well when it comes to trying to reach out to Trump's supporters. Of those providing his roughly 40 per cent
approval ratings, half say they 'strongly approve' and are probably lost to the Democrats. But if we understand the personal
level at which pro-Trump strivings operate, we may better appeal to the other half, and in that way forestall the coming emergency.
The late-Peter Bernstein once wrote, "The market's not a very accommodating machine; it
won't provide high returns just because you need them."
When you do need higher investment returns because of a perceived shortfall in assets for a
specific goal you generally have 3 options to remedy the situation:
(1) Adjust your expectations, and therefore, your lifestyle or goals.
(2) Increase your savings rate.
(3) Take more risk.
The first two options are for the realists while the third option is for the
optimists.
I've come to suspect that a more cynical ploy is in play:
The public is being fed the Koolade that outside high-fee money managers have the "Secret
Sauce" that guarantees top-quartile returns not because anybody at CalPERS actually
believes that poppycock for a minute.
Rather, this seemingly quixotic quest for the "Secret Sauce" provides a
justification and a cover for the soft corruption of paying unconscionable fees
to outside managers, who in turn grease the wheels with millions of dollars in political
contributions, and soft-landing consulting gigs for former CalPERS muckety mucks.
More Shock Doctrine. They are lying. Follow the money
"... I don't see how nations- or states- can develop other than with a mercantilist mindset. Doesn't the failure of globalization demand a return to mercantilist methods in order to have a functioning society in the modern, technological world? ..."
"... From my limited and naive understanding of history, it seems to me that the opportunity for peaceful coexistence on the planet is consistently being squandered by Western nations -- particularly the US. ..."
The European multinational is following a trend started by Boeing, which
recently opened a new completion plant in China. On the face of it, the decision by the two
companies (which dominate the civilian aviation market) makes sense: build where your biggest
customer lives, especially as China does not yet have a fully homegrown civil aviation industry
ready to compete globally. The benefits are many, including the goodwill and esteem of the
country that would be buying these planes. In the long term, however, that might prove to be a
costly miscalculation. Based on its recent history ( here and
here ), it
won't take long for China to catch up and largely displace both companies domestically in
Beijing's home aviation market, as well as seizing a large chunk of the corporate duopoly's
global market share. Airbus and Boeing could therefore be making short-term decisions with
negative long-term consequences for their future profitability.
Given China's formidable economic advancement, none of this should come as a surprise to
either Airbus or Boeing. Nor should it shock Western governments. The problem is that everybody
has historically been guided by the naïve assumption that simply admitting China to
organizations such as the World Trade Organization (WTO) would induce Beijing to, in
the words of Philip Pan , "eventually bend to what were considered the established rules of
modernization: Prosperity would fuel popular demands for political freedom and bring China into
the fold of democratic nations. Or the Chinese economy would falter under the weight of
authoritarian rule and bureaucratic rot." China has unquestionably modernized, but its
politically illiberal, dirigiste polity has, if anything, massively
moved in the opposite direction, strengthened by that very modernization process that has done
anything but falter. Furthermore, the country has many aims and goals that are antithetical to
the long-term prosperity of Western companies and economies (as the European Union is
beginning to recognize ).
Boeing and Airbus might simply become the latest Western sacrificial lambs. Beijing has
explicitly targeted wide-bodied aircrafts as one of its 10 new priority sectors for import
substitution in its " Made in China
2025 " document, so whatever short-term gains Airbus and Boeing receive in terms of
securing additional orders from China could well be undermined longer-term. The resultant
technology transfers and lower labor costs will almost certainly give Beijing a quantum leap
toward competing directly and ultimately displacing both companies. Given the merger with
McDonnell Douglas, Boeing will continue its march toward effectively becoming a branch of the
U.S. Department of Defense, as its civilian market share crashes, but Airbus doesn't really
have the luxury of a military alternative, given the relative paucity of European defense
expenditures.
As if Boeing needed any further problems, the 737 fiasco represents the latest in a series
of setbacks for the company. Boeing's 737 global recall, coming on the heels of the initial
launch problems of the 787 Dreamliner some six years ago (where the " demoduralization " of
production meant that Boeing "could not fully account for stress transmission and loading at
the system level," as Gary Pisano and Willy Shih write ), together
illustrate the dangers of spreading manufacturing too far across the globe: Engineers,
notes CUNY fellow Jon Rynn , "need
to 'kick the tires' of the new production processes they design. So while a market may be
global, production and the growth of production take place most efficiently" in relatively
close geographic quarters.
American companies such as Boeing consistently underestimate the value of closely
integrating R&D and manufacturing, while underplaying the risks of separating them (
as
recent events have demonstrated again to the company's cost ). By deciding to expand its
A330 production in China, Airbus looks poised to repeat Boeing's error, a potential
miscalculation that most European Union companies have hitherto largely avoided, because the EU
has prioritized domestic manufacturing/discouraged offshoring more than its U.S. counterparts
(in regard to the loss of U.S. manufacturing jobs attributable to China, the American
Economic Review paper by Justin R. Pierce and Peter K. Schott specifically notes that there
was "no similar reaction in the European Union, where policy did not change").
Beijing itself has historically balanced its purchases from both major civil aviation
manufacturers to ensure that it does not rely too heavily on one aircraft supplier, which means
that Airbus will likely benefit from the void created by the 737 recall. All the more reason
why the European conglomerate should be wary of following the pied piper-like expansion into
China. (The 737 recall also complicates resolution of the U.S.-China trade conflict, which had
appeared closer to resolution in light of Beijing's proposal to buy an additional $1.2tn in
U.S. exports over six years. Boeing aircraft purchases featured heavily on Beijing's shopping
list.)
But the longer-term challenges relate to China's economic development path and its
corresponding move up the high-tech curve, which have largely been characterized by
mercantilist policies of protection and heavy government subsidy. In this regard, the Chinese
state has followed a national development strategy first outlined in the
mid-19th century by the German economist Friedrich List , who argued that the national
government should play a crucial role in promoting, guiding, and regulating the process of
national economic advancement.
Protectionism, List argued, should play a role here as well during the country's "catch up"
phase of technological development. List wrote the analysis against a historic backdrop where
Germany was beginning to challenge the dominant economic power of its time, the United Kingdom.
So the defenders of Beijing might well point to his work to show that there is nothing new
about using the state as a principal instrument to accelerate economic development and
innovation.
However, List was analyzing two capitalist economies operating within the context of a
19th-century gold standard global financial system, which invariably circumscribed the scope of
state involvement (the finite availability of gold reserves limiting fiscal policy options). By
contrast, today the global economy operates under a fiat currency system, and what therefore
distinguishes China's economic domestic development from its 19th century predecessors is the
sheer scale of fiscal resources it can deploy in the furtherance of its economic (and military)
objectives. Some of these objectives might not be so benign to the West
longer-term.
Which points to another consideration for the West: for all of its supposed embrace of
capitalism, China is still primarily a state-dominated economy, which eschews the disciplines
of a free market economy. This means it has the capacity (and ideological predisposition) to
use the national fiscal policy as a loss leader, absorbing losses well beyond what would be
tolerated in an economy dominated by private enterprise (private companies, of course, can go
bust). Beijing underwrites its designated national champions by relying on a combination of
subsidies (some disguised, as they flow through state-backed investment funds and the financial
sectors) and "Buy China" preferences to develop Chinese products, even though these policies
are contrary to the rules of WTO membership, which China eagerly joined in 2001. As the
economist Brad Setser argues
, "various parts of the Chinese state compete, absorb losses, and then
consolidat[e] around the successful firms. Other countries [might] worry about the
[scale of the cumulative] losses," notes Setser, but not the Chinese government, which simply
socializes the losses at the national level, and writes them off.
In this regard, Boeing and Airbus would do well to consider China's experience in the solar
industry. Designating this as another strategic sector for growth in the 1990s, Chinese solar
companies, with the explicit backstop of the state, ultimately raised enough funding via debt
to build sufficient solar capacity for the world three times over. The overinvestment
ultimately killed the cash flows of major Western competitors and knocked them out of the
business, leaving the market free for China to dominate. Commenting on the trend, Scientific
American highlighted
that "between 2008 and 2013, China's fledgling solar-electric panel industry dropped world
prices by 80 percent, a stunning achievement in a fiercely competitive high-tech market. China
had leapfrogged from nursing a tiny, rural-oriented solar program in the 1990s to become the
globe's leader in what may soon be the world's largest renewable energy source."
Here was a classic case of state-guided/supported commercial companies receiving benefits
that went far beyond anything in, say, Korea or Taiwan, or even Japan in the earlier part of
their development. Now this trend is manifesting itself across the entire spectrum of the
Chinese guided economy, including agricultural equipment, industrial machinery,
telecommunications, AI, computer chips, and civil aviation. In another disturbing parallel that
Boeing and Airbus would do well to consider, "[t]he timeline of China's rise began in the late
1990s when Germany, overwhelmed by the domestic response to a government incentive program to
promote rooftop solar panels, provided the capital, technology and experts to lure China into
making solar panels to meet the German demand," according
to Scientific American . Much like the German solar companies, which shipped valuable
manufacturing and technological expertise to China, to sustain demand, Boeing and Airbus could
well be signing their economic death warrants by agreeing to offshore increasing amounts of
production in China to sustain their global market shares (aided and abetted by their more
market-oriented governments, which frown on the idea of national industrial policy).
The same thing is happening in wind power in China, which is expected to see offshore wind
capacity grow from 2 gigawatts last year to 31 gigawatts in the next decade. China's expansion
here has already forced Siemens and Gamesa to merge to cope with the rising competitive
challenge. As far as aviation itself goes, Setser
makes the point that "China may cut into the United States' future exports by building its
own competitor to the 737 and also cut into Europe's future exports if Airbus decides to build
the A330 in China and China buys
'Made in China' Rolls-Royce engines for the C929 and the A330." Even if this allows the
duopoly to maintain its dominance in global civil aviation, it is hard to see how shifting
manufacturing production of aircraft components to China to get orders constitutes a "win" for
the U.S. or European workers who are already being displaced. And Boeing's
weak-kneed response to the 737 crisis will likely exacerbate the company's problems going
forward.
The bottom line is that both Western governments and Western corporations have persistently
underestimated the power of China's economic development model, and the corresponding economic
threat that it poses to the West's own affluence. The usual criticism leveled against the
Chinese growth model is that a country that subsidizes its industries ends up with inefficient
industries, because heavily protected local firms are shielded from global competition,
ultimately leaving the country that resorts to protectionism with inferior products. The idea
of national champions, built up via state dirigisme, according to classic liberal economic
doctrine, ultimately ensures that economic efficiency and commercial considerations get
squeezed out. Rent-seeking and corruption become institutionalized, goes the argument, so these
national champions ultimately will not be able to compete in the global marketplace. That was
certainly the assumption of Milton Friedman, who called the
Chinese Communist Party's state-driven strategy "an open invitation to corruption and
inefficiency." By contrast, according to Defense and the National Interest , the governing
assumptions of capitalist economies is that "[t]he discipline of the 'marketplace,'" not the
state, is better suited to choose winners and knock out losers "who cannot offer the prices or
quality or features of their competitors."
China represents the ultimate repudiation of these seemingly ironclad economic laws. The
country's success has come across a slew of industries: clean tech, notably wind and solar
power, internet companies (despite overwhelming censorship, China has corporate behemoths, such
as Alibaba, or Baidu, which rival Google in scale and scope), and more recently, in the
telecommunications sector (where Huawei has clearly benefited from "Buy China" preferences
created by the state via its state-owned telecommunications enterprises and now is considered
to be the global leader in 5G telephony). In practice, therefore, there is no reason why the
same model cannot work with regard to civil aviation even as Airbus and Boeing eagerly provide
the rope with which they may hang their respective companies in the future.
Designating this as another strategic sector for growth in the 1990s, Chinese solar
companies, with the explicit backstop of the state, ultimately raised enough funding via
debt to build sufficient solar capacity for the world three times over.
I'm confused. Why should it matter that they raised funding via debt? It kinda reads like
Auerback feels this should shock us, or make us think China is "cheating" or somesuch. But
iirc there's a nice book by Mazzucato that proves something that Chomsky's been saying since
forever about the US (federal) govt. Now to be sure, the US govt tends to mainly simply give
away money, rather than extending loans, but..
Fiat economies have solidly proved that debt is just noise. Unless politicians use it as a
cudgel to kill good fiscal governance. I am confused about the use of the term "socializing
losses" here because what really seems to be happening is China is creating social value.
When our corporations are coddled and their externalized costs and losses are socialized we,
the tax payers, are the ones who suffer the austerity in order to keep the dollar "strong"
and etc. I'll never forgive this country for allowing our corporations to murder American
labor in the 80s and hot-foot it off to China to make their profit. Now that was definitely
socializing losses – in fact it was socializing losses in advance. I don't think we
will ever recover from that little episode of free marketeering. China might be scary because
they are so very powerful, pragmatic and adaptable. But they are no more "illiberal" than we
are. It's time to set some standards.
Just to point out that Airbus has had an assembly plant in Tianjin in China since 2010. I
recall reading a few years ago that Airbus found costs were so high because of a shortage of
the right workers it would actually have been cheaper to make them in France. Airbus also
assemble aircraft in the US for precisely the same reason – to get a manufacturing
'foothold' in important markets to prevent mercantilist retaliation.
But as the article says, many a manufacturer has found to their cost that the Chinese
simply don't play fair, they will extract every bit of information they can from those plants
and use it for their new Comac aircraft (which so far are not very impressive, nobody wants
to buy them).
You may consider that chinese don't play fair, it also migth be considered that Airbus
strategy is just another way of economic colonization and to prevent the surge of new
competitors maintaining the duopoly. Is it fair?
Given the recent drift of political geostrategy leaded by the US in which anything is
"fair" to defend particular interests, my opinion is that China interest on developing their
own airplane industry is not only fair but very reasonable. One wonders when the US will put
in place another arbitrary ban.
I don't see how nations- or states- can develop other than with a mercantilist mindset.
Doesn't the failure of globalization demand a return to mercantilist methods in order to have
a functioning society in the modern, technological world?
The argument that globalization has not failed is tested by growing social tensions and
inequality around the world. A return to mercantilism, or a version thereof seems logical.
Thriving internal markets linked to strong alliances seem to offer a path into the future
that is workable. Peaceful nations trading among themselves. Over time, resource issues can
be worked out peacefully. The competition will be over functioning economies, not world
domination. But to get there, nations have to have both security and technical ability.
Should the Chinese or the Russians be trusted to bring about a positive transformation in
world society? Time will tell. I would hope so.
From my limited and naive understanding of history, it seems to me that the opportunity
for peaceful coexistence on the planet is consistently being squandered by Western nations --
particularly the US.
If a functioning world government is not possible, than the next best thing would be
functioning national governments that set standards and economic policy that benefited the
majority of citizens, not just the elite. It seems the truly intelligent, and wise ones see
this.
If a functioning world government is not possible, than the next best thing would be
functioning national governments that set standards and economic policy that benefited the
majority of citizens, not just the elite. It seems the truly intelligent, and wise ones see
this.
This is what we had under the Bretton Woods system from appoximately 1945 to 1973.
Moderate free trade with each country setting its own goals, policies, and standards, yet
being connected economically to other countries. An intermediate level between full
mercantilist protectionism and completely open free trade and unrestricted currency flows. It
was replaced by neoliberalism's goal of open borders with unrestricted free trade, currency
flows, and labor.
Yes, but a return seems inevitable. If not, serfdom and peasantry brought back due to
excessive crapification of production and rent seeking by a global oligarchy is in our
future.
Native populations would gladly buy less advanced goods and services if produced locally
and offered secured jobs and livelihoods. Made in China, Made in USA, Made in Russia- makes
perfect sense. Supplying the world through monopolistic corporations is only feasible if not
weaponized. But that is the path not taken.
If you ask a neoliberal what the end game would look like, and they are forced to answer,
most people would be horrified by the answer.
Brexit is a good analogy. The transition could be a managed affair with less pain to go
around, or a crash out.
In the end, saner heads will prevail if only for growing grass roots efforts to create a
fairer economy and necessity.
US forced UK to break and give up jet turbine, Radar, and many other technologies.
Philips, Dutch under Nazi occupation, had all it's patents abrogated and USA assets seized
and never returned. WW 2 made USA a world power not just from being isolated from war but
because USA stole everything and everyone of any value.
Blame the United States for many things, but realize that technology like radar and jet
turbines were extremely important during the Second World War.
During a major war everything is open to theft, or even just being given away, by everyone
as merely surviving becomes more important than any other concern by the various states.
There are also the large businesses that often, very illegally and even treasonously,
continue to do business with their country's enemies. Those businesses just get nasty words
usually and keep their profits (of course).
Examples of both are the Polish and French work on the German Enigma encryption system
given to the British, the Soviet theft and reverse engineering of American technology, IBM's
leasing and maintaining its punchcard machines (census records used in Holocaust) Ford's
manufacturing and maintaining its vehicles and Standard Oil's running its refineries in, and
shipping when possible oil, into Europe for the Nazis, the Nazis stold from everyone
(technology in armored vehicles, artillery, radar, radio) likewise the Japanese who also got
technology from the Nazis. And everyone stold from the Germans.
The only reason the United States got to take full use of what it got was because it's
universities, businesses, and factories were all intact afterwards.
Nobody wants to buy them now but in a few years they will just like cars from S. Korea
were looked upon as inferior to Japanese ones but now they they're deemed to be just as good
and better value for the money.
When I worked there, it seemed that Boeing was always on the cutting edge of bad corporate
ideas. So it's baffling to me that it's taken them so long to have their guts carved out by
China. I mean, the peer pressure at the corporate country club I infer is rather intense. But
I appreciate it as my pension from them is now in a seaparate autonomous account. That is no
guarantee it will be truly insulated but it helps.
I have worked in the electronics industry in Northern California for many years and
watched the outsourcing of manufacturing and some design overseas.
I believe that many in the industry have realized that moving manufacturing and design
overseas has helped to create some very worthy competitors.
Some years ago, I was told of a company that wanted a low end product for an existing
product line.
The company negotiated with a Chinese company and rebranded one of their inexpensive
products, but only after the Chinese company was told of design changes/improvements.
As I was told, the USA company realized they had helped bring a competitor up the learning
curve and would not do it again.
I remember reading that the telecom companies also went into China with assembly plants
and found they did not see the revenue they projected because they "trained new competition"
that opened their own facilities.
Probably there will be considerable lower-level resistance inside Boeing to moving
assembly/design to China, but the "big picture" executives will rule the day.
People will get with the program, as one technician who was being laid off about 20 years
ago related to me. "They told me I could leave that day, or get more pay by training my
overseas replacement for two weeks."
People will get with the program, as one technician who was being laid off about 20
years ago related to me. "They told me I could leave that day, or get more pay by training
my overseas replacement for two weeks."
This has been happening in the United States since the 80s. I am surprised we have
workers, knowledge, or equipment left to be stolen, sold, given away, or thrown away for our
Blessed Elites' God Mamon.
I expect the Chinese to be fools as, for a very old civilization, they are surprisingly
parochial and shortsighted, but seeing my fellow Americans throwing everyone else, including
most Americans, into the compost pile because "greed, for lack of a better word, is good"
makes me want to drink.
Once you impoverish and enrage the population of a nation as large as the United States
what does anyone expect to happen? To everyone else?
This was made possible by keeping the decision secret from the targeted technician(s)
until the last moment before implementation. If the company had told these technicians
several years ahead of time that " in several years time we will give you the choice of
leaving immediately or working for two weeks to train the overseas replacement we will
replace you with" . . . . that the technician(s) in question would have saved up two weeks
worth of living expenses so as to be able to surprise the company with their own last-second
refusal to train the replacement for two weeks pay when the time came.
Which is why the company never told these technicians about this "train your replacement"
plan several years in advance. I sincerely hope this technician was able to withhold certain
key information from his trainee. Even better would be if he had been able to give his new
trainee certain subtle dis-information and dis-training would which lead to downstream decay
in the foreign replacements' performance sometime after the replacement was made. Hopefully
to the detriment of the company which pulled that stunt.
I had to do it twice. I trained my Indian replacement for my world-leader high-tech
employer.
Ten years later, trained my Chinese replacement for my other world-leader employer.
Other countries [might] worry about the [scale of the cumulative] losses," notes Setser,
but not the Chinese government, which simply socializes the losses at the national level,
and writes them off.
Auerback's entirely right on this. But I disagree completely: Boeing and Airbus
should sign suicide pacts. The capitalists are selling China the rope to hang them
with – and please, China, do hang them! While you're at it, keep developing the green
tech the species needs to survive.
"Considering" a move overseas sounds like an indirect way of asking for more special
treatment in the two companies' respective home markets. Which they will probably need
– the market for airliners might be overextended even without the Boeing fiasco.
It is not "Boeing" and "Airbus" as such which are making these decisions. It is actual
human executive persons inside offices in buildings called "Boeing" and "Airbus" who are
making these decisions.
In the current Forced Free Trade environment, if those executives making those decisions
will make more personal money with in order to retire richer with by relocating the bussiness
to China, they will relocate the bussiness to China. If it goes extinct after they have taken
their personal money and run; it is no longer their problem to care about. So they won't care
about it.
My main take-away from Marshall's post is that China is harnessing the power of fiat money
to develop its economy. Why shouldn't all countries do that? It seems to me ideological
blinders are preventing it except perhaps in military expenditures in the U.S. All caveats
regarding human rights, inequality, corruption, environment, etc., apply of course.
Airbus has plant in Tianjin since 2010. The information that China managed to extract from
it did not make the COMAC C919 a competitive aircraft.
So, Airbus and Boeing may think now that the risks of setting a plant in China are less
than expected.
Civil aviation is a particular industry. There is a lot of know-how in the design offices
and in the supply chains. This know-how cannot be copied from a manufacturing plant.
Same thing with the conventional auto industry, however, it's a totally different story
with high speed rail, ship-building, and telecommunications, for which China has caught up.
China's electric vehicle industry also seems promising. I think Comac's ARJ21 and C919 are
good enough to be competitive on China's domestic market.
It is also the publicly-held stock company model, whereby management and boards compute
risk/reward far out enough to match their personal enrichment deadlines, no more.
Neoliberals concentrate on the next quarter's earnings; these companies are pr0bably
eyeing the cheaper labor in the plants in China. I can see that as their main incentive.
Combine the insights of this post with MMT and you have a winner. With a few
qualifications:
1. success (wealth creation?) should be measured by the ability of the nation, with perhaps a
few of its closets friends, to support and defend itself – NOT by how fast the number
of zeros in the financial portfolios of its citizens grows;
2. nor should it be measured by how (temporarily?) cheaply Western consumers can continue the
consumption of the cars, televisions, etc that powers the growth of those portfolios.
Auerbac's choice of the future for the Western airline industry as a potential object of
concern is, however, interesting. It suggests he hasn't been reading Naked Capitalism's
warnings about that industry's planet-killing potential.
I'm catching up on NC post reading this morning and had just finished the post from
earlier this week, "Work of the Past " before I read this one. Autour's study of the widening
wage gap increases between workers with low and high education levels, which, as commenters
there pointed out, were seen as almost natural phenomena, no agency involved, segues nicely
into this post. And, resulted in my thinking about the rise of so-called 'toxic
masculinity.'
When I moved to Long Beach, California in the '80's, I lived just a few miles from the
then-thriving McDonnell-Douglas assembly plant. Driving by, you could see the end product
planes, still an unpainted dull metallic gray, sitting in a row on the tarmac. Crews would
then paint on the distinctive livery of the purchasing airline and the new plane, in glowing
color, would be rolled out. The CEO of the airline would arrive, have his tie cut off (don't
ask!) and take delivery of the new plane in a ceremony that involved the proud workers.
For a short time, I worked there, hiring training pilots. The esprit-de-corps in
the plant was infectious. People were immensely proud to be working there and had a vested
interest in each plane as it rolled off the assembly line. (There was a growing concern with
workers going out for Friday lunch and never coming back; or returning and then falling
asleep inside the wings or engine cowlings, but that was at the end, when workers knew the
company was contracting.)
I was there when the company sold plants in San Diego and older guys with years of
experience came up to Long Beach to work as temporary contractors. Then the LB plant
closed.
All those employees, mainly white males, who had good jobs, worked hard, crafting a
product they were proud of, that flew all over the world (spewing carbon dioxide, but that's
another tale), owned a nice little house, took family vacations, cut adrift.
Our nation's lack of an industrial policy not only strips workers of their jobs, their
sources of income and their pensions, but takes away their dignity, their reason for getting
up in the morning. It strips away the bonds they have forged with their co-workers and
smashes the pride they had in their product. It emasculates them. And, what is left becomes
poisoned and toxic, turns to hate and despair.
We do have an industrial policy – go to war for the oil companies to name one
objective. Our government concludes pacts to force other countries to buy our grain, pharma,
planes, medical equipment etc. etc.
Unfortunately, this plicy do not translate into manufacturing in this countries because these
companies chase cheap labor elsewhere around the world.
China is still primarily a state-dominated economy, which eschews the disciplines of a
free market economy.
This is the most hilarious quote I think I have ever seen on Naked Capitalism.
If your competitor's strategy is having them eat your lunch, rather than criticize that
strategy, maybe you might consider learning a thing or two from it.
One assumes that the CEOs of these companies making these decisions actually care about
the future of the company, the future of their country. They don't. They care about getting
rich. They live in a different world than the rest of us. End of story.
China is doing what Japan did with automobiles and consumer electronics after WW2.
Toyota was once warehouse with a dormitory, and the workers found out if they were going to
work today by looking out the window to see if there was smoke coming from the warehouse
chimney.
And I am glad it happened, my 1995 Toyota Tacoma is better and cheaper than anything made in
USA. Also true for my 2004 Mazda3.
The contributors to this blog seem to have no regard for USA consumers.
Yes my local clothing store closed down long ago, but they never had my size pants anyway.
Walmart does, Costco does, and for far less $.
Do you really think that Boeing deserves our support? Do you really think they have acted
responsibly?
I think Boeing is just another oligarch, like VW, that will do anything to increase
profits.
"Yes my local clothing store closed down long ago, but they never had my size pants
anyway. Walmart does, Costco does, and for far less $."
You must be both not so old and not so tall. I'm both. Nike used to make XL t-shirts that
fit me, but now its XXLs are too small. I have one Nike t-shirt from at least thirty years
ago and it fits perfectly, so my body isn't what changed.
And if you don't realize that Walmart quality is far below what one would have found in US
clothing stores thirty years ago, there's nothing more to say.
Walmart and Amazon sell the same socks, t shirts, and pants.
And so does Hanes if you order direct online.
I don't think any of them are made in USA.
I used to buy fine cotton t shirts made in L.A (CA)
They are no longer in business because they cost $20, and Hanes now sells for $5 online.
Walmart quality varies, so do their prices.
I know what I want, and am glad to buy it for less anywhere that sells it.
Most of the CEOs don't care about the worker that works for them.
They largely see them as something to exploit so that they can get their big stock options
bonus. Boeing is no different, nor is Airbus.
From the CEO's point of view, they outsource, they transfer technology, and for a few
years, the profits will be good. Then when the full extent of the failure becomes apparent,
they will be gone anyways, having cashed in on their stock options and a new CEO will be
there to take the fall.
It's the MBA culture run amok and it has been responsible for a large amount of the damage
done to the middle classes of the Western world. They are creating future competitors and
destroying their own communities.
A while back, Eamonn Fingleton noted this problem – only for Japan.
The Chinese have long wanted to develop their own domestic aerospace industry. An example
of one area that China needs to master is the jet turbine blade manufacturing. It's an
extremely difficult part of making a competent aircraft, as higher inlet temperatures mean
more efficient aircraft.
The difference is that China takes a more long term view of what is in the best interest
of their nation, however flawed and corrupt the CCP may be. The US ruling oligarchs are a
naked kleptocracy that milk their population.
To paraphrase Bill Clinton, that depends upon the definition of "modernized." China will
always be the preeminent communist country, but Deng and others realized that China could
earn big bucks by playing a capitalist game, as long as Chinese businessmen do not interfere
with the government.
Airbus and Boeing are merely the latest suckers to believe that China will ever change.
Der Spiegel noted years ago that Chinese engineers were videotaped in the middle of the night
taking measurements of Germany's Transrapid train. Today China has the best technology from
all major train manufacturers, with short-sighted entities such as the state of California
seriously considering buying Chinese trains (before the new governor canceled the project, of
course).
The aircraft horse has already left the barn. China's C919 is a 737 clone which will allow
China to stop buying smaller airliners, with many countries naively buying it to save money.
Obtaining Airbus and Boeing technology will allow China to do the same for larger
airliners.
If you want a real laugh, read the articles written by libertarians about how Americans
will always be more productive than Chinese, so allowing China into the WTO and giving it
PNTR will not hurt us in the long run.
The basic problem in the West is that the neo-liberal ideology has merged with human greed
to form an economic/political system that is divorced from reality. At least the Party in
China has Russia as an example and must deal with the real world to stay in power less they
lose their mandate to rule. America has its exceptionalism. China has its chauvinism. My
opinion is that the iPhone sales cratered there for one reason; Trump's trade war. Boeing's
boneheaded decision to add a fatally flawed fly-by-wire system to the 737 Max without telling
anyone and with no training deserves prison time for Chicago executives for manslaughter.
They won't go to jail and the last manufacturing American led industry will die away.
Mid-America is a colony to global oligarchs and their bi-coastal lackeys. The only way to
turn our fate around is to restore democracy and government by and for the people.
"... "Asian growth was weak, the Fed was worried about global growth potentially leading the U.S. into recession, and they preemptively eased," Setia said. "We might be in for a similar type of ride here." ..."
10-year rate sinks below 3-month rate for first time since '07
New manufacturing data hinder already-weak case for tightening
The
inversion of the Treasury yield curve shows bond traders see a worsening economy pushing
the Federal Reserve to make its next interest-rate move a cut, even if officials seem reluctant
to concede that just yet.
U.S. central bankers sent interest rates plunging on March 20 by slashing their projections
for future increases. Weak European and American manufacturing data two days later cemented the
notion that their tightening campaign may be over, with yields on 10-year Treasuries slipping
below 3-month rates for the first time since 2007.
The growing specter of an economic slump sent a shiver through financial markets Friday,
hitting not only bond yields, but also also dragging down share prices and hammering
emerging-market assets.
The so-called inversion of the Treasury yield curve has heralded recessions in the past. The
idea is simple: the Federal Reserve typically responds to downturns in the economy by cutting
rates. Investors anticipate the cuts and incorporate those expectations into longer-term
yields, tilting the curve downward.
... ... ...
Easing Priced
U.S. money markets are priced for about half a percentage point of easing from the Fed over
the next two years, according to interest-rate derivatives. The dramatic swing from December,
when markets were still priced for additional tightening, raises questions about how bad the
outlook would have to get before Fed officials would start cutting rates.
For Rajiv Setia, the New York-based head of U.S. and European rates research at Barclays
Capital Inc., a further deterioration overseas might be enough to tip the scales. He recalled
what happened during the 1998 emerging-market crisis.
"Asian growth was weak, the Fed was worried about global growth potentially leading the U.S.
into recession, and they preemptively eased," Setia said. "We might be in for a similar type of
ride here."
One source said some of the parents are being
given a short window to consider a deal or potentially face additional charges.
It's unclear which parents prosecutors hope to seek out for cooperation, but sources said
authorities were interested in getting a better picture of how the scam worked. The sources
requested anonymity because they were not authorized to speak publicly on the matter.
"... The divisions can always be jacked up. "My opponent is a white nationalist!" and so he doesn't just think you're lazy, he wants to kill you. Convince average Americans to vote against their own interests by manipulating them into opposing any program that might benefit black and brown equally or more than themselves. ..."
"... Listen for what's missing in the speeches about inequality and injustice. Whichever candidate admits that we've created an apartheid of dollars for all deserves your support. ..."
The birth lottery determines which of those three bands we'll sink or swim together in,
because there is precious little mobility. In that bottom band,
81 percent face flat or falling net worths (
40 percent of Americans make below $15
an hour) and so aren't going anywhere. Education, once a vehicle, is now mostly a tool for the
preservation of current statuses across
generations, to the point that it's worth paying bribes for. Class is sticky.
Money, not so much. Since the 9.9 percent have the most (except for the super wealthy at
least), they have the most to lose. At their
peak in the mid-1980s, the managers and technicians in this group held 35 percent of the
nation's wealth. Three decades later, that fell 12 percent,
exactly as much as the wealth of the 1 percent rose. A significant redistribution of wealth
-- upwards -- took place following the 2008 market collapse, as bailouts, shorts,
repossessions, and new laws helped the top end of the economy at cost to the bottom. What some
label hardships are to others business opportunities.
The people at the top are throwing nails off the back of the truck to make sure no one else
can catch up with them. There is a strong zero sum element to all this. The goal is to
eliminate the competition
. They'll have it all when society is down to two classes, the 1 percent and the 99 percent,
and at that point we'll all be effectively the same color. The CEO of JP Morgan
called it a bifurcated economy. Historians will recognize it as feudalism.
You'd think someone would sound a global climate change-level alarm about all this. Instead
we divide people into
tribes and make them afraid of each other by forcing competition for limited resources like
health care. Identity politics sharpens
the lines, recognizing increasingly smaller separations, like adding letters to LGBTQQIAAP.
Failed Georgia gubernatorial candidate Stacey Abrams, herself with presidential ambitions,
is an example of the loud voices demanding
more division . Contrast that with early model Barack Obama at the 2004 Democratic National
Convention, who pleaded, "There's not a black America and white America and Latino America and
Asian America; there's the United States of America."
The divisions can always be jacked up. "My opponent is a white nationalist!" and so he
doesn't just think you're lazy, he wants to kill you. Convince average Americans to vote
against their own interests by manipulating them into opposing any program that might benefit
black and brown equally or more than themselves. Keep the groups fighting left and right and
they'll never notice the real discrimination is up and down, even as massive economic forces
consume all equally. Consumption becomes literal as Americans die from alcohol, drugs, and
suicide in record numbers
.
Meanwhile, no one has caught on to the fact that identity politics is a marketing tool for
votes, fruit flavored vape to bring in the kiddies. Keep that in mind as you listen to the
opening cries of the 2020 election. Listen for what's missing in the speeches about inequality
and injustice. Whichever candidate admits that we've created an apartheid of dollars for all
deserves your support.
** The author doesn't really drive for Uber but his conversation with the Spaniard was
real.
Mr Van Buren. This piece nails it. The Democrats made a huge mistake focusing on race and
LGBTQ instead of class. Their stated goal should be to replace race based affirmative action
with class-based programs.
If there is serious violence coming to America it will come during the next major
recession/financial crisis. The ARs will come out of the closet when, during the next
financial crisis, the elites are bailed out (again), yet the riff raff lose their homes and
pickups to foreclosure.
I am very pessimistic in this area. I believe the elites, in general, are agnostic to SJW
issues, abortion, job loss, BLM, religious liberty, and on and on. The look at the riff raff
with amusement, sparring over such trivial things. Meanwhile, the river of cash keeps flowing
to their bank accounts.
Imagine if the digital transfer of money was abolished. Imagine if everybody had to have
their money in a local bank instead of in an investment account of a major bank. Imagine if
Americans saw, day after day, armored vehicles showing up at local banks to offload sacks of
currency that went to only a few individual accounts held by the very rich.
Instead, the elites receive their financial statements showing an ever increasing hoard of
cash at their disposal. They see it, but nobody else does. However, if everybody saw the
river of wealth flowing to the elites, I believe things would change. Fast. Right now this
transfer of wealth is all digital, hidden from the view of 99.99% of Americans and the IRS.
And the elites, the banking industry, and the wealth management cabal prefer it that way.
It's easy to propose the ultimate goal of the elites is to have a utopian society to
themselves, where the only interaction they have with the riff raff is with subservient
technicians keeping it all running. Like the movie Elysium.
When feudalism comes to America, it will be justified by Libertarianism. With government
defined as the bad guy, there's nothing to stop the 1% from organizing everything to their
own benefit.
On the other side of the political spectrum, identity politics emphasizes people's
differences and tribal affiliations over their shared citizenship. This prevents them from
making common cause.
Fundamentally, these trends make the body politic so weak that it becomes susceptible to
takeover by authoritarians that represent narrow interests.
"His skin was clearly a few shades darker than mine, though he pointed out that was only
because my relatives came from the cold part of Europe and he came from the sunny part."
The Spanish in Europe got their color from the Moorish invasion, not the sun.
More of my annoying trivia that has little to do with the subject of an article.
Welp, the Democratic Party, by and large, believes all Americans regardless of class, race,
religion, and gender should have guaranteed equal access to affordable healthcare, a
substantial minimum wage, education and the rest.
Stacy Abrams wants these items too, along with equal access to the voting franchise.
"Until slavery was ended in the United States, human beings were legally considered
capital, just like owning stocks and bonds today. But the Spaniard knew enough about history
to wonder what reparations would be offered to the thousands of Chinese treated as animals to
build the railroads or the 8,000 Irish who died digging the New Basin Canal or the whole
families of Jews living on the Lower East Side of New York who were forced to employ their
children to make clothing for uptown "white" stores. Later in the same century, wages were
"voluntarily" cut to the bone at factories in Ohio to save jobs that disappeared anyway after
the owners had wrung out the last profits."
That would be an excellent point if your inner Spaniard concluded reparations should be
offered to the others as well, but ends up being merely tendentious if he contends that no
one gets reparations.
But will you like it if the Democratic Party makes that part of their platform too?
I was born in Middletown, Ohio alongside the elegiacal hillbillies, who, by the way,
didn't care for the blacks on the other side of the tracks anymore than my Armco-employed
grandfather did, and certainly the business owners who disappeared the jobs and cut wages
while voting for the so-called free traders were of the same ilk.
I didn't know any Democrats among any of my family's circle and, by the way, Middletown
might as well have been south of the Mason Dixon anyway for all the white Democrats in town
who gave not a crap about their fellow black citizens, certainly not the business owners who
disappeared the jobs while voting for the so-called free traders.
It was the Republican Party (Larry Kudlow, I'm gunning for you) who championed creative
destruction and the red tooth and claw of unfettered worldwide competition without asking, in
fact jumping for joy, what the unintended consequences would be because the consequences were
intended smash the unions for all, cut wages and benefits and hand the booty to shareholders,
move operations to lower-tax, lower wage, environmentally unregulated parts of the globe to
manufacture them thar high margin MAGA hats for the aggrieved.
What a beautiful grift!
Hello, Marianas.
That Democrats jumped on the bandwagon is no credit to them, especially while assuming the
prone position as the republican party frayed the safety net.
True, the republicans laid off everyone, regardless of race, gender, and class and then
cut everyone's benefits.
As the Spaniard rightly understood, one can look way back into our history and see that the
moneyed class has always used identity politics in economic control games to divide and
conquer. That the Republicans rail on this as some evil creation of the modern Democrat is
laughable at best. That the sheep who follow the party mouth pieces of the moneyed class in
this media age can still be so easily manipulated is rather pitiful. Making common cause for
the general welfare has never really sunk in as an American value.
Divide and conquer remains our true ethos. As the dole gets evermore paltry the only
seeming options remaining are common cause for a common good or greater violence. One
requires us to find a contentment beyond the delusional American dream of becoming that 1 to
10%. The other just requires continued anger, division and despair.
Ironically the view that race/culture isn't at all important and should be disregarded in
view of the class division (a "distraction"), is pretty much endorsing the classic Marxist
critique.
It's easy to notice divide and conquer when it's hate against those of the same class but are
of a different culture/race.
But what's *difficult* to notice is identifying with the elites of your race in a positive
way.
A lot of people, especially with the onset of realityTV, tend to think rich people are just
like them (albeit a little smarter). The methods and systems to keep power aren't considered.
They're made non-threatening. So many billionaires and politicians act effete today to stoke
this image.
" Whether your housing is subsidized via a mortgage tax deduction "
This jumped off the screen. I wonder how many people even realize that. Probably the same
number who still believe that social security is a "forced savings".
Not to put too fine a point on it but clearly we are wasting our time arguing. As long as the
current system of government remains in effect it will be same old same old.
Many changes are in order–starting with this archaic remnant of a bygone era called
"The Two Party System".
Spaniards are indeed Hispanic. The definition of Hispanic relates to a linguistic grouping
– that is, relating to Spain or Spanish speaking countries. Your friend would indeed
qualify for all sorts of preferences according to the definition.
As to being a POC, I could not locate any definition as to what threshold of skin tone
qualifies someone as a POC. I wager none yet exists but will be forthcoming.
Johann
As for the skin tone of Spaniards, many in the south have the Moorish influence,however,
in the rest of the country skin tones range from light beige to very fair. Rather similar to
Italians, actually.
First, kudos to Van Buren for getting a Seamless delivery while driving. That's not easy to
coordinate. Second, I look forward to more conservative policies addressing poverty, drug
addiction and access to health care. This article adds to the 10-year rant against what
Democrats have done or want to do.
Like nearly every Republican of the last 10 years, Van Buren offers none here. But I'm
sure once the complaining is out of his system, they will arrive.
Your Spaniard friend also has it all wrong. The real division line is between those willing
to initiate coercion for their own self-righteousness and those who refuse to. Anyone that
supports government is one-in-the-same, regardless of color or class.
Thirty years ago I'd be asking who printed the canned response pamphlet to give prepared
talking points to enable anyone to provide quick sharp tongued witty criticisms of anything
they may encounter that didn't tow the party line.
Now I gotta ask where do I download the Trollware to accomplish the same thing.
The Moors were a tiny class of invaders who left rather little imprint on the Spanish genome.
That was true of the Romans and the Goths as well. Spanish genes are mostly the genes of the
pre-Roman population: the Iberians in the south (who maybe migrated from North Africa), Celts
in the north, and the indigenous Basques along the Pyrenees.
What happened to "a rising tide lifts all boats"? We've been promised for decades that the
wealth generated by those at the very top would "trickle down." This was a cornerstone of
Reaganism that has been parroted ever since.
There have been naysayers who say that that theory was fantasy and that all we would have
is increased wealth disparity and greater national deficits.
It does feel like in 2017. But that does not means much as economy changed substantially and probably nor in the right
direction... Purchasing power of population probably was eroded despite growth of absolute numbers of customers because of
decimation of well paying jobs. Also the market now is dominated by HFT which serves as an amplifier of pre-existing
trend and can by itself course a crash or mini crash. Another factor is oil prices.
But the idea of disconnect if a very useful idea and many other analysts predicted negative year for S&P500. I see dot-com
bubble No.2 here, not so much subprime mortgages problem of 2008. Subprime exists now in junk bond produced by shale oil players,
but it is much less in size.
He said
the stock market, for now,
"likes the fact that they (the Fed) aren't going to give them any problems."
But things could change quickly and dramatically, he said, with his final comment, the most
ominous:
"It feels eerily like '07,"
he said.
"
The stock market is near its high and the economy is noticeably weaker
- and yet everyone is saying 'Everything is Great!
'"
And just in case you wondered how bad the underlying is - despite equity market's enthusiasm -
Citi's Economic Data Change index as its worst level since 2009...
I'm gratified that there seems to be general acceptance of the core secular stagnation
argument. "Normal" policy settings of real interest rates in the 2 percent range, balanced
primary budgets and stable financial markets are a prescription for stagnation and
underemployment. Such economic success as the industrial world has enjoyed in recent decades
has reflected a combination of very low real rates, big budget deficits, private leveraging up
and asset bubbles.
No one from whom I have heard doubts the key conclusion that a combination of meaningfully
positive real interest rates and balanced budgets would likely be a prescription for sustained
recession if not depression in the industrial world.
Notice that this is a much more fundamental argument than the suggestion that the some
effective lower bound on interest rates may impede stabilizing the economy. The argument is
that because of chronic private sector tendency towards oversaving, economies may be prone to
underemployment and financial stability absent policy responses which are themselves
problematic.
This is an argument much more in the spirit of Keynes, the early Keynesians, and today's
Post-Keynesians than the New Keynesians who have set the terms for much of contemporary
macroeconomic discourse both in academia and in the world's central banks.
The central feature of New Keynesian models is an idea that economies have an equilibrium to
which they naturally revert independent of policies pursued. Good central bank policy achieves
a desired inflation target (assumed to be feasible) while minimizing the amplitude of
fluctuations around that equilibrium.
In contrast contemporary experience, where inflation has been below target almost throughout
the industrial world for a decade and is expected by markets to remain below target for
decades, and where output is sustained only by large budget deficits or extraordinary monetary
policies, suggest that central banks acting alone cannot necessarily attain inflation targets
and that misguided policy could easily not just raise the volatility of output but also reduce
its average level.
While there seems to be little doubt that real interest rates–short and long, ex ante
and ex post -- have declined very substantially even as (other things equal) budget deficits
and expanded social security programs should have increased them, there remains debate about
how to analyze these trends. Lukasz and I argue that adjustment to balance saving and
investment is the best way understand declining real rates. DeLong wonders about changing risk
premiums and Wolf cites BIS work arguing that low rates reflect the monetary policy regime.
There is no reason why there needs to be only one cause of low real rates so these factors may
enter. But as I expect we will illustrate in the revised version of the paper, the largest part
of the low frequency variation in ex ante real returns is accounted for by a downward trending
factor common to all asset prices. This is illustrated for the US in the figure below. So risk
premiums or factors specific to Treasuries are likely not high order.
Figure: Decline in US real asset returns
Granting that secular stagnation is a problem, there is the question of policy response. The
right policy response will be the one that assures that full employment is maintained with a
minimum of collateral problems. Sandbu argues against the notion of secular stagnation in part
because he thinks it may lead in unconstructive directions like protectionism and because he
believes that stagnation issues can be feasibly and relatively easily addressed by lowering
rates. Wolf, relying on the BIS, is alarmed by the toxic effects of very low rates on financial
stability in the short run and economic performance in the long run, and prefers fiscal
stimulus. Leonhardt prefers a broad menu of measures to absorb saving and promote
investment.
I am not certain of the right approach and I wish there was more evidence to bring to bear
on the question. I can certain see the logic of the "zero is just another number" view, that
holds that the current environment poses no new fundamental issues but just may require
technical changes to make more negative interest rates possible. I am skeptical because (i) I
am not sure how large the stimulus effect of rates going more negative is because of damage to
banks, reduced interest income for consumers, and because capital cost is already not the
barrier to investment; (ii) I wonder about the quality of any investment that was not made at a
zero rate but was made at a negative rate; and (iii) I suspect that a world of significantly
negative nominal rates if sustained will be a world of leveraging, risk seeking and bubbles. I
have trouble thinking about behavior in situations where people and firms are paid to
borrow!
I am inclined to prefer more reliance on reasonably managed fiscal policies as a response to
secular stagnation: government borrowing at negative real rates and investing seems very
attractive in a world where there are many projects with high social returns. Moreover, we are
accustomed to thinking in terms of debt levels but it may be more appropriate to think in terms
of sustained debt service levels. With near zero rates these are below average in most
industrial countries. The content of fiscal policies is crucial. Measures which run up
government debt without stimulating demand like large parts of the Trump tax cut are ill
advised. In contrast measures which promote investment and raise the tax base down the road are
much more attractive.
There are of course other measures beyond stabilization policies like fighting monopolies,
promoting a more equal income distribution, and strengthening retirement security for which the
desire to maintain macroeconomic stability provides an additional rationale.
The Pentagon's inspector general has formally opened an investigation into a watchdog
group's allegations that acting Defense Secretary Patrick Shanahan has used his office to
promote his former employer, Boeing Co.
Citizens for Responsibility and Ethics in Washington filed an ethics complaint with the
Pentagon's inspector general a week ago, alleging that Shanahan has appeared to make statements
promoting Boeing and disparaging competitors, such as Lockheed Martin.
Shanahan, who was traveling with President Donald Trump to Ohio on Wednesday, spent more
than 30 years at Boeing, leading programs for commercial planes and missile defense systems. He
has been serving as acting Pentagon chief since the beginning of the year, after James Mattis
stepped down.
The probe comes as Boeing struggles to deal with a public firestorm over two deadly crashes
of the Boeing 737 Max 8 jetliner within the last five months. And it focuses attention on
whether Trump will nominate Shanahan as his formal pick for defense chief, rather than letting
him languish as an acting leader of a major federal agency.
Dwrena Allen, spokeswoman for the inspector general, said Shanahan has been informed of the
investigation. And, in a statement, Pentagon spokesman Tom Crosson said Shanahan welcomes the
review.
"Acting Secretary Shanahan has at all times remained committed to upholding his ethics
agreement filed with the DoD," said Crosson. "This agreement ensures any matters pertaining to
Boeing are handled by appropriate officials within the Pentagon to eliminate any perceived or
actual conflict of interest issue(s) with Boeing."
During a Senate hearing last week, Shanahan was asked by U.S. Sen. Richard Blumenthal,
D-Conn., about the 737 Max issue. Shanahan said he had not spoken to anyone in the
administration about it and had not been briefed on it. Asked whether he favored an
investigation into the matter, Shanahan said it was for regulators to investigate.
On Wednesday, Blumenthal said that scrutiny of Shanahan's Boeing ties is necessary. "In
fact, it's overdue. Boeing is a behemoth 800-pound gorilla -- raising possible questions of
undue influence at DOD, FAA and elsewhere," said Blumenthal.
Shanahan signed an ethics agreement in June 2017, when he was being nominated for the job of
deputy defense secretary, a job he held during Mattis' tenure. It outlined the steps he would
take to avoid "any actual or apparent conflict of interest," and said he would not participate
in any matter involving Boeing.
The CREW ethics complaint, based to a large part on published reports, including one by
Politico in January, said Shanahan has made comments praising Boeing in meetings about
government contracts, raising concerns about "whether Shanahan, intentionally or not, is
putting his finger on the scale when it comes to Pentagon priorities."
One example raised by the complaint is the Pentagon's decision to request funding for
Boeing 15EX fighter jets in the 2020 proposed budget. The Pentagon is requesting about $1
billion to buy eight of the aircraft.
Shanahan, 56, joined Boeing in 1986, rose through its ranks and is credited with rescuing
a troubled Dreamliner 787 program. He also led the company's missile defense and military
helicopter programs.
Trump has seemed attracted to Shanahan partially for his work on one of the president's
pet projects -- creating a Space Force. He also has publicly lauded Shanahan's former employer,
Boeing, builder of many of the military's most prominent aircraft, including the Apache and
Chinook helicopters, the C-17 cargo plane and the B-52 bomber, as well as the iconic
presidential aircraft, Air Force One.
This is only the third time in history that the Pentagon has been led by an acting chief,
and Shanahan has served in that capacity for longer than any of the others.
Presidents typically take pains to ensure the Pentagon is being run by a Senate-confirmed
official, given the grave responsibilities that include sending young Americans into battle,
ensuring the military is ready for extreme emergencies like nuclear war and managing overseas
alliances that are central to U.S. security.
3 hours ago Why did Trump
appoint a former Boeing executive and industry lobbyist to the the Secretary of Defense to
replace General Mattis? What in Shananhan's background makes him qualified to lead our nation's
military forces? 3 hours ago WITHOUT A DOUBT HE DID., ALSO INVESTIGATE NIKKI HALEY'S APPOINTED
ON BOEING'S BOARD TO REPLACE SHANAHAN. FOLLOW THE HOEING KICKBACKS(MONEY), TO DONALD TRUMP'S
FAMILY. 3 hours ago
Shanahan probably helped Boeing on the promise of a later payback just like Ms. Nikki Haley did
while Gov of SC where Boeing built a new plant on her watch. She helped big time to keep the
Unions out of the new Boeing plant and now Boeing is going to put her on their board of
directors. Nothing like a bit of an obvious payoff. 2 hours ago Reminds me of the Bush Jr days in
the White House. During the Gulf War (#2) Vice President #$%$ Cheney awarded oil company
Halliburton (Cheney was CEO before accepting the VP job) to deliver meals for the troops. The
contract was ?No Bid.? Why was an oil company delivering food to troops with a no bid contract?
After Cheney?s Job was over being VP he went back to being CEO at Halliburton and moved
Halliburton?s headquarters to Dubai. What an American! 2 hours ago Now we understand why Boeing
& the FAA hesitated to ground those planes for few days despite many countries who did
grounded those plane which is a precedent for a country to ground & NOT wait for the
manufacturer. ONLY after Canada grounded those planes Boeing & the FAA & that's because
Canada IS a the #1 flight partner of the US ! 4 hours ago Years ago there was a Boeing
procurement scandal and Trump does love the swamp he claims to hate.
"The latest Brent rally has brought prices to our peak forecast of $67.5/bbl, three months
early," Goldman Sachs wrote in a note. The investment bank said that "resilient demand
growth" and supply outages could push prices up to $70 per barrel in the near future. It's a
perfect storm: "supply loses are exceeding our expectations, demand growth is beating low
consensus expectations with technicals supportive and net long positioning still depressed,"
the bank said.
The outages in Venezuela could swamp the rebound in supply from Libya, Goldman noted. But
the real surprise has been demand. At the end of 2018 and the start of this year, oil prices
hit a bottom and concerns about global economic stability dominated the narrative. But, for
now at least, demand has been solid. In January, demand grew by 1.55 million barrels per day
(mb/d) year-on-year. "Gasoline in particular is surprising to the upside, helped by low
prices, confirming our view that the weakness in cracks at the turn of the year was supply
driven," Goldman noted. "This comforts us in our above consensus 1.45 mb/d [year-on-year]
demand growth forecast."
"... I read this book over two nights and it unfortunately brought back my own experiences of working for a narcissist to the point of causing sleeplessness and indigestion. ..."
"... However the pattern of behavior at Theranos was ingrained and consistent - "an orchestrated litany of lies" as a judge has said in another matter. ..."
"... This is a similar personality type with a different set of risks. These people are common in finance and medicine: https://www.theatlantic.com... ..."
"... In the absence of a moral filter, says Martha Stout[1], "Politicians are more likely than people in the general population to be sociopaths...That a small minority of human beings literally have no conscience was and is a bitter pill for our society to swallow–but it does explain a great many things, shamelessly deceitful political behavior being one." ..."
I wrote in
2010 at SST on the characteristics and dangers associated with narcissistic leadership. "Bad
Blood' by John Carreyrou chronicles the rise and fall of Theranos, a Silicon Valley healthcare
startup founded and run by Elizabeth Holmes, a card carrying narcissist if ever I saw one.
This
book, in my opinion, paints such a detailed and comprehensive picture of the way these
creatures operate that I thought it worthwhile to bring it to the attention of SST members who
may doubt my warnings of the dangers of allowing such folk near the levers of power in business
and, worse, Government.
I read this book over two nights and it unfortunately brought back my
own experiences of working for a narcissist to the point of causing sleeplessness and
indigestion.
Under the direction of the charismatic Holmes, Theranos burned through some $900
million in investors funds before being found out in 2015. Their blood testing business was a
sham that endangered patients. The company's key business strengths were the "reality
distortion field" Elizabeth Holmes projected over investors and directors and the twin weapons
of secrecy and fear they wielded over their employees.
Disbelievers my argue that start up
companies sometimes require desperate measures to stay afloat and that you cannot make an omelette, etc. etc. However the pattern of behavior at Theranos was ingrained and consistent -
"an orchestrated litany of lies" as a judge has said in another matter.
In the absence of a moral filter, says Martha Stout[1], "Politicians are more likely than
people in the general population to be sociopaths...That a small minority of human beings
literally have no conscience was and is a bitter pill for our society to swallow–but it
does explain a great many things, shamelessly deceitful political behavior being one."
My study of Chinese government revealed an important truth -- one that explains much about
that country's rapid rise: they find our amateur, promise-driven, personality-based
governance repulsive. They would no more vote for amateur politicians than for amateur brain
surgeons. To them charm, good looks, quick wits and rhetorical skill signify shallowness,
instability and glibness. Altruistic politicians have been fundamental to Chinese governance
for two millennia.
Their political stars have always been experienced, scholarly, altruistic problem-solvers
chosen on merit after decades of testing.
In 1000 AD, during our Dark Ages, with just one scholar-official for every eight thousand
citizens, China was harmonious, technologically advanced and prosperous. Emperors and
dynasties came and went while loyal, disciplined–often courageous–civil servants
lived far from family, serving in remote regions under terrible conditions.
Confucius'[2] moral meritocracy and the rigors of the job discouraged sociopaths and
officials integrity, efficiency and entrepreneurial energy made China the most advanced
civilization on earth.
So highly do the Chinese esteem their best politicians that they deified one whose legacy,
a water diversion project, has repaid its capital investment every twenty-four hours for
2,270 years. Millions visit his shrine, which is built overlooking his masterpiece, every
year to offer incense and sincere thanks.
The altruistic tradition is remembered in a Singapore Government White Paper, "The concept
of government by honorable men who have a duty to do right for the people and who have their
trust and respect fits us better than the Western idea that government power should be as
limited as possible."
And would-be members of China's Communist Party take an oath to "Bear the people's
difficulties before the people and enjoy their fruits of their labors after the people". They
often fail, obviously, but at least they've got something to shoot for–and a standard
that the other 1.3 billion non-members can hold them to.
[1] The Sociopath Next Door, by Martha Stout Ph.D.
[2] The Doctrine of the Mean
If so, economics will suffer and chances for Trump for re-election are much lower, of exist at all due to all his betrayals
In the fable of "The Boy Who Cried Wolf," the wolf actually arrives at the end. Never forget that. Peak oil will arrive. We don't
know when, and we are not prepared for it.
Shale play without more borrowed money might be the next Venezuela. .
I am now of the opinion that 2018 will be the peak in crude oil production, not 2019 as I earlier predicted. Russia is slowing down
and may have peaked. Canada is slowing down and Brazil is slowing down. OPEC likely peaked in 2016. It is all up to the USA. Can
shale oil save us from peak oil?
OPEC + Russia + Canada, about 57% of world oil production.
"I am now of the opinion that 2018 will be the peak in crude oil production, not 2019 as I earlier predicted. Russia
is slowing down and may have peaked. Canada is slowing down and Brazil is slowing down. OPEC likely peaked in 2016. It is all
up to the USA. Can shale oil save us from peak oil?"
IEA´s Oil 2019 5y forecast has global conventional oil on a plateau, i.e. declines and growth match each other perfectly
and net growth will come from LTO, NGL, biofuels and a small amount of other unconventional and "process gains".
Iran is ofc a jocker, since it can quickly add supply. Will be interesting to see how Trump will proceed.
I am quite original in my opinion about Peak Oil. I think it took place in late 2015. I will explain. If we define Peak Oil as
the maximum in production over a certain period of time we will not know it has taken place for a long time, until we lose the
hope of going above. That is not practical, as it might take years.
I prefer to define Peak Oil as the point in time when vigorous growth in oil production ended and we entered an undulating
plateau when periods of slow growth and slow decline will alternate, affected by oil price and variable demand by economy until
we reach terminal decline in production permanently abandoning the plateau towards lower oil production.
The 12-year rate of growth in C+C production took a big hit in late 2015 and has not recovered. The increase in 2 Mb since
is just an anemic 2.5% over 3 years or 0.8% per year, and it keeps going down. This is plateau behavior since there was no economic
crisis to blame. It will become negative when the economy sours.
Peak Oil has already arrived. We are not recognizing it because production still increases a little bit, but we are in Peak
Oil mode. Oil production will decrease a lot more easily that it will increase over the next decade. The economy is going to be
a real bitch.
Interesting thesis, keep in mind that the price of oil was relatively low from 2015 to 2018 because for much of the period
there was an excess of oil stocks built up over the 2013 to 2015 period when output growth outpaced demand growth due to very
high oil prices. Supply has been adequate to keep oil prices relatively low through March 2019 and US sanctions on Iran, political
instability in Libya and Venezuela, and action by OPEC and several non-OPEC nations to restrict supply have resulted in slower
growth in oil output.
Eventually World Petroleum stocks will fall to a level that will drive oil prices higher, there is very poor visibility for
World Petroleum Stocks, so there may be a 6 to 12 month lag between petroleum stocks falling to critically low levels and market
realization of that fact, by Sept to Dec 2019 this may be apparent and oil prices may spike (perhaps to $90/b by May 2020).
At that point we may start to see some higher investment levels with higher output coming 12 to 60 months later (some projects
such as deep water and Arctic projects take a lot of time to become operational, there may be some OPEC projects that might be
developed as well, there are also Canadian Oil sands projects that might be developed in a high oil price environment.
I define the peak as the highest 12 month centered average World C+C output, but it can be define many different ways.
Our capability to store oil is very limited considering the volume being moved at any time from production to consumption.
I understand that it is the marginal price of the last barrel of oil that sets the price for oil, but given the relatively inexpensive
oil between 2015 and now, and the fact that we have not been in an economical crisis, what is according to you the cause that
world oil production has grown so anemically these past three years?
Do you think that if oil had been at 20$/b as it used to be for decades the growth in consumption/production would have been
significantly higher?
I'll give you a hint, with real negative interest rates and comparatively inexpensive oil most OECD economies are unable to
grow robustly.
To me Peak Oil is an economical question, not a geological one. The geology just sets the cost of production (not the price)
too high, making the operation uneconomical. It is the economy that becomes unable to pump more oil. That's why the beginning
of Peak Oil can be placed at late 2015.
The economic system has three legs, cheap energy, demographic growth, and debt growth. All three are failing simultaneously
so we are facing the perfect storm. Social unrest is the most likely consequence almost everywhere.
If prices are low that means there is plenty of oil supply relative to demand. It also means that some oil cannot be produced
profitably, so oil companies invest less and oil output grows more slowly.
So you seem to have the story backwards. Low oil prices means low growth in supply.
So if oil prices were $20/b, oil supply would grow more slowly, we have had an oversupply of oil that ls what led to low oil
prices. When oil prices increase, supply growth will ne higher. Evause profits will be higher and there will be more investment.
It is you who has it backwards, as you only see the issue from an oil price point of view, and oil price responds to supply
and demand, and higher prices are an estimulus to higher production.
But there is a more important point of view, because oil is one of the main inputs of the economy. If the price of oil is sufficiently
low it stimulates the economy. New businesses are created, more people go farther on vacation, and so on, increasing oil demand
and oil production. If the price is sufficiently high it depresses the economy. A higher percentage of wealth is transferred from
consumer countries to producing countries and consumer countries require more debt. During the 2010-2014 period high oil prices
were sustained by the phenomenal push of the Chinese economy, while European and Japanese economies suffered enormously and their
oil consumption depressed and hasn't fully recovered since.
In the long term it is the economy that pumps the oil, and that is what you cannot understand.
The economy decides when and how Peak Oil takes place. If you knew that you wouldn't bother with all those models.
And in my opinion the economy already decided in late 2015 when the drive to increase oil production to compensate for low
oil prices couldn't be sustained.
Both supply and demand matter. I understand economics quite well thank you. You are correct that the economy is very important,
it will determine oil prices to some degree especially on the demand side of the market. If one looks at the price of oil and
economic growth or GDP, there is very little correlation.
The fact is the World economy grew quite nicely from 2011 to 2014 when oil prices averaged over $100/b.
There may be some point that high oil prices are a problem, apparently $100/b in 2014 US$ is below that price. Perhaps at $150/b
your argument would be correct. Why would the economy need more oil when oil prices are low? The low price is a signal that there
is too much oil being produced relative to the demand for oil.
I agree the economy will be a major factor in when peak oil occurs, but as most economists understand quite well, it is both
supply and demand that will determine market prices for oil.
My models are based on the predictions of the geophysicists at the USGS (estimating TRR for tight oil) and the economists at
the EIA (who attempt to predict future oil prices). Both predictions are used as inputs to the model along with past completion
rates and well productivity and assumptions about potential future completion rates and future well productivity, bounded by the
predictions of both the USGS and the EIA along with economic assumptions about well cost, royalties and taxes, transport costs,
discount rate, and lease operating expenses.
Note that my results for economically recoverable resources are in line with the USGS TRR mean estimates and are somewhat lower
when the economic assumptions are applied (ERR/TRR is roughly 0.85), the EIA AEO has economically recoverable tight oil resources
at about 115% of the USGS mean TRR estimate. The main EIA estimate I use is their AEO reference oil price case (which may be too
low with oil prices gradually rising to $110/b (2017$) by 2050.
Assumptions for Permian Basin are royalties and taxes 33% of wellhead revenue, transport cost $5/b, LOE=$2.3/b plus $15000/month,
annual discount rate is 10%/year and well cost is $10 million, annual interest rate is 7.4%/year, annual inflation rate assumed
to be 2.5%/year, income tax and revenue from natural gas and NGL are ignored all dollar costs in constant 2017 US$.
You do incredible work Dennis and I believe you are correct. Demand for oil is relatively inelastic which accounts for huge price
swings when inventories get uncomfortably high or low. If supply doesn't keep up with our needs, price will rise to levels that
will eventually create more supply and create switching into other energy sources which will reduce demand.
Why would the economy need more oil when oil prices are low? The low price is a signal that there is too much oil being
produced relative to the demand for oil.
You don't seem to be aware of historical oil prices. For inflation adjusted oil prices since 1946 oil (WTI) spent:
27 years below $30
13 years at ~ $70
18 years at ~ $40
10 years at ~ $90
5 years at ~ $50 https://www.macrotrends.net/1369/crude-oil-price-history-chart
And the fastest growth in oil production took place precisely at the periods when oil was cheapest.
You simply cannot be more wrong about that.
And your models are based on a very big assumption, that the geology of the reserves is determinant for Peak Oil. It is not.
There is plenty of oil in the world, but the extraction of most of it is unaffordable. The economy will decide (has decided) when
Oil Peak takes place and what happens afterwards. Predictions/projections aren't worth a cent as usual. You could save yourself
the trouble.
I use both geophysics and economics, it is not one or the other it is both of these that will determine peak oil.
Of course oil prices have increased, the cheapest oil gets produced first and oil gradually gets more expensive as the marginal
barrel produced to meet demand at the margin is more costly to produce.
Real Oil Prices do not correlate well with real economic growth and on a microeconomic level the price of oil will affect profits
and willingness of oil companies to invest which in turn will affect future output. Demand will be a function of both economic
output and efficiency improvements in the use of oil.
Also keep in mind that during the 1945-1975 period economic growth rates were very high as population growth rates were very
high and the World economy was expanding rapidly as population grew and the World rebuilt in the aftermath of World War 2. Oil
was indeed plentiful and cheap over this period and output grew rapidly to meet expanding World demand for oil. The cheapness
of the oil led to relatively inefficient use of the resource, as constraints in output became evident and more expensive offshore,
Arctic oil were extracted oil prices increased and there was high volatility due to Wars in the Middle east and other political
developments. Oil output (C+C) since 1982 has grown fairly steadily at about an 800 kb/d annual average each year, oil prices
move up and down in response to anticipated oil stock movements and are volatile because these estimates are often incorrect (the
World petroleum stock numbers are far from transparent.)
On average since the Iran/Iraq crash in output (1982-2017) World output has grown by about 1.2% per year and 800 kb/d per year
on average, prices have risen or fallen when there was inadequate or excess stocks of petroleum, this pattern (prices adjusting
to stock levels) is likely to continue.
There has been little change when we compare 1982 to 1999 to 1999-2017 (divide overall period of interest in half) for either
percentage increase of absolute increase in output.
I would agree that severe shortages of oil supply relative to demand (likely apparent by 2030) is likely to lead to an economic
crisis as oil prices rise to levels that the World economy cannot adjust to (my guess is that this level will be $165/b in 2018$).
Potentially high oil prices might lead to faster adoption of alternative modes of transport that might avert a crisis, but that
is too optimistic a scenario even for me.
China will be in outright deflation soon enough. Economic stimulus is starting to fail in China. They can't fill the so called
bathtub up fast enough to keep pace with the water draining out the bottom. So to speak.
Interest rates in China will soon be exactly where they are in Europe and Japan. Maybe lower.
In order to get oil to $90-$100 the value of the dollar is going to have to sink a little bit. In order to get oil to $140-$160
the dollar has to make a new all time low. Anybody predicting prices shooting up to $200 needs the dollar index to sink to 60
or below.
The reality is oil is going to $20. Because the rest of the world outside the US is failing. Dennis makes some nice graphs
and charts and under his assumptions his charts and graphs are correct. But his assumptions aren't correct.
We got $20 oil and an economic depression coming.
Peak Oil is going to be deflationary as hell. Higher prices aren't in the cards even when a shortage actually shows up. We
will get less supply at a lower price. Demand destruction is actually going to happen when economies and debt bubbles implode
so we actually can't be totally sure we are ever going to see an actual shortage.
We could very well be producing 20-30% less oil than we do now and still not have a shortage.
Oh and EV's are going to have to compete with $20 oil not $150 oil.
When do you expect the oil price to reach $20/b? We will have to see when this occurs.
It may come true when EVs and AVs have decimated demand for oil in 2050, but not before. EIA's oil price reference scenario
from AEO 2019 below. That is a far more realistic prediction (though likely too low especially when peak oil arrives in 2025),
oil prices from $100 to $160/b in 2018 US$ are more likely from 2023 to 2035 (for three year centered average Brent oil price).
My assumptions are based on USGS mean resource estimates and EIA oil price estimates, as well as BIS estimates for the World
monetary and financial system.
Your assumption that oil prices are determined by exchange rates only is not borne out by historical evidence. Exchange
rates are a minor, not a major determinant of oil prices.
Technically speaking. The most relevant trendline on price chart currently comes off the lows of 2016/02/08. It intersects
with 2017/06/19. You draw the trendline on out to where price is currently. Currently price is trying to backtest that trendline.
On a weekly price chart i'd say it touches the underside of that trendline sometime in April in the low 60's somewhere between
$62-$66 kinda depends on when it arrives there time wise. The later it takes to arrive there the higher price will be. I've been
trading well over 20 years can't tell you how many times i've seen price backtest a trendline after it's been broken. It's a very
common occurrence. And i wouldn't short oil until after it does.
But back to your question. $20 oil what kind of timetable. My best guess is 2021-2022. Might happen 2020 or 2023. And FED can
always step in and weaken the dollar. Fundamentally the only way oil doesn't sink to $20 is the FED finds a way to weaken the
dollar.
But understand the FED is the only major CB that currently doesn't have the need to open up monetary policy. It's really the
rest of the worlds CB ultra loose monetary policy which is going to drive oil to $20.
"... "If that was to happen and no energy source can cover the decline rate, wouldn't the world be pretty fucked economically thereafter? Hence one can assume or take a wild ass guess that the decline after peak would resemble something like Venezuela. So not a smooth short % decline rate." ..."
"... Realistically the global economy is already in a tight spot. It started back in 2000 when Oil prices started climbing from about $10/bbl in 1998 to about $30/bbl in 2000. Then the World Major Central banks dropped interest which ended triggering the Housing Boom\Bust and carried Oil prices to $147/bbl. Since then Interest rates have remained extremely low while World Debt has soared (expected to top $250T in 2019). ..."
"... Probably the biggest concern for me is the risking risks for another World war: The US has been targeting all of the major Oil exporters. The two remaining independent targets are Venezuela & Iran. I suspect Venzuela will be the next US take over since it will be a push over compared to Iran. ..."
"If that was to happen and no energy source can cover the decline rate, wouldn't the world be pretty fucked economically
thereafter? Hence one can assume or take a wild ass guess that the decline after peak would resemble something like Venezuela.
So not a smooth short % decline rate."
Energy is the economy, The economy cannot function without energy. Thus its logical that a decline in energy supply will reduce
the economy. The only way for this not to apply is if there are efficiency gains that offset the decline. But at this point the
majority of cost effective efficiency gains are already in place. At this point gains become increasing expensive with much smaller
gains (law of diminishing returns). Major infrastructure changes like modernizing rail lines take many decades to implement and
also require lots of capital. Real capital needed will be difficult to obtain do to population demographics (ie boomers dependent
on massive unfunded entitlement & pensions).
Realistically the global economy is already in a tight spot. It started back in 2000 when Oil prices started climbing from
about $10/bbl in 1998 to about $30/bbl in 2000. Then the World Major Central banks dropped interest which ended triggering the
Housing Boom\Bust and carried Oil prices to $147/bbl. Since then Interest rates have remained extremely low while World Debt has
soared (expected to top $250T in 2019).
My guess is that global economy will wipe saw in the future as demographics, resource depletion (including Oil) and Debt all
merge into another crisis. Gov't will act with more cheap and easy credit (since there is no alterative TINA) as well as QE\Asset
buying to avoid a global depression. This creating a wipesaw effect that has already been happening since 2000 with Boom Bust
cycles. This current cycle has lasted longer because the Major central banks kept interest rates low, When The Fed started QT
and raising rate it ended up triggering a major stock market correction In Dec 2018. I believe at this point the Fed will no longer
seek any further credit tightening that will trip the economy back into recession. However its likely they the global economy
will fall into another recession as consumers & business even without further credit tighting by CB (Central Banks) Because they've
been loading up on cheap debt, which will eventually run into issues servicing their debt. For instance there are about 7M auto
loans in delinquency in March of 2019. Stock valuations are largely driven by stock buybacks, which is funded by debt. I presume
companies are close to debt limit which is likely going to prevent them from purchase more stock back.
Probably the biggest concern for me is the risking risks for another World war: The US has been targeting all of the major
Oil exporters. The two remaining independent targets are Venezuela & Iran. I suspect Venzuela will be the next US take over since
it will be a push over compared to Iran. I think once all of remaining independent Oil Exports are seized that is when the
major powers start fighting each other. However is possible that some of the proxy nations (Pakastan\India),(Israel\Iran), etc
trigger direct war between the US, China, and Russia at any time.
Notice that the US is now withdrawing from all its major arms treaties, and the US\China\Russia are now locked into a Arms
race. Nuclear powers are now rebuilding their nuclear capacity (more Nukes) and modernizing their deployment systems (Hypersonic,
Very large MIRV ICBMS, Undersea drones, Subs, Bombers, etc.
My guess is that nations like the US & China will duke it out before collapsing into the next Venezuela. If my assessment is
correct, The current state of Venezuela will look like the garden of Eden compared to the aftermath of a full scale nuclear war.
Currently the Doomsday clock (2019) is tied with 1953 at 2 minutes:
1953 was the height of the cold war. I presume soon the Doomsday clock will be reduced to less than 2 Minutes later this
year, due to recent events in the past few weeks.
"the world's nuclear nations proceeded with programs of "nuclear modernization" that are all but indistinguishable from
a worldwide arms race, and the military doctrines of Russia and the United States have increasingly eroded the long-held taboo
against the use of nuclear weapons."
" The current international security situation -- what we call the "new abnormal" -- has extended over two years now.
It's a state as worrisome as the most dangerous times of the Cold War, a state that features an unpredictable and shifting
landscape of simmering disputes that multiply the chances for major military conflict to erupt."
"... Another house manager, Alfredo Rodriguez, told Recarey that very young girls were giving Epstein massages at least twice a day, and in one instance, Epstein had Rodriguez deliver one dozen roses to Mary, at her high school. ..."
"... Palm Beach prosecutors said the evidence was weak, and after presenting the case to a grand jury, Epstein was charged with only one count of felony solicitation of prostitution. In 2008, he pleaded guilty and nominally served 13 months of an 18-month sentence in a county jail: Epstein spent one day a week there, the other six out on "work release." ..."
"... Today, Jeffrey Epstein is a free man, albeit one who routinely settles civil lawsuits against him, brought by young women, out of court. As of 2015, Epstein had settled multiple such cases. ..."
In 2005, the world was introduced to reclusive billionaire Jeffrey Epstein, friend to princes and an American
president, a power broker with the darkest of secrets: He was also a pedophile, accused of recruiting dozens of underage girls into
a sex-slave network, buying their silence and moving along, although he has been convicted of only one count of soliciting prostitution
from a minor. Visitors to his private Caribbean island, known as "Orgy Island," have included Bill Clinton, Prince Andrew and Stephen
Hawking.
According to a 2011 court filing by alleged Epstein victim Virginia Roberts Giuffre, she saw Clinton and Prince Andrew on the
island but never saw the former president do anything improper. Giuffre has accused Prince Andrew of having sex with her when she
was a minor, a charge Buckingham Palace denies.
"Epstein lives less than one mile away from me in Palm Beach," author James Patterson tells The Post. In the 11 years since Epstein
was investigated and charged by the Palm Beach police department, ultimately copping a plea and serving 13 months on one charge of
soliciting prostitution from a 14-year-old girl, Patterson has remained obsessed with the case.
"He's a fascinating character to read about," Patterson says. "What is he thinking? Who is he?"
Patterson's new book,
"Filthy Rich:
A Powerful Billionaire, the Sex Scandal That Undid Him, and All the Justice That Money Can Buy," is an attempt to answer such
questions. Co-authored with John Connolly and Tim Malloy, the book contains detailed police interviews with girls who alleged sexual
abuse by Epstein and others in his circle. Giuffre alleged that Epstein's ex-girlfriend Ghislaine Maxwell, daughter of the late media
tycoon Robert Maxwell, abused her. Ghislaine Maxwell has denied allegations of enabling abuse.
Epstein has spent the bulk of his adult life cultivating relationships with the world's most powerful men. Flight logs show that
from 2001 to 2003, Bill Clinton flew on Epstein's private plane, dubbed "The Lolita Express" by the press, 26 times. After Epstein's
arrest in July 2006, federal tax records show Epstein donated $25,000 to the Clinton Foundation that year.
Bill Clinton in 1994. AP
Epstein was also a regular visitor to Donald Trump's Mar-a-Lago, and the two were friends. According to the Daily Mail, Trump
was a frequent dinner guest at Epstein's home, which was often full of barely dressed models. In 2003, New York magazine reported
that Trump also attended a dinner party at Epstein's honoring Bill Clinton.
Last year, The Guardian reported that Epstein's "little black book" contained contact numbers for A-listers including Tony Blair,
Naomi Campbell, Dustin Hoffman, Michael Bloomberg and Richard Branson.
In a 2006 court filing, Palm Beach police noted that a search of Epstein's home uncovered two hidden cameras. The Mirror reported
that in 2015, a 6-year-old civil lawsuit filed by "Jane Doe No. 3," believed to be the now-married Giuffre, alleged that Epstein
wired his mansion with hidden cameras, secretly recording orgies involving his prominent friends and underage girls. The ultimate
purpose: blackmail, according to court papers.
Britain's Prince Andrew in 2012 AP
"Jane Doe No. 3" also alleged that she had been forced to have sex with "numerous prominent American politicians, powerful business
executives, a well-known prime minister, and other world leaders."
"We uncovered a lot of details about the police investigation and a lot about the girls, what happened to them, the effect on
their lives," Patterson says.
"The reader has to ask: Was justice done here or not?"
Epstein, now 63, has always been something of an international man of mystery. Born in Brooklyn, he had a middle-class upbringing:
His father worked for the Parks Department, and his parents stressed hard work and education.
'We uncovered a lot of details about the police investigation and a lot about the girls, what happened to them, the effect
on their lives.'
- James Patterson
Epstein was brilliant, skipping two grades and graduating Lafayette High School in 1969. He attended Cooper Union but dropped
out in 1971 and by 1973 was teaching calculus and physics at Dalton, where he tutored the son of a Bear Stearns exec. Soon, Epstein
applied his facility with numbers on Wall Street but left Bear Stearns under a cloud in 1981. He formed his own business, J. Epstein
& Co.
The bar for entry at the new firm was high. According to a 2002 profile in New York magazine, Epstein only took on clients who
turned over $1 billion, at minimum, for him to manage. Clients also had to pay a flat fee and sign power of attorney over to Epstein,
allowing him to do whatever he saw fit with their money.
Still, no one knew exactly what Epstein did, or how he was able to amass a personal billion-dollar-plus fortune. In addition to
a block-long, nine-story mansion on Manhattan's Upper East Side, Epstein owns the $6.8 million mansion in Palm Beach, an $18 million
property in New Mexico, the 70-acre private Caribbean island, a helicopter, a Gulfstream IV and a Boeing 727.
"My belief is that Jeff maintains some sort of money-management firm, though you won't get a straight answer from him," one high-level
investor told New York magazine. "He once told me he had 300 people working for him, and I've also heard that he manages Rockefeller
money. But one never knows. It's like looking at the Wizard of Oz -- there may be less there than meets the eye."
Jeffrey Epstein's Palm Beach home Splash News
"He's very enigmatic," Rosa Monckton told Vanity Fair in 2003. Monckton was the former British CEO of Tiffany & Co. and confidante
to the late Princess Diana. She was also a close friend of Epstein's since the 1980s. "He never reveals his hand . . . He's a classic
iceberg. What you see is not what you get."
Both profiles intimated that Epstein had a predilection for young women but never went further. In the New York magazine piece,
Trump said Epstein's self-professed image as a loner, an egghead and a teetotaler was not wholly accurate.
Donald Trump in 1990 AP
"I've known Jeff for 15 years," Trump said. "Terrific guy. He's a lot of fun to be with. It is even said that he likes beautiful
women as much as I do, and many of them are on the younger side. No doubt about it -- Jeffrey enjoys his social life."
Three years after that profile ran, Palm Beach Police Officer Michele Pagan got a disturbing message. A woman reported that her
14-year-old stepdaughter confided to a friend that she'd had sex with an older man for money. The man's name was Jeff, and he lived
in a mansion on a cul-de-sac.
Pagan persuaded the woman to bring her stepdaughter down to be interviewed. In his book, Patterson calls the girl Mary. And Mary,
like so many of the other girls who eventually talked, came from the little-known working-class areas surrounding Palm Beach.
A friend of a friend, Mary said, told her she could make hundreds of dollars in one hour, just for massaging some middle-aged
guy's feet. Lots of other girls had been doing it, some three times a week.
Mary claimed she had been driven to the mansion on El Brillo Way, where a female staffer escorted her up a pink-carpeted staircase,
then into a room with a massage table, an armoire topped with sex toys and a photo of a little girl pulling her underwear off.
Ghislaine Maxwell Getty Images
Epstein entered the room, wearing only a towel, Mary said.
"He took off the towel," Mary told Pagan. "He was a really built guy. But his wee-wee was very tiny."
Mary said Epstein got on the table and barked orders at her. She told police she was alone in the room with him, terrified.
Pagan wrote the following in her incident report:
"She removed her pants, leaving her thong panties on. She straddled his back, whereby her exposed buttocks were touching Epstein's
exposed buttocks. Epstein then turned to his side and started to rub his penis in an up-and-down motion. Epstein pulled out a purple
vibrator and began to massage Mary's vaginal area."
Palm Beach assigned six more detectives to the investigation. They conducted a "trash pull" of Epstein's garbage, sifting through
paper with phone numbers, used condoms, toothbrushes, worn underwear. In one pull, police found a piece of paper with Mary's phone
number on it, along with the number of the person who recruited her.
On Sept. 11, 2005, detectives got another break. Alison, as she's called in the book, told Detective Joe Recarey that she had
been going to Epstein's house since she was 16. Alison had been working at the Wellington Green Mall, saving up for a trip to Maine,
when a friend told her, "You can get a plane ticket in two hours . . . We can go give this guy a massage and he'll pay $200," according
to her statement to the police.
Alison told Recarey that she visited Epstein hundreds of times. She said he had bought her a new 2005 Dodge Neon, plane tickets,
and gave her spending money. Alison said he even asked her to emancipate from her parents so she could live with him full-time as
his "sex slave."
She said Epstein slowly escalated his sexual requests, and despite Alison's insistence that they never have intercourse, alleged,
"This one time . . . he bent me over the table and put himself in me. Without my permission."
Alison then asked if what Epstein had done to her was rape and spoke of her abject fear of him.
An abridged version of her witness statement, as recounted in the book:
Alison : Before I say anything else . . . um, is there a possibility that I'm gonna have to go to court or anything?
Recarey : I mean, what he did to you is a crime. I'm not gonna lie to you.
Alison : Would you consider it rape, what he did?
Recarey : If he put himself inside you without permission . . . That, that is a crime. That is a crime.
Alison : I don't want my family to find out about this . . . 'Cause Jeffrey's gonna get me. You guys realize that, right? . . . I'm
not safe now. I'm not safe.
Recarey : Why do you say you're not safe? Has he said he's hurt people before?
Alison : Well, I've heard him make threats to people on the telephone, yeah. Of course.
Recarey : You're gonna die? You're gonna break your legs? Or --
Alison : All of the above!
Alison also told Recarey that Epstein got so violent with her that he ripped out her hair and threw her around. "I mean," she
said, "there's been nights that I walked out of there barely able to walk, um, from him being so rough."
Two months later, Recarey interviewed Epstein's former house manager of 11 years, documented in his probable-cause affidavit as
Mr. Alessi. "Alessi stated Epstein receives three massages a day . . . towards the end of his employment, the masseuses . . . appeared
to be 16 or 17 years of age at the most . . . [Alessi] would have to wash off a massager/vibrator and a long rubber penis, which
were in the sink after the massage."
Another house manager, Alfredo Rodriguez, told Recarey that very young girls were giving Epstein massages at least twice a
day, and in one instance, Epstein had Rodriguez deliver one dozen roses to Mary, at her high school.
In May 2006, the Palm Beach Police Department filed a probable-cause affidavit, asking prosecutors to charge Epstein with four
counts of unlawful sexual activity with a minor -- a second-degree felony -- and one count of lewd and lascivious molestation of
a 14-year-old minor, also a second-degree felony.
Today, Jeffrey Epstein is a free man, albeit one who routinely settles civil lawsuits against him, brought by young women,
out of court.
Palm Beach prosecutors said the evidence was weak, and after presenting the case to a grand jury, Epstein was charged with
only one count of felony solicitation of prostitution. In 2008, he pleaded guilty and nominally served 13 months of an 18-month sentence
in a county jail: Epstein spent one day a week there, the other six out on "work release."
Today, Jeffrey Epstein is a free man, albeit one who routinely settles civil lawsuits against him, brought by young women,
out of court. As of 2015, Epstein had settled multiple such cases.
Giuffre has sued Ghislaine Maxwell in Manhattan federal court, charging defamation -- saying Maxwell stated Giuffre lied about
Maxwell's recruitment of her and other underage girls. Epstein has been called upon to testify in court this month, on Oct. 20.
The true number of Epstein's victims may never be known.
He will be a registered sex offender for the rest of his life, not that it fazes him. "I'm not a sexual predator, I'm an 'offender,' "
Epstein told The Post in 2011. "It's the difference between a murderer and a person who steals a bagel."
"Monopoly" is such an ugly term. We prefer to call it "market power" these days, because of
course it's a good thing if the job creators and their enterprises have more power to do all
the good things they do for us.
It's clearly class warfare, if not racism, to use the term of abuse, "monopoly", when you
mean "market power".
Normally, when banks look into merging, the impetus is either opportunism, whether well
informed or not, or desperation. The only thing that differentiates the possible combination of
Deutsche Bank, long the sickest man of Europe, and not all that healthy Commerzbank is that the
desperation isn't driven by the usual urgency, that a bank is about to keel over, unless, as
some wags speculate, Deutsche's first quarter numbers are coming in so bad that the bank needs
to have some of credible plan to Do Something before it announces the results. One commentor at
the Financial Times reported that "DBK was and is having trouble with wholesale funding spreads
widening very strongly." That suggests that the German giant, after so many years of limping
along, may be too close to a tipping point for the officialdom to sit pat.
Bloomberg also highlighted high borrowing costs due to credit risk:
For Deutsche Bank, the urgency to address the situation is exacerbated by high funding
costs and the risk of a credit rating cut. Chairman Paul Achleitner is said to see an
expansion of Deutsche Bank's retail deposit base -- which Commerzbank would bring -- as one
way to lower funding costs.
Germany is a particularly difficult banking market . Readers may recall how Michael Hudson,
in his classic article From Marx to Goldman Sachs, pointed out how it had been inconceivable to
Marx that finance-oriented capitalists would win out because their way of operating was harmful
to manufacturing. Germany embraced an industry-oriented approach to capitalism, while Britain
sought to be the world's banker. Hudson argues that an unfortunate and not widely recognized
outcome of Germany's defeat in World War I was it helped advance finance-oriented capitalism
into a dominant position.
While I can't prove it (and I hope those who know the German banking market better will pipe
up), some of the difficulties Deutsche and Commerzbank are suffering appears to be the results
of Germany being ambivalent about bank profits, as in on some level (and perhaps explicitly in
some circles) seeing them as a drag on commerce if they rise above a very modest level. The
reason I suspect this is that when I worked with the Japanese, who are also strongly
mercantilist, manufacturing-oriented, banking profits were seen as a bad thing. Japanese banks
had fabulously low returns on assets by global standards and were extremely lean. Sumitomo
Bank, which was a bad boy by seeking to be Japan's most profitable bank, was pretty close to
Citibank in total assets, had half as many foreign branches and about 2/3 as many domestic
branches. In the mid-1980s, Citi had over 100,000 employees. Sumitomo Bank had 16,000 and was
planning to reduce the number to 14,500.
Germany's Landesbanken have government backing and their Sparkasse purportedly are not
profit oriented. The fact that most advanced economies feel the need to at least one bank as a
serious international player is undermined by the big banks having even more
difficult-than-in-other-countries competition for retail deposits.
But Germany feels it can't not have a national champion.
From Bloomberg :
By bowing to officials' desire to forge a durable German lender with global reach out of
two troubled firms, Deutsche Bank's leaders are hardly putting their woes behind them:
massive job cuts, political turbulence, a weakening European economy, U.S. probes into its
dealings with Donald Trump and a herculean integration – not to mention skeptical
clients and investors -- lie ahead if they reach a deal.
That does not excuse Deutsche Bank having long been spectacularly mismanaged. It's been
operating under what amounts to regulatory forbearance since the crisis, with capital levels
way way below any other big international bank. But Deutsche is the classic "too big to fail"
bank. Whether it is too big to bail is debatable, but the EU's new Banking Recovery and
Resolution Directive, which banking experts almost to a person declared to be a horrorshow, was
supposed to end bailouts and force bail ins .refusing to recognize that that's a prescription
for bank runs. And even though Deutsche is very much the German government's problem, as
readers no doubt have figured out, German politicians hate fiscal spending and stealth
monetization of spending. So until there is a crisis to force their hands, they are allergic to
providing official support to Deutsche.
No one is trying to put lipstick on this pig . It's remarkable to see how little support
there is for the prosed merger. I've never seen comments in major media outlets, particularly
citing the opinions of insiders. From the Financial Times
:
The long-mooted idea of merging the two has been met with stiff opposition from the bank's
influential unions, and scepticism by five of Deutsche Bank's top six shareholders, who fret
that it may derail the lender's internal restructuring.
Among the few clear supporters of a deal are Paul Achleitner, Deutsche Bank chairman,
Martin Zielke, Commerzbank chief executive and private equity fund Cerberus, one of the
biggest shareholders in both lenders.
Deutsche Bank management had previously been resistant to a merger, but lacklustre
performance, combined with the prospect of lower-for-longer interest rates and pressure from
the German government to address the lenders' bloated costs and measly returns, triggered a
rethink.
Of course, the reason for having to resort to Commerzbank is no major international bank
would be saddled with a garbage barge like Deutsche. It's not just that it's hard to see why
any bank that wasn't subject to German political pressures would even consider this idea; their
regulators would nix it directly or kill the deal by imposing insurmountable conditions.
The nominal excuse for the deal is unpersuasive . The claim is that cost-cutting efforts at
both banks have not gone deep enough, and the only way to cut further is to merge. I am
admittedly generalizing from the US, but we have had far more bank consolidation than anywhere
in the world. Bigger banks are not more efficient. Even if there are theoretical economies of
scale in funding and in certain lines of business, they are often not realized. On top of that,
there are diseconomies of scope.
For instance, it's clear that one of the hoped-for sources of cost savings is branch
consolidation. But the US experience is that this is often a fail. Even when branches seem to
overlap, customers don't like it when their favorite branch disappears. More customers than the
banks expect leave.
The employees' union expects that up to 30,000 jobs would be axed if the merger went
through. A common pattern with US bank deals is that the combined makes cuts that the separate
banks could have made but didn't. One wonders here if a reason for the transaction is to
bulldoze labor organizations.
The two banks expect to lose customers ..and this comment suggests they are mainly looking
at business customers. Again from the Financial
Times :
They estimated that while annual costs would fall by €2.3bn, a deal would trigger
revenue losses of around €1.5bn because of clients moving business to rivals to
maintain diverse banking relationships.
A worsening of the Deutsche Bank train wreck is guarantted . Clive gave a warning when the
merger idea hotted up at the end of January:
The big banks have totally lost control of their IT estates. They have no consolidated
idea what their installed assets are and what they do. I was on a conference call yesterday
which managed to finally conclude -- after 9 months and I am not kidding -- definitively that
an application was really still needed (it had been targeted for possible
decommissioning).
We bought a US bank's UK book for a specific retail product two years ago. With a lot of
luck we'll be able to do a very soft launch post migration onto our hosting (and there was
the distinct advantage that we shared the same hosting platform and suppliers) in another six
months. Full migration might, just might, be completed in another 18 months. The budget for
the migration programme is £1.9bn. For one bloody product book. Bog standard vanilla
consumer lending product lines. And we had to take an axe to a lot of the US bank product
offers.
DB and CB would burn through their entire shareholders' equity before they even got half
way through.
Even yours truly, who is hardly plugged into IT circles, has been hearing horror stories for
at least 15 years. Richard Smith flagged this 2018 article, Inside Deutsche
Bank's "dysfunctional" IT division . From the top of the piece:
So, COO Kim Hammonds is leaving Deutsche Bank. Less than a month after describing Deutsche
as, "vastly complex," the, "most dysfunctional place she's ever worked," and in the middle of
a, "difficult transformation," Hammonds has left, "by mutual agreement with the supervisory
board." She was, "a breath of fresh air," according to the chairman. In some ways, however,
Hammonds does not seem to have been fresh enough.
Hammonds' key task at Deutsche Bank was to streamline the bank's unwieldy array of
operating systems. When now ex-CEO John Cryan presented his "Strategy 2020" plan in October
2015, he expressed his intention of eliminating 6,000 Deutsche Bank contractors and cutting
the bank's operating systems from 45 to four. Two and a half years later, Deutsche still has
32 different operating systems, and the contractors we spoke to complained that the bank has
become "toxic" to work for.
Lots of ugly detail for those of you who like that sort of thing.
And it's not as if Commerzbank is much better. Richard also cited this Handlesblatt story,
Buchungspanne verärgert Commerzbank-Kunden , which he summarized as "A recent outbreak
of TSB-like core banking cockupry (direct debits and standing orders failing)."
But as he concluded, "There's no set of systems so bad that you can't make them worse by
doing a merger, so bring it on, say I."
If nothing else, this merger will be a full employment act of German bank consultants who
can take the pain of working on such a mess. But even from this remove, it's obvious that the
effort to prop up zombie-in-the-making Deutsche is running out of tricks. This will end badly.
The only question is how quickly that becomes undeniable.
" seeing [bank profits] as a drag on commerce if they rise above a very modest level "
Right. I am not German but Dutch, and these two countries are geographically and
spiritually close enough to share opinions on lots of things.
There exists a quite widespread sentiment here that "banks do not make profits, they steal
somebody else's profits". The idea being that *real* profits are generated in a *real*
economy where *real* things are done, built, manufactured and dug up. This in contrast to a
"financial sector" leeching off the money streams that inevitably exist in the real economy,
only to create pseudo-profits that more harm than benefit said real economy.
Personally, this view to me does not seem too far-fetched. But then, I'm not a banker.
DB needs to become smaller, not larger. Few years back, it was talking about selling its
US equity business, no idea why that fell through. That IMO should be really the first step,
not any sort of mergers.
There was an excellen article by somene, maybe even the ex-CEO of DB on its IT woes. IIRC,
it was basically that the whole stuff was a collection of fiefs that were built in the last
two decades, where the only goal was revenue or day 1 PnL, w/o any idea on what it takes to
run the business.
I think that sort of "Worry About Day 2 Operations..but never actually do anything about
it" is not an uncommon occurrence. My current firm / senior management is trying to
un-pretzel their architecture out of a similar (if on a smaller platform) issue that has
built up over 10 years. It's pretty hard to get out of it even with a lot of senior will and
money. I can't imagine it building up over 20+ years!
I wonder what DB's data governance looks like. I bet the now ex-COO wasn't able to get the
existing power-structure slapped around sufficiently to put the control / governance into
place so that the architecture could be unwound. If step 1 (Data governance/ control over
existing architecture) is impossible, then the rest is just a side-show (I know from current
experience).
At one of my previous gigs, the firm struggled with anything new. I actually came up with
a framework for them, which included commited revnue for the product to merge to the main
systems, and a hard cap on revenue/no of deals until it was done.
15 years later, I just heard from my colleague there that the system I put in to deal with
something is still doing it. It seems that the main cultprit is actually not the FO, as
usual, but IT, who saw any successfull implementation outside of their process as a direct
threat (especially if it was done on a fraction of their budget).
That then means you get a lot of small projects, which just get done – because the
business has to work, after all – but never rolled into anything as the IT dept is
constitutionally unable to do so due to its internal politics.
On your other point – well, to have some data governence, you have to know what data
you have, and how it works. W/o that, you'll never get there.
Same goes for architecture. It's one thing to draw pretty pictures and boxes to present,
but w/o actually understanding what's there now, and how it can work in the future (and that
means not just on a sunny day, but when the midden hits the fan too), then control over the
architecture gives you little, apart from some IT guys (and gals) getting to play with new
technology to put on their CVs.
My last year at a TBTF was working on a project to try and get our arms around
architecture standards. It was the first time we had federated the bu based architects. Of
course every BU "already had architectural standards". BU A had a documents store with 8000
entries documenting everything they knew about, BU B had a live, breathing web application
that changed weekly as their governance process dictated, BU C had a 22 page powerpoint. That
was 3 out of 12 at the table.
We took over tracking a global decommissioning initiative. It was basically low hanging
fruit to just dump complexity. I found we hadn't even agreed on what decommissioning meant.
Apps that were "decommissioned" 4 years earlier were still live in production because we
couldn't figure out how to comply with regulatory reporting requirements without leaving it
up. Another BU decided they weren't going to try and hit the goal because "they were making
money". It was herding cats. Architects would agree to do something, and go back into their
BU's and get stonewalled or outright directed to not do it. Regardless, it was a worthy
effort because the first step in fixing a problem is admitting you have it.
My experience is that the IT orgs mirror the BU structure and governance. In three massive
banks, I've only seen one centrally governed IT group, which very much mirrored how the
company was run. It was an acquisition machine and the core merger methodology was to merge
onto a common platform. The number 2 exec in the company ran the mergers and was ruthless,
the CEO never flinched. There would be no legacy. It failed during the crisis, largely
because that strong central governance made fatal business decisions that killed the whole
org. So be careful what you wish for.
One of the UKs largest asset managers comes to mind as an example of the Centralization
through IT platform approach.
All Investment Banks are to a great degree just franchise businesses. Go and make some
money. Here is some budget and some desk space. Buy a computer and get on with it.
When I arrived in June 2016, I was told there well over a hundred systems in use. In
essence, whenever some star signing was made, such star was told to go and buy whatever he /
she needed.
To this day, the IT dysfunction continues. Sometimes, good systems are taken out of
service due to cost and ones that can't work with what's left are retained. Go figure!
In addition to equities, the structured and leverage finance toxic waste should also
go.
I get the impression that Stefan Hoops, the new head of global transaction banking, will
detach bits from Treasury, Markets and Corporate Finance and add them to GTB and make a
commercial bank, a new core to the bank. One can expect a pull back from the US, too.
The new model is likely to be Barclays plus, i.e. commercial banking with some IB and
asset servicing, not a pure commercial bank like Lloyd's.
That new model would make much sense, as DB cannot survive just on commecial banking in
Germany (Any plans to do just that would pretty much kill it, as it's too large to be
supported by that), and there's no reasonable retail play unless it wants to to outside
Germany.
But it would still require dropping substantial parts of the IB business. I see very
little appetite for that..
Amazing! Yves' post and the various comments make it sound like IT has all the properties
of a virus. Almost impossible to cure or expunge when it becomes dysfunctional. Moreover, its
components can become toxic and morph into some new form.
To me it's like accounting or engineering or operations. It's a reflection of the
business. Keep in mind the example above represented a global MNC with 3 distinct credit card
businesses, three distinct retail banking franchises, trading in every major capital market,
investment banking organized by US, EMEA and Asia, Wealth Management with distinct
philosophical differences by geography with core operations on 4 continents. And I suspect
this is small time compared to Clive's experiences.
These organizations are too big and far too complex. NC has had numerous posts on how
scale drives inefficiency once reaching a certain point. This is 100% the case.
The heart of the banking and other IT problems, imo, is this: The people who wrote the
original code to perform specific tasks understood, or were advised by people who understood
exactly what the task was, what it did, how it fitted into the overall banking process , and
what specific process upstream and downstream handoffs were required.
Bring in a new generation (or two) of new bankers who assume "the computer handles that"
– without understanding the what and why of whatever 'that' is. Now you have the
problem of not only computer integration, but also the problems of lost competency and lost
institutional memory of core banking functions. That's before taking into account the budget
cutting undermining IT departments, creating its own disfunction. imo.
Bankers are like puppies and someone else needs to clean up the mess they leave
behind.
"It's nearly $14 trillion pyramid of super leveraged toxic assets was built on the back
of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" All the
Presidents Bankers, Nomi Prins.
Look at the mess those naughty banker puppies have made, who will clear it up for
them?
The structure of the Euro-zone meant there was no one to clean up properly after those
naughty banker puppies.
Speaking with no more qualification than being German, I would not say that banking
profits are unwanted in general rather the industry has two or three significant challenges
compared to the US.
First of all profit margins are very low across all businesses, even favoured ones such as
automotive struggle to generate double digit operating margins and a sustained double digit
net profit margin outside IT is very rare. Second there is good competition for retail
customers and switching banks or keeping several accounts at different banks is very easy.
'Normal' banking consisting of debit card, credit card, online banking, wire transfers, ATM
service and savings account are available for everyone not involved in personal bankruptcy
proceedings free of charge. Hence 'access to deposit funding' not making profits is cited as
a reason to merge. Interestingly the Sparkassen are usually on the expensive end of retail
because they are committed to local branches and good conditions. The third point I would
like to raise is more of a probably justified stereotype – Germans do a lot less
borrowing than some other cultures see for instance private debt to GDP figures. Where I grew
being in debt was considered shameful and everyone tried to pay back their debt ASAP be it 5
Mark for lunch or the mortgage on the house.
Other financial sectors, for instance insurance, do very good business and achieve
significant profits in Germany.
I don't think the difference you mention can be symplistically qualified as "cultural". It
may also be, and probably more importantly, about incentives put in place to promote debt
growth or lack thereof. Could it be that Germany didn't put them in the first place to
prevent consumption and force surpluses or, easier, lending rates were in comparative terms
and in relation with inflation higher in Germany than other Euro countries. If you believe
that people in Spain, for instance, is willing to become wildly indebted to buy a house
because of 'cultural reasons' you are mistaken. It is that many feel that there is no
alternative. But then, becoming indebted results in a culture of debt
I have read that by the end of 2018 consumer credit and the housing marke were heating in
Germany .
The Boeing Company BA recently won a $250 million contract to offer weapon system
integration for the Long Range Stand-Off (LRSO) Cruise Missile. Work related to the deal is
scheduled to be completed by Dec 31, 2024.
The contract was awarded by the Air Force Nuclear Weapons Center, Eglin Air Force Base,
Florida. Per the terms of the deal, this aerospace giant will provide aircraft and missile
carriage equipment development and modification, engineering, testing, software development,
training, facilities and support necessary to fully integrate the LRSO Cruise Missile on the
B-52H bomber platform.
Attributes of LRSO
The LRSO is a nuclear-armed air-launched cruise missile, under development. It is set to
replace the current AGM-86 air launched cruise missile (ALCM). LRSO, might be up to about 50%
longer than Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER) and still be
suitable for internal carriage by the B-2 and B-52.
Our View
AGM-86 ALCM has been serving the U.S. Air Force quite efficiently. However, with
increasingly sophisticated air defense systems developed by America's nemeses, especially
Russia, demand for a new stealth nuclear-armed cruise missile capable of either destroying
these defenses or penetrating them has been increasing consistently. In this scenario, the LRSO
comes as the most credible stealthy and low-yield option available to the United States
(according to Strategic Studies Quarterly Report).
Boeing's B-52, which has been the U.S. Air Force's one of the most preferred bombers, is
completely dependent on long-range cruise missiles and cannot continue in the nuclear mission
beyond 2030 without LRSO. As B-52 is expected to play a primary role in the U.S. nuclear
mission for at least next decade and ALCM is already well beyond its originally planned end of
life, we may expect more contracts similar to the latest one to usher in from the Pentagon in
the coming days. This, in turn, should prove conducive to Boeing.
Price Performance
In a year's time, shares of Boeing have gained about 16.5% against the industry's 2.2%
decline.
"... Was the American Middle Class a Cold War thing? ..."
"... The British middle class seems to have been mostly people living on investments -- not in the manorial style, but with enough to have a flat, and a servant -- in a style that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970's, it's mostly ended by now. ..."
feel that being middle class is not what
it once was and that we are all running in place as fast as we can to stay the same, to quote Alice in
Wonderland's Red Queen," Brenda Madison, an art director and graphic designer in Laguna Beach (Orange
County), told me. "Never did I think I would worry that Social Security and Medicare may not be available in
my future or that a medical injury or unexpected repair would bankrupt us."
She and her husband, now in their middle years, "are not sure we will be able to retire in our home."
Patricia Moore is a single mother of three who lives in a two-bedroom apartment in Los Angeles and a
licensed vocational nurse working in hospice about to take the licensing exam to be a registered nurse. Due
to a shortage of space, she sleeps on the couch and is "still struggling to make ends meet." Her rent is
$1,598 a month, her pay is about $3,200, and her student loan payback is $375 a month. Moore recently has
had to resort to a GoFundMe campaign so she could stay home with her daughter during a monthlong health
crisis, and has at times had to donate plasma. She said she is unable to provide "the extras for her kids."
Moore began to enter her youngest son in focus groups in office buildings or hotels in neighborhoods like
Beverly Hills. Sometimes he would make $75 an hour and the whole family would eat from buffets, the kind
with cantaloupe, and maybe they'd also get a gift card. At first, he tested toys and then video games but
also an MRI to map his brain. It was only because of these gigs that Moore could finally say, "Go buy
yourself something," to her children.
These were Americans for whom the meaning of middle-class life had altered from something stable to
implied economic fragility.
Their burdens were the price of health and child care, educational debt or a housing market gone berserk.
They wanted job security, pensions and Social Security and unions, but these things seemed like a fantasy
out of a mid-century American novel like "The Man in the Gray Flannel Suit." The middle class' long
historical association with the status quo -- strongly identifying with institutions or corporations,
rejecting restive discontent -- has made their new wobbliness all the more startling to them.
But when did that vulnerability start? Toward the end of the past century into this one, there was a rise
in what author Barbara Ehrenreich has called a "fear of falling," an anxiety among the
professional-managerial class about downward mobility. I think of fear of falling as the opposite side of
the coin of American individualism and its historic promise of social and economic progress.
Since the 1980s, some members of the middle class have gone "from a kind of security to being reduced to
the kind of economic unstable state that working-class Americans have had to experience forever," explained
Caitlin Zaloom, an anthropologist at New York University who studies the middle-class financial experience.
The office or academic job started to resemble the precarious work life that working poor Americans have
long understood to be their lot, she said. And then there are the robots waiting in the wings to take their
ostensible share of middle-class jobs, and soon.
This new fragility is one theory to explain the 2016 election of Donald Trump. Trump voters were
sometimes mistaken for all hillbilly elegiac or Rust Belt proletariat. In truth, an estimated
38 percent of white people
with bachelor degrees voted for the man -- closer to "office worker elegy."
Indeed, as much as Trump's messaging has been jingoistic or racist, he has also been addressing middle-class
anxiety when he continually repeated that the system is "rigged."
While some have protested that Trump's success has more to do with loss of status or rank bigotry, Johns
Hopkins University sociologist
Stephen
L. Morgan has conducted studies that reveal one substantial motivator of the Trump vote was
economic. He noted that a successful national Democratic candidate would be one who appealed "to people who
have not fared well in the postindustrial economy," such as those in some once-prosperous areas of the
Midwest.
Ordinary middle-class people's struggles can be, of course, ameliorated by broad shifts, such as adopting
a form of universal basic income or a flat monthly cash stipend for familial caregivers of their young or
elderly kin. And we should at least explore adopting Medicare for all, to address rising health care costs.
We also need to more effectively push for longer paid parental leave -- or, in many cases, any paid parental
leave.
But if we can't get relief from federal programs or our employers, we will need to craft local or state
solutions. Retaining rent stabilization laws is key in our cities, as is building more affordable housing
for, say, teachers and municipal workers, so they can continue to live in the places they serve.
Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to
others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant
they didn't simply internalize their real-world burdens into self-punishment. They seemed more able to patch
together personal solutions -- small-scale child care fixes like sharing pickup with their neighbors, for
instance.
Simply voicing hopes and difficulties, and making them audible for their leaders to name and address, is
a small part of what must happen for things to change. Although for some, these needed transformations may
seem to be coming too late.
As Madison put it, "We are trying not to think too much about the future."
My ground level observations indicate that there is a lot of "denial" going on in the minds of the
putative 'middle class.'
One major barrier to the public 'conversations' about the economic malaise affecting America today is the
still prevalent custom of shaming the victims of bad luck. I see this tying all the way back to the
Calvinist theological concept of "Election," which is an aspect of "Predestination." In effect, one suffers
in life because the Deity chooses to make it so. Thus, those who do well in life can "legitimately" look
down on those who suffer. It is a perfect excuse for callousness of heart.
We read Weber's "The Protestant Ethic and the Spirit of Capitalism" in class in my High School. Written
around 1900, it still has merit as a descriptive and predictive tome.
Some of what is perceived as shaming, may just be understood as trying to understand how those with
good professions etc. end up that way (and no I don't judge those without "good professions" – I don't
think we choose our fate to any real degree see. It's just takes more to understand why is all). Now from
the inside some good professions are not really, or have become so niche that that is the story but
This:"Finally, I saw when reporting my book that, when squeezed, people revealed their financial woes to
others, they tended to then recognize that their obstacles were partially systemic. That, in turn, meant
they didn't simply internalize their real-world burdens into self-punishment. They seemed more able to patch
together personal solutions -- small-scale child care fixes like sharing pickup with their neighbors, for
instance."
commiseration is new, in my experience. not too long ago, one didn't speak about economic difficulties in
polite company at least in the middle class(poor people, oth, sometimes do)
that they're finding such behaviour is worrying, as it means the precariousness is spreading which causes
cognitive dissonance, since it's counterintuitive according the the Narrative we're all supposed to cling
to.
to wit, in my recent exposure to network tv in hotels and dr's offices, i note that -- like in the Matrix–a
grand illusion of the late 90's is laid across the world.
I hear locally upper middle class soccer moms having lunch, and it's oneupmanship all around everything's
fine, and we went to the most wonderful resort, in our new suv, and our son married a doctor and they
honeymooned as missionaries (!) but it's all nonsense, and everyone knows it.(the quick flash of panic in
their eyes, "will the card work?")
That was the norm not so long ago all the way down to the dregs of the former middle class. i see the
rending of that pretension the misty veil of utopian just-worldism as what's at the root of so many of these
dislocations an eruptions of late.
"Believe Real Hard" just doesn't cut it any more, and those soccer moms don't know how to think about it.
Per Ambrit's reference to Calvinism, at some point reality intrudes and one must climb down from the pillar.
Becoming They and The Other. It can't happen to me -- I am a Exceptional! ™ (and white). Could Compassion be on the horizon– on the wax as more and more realize they are in the global
Lemming-fall rat-race to the bottom ?
They're not attending/joining churches because that costs money and they don't have the money.
Once there are more "churches" that only cost what people can afford, more people will attend. Just
a prediction.
it's not all illusions, a part of the population is doing pretty well, they take vacations and crap
(who even has ANY paid time off anymore anyway? not me. even STAYCATIONS are off the table! Heck getting
a cold is pretty much off the table ..). But others
But yea the Big Lie Narrative of these times is that the economy is doing well, Trump's economic
performance will get him reelected (this economy is total garbage, so F trump and the horse he rode in
on), unemployment is low and other BS.
Lots of sad reading here. But seriously – $117,400 a year qualifies as "low income."? I know that it is
true but at the same time that is so stupid on the face of it. I do have to admit here to a weakness for
nostalgia – especially for places that I have never experienced but have read about. Sometimes out of idle
curiosity I might flick through a few videos like that on America in earlier times and you can see one such
clip at
Having said this, I sometimes wonder what would have happened if neoliberalism had spluttered out during the
1970s as a nonstarter of an idea and instead a different timeline had formed. In this one, instead of wages
flate-lining back in the 70s, they had kept apace with GDP like they had the previous thirty years. People,
more secure in their wages, would never have embarked on the credit boom like they did when wages dropped.
In this timeline too the rich are still taxed at 70% which mopped up all the surplus that would otherwise
have instead gone on to founding think tanks and money in politics. With an affluent population, there was
never was a need to import so much from China and the unions were still strong enough to stop industries
being shipped off to there. It would have been a completely different America.
But that is another timeline and we are instead in one where people will soon be in a position where they
have nothing else to lose. And that is a very dangerous proposition that. And they still have potentially a
very powerful weapon – their numbers. And their votes.
The 70s were going to be a very tough decade: The loss of our huge post-WW2 advantages in
manufacturing, oil shocks, a very expensive war to pay for, and Watergate probably fits in their
somewhere.
I am not sure what we did in the 70s and after was exactly neoliberalism, but any restraint shown in
the face of the new realities (Carter and his sweaters, Bush breaking his tax pledge) were massively
unpopular, and I think that was going to be the case in general – regardless of what path we went down.
The very idea that neo-liberalism was the cause (as opposed to an interaction with) of the root
problems I think is indicative of over optimism about our situation. Contrary, I do think it is very
reasonable to say that neo-liberalism made the problems worse.
The distinction is important, you can reject our current situation and policies, and still not be
particularly convinced that the opposing voices are being more realistic.
After reading "Democracy in Chains" by Nancy MacLean, I'm leaning toward neoliberalism as a cause.
It kicked into high gear with Reagan's election in 1980, and Bill Clinton made sure there was no
stopping it.
In reference to this from the original post: "In truth, an estimated 38 percent of white people
with bachelor degrees voted for [Trump]," I have to say, I think you call those people Republicans,
and don't kid yourself. They will do it again.
Carla, thank you, exactly so. The technique of it all was quite insidious, as it was an appeal
disguised and self righteous to greed to a two groups: baby boomers and their parents sociology
primed for such pitches. Once that genie got out of the bottle there was no getting it back in.
So, will the millenials kill-off the Genie for good .. or will they, in their turn, rub that
lamp all the more, to parlay their 3 wishes towards other equally speciously sparklely endeavors
??
we can't 'rub the lantern'; when those in power in 1981 set off down the neoliberal road,
the conditions of their wish were fulfilled by debt-enslavement of everyone who came after
them to support enriching those who clawed their way to the top.
the only millennial oligarch is Zuckerberg and I don't think anyone believes he is going
to maintain his power even half as long as, say, Bill Gates. the only millenials who believe
in neoliberalism are paid shills for the elite like Ben Shapiro or Charlie Kirk and by the
same Zuckerberg:Gates ratio, they have less than half as much power as a Rush Limbaugh.
Neoliberalism is dead, we're in the gramscian interregnum, at this point I just hope and
plead with the infinite that we get Bernie in 2020 instead of Cotton/Creshaw primarying Trump
or something awful like that because the familyblogging Democrats refuse to pass the torch in
favor of one more term of grift.
Rev Kev, who I was responding to, correctly noted that the 1970s were when wages began to drop.
Ronald Reagan and Bill Clinton of course come later. This doesn't mean that their policies were not
problematic, but it does make it difficult to blame them as the causal agents of something that
started in the 1970s.
If you want to blame Johnson/Nixon and their Vietnam War policies, that would make some sense,
but they don't seem to me to be poster children for Neoliberalism with one being associated with
the Great Society and the other the author of price controls to suppress inflation.
When things get a bit tough (and note that in the 70's for all the hype they were not in fact
that tough – until govt policy of a NL kind stepped in) – then you have policy choices. If you
go NL, then that is a choice, and causally so. (It was usual to hide this causality in TINA.)
Financialization of the housing market creates obscene rents, leading to less household formation,
then the need to "do something" about population decline. Japan is 20 years ahead of us in that regard,
Indeed it does here in the SF Bay Area. The surprise of it all is part of the denial – the wife and I
look at our family income (usually 10-20% less than that) and are straight up perplexed that it doesn't
go as far as it "should". We certainly have a pleasant enough middle-class life, but it feels precarious
in a way that we never expected. And we only have that because we have subsidized housing (we live in a
house the family has owned for years, so are paying well below the insane market rates). If we had to pay
market rates we would be poor, or close to it.
We certainly rant to one another about the systemic issues behind this situation, but there are a lot
of California liberals who bitterly cling to questionable ideas like a balanced budget or Kamala Harris.
I've been wondering when I'll hear a candidate advocating lower home and rent prices – where I live we
absolutely need that if we're to keep a semblance of civilization and democracy.
You have hit on a major 'disrupter' of the body social. "Civilization and democracy" are being
willfully sacrificed to the Gods of Profit. That betrayal is a core part of neo-liberalism.
Re; lower home and rent prices. For the last 40 years, as the prosperous Great Lakes region became
the rust belt, we who live here have been constantly told: if you want a job, just MOVE to where the
jobs are.
Now are we allowed to say to the mortgage-or-rent-impoverished middle class folks who live on the
coasts, "If you want lower house and rent prices, just move to where the lower priced houses and
apartments are" ? We got plenty of room for y'all here, honest. And we're mostly midwest-nice, too.
But seriously – $117,400 a year qualifies as "low income."?
If you are very lucky, and I mean
lucky
, you might find an old junior one bedroom apartment
for the low, low price of $1,500 a month. No patio, no dishwasher, no nothing except a parking spot. This
is not exaggeration, sarcasm or humor, but reality. In some places in California it's closer to three
thousand dollars.
Most of us Californians do not make even fifty thousand and, if we do, we have to live closer to the
cities where the well paying jobs are. I keep waiting for the housing bust to arrive for last time the
rents dropped as much as thirty percent. Hopefully, I will still be in my apartment, or at least in an
apartment when that happens.
Another factor is cities not allowing for higher density housing. If somebody has a brownstone or
something similar, they will fight tooth and nail against that 6 story apartment building that would
allow a lot more people to live in the neighborhood. Under-investment in rapid mass transit also hurts
workers commuting to jobs and forces far more cars on the roads and parking spaces.
it was certainly precarious in the great depression, seems to thrive in boom periods. the white middle
class, and some of the black middle class did well in the 50's and early 60's. that was when the us was
economically at the pinnacle of the world, and i think that was because most of the other first world
economies were rebuilding from the rubble of ww2.
The only item I can think of that was an import from the Soviet Union and on retail shelves for
sale here during the Cold War, was Stolichnaya vodka, and as far as the Peoples Republic of China
goes, fireworks.
If I didn't finish the food on my plate, my parents would admonish me with tales of people starving
to death in China, and indeed they were.
For me as a child, the starvation place was Africa. I wonder about the psychological motivations
that made our parents ignore the suffering right nearby in our own neighborhoods and focus instead
on some far away place.
Today, that starvation is all around us. I personally feel guilty now that we cannot give very much
to beggars and homeless etc. due to our own straitened circumstances. The myth of "The Exceptional
Ones" (TM) is still a strong part of the social narrative today.
I try to do my infinitesmal part, ambrit .. by taking any surplus from the garden, when there
IS a surplus that is .. and donate it to the local foodbank. Last year it was 5 full lugs of
grapes fresh off the vine, a few yrs before that it was an over abundance of beets. This season
it might be potatoes THATs My lifestyle !
All on less than a $35,000 yr combined income. But that means no trips to Cancun, no new Car
every couple of years, no DeathCare expenditures, and no mortgage.
I feel humbled every time I make a delivery, especially when I see families in obvious distress
w/ young children .. looking for sustenance that they cannot otherwise afford to buy .. it
breaks my heart.
Yes to that. We got a bumper crop of 'volunteer' Muscadines last year. They made good
jelly. I should build a trellis or wire support network for the vines this year. With this
weather, we should get another good crop.
Living the 'prepper' life has it's compensations.
Our's were primarily muscat as well, what we donated. I ended up canning the rest,
turning them into muscat conserves half of which we've already given away to friends and
aquaintances. The other grapes, the Mars variety, became raisins, for home consumption.
Everyone should learn how to can .. cuz you never know when just-in-time .. just STOPS
!
Possibly this was a major influence. When the USA had identified large foreign enemies that must be
countered (Russia and China) there was an impetus to build in America and keep the USA population engaged
with the Russian and "Red" Chinese threat.
The USA was also an oil exporter until 1971, which allowed some control of oil prices.
Globalization was not prominent and I remember the poor quality Japanese tools of the 1960's (and
Chinese manufactured stuff rarely seen by me (firecrackers?))
Furthermore we had two large countries that economically were not as advanced as the USA and were not
viewed as particularly successful with their flawed Communist systems.
Effectively, China and Russia were playing the game with one hand tied behind their back.
This may also have allowed USA unions to be strong, increasing wages for union and non-union workers.
Perhaps the USA is currently making some other countries focus inwardly on their countries as the USA
did in the 1950's and 1960's.
By forcing sanctions on various countries (Iran, Russia, Venezuela) the USA may make them less
dependent on global resources and more like the more self sufficient USA of the 50's and 60's.
Very, very possibly. Thanks to Project Gutenberg, I'm reading a lot of
fin de sičcle
novels
and literature, e.g. Booth Tarkington.
The British middle class seems to have been mostly people living
on investments -- not in the manorial style, but with enough to have a flat, and a servant -- in a style
that you might associate with Sherlock Holmes. A middle class that included people with jobs definitely
seems post-WWII, and, of course, since the wage stagnation starting in the mid 1970's, it's mostly ended
by now.
"While some have protested that Trump's success has more to do with loss of status or rank bigotry, Johns
Hopkins University sociologist Stephen L. Morgan has conducted studies that reveal one substantial motivator
of the Trump vote was economic. He noted that a successful national Democratic candidate would be one who
appealed "to people who have not fared well in the postindustrial economy," such as those in some
once-prosperous areas of the Midwest."
But this is circular reasoning, why would people in the "middle class" think that Trump's policies are
better for them than Clinton's policies?
It's not like Trump is a sort of middle class guy himself, in facts H. Clinton is probably more "middle
classey" than Trump.
Plus, what does the term "middle class" mean specifically? How are these people different from "working
class" or small bourgoise?
Middle class to me growing up, meant that the school custodian across the street and 3 doors down from
us, could afford to buy a home, or you played little league with the son of a gas station owner, who made
enough from his 2 service bays always full (cars weren't nearly as reliable in the 60's) to also own a
home.
My doubt about the middle class is this: it is a term that various schools/sociologists/economists
used to mean very different things, so when someone speaks of the middle class it's difficult for me
to understand what he/she is speaking about.
For example:
1) In marxism it generally means the small bourgoise, meaning the small shopkeeper, the farmer who
owns his land etc;
2) at times, it just means people of the working class who have good jobs, that is different from
the definition (1). The disappearence of the middle class just means the disappearence of good jobs;
3) sometimes (wrongly IMHO) "workers" are supposed to be only blue collar and only without high
education, so "middle class" means people who have a degree and are white collars;
etc.
At times these categories can somehow mix but the class interest of someone who is a small business
owner is different from the class interest of someone who has a good employee job which might be
different from the interest of someone who could have a degree and a sucky white collar job.
So this very general idea of middle class is very confusing IMHO.
@MisterMr -- I think that because EVERYTHING in the good ole US of A is about money, the
understanding of a term like "middle class" becomes just about money, too.
When I was young (yes, a long time ago), I was given to understand that "middle class" meant
basically people with white collar jobs or jobs that required some professional accreditation:
teachers, nurses, lawyers, accountants, etc. "Working class" meant people with blue-collar jobs,
even if some of them regularly made more money than a teacher or, say, a nurse. "Upper class"
included high-earning professionals, CEO's, and of course those with inherited wealth. Poor, then
as now, was the one thing you definitely didn't want to be.
But, as I said, money has obliterated all those fine distinctions of snobbery. Now there is only
one: $.
The label of "Middle Class" in America can be used as either for the social class or for the
economic class with the white collar workers generally being both and the blue collar workers
being, before the 1950s, working class with working class wages. For about two decades the high
and low ends of the income range collapsed with most people being squeezed into the economic
middle class regardless of social class.
Now, income disparity has destroyed the economic middle class and the classic pyramid shaped
map of the social and economic system reappearing. The tiny wealthy elites; the slightly larger
service and professional class providing what the elites want; the small number of bureaucrats,
lawyers, doctors, mechanics, religious workers and so that any large societies need just to
function at all; the greatest numbers are the laboring class, and I don't mean the working
class.
The mental map of most Americans is stuck on the almost flat pyramid of 1970 in which all
classes were getting wealthier collapsing together economically, with the exception of the
wealthy not gaining wealth at the same rate as the bottom 99%. Even the poorest blacks finally
started to improve economically.
That picture is buried somewhere deeeep in our collective heads where the only real
differences was what type of job you were going to have and where mistakes, failure, and
disaster did not mean poverty. At worst, it meant a change of work or a temporary set back or a
change of social class but not economic class.
Find that image in your head, yank it out, put a stake in its heart, burn it, and scatter the
ashes. That picture died around 1973. Whatever the truth of that image it is long dead.
But too many people are trying to pretend that we are not living in a zero sum game of winner
take all.
Trump had the advantage that he was not tagged, directly or indirectly, with Bill Clinton's NAFTA,
welfare reform or supporting "Free trade" that seemed to only work well in economists' minds (TPP).
Clinton also supported the Iraq War, Libya and other military adventures, and Trump couldn't vote
for/against these operations that directly affected their communities.
Campaigning Trump called these wars "mistakes" while Hillary C would not.
Someone summed the election as "With Hillary you know you are screwed, with Trump you might not be."
Thanks, however it is a fact that a situation of bad economy and increasing inequality, that
ideally is supposed to be the main reason to vote left, is causing an upsurge in right-leaning
populism instead.
there is no populist right that brings home the bacon in the U.S. either as far as I can see.
Theoretically there could be, but theoretically a lot of things, including much more plausibly
and likely the rise of a left that brings home the bacon. IOW the trains don't even run on time
now.
Trump's economy is scarcely better than Obama's (depends on which year though, in the worst of the
Great Recession only then was it worse). So if it's really about the economy: then Trump will lose the
next election.
IMHO it IS about the economy, but not in the direct sense we mean: if the economy goes on as it is,
Trump will be able to spin it as good, whereas a democrat would be toast.
But I expect a recession to hit earlier, in which case I think Trump will not be re-elected.
Whenever I read articles illustrating the dawning awareness of the middling classes to their extreme
precarious social status, I can't help but marvel at the audacity of elites jumping to the front of the
protest line proclaiming their desire to "lead" the distraught masses. Even more so, those same distraught
workers giving their oppressors the opportunity to do so. That is the definition of a dysfunctional society-
rewarding failure. The elites might think themselves clever, and exceptional, for dreaming up such scams,
but that dynamic alone goes a long way to explaining the rapid decline of America's prominence in the world.
America is consumed by a cynical rot that has firmly entered into the body politic. There is no easy way
to excise this cancer, but the answer must lie in some form of national mission. The current American
leadership have chosen a militaristic vision of conquest for the nation masked with a marketing program of
bringing democracy to the world. This contradictory scam will not work, and there is ample evidence showing
just how destructive and impotent this strategy truly is. The rest of the world is moving on, and if
Americans don't wise up to the the destructive nature of their system, they will be left behind.
Corporations must be in the service of the nation, not the other way around. Corporations must be allowed
to die and change, the nation, and its people must prevail over time. It is an obscene contradiction that
the American system is reversing this dynamic. The people are allowed to die, while the corporations, and
those that control them are allowed to persist.
As a working class American, my only desire at this point is for an American elite leadership that has a
vision larger and broader than worshiping a bank account. If American workers don't demand a better
leadership, history will show them to be worse than peasants, they will be proven to be willful consumerist
dupes.
America is in an identity crisis- a cultural crisis. That does not bode well for the nation and makes it
ill equipped to deal with other nations and the world's problems- let alone our own.
"The current American leadership have chosen a militaristic vision of conquest for the nation masked
with a marketing program of bringing democracy to the world."
That train officially left the station around 1898.
1. The author doesn't really explore how rent extraction through housing is the single biggest destroyer
of American household wealth, with housing costs outpacing wages almost everywhere.
2. "Explore" Medicare for all? Build "affordable" housing, but only for certain deserving individuals
like teachers?
It's disappointing that the author chooses to end this with such centrist Dem proposals.
There needs to be a right to housing, which means a right to build housing: abolish any zoning that
excludes dense residential development. Seize land by eminent domain if necessary.
===There needs to be a right to housing, which means a right to build housing: abolish any zoning that
excludes dense residential development. Seize land by eminent domain if necessary===
Thanks Joe. While I am not an expert in housing, the lack of affordable housing seems to be tied to:
1. As you say zoning laws that exclude dense residential development.
2. Land Use regulations which are probably tied to #1 above.
3. The high costs incurred by residential developers in navigating the byzantine and bureaucratic maze of
permits and regulations at the federal, state, and local levels.
4. The speculative nature of the housing market i.e. IMO the housing bubble is driven by monetary
policies and the actions of "behind the scenes" lever pullers. If housing is treated as a commodity by
the finance sector then the machinations of Wall Street can impact housing prices as they did in the 2008
crash.
5. To my point above, in the far northwest suburbs of Chicago there is a lot of empty office space and
light industrial space. So excess supply would tell you that the prices for these properties should go
down. Not the case. They are still expensive. If a homeowner is trying to sell their house they will
lower the price until it is sold or not sell it. But the same rules do not apply to businesses.
To #5 above, again if we "believe" what we are told in Econ 101 about free markets and supply and
demand then an excess supply should result in a downward price drop until the excess supply is cleared.
God help me! I just typed the previous sentence from memory as if verbatim from my Econ 101 class 30
years ago!! #head on desk! So if office and industrial prices are not dropping then someone has to be
holding the "bank notes" as is not concerned about if or when they sell.
Basically in short it seems zoning issues and cost issues are the big obstacles in dense residential
development. I am not an advocate of relaxing regulations which could result in shoddy and unsafe
construction but maybe there is a middle ground. Something needs to be done.
It's not just dense housing, it ALL housing .. in terms of livability (environs with nature as an
active component), and Affordable design/construction with energy efficiency in mind .. on a large
enough scale to benefit the public ! There is, for all practical purposes none of that to be had. As
it currently stands, you have to be richer than God to do ANYTHING other than the unimaginative and
wasteful development that has been built up to this point.
So instead of "Where's My flying car??" .. the question might now more accurately be "Where's My
passive solar, earthen-berm, strawbale, rammed-earth, or cob house/apartment???"
to expand and maybe add onto this, AirBnb/vacation rentals + rental 'business as income' (at
institutional eg Berkshire Hathaway and the associated securitized offerings as well as individuals
and small biz creating the 'income stream' via LLC pass through) is a major driver affecting the
speculation. What happened to all the foreclosures from a decade ago? They were turned into rentals,
they still exist.
I am all for an affordable housing mandate, but not in an Obamacare fashion by building tons more
housing at crappy inflated prices with some means-tested voucher all so the rentiers can keep their
profits. Destroy the rentiers and make housing right, make it a policy that is enforced with
regulations and limits on numbers of rental units.
==AirBnb/vacation rentals + rental 'business as income' (at institutional eg Berkshire Hathaway
and the associated securitized offerings as well as individuals and small biz creating the 'income
stream' via LLC pass through) is a major driver affecting the speculation===
To your point there was a recent article on NC that discussed your comment above.
Across the street from the townhouse subdivision where my wife and I live is a subdivision of
$275K – $350K houses. One of the more expensive houses was sold a year ago to a company that uses
it for a rental.
I talked to the previous owner frequently while walking our dog, and he sold the house after it
had been on the market for only about a month. As far as the previous owner was concerned the house
sold for close to his asking price so he was happy. He had no concern about selling the house to a
company that was going to use it for a rental. The previous owner had been living in that house in
that neighborhood for 25 years and seemed to know most everybody in his subdivision. He and his
wife raised their two sons in that house and also put a lot of time and effort into the landscaping
around the house.
The rental company that bought the house does the absolute minimal landscaping of the house and
barely mows the lawn on a semi regular basis. The company clearly does not have any regard for the
"appearance" of the house or the neighborhood. Which is a shame because the other houses near it
are well maintained which, due to the lack of landscape maintenance, makes the "rental company"
house an eyesore as far as grass, weeds, etc. are concerned.
I do not begrudge the previous owner for selling to the rental company. His asking price was met
so he was happy. And in the last few years, other houses in that subdivision have taken 1-2 years
to sell. What I have an issue with is these vulture rental companies acting as mercenaries and
treating houses and the neighborhood as so much fodder on a balance sheet.
One could also make the argument that without the rental company sticking it's nose where it
does not belong, the (ahem, cough, cough) free market would have been allowed to work somewhat. By
that I mean if this particular house had also taken a long time to sell like the others in that
neighborhood, and had subsequent price reductions in order to sell it, then maybe the average
housing price in that neighborhood/town/suburb would have gone down helping affordability.
"In fact, the typical CEO made a whopping 312 times their median employees' salary in 2017, according to the
Economic Policy Institute."
Note that is vs median salary not lowest paid.
The self serving disconnect between the management class and labor class is truly amazing.
Work is not valued. And the contribution to productivity is extracted and given to ownership. It's not
income inequality we should emphasize but simple fairness. Let's call it Income Fairness.
"fairness" is too vague and insubstantial a concept around which to base any kind of rights, much less
what some should get or we should do as a society.
we once thought it was "fair" as a society to enslave people. after we stopped that (and not because
it wasn't "fair", but as a political move), we thought it was "fair" to continue to deny them many of
their rights because they weren't "white".
huge numbers of us still think it is fair that people die from various issues caused by their
"unwillingness to work" or "unwillingness to work smarter". how many times do people say "if you don't
get more education, you can just shut up about earning enough to live on. working at McDonald's, you are
slacking and therefore can not demand anything. go to school, fool!" people argue all of the time that a
"living wage" is not fair, because a person who does low-value jobs isn't making enough money for their
employer to justify the wage (basically, profit produced by that employee would either be nil or zero).
and that is perfectly "fair" to these arguers.
fair is the idea that some deserve more and some less, due to something being "earned" by someone. it
is a nice idea to teach children. real world morality is much more complicated than that, and a society
of justice and laws and policies and bureaucracies can not be based around that. waaay too nebulous, and
open to interpretation. everyone -knows what "fair" is- when they see it, because everyone's definition
of "fairness" is different. as some kind of lofty ideal, it is fine. in practice, it is meaningless.
Is this simply a Rip van Winkle account of the middle-class situation that has been well-reported and
vigorously commented upon for some time? What am I missing?
The shift came when ol' Rip realized that the rumbling sound he heard was not the sound of the ghostly
sailors bowling but the sound of distant cannon fire.
The middle class stands upon the floor provided by the working class. And that floor is failing, as the
human capital of society is gradually, but with increasing rapidity, plundered, from the bottom up.
The poor used to have more than they do now, and be less dependent on government redistributions of
income.
Even the middle class owns less productive capital, as the small business owners who used to populate the
main streets of American towns have been driven out of business by the Walmarts. Those businessmen were the
social elites of their communities, giving those communities leadership, shape, structure and dimension.
Owning less productive capital, their communities pretty much hollowed out, the middle class have lost
much of their self sufficiency, and have become increasingly dependent on the whims of distant oligarchs.
First the Walmarts. Now the Amazons. And there will be even fewer resources available to support the
necessary services local communities provide.
The middle class are right to be afraid. The distant oligarchs and their bankers will only allow so much
debt before they pull out the rug.
Too bad no one paid attention what was happening to the working poor. Long ago, the 1% used to command 7%
of the nation's income. Now they command 21%. That 14% had to come from someone.
With almost 40 years of work under my belt, I have been passing along some advice to my kids to help them
navigate the current "middle class conundrums":
1. Owning a home is unlikely to make you wealthy. With just a few major city core exceptions, don't
expect it to go up by more than inflation over the decades. So buy or rent just what you need and do real
analysis of what you need and why.
2. Only live in a big expensive city if you need to for your chosen career. The smaller cities have a lot
of opportunity for people with good work habits, even in the "Rust Belt" and the living costs are far lower.
3. College degrees are useful. Getting them with large debt loads is a bad idea though. Don't take on
more student debt than about 2/3 of your expected starting salary for a four year degree and take on little
or not debt for a 2-year degree.
4. Going to a name-brand school is worthwhile if you don't have to rack up significant extra debt.
Otherwise, pick college and university by major and cost. Your internal traits make a far bigger difference
than the school you went to.
5. Only go to graduate school if your desired career path requires it. Otherwise, you are losing years of
earning power while incurring costs and debt. If you want a grad degree just for the joy of it, do it as
night school as a hobby.
6. Start a Roth IRA with monthly contributions early, even if it is only $50/month. It builds habits and
over the years will likely ensure you are in the top 25% in assets.
7. We are in a golden age of investing right now compared to 30 years ago. You can have worldwide,
multi-asset class diversified investments at an annual expense ratio of 0.25% which was unheard of at the
beginning of my career. So inexpensive Target Date funds or similar vehicles from companies like Vanguard
mean you can do fire-and-forget investing while you focus on the rest of your life.
8. Don't assume the full value of a company or state pension will be there when you retire. These are
rife with deliberate and accidental mismanagement and partial defaults are likely with many of them. Instead
save so that you are not reliant on them for a basic acceptable standard of living.
8. You don't need financial advisors for investing, just to help you with personal finance instead. But
that is not what they are usually selling, so 99% of the purported financial advisors are to be avoided as
they are hazardous to your finances.
10. Try to get a positive cash flow in your life as early as possible to dramatically reduce stress. That
is difficult if you have kids, large student loans, or large mortgage/rent costs, so those are the big
decisions you need to make on life-finance balance.
Regarding Social Security, it is currently structured to provide 75% to 80% of its current benefits
starting in 2034. That is still a significant safety net, but would require Congress to act to get it back
to around 100%.
Medicare is just part and parcel of the US healthcare cost issues. If the US can get down to less than
14% of GDP in healthcare expenditures while providing universal coverage, then the Medicare/Medicaid funding
issue effectively goes away. This is not impossible as the US is the only developed country that is above
14%.
Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet
and risk shifting. Regulatory policies and a credit based monetary system have resulted in massive real
price increases in inelastic areas of demand such as healthcare, education and housing eroding purchasing
power. Further, trade policies have put U.S. manufacturing at a massive disadvantage to the likes of China,
which has subsidized state-owned enterprises, has essentially slave labor costs and low to no environmental
regulations. Unrestrained immigration policies have resulted in a massive supply wave of semi- and unskilled
labor suppressing wages.
Recommended initial steps to reform:
1. Change the monetary system-deleverage economy with the Chicago Plan (100% reserve banking) and fund
massive infrastructure lowering total factor costs and increasing productivity. This would eliminate
2. Adopt a healthcare system that drives HC to 10% to 12% of GDP. France's maybe? Medicare model needs
serious reform but is great at low admin costs.
3. Raise tariffs across the board or enact labor and environmental tariffs on the likes of China and other
Asian export model countries.
4. Take savings from healthcare costs and interest and invest in human capital–educational attainment and
apprenticeships programs.
5. Enforce border security restricting future immigration dramatically and let economy absorb labor supply
over time.
As I have said in other comments, I like Liz Warren a lot within the limits of what she is good at
doing (i.e. not President) such as Secretary of the Treasury etc. And I think she likes the media
spotlight and to hear herself talk a little to much, but all quibbling aside, can we clone her??? The
above comment and video just reinforce "Stick to what you are really good at Liz!".
I am not a Liz Warren fan boi to the extent Lambert is of AOC, but it seems that most of the time when
I hear Warren, Sanders, or AOC say something my first reaction is "Yes, what she/he said!".
RT CrossTalk host Peter Lavelle and The Duran's Alex Christoforou take a quick look at the college admissions scam revolving around
William Rick Singer, who was running a for-profit college-counseling program, where according to federal prosecutors, has a goal
focused on helping "the wealthiest families in the U.S. get their kids into school."
Arrest warrants for Hollywood stars, Lori Loughlin and Felicity Huffman, were delivered on Tuesday following their alleged involvement
in a college-entrance-exam cheating scandal.
According to CNN,
the women were two of around 50 people who were the subject of
federal indictment
following an extensive FBI investigation named "Operation Varsity Blues."
Loughlin's husband, Mossimo Giannulli, was also implicated, and was arrested early on Tuesday morning.
TMZ reported
that Huffman was arrested by seven armed FBI agents. Her husband, William H. Macy, has not been charged in connection to the case.
Loughlin, Giannulli, and Huffman are all facing charges of felony conspiracy to commit mail fraud and honest services mail fraud.
Huffman is accused of spending $15,000 on an organization that allegedly helped her daughter cheat on her SATs. Loughlin and Giannulli
are accused of paying $500,000 to get their daughters into University of Southern California as recruits for the crew team for which
neither of Loughlin's daughters rowed crew.
All three were recorded by the FBI on phone calls discussing their plans to alter or lie about their children's college applications.
Is there anything left in this country that has not been deeply tainted by corruption?
By now you have probably heard that dozens of people have been arrested for participating in a multi-million dollar college admissions
scam. Enormous amounts of money were paid out in order to ensure that children from very wealthy families were able to get into top
schools such as Yale University, Stanford University, the University of Texas and the University of Southern California.
And as The Economic Collapse blog's Michael Snyder writes, we should certainly be disgusted by these revelations, but
we shouldn't be surprised. Such corruption happens every single day on every single level of society in America. At this point our
nation is so far gone that it is shocking when you run into someone that actually still has some integrity.
The "mastermind" behind this college admissions scam was a con man named William Rick Singer. He had been successfully getting
the kids of wealthy people into top colleges for years using "side doors", and he probably thought that he would never get caught.
But he did.
There were four basic methods that Singer used to get children from wealthy families into elite schools. The first two methods
involved bribes
Bribing college entrance exam administrators to allow a third party to facilitate cheating on college entrance exams, in some
cases by posing as actual students,' is the first.
Bribing university athletic coaches and administrators to designate applicants as purported athletic recruits – regardless
of their athletic abilities, and in some cases, even though they did not play the sport,' is the second.
Because many of these kids didn't even play the sports they were being "recruited" for, in some cases Photoshop was used to paste
their faces on to the
bodies of real athletes
In order to get non-athletic kids admitted to college as athletes, Singer often had to create fake profiles for them. Sometimes
this involved fabricating resumes that listed them having played on elite club teams, but to finish the illusion Singer and his
team would also use Photoshop to combine photos of the kids with actual athletes in the sport.
A number of college coaches became exceedingly wealthy from taking bribes to "recruit" kids that would never play once they got
to school, but now a lot of those same coaches are probably going to prison.
'Having a third party take classes in place of the actual students, with the understanding that the grades earned in those
classes would be submitted as part of the students' application,' is the third.
The fourth was 'submitting falsified applications for admission to universities that, among other things, included the fraudulently
obtained exam scores and class grades, and often listed fake awards and athletic activities.'
Of course the main thing that the media is focusing on is the fact that some celebrities are among those being charged in this
case, and that includes
Lori Loughlin from "Full House"
It was important to "Full House" star Lori Loughlin that her kids have "the college experience" that she missed out on, she
said back in 2016.
Loughlin, along with "Desperate Housewives" actress Felicity Huffman, is among those
charged in a scheme in which parents allegedly bribed college coaches and insiders at testing centers to help get their children
into some of the most elite schools in the country, federal prosecutors said Tuesday.
Despite how cynical I have become lately, I never would have guessed that Lori Loughlin was capable of such corruption.
After all, she seems like such a nice lady on television.
But apparently she was extremely determined to make sure that her daughters had "the college experience", and so Loughlin and
her husband shelled out
half a million dollars in bribes
Loughlin and Giannulli 'agreed to pay bribes totaling $500,000 in exchange for having their two daughters designated as recruits
to the USC crew team – despite the fact that they did not participate in crew – thereby facilitating their admission to USC,'
according to the documents.
As bad as this scandal is, can we really say that it is much worse than what is going on around the rest of the country every
single day?
Of course not.
We are a very sick nation, and we are getting sicker by the day.
William Rick Singer had a good con going, and he should have stopped
while he was ahead
"This book is full of secrets," he said in Chapter 1 before dispensing advice on personal branding, test-taking and college
essays.
But Singer had even bigger secrets, and those would cost up to $1.2 million.
But like most con men, Singer just had to keep pushing the envelope, and in the end it is going to cost him everything.
The ironic thing is that our colleges and universities are pulling an even bigger con. They have convinced all of us that a college
education is the key to a bright future, but meanwhile the quality of the "education" that they are providing has deteriorated dramatically.
I spent eight years in school getting three degrees, and so I know what I am talking about. For much more on all this, please see
my recent article entitled
"50 Actual College Course Titles That Prove That America's Universities Are Training Our College Students To Be Socialists" .
I know that it is not fashionable to talk about "morality" and "values" these days, but the truth is that history has shown us
that any nation that is deeply corrupt is not likely to survive for very long.
Avarice, ambition, revenge and licentiousness would break the strongest cords of our Constitution, as a whale goes through
a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.
Today, we are neither moral or religious.
What we are is deeply corrupt, and America will not survive if we keep going down this path.
I first suggested the U.S. economy was headed toward a recession more than a year ago, and now others are forecasting the same.
I give a business downturn starting this year a two-thirds probability.
The recessionary indicators are numerous. Tighter monetary policy by the Federal Reserve that the central bank now worries it
may have overdone. The near-inversion in the Treasury yield curve. The swoon in stocks at the end of last year. Weaker housing activity.
Soft consumer spending. The tiny 20,000 increase in February payrolls, compared to the 223,000 monthly average gain last year. Then
there are the effects of the deteriorating European economies and decelerating growth in China as well as President Donald Trump's
ongoing trade war with that country.
There is, of course, a small chance of a soft landing such as in the mid-1990s. At that time, the Fed ended its interest-rate
hiking cycle and cut the federal funds rate with no ensuing recession. By my count, the other 12 times the central bank restricted
credit in the post-World War II era, a recession resulted.
It's also possible that the current economic softening is temporary, but a revival would bring more Fed restraint. Policy makers
want higher rates in order to have significant room to cut in the next recession, and the current 2.25 percent to 2.50 percent range
doesn't give them much leeway. The Fed also dislikes investors' zeal for riskier assets, from hedge funds to private equity and leveraged
loans, to say nothing of that rankest of rank speculations, Bitcoin. With a resumption in economic growth, a tight credit-induced
recession would be postponed until 2020.
"Recession" conjures up specters of 2007-2009, the most severe business downturn since the 1930s in which the S&P 500 Index plunged
57 percent from its peak to its trough. The Fed raised its target rate from 1 percent in June 2004 to 5.25 percent in June 2006,
but the main event was the financial crisis spawned by the collapse in the vastly-inflated subprime mortgage market.
Similarly, the central bank increased its policy rate from 4.75 percent in June 1999 to 6.5 percent in May 2000. Still, the mild
2001 recession that followed was principally driven by the collapse in the late 1990s dot-com bubble that pushed the tech-laden Nasdaq
Composite Index down by a whopping 78 percent.
The 1973-1975 recession, the second deepest since the 1930s, resulted from the collapse in the early 1970s inflation hedge buying
of excess inventories. That deflated the S&P 500 by 48.2 percent. The federal funds rate hike from 9 percent in February 1974 to
13 percent in July of that year was a minor contributor.
The remaining eight post-World War II recessions were not the result of major financial or economic excesses, but just the normal
late economic cycle business and investor overconfidence. The average drop in the S&P 500 was 21.2 percent.
At present, I don't see any major economic or financial bubbles that are just begging to be pricked. The only possibilities are
excess debt among U.S. nonfinancial corporations and the heavy borrowing in dollars by emerging-market economies in the face of a
rising greenback. Housing never fully recovered from the subprime mortgage debacle. The financial sector is still deleveraging in
the wake of the financial crisis. Consumer debt remains substantial but well off its 2008 peak in relation to household income.
Consequently, the recession I foresee will probably be accompanied by about an average drop in stock prices. The S&P 500 fell
19.6 percent from Oct. 3 to Dec. 24, but the recovery since has almost eliminated that loss. A normal recession-related decline of
21.2 percent – meeting the definition of a bear market – from that Oct. 3 top would take it to 2,305, down about 18 percent from
Friday's close, but not much below the Christmas Eve low of 2,351.
A. Gary Shilling is president of A. Gary Shilling & Co., a New Jersey consultancy, a Registered Investment Advisor and author
of "The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation." Some portfolios he manages invest
in currencies and commodities.
The_Mick, 9 hours ago
"I first suggested the U.S. economy was headed
toward a recession more than a year ago, and now others are forecasting the same." And yet you were WRONG a year ago! You don't get excused for last year just because you're still predicting it!
Of course a recession is coming - maybe this year but maybe not for 10 years. Recessions happen from time to time but they are not
predictable because economics has too many variables we can't quantify.
And do you think you're impressing anyone by adding "maybe a bear market too"???
What do you mean "maybe"? If there's a recession then, of course, our slightly overpriced market will experience a bear market! DUH!
Terry7 hours ago I expected a deeper understanding from My Shilling.
This article seems very week. If he had submitted it as an an economic paper I don't think he would get high marks. Many historical
economic facts glossed over or omitted. Terrible job of describing the causes of the early 1970s world recession . As for a recession
without a bear market.....? Don't make me laugh.... And buy the way we are already in a bear market !
This decade is a lot like the 1990s in that it has been a nice long run. But no business cycle goes on for every. It's just does
not work like that because it is cycle in nature. After a ten year run in stocks it is less risky for serious money to be out of
them that in them. That is why the bond market is so solid right not. Because it's not work risking all your cash for maybe a couple
more percent when you have already make 300% or more..
The western economies are just running off free or very cheap money being constantly pumped into investment assets by the central
banks. There are no real guts to them. USA, EU and Japan have been running the printing presses with abandonment. At the same time
China and India are becoming the industrial power houses because they had over one billion people who will work for next to nothing.
Because every investment asset is pumped up of "free" money in the form of very low interest rate loans from the FED etc. Things
are very fragile. And someone has give Powel this "reality check". So the FED does a 180 on policy and now looks like a Wall St poodle.
And they speculators have gone back to pumping FANG stocks
But they all know this market is very pumped up and fragile. And they all keep their stop loss triggers very tight. That is why
it falls so dramatically when it takes a hit. Like OMG the FED funds rate going from 2.75% to 3.00% !! So tread very carefully .
The cracks are all around
Salo, 7 hours ago
I am only surprised when I read
that another recession is not coming.
Almost 10 years since the "end" of the Great Recession, and all it took was $22 Trillion of borrowed money, a $4 Trillion in the
red Fed balance sheet and interest rates just barely north of 2%. Oh, and one big beautiful corporate tax cut. Who knew expansionary
economies were so uncomplicated?
Ricardo, 6 hours ago
I remember reading
Gary Shilling's articles a few years after the Crash of 2009 when he attempted to prove without a doubt that market returns would
be sub-par for decades to come. He was wrong and you would have missed out on the longest and biggest bull market in history. Be
wary of what Gary has to tell you.
How the Boeing 737 Max grounding and the Genoa
bridge collapse show us that allowing companies to self-certify the safety of their products can be deadly
On
Wednesday the United States joined 42 other countries in grounding Boeing's 737 Max 8 jets, days after a crash
in Ethiopia of a 737 Max 8 jet left 157 people dead. The United States was a holdout, taking days longer to
ground the planes than most of Europe. Our Federal Aviation Administration (FAA) said, in those days between,
that they weren't grounding the planes because "
the
agency's own reviews of the aircraft show no 'systematic performance issues.'
"
There were some conflicting accounts of exactly how
the US came to ground the 737 Max 8. A
statement from Boeing
on Wednesday read that "Boeing has determined -- out of an abundance of caution and in
order to reassure the flying public of the aircraft's safety --
to
recommend to the FAA the temporary suspension of operations
of the entire global fleet of 371 737 MAX
aircraft."
In other words, Boeing claimed it was their idea /
recommendation that the FAA ground the aircraft. Meanwhile, Donald Trump declared that he grounded the aircraft
by executive order, forcing the FAA's hand.
Which begs the question -- why did it take a
presidential decree and/or the company itself to get the FAA, the main agency responsible for overseeing
airplane transit in the United States, to ground potentially dangerous aircraft?
As James Hall, the former National Transportation
Safety Board chairman,
explained in the Times
, in 2005 the FAA turned its safety certification responsibilities over to the
manufacturers themselves (if manufacturers met some requirements). In plain speak, this means that Boeing got
to decide if Boeing's airplanes were safe enough to fly -- with no additional third-party checks.
The FAA said the purpose of this change was to
save the aviation industry roughly $25 billion
between
2006 to 2015.
Given this, it makes you wonder if the statement on
Tuesday by Acting FAA Administrator Daniel K. Elwell -- that the agency had conducted its own review -- was
factual, or if the agency had simply reviewed the safety review that Boeing had conducted on itself. It also
clarifies why Boeing came to recommend to the FAA that their planes be grounded, rather than the FAA taking any
decisive action on their own.
The term for this maze, where a government safety
agency allows an industry to regulate itself so the industry can
save some
money
, and where the industry itself has to be the one to recommend to government that their product
shouldn't be in operation pending investigation, is
regulatory
capture
.
From Wikipedia
: "Regulatory capture is a form of government failure which occurs when a regulatory agency,
created to act in the public interest, instead advances the commercial or political concerns of special
interest groups that dominate the industry or sector it is charged with regulating."
The issue, in short, is that it is rarely in a
business' self-interest to ensure the absolute safety of their products. Safety testing takes time, money, and
if inspections reveal problems that need fixing, more money. Corporations are profit maximizers and pursue
whatever method they need to minimize cost (including minimizing fixing flaws in their products) and maximize
profit.
Without the threat of outside inspection or serious
repercussions, there are few incentives to fix potential problems. Insurance covers accidents, and most
mega-corporations have funds set aside in their operating budgets to pay the (generally small, relative to
their operating budgets) fines governments may impose if and when a problem is discovered.
This is why it is unlikely that industry will ever
sufficiently regulate itself on safety issues.
Remember Edward Norton's job in "Fight Club"?
"The car crashes and burns with everyone trapped inside. Now,
should we initiate a recall? Take the number of vehicles in the field, A. Multiply it by the probable rate of
failure, B. Multiply the result by the average out-of-court settlement, C. A x B x C equals X. If X is less
than the cost of a recall, we don't do one."
The United States isn't alone in turning over
self-certification of its transportation and infrastructure to industry. The Genoa Bridge Collapse in Italy
last year, in which 43 people died, is another case.
The
Morandi Bridge is a privately-owned toll bridge, publicly built but later sold off to Autostrade, a company
majority owned by the Benetton clothing family. As a private infrastructure company, Autostrade has a profit
maximization goal of keeping bridge maintenance costs low and toll profits high. Thanks to further
privatization efforts of the Italian government, the
safety and inspection
of bridges
is also conducted by private companies. In the case of the Morandi Bridge, the inspection
company responsible for safety checks and certification of the bridge was owned by Autostrade's parent company,
leaving the company that owns the bridge to self-certify its
safety.
The result, as the world saw, was a bridge that collapsed.
As Texas engineer Linwood Howell
said in the Times,
"the engineers inspecting the bridge would have their own professional liabilities to
worry about, including the profits of the company that was paying them," i.e. a clear conflict of interest
between maintaining basic safety and ensuring their own jobs.
Meanwhile, as Italian law professor Giuliano
Fonderico
noted
, "the government behaved more like its first priority was cooperating with Autostrade, rather than
regulating it."
George Stigler, who received the Nobel Peace Prize
in Economics
in part for his work around regulatory capture
in 1982, believed that it was likely that industry would
come to dictate the regulatory issues within their industries because of personal connections, a greater
understanding of issues facing industry than the general public, but mostly, a public ignorance around what
their regulators are up to.
Perhaps it is time for people to pay
a little more attention to what our regulators, who we pay to protect us from bridge collapses and plane
crashes, are up to. There are some
people with big ideas on fixes
for regulatory capture, but public demand will also need to exist for real
reform efforts to take place.
Countries that have reported their January production (shown on the chart)
OPEC14 -822
Alberta -268
Mexico -87
Russian Federation -78
Brazil -60
Norway -48
Total -1,429 kb/day
Chart https://pbs.twimg.com/media/D12BlLBW0AEDR6G.png
So far for February: Russia, OPEC14, Norway
Total: -330 kb/day
1. When something is increasing 0.8% a year based on data with, say, 2% or higher margin of error this is not a growth.
This is a number racket.
2. We need to use proper coefficients to correctly estimate energy output of different types of oil We do not know real
EROEI of shale oil, but some sources claim that it is in the 1.5-4.5 range. Let's assume that it is 3. In comparison, Saudi oil
has 80-100 range. In this sense shale oil is not a part of the solution; it is a part of the problem (stream of just bonds produced
in parallel is the testament of that). In other words, all shale oil is "subprime oil," and an increase of shale oil production
is correctly called the oil retirement party. The same is true for the tar sands oil.
So the proper formula for total world production in "normalized by ERORI units" might be approximated by the equation:
where coefficients (I do not claim that they are accurate; they are provided just for demonstration) reflect EROEI of particular
types of oil.
If we assume that 58% of the US oil production is shale oil and condensate then the amount of "normalized" oil extracted in
the USA can be approximated by the formula
total * 0.83
In other words 17% of the volume is a fiction. Simplifying it was spent on extraction of shale oil and condensate (for concentrate
lower energy content might justify lower coefficient; but for simplicity we assume that it is equal to shale oil).
Among other things that means that 1970 peak of production probably was never exceeded.
3. EROEI of most types of oil continues to decline (from 35 in 1999 to 18 in 2006 according to
http://www.euanmearns.com/wp-content/uploads/2016/05/eroeihalletal.png).
Which means that in reality physical volume became a very deceptive metric as you need to sink more and more money/energy into
producing every single barrel and that fact is not reflected in the volume. In other words, the barrel of shale oil is already
50% empty when it was lifted to the ground (aka "subprime oil"). In this sense, shale wells with their three years of the high
producing period are simply money dumping grounds for money in comparison with Saudi oil wells.
4. The higher price does not solve the problem of the decline of EROEI. It just allows the allocation of a larger portion
of national wealth to the oil extraction putting the rest of the economy into permanent stagnation.
5. If we assume average EROEI equal 3 (or even 5) for shale oil then rising shale oil production along with almost constant
world oil production is clearly a Pyrrhic victory. Again, putting a single curve for all types of oil is the number racket,
or voodoo dances around the fire.
NOTES:
1. IMHO Ron made a correct observation about Saudi behavior: the declines of production can well be masked under pretention
of meeting the quota to save face. That might be true about OPEC and Russia as a whole too. Exceptions like Iraq only confirm
the rule.
That's what neoliberal bottomfeeders like Summers, Krugman and Dejong should read and
memorize
Notable quotes:
"... Neoclassical economics became important in large measure to show that markets delivered efficient outcomes, and efficiency was seen as tantamount to socially desirable. That's before considering that highly efficiency almost always comes at the expense of safety and robustness, and that efficient solutions may not be equitable. ..."
"... So, maybe the proper distinction to be made is between "trustworthy" experts and "untrustworthy" ones. The question then become what makes experts trustworthy -- not, I should stress, intrinsically trustworthy, but rather perceived by the public to be so. ..."
"... The third point is that trust in expertise seems to be quite generally declining. This is partly perhaps because education is more widespread, which makes possession of an education appear in itself less authoritative. It is also partly because of the rapid dissemination of information. It is partly because of the easy formation of groups of the disaffected and dissemination of conspiracy theories. The internet and the new social media it has spawned have turned out to be powerful engines for the spreading of disinformation aimed at manipulation of the unwary. ..."
Yves
here. Even though Martin Wolf's post makes many important observations, I feel the need to take
issue with his conclusion. Economists have been and continue to be enormously successful as
experts. PhDs in economics make roughly twice as much as those in other social sciences.
Economists are the only social scientists to have a seat at the policy table. And they continue
to do so, despite their colossal failure in the global financial crisis, with no serious change
in the discipline and no loss of reputation of any prominent economists.
Neoclassical economics became important in large measure to show that markets delivered
efficient outcomes, and efficiency was seen as tantamount to socially desirable. That's before
considering that highly efficiency almost always comes at the expense of safety and robustness,
and that efficient solutions may not be equitable.
The importance of economists as policy advisers grew in the post World War II era, after the
USSR managed the impressive feat of industrializing in the 20th century. US officials were
concerned that a command and control economy could beat a messy, consumer oriented capitalist
one, and turned to economists to give guidance on how to achieve high growth rates so as to
produce enough guns and butter.
As for the specific impetus for Wolf's article, it appears to be due to voters ignoring the
dire warnings made by the Remain campaign during the Brexit referendum campaign that Brexit
would have large economic costs. But based on reports after the vote came in, that repudiation
came not just because the public might well have good reason not to believe economists as a
result of the crisis, but how the Remain campaign carried itself in the debates. That side
apparently made arrogant-seeming, data heavy arguments, while the Leavers made stirring appeals
about sovereignty .a UK version of MAGA.
"I think people in this country have had enough of experts."
-Michael Gove
Michael Gove, winner of the Brexit referendum (though loser in the game of politics, having
failed to become leader of his party, and so, maybe, no true expert either) hit the nail on the
head. The people of this country have, it seems, had enough of those who consider themselves
experts, in some domains. The implications of this rejection of experts seem enormous. That
should be of particular significance for economists, because economists were, after all, the
"experts" against whom Mr. Gove was inveighing.
Yet it is not really true that the people of this country have had enough of experts. When
they fall ill, they still go to licensed doctors. When they fly, they trust qualified pilots.
When they want a bridge, they call upon qualified engineers. Even today, in the supposed
"post-fact" world, such people are almost universally recognized as experts.
So, maybe the proper distinction to be made is between "trustworthy" experts and
"untrustworthy" ones. The question then become what makes experts trustworthy -- not, I should
stress, intrinsically trustworthy, but rather perceived by the public to be so.
One might make three, admittedly speculative, points about this distinction between experts
deemed by the public to be deserving of trust and those who are not.
The first is that some forms of expertise appear simply to be more solidly based than others
in a body of theory and/or evidence, with recognizable successes to their credit. By and large,
doctors are associated with cures, pilots with keeping airplanes in the sky and engineers with
bridges that stay up. Such successes -- and there are many other comparable fields of expertise
-- self-evidently make people with the relevant expertise appear trustworthy.
The second is that some forms of expertise are more politically contentious than others.
Nearly everybody, for example, agrees that curing people, flying airplanes and building bridges
are good things. Social and political arrangements -- and economics is inescapably about social
and political arrangements -- are always and everywhere contentious. They affect not only how
people think the human world works, but also how it ought to work. These forms of expertise are
about values.
The third point is that trust in expertise seems to be quite generally declining. This is
partly perhaps because education is more widespread, which makes possession of an education
appear in itself less authoritative. It is also partly because of the rapid dissemination of
information. It is partly because of the easy formation of groups of the disaffected and
dissemination of conspiracy theories. The internet and the new social media it has spawned have
turned out to be powerful engines for the spreading of disinformation aimed at manipulation of
the unwary.
It might be encouraging for economists that they are not the only experts who are
mistrusted. Consider the anti-vaccination movement, hostility to evolutionary theory, or
rejection of climate science. All these are the products of doubts fueled by a combination of
core beliefs and suspicion of particular forms of expertise. The anti-vaccination movement is
driven by parents' concerns about their children. The hostility to evolution is driven by
religion. The rejection of climate science is clearly driven by ideology. Every climate denier
I know is a free marketeer. Is this an accident? No. The desire to believe in the free market
creates an emotional justification for denying climate science. In principle, after all, belief
in free markets and in the physics of the climate system have absolutely nothing to do with
each other.
So economists are in good company with other forms of politically or socially contentious
expertise. But they have a special difficulty. Not only are they engaged in an essentially
controversial, because political, arena, and so also an inherently ideological one, but they
suffer to a high degree from the first point I made above: their "science", if science it is,
just does not look to the public to be solidly based. It does not work as well as the public
wants and economists have claimed. Economists claim a certain scientific status. But much of it
looks to the outsider more like "scientism" -- the use of an incomprehensible intellectual
apparatus to obscure ignorance rather than reveal truth.
This does not mean that economists don't know useful things. It is quite clear that they do.
Markets are extraordinary institutions, for example. Economists' elucidation of markets or of
the principle of comparative advantage is a great intellectual achievement. Yet suspicion of
economics and economists is both long-standing and understandable.
The problem became far more serious after the financial crisis. The popular perception is
that the experts -- macroeconomists and financial economists -- did not appreciate the dangers
before the event and did not understand the longer-run consequences after it. Moreover, the
popular perception seems to be in large part correct. This has damaged the acceptance of the
expertise of economists to a huge extent.
So how, in this suspicious contemporary environment, might economists persuade the public
they are experts who deserve to be listened to?
I decided to ask my colleagues this question. One answered that:
1. Good economists have a clear (if incomplete) understanding of how the world works. This
is a pre-requisite to making it a better place.
2. Economists have a sense of scale. They understand the difference between big and small
and how to make that distinction. This is vital for policy.
3. Economics is all about counterfactuals. It understands the relevant comparators even if
they are difficult to work out.
4. Economists are experts on incentives and motivations and empirically try to measure
them rather than relying on wishful thinking.
5. Generally, good economists are expert in understanding the limits of their knowledge
and forecasting abilities.
Another colleague added:
The general public usually associate economists with:
-A small set of macroeconomic forecasts (growth, inflation mainly), and
-A belief that markets always produce perfect outcomes
And they attribute failure to them if either:
-point forecasts (inevitably) prove wrong, or
-markets produce some bad outcomes
Whereas the expertise of economists is really in the building blocks that enable you to
construct sensible forecasts and to understand how people are likely to behave and respond to
a given set of circumstances/policies. This structure for understanding the world allows
economists to take on board new developments, understand whether they reflect a rejection of
their existing theories or merely a (possibly tail) outcome that was consistent with their
"model," and push forward their understanding of the world from there. Rather than throwing
away all existing wisdom when circumstances change somewhat.
I agree with these propositions. Properly understood, economics remains very useful. One
realizes this as soon as one is engaged with someone who knows nothing at all about the
subject. But I still have four qualifications to make.
First, a large part of what economists actually do, namely forecasting, is not very soundly
based. It would be a good idea if economists stated that loudly, strongly, and repeatedly.
Indeed, there should be ceaseless public campaigning by the professional bodies, emphasizing
what economists don't know. Of course, that would not -- as economists might predict -- be in
their interests.
Second, in important areas of supposed economic expertise, the analytical basis is really
weak. This is true of the operation of the monetary and financial systems. It is also true of
the determinants of economic growth.
Third, economists are not disinterested outsiders. They are part of the political process.
It is crucial to remember that certain propositions favor the interests of powerful people and
groups. Economists can find themselves easily captured by such groups. "Invisible hand"
theorems are particularly open to such abuse.
Finally, the division between economic aspects of society and the rest is, in my view,
analytically unsound. The relationship between, say, economics and sociology or anthropology is
not like that between physics and chemistry. The latter rests upon the former. But economics
and anthropology lie side by side. I increasingly feel that the educated economist, certainly
those engaged in policy, must also understand political science, sociology, anthropology, and
sociology. Otherwise, they will fail to understand what is actually happening.
If I am right, the challenge is not just to purify economics of exaggerated claims, though
that is indeed needed. It is rather to recognize the limited scope of economic knowledge. This
does not mean there is no such thing as economic expertise: there is. But its scope and
generality are more limited than many suppose.
Michael Gove was wrong, in my view, about expertise applied in the Brexit debate. But he was
not altogether wrong about the expertise of economists. If we were more humble and more honest,
we might be better recognized as experts able to contribute to public debate.
With this in mind, what should be the goal of an education in economics at the university
level? A part of the answer will come from developments within the field. In time, the
incorporation of new ideas and techniques may make the academic discipline better at addressing
the intellectual and policy challenges the world now confronts.
Another part of the answer, however, must come from asking what an undergraduate education
ought to achieve. The answer should not be to produce apprentices in a highly technical and
narrow discipline taught as a branch of applied mathematics. For the great majority of those
who learn economics, what matters is appreciation of both a few core ideas and of the
complexity of the economic reality.
At bottom, economics is a field of inquiry and a way of thinking. Among its valuable core
concepts are: opportunity cost, marginal cost, rent, sunk costs, externalities, and effective
demand. Economics also allows people to make at least some sense of debates on growth,
taxation, monetary policy, economic development, inequality, and so forth.
It is unnecessary to possess a vast technical apparatus to understand these ideas. Indeed
the technical apparatus can get in the way of such an understanding. Much of the understanding
can also be acquired in a decent, but not inordinately technical, undergraduate education. That
is what I was fortunate enough to acquire in my own years studying philosophy, politics and
economics at Oxford in the late 1960s. Today, I believe, someone with my background in the
humanities would never become an economist. I am absolutely sure I would not have done so. It
might be arrogant to make this claim. But I think that would have been a pity -- and not just
for me.
In addition, it would be helpful to expose students to some of the heterodox alternatives to
orthodox economics. This can only be selective. But exposure to the ideas of Hyman Minsky, for
example, would be very helpful to anybody seeking to understand the macroeconomic implications
of liberalized finance.
The teaching of economics to undergraduates must focus on core ideas, essential questions,
and actual realities. Such a curriculum might not be the best way to produce candidates for PhD
programs. So be it. The study of economics at university must not be seen through so narrow a
lens. Its purpose is to produce people with a broad economic enlightenment. That is what the
public debate needs. It is what education has to provide.
I am afraid a worse problem with economists is that they don't seem interested in anyone's
opinions except their own.
They even hold ecology in disdain, not having any interest in learning what is, in fact,
the foundational system of their own 'science.' The booms and busts of capitalism show
familiar patterns to ecologists. Why, ecologists even have equations for them!
But I guess ecology is just too simple for the attentions of economists : Stupid animals.
They don't even use money! What kind of economy can that be?
So economists look for models everywhere except where to find them. The hubris of
humanity, not needing to give due attention to the economies of 'animal' societies.
To Yves. Well, I nearly lack the heart to respond, but I feel I must. Taking yesterday's
NC's lessons of looking at a human facing and having eye contact to remain human online, I
now do both – a human sits next to me. I read aloud to her.
Ok, you are a strong advocate of becoming a certified economist. Because 1.they make a lot
of money and 2. only they sit at the policy table.
Further claims made in your preamble: in no particular order of importance: something
about efficient outcomes that may not be equitable; command & control and guns and
butter; and sadly an analysis of Brexit voters in either camp.
(One exception to all that I say is those using MMT, certified, with a degree or not.
Again something I first learned about on NC.)
Yesterday, somewhere in the NC collective was the notion that the above mentioned
economists tell tho' we may be so out of balance with the world that our extinction as a
species is a legitimate issue to discuss, that in the end there ain't any money to not only
not fix the problem but not even deal with it. And these guys/gals you laud? I and others
have argued this gang provided the intellectual nonsense that put us where we are now.
What is your point that Econ grads make the most amount of money compared to what?
Philosophy majors? True or not I still say it's a waste of a life. Not the knowing, but the
being of one. I don't see what value there is for civilization in general but specifically
that just because they make a lot of money, it's good?
All social science grads you say v Econ grads make more money. I doubt that. Seems every
school district requires a PhD in Education, and a PhD in Business is very lucrative (not
saying useful, just pays well).
The policy table. I'm truly baffled as to what you refer. If they are the only ones at
said table then it follows they are the only ones at it. In my long life I'm trying to think
were we ever let an economist have the final say, or even a moderate say in any political,
governmental, or military policy. Some input yes, but deterministic, no. If they were sitting
at their own table, when asked they came to table with those that had the votes, give their
opinion and then left. Sociological impact statements had far bigger influence on policy. And
policy is no more then the data we can agree on to make decisions.
Sure, many governments, NGOs, multinationals all have jobs for economists but in someway
this is self serving, not a necessity. Kuhn's book on "The Structure of Scientific
Revolutions", does a good job of explain how authority gets established, vested, and in the
end becomes useless. That it exists is not an argument that it is necessary or good. That
there needs to be some way to define and explain things economic I no have issue with, that
outside of MMT that is has been, using system theory I don't see it.
As to efficient outcomes that may not be equitable that speaks for itself. It doesn't. No
'may not' about it, said with respect.
As to command & control and guns and butter, seems like a long time ago. A long time
ago, using science to help in making decisions was new and it took awhile to get it right, or
at least to get it working.
(Small note, I have dual US & UK citizenships)
An analysis of Brexit voters in either camp. I can tell you why I voted the way I did but
I need to make an appeal to Stephen Pinker's, "The Blank Slate". Either I have the free will
to make a decision and accept responsibility for it or I don't. I believe I do and did. I
voted to leave and yes their are economic impacts, as well as social, political, historical,
psychological, and philosophical. As did in electing Trump. As did the 1776 revolution, as in
the US Civil War, almost anything. Money is not everything nor the only thing. And the future
isn't what it used to be. The Long Emergency is here.
Hayek liked banding around watery terms like freedom and liberty its when he stopped being
an economist [political theory in times past] and jointed the ranks of ideologues .
Boy are you shooting the messenger. I'm not saying the way the economics discipline has
become influential is a good thing, but that is the way it is. How economics operates as a
discipline is great for economists, so why should they change? So what if their prescription
fail way too often? For instance, there haven't been any bad consequences to anyone who
didn't see the crisis coming and (even worse) advocated bank deregulation, starting with
Larry Summers (but he had plenty of company).
And you are simply wrong about the influence economists have. In the US, CBO budget
scoring is fundamental to how Congress views various proposed programs, even though we have
described how the CBOs methods are crap and the CBO operates as an a big enforcer of deficit
hysteria (as in they play a politicized role). The Fed and other central banks, the most
powerful single government economic actors, are all run by monetary economists. The IMF,
another very powerful institution, has deeply embraced and implements neoliberal policies,
namely, balanced budgets and squeezing labor (labor "reforms"). In the US, economists in op
eds and even in Congressional testimony (see Bernanke for instance) argue for balanced
budgets and argue the supposed necessity of cutting Social Security and Medicare and NEVER
mention cutting military spending. They are acting not just as enforcers of overall spending,
but by advocating what to cut, are influencing priorities.
Back in my former life as an economist-in-training, I ran into ecological economics as a
branch of natural resource economics. It was completely backwards – the extent
ecological theory was brought in didn't extend beyond simple predator-prey-plant models, and
the goal was to find the macroeconomic general equilibrium of biomass in the ecosystem.
That was probably just the most striking example of the institutional close-mindedness I
saw back among the economists.
Mr Wolf says, among the important concepts are "externalities" Like everything that
supports economic activity. Economics reduces the real world to "externalities" and simple
equations about things measured in crude tokens – money. How good can it be then.
Also, "Such a curriculum might not be the best way to produce candidates for PhD programs"
– is that a goal in itself? Like, the world needs a certain amount of economics PhDs
produced? What for?
Prof. Michael Hudson, Prof. Richard Wolff and others have long ago explained what's wrong
with mainstream economics, but that can't be said in FT.
This reminds me of the party press during the Perestroika in the 80ies talking about
reform in a similar soft and obfuscatory of the truth way, full of wishful recommendations,
striking a demurely optimistic tone supposed to convey integrity. It was bullshit and when
the real things started happening, everybody forgot about it, because it had no depth and no
bearing on real life.
It seems obvious to most people that not all values are commensurable with each other. For
instance, things like literary and artistic quality, friendships, and human lives cannot
defensibly be measured in dollar terms. However, this is just what economics attempts to do.
Hence, environmental economics simply aims to put a dollar value on environmental quality (or
degredation). Hence, the entirety of my Labor Economics course was focused on how you place a
monetary value on a human life, when the human happens to die because of their job.
So, I tend to agree with you. The whole discipline is of questionable value, so long as
economists refuse to accept some very basic truths and incorporate much more than money into
their analyses.
That comment strikes me as strange because one of the weaknesses of classical economic
models was the fact that how money works was not part of their inquiry.
In trying to judge the abilities of an expert, the best that most people can do is to see
the results on what they practice. If a doctor has a reputation of getting his patients
drug-addicted, then you would not go to them. If an engineer built a building but the roof
constantly leaked, you would think twice about giving them another contract. But let us think
about how well economists are judged. You might say that a lot of people in the UK discounted
their advice during Brexit but it has been noted that a lot of the Leave campaign was based
in depressed areas. Why were so many areas depressed? Because the people knew that the
government was using the advice of economists as to which areas to prioritize for resources.
And usually that meant London and its outer areas – which voted Remain.
People are fully aware of what happens too when WTO economists go into a country –
social services are cut, public transport is cut way back, the cost of living for the poor
skyrocket while the rich seem to be protected. And take a look at the economic state of the
United States. Wages have flatlined since the 70s, infrastructure is falling into disrepair,
whole swathes of the country are abandoned to their own devices, de-industrialisation is a
fact, etc, etc etc but the point is that the people that were giving all the advice to have
this done were economists like Ken Rogoff and his wonky austerity study. It may have been the
politicians that pulled the trigger but it was economists that were loading the gun.
if you want a breed of economists more grounded in reality, then I would suggest having them
work in a fulfillment center for a week to show the the consequences of what happens when you
get priorities wrong. Certainly they need to study the work of economists like Hyman Minsky
and Susan Strange who had gone out of fashion before the crash but the long and short of it
is to see what works and what does not work. I do not mean to be insulting here but as far as
I can see, modern economic theory has really been a theory for the top 20% and not for the
rest of the population. And now we are seeing the result up close and personal and until this
changes, people will not feel the need to take the advice of economist, even when they
should. Martin Wolf is fortunate in having also a humanities background but how true is that
nowadays?
The sentence " So, maybe the proper distinction to be made is between "trustworthy"
experts and "untrustworthy" ones " is important. Unfortunately, in the article I miss a key
aspect in making that distinction.
I seem to notice that the "trustworthy" areas of expertise in general tend to be removed
from political ideas or preferences. Left or right, liberal or conservative, democrat or
republican, it does not affect the way in which trustworthy experts go about their business.
It does not influence the way in which a doctor cures patients, a pilot flies a plane or an
engineer constructs a bridge. However, as soon as we start discussing things like the
economy, talk is full of "liberal" or "left" economists as opposed to "conservative" or
"right" economics. I have never heard of one bridge being more at risk of collapse because it
was designed by a liberal engineer versus a conservative one, or the other way round. When
discussing the strength of a bridge political leanings simply do not come into play, it is
not a factor like the strength of the steel used. But for all economic debate, these leanings
often seem to be the essence of the discussion.
Given the general public's intensifying distrust of politicians and all things political,
it does not surprise me that disciplines tainted by political colouring (like economics) are
considered "untrustworthy" compared to disciplines where political colouring is not a factor
(like the aforementioned doctors, pilots and engineers).
Since economics *is* in fact very interwoven with politics, I think the general public
will always treat economists the same way they treat politicians, that is with a healthy dose
of distrust. And who can blame them?
Yes, ability vs integrity.
And you can take 10 of the most honest and well meaning people, dedicated to the public good
and advancement of learning, employ them in a structure set up to profit first and ask
questions second, and the whole is going to be not the same as the sum of the parts.
I'd say an unhealthy dose of distrust is more likely and more common.
People tend to treat conventional econospeak as so much blah, blah, blah and then turn
around and credit or discredit what has been said on the basis of the tone with which it was
said.
Economists working for the kleptocracy get a lot of mileage out of sounding serious, while
talking complete rubbish. And, sadly, many economists working the left, get away with lame
one-liners and a rudderless iconoclasm.
I had an e-mail exchange with Mr. Wolf many years ago – before the 2008 crash
– where he basically told me that we live in the best of all possible worlds and that
nothing needs to change – he has changed his tune since then, I suppose to try to avoid
looking like a complete idiot and also to try to deflect criticism on to others. Maybe he has
öearned something in the meantime, but maybe he is just faking for the sake of
appearences.
I think he is faking it. It's the party line. It is the beginning of the neoliberal
Perestroika (see also Brad DeLong).
I quite like to look at it this way – it is very clarifying (as I lived in the
Perestroika) and I recommend it. Don't for a moment trust the Perestroika – it is
half-measures at best and purposeful deception at worst.
" The answer should not be to produce apprentices in a highly technical and narrow
discipline taught as a branch of applied mathematics ." With apologies to Mr. Richter,
economics is taught more like a branch of mathematical sophistry, and that is slighting the
original sophists.
I was an undergraduate studying applied mathematics at the time and place, present day
neoclassical economics was being developed, published and starting to be taught. I can think
of just one economics-and-finance classmate who continued to study mathematics beyond first
year calculus – which everyone had to take.
Our introductory numerical analysis professor was scathing about his colleagues at the
other side of the Quads. He made it quite plain that we could not skip the rigor and "try to
prove something like an economist". Pretty much all the econ students dropped his course when
they discovered that. The specific problem they could not address, can be simply stated. If
you know a number but don't know its error, you don't know the number. The difficulty the
great mass of economists have with just that, excludes economics as a branch of applied
mathematics.
pretty much the sum total of neoclassical economics is trying to work out the
counterfactual of how the economy would work if everyone had more-or-less complete
information to work with.
introduce genuine uncertainty, and pretty much the whole apparatus turns topsy-turvy and
all the "laws" of economics disappear or become highly contingent on circumstances unlikely
to obtain.
"Fixing" economics must start with a wholesale divestment from the idea of this profession
being a "science", said divestment openly promoted by economists themselves. All manner of
hardwired, warped thinking, to say nothing of obstinacy in changing one's views when
confronted with contradictory evidence, results from people believing that they're scientists
practising a real science. When such thinking seeps into the subconscious, the obstinacy is
locked into place and even events of the scale of the GFC aren't enough to shake loose the
erroneous biases held by the mainstream profession.
How else would an entire profession place so much faith in the predictive powers of its
models if not having such faith resting on a (supposed) firm foundation of science? An
engineer designing a beam for a bridge has justifiable faith in continuum mechanics (a real
science) as a sound foundation for their work, economics is devoid of such sound foundations
and its time the profession loudly and publicly declared this in an unprecedented act of
intellectual honesty.
Additionally, we see weak to non-existent culpability enforcement when policy
recommendations put on the table by economists wreck lives (as they have over decades), this
in stark contrast with e.g. an engineer designing a bridge that collapses and kills hundreds.
In other words, economists have outsized influence in matters of policy out of proportion
with the amount of actual skin they have in the game. On the other side, this "economics is a
science" narrative disarms a public already deficient in the marginal capacity for
independent, critical thinking to question anything economists say, said public including
politicians who, as aptly put by the Rev Kev, pull the trigger of a policy gun loaded by
economists.
>. . . economics is devoid of such sound foundations and its time the profession loudly
and publicly declared this in an unprecedented act of intellectual honesty.
Not one economist, with their ass planted firmly on their throne at the policy table, will
admit to that. The operating principle is venality.
Now that they have lost the respect of the peasants, I don't want them to matter again.
What I would like to see is mass firings of eclownomists, so they can experience life as
lived by the peasants, just once. It may even free up resources to pay people to actually do
good things instead of perpetuating one failure after another, and being grossly rewarded for
those failures.
I think he gets the wrong end of the stick here: "Consider the anti-vaccination movement,
hostility to evolutionary theory, or rejection of climate science."
No doubt there are occasions when vaccinations can do serious harm: a niece of mine was
excused a standard vaccination because of a contra-indication in her family medical
history.The anti-vaxers, though, seem to have elevated some small kernel of truth into a
stupid all-encompassing doctrine without giving the matter enough critical thought.
The anti-evolutionists seem to have failed to devote any critical thought to the matter at
all.
But the sceptics about "climate science" have deployed critical thinking to identify this
new religion as being composed largely of incompetence, dishonesty, and hysteria. It's the
likes of old Wolfie who are lacking in critical thought on this issue. Maybe he's one of
those people who is uneducated in science, and so too easily swayed by chaps shouting
excitedly about models, measurements, and so forth.
It's very odd. Goebbels Warming is now old enough that you can check the historical record
of its predictions of dreadful tipping points, of the disappearance of snow from Britain, of
the flooding of this and that Pacific island group, and so on. All false. So why should
anyone rational believe a word of it? After all, almost from the beginning its proponents
believed that the science was settled – it was inarguable. In which case why have their
predictions proved so lousy?
Consult a poet: humankind cannot bear very much reality.
Consult an economist: incentives matter.
So, Yves, you are saying ("Economists are the only social scientists to have a seat at the
policy table," etc.) that economists are like weathermen. They still have a time slot on the
evening news and are respected, even though their accuracy is abysmal. They make a lot of
money doing this.
Basically, this is because we expect very little of economists and because they have
stopped using ordinary language professionally, they have the status equivalent to someone
actually helpful.
I think economics has become an asocial science with too many economists willing to
provide some sort of academic cover for whatever the plutocrats want to do.
I think the analogy to meteorologists is interesting. As an engineer, I have some
perspective on this.
In engineering design, frequent failure of what we design is generally undesirable. So we
have our analytical tools based on both scientific theory and empirical data, and then apply
a factor of safety (sometimes called factor of ignorance, but more accurately is a
recognition that there is a probabilistic distribution of outcomes and the factors of safety
shift the design towards success instead of high probability of failure).
Airline pilots operate similar to engineers in that they aren't flying close to the edge
of the airplane's flight characteristics. Instead they stay in a zone quite a ways away from
what the airplane could potentially do. This is one of the reasons that airplane travel is
very safe, especially compared to car travel.
Meteorologists are trying to make predictions of the most likely scenario which means they
are trying to hit the center of the distribution of the potential outcomes. As a results,
they frequently are shown to have "missed" in that some other lower probability event
occurred instead. Over the past couple of decades, we have gotten used to seeing weather
forecasts with probabilities or ranges of outcomes.
I think the public presentation of economics has two separate problems, but both undermine
economics credibility.
First, economics is a field that is trying to predict the most likely event and the range
of potential outcomes, similar to the weather forecasts, but does not present the predictions
this way. So people don't cut economists slack because their public presentations don't
recognize the range of potential outcomes and the frank recognition of the inaccuracy of
their predictions that we are used to with the weather people, especially once they get past
24 hrs of predictions.
Second, many of the economists that make public predictions are funded by interest groups.
When we see a lawyer on TV, we know that he is being paid by a client to be an advocate and
that is his job as a lawyer. So we may disregard what he has to say but we understand the
context he is speaking in. However, the economists don't say who they are being paid by and
so they are presumed to be independent experts when they are sometimes not. I believe this is
a fundamental ethical issue within the economics profession.
So when the economics predictions (e.g. effects of tax cuts) fail to be accurate, it needs
to be parsed out if it was simply a lower probability event or if the predictions were
intentionally biased to begin with. None of this is well-addressed by the economics
profession, which greatly undermines credibility.
Economists also use the term 'efficiency' to denote pareto optimality, which causes much
confusion.
Especially when communicating with both analytical people of a hard-sciencey or
engineering background (efficiency = a context specific figure,
some-measure-of-output/some-measure-of-input, strict limits in how far you can generalize),
and business people (efficient = low cost)
economists also routinely distinguish the allocative efficiency they focus upon
almost exclusively from the kinds of technical or managerial efficiency that most of the rest
of the world focuses upon, but they rarely admit that their focus is so narrow and does not
generalize to encompass common sense notions of cost and efficiency -- it is almost as if
they want to avoid the critical examination engineering enables while providing double-talk
as cover for business people trying to privatize the profits while socializing the costs.
Let me start by saying that I object to the term "Dismal Science" for economics.
This is not because of the "dismal" part, it's because of the "science" part.
That being said, the devaluing of expertise is due in large part to something not
mentioned by Mr. Wolf: corruption, particularly for the field of macroeconomics.
We have seen this repeatedly in the past few decades, where nominally independent
researchers have been found to slant their research to accommodate the results desired by
their patrons. (The sad state of pharma and medical research come to mind as well)
In fact, ACCORDING TO THEIR OWN "RATIONAL ACTOR" THEORIES , academics in general, and
economists in particular,will behave in ways that will most strongly benefit themselves, and
not in ways that serve the truth or reality. (Studies have shown that economists
are the most selfish academics )
I believe that if you discuss the devaluation of knowledge and expertise without
discussing the pervasive corruption in western society, you are ignoring the proverbial
elephant in the room.
Economic Science is very optimistic that what they characterize as "economic growth" in
using up the world's resources in its pursuit, is a "good thing".
Economists are selling a limitless planet on which humans will always "pull the rabbit out
of the hat", to solve any resource issue, including climate change and overpopulation.
That being said, I view the economic profession, as largely practiced by its well-paid
members, as a mechanism to justify what the political and business elite want to do.
The elite are simply getting what they pay to hear.
I worked on simulation software for integrated circuits. My friend studied economics with
all the famous people. When I described to him what I did if there seemed to be a discrepancy
between what my simulator said and how the integrated circuit behaved in real life or the
intuition that an electrical engineer had about how it would behave in real life he was
amazed. I was amazed that he was amazed. How could you possibly believe a simulator that
necessarily has bugs in it, if you don't track down discrepancies to understand which is
right, your intuition or the simulator?
Sometimes, I had to be very inventive to find another way to make a complex calculation in
a way that would test out if the simulator was right. If economics students are taught the
math, but not how to check their work, and the necessity of checking their work, then they
shouldn't be in positions to make policy recommendations.
Many economists avoid operational modeling of the processes of the actual, institutional
economy. And, that which does take place in narrowly conceived research by specialists is
never allowed to feed back on the methods or theories embodied in the core doctrines.
One way mainstream macroeconomics defeats its own feeble efforts at empiricism is to set
the problems in a frame of time-series regression analysis of highly aggregated data:
national GDP and its high-level components year-by-year or quarter-by-quarter.
The behavior of tens or hundreds of millions of people reduced to statistics for largely
formless accounting conventions relating to a single somewhat amorphous entity (a country)
over time. History, however it happens, only ever happens one way, so there's always zero
degrees of freedom in the aggregate time-series.
There is so little information left in the data, even the most clever econometricians
would need a thousand years of data to "test" the most basic hypotheses. It is absurd to
approach the task in the way they do.
Is it necessarily as difficult a task as they make it, to learn something useful
about the way the economy works?
The problems of statistical aggregation and time-series are not rooted in the object of
study -- the actual political economy -- so much as they are created by the conceptual
apparatus.
In short form, economists have an analytic theory -- in form and epistemic status,
something akin to Euclid's geometry. A geometry is not itself a map of the world and no one
doing geometry confuses geometry with cartography or land surveying, but most economists do
not understand that their theory is not itself a model of the actual political economy.
Someone like Paul Krugman actually thinks he has "a map" of the political economy in, say,
IS/LM . No student of geometry expects to find a dimensionless point in the bathroom or an
isoceles triangle growing in the garden. Yet, economists regularly purport to casually
observe perfectly competitive markets in equilibrium or the natural interest rate.
I think economists could do as well as, say, meteorologists or geologists in developing an
empirically grounded understanding of the observable political economy, if they focused their
attention on concrete and measurable mechanisms of the institutional economy and stopped
talking meaninglessly about formless "markets" that have no existence.
This article reminds me of why I stopped reading The Economist after the GFC. The
Economist was quite explicit in advocating for a weak regulatory environment. I remember
articles talking about how great it was for the Office of Thrift Supervision to regulate
banks alongside others like the Fed because regulatory competition was good. After the GFC
they were writing articles about how they opposed this all along.
It's not just that so many economists are wrong. It's that many times their models and
predictions are wrong and they claim that it is either not what they argued for or
'externalities' intervened. Of course they never mentioned such externalities before. Many
just outright conjure up unicorns. There were no shortage of economists claiming that the
housing bubble was not a problem and the economy will grow to the point where things just
naturally level off. Of course there was no accountability for those peddling these
falsehoods.
Perhaps it's changed since I started out as an econ. major in the mid '70's, but what
disillusioned me was the total disregard for actual human behavior. Real people do NOT always
behave rationally or honestly. Emotions/psychology do figure greatly in real people making
"economic" decisions – just ask anyone who makes their living based on selling
something.
Every economic model should be prefaced with "In an ideal world " (or perhaps more
honestly "In an economist's construct of an ideal world )
How many brand name economists up and quit in disgust 11 years ago when the powers that be
decided to go against everything they stood for, and bailed out those that deserved to go
down in financial flames?
A parenthetical lifted from Randy Wray's post responding to DeLong on MMT:
an exasperated Wynne Godley came into my office a couple of decades ago and announced
that every [mainstream model] he had looked at was incoherent
That's the base problem, imho: economists are very successful as "experts" in a
sociological sense, slotting into the role with firm claims on salary, status and ritual
respect, as Yves Smith observed, but economics as a civic doctrine and a common frame of
reference for political discourse is incoherent and economics as a scholarly discipline or
"social science" fails methodological or epistemic standards.
There is a history of imperviousness to absolutely devastating critiques that isn't
explained. Is that persistent "wrongness" related to professional success or only a
by-product of an unfortunate pedagogy? Who puts the dogmatism into a dogma . . . and keeps it
there?
(disclosure: i was a professional economist myself many years ago -- neither ambitious nor
particularly successful, but I did attend ruling class schools for what that was worth)
Prof. Richard Werner has a fantastic talk (at the Russian Academy of Sciences) about,
among other things, "the unresolved puzzles of modern economics" – to me the most
striking there was how he dispenses with concept of "equilibrium".
He talks about the "puzzles" ~30 min in.
It is enough to see that and know that mainstream economists are little more than the high
priests of the peculiar modern religion guiding our society.
"The teaching of economics to undergraduates must focus on core ideas, essential
questions, and actual realities."
Sadly Mr. Wolf suffers from the same delusions that so many mainstream economist suffer.
They think they have actually considered "actual realities".
Yet the foundations of mainstream economics ignores these ACTUAL REALITIES
– Assumes Loanable Funds yet the Bank of England & the Bundesbank both publicly
published research say endogenous money is correct. Loans create Deposits. They are clueless
as to how finance works. I recall the infamous intro to econ question "If I double you income
and double prices for beer, how much beer can you now purchase?" The standard econ answer is
the same amount of beer. But in the real world the correct answer is you don't know. The
professor never told you how large the fixed debt payments of the person were which most
definitely impacts the amount of disposable income you have to buy beer. But then again most
economists would likely fail any advanced accounting class. Long gone are the days when
undergraduate economics students in economics had to take 2 or 3 semesters of accounting.
Even my alma mater which is definitely heterodox in faculty and has MMT / UMKC taught faculty
only require 1 these days. You need a strong foundation in accounting to be stock flow
consistent in your modeling of a highly monetary modern economy.
– Assumes upward sloping supply curve is the market norm. At least 3 economic studies
have attempted to measure this on large cross industry scales and every time concludes that
over 1/2 of all businesses face downward sloping cost curves (natural monopoly stuff, and we
wonder why industry concentration is the norm) and another 1/3 face flat cost curves. An
upward sloping supply curve, for those not taking advanced or graduate level economics IS the
assumed upward sloping marginal cost curve of the industry or nation if you're crazy enough
to apply it at the macro level.
There are dozens more piss pore assumptions that underpin mainstream economics. In this
day and age far more EMPIRICAL, real word data can be used to confirm what really makes an
economy work, but sadly what we teach in college is garbage where the ACTUAL REALITIES are
ignored.
a logical definition of wealth is absolutely needed for the basis of economics if it is
to be a science."
Frederick Soddy, WEALTH, VIRTUAL WEALTH AND DEBT,
2nd edition, p. 102
Economists and financiers seem to be incapable of understanding we live on a finite planet.
Nor do they seem to be able to get beyond equating money with wealth. It is much easier to
just put a price on something like a Beethoven symphony (or call it 'priceless') than to
attempt a definition of wealth. But for most of us the ingredients of a definition are much
simpler. Topping the list has to be energy. You can't create it but you can dissipate it,
i.e. render it useless, by for example manufacturing useless junk that falls apart quickly
enough for people who run or own the business to make a lot of money.
Or if your customers can no longer afford the junk because you have automated or
off-shored their jobs, you can sell guns and bombs to your wholly owned government – to
use in blowing up people who stand in the way of your accumulating more of the money created
by your bankers, financiers and politicians. Then there is the basic intelligence required to
run the machinery and discern better – i.e. more energy and resource efficient –
ways of doing things. With real wealth creation comes power. The Chinese may have figured
this out. The West's 1%, its economists, bankers and politicians don't appear to have a
clue.
Did Kenneth Rogoff apologise for his hit on Iceland and his subsequent dismay defense in
Ferguson's "Inside Job"? At least one of the Chicago boys (Jonathan Sachs) has resiled from
the opinions of Friedman and rejoined the human race but only after a raft of countries were
ground down by the mill of the moneymen. Chile and Poland seem to have survived at horrible
social cost but what of the others?
The plaint is partly true. When governments were advised by economists, they replaced the
wishes of the electorate. The economist brought along their army of lawyers who instantly
appeared as mercenary terrorists to browbeat and coerce officials with various threats to do
as the moneymen asked and cease attending to the people. This is still the state of play in
UK and USA and those core paper-issuers drag the 'also rans' along with carrots and
sticks.
I believe the fault lies in lazy officials who seldom run trials on new ideas in limited
areas but drop the entire country into one speculative foray after another. Its a shame that
its not mentioned. There is no good reason why the whole country has to be volunteered for
these new scheme. Why has the UK Treasury shut down every competing form of banking to the
high street banks – the trust banks, coop bank, post office bank, municipal banks,
mutuals – all thrown away as infringers of the BoE's monopoly. The country needs an
Oliver Cromwell or Napoleon to lead it not the present bunch of ragamuffins and
hooligans.
That brings me to the second problem the disastrous state of the representation. It is
mainly due to the control factions have brought to bear on the selection of candidates for
office. That has to stop and the way to do it to have primary assemblies of every 200-300
people who select one of their number to represent them. He's a school friend or neighbor and
a known quantity. Several primary assemblies select a chap to represent them and so on up
this new structure of democracy to the top.
The business community have sought to keep everyone's nose to the grindstone with
statistics justifying under payment by understating inflation. That has to stop. The
economics trade belongs with astrology and weather forecasting until it acknowledges the
fundamentals that drive prices.
It seems to me from my citizen's non-professional perspective that the only real
economists are experts in resource extraction, manufacturing and end use of same.
IOW, a forester, mining, petroleum, construction engineer and even a naval admiral,
sitting around a table, all beholden to and obeying the supreme chairmanship of an ecologist,
would be a better and less destructive thing for the world than a bunch of money only maximum
value extraction Wall Streeters controlling the engineers mentioned above.
Can there even be an economy without resource extraction? It seems like most new economic
schemes are attempting this with humans bodies, credit ratings and bank accounts being the
last available commodity.
The economists got Ricardo's theory of comparative advantage, but they missed this:
"The interest of the landlords is always opposed to the interest of every other class
in the community" Ricardo 1815 / Classical Economist
What does our man on free trade mean?
He was an expert on the small state, unregulated capitalism he observed in the world around
him. He was part of the new capitalist class and the old landowning class were a huge problem
with their rents that had to be paid both directly and through wages.
Disposable income = wages – (taxes + the cost of living)
Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord's rents in wages reducing profit.
Ricardo is just talking about housing costs, employees all rented in those days.
Employees get their money from wages and so the employer pays through wages.
Look at the US cost of living: The cost of living = housing costs + healthcare costs + student loan costs + food +
other costs of living
Employees get their money from wages, so it is the employer that pays through wages,
reducing profit and driving off shoring from the US.
Maximising profit requires minimising labour costs; i.e. wages.
China, Asia and Mexico look good, the US is awful.
(This is Michael Hudson's argument in a slightly different from)
There are some fundamental problems with today's economics, like this and the fact it
doesn't look at money, debt or banks.
Also, it hasn't worked out financial markets are not like other markets.
The supply of stocks stays fairly fixed and central banks can create a "wealth effect" by
just adding liquidity. More money is now chasing a fairly fixed number of financial assets
and the price (e.g. stock market) goes up.
Thanks as always for the valuable posts. I am curious about your opinion on something.
Once oil production peaks and plateaus, then inevitably declines, do you think world GDP will
start declining afterwards? I'd assume it would lag behind it by a short period of time
possibly (obviously depending on country etc but overall).
If that was to happen and no energy source can cover the decline rate, wouldn't the world be
pretty fucked economically thereafter? Hence one can assume or take a wild ass guess that the
decline after peak would resemble something like Venezuela. So not a smooth short % decline
rate.
I hope what i am asking makes sense.
Mike, in all honesty, I have no idea. The problem is there are so many other things going on
at the same time. The world is getting warmer, water tables are falling everywhere, rivers
are drying up, fisheries are disappearing, and I could go on for an hour explaining how
everything is falling apart. And now we hear that the insect population is declining very
fast. Why?
So as fossil energy starts to decline and renewables will not help very much, what will
happen. Will that exacerbate all our other problems. Yes, it most likely will. Look at
Venezuela. Is that what almost every nation will look like in 50 years? Well, probably not
every nation but a lot of them for sure.
So, the world is going to hell in a handbasket. But I am 80 years old. I will be safely
dead when the shit hits the fan. Lucky me.
The European banking system is about to implode with Italian banks in the worst state but
which banks then owe the counter party risks, step forward the French banks. Macron is as it
will be recalled a Rothschild banker.
The likes of the British banks aren't much better of course but the EU needs the UK and
more importantly it's money to rescue thewe EU banks. Trouble is this is impossible task, but
the EU is not about to allow the fifth largest economy to simply walk away.
Dennis Wrote:
"I think the 4 Mb/d of increased tight oil output from Dec 2019 to Dec 2025 may be enough to
keep World C+C output increasing through 2025, this assumes oil prices follow the AEO 2018
reference case "
I am sure there is sufficient Oil in the ground to delay Peak production to about 2040, if
the consumer demand can afford $300 bbl. Shale drilling is a lot like the housing bubble that
began in 2003 and when bust in 2008. It made no sense to lend people with no job, no income
and no assets, money to buy a home, but Lenders did it anyway and they did it for 5 years
straight. While Shale Drillers aren't Ninja home buyers they continue to fund operations
using debt.
Shale growth is a function of credit available to shale drillers. As long as they can
find a sucker^H^H^H^H lender to finance their growth, it will continue.
My wild-ass guess is that credit growth for shale drillers ends in 2021, because a lot
of old shale debt comes due between 2020 and 2022.
My guess is that the shale drillers will have trouble rolling over the existing debt
will also finding lenders to provide them more credit. In the past I presumed that interest
rates would rise to the point it cut them off from adding new debt. but the ECB & the Fed
continue to keep rates low. Perhaps the Shale drillers will get direct gov't funding to
continue, pseudo nationalization as Watcher has proposed over many years on POB.
I don't see much traction in significantly higher oil prices. with 78% of US consumers
living paycheck to paycheck, already, I don't believe they can absorb any substantial
increase in energy costs.
Its also very likely demographics will start impacting energy consumption in the west
as Boomers start retiring. A lot of boomers have postponed retirement, but I suspect that
this will start to change in the early 2020s as age related issues make it more difficult for
them to keep on working. Usually retired workers, consume considerably less energy as they no
longer commute to work, and usually downsize their lifestyles.
(Global) peak oil comes in phases. The 1st phase 2005-2008 caused the 2008 oil price shock
and the financial crisis. Money printing was used to keep the system afloat and finance the
US shale oil boom. The resulting high debt levels are now limiting economic activities. A lot
of the problems we see in the world come from this chain of events.
I warned the Australian Prime Minister John Howard in 2004/05 but he did not want to
listen.
As Art Berman said, shale oil is oil's retirement party.
When we are down to fracturing rocks and drilling tens of thousands of horizontal wells
that produce tiny streams of oil that decline by 70% in just three years we should
instinctively know that we are reaching the bottom of the proverbial barrel, literally.
Amazing how most people think just the opposite .
.Saudi Arabia
Quota 10,311
.Feb. Production 10,087
.Difference -224
Saudi Arabia produced 224,000 barrels per day less than their quota. Did not anyone
notice this and wonder why? The rest of OPEC was 179,000 barrels per day over their quota.
Iraq was the largest violator being 121,000 bpd over their quota.
Also, Saudi Arabia was the absolute driving force behind these quota cuts implemented in
January.
Noticed, and you could argue that they are showing the way and taking the larger part of the
burden since they want to be so nice to the rest of the opec members ;-).
Or perhaps the level they have been producing at is unsustainable and they are really glad
to officially have an excuse to cut back on production.
Venezuela production is not only being hit by the blackout – which seems to have
damaged their overall grid capacity – but by new sanctions. Their diluent supplier has
just stated they will stop business.
Perhaps useful to note that Maduro was just as incompetent 6 months ago as presumably he is
now. He was just as incompetent 9 months ago as presumably he is now. And indeed, he was just
as incompetent three months ago as he is now. In fact we could take it back years.
Thus, it surely is just a coincidence that their blackout occurred at a point in time when
a foreign coup attempt was underway, rather than 9 or 6 or 3 months ago. Sabotage could not
be involved because we're told that incompetence and corruption is responsible, of the sort
that just happened to manifest itself at this point in time.
The 20 folks who are alleged to have died in hospitals from lack of power just
coincidentally died at this particular point in time. Because it is merely coincidence, the
saboteurs probably cannot be tried for murder.
Power has apparently been restored. Oil will resume its flow at whatever magnitude.
Of course there are no coincidences, just the things that the CIA, the Illuminati, the
freemasons, the jewish bankers and the Martians wanted to happen.
"Thus, it surely is just a coincidence that their blackout occurred at a point in time when a
foreign coup attempt was underway, rather than 9 or 6 or 3 months ago. Sabotage could not be
involved because we're told that incompetence and corruption is responsible, of the sort that
just happened to manifest itself at this point in time."
I am sure the US is trying to speed up the process. After all, those Aid buses were not
torched by Mo or his supporters but by Western agents. Its difficult to know who is really to
blame for the blackout, but the US has an agenda to take control over VZ. I would not rule
out the US causing it.
"... Yang promises a universal entitlement, not dependent on income, that he calls a "freedom dividend." To be funded through a value added tax , Yang claims that it would reduce the strain on "health care, incarceration, homeless services, and the like" and actually save billions of dollars. Yang also notes that "current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally." ..."
"... Yang is justifying the need for such a program because of automation . Again, VDARE.com has been exploring how automation may necessitate such a program for many years . Yang also discussed this problem on Tucker Carlson's show , which alone shows he is more open to real discussion than many progressive activists. ..."
"... Indeed, journalists, hall monitors that they are, have recognized that President Trump's online supporters are flocking to Yang, bringing him a powerful weapon in the meme wars. ..."
"... it is ominous for Trump that many of the more creative and dedicated people who formed his vanguard are giving up on him. ..."
Yang is a businessman who has worked in several fields, but was best known for founding
Venture for America , which helps college graduates become entrepreneurs.
However, he is now gaining recognition for his signature campaign promise -- $1,000 a month for every American.
Yang promises a
universal entitlement, not dependent on income, that he calls a "freedom dividend." To be funded through a
value added tax , Yang claims that it would
reduce the strain on "health care, incarceration, homeless services, and the like" and actually save billions of dollars. Yang also
notes
that "current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally."
As Yang himself notes, this is not a new idea, nor one particularly tied to the Left. Indeed, it's been proposed by several prominent
libertarians because it would replace the far more inefficient welfare system.
Charles Murray called for
this policy in 2016. [ A
guaranteed income for every American, AEI, June 3, 2016]
Milton
Friedman suggested a similar policy in a 1968 interview with William F. Buckley, though
Friedman called it a
"negative income tax."
It's also been proposed by many nationalists, including, well, me. At the January 2013 VDARE.com Webinar, I
called for a "straight-up minimum income for citizens only" among other policies that would build a new nationalist majority
and deconstruct Leftist power. I've
retained that belief ever since and argued for it here for years.
However, I've also made the argument that it only works if it is for
citizens
only and is combined with a restrictive immigration policy. As I previously
argued in a piece attacking Jacobin'sdisingenuous
complaints about the "reserve army of the unemployed," you simply can't support high wages, workers' rights, and a universal
basic income while still demanding mass immigration.
Yang is also directly addressing the crises that the Trump Administration has seemly forgotten. Unlike Donald Trump himself, with
his endless boasting about "low black and Hispanic unemployment," Yang
has directly spoken about the demographic
collapse of white people because of "low birth rates and white men dying from
substance
abuse and suicide ."
Significantly, President Trump himself has never once specifically recognized the plight of white Americans.
...He wants to make
Puerto Rico a state . He
supports a path to citizenship for illegal
aliens, albeit with an 18-year waiting period and combined with
pledges to secure the border
and deport illegals who don't enroll in the citizenship program. He
wants to create a massive bureaucratic system to track
gun owners, restrict
gun ownership , and require various "training" programs for licenses. He wants to
subsidize local journalists with taxpayer
dollars...
... ... ...
Indeed, journalists, hall monitors that they are, have recognized that President Trump's online supporters are flocking to
Yang, bringing him a powerful weapon in the meme wars. (Sample meme at right.) And because many of these online activists are
"far right" by Main Stream Media standards, or at least Politically Incorrect, there is much hand-waving and wrist-flapping about
the need for Yang to decry "white nationalists." So of course, the candidate has dutifully done so, claiming "racism and white nationalism
[are] a threat to the core ideals of what it means to be an American". [
Presidential candidate
Andrew Yang has a meme problem, by Russell Brandom, The Verge, March 9, 2019]
But what does it mean to be an American? As more and more of American history is described as racist, and even national
symbols and the national anthem are targets for protest, "America" certainly doesn't seem like a real country with a real identity.
Increasingly, "America" resembles a continent-sized shopping mall, with nothing holding together the warring tribes that occupy it
except money.
President Trump, of course, was elected because many people thought he could reverse this process, especially by limiting mass
immigration and taking strong action in the culture wars, for example by promoting official English. Yet in recent weeks, he has
repeatedly endorsed more legal immigration. Rather than fighting, the president is content to brag about the economy and whine about
unfair press coverage and investigations. He already seems like a lame duck.
The worst part of all of this is that President Trump was elected as a response not just to the Left, but to the failed Conservative
Establishment. During the 2016 campaign, President Trump specifically
pledged to protect
entitlements , decried foreign wars, and argued for a massive infrastructure plan. However, once in office, his main legislative
accomplishment is a tax cut any other Republican president would have pushed. Similarly, his latest budget contains the kinds of
entitlement cuts that are guaranteed to provoke Democrat attack ads. [
Trump said he wouldn't cut Medicaid, Social Security, and Medicare . His 2020 budget cuts all 3, by Tara
Golshan, Vox, March 12, 2019] And the president has already backed down on withdrawing all troops from Syria, never mind Afghanistan.
Conservatism Inc., having learned nothing from candidate Donald Trump's scorched-earth path to the Republican nomination, now
embraces Trump as a man but ignores his campaign message. Instead, the conservative movement is still promoting the same tired slogans
about "free markets" even as they have appear to have lost an
entire
generation to socialism. The most iconic moment was Charlie Kirk, head of the free market activist group Turning Point USA, desperately
trying to tell his followers not to cheer for Tucker Carlson because
Carlson had suggested a nation should be treated like a
family, not simply a marketplace .
Thus, especially because of his cowardice on immigration, many of President Trump's most fervent online supporters have turned
on him in recent weeks. And the embrace of Yang seems to come out of a great place of despair, a sense that the country really is
beyond saving.
Yang has Leftist policies on many issues, but many disillusioned Trump supporters feel like those policies are coming anyway.
If America is just an economy, and if everyone in the world is a simply an American-in-waiting, white Americans might as well get
something out of this System before the bones are picked clean.
National Review ' s Theodore Kupfer just claimed the main importance of Yang's candidacy is that it will prove meme-makers
ability to affect the vote count "has been overstated" [
Rise of the pink hats,
March 12, 2019].
Time will tell, but it is ominous for Trump that many of the more creative and dedicated people who formed his vanguard
are giving up on him.
"But the impotence one feels today -- an impotence we should never consider permanent -- does
not excuse one from remaining true to oneself, nor does it excuse capitulation to the
enemy, what ever mask he may wear. Not the one facing us across the frontier or the
battle lines, which is not so much our enemy as our brothers' enemy, but the one that
calls itself our protector and makes us its slaves. The worst betrayal will always be to
subordinate ourselves to this
Apparatus,
and to trample underfoot, in its service,
all human values in ourselves and in others."
Simone Weil
"And in some ways, it creates this false illusion that there are people out there looking
out for the interest of taxpayers, the checks and balances that are built into the system
are operational, when in fact they're not. And what you're going to see and what we are
seeing is it'll be a breakdown of those governmental institutions. And you'll see
governments that continue to have policies that feed the interests of -- and I don't want
to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone
else...
If TARP saved our financial system from driving off a cliff back in 2008, absent
meaningful reform, we are still driving on the same winding mountain road, but this time
in a faster car... I think it's inevitable. I mean, I don't think how you can look at all
the incentives that were in place going up to 2008 and see that in many ways they've only
gotten worse and come to any other conclusion."
Neil Barofsky
"Written by Carmen Segarra, the petite lawyer turned bank examiner turned whistleblower
turned one-woman swat team, the 340-page tome takes the reader along on her gut-wrenching
workdays for an entire seven months inside one of the most powerful and corrupted
watchdogs of the powerful and corrupted players on Wall Street – the Federal Reserve Bank
of New York.
The days were
literally
gut-wrenching. Segarra reports that after months of being
alternately gas-lighted and bullied at the New York Fed to whip her into the ranks of the
corrupted, she had to go to a gastroenterologist and learned her stomach lining was gone.
She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of
conversations between New York Fed officials and Goldman Sachs. After being fired for
refusing to soften her examination opinion on Goldman Sachs,
Segarra released the tapes to ProPublica and the radio program This American Life
and
the story went viral from there...
In a nutshell, the whoring works like this. There are huge financial incentives to go
along, get along, and keep your mouth shut about fraud. The financial incentives encompass
both the salary, pension and benefits at the New York Fed as well as the high-paying job
waiting for you at a Wall Street bank or Wall Street law firm if you show you are a
team player
.
If the Democratic leadership of the House Financial Services Committee is smart, it will
reopen the Senate's aborted inquiry into the New York Fed's labyrinthine conflicts of
interest in supervising Wall Street and make removing that supervisory role a core
component of the Democrat's 2020 platform. Senator Bernie Sanders' platform can certainly
be expected to continue the accurate battle cry that 'the business model of Wall Street is
fraud.'"
So much stuff going on.. it's shaping up to be a very interesting weekend.
But, let me start with a diversion...
There is a story of the Great Scottish King – Robert the Bruce. Having been defeated by the
English multiple times, his family captured and executed, (or in the case of his daughter, left
suspended in an open cage thru the winter), his army was scattered, the clans turned against him,
on his own and without any support - he was on the verge of giving up. As he contemplated a bleak
future, he watched a spider struggle to construct a web in the dank cave he was hiding in. The
beastie failed again and again.. Finally, Bruce reached his decision. If the Spider succeeded, he
would carry on.
He went on to become Scotland's Greatest King.
Try, Try, Try again ?
Perhaps Scotland will pull an unlikely win at Twickenham
on Saturday? She-who-is-now-Mrs-Blain did warn me not to
"
bore everyone about Brexit
",
but needs must.
Even though a No-Deal Brexit is ruled out in the short-run, where do we go from here?
Or,
perhaps, Theresa May is set to surprise us all. She really doesn't know when to give
up.
The scuttlebutt round Westminster is she's going to take her Brexit agreement back to
the House for a third time – and is currently scaring the Rees-Moog loonies with the threat of a
long extension leading to NO-Brexit and second referendum, and the Remoaners with the threat of a
short-extension leading to No-Deal Brexit. At least 70 Labour MPs want to avoid a second referendum
and could, perhaps, vote with her.
Of course, my above simplistic analysis ignores the EU.
"It is a very grand plan, but what about the Germans?" asked a famous Polish General in
WW2...
How the EU reacts to the likely request for an extension is going to be fascinating..
Meanwhile, there is a bit of a political stramash brewing in the US after a number of
fund managers and "actresses" (heaven forbid) were arrested for fraudulently bribing universities
to give their kids places.
Some of my more "right of centre" US correspondents are full of
righteous indignation that such obvious Democrats - on the basis the whole of Hollywood are goddam-lefty-commies
- are dishonestly getting their kids opportunities they don't merit. Bribery, criminal corruption,
hidden influence, the haves and have nots. Oops I think one of their heads just indignantly
exploded.
But this is important stuff.
Firstly, isn't it obvious that any society with an
ounce of common sense would make education the core of its development strategy? It's the single
most important factor likely to improve an economy and raise the prospects of its population. Yet,
here in the UK, the government has seen fit to chain students to years of debt and penury for
pretty average university courses? Its madness. In the States, its gone a step further – another
way for the rich to raise themselves higher.
The fact the monied and the wealthy across US society think its somehow
acceptable to pay-to-play for the top educational places and they advantages these confer for life,
sums up a moral corruption and is yet another symptom of the entitlement and pernicious income
inequality now at the core of the "Land of the Free".
As a chum told me
yesterday.. "its last stage empire" stuff. Its neither a Democrat or Republican thing – although it
doesn't help when the President is such a clearly negative role model. If its ok for the boss to
lie and cheat.. then what I do wrong?
(You could argue nepotism is the ultimate and absolute corruption – the rich ensuring the rich
get the best of everything and deny deserving poorer folk places they've earned. But, where does
guilt begin? What's so different from those of us who paid over expensive school fees to give our
kids the best chance in life? I could just about afford it. Single Parent in Brixton could not. My
kids got a better start. Whether the Brixton kid now runs past them is entirely their
responsibility now )
Its stories like this that are stoking the inequality bonfire. If it burns out of
control then markets will have nothing to say as the global reset is pressed!
Today at 4:15pm EDT, DoubleLine founder Jeff Gundlach is holding his latest live webcast
open to investors and casual listeners, titled enticingly 'Highway to Hell', and which we
assume will discuss either Brexit, the US-China trade deal, the long-term US debt picture or
how this, latest asset bubble finally ends.
Readers can register and follow it live at
this address
,
or clicking on the image below
As usual, we will grab and highlight the most interesting charts from Gundlach's
presentation as they come in.
* * *
Gundlach, as usual, starts with one of his favorite charts, the one showing the global
central bank balance sheet level juxtaposed to the global market, as the background for the
Fed's "180 degree turn" in the stock market's recent rebound, which is understandable since the
"S&P was and is in a bear market."
... ... ...
If that wasn't bad enough, Gundlach also said that
stocks will take out the December low
during the course of 2019 and markets will roll over earlier than they did last year.
Shifting from the market to the economy, Gundlach shows that global economic momentum is getting
worse across the globe...
Gundlach then highlights the sudden collapse in global trade, which would suggest the world is in
a global recession.
And yet at the same time, US economic data, at least in the labor market,
has never been stronger as Gundlach shows:
Of course, another big red flag is the collapse in December retail sales, and despite the sharp rebound in the January print
as we saw yesterday, Gundlach highlights the sharp drop in the 6 month average and highlights it as another potential
recessionary risk factor.
Going back to one of his favorite topics, the relentless growth of US debt, Gundlach shows the following chart of debt by
sector. Needless to say, it is troubling, and as Gundlach said.
And tied to that, the following new warning on the US interest expense: "The US interest expense is projected by the CBO to
explode higher starting yesterday"
Gundlach then went on a rant against MMT, calling it a "crackpot" theory, which is based on a "completely fallacious
argument", and adds that "People who have PhDs in economics actually are buying the complete nonsense of MMT which is used to
justify a massive socialist program."
Gundlach also discusses the US trade deficit, which recently soared, saying that "the trade deficit is not shrinking but
expanding," and the goods deficit is at "an all-time record", which according to Gundlach may hurt Trump's re-election chances.
Having predicted president Trump early, when everyone else was still mocking him, Gundlach admits that he is "not really sure
what's going to happen,'' when it comes to the next election. "If you ran on promising a lesser trade deficit'' and elimination
of national debt, and both have "exploded" higher, Gundlach thinks it's hard to say that you're winning.
And speaking of the next president, Gundlach suggests that if the economy falls into recession and Trump gets thrown out, we
might get the chance to see how MMT, i.e. helicopter money, really works with the next, socialist, president.
Perhaps this is also why to Gundlach "the next big move for the dollar is lower."
Looking ahead, Gundlach also touches on the future of monetary policy, and once again highlights the discrepancy between the
bond market, which expects half a rate cut, and the Fed's dot plot which expects three hikes in 2019-2020.
What happens? To Gundlach, "Fed expectations are likely to show capitulation to the Fed this time...the bond market is having
none of the Fed's two dots that they revealed in December." He then adds that the Fed "will absolutely drop the 2019 dot,"
suggesting it may be dropped to 1/2 a hike.
Optimism that a new trade deal will occur between America and
China has driven stock markets higher even as data continues to
emerge confirming economies across the world continue to slow. It
seems much of the current market fervor is based on optimism and
hope falls into the category of "irrational exuberance" a term
that Allen Greenspan has in the past used to describe unbridled
enthusiasm. More on the realities being ignored in the following
article.
Hmm....Kinda strange call there Jeffy Jeff on those higher
interest rates.
Especially considering just today where the 1yr
yield is higher than...get this, the 2yr, the 3yr, the 5yr
aaaaand the 7year bond. Kinda strange setup for rates exploding
higher isn't it? Or if you like to think of it as a belly that
sumbuck is getting one BIG pot gut.
Politicians are imbeciles and have no remedies. The US is the
least ugly pig of the bunch. The EU needs major structural tax
and regulatory reform; open borders with a pervasive social
welfare state has proven a recipe for disaster. The US is in
similar circumstances, but its tax and regulatory environment are
at least rational. It requires massive entitlement and spending
reforms with some minor tax hikes on the top end marginal income
and capital gains brackets.
Today at 4:15pm EDT, DoubleLine founder Jeff Gundlach is holding his latest live webcast
open to investors and casual listeners, titled enticingly 'Highway to Hell', and which we
assume will discuss either Brexit, the US-China trade deal, the long-term US debt picture or
how this, latest asset bubble finally ends.
Readers can register and follow it live at this address ,
or clicking on the image below
As usual, we will grab and highlight the most interesting charts from Gundlach's
presentation as they come in.
* * *
Gundlach, as usual, starts with one of his favorite charts, the one showing the global
central bank balance sheet level juxtaposed to the global market, as the background for the
Fed's "180 degree turn" in the stock market's recent rebound, which is understandable since the
"S&P was and is in a bear market."
Former Pope Benedict's sudden resignation is speculated by many to have stemmed from rampant
child abuse. These accusations are supported by a number of witnesses and a shocking story that
got no air time in the mainstream media -- that the former
Pope Benedict's brother abused at least 231 children at a catholic boys choir .
One document that turned up after 30 years showed that the Thatcher
government knew and was told about the Westminster officials' odd sexual behaviors. The
CIA and
KGB even knew about what was going on and hoped to blackmail the VIP pedophile ring in
exchange for information.
Even the High Court judge to the Queen,
Lord Justice Fulford, tried to lower the age of consent to four. Absolutely sick and
twisted -- four years old.
Put simply this is utterly disgusting.. Children are being put below politics, because
psychopaths are in control and believe that they are
entitled to abuse people . It's even alleged that they used
children's foster homes as a supply to fulfill their sick urge.
Actor and comedian Russell Brand did a very good expose on the UK Pedophilia scandal. So did
Australia's
60 minutes and another Australian comedy show called "The Last Leg". Using comedy to shed
light on a dark subject is an old practice made well known by comedian's like George Carlin .
... ... ...
There was a documentary set to be aired called the "Conspiracy of Silence" on the Discovery
Channel, but that documentary was canceled at the last minute and all copies bought up until a
copy leaked online years later...showing the influence these pedophiles have on the media. Not
only that but several people were threatened, murdered or imprisoned to keep this sick secret
hushed up.
Conspiracy of Silence BANNED TV Documentary :
... ... ...
The State Department
DYNCORP was found to have trafficked children, and continued to receive government
contracts. Congresswoman Cynthia Mckinney asked then Secretary of Defense Donald Rumsfeld why
this corporation continues to receive funding. His answer admitted abuse happened.
Further information on DYNCORP's trafficking of children can be found from a whistle-blower,
Kathryn Bolkovac - a human rights investigator who saw UN officials, military and state
department officials involved in human trafficking in Bosnia. Her story was then turned into a
Hollywood movie called "The
Whistleblower."
Pedophilia has come up in the mainstream a lot lately, as PizzaGate came to light fairly recently and more and more pedophile
rings are being exposed, some of which have involved government officials.
If you're unfamiliar with PizzaGate, it refers to a wide range of email correspondence leaked from the DNC that allegedly unearthed
a high-level elitist global pedophile ring in which the U.S. government was involved.
It emerged when Wikileaks released tens of thousands of emails from the former White House Chief of Staff under Bill Clinton,
John Podesta, who also served as Hillary Clinton's campaign manager. It's because of these emails that many claimed John Podesta
was a part of these child trafficking rings as well.
Since then, conspiracy theorists and world renowned journalists alike have been looking into the topic and speculating how big
this problem could be and who could be involved within these underground rings.
For example, award winning American journalist Ben Swann explained the Pizzagate controversy in detail on mainstream news:
Not long after, Swann's entire online personal brand and accounts had all but vanished from the
internet. Why?
More recently, there's been some speculation that these pedophile rings could stretch into pop culture, potentially involving
more pedophilia scandals and symbolism within the media. The question here is: Is there any tangible evidence of all of this, or
is it mere speculation?
Pedophilia Symbolism
I'd like to begin by identifying the symbols that are used by pedophiles to identify themselves and make their requests within
underground networks. Here is a link
to a declassified FBI document illustrating the symbols and images used by pedophiles to "identify their sexual preferences."
So, how do these images relate to pizza? First of all, before PizzaGate was even suggested, "cheese pizza" was used as
a code word to discuss "child porn" (hint: it's the same initials, CP). A quick Google search will reveal that the market for underage
sex workers is fairly substantial, and you can even see a 2015 post on
Urban Dictionary that explains
how "cheese pizza" is used as code for child porn.
As per PizzaGate and the symbolism, it all started when multiple emails involving John Podesta, his brother, and Hillary Clinton
simply didn't add up. Strange wording discussing pizza and cheese left readers confused, and because the emails made so little sense,
it led many to suspect that they were code for something else.
For example, this email addressed to John Podesta
reads: "The realtor found a handkerchief (I think it has a map that seems pizza-related)," and
this email sent from John Podesta asks: "Do you
think I'll do better playing dominos on cheese than on pasta?" There are many more examples, and I encourage you to go through
the Wikileaks vault to explore.
On top of that, the DNC was associated with two pizza places, Comet Ping Pong and Besta Pizza, which use very clear symbols of
pedophilia in their advertising and have strange images of children and other ritualistic type images and suspicious videos on their
social media accounts – which has since been made private given the controversy over the images and their link to the DNC, but again,
a quick Google search will show you what those images looked like. You can read the email correspondence between John Podesta and
Comet Ping Pong's owner, James Alefantis,
here .
They know, however, that they've been conned, played, and they're absolute fools in the
game.
Thank you Mr. Black for the laugh this morning. They know exactly what they have been
doing. Whether it was deregulating so that Hedge funds and vulture capitalism can thrive, or
making sure us peons cannot discharge debts, or making everything about financalization. This
was all done on purpose, without care for "winning the political game". Politics is
economics, and the Wall Street Democrats have been winning.
For sure. I'm quite concerned at the behavior of the DNC leadership and pundits. They are
doubling down on blatant corporatist agendas. They are acting like they have this in the bag
when objective evidence says they do not and are in trouble. Assuming they are out of touch is
naive to me. I would assume the opposite, they know a whole lot more than what they are letting
on.
I think the notion that the DNC and the Democrat's ruling class would rather lose to a
like-minded Republican corporatist than win with someone who stands for genuine progressive
values offering "concrete material benefits." I held my nose and read comments at the kos straw
polls (where Sanders consistently wins by a large margin) and it's clear to me that the
Clintonista's will do everything in their power to derail Bernie.
Keynes' "animal spirits" and the "tragedy of the commons" (Lloyd, 1833 and Hardin, 1968)
both implied that economics was messier than Samuelson and Friedman would have us believe
because there are actual people with different short- and long-term interests.
The behavioral folks (Kahnemann, Tversky, Thaler etc.) have all shown that people are even
messier than we would have thought. So most macro-economic stuff over the past half-century has
been largely BS in justifying trickle-down economics, deregulation etc.
There needs to be some inequality as that provides incentives via capitalism but
unfettered it turns into France 1989 or the Great Depression. It is not coincidence that the
major experiment in this in the late 90s and early 2000s required massive government
intervention to keep the ship from sinking less than a decade after the great unregulated
creative forces were unleashed.
MMT is likely to be similar where productive uses of deficits can be beneficial, but if the
money is wasted on stupid stuff like unnecessary wars, then the loss of credibility means that
the fiat currency won't be quite as fiat anymore. Britain was unbelievably economically
powerfully in the late 1800s but in half a century went to being an economic afterthought
hamstrung by deficits after two major wars and a depression.
So it is good that people like Brad DeLong are coming to understand that the pretty
economic theories have some truths but are utter BS (and dangerous) when extrapolated without
accounting for how people and societies actually behave.
I never understood the incentive to make more money -- that only works if money = true value
and that is the implication of living in a capitalist society (not economy)–everything
then becomes a commodity and alienation results and all the depression, fear, anxiety that I
see around me. Whereas human happiness actually comes from helping others and finding meaning
in life not money or dominating others. That's what social science seems to be telling us.
" He says we are discredited. Our policies have failed. And they've failed because
we've been conned by the Republicans."
That's welcome, but it's still making excuses. Neoliberal policies have failed because
the economics were wrong, not because "we've been conned by the Republicans." Furthermore, this
may be important – if it isn't acknowledged, those policies are quite likely to come
sneaking back, especially if Democrats are more in the ascendant., as they will be, given the
seesaw built into the 2-Party.
Might be right there. Groups like the neocons were originally attached the the left side of
politics but when the winds changed, detached themselves and went over to the Republican right.
The winds are changing again so those who want power may be going over to what is called the
left now to keep their grip on power. But what you say is quite true. It is not really the
policies that failed but the economics themselves that were wrong and which, in an honest
debate, does not make sense either.
"And they've failed because we've been conned by the Republicans.""
Not at all. What about the "free trade" hokum that DeJong and his pal Krugman have been
peddling since forever? History and every empirical test in the modern era shows that it fails
in developing countries and only exacerbates inequality in richer ones.
That's just a failed policy.
I'm still waiting for an apology for all those years that those two insulted anyone who
questioned their dogma as just "too ignorant to understand."
It's intriguing, but two other voices come to mind. One is Never Let a Serious Crisis Go To
Waste by Mirowski and the other is Generation Like by Doug Rushkoff.
Neoliberalism is partially entrepreneurial self-conceptions which took a long time to
promote. Rushkoff's Frontline shows the Youtube culture. There is a girl with a "leaderboard"
on the wall of her suburban room, keeping track of her metrics.
There's a devastating VPRO Backlight film on the same topic. Internet-platform
neoliberalism does not have much to do with the GOP.
It's going to be an odd hybrid at best – you could have deep-red communism but enacted
for and by people whose self-conception is influenced by decades of Becker and Hayek? One place
this question leads is to ask what's the relationship between the set of ideas and material
conditions-centric philosophies? If new policies pass that create a different possibility
materially, will the vise grip of the entrepreneurial self loosen?
Partially yeah, maybe, a Job Guarantee if it passes and actually works, would be an
anti-neoliberal approach to jobs, which might partially loosen the regime of neoliberal advice
for job candidates delivered with a smug attitude that There Is No Alternative. (Described by
Gershon). We take it seriously because of a sense of dread that it might actually be powerful
enough to lock us out if we don't, and an uncertainty of whether it is or not.
There has been deep damage which is now a very broad and resilient base. It is one of the
prongs of why 2008 did not have the kind of discrediting effect that 1929 did. At least that's
what I took away from _Never Let_.
Brad DeLong handing the baton might mean something but it is not going to ameliorate the
sense-of-life that young people get from managing their channels and metrics.
Take the new 1099 platforms as another focal point. Suppose there were political measures
that splice in on the platforms and take the edge off materially, such as underwritten
healthcare not tied to your job. The platforms still use star ratings, make star ratings seem
normal, and continually push a self-conception as a small business. If you have overt DSA plus
covert Becker it is, again, a strange hybrid,
Your comment is very insightful. Neoliberalism embeds its mindset into the very fabric of
our culture and self-concepts. It strangely twists many of our core myths and beliefs.
This is nothing but a Trojan horse to 'co-opt' and 'subvert'. Neoliberals sense a risk to
their neo feudal project and are simply attempting to infiltrate and hollow out any threats
from within.
There are the same folks who have let entire economics departments becomes mouthpieces for
corporate propaganda and worked with thousands of think tanks and international organizations
to mislead, misinform and cause pain to millions of people.
They have seeded decontextualized words like 'wealth creators' and 'job creators' to
create a halo narrative for corporate interests and undermine society, citizenship, the social
good, the environment that make 'wealth creation' even possible. So all those take a backseat
to 'wealth creator' interests. Since you can't create wealth without society this is some
achievement.
Its because of them that we live in a world where the most important economic idea is
protecting people like Kochs business and personal interests and making sure government is not
'impinging on their freedom'. And the corollary a fundamental anti-human narrative where
ordinary people and workers are held in contempt for even expecting living wages and conditions
and their access to basics like education, health care and living conditions is hollowed out
out to promote privatization and become 'entitlements'.
Neoliberalism has left us with a decontextualized highly unstable world that exists in a
collective but is forcefully detached into a context less individual existence. These are not
mistakes of otherwise 'well meaning' individuals, there are the results of hard core ideologues
and high priests of power.
Two thumbs up. This has been an ongoing agenda for decades and it has succeeded in
permeating every aspect of society, which is why the United States is such a vacuous,
superficial place. And it's exporting that superficiality to the rest of the world.
I read Brad DeLong's and Paul Krugman's blogs until their contradictions became too
great. If anything, we need more people seeing the truth. The Global War on Terror is into its
18th year. In October the USA will spend approximately $6 trillion and will have accomplish
nothing except to create blow back. The Middle Class is disappearing. Those who remain in their
homes are head over heels in debt.
The average American household carries $137,063 in debt. The wealthy are getting richer.
The Jeff Bezos, Warren Buffett and Bill Gates families together have as much wealth as the
lowest half of Americans. Donald Trump's Presidency and Brexit document that neoliberal
politicians have lost contact with reality. They are nightmares that there is no escaping. At
best, perhaps, Roosevelt Progressives will be reborn to resurrect regulated capitalism and debt
forgiveness.
But more likely is a middle-class revolt when Americans no longer can pay for water,
electricity, food, medicine and are jailed for not paying a $1,500 fine for littering the
Beltway.
A civil war inside a nuclear armed nation state is dangerous beyond belief. France is
approaching this.
The American takeover of the Brazilian presalt oil continues; this time, the usurpers who
toppled legitimate president Dilma Rousseff are going to sell commercial secrets of Brazilian
oil giant Petrobras to the DoJ, in exchange for R$ 2.5 billion (circa US$ 0.63 million) to
found a NGO that will effectively work as a parallel Police State in the country:
"At this point in the cycle, a pickup in inflation will generally lead to corporate margin
compression, which is potentially more supportive of maintaining a long duration stance,"
Bartolini, lead portfolio manager for U.S. core bond strategies, said after the jobs figures.
He sees annual CPI remaining around this report's consensus of 1.6 percent -- the slowest since
2016 -- for a while.
Benchmark 10-year yields enter the week at 2.63 percent, close to the lowest level in two
months. In the interest-rate options market, traders have been ramping up positions that target
lower yields in five- and 10-year notes.
DougDoug,
The Fed is pretty much DONE with rate hikes, as paying the INTEREST on, 22 Trillion in
Debt will get,.. UGLIER and UGLIER ! Especially with, all the new,.. Tax and SPEND Demo'Rat
Liberals, coming into, Congress ! "We the People", will be,.. TOAST !!
I'm HOLDING, my "Floating Rate" senior secured, Bond CEF's and my Utility and Tech, CEF's,
too ! Drawing NICE Dividends,.. Monthly !
The World is NOT ending for, the USA,.. THANKS,.. to Trump !
NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is launching a review of the main set of rules governing stock
trading, opening the door to the biggest potential changes in a decade-and-a-half, the head of the agency said on Friday.
The possible changes are aimed at making it easier to trade illiquid stocks, making more trading information available to investors,
and improving the speed and quality of public data feeds needed for trading.
The SEC in 2005 adopted a broad framework called Regulation National Market System that was largely aimed at ensuring retail investors
get the best price possible and preventing trades from being executed at prices that are inferior to bids and offers displayed on
other trading venues.
Since then, faster, more sophisticated technology has put a bigger focus on rapid-fire, high-speed trading. There has also been
an influx of new electronic stock exchanges, fragmenting liquidity and increasing costs for brokers around exchange connectivity
and market data needed to fuel algorithmic trading.
"It is clear that the market challenges we faced in the early 2000s are not the same as the issues that we confront over a decade
later," Jay Clayton, chairman of the SEC, said at an event in New York.
To get a better grasp of current market issues, the SEC held a series of roundtable discussions with industry experts last year
that led to potential rule-making recommendations around thinly-traded securities, combating retail fraud, and market data and market
access, Clayton said.
Some areas the SEC is looking at include:
- Increasing the speed of, and adding more stock price information to, public data feeds to help make them more competitive against
the more expensive, private data feeds sold by most stock exchanges.
- Allowing thinly-traded securities to trade only on their listing market, rather than on all 13 U.S. stock exchanges.
- Improving disclosure around reverse mergers.
- Adjusting the quote size of some high-priced stocks.
The 2019 review follows an active 2018 for the SEC.
The regulator adopted rules to increase transparency around broker-dealer stock order routing and private off-exchange trading
venues. It also ordered a pilot program to test banning lucrative rebate payments that exchanges make to brokers for liquidity-adding
stock orders.
judi 1 hour ago What about Naked Shorting? It is out of control and no one including the SEC is doing anything to stop it??
Tara 41 minutes ago The rules implemented in 2005 did nothing to help retail traders with accounts under 25K.
When are you going to address the real issue of stock price manipulation? Also, bring back the uptick rule. And while you are at
it, we need rules to punish dishonest analysts who publish opinions of price that are so far off the charts, they never reflect actual
earnings often announced days later.
Rob 38 minutes ago They are going to make it more in favor of big boys aka the banks
"... Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously."" ..."
"... "Erie Locomotive Plant Workers Strike against Two-Tier" [ Labor Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it would impose a two-tier pay system that would pay new hires and recalled employees up to 38 percent less in wages, institute mandatory overtime, reorganize job classifications, and hire temporary workers for up to 20 percent of the plant's jobs. ..."
"... Workers voted on Saturday to authorize the strike." • Good. Two-tier is awful, wherever found (including Social Security). ..."
"[S]hopping with T was different. When she walked into a store, the employees greeted her by name and began to
pull items from the racks for her to try on. Riding her coattails, I was treated with the same consideration, which is how I
wound up owning a beautiful cashmere 3.1 Philip Lim sweater that I had no use for and rarely wore, and which was eventually
eaten by moths in my closet.
Buying beautiful clothes at full retail price was not a part of my childhood and it is not a part of my life now. It
felt more illicit and more pleasurable than buying drugs. It was like buying drugs and doing the drugs, simultaneously.""
"Erie Locomotive Plant Workers Strike against Two-Tier" [
Labor
Notes ]. "UE proposed keeping the terms of the existing collective bargaining agreement in
place while negotiating a new contract, but Wabtec rejected that proposal. Instead it said it
would impose a two-tier pay system that would pay new hires and recalled employees up to 38
percent less in wages, institute mandatory overtime, reorganize job classifications, and hire
temporary workers for up to 20 percent of the plant's jobs.
Workers voted on Saturday to
authorize the strike." • Good. Two-tier is awful, wherever found (including Social
Security).
"... To borrow Henry Ford's quote: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." ..."
"... Note to Larry, please follow this logic: Money is Fiat; Fiat is cooperation; Cooperation is fiscal control; and fiscal control is civilization. Nowhere in this chain of thought does debt; interest; austerity; or any of your other little techniques even exist. Those bizarre ideas exist in more primitive thinking about power and slavery and savage exploitation. You know the routine. ..."
Lawrence Summers, according to Lawrence Summers, is a "serious economist." He has just written an op-ed in the
Washington Post in which he seriously explains why Modern Money Theory -- as proposed by "fringe economists," as he calls them
-- is a recipe for disaster. I am going to leave it to the "fringe economists" to rebut Mr. Summers; (I'm confident that professors
Wray, Kelton, Tcherneva, Tymoigne, and Fullwiler can take care of that job quite easily). What I want to consider is something even
more fundamental: How is it that someone who presents himself as a "serious economist" can get away with speaking incoherently while
expecting us -- the everyday citizens of America -- to take what he is saying as true?
Here is Summers' first point about why MMT is a recipe for disaster: "Modern monetary theory holds out the prospect that somehow
by printing money, the government can finance its deficits at zero cost. In fact, in today's economy, the government pays interest
on any new money it creates, which takes the form of its reserves held by banks at the Federal Reserve. Yes, there is outstanding
currency in circulation, but because that can always be deposited in a bank, its quantity is not controlled by the government. Even
money-financed deficits cause the government to incur debt."
Yes, that's very clear and logical, isn't it? The government "prints" money and then pays interest on it? The interest it pays
become the "reserves" in the Federal Reserve system? And what exactly does that have to do with "outstanding currency in circulation"?
And what is it exactly that happens when that "outstanding currency" gets deposited in a bank? And if "money-financed" deficits cause
the government to incur debt, maybe we should think about financing our deficits with something other than money? These are all serious
economic questions.
Summers' incoherent rambling reminds me of another case of incoherent ramblings reported, coincidentally, in the same edition
of the Washington Post: Donald Trump's CPAC speech as evaluated by columnist
Eugene Robinson . Here are a few instances of Trump apparently giving his best impersonation of Lawrence Summers:
"When the wind stops blowing, that's the end of your electric. Let's hurry up. 'Darling -- Darling, is the wind blowing today?
I'd like to watch television, Darling.' No, but it's true . Now Robert Mueller never received a vote, and neither did the person
that appointed him. And as you know, the attorney general says, 'I'm going to recuse myself. I'm going to recuse.' And I said, why
the hell didn't he tell me that before I put him in? How do you recuse yourself?"
Lawrence Summers' second point about the fallacy of MMT goes like this: "Contrary to the claims of modern monetary theorists,
it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience
of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging
markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once to avoid
the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such an inflation tax.
If this limit is exceeded, hyperinflation will result."
Really, that all must be true, because Summers is a serious economist. Didn't really know there were third world countries that
have been practicing Modern Money Theory for a long time -- but obviously it didn't work out well for them. And, clearly, you can't
tax people more than they possess, so that proves it: hyperinflation!
Donald Trump had more to ramble about as well: "And they showed -- they showed from the White House all the way down There were
people. Nobody has ever seen it. The Capitol down to the Washington Monument -- people. But I saw pictures that there were no people.
Those pictures were taken hours before . They had to walk with high-heels, in many cases. They had to walk all the way down to the
Washington Monument and then back. And I looked, and I made a speech, and I said, before I got on -- I said to the people who were
sitting next to me, 'I've never seen anything like this.'"
Lawrence Summers' third denunciation of MMT is as follows: "Modern monetary theorists typically reason in terms of a closed economy.
But a policy of relying on central bank finance of government deficits, as suggested by modern monetary theorists, would likely result
in a collapsing exchange rate. This would in turn lead to increased inflation, increased long-term interest rates (because of inflation),
risk premiums, capital fleeing the country, and lower real wages as the exchange rate collapsed and the price of imports soared."
But of course! That's all obvious, isn't it? Mr. Summers is just pointing it out. Exchange rates would collapse. It's the most
obvious thing any reader of his argument can easily grasp and understand -- and that means "risk premiums" too (which clearly nobody
wants).
At one point in his CPAC speech Donald Trump says this: "You know I'm totally off-script right now. And this is how I got elected,
by being off-script. True. And if we don't go off-script, our country is in big trouble, folks. Because we have to get it back."
What strikes me is that our country is, indeed, in big trouble -- but it's because the "script" that's being read to us by our
political leaders, commentators, and "serious economists" is nothing more than an incoherent babbling.
"somehow by printing money" is a significant tell -- the stupider the clichéd metaphor, the more incoherent the economics.
Summers in using that cliche is confusing currency with money, which error really ought to embarrass him, but obviously does not.
Summers' Op-Ed is bafflegab of the highest order. It's sad that that's what passes for informed commentary these days, but
I think for monetary issues that's always been the case. Any school that dares to teach monetary economics is defunded, exiled
to 2nd or 3rd tier status.
There has been a lot of pushback on this Op-Ed and Krugman's from unexpected sources (Forbes, Bloomberg). This response is
especially good:
Also, demonstrating what a careerist Krugman is: Paul Krugman to Bernard Lietaer: "Never touch the money system"
https://www.youtube.com/watch?v=Q6nL9elK0EY . (short – 44 sec.)
Krugman has been a member of the lobbyist group for the central bankers, the Group of Thirty (www.group30.org) ever since it
was founded by the Rockefeller Foundation back in 1978.
I read it 2 days ago and felt no compulsion to praise. Harvey includes some Summersian bullshit of his own. For example:
"Just as the President's daughter said days ago, people like to work. Quite right."
Harvey clearly does not live on the beach where the slacker-surfer lifestyle dominates. Likewise, it seems likely that he has
never had to manage human resources in a large organization where more than just a few workers are obviously not liking what they
are doing.
The biggest barrier to full-employment is that not everybody wants to work or at least work very hard. That causes co-worker
resentment, an unproductive workplace climate, and if ignored long enough, it can impair productivity to the extent that everybody
becomes out of work.
So, you don't consider surfing work? Perhaps you're right, but I don't consider lack of enthusiasm for bullshit jobs evidence
that people don't want to work.
The biggest barrier to full-employment is that not everybody wants to work or at least work very hard.
Thank God for those people, it makes my life so much easier. You wouldn't like working in a world where everyone and anyone
could replace you.
I've never worked in an environment where everyone pulled their own weight, but it's also true that we tend to hold others
to a higher standard than we hold ourselves.
wetsuits cost hundreds of dollars, my cheapest new board was an ellington for $400 like 15 years ago (no, it can't really be
that long ago?) My brothers quiver is easily worth $10,000, which is lucky for me because he can't ride them all at once. Not
to say there isn't a large transient population, beaches have bathrooms and showers, but the surfer/slacker may not be a real
thing?
also https://brandongaille.com/22-surfing-industry-statistics-trends/
FTL
#12. In a survey about surfing in the United Kingdom, surfers were disproportionally represented in managerial, professional,
or business-owning employment classes. Nearly 80% of surfers fit into these employment categories, compared to just 54% of the
general population. (Surfers Against Sewage)
#13. Surfers also have a higher level of education attainment compared to the general population. In the UK, 64% of surfers
reported having a higher education, compared to just 27% of the general population. (Surfers Against Sewage)
I thought it was notably good too, and clearly written. Agree or not, what he was saying was not in question, unlike Summers's/
Krugman's slippery stuff.
Larry Summers is on a list of people I've created where if I read or hear something they write or say and agree with it, I
go back and check my premise on said topic.
Have never had to do so with Summers. This entire editorial reeks of Upton Sinclair's famous quote "it's impossible to get
someone to understand something when his paycheck depends on him not understanding it."
John Harvey in Forbes takes Summers, Rogoff, and clown prince Krugman down point by point as well.
Because I have only a single college course in Macro (taken 40 years ago), I am hardly any kind of economist, certainly not
a serious one. But I do have some ability to parse a sentence and figure out the meaning–usually. Thanks for pointing out that
the garble I can make no sense of is just garble. I thought I was just one of the uninitiated and ignorant masses.
I am curious about the audience Summers had in mind when he wrote or uttered this. Who are they?
I think the important information is conveyed to his intended audience via the title – the rest of it is filler, to justify
printing it.
You're not alone in your interpretation of his column. I have enough confidence in my reading comprehension abilities to state
affirmatively that his column is full of Thomas Friedman-like gibberish.
In the UK, we have a what you may call reverse Churchill problem, i.e. Churchill provokes mixed emotions in the UK, but is
revered in the US. In the US, Summers provokes mixed emotions, but is revered in the UK, at least by the usual neo-liberal suspects.
God Forbid. The family blogger has even been floated as a potential successor to Carney, probably a ploy by his vermin acolytes
at the FT.
You will be delighted to hear that Summers' vicar on earth, or at least in the UK, New Labour family blogger Ed Balls was ousted
from the Commons and some of public life by Andrea Jenkins. Jenkins is an Ultra Brexiteer, but History will be kind to her for
sparing the long-suffering UK public from more of Balls. Oh, yes, she will be elevated to the Pantheon for that ouster alone.
Larry Summers, famous for stating that there is a "good economic case" to be made for exporting all our toxic waste to Africa.
Larry Summers, famous for claiming that there aren't more women in STEM fields because "girls are bad at math." Larry Summers,
beloved of neo-liberals everywhere.
Abstract: In OECD countries over the period 1980–2017, countries with lower debt-to-GDP ratios responded to financial distress
with much more expansionary fiscal policy and suffered much less severe aftermaths. Two lines of evidence together suggest
that the relationship between the debt ratio and the policy response is driven partly by problems with sovereign market access,
but even more so by the choices of domestic and international policymakers. First, although there is some relationship between
more direct measures of market access and the fiscal response to distress, incorporating the direct measures attenuates the
link between the debt ratio and the policy response only slightly. Second, contemporaneous accounts of the policymaking process
in episodes of major financial distress show a number of cases where shifts to austerity were driven by problems with market
access, but at least as many where the shifts resulted from policymakers' choices despite an absence of difficulties with market
access. These results point to a twofold message: conducting policy in normal times to maintain fiscal space provides valuable
insurance in the event of financial crises, and domestic and international policymakers should not let debt ratios determine
the response to crises unnecessarily. [emphasis added]
If only one of the authors had been in a position to shape the administration's response in early 2009
Not to mention the article published here on NC back in 2013:
The very thing that the former endowment chiefs had worried about and warned of for so long then came to pass. Amid plunging
global markets, Harvard would lose not only 27 percent of its $37 billion endowment in 2008, but $1.8 billion of the general
operating cash – or 27 percent of some $6 billion invested. Harvard also would pay $500 million to get out of the interest-rate
swaps Summers had entered into, which imploded when rates fell instead of rising. The university would have to issue $1.5 billion
in bonds to shore up its cash position, on top of another $1 billion debt sale. And there were layoffs, pay freezes, and deep,
university-wide budget cuts.
Churchill is revered in America by people whose memory only goes back to 1941 and even then, only plays the highlights.
This American thinks he was a war criminal many times over and in a just world would have died in a prison cell, but I recognize
I'm the minority in my country
I don't believe anyone is completely useless. Al Gore made a follow-up film "An Inconvenient Sequel" which mentioned, inter
alia, the likely failure of COP21 because India needed hundreds of gigawatts of new energy and the banks would dun them 13% on
loans plus 2% for the exchange if they opted for green energy. Gore got onto Summers and a deal was thrashed out that was satisfactory
to India. The country then signed the agreement along with the rest of the world. A man with that kind of clout with the hooligans
in banking as valuable.
I have considered Larry's presence in any political campaign the kiss of death, since Obama first ran for president. Fair warning,
contenders for 2020! You do not want to be seen so much as shaking Larry's hand in public!
MMT is what we do. We cycle like MMT says we should, we tax and sequester like MMT says we should, we devalue once a generation
as MMT says we should. We are MMT, Larry SUmmers is simply faking it to protect the Keynesian form of MMT. The difference between
Keynes and MMT? MMTers have no assumption about smooth trajectories.
This is all the most useless debate among economists I have seen, and I have watched a ton of useless debates in the ten years
of the last 'MMT' cycle. So, let us get on with the next MMT cycle, starting with a period of extraordinary means, followed by
Tax and sequester, then if we are lucky, we get a devaluation, in proper MMT order.
Bingo this guy gets it, we already print off a bunch of money to finance spending, lower interest rates to prop up spending
and decrease debt costs, etc. Except the way we do it now benefits the rich by forcing the rest of us to spend spend spend because
our money does nothing in the savings account. Meantime, the money gets pushed into stocks and bonds which benefits only a certain
class.
This essentially paves the way for MMT, which is just to reallocate who gets the benefit of this money printing from the rich
to the rest of us.
The current system clearly doesn't work, however, and the idea that we can just spend money we make up out of thin air as a
stable plan is nonsense. Just like it was in 2008, and just like it is now with a 23 trilliion national debt.
We want medicare for all, increase the payroll tax and a small income tax, and that will do it. Charge everyone a "premium"
for health coverage in their pay check that is far cheaper than what it is now, or let employers pay for it and get a tax deduction.
No need to print monopoly money for anyone–rich or poor. We are wealthy enough to afford this stuff.
This is really no different from the dust big tobacco kicked up for 30 years to deny cancer, or big oil and climate denialism:
there are a bunch of greedy b******s out there who have been making a killing off of looting, asset stripping and environmental
and social market externalities doing all they can to milk the last dollar from a completely rotten system.
Summers is pitching in to obscure perceptions of the rot that serves him so well.
Stop any significant % of the war machine spending $1T+ per year and spend it at home in the US on crushing the price of housing
and providing a jobs guarantee; you wouldn't be able to run from the economic boom anywhere
Look at what he did to Harvard! Wrecked its endowment by a stupid interest rate swaps bet. Harvard had to get rid of hot breakfasts
and an expansion in Alford as a result.
Disclaimer: I'm no economist as my degree is in electrical engineering.
I prefer to look at MMT as somewhat similar to a company issuing additional common and preferred stock.
The company, in this case is a government.
In this view, common stock issuance (that pays no dividend) is new currency issued and preferred stock issuance = US treasury
certificates that pay interest ( similar to a preferred stock dividend ).
One can argue that "the market" will not penalize a company (or government) when it raises funds via new stock issuance, IF
the proceeds are perceived will be invested wisely.
But if the new stock issuance proceeds are perceived to be used foolishly than one would expect the issuing "company" will
see the value of their preferred and common stock drop (as inflation decreases the value of its currency).
For example, if MMT minded US government issues new monetary "common/preferred stock" (creates new currency and issues treasury
securities) and uses this purchasing power to improve US infrastructure, improve the bloated USA healthcare/financial industries
or educates its people more cost effectively, then the global market could be completely happy with this use of the world's resources.
And the relative value of the US currency might be stable or even increase.
On the other hand, if the MMT minded US government issues more currency/securities and funds a destructive war, one might expect
the existing global holders of the USA's currency and securities to be disappointed and push the relative value down.
Just as a corporation has to have some sort of resources (IP, customer list, inventories, market dominance, new products in
development) that are valued for it to issue stock, a MMT minded government must be viewed as having resources and power.
For example, Haiti is a sovereign nation with its own currency, the Haitian gourde.
But I suspect Haiti will have a very difficult time using MMT (issuing gourde denominated securities) to improve its economy
as it is perceived has having few resources and a prior history of resource squandering corruption (Papa/Baby Doc Duvalier) .
I betcha that Haiti's debts are not in Gourdes but in Euros, Pounds, and Dollars. Most US debit to itself and foreign countries
in our own currency. As Mosler points out, inflation often hurts our trading partners worse than it does us.
I share your analogy 100% and I think this is the right way to present monetary theory (I don't want to say "modern" because
it is more than a century that it works like this already). Although, I would add a twist : the government also distributes dividends
in non monetary terms, by providing, say, free roads, free education or free healthcare ( In the preceding century, there were
actually railroads issuing bonds that paid interest with free tickets !)
Of course, the amount of "paid in kind" dividend is similar whether one holds one dollar in the pocket or a million, so it is
not popular with the wealthy class.
I think it is an important component to point out because one frequently encounters people who frequently complain that a dollar
today is worth less than a dollar yesterday, but forget that between yesterday and today, the government provided services to
the dollar holder regardless of him/her earning an income and paying taxes.
I was going to ask the serious question 'how did Larry Summers get to his esteemed position in the first place ?' Nothing
I've ever read by or about him over the years has indicated that he is anything but a second rate bluffer with a talent for impressing
other bluffers, and yet in many quarters he seems to be held in significant awe.
But mindful of the rules here about 'setting homework' I looked up his career in Wikipedia. It seems he was quite influential
in developmental economics, which no doubt led to his gig in the World Bank. So someone who is considered a Harvard expert in
development economics writes:
Lawrence Summers' second point about the fallacy of MMT goes like this: "Contrary to the claims of modern monetary theorists,
it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience
of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging
markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once
to avoid the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such
an inflation tax. If this limit is exceeded, hyperinflation will result."
If someone talking in a bar said that, you'd consider him an idiot, or at best, someone who just hasn't read very much. And
yet a Harvard professor can, without embarrassment, write such nonsense. And still be taken seriously. It really is unbelievable.
The argument, shorn of the beebling and handwaving, does make some sense. A Haitian government, say, that tries to issue more
gourdes (HTG) to pay off a US$ (or ECU, or anything foreign) debt is going to find out that no number of gourdes will be enough.
It will have to be US$, and they will only be acquired on the terms the US$ creditor specifies. This has been true ever since
independence, when the whole world insisted that the Haitians buy themselves back from France.
They can used gourdes to mobilize their own efforts and their own resources, and hope to achieve something with those.
"A Haitian government, say, that tries to issue more gourdes (HTG) to pay off a US$"
That is a government creating its own currency, which it then has to exchange for another currency. That is roughly what Germany
was forced to do with after the massive WWI debts were forced on it and it went through hyperinflation. The issue is owing money
in another currency. MMT economists have said again and again that countries should try to avoid, if they can, owing money in
a foreign currency. Obviously, many poor countries have no option. Different than a government issuing bonds in its own currency.
If the Haitian government injected its own currency into the economy, then issued bonds in its own currency as a means of reaching
its central bank's targeted interest rate, and Haiti owed money in its own currency, that would be a good comparison to our situation.
Summers doesn't understand (or pretends not to) the problem of bringing up hyperinflation in places like Peru and Venezuela, or
the problems poor countries face in regards to external debt, versus what the situation is in the US. We are in no way comparable
to those countries or situations. It's absurd, and he knows better, or he should.
In regards to the debt of developing and underdeveloped countries; the big issue is the need for a massive debt write down
(among a host of other things). On that, Éric Toussaint's work is hugely important.
Even in this case -- the point is how much of your own currency can you create? The runaway debt inflation is just getting
the information the hard way. And it is irreversible, unless you can send out assassins to kill your off-shore debt holders.
If you can come up with a good idea of how much you can safely print, why borrow it? If there was just some academic profession
that could come up with useful answers to that question
"Even in this case -- the point is how much of your own currency can you create? "
This has been discussed many times. The broad limit is the productive capacity of the economy. Are we at full employment, are
we at full productive capacity? If the change in the money stock is proportionally larger than the value of the goods and services
created with that money, then you could have inflation. Could, because inflation is more complex than that. If the government
were to create a bunch of money (forget private credit creation for a second since we can't control that much right now), but
that money went to rich people that hoarded it, if it was used by companies to buy up their own shares, if it was used to buy
goods from other countries, if it was put in a tax shelter, among countless other things, that money wouldn't circulate around
the economy and wouldn't cause much inflation. It is possible for the government to create lots of money and for deflation to
set it. Happened after the crash in 1929, that was Friedman's argument as to why the Great Depression happened. He said that even
though the Fed was creating lots of money, the economy was contracting at a greater rate and so in real terms the money supply
was shrinking. Steve Keen responded to that and showed the problems with that argument, but this dynamic is well known. Private
banks creating credit money are a part of this and the crash in 1929 too. After the crash in 2007/2008, it is pretty well established
that while the government did create a lot of money, it didn't create enough and it didn't channel to the parts of the economy
that could have led to a recovery for working people. So, not only how much money is created, but where that money goes in the
economy, whether or not more stuff can be produced, expectations of the future, among other things, will determine inflation.
"If you can come up with a good idea of how much you can safely print, why borrow it? If there was just some academic profession
that could come up with useful answers to that question "
Not trying to be rude, but have you actually read MMT literature? Cause all this stuff is addressed. We don't borrow money
in the way you think. The government, the US government, doesn't need to borrow or tax in order to spend. The particular way we
have chosen to create money was developed decades ago, when we were on the gold standard and had either the value of dollars fixed
to an ounce of gold, or later all currencies fixed to the dollar which could be exchanged in a given amount for gold. We aren't
on gold anymore. We could just have the government spend the money into the economy and use taxes to manage inflation. We don't
have to issue bonds, and Wray I believe has said that states that have control over their own currencies shouldn't issue bonds
in this way anymore. But those bonds come with no risk at all (the government will not default on the bonds unless forced to by
politicians) and they accrue interest, so investors like them, especially when there is uncertainty. But we don't have to issue
bonds AFTER the government spends to manage inflation. My understanding is that the Fed is the buyer of last resort on the secondary
market for bonds, and those that take part in bond auctions are required to actually bid. I don't see why investors would all
of a sudden not like US bonds (it would have to be something with geopolitical implications) but even if they did, the situations
could be dealt with, and again, we don't need to even issue bonds in order to spend anyway. That is a radically different situation
than Haiti owing money in another currency and being massively in debt to other countries in other currencies, with little ability
to export value added goods that have strong terms of trade. Read up on the amount of debt owed by Haiti to France since the Haitian
revolution, and the amount of debt paid but still owed by developing and underdeveloped countries in the post-WWII era. You think
Summers cares? How in the world is that comparable to the US in 2019? It is ridiculous, and Summers knows it.
That is true and it's one of the key factors that can lead to hyperinflation. However, Summers isn't talking about that scenario.
Nothing in his argument mentions foreign currency denominated debt. He's simply claiming that there is some upper limit on deficit
spending beyond which the economy will automatically tip over into hyperinflation. I'd love to see him point out one instance
in history where that's happened without external factors like foreign currency debt playing a role. The closest thing I can think
of is credit bubbles, but those are self-correcting in the long run and can't spiral out of control like hyperinflation.
Wow, I'd no idea of that. Whatever about Samuelson (yes, I suffered through his textbook), Arrow did some very interesting
and incisive work. I guess Summers was, as the Vietnamese would say 'second rice crop'.
"I remember the fall night in 1972, after Kenneth was awarded the Nobel Prize. The other American Nobel Prize winner at that moment,
Paul Samuelson, also my uncle, hosted a party for Kenneth and the Cambridge economics community. I was a sophomore economics major
at MIT, so I was hardly appropriate company for such an august gathering, but I was a little unique in being related to both the
host and the honoree, so I was invited and I participated as best I could in the conversation."
Reminds me a scene in John Carpenter's Christine: "There's no smoking in this garage!" the owner says having gotten up from a card game where all his buddies are sitting around
a table waiting for him to rejoin them, as they all smoke." "Sir, those men over there are smoking. You better them them to stop."
"The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of
us have been, into every corner of our minds."
And this from the author of the article:
"Those prominent economists aren't even so much rejecting MMT as holding tight to their own orthodox views. This is not necessarily
on purpose, but it's extremely difficult for anyone to make a paradigm shift. MMT, aka macroeconomics done properly, is, as Keynes
says, "extremely simple and should be obvious." The problem we have here is the difficulty in escaping from antiquated notions
of macro modeling (Krugman), inflation (Summers), and debt financing (Rogoff)."
I think one of the problems we have in this country and the world is that what we think of as the mainstream educational model
is actually socialization, indoctrination, brainwashing, and or ideological training. And then "jobs" are based on how well you
bought in to that brainwashing.
Various education reformers over the past decades such as Ivan Illich and John Taylor Gatto have mentioned similar critiques
of education in the US and the world in that our educational system does not foster problem solving and critical thinking.
It is my belief that our educational system creates a type of false self in people. In order to get the "right" answers and
do well on tests, etc, you have to compromise your truth, your experience, and your true self and allow yourself to be programmed
in the particular models of your profession.
Maybe in Summers, Hillary, and Trump's case, as they have gotten older that "programming memory/false self" is starting to
become fractured due to cognitive decline, physical issues, stress, fatigue, etc. and as they desperately try to regurgitate their
brainwashing it is coming out in an incoherent mess.
As Summers is only 64, before Yves jumps on me for equating cognitive decline with being older or in one's 60's I think it
is specific to each individual. I just turned 60 and my brain is as sharp as ever, it is my body that is slowing the train down!!
To illustrate my point, a while back I read Anthony Atkinson's book, Inequality: What Can Be Done? He mentions in the book
that Greg Mankiw's Principle of Micro/Macro economics textbooks have very little on the subject of inequality. How could a mainstream
textbook on economics not have a significant portion on inequality?? IMO because in Mankiw's case inequality does not fit his
ideology.
NC has a way of posting articles the same day that can be connected. I think this post can be related to the " Is a Harvard
MBA Bad for You?" post. The MBA becomes brainwashing. Instead of trying to solve a problem MBA'ers and other professions try to
fit the ideology of what they were taught in school to the problem.
To use an analogy: there are usually multiple routes to get from one town to the other. It does not always have to be the "main
road". Sometimes the main road is not always the fastest, shortest, etc. And sometimes by taking the same road all the time, one's
perspective becomes narrow and hinders thinking outside of the box.
To borrow Henry Ford's quote: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe
there would be a revolution before tomorrow morning."
After decades of allowing ourselves to be brainwashed, I think we are starting to, as J.D. Alt mentions above, "question the
scripts" and are finding them to be a house of cards.
Well you are just a kid. I'm 72 and I think I'm a family blogging genius but it could be just the first symptom. Whatever I'm
going to tell you guys what I think about this stuff until I get politely censored. I never studied economics – but I studied
languages until words were falling out of my ears. And in my lexicon Larry doesn't even have the integrity of an idiot. Sometimes
an idiot is spot on. Larry is a deceptive, self-serving power tripper dedicated to a time gone by and never to return. Too bad.
Thanks Susan! Recently I went to my doctor and he asked me how I was feeling. I said physiological (my term for non-skeletal)
I am 40. Structurally (arthritis, herniated discs, etc. etc.) I feel like I am 70!
===but I studied languages until words were falling out of my ears===
I have always had an intuitive sense for language. Verbal and non verbal language. The words used, tone, inflections, etc.
Andrew Carnegie once said that the older he became the less he paid attention to what people said and the more he paid attention
to their behavior. And I think that is partly true but language is important.
And as you mention language can be used to convey power. Pierre Bourdieu wrote Language and Symbolic Power which I have been
wanting to read. I have also skimmed through some of Michel Foucault's work on discourse analysis.
Also I have read some of Kenneth Burke's work such as A Grammar of Motive's and A Rhetoric of Motives. After reading Burke's
books I became more curious about people's motives behind their language and behavior, and also the idea of rhetoric. IMO Obama
is a master at rhetoric and hence could fool a lot of people, while Trump sucks at it.
If you have not done so already I suggest looking up the Logical Fallacies links on NC's policies page. I believe a lot of
language uses for power are in snowing the public in using arguments or propaganda that contain logical fallacies and heuristics.
I have learned a lot in examining what people say and their arguments from NC.
Yeah, I found what he said to be absolutely absurd. He seems to believe that MMT describes something we might do, as opposed
to explaining how things are, at least in countries like the US. If he can't understand, or pretends to not understand, the difference
between a country owing money in a foreign currency versus issuing bonds in a country's own currency, and the actual role of bonds
in the US system or how money is actually created, then he isn't trying. Cause, whatever we want to say about Summers and all
he represents, he isn't a stupid man. I haven't seen a single critique of MMT from the likes of Krugman or Summers that demonstrates
that they understand the thing they think they are critiquing, or that they understand how things actually work. In response to
MMT, they either respond with some models that they were taught that aren't based in reality, or they just lie about MMT. It is
the economic version of people like Pelosi lying about single payer in the political sphere using ridiculous logic.
That, to me, is frightening, given how much power he has and who he has been hired to give advice to. People like Summers seem
to freak out, really when you look at it, by the fact that we are questioning a fantasy account of how things are. They want to
continue to make policies on the assumption that things are in reality what they say they are in their models, and there is a
huge gap between the assumptions in their models and reality. If he were to acknowledge the insights from MMT about how things
work, many of the excuses those in power have for doing nothing as the country falls apart would crumble, and those doing nothing
are then more directly responsible for the impact of their policies. Once you realize that they are not investing in communities
being neglected by private interests, they aren't investing in things needed to deal with the environmental crisis, they aren't
helping to fund programs to get people healthcare or things like clean water (communities like Flint say hello) because they are
paid by interests to do those things, and for ideological and class reasons, they can no longer pretend that the government "can't
afford" those things. The debate switches to a place they don't want to be in, and they are then more responsible for the decisions
they make. It is no longer about circumstances forcing themselves on these worthless politicians.
I also think some need to observe that Keynes was not a Keynesian in the manner that mainstream use the IS-LM. One is the use
of econometrics and the other is the IS-LM was a – starting point – of observation that needed more fleshing out and not some
"economic law [tm] carried down the mount.
Would additionally point out good old Ralph Musgrave over at TJN proclaiming his long support for MMT with caveats, sadly anyone
with with a functional memory would know key MMT'ers stance with Musgrave does not support those claims.
PS. great start to the day 50kg black German Sheppard just bound up on the bed – all wet – and wanted to share his eagerness
for the day .
Keynes believed in governments planning more investment, especially during down times. This is the blunder modern day "sheep"
don't understand. It isn't deficits that matter, but pushing the investment into usage/production. Deficits like we have now are
nothing more than public debt underwriting private debt expansion via financial engineering. Of course market statists would hate
the government with a bigger % of total investment, as they would lose control of the economic system and bow to the will of another.
Its amazing how dopamine release and other "feel good" consumption based games and circuses so rules the people. All they live
for is the fix. The bourgeois sells it them as "their fix", "their ownership" of said fix while they rake in profits and destroy
the environment. Truly like the Roman end times. No wonder the Christians are so worried. They see themselves replaced like the
old rituals and traditions that proceeded it.
Yves, I'm not a MMT fan, but you're spot-on about Summers. Didn't he lose the Harvard Endowment over $1 Billion with his "sage
management"? He's an idiot.
One would think after the Chicago boys foray with Born and its after math people would question the use of such people as PR
tools – well must be running dry.
Suggest you look into the groundings of MMT and not emotive processes – see link above. Keynes started a process to refute
orthodox thinking, seems some post morte folded parts [tm] into orthodox thinking so they could own – manage that perspective.
Hence when needed mainstream will utilize Keynes to say money is not a problem and then completely reverse azimuth and say Keynes
said money is a problem ..
Can't wait till they take Marx out of context to support some elitist social views ..
I am curious, just want to know. When you say you aren't a fan of MMT, what is the reason? I am interested in good critiques
of its insights, just hard to come by, since it does seem to describe present really pretty well.
As with most "serious economists" he's really an overpaid fraud. The man professes to understand government deficits, yet he
has no idea how the accounting works.
From Warren Mosler
"Several years ago I had a meeting with Senator Tom Daschle and then Asst. Treasury Secretary Lawrence Summers. I had been discussing
these innocent frauds with the Senator, and explaining how they were working against the well being of those who voted for him.
So he set up this meeting with the Asst. Treasury Secretary who was also a former Harvard economics professor and had two uncles
who had won Nobel prizes in economics, to get his response and hopefully confirm what I was saying.
I opened with a question: "Larry, what's wrong with the budget deficit?"
To which he replied: "It takes away savings that could be used for investment".
To which I replied: "No it doesn't, all Treasury securities do is offset operating factors at the Fed. It has nothing to do
with savings and investment".
To which he replied: "Well, I really don't understand reserve accounting so I can't discuss it at that level".
Senator Daschle was looking at all this in disbelief. The Harvard professor of economics Asst. Treasury Secretary Lawrence
Summers didn't understand reserve accounting? Sad but true."
Note to Larry, please follow this logic: Money is Fiat; Fiat is cooperation; Cooperation is fiscal control; and fiscal control
is civilization. Nowhere in this chain of thought does debt; interest; austerity; or any of your other little techniques even
exist. Those bizarre ideas exist in more primitive thinking about power and slavery and savage exploitation. You know the routine.
Maybe, but debt expansion is debt expansion. Globally debt exhaustion looks to have been reached and we are at the top of the
mountain. We are at the first stage, the next stage is what triggers the recession. The last stage, the Minsky moment.
Summers is a cluck, but a useful one in this case. The move from a mixed economy to financial engineering is very addictive
to the "people". Moving back to a mixed economy won't be all giggles for everybody as consumption is naturally cut.
Like all junkies, the detox won't be easy and in some cases, fatal.
Yes, it is what is so frightening about our current breakdown. Debt is the whole system. It was necessary to maintain that
system. But there's no reason why debt can't be put in what banksters call a "bad bank" and just let it run off the books. It
can all be done in some resolution that forgives some and allows some to linger without interfering in the economy anymore. There
will always be private debt, so caveat friends and neighbors. But there's no reason to suffer an impossible debt burden as a sovereign
nation. And from here on in we should not buy anything unless it can be purchased in US dollars/treasuries. The debt to ourselves
doesn't matter. The thing that matters is how we spend our money, do we waste time on bad projects or do we create a more valuable
civilization with good ones? Debt is just a monkeywrench, useful to gamblers and middlemen. We could configure a completely different
economics with very little pain if we put our minds to it.
Another good link to Larry Summers, Serious Economist. I remembered this passage from Herman Daly's book, and the magic of
DuckDuckGo found this. Long but worth the few minutes. NB, I don't know anything about this blogger: https://sallywengrover.wordpress.com/tag/herman-daly/
Not much love for Larry Summers here – and rightly so. I remember reading a conversation that he was in where he explained
how things worked. I'll see if I can summarize it-
Larry Summers is a serious person.
Important people listen to serious people.
This is how serious people express power – by having important people listen to them.
Golden rule is that serious people never criticize each other in public – ever.
I'm sure that people here can pick out the flaw in this arrangement – as in Garbage In, Garbage Out as far as important people
are concerned and the information & opinions that they receive.
Seriously, what would you expect from a person who writes this at the first paragraph for
his biography (emphasis mine) :
"Dr. Summers' tenure at the U.S. Treasury coincided with the longest period of sustained economic growth in U.S. history. He is
the only Treasury Secretary in the last half century to have left office with the national budget in surplus . Dr. Summers has
played a key role in addressing every major financial crisis for the last two decades."
Change "addressing" by "participating in the genesis of", and you are quite close to the truth
Mmmm, and all that treasury surplus was accrued by Larry's Austerity which exponentiated the private debt and turned into the
2008 tsunami. Heck of a job, Larry.
Larry Summers is useful as a canary. The day Obama appointed him as an adviser (before his inauguration) was the day I understood
Obama would do diddly squat about fixing the root causes of the Great Recession.
The part I don't understand is how he gained his prominence, other than literal nepotism. You'd think the fact he lost Harvard's
endowment a cool billion would have killed his career given how prominent Harvard grads are in the US' power structure.
We were flying blind during globalisation and policymakers didn't understand the monetary system.
The FT revealed the Chinese were undertaking a major study of the West.
I think they must have worked out things are fundamentally wrong as they have made all the classic mistakes everyone else has
made since 2008.
They have already worked out inflated asset prices and the private debt-to-GDP ratio are indicators of coming financial crises
and these were the indicators that showed 1929 and 2008 were coming.
By the time they understood what was going on the Minsky Moment was dead ahead, and they could no longer use the debt fuelled
growth model they had used before.
When US policymakers understand the monetary system they may be able to make some valid comments.
There is an interesting article in the Journal Of Petroleum Technology which summarizes an
SPE article by Schlumberger.
"Yet another SPE paper has concluded that old wells outperform new ones, but this study
offers a lot more detail about development in the Permian.
The paper, authored by Schlumberger (SPE 194310), offers comparisons of five major plays
in the Midland and Delaware basins, including details down to the pounds of proppant pumped
per foot, that show that completions are becoming increasingly similar.
"In general, normalized production from child wells is lower than parent wells," said Wei
Zheng, production stimulation engineer for Schlumberger. Older wells outperform newer ones
even when adjusting for the fact that new horizontal wells extend further through the
reservoir and more proppant is pumped.
"We are getting the same result as 5 years ago when we were spending less," she said
during a presentation at the recent SPE Hydraulic Fracturing Technology Conference."
Figure 2 which adjusts production for lateral length and proppant is particularly
interesting.
It describes especially most comapanies going to a more wide well spacing – so total
recovery of the basin will fall, but drilled wells will be more profitable.
His greatest accomplishment may well be that he has caused Washington's Swamp Dwellers to rise from the ooze and expose themselves
for all the world to see. That's weakened them immeasurably, perhaps fatally. To be sure, that's no small thing, and the next
Trump to come along is now on full alert as to who & what to bring with him.
You nailed it. Even if they do eventually succeed in foiling Trump, things will never be the same again. The whole world is watching
the circus in Washington, and so Washington's brand ('democracy') is now shot. 2016 was indeed an annus mirabilis! " things will
never be the same again. The whole world is watching the circus in Washington.."
It looks and sounds like dementia – as if a sick person behaving inappropriately, showing unprovoked aggression (like some
Alzheimer patients), using silly or senseless phrasing, and having the unreasonable demands and uncontrolled fits of rage like
a spoiled child. The marasmic McCain, marasmic Pelosi, and hysterical Max Boot, the openly lying Clapper and the hate-filled profiteer
Brennan.
As I have written here and elsewhere, President Swamp Drainer needs to get control of the DoJ. He got rid of Comey, which was
good, but got Rosenstein and Mueller in response. Meanwhile Jeff Sessions is twiddling his thumbs re the Russia witch hunt. Perhaps
his recusal was appropriate, but he's not doing anything whatsoever regarding Swamp Draining. So it feels like he's a disingenuous
old guard GOPer, who wants to obstruct any real progress, while dragging his feet with do-nothingness obscured behind a facade
of law enforcement community boosterism. By this tactic the GOP attempts to stall until 2020, when it can then point at Trump's
failures (failures they have enabled by their stalling, wink wink) and then campaign to take "their" party back. In short, Sessions
may just be an anti-Trump "mole" planted in the single most important position with regard to swamp draining, in order to ***prevent***
any swamp draining.
Let me be clear: in the last 24 years the DC political class has gone almost entirely criminal, with the last 13 years dedicated
to serial war crimes. In this sort of situation the DoJ, AG, and FBI head, becomes corrupted, and turns away from the rule of
law to become a shield for the DC criminal despotism.
So watch closely what happens next. Just today rumors have come out -- though I've been speaking of this for several weeks
now -- that there is talk in the White House about ***recess appointments*** . We have reached the crucial moment, and I for one
am surprised that, as important as this is, it has not been prominent in public discussion until now. The "August" was scheduled
to begin at the end of business tomorrow, July 28th. Because of the health care business, McConnell has postponed it for two weeks,
so let's call it for close of business Friday, August 11th. That's fifteen days from now.
When Congress goes home fifteen days from now, this country and the world may very well change forever. Go to Wikipedia and
look up "recess appointment". Here's what you will find:
" a recess appointment is an appointment by the President of a federal official while the U.S. Senate is in recess.
Recess appointments are authorized by Article II, Section 2 of the U.S. Constitution, which states:
The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting
Commissions which shall expire at the End of their next Session .
If Trump is the fighter I think he is, then this is what he has been waiting for, ever so patiently these last six months.
Notice that the Congress cannot countermand recess appointments. Recess appointments end by expiration, and then only at the end
of the following Congressional session. Other than impeachment, Congress cannot stop Trump from doing this .
So Trump dumps Sessions, purges the anti-Trump prosecutors from previous administrations, and appoints a new FBI head and dozens
of fire-breathing swamp-draining prosecutors who immediately start doling out orange jumpsuits. He could -- not saying that he
would execute this "nuclear option" -- but he could lock up virtually the entire Congress on war crimes charges; Neocons for conspiracy
to commit war crimes; Cheney, Addington, Yoo, and Bybee to the Hague for torture; Hillary and Obama for Libya.
Control of the DoJ is the key.
The next two weeks will show whether Trump is the real deal, or just another schlub.
"There ain't no such thing as a free lunch" (alternatively, "There is no such thing as a free lunch" or other variants)
is a popular adage communicating the idea that it is impossible to get something for nothing.
The acronyms TANSTAAFL, TINSTAAFL, and TNSTAAFL, are also used. Uses of the phrase dating back to the 1930s and 1940s have
been found, but the phrase's first appearance is unknown.[1]
The "free lunch" in the saying refers to the nineteenth-century practice in American bars of offering a "free lunch" in
order to entice drinking customers.
The phrase and the acronym are central to Robert Heinlein's 1966 science-fiction novel The Moon Is a Harsh Mistress, which
helped popularize it.[2][3]
The free-market economist Milton Friedman also popularized the phrase[1] by using it as the title of a 1975 book,[4] and
it is used in economics literature to describe opportunity cost.[5]
Campbell McConnell writes that the idea is "at the core of economics".
[I was a bigger fan of Robert Heinlein's than I was of Milton Friedman and even then it was "Stranger in a Strange Land" and
"The Unpleasant Profession of Jonathan Hoag" rather than later works that appealed to me.]
Just as an aside. It is worth remembering where the current globalization came from
historically.
It started with the 1970s inflation, (caused partly by the oil crisis) and the coincident
abuse of monopoly power by a number of unions (please those on the outer left don't try to
pretend it didn't happen, it did).
Uncle Milton came along with plausible sounding solutions (monetarism and increasing
foreign competition). Increasing foreign competition worked for a while – until the
mergers starting being international and industry concentration increased on an international
scale (and so was harder to combat).
Uncle Milton has since been proved wrong about almost everything. His one big idea that
never got tried (negative income tax – which could implemented more simply and
effectively as a universal basic income) ironically is the only one I think was good.
After more than a decade at the helm of one of Harvard's largest courses, Economics
Professor N. Gregory Mankiw announced in an email to graduate students Monday that he will step
down from teaching Economics 10: "Principles of Economics" at the end of this semester.
This is neoliberal/neocolonial analysis of the situation. Reader beware. But it catches some
interesting interdependencies. For example the need for revenue intensifies with the growth of
the population. This creates problems for KSA. As of March 2019 oil price per barrel did not
return to $90 level yet.
The article was written in 2015 but still has value. So it is interesting to read what
neoliberal thought at this time is not that different from what they think now...
The idea that Saudi Arabia is an independent player is too simplistic... It never was. It
just hides the key role of the USA in engineering oil prices slump and the fact that Saudi Arabia
is a vassal of Washington is ignored.
"... The Saudi miscalculation has several sources. One is the negative feedback loop between
oil production, GDP, and national budgets that plagues many non-Western oil producers. Their GDP
and national budgets depend significantly on the revenues from their oil exports. As a result,
the revenue shortfalls incentivize them to produce as much oil as possible to mitigate the
shortfall. ..."
"... Asian customers are taking advantage of the competition. They are reducing the share of
long-term contracts in favor of spot purchases. For example, as the Wall Street Journal reported
, some Japanese refiners are cutting the proportion of oil purchased through long-term contracts
to around 70 percent from more than 90 percent, while some South Korean refiners are reducing the
proportion from 75 to 50 percent. Furthermore, several national oil companies, Venezuela's among
them, are building refineries with local partners in Asia, which will use their crude. ..."
"... Third, Saudi refusal to act as price guarantor undercuts the confidence foreigners need
to invest in, or loan to, oil projects. ..."
"... Fourth, in terms of political risk, Saudi Arabia with its Gulf allies, Iran, and Iraq,
and the Middle East in general, is at the epicenter of global tension, turmoil, and tumult.
..."
"... Fifth, its influence within OPEC, and therefore its ability to manage OPEC output and
prices, is diminished ..."
"... Saudi officials apparently viewed $90 or even $80 per barrel oil for "one or two years"
with equanimity. Can they maintain the composure they have displayed thus far as they incur in a
single year the revenue losses they expected to take four years (at $90 oil) or two years (at $80
oil)? ..."
"... Yet, in effect, these countries are engaged in the oil equivalent of mutually assured
destruction. The sharp drop in oil revenue damages each of these countries economically and
financially, while the wars they wage directly and indirectly against each other drain resources
from vital domestic projects. ..."
The Saudi miscalculation has several sources. One is the negative
feedback loop between oil production, GDP, and national budgets that plagues many non-Western
oil producers. Their GDP and national budgets depend significantly on the revenues from their
oil exports. As a result, the revenue shortfalls incentivize them to produce as much oil as
possible to mitigate the shortfall.
According to the IEA ,
daily output in June 2015 increased 3.1 million barrels over 2014, with 60 percent (1.8 million
barrels) coming from OPEC. At 31.7 million barrels per day, OPEC output reached a three-year
high.
This increase in output occurs with the context of a narrow global demand opportunity.
Growth in demand in 2015, which the IEA forecasts to average around 1.4 million
barrels per day, comes primarily from Asia and North America. In other major export markets,
demand is stagnant. That has oil exporting countries, including OPEC members, Russia and
others, focusing
their sales on Asia, particularly China. North American demand is growing now that oil
prices are low, but due to high levels of domestic production, the U.S. is no longer a growth
market for oil exporters.
Each producer, therefore, is incentivized to undercut other producers directly (price per
barrel) or indirectly (absorbing shipping cost or delivery risk) to win sales in Asia (or
displace incumbent suppliers in other major markets). National oil producers can and are
shifting the cost of the lowered prices to other sectors of the economy. The U.A.E., for
example, has ended fuel subsidies, thereby essentially, increasing its budget revenues, while
Saudi Arabia recently
floated a $4 billion domestic bond offering to help finance its budget.
Asian customers are taking advantage of the competition. They are reducing the share of
long-term contracts in favor of spot purchases. For example, as the Wall Street Journal
reported
, some Japanese refiners are cutting the proportion of oil purchased through long-term
contracts to around 70 percent from more than 90 percent, while some South Korean refiners are
reducing the proportion from 75 to 50 percent. Furthermore, several national oil companies,
Venezuela's among them, are building refineries with local partners in Asia, which will use
their crude.
Given this environment, it is not surprising that the revenue elasticity of production is
highly sensitive, and negative. Saudi Arabia increased production by 6.8 percent in the first
quarter of 2015 but saw export revenues shrink by 42 percent.
Any Saudi Victory Will Be Pyrrhic
Saudi confidence in their financial wherewithal is proving misplaced.
Their need for
revenue is intensifying rather than moderating. They are fighting a multi-front war with
Iran directly (in Yemen) and indirectly (in Syria, Lebanon, and Iraq). ISIS, Al Qaeda, and
disaffected Shias present a significant domestic security threat. Countering external and
internal threats demands increased spending (including, perhaps, a very expensive future
nuclear weapons program), as does placating the fast growing male and female youth demographic,
which requires substantial spending on education, training, employment, and support. Hence, the
budget deficit equal to 20 percent of GDP, noted above. Increased production does not offer a solution.Saudi Arabia doesn't have the capacity
to increase production sufficiently to reduce the shortfall significantly in any meaningful
timeframe. They currently do not have the spare capacity-to make up for the $291 million in
export revenue lost in Q1 , 5.4 million more barrels a day would have been necessary at
$53.92 a barrel. Of course, such a drastic increase in output would have driven prices even
lower. It is doubtful they can increase capacity substantially even in the medium- to long
term. They won't be able to spend significantly more than other major national oil companies.
First, low prices reduce Aramco's cash flow and therefore its ability to fund investment.
Second, the Saudi government likely will increase its draw from this cash flow to fund higher
priority national security and domestic security needs. Third, Saudi refusal to act as price guarantor undercuts the confidence foreigners need to
invest in, or loan to, oil projects. What might be attractive at $75 per barrel oil isn't
at $50 oil, and even less attractive if the price of oil is thoroughly unpredictable. Fourth, in terms of political risk, Saudi Arabia with its Gulf allies, Iran, and Iraq, and
the Middle East in general, is at the epicenter of global tension, turmoil, and tumult. Fifth, its influence within OPEC, and therefore its ability to manage OPEC output and
prices, is diminished . Their underestimate of the impact of their policy change on prices,
their indifference vis-à-vis the financial damage to other OPEC members, and their
willingness to take market share at the expense of other OPEC members undercut their
credibility within OPEC (particularly since it derived from Saudi willingness to protect the
interests of all members (and sometimes to endure disproportionately).
While Saudi financial reserves are substantial (
circa $672 billion in May ), drawing on them is little more than a stop-gap measure. If its
major competitors (Russia, Iraq, Iran, and North America) maintain or even increase output (and
they have the incentive to do so), prices could stay lower far longer than the Saudis
anticipated.
Saudi reserves have decreased some $65 billion since prices started to fall (in November),
so ~$100 billion to ~$130 billion at an annual rate. The longer prices stay low, the faster
their reserves fall, and, as reserves plummet, the greater the pressure to prioritize spending,
to the disadvantage of some Saudis.
Saudi Arabia Caused The Problem, Can It Engineer A Solution?
Saudi officials apparently viewed $90 or even $80 per barrel oil for "one or two years"
with equanimity. Can they maintain the composure they have displayed thus far as they incur in
a single year the revenue losses they expected to take four years (at $90 oil) or two years (at
$80 oil)?
And if they can't-and surely, though they are loath to admit it, they can't - can they
engineer a durable increase in prices - i.e., a durable decrease in output? At first glance, it
seems impossible. Daily output from Saudi
Arabia (10.5 million), and its allies, UAE (2.87), Kuwait (2.8), and Qatar (.67), is
roughly equal to the daily output from countries with which it is in conflict, directly or
indirectly, Russia (11.2), Iran (2.88), and Iraq (3.75), and therefore have an incentive to
take advantage of any unilateral Saudi output concessions.
Yet, in effect, these countries are engaged in the oil equivalent of mutually assured
destruction. The sharp drop in oil revenue damages each of these countries economically and
financially, while the wars they wage directly and indirectly against each other drain
resources from vital domestic projects.
Moreover, given the sensitivity of prices to changes in volume, it is possible, if not
likely, that holding output steady or matching a Saudi
"... with shale fields as an important source of output, he said. While Goldman's official forecasts extend to 2020, there is a "very high probability" prices will stay depressed until the end of next decade, he said. ..."
"... U.S. benchmark West Texas Intermediate crude futures fell 25 cents to settle at $46.90 on the New York Mercantile Exchange. Prices are down 12 percent this year and 50 percent over the past 12 months. ..."
Goldman cut its crude forecasts this month, saying the global surplus of oil is bigger than it
previously thought and that failure to reduce production fast enough may require prices to fall
near $20 a barrel to clear the glut. Prices may touch that level when stockpiles are filled to
capacity, forcing producers in some areas to cut output, Currie said Wednesday.
"The last time we saw a period that was similar to today was 1986, 29 years ago," he said. "We
waited 15 years" for oil to start rising again.
Lower iron ore, copper and steel prices as well as weaker currencies in commodity-producing
countries have reduced costs for oil companies, according to Currie. The world is shifting from
an "investment phase" of a 30-year commodity cycle to an "exploitation phase," with shale fields
as an important source of output, he said. While Goldman's official forecasts extend to 2020,
there is a "very high probability" prices will stay depressed until the end of next decade, he
said.
U.S. benchmark West Texas Intermediate crude futures fell 25 cents to settle at $46.90 on the New
York Mercantile Exchange. Prices are down 12 percent this year and 50 percent over the past 12
months.
Should oil fall to $20, it would be "one touch," he said. Inventories would top out in parts of
the world, some producers would shut production and the market would come into balance.
Can't find the link but Bill Maher said an Indo-Pakistani war would be "entertaining" or
"amusing" or something like that. That guy has become untethered from his brain.
God, that Trish Regan is a moron on steroids. But, it was very heartening to see Russia
stepping up with aid. Certainly, the physical aid is important to Venezuela but, more
important, is the knowledge that they are not facing the US alone – cautiously
optimistic that Venezuela can survive the assault.
Soooo many bullshit moments, my head is reeling. "The ones who are the aggressors here are
the RUSSIANS, the United States supports a peaceful transition of power". Yes, to the leader
it picked for the country, in a process about as far from democracy as an egg is from an
eggplant. "Russia might not have the same good sweet deals, there would be a more competitive
landscape, and they don't like that". Trish, baby – your National Security Advisor is
on record as publicly stating it would make a big difference to the US economy if the USA
could invest in and produce Venezuela's oil. It already has complete control of the refining
end – if it were also investing in it and producing it what would be left for the
Venezuelans?
It is important to Americans that they always are doing the right thing, the just thing,
the altruistic thing, and that nothing so smutty as American profit and financial gain come
into it. It is for this reason they are fed such self-serving pablum daily by their news
media.
But why should someone as wealthy and well known as Robert Kraft visit a massage parlor in a
strip mall? He could have top whores from around the world flown in to his penthouse . For
god's sake, he could have gone to that private Caribbean Island where the insiders go for
illicit sex with whomever/whatever they could imagine. Something is weirder than average
here.
Log books show Bill Clinton just loved Island hospitality as evidenced by his numerous
visits. Odd, how utterly quiet the MSM is about this – y'ld think that industrial scale
rape of young girls would be newsworthy in the MSM. No, just the Covington Kid get them
going. Eyes Wide Shut at work here.
I think it's the thrill of the chase that appeals, plus knowing that you did something
illegal (either secretly or in full view) and got away with it. Having whores flown to your
place wouldn't have the same appeal.
Well, I suppose being a Peeping Tom could his next adventure. Nevertheless, it still makes
little sense from a psychological aspect. Some say he was somehow set up as a lot of NFL
owners are tired of his team winning the Superbowl every other year and wanted to take him
down a notch or two.
I suspect that most super rich, if not perverts from a young age, end up being perverted
– the power of money and a highly developed market offering perversion is just too much
to resist for most humans. That is a major reason why capitalism or free markets or whatever
you want to call a system that encourages accumulation of vast amounts of wealth is (drum
roll) perverted.
Again, the only defense needed by a cop in killing a suspect was "I thought my life was in
danger" regardless if that were actually the case. In the particular instance, I do think the
cops may have thought such but they were apparently trigger happy and reacted to a "flash of
light" or glint off some something metallic. They thought it was a muzzle blast. Really? They
offered confusing statements as well – the suspect advanced on them in a shooting
stance but refused to show his hands. What kind of shooting stance would that be?
I don't think it was cold blooded murder in this case – just manslaughter. They
ought to be charged accordingly and kicked off the force. But no, everything is OK, nothing
to see. Besides, it would have a chilling effect on police everywhere if they were fearful of
being charged every time they killed someone. I mean, like, who would want to be a cop?
I note that in this instance, though, the deceased was committing a crime; a series of them,
in fact. Nothing he needed to be killed for, certainly, but a case removed from all the other
black men who have been shot with their cell phone in their hand, or nothing at all, while
the cops who decided to 'question' them ( sometimes for nothing more than walking on the
sidewalk in a mostly-white neighbourhood) had no apparent reason to be bothering them. Police
intervention was certainly called for here, although it is hard to believe it could not have
been carried out without any real violence at all. The list of people who actually decided to
go for their gun when ordered to put their hands up by police who already have their weapons
out must be a short one.
Police in America seem uniformly convinced that black men they detain will try to kill
them. I wonder why? Have a lot of police officers been shot to death by black men? I bet the
list of black men killed by police is a lot longer.
To partially address the question of how many police are killed by felonious acts (shot, run
over, etc.) versus how many they have killed by shooting (not counting fatalities from
crashes during police chases), its roughly 65 to 1,000+. or better than a 15 to 1 kill ratio.
31% of the civilian victims were black.
In Britain and Japan, there were a few civilians killed by police last year. China had 4
(US rate was 1,500 times higher per capita). Could not find info on Russia. Philippines was
way higher than the US rate apparently due to the drug war and terrorists may be included in
that data as well.
My 02 gets 48 at 55 mph, 44 at 75-80, in town, around 40, has 150K on it
Assuming 12K miles per year you get 12 years.
So 8 years is not unreasonable and probably is too low (sorry I can't find the academic
reference I used right now)
BTW replacement cost of the battery for Leaf is around $5.5K and even for Leaf you get
something like 6 years.
Transport makes up another 25% or so. That is why I'm interested in battery electric
vehicles. Eventually the vast majority of vehicles will have to be battery powered or just
something other than petroleum based fuels. My hope is that the good people in the oil patch
can keep things going long enough for the transition to get started in earnest.
I did an exercise once in which I calculated that, for a particular year, it would
required less than 20% of the electricity produced in that year to power an all electric,
light vehicle fleet in the US. If renewables were to grow fast enough to dominate the US
electricity markets by say 2030, dealing with the additional demand from EVs should not be an
intractable problem.
Transport makes up another 25% or so. That is why I'm interested in battery electric
vehicles. Eventually the vast majority of vehicles will have to be battery powered or just
something other than petroleum based fuels. My hope is that the good people in the oil
patch can keep things going long enough for the transition to get started in earnest.
We need to try to see a bigger picture. EV does not exists in vacuum. They need
infrastructure such as lithium battery producing plants, charging stations, and more powerful
electrical grid (in case they reach substantial proportion of private cars)
We also need to understand that that the energy needed to create a car lithium battery is
close to energy required to driving a medium size diesel for over 8 years (which might last
20 years or more with proper maintenance -- even Prius can last over 10 years and 200K
miles). If this is not an exaggeration, than this is as close to a death sentence for EV
vehicles as one can get from "saving energy" standpoint.
Precise economic calculations does not favor EV. Looks what is happening with the demand
for Tesla cars. It's not pretty. Despite all hoopla, they were forced to lower prices to
sustain the demand.
The largest part of electricity produced in the USA now is produced using natural gas, so
in this sense pushing electrical cars in the USA without pushing nuclear power plants is a
very stupid idea. But it is a good idea for France.
But nuclear power plants have their set of dangers and problems, as we know from
Fukushima.
In does not make much sense to waste 30% or more of natural gas this way, in comparison
with using nat gas for transportation directly. So this is not a progress, this is a
regress.
So things are more complex then they looks but IMHO currently economics does not favor
electrical cars too much, in comparison with alternative. Although large scale experiments
like Tesla are necessary and make sense as they prepare us for a very uncertain futures and
we need to keep all options on the table.
But again the fact that nothing is done in the USA to stimulate usage of cars on natural
gas is a sign of stupidity and regress, not a sign of progress.
Please remember that the road to hell is paved with good intentions. That actually should
be tattooed on Elon Musk forehead ;-).
x Ignored
says: 02/26/2019
at 3:27 pm I think not all
followed the link
article is big.
Maybe someone will be interested
I will write here in several posts.
I hope someone will be interested.
I continue:
The fluctuations of this second parameter, associated with economic crises and recessions
observed in the period under review, make it possible to evaluate the contribution of the
notorious "energy efficiency" to the global increase in energy consumption. In a situation of
almost "zero growth" of the world economy, which occurred in the period 2008–2009, the
consumption of primary energy decreased by 0.8% per year. At the same time, for each percent of
economic growth, it is necessary to "pay off" by increasing the consumption of primary energy
by about 0.6%.
In an expected way, an improvement in energy efficiency was reflected in monetary
indicators: in 2017, each TOE of consumed energy generated $ 8,617 of global GDP, which
corresponds to 1.7% of annual growth over the period 2007–2017.
Of course, the world's primary energy is not evenly distributed across countries. Even the
top five leaders in the use of primary energy: China, the United States, the European Union,
India and Russia – have completely different consumption patterns, which are associated
with the historical, geographical, economic and political differences of these countries.
Thus, as of 2017, China has already been the largest global consumer of primary energy: its
energy consumption has reached 3.132 billion TOE, which is equal to 23% of the global
consumption of primary energy. The growth of Chinese energy consumption is also impressive: in
the period from 1990 to 2013, per capita energy consumption in China increased from 0.602 TOE
to 2.14 TOE -- that is, almost four times. Since then, energy consumption growth in China has
somewhat slowed down, and by 2017, per capita energy consumption there was only 2.26 TOE, which
is not only still significantly lower than per capita energy consumption in countries with
developed capitalist economies, but and corresponds to an increase in energy consumption of
about 1.5% per year (and an economic growth of 2% per year).
If we consider the inertia of this historical trend and additionally take into account the
fact that the new policy of the ruling CPC implies a transition to stimulating consumer demand
within the country, then we can assume that by 2050 per capita energy consumption in China
should reach 5-5.5 TOE. This figure takes into account, in addition, the observed impact of
energy efficiency (the same 0.8% per year), but suggests that GDP per capita in China will grow
to about the equivalent of $ 50,000 by 2050. At the same time, it should be understood that in
a part of the population, a conservative forecast is adopted, according to which the population
of China will reach a peak by 2030 and decrease to 1.36 billion by 2050. Taking into account
these factors, China's energy demand in 2050 will exceed 7,000 million TOE, i.e., it will grow
2.23 times and make up more than half of the current volume of primary energy production.
Information that, according to fertility data, the population of China in 2018 decreased by
1.27 million people, has not yet been officially confirmed, and it is clear that the above
figure can be significantly adjusted downward, but in any case, China will pull the world
energy "blanket" on themselves.
The United States is the second largest consumer of primary energy in the world. In 2017,
the US energy consumption amounted to 2,235 million TOE, which corresponds to 17% of world
primary energy consumption. US per capita energy consumption peaked at 8.01 TOE in 2000, which
was a historic peak. For the period from 2007 to 2009, per capita energy consumption in the
United States decreased from 7.7 to 7.04 TOE, and in 2017 it reached the level of 6.87 TOE.
Nevertheless, the United States continues to be the most "voracious" consumer of primary energy
per capita, and their ability to further reduce the achieved level is very slim if they are not
linked to the global restructuring of their economic and social structure, which is highly
unlikely without a deep national crisis. An additional factor is the steady growth of the US
population, which has no tendency to slow down until 2050.
Reply
Still continuing (3):
The European Union is the third largest consumer of primary energy in the world. In 2017, the
energy consumption of the European Union amounted to 1,689 million TOE, which is equivalent
to 13% of world primary energy consumption. Historically, EU per capita energy consumption
was the highest before the onset of the 2008 crisis and amounted to 3.71 TOE in 2006. In the
future, the European Union immediately fell into a double crisis: the global economic year
2008–2009 and its own financial one, connected with the debts of the Mediterranean
countries, first of all – Greece. This led to the fact that energy consumption per
capita in the EU was reduced to a minimum of 3.2 TOE in 2014. By 2017, per capita energy
consumption in the EU was only partially recovered and reached 3.29 TOE. At the same time,
its value has a very pronounced country differentiation, and if for Germany in 2017 this
figure was 3.86 TOE, for France – 3.61 TOE, then for the UK – 2.72 TOE, for
Poland – 2.71 TOE, for Portugal – 2.23 TOE, and for Romania – 1.69 ToE. In
general, this level of per capita energy consumption quite adequately reflects the EU's
longstanding efforts towards supporting energy efficiency, but also vividly shows the limits
of what can be achieved within the framework of a concept combining a set of measures for
energy saving and green energy replacement. As we see, as a result of the implementation of
such programs, the European Union did not become "European China" at all, although it became
less like "European America" in the energy issue.
Thus, it can be assumed that in the long-term trend, the per capita energy consumption of
EU countries will decrease slightly, only by copying the general trend of slow increase in
energy efficiency.
India is the fourth largest consumer of primary energy in the world. In 2017, energy
consumption in India increased to 754 million TOE, which is 5.6% of the world. India, like
China, is characterized by very rapid economic growth, which was expressed in terms of per
capita energy consumption: more than twice since 1990, when it amounted to 0.225 TOE, to
0.562 TOE in 2017. If per capita energy consumption in India continues to follow the same
pace, by 2050 it should reach a mark of 1.21 TOE, while India's GDP per capita will reach
approximately 19 thousand dollars. It is expected that by 2050 the population of India will
grow to 1.72 billion people. That is, it can be expected that by 2050 India's energy demand
will exceed 2 billion THN – or it will grow 2.65 times, overtaking even China in terms
of relative growth, and in absolute figures ahead of the European Union.
And finally, the Russian Federation, which is the fifth of the world's largest energy
consumers. In 2017, primary energy consumption in Russia amounted to 698 million TOE, which
accounted for 5.2% of world primary energy consumption. In 1990, when Russia was still part
of the USSR, per capita energy consumption in Russia was 5.8 TOE. Over the past years, Russia
has already passed its historic low, when the economy of the new country was torn to shreds
by neoliberal "shock therapy", the short-sighted policy of rapid privatization and the total
introduction of the "wild" market – including in the energy sector. This was reflected
in the fact that the minimum energy consumption per capita in Russia was achieved by 1998 and
amounted to 4.03 TOE. Smaller values of per capita consumption, apparently, are
simply impossible in a cold and harsh Russian climate, since heat supply is a vital function
in it – therefore, a value of 4.03 TOE can be considered the level of "basic survival"
in Russia. An interesting fact: in Canada, where the climate is very similar to that of
Russia, per capita energy consumption is 9.5 TOE as of 2017. At the same time, no one in
Canada speaks of "cheap electricity" or "too high costs for heat supply," realizing that this
is the necessary conditions for the survival of the country's population.
Since 1998, per capita energy consumption in Russia has been steadily growing and reached
a level of 4.83 Toe in 2017, which corresponds to about 0.8% per year. Most likely, this
trend will continue in the future, since the living standards of the Russian population are
still lower than the living standards in the European Union or the United States, and the
Russian level of per capita consumption lags behind the level of the late USSR, even taking
into account the accumulated "bonuses" in energy efficiency.
World energy: forecast
As noted above, the parameters of GDP and total energy consumption – just as the
parameters of per capita GDP and per capita energy consumption – in the current economy
have a strong correlation.
Moreover, almost all the leading countries of the world fit into a very clearly traceable
ratio, which corresponds to 10 thousand dollars of per capita GDP for every one TOE per
capita consumption. Smaller values of this parameter are characteristic of a
number of underdeveloped and developing countries, which leads to a "average" value of $
8,617 per 1 TOE for global GDP.
There are deviations and "up" on the scale of specific energy – this is already
mentioned in the text of Russia, Canada and the United States.
For Canada, Russia and the Scandinavian countries, you can build a separate branch of the
graph, on which for the "northern" economies it turns out that for every 10 thousand dollars
of per capita GDP they need to spend about 2 TOE per capita consumption – twice as much
as for those living in tropical or subtropical climate of China or India.
The phenomenon of "overconsumption" of the United States, as is clear, has a different
nature – it is associated with the actual "imperial" energy tax for the whole world,
which allows the United States to still maintain excessive energy consumption, which is in no
way connected with the country's climate the political structure of the United States, which
is the world hegemon.
It is important to emphasize that, if we exclude from consideration the "imperial" United
States and "northern" Russia and Canada, then the correlation between oil consumption and the
GDP of a particular country acquires almost 100% of its character. For example, Japan, not
mentioned above, was the sixth largest energy consumer in the world in 2017 and surpassed
most EU countries in terms of both per capita GDP and per capita oil consumption! Although,
it would seem, the southern conditions of Japan, almost completely located in the subtropical
and tropical zones, suggest lower figures for per capita oil consumption.
In 2017, energy consumption in Japan amounted to 456 million TOE, which amounted to 3.4%
of world primary energy consumption. Historical peak energy consumption per capita in Japan
reached in 2005 and amounted to 4.15 TOE. Since then, energy consumption in Japan has tended
to decline, as the country's national economy fluctuated between a hidden recession and sheer
economic stagnation. The effect of the largest nuclear accident at the Fukushima nuclear
power plant in 2011 is indicative in this respect: despite the radical restructuring of the
energy sector in Japan caused by this catastrophe and the almost complete closure of nuclear
power plants in the country, the consumption of primary energy in the Land of the Rising Sun
has not undergone such a sharp falls: almost all the "fallen out" volumes of atomic energy
were promptly replaced by increased consumption of oil and natural gas. And the general trend
of growth or reduction of primary energy consumption still showed a correlation with only
three parameters: the country's population, the level of per capita GDP of the national
economy and the general trend of improving energy efficiency, which in the case of Japan
describes the same energy saving parameter of 0.8% per year .
By 2016, per capita energy consumption in Japan decreased to 3.55 TOE, which was even
lower than per capita consumption in 1990, with a fundamentally higher GDP and a practically
stable population (an increase of only 3 million people with 123 million in 1990). In 2017,
per capita energy consumption in Japan grew only slightly to 3.6 TOE, which is quite
consistent with the very modest growth of the national economy.
As already mentioned, the practical economic result of "green" energy, observed for the
period 2007–2017, can be optimistically described as "zero" or "poorly distinguishable
from statistical error". Of course, one can complain that the sun and wind today give only 2%
of the global primary energy production and you need to "just give them more time (and
money)", but the sad reality is this: supposedly "promising" new energy sources affect the
economy. Their implementation in the countries of the European Union did not affect the
picture of energy efficiency and did not alter the ratio between GDP and tons of oil
equivalent spent on its production, while the global crisis and the debt crisis of the EU
itself turned out to be much more significant factors.
Still continuing (4):
A simple forecast follows from these sad conclusions: even if over the next decade the volume
of "green" energy again grows 4 times, then its share will reach only 8%. However, even this
level is an almost unrealizable dream: according to most forecasts – for example, the
IEA in 2017 and the Energy Information Administration (EIA) in 2018 – the actual
relative growth of renewable energy sources will be only about 2–20 years before 2030.
2.5 times. Unknown conclusion: even by 2030, the share of oil, natural gas and coal will be
at least 75% of the total primary energy level, which will be related to nuclear and
hydropower and the continuing relative waste from the use of wood energy and biomass. During
the years 2030-2040, the year can be almost fantastic, and all this will be due to the
difficulties that must be achieved in the field of oil, gas and coal in the balance sheet.
energy.
An extremely unpleasant situation with such a pessimistic forecast is expected with world
oil production. At the moment, its growth was concentrated in only nine oil-producing
countries. As an example, oil production in China is expected in 2015, after which it was not
even possible to achieve an increase in Chinese oil production.
Today, this "growing oil subsoil" includes the following countries (the estimated year of
oil production and data source are shown in brackets): Canada (peak in 2049, BP), USA (2042,
EIA), Iraq (2042, BP) , Kuwait (2040, BP), Iran (2039, BP), United Arab Emirates (2037, BP),
Russia (2033, IEA), Saudi Arabia (2030, BP), Brazil (2024, BP).
The exit from almost all the "growing" sources of oil production in the world is caused by
a drop in production from 2030 to 2040, which means the global energy crisis of humanity. and
there is "tasty", and there is energy, and all this economic strategy of modern
civilization.
Of course, partial replacement with liquid motor fuel, which is easily obtained from
petroleum, can be carried out using natural gas, as well as using chemical reforming in
various types of liquid hydrocarbons and molecular hydrogen.
However, this situation is hardly optimistic. In 2015, the world's peak production was
observed. Currently, natural gas production growth is concentrated in only ten countries (the
estimated year of natural gas production and data source are shown in parentheses): Canada
(2074, IEA), USA (2063, EIA), Iran (2046, BP), Qatar (2043 , BP), Saudi Arabia (2037, BP),
Algeria (2027, BP), China (2027, BP), Australia (2026, BP), Russia (2026, BP), Norway (2023,
IEA).
It is easy to see that already after 2030, the natural gas market will, like the oil
market, be practically monopolized by four or five countries, each of which will be able to
easily manipulate prices by simply adjusting its own production, since other players simply
will not have any -or free capacity. Unfortunately, in the case of Russian oil, and when
analyzing the prospects for Russian gas in such an oligopolistic market, it can be noted that
Russia will be in the "first echelon" of losers, at whose expense they will try to solve
world problems with the energy balance.
Of course, a partial replacement of natural gas and oil can be expected in the form of a
return to more "dirty" and expensive coal. By the way, it was precisely such a strategy that
China and India chose in the 1990s, who, without having wide access to the oil and natural
gas market, relied on their own deposits of hard coal. The incidental damage to ecology and
human health in this case was the price paid for the rapid industrialization paid by Indian
and Chinese society.
However, even on the "coal" path, humanity has its own problems. Today, the rapid growth
of coal production is possible only in four (!) Countries of the world. All other countries
have already passed their peak of hard coal mining, some of them more recently, such as the
USA (2008), China (2013) or South Africa (2014).
According to estimates by international energy agencies, today, growth in coal production
is possible only in the following countries (in brackets is the expected year of peak coal
mining and source of data): Russia (2112, BP), India (2052, BP), Australia (2032, IEA) ,
Indonesia (2031, BP).
I apologize for
posting an article here
– It was designed for a reader in Russia.
Ending:
Mirovaya energiya: stsenariy
I
World Energy Scenario
The inertial scenario of the development of mankind suggests that by 2050 the world
consumption of primary energy will increase one and a half times and will be about 20 billion
TOE. This indicator takes into account both the observed effects of energy conservation and a
very conservative estimate of future economic growth – within 2–2.5% of the
annual increase in global GDP.
However, crisis tendencies will be waiting for us much earlier than in 2050: it seems that
the gap between supply and demand on the global energy market will be formed by the early
2030s, when global energy consumption will approach the level of 16-17 billion TNE . As
already mentioned, peak years for world production of oil, natural gas and coal are coming in
the very near future. According to the IEA, the peak of world oil production will come as
early as 2022, when all of humanity will be able to provide about 4,530 million TOE with oil.
According to the same forecast, coal will be at its peak in 2028, when at the expense of it
it will be possible to get about 6 billion THE (which corresponds to about 8.4 billion tons
of physical coal mining, due to its lower energy value). And finally, global natural gas
production will peak in 2036, when this energy carrier can provide 3.9 billion ToE.
It is easy to understand that, taking into account the predicted share of oil, coal and
natural gas in primary energy of about 75% by 2030, the sum of peak production (14,430 TOE)
almost fully corresponds to ¾ the lower bar of estimated consumption in 2030 (16,000
TOE) . It should be understood that the peak values for oil and hard coal in
the world will be reached before 2030, after which these energy carriers will only decrease
in the volume of physical production. In part, this effect can be compensated for through the
involvement of more low-margin fields (as it happened with shale oil and gas), but the limits
of such compensatory mechanisms are not unlimited. In addition, a significant increase in the
price of primary energy in itself is a sign of the crisis of the existing economic structure,
which clearly links social stability with economic growth, and economic growth is fueled
precisely by the available (both physically and in price) energy.
Of course, the increase in the price of oil, natural gas and coal will improve the
economic prospects of "green" energy (simply due to the banal high cost of any energy
available to humanity), but this also means that within future economies huge amounts of
energy will simply be spent on maintaining the internal structure economies and the
livelihoods of the critically needed primary energy sector.
An idea of this kind of economic structure may well be given by the economic
model of the USSR, where such a bias towards the enterprises of "Group A" was dictated by
military and state construction, while consumer goods of the enterprises of "Group B" were in
short supply. However, in the USSR this mechanism was a reflection of the planned economy, in
the case of the supposed "peak" scenario of 2030, it would be formed by purely market
mechanisms within the framework of the "classical" capitalist economy.
It is clear that this implies a "contraction" of the final consumption of the population,
which will be caused by the forced flow of capital to the high-yielding primary energy
production sectors, forced and natural in the framework of the capitalist economy. At the
same time, the "welfare society" of the model countries of the "collective West", such as the
European Union and, in particular, the United States, will collapse. Faced with this kind of
crisis, the "overconsuming" Western countries will unambiguously join the battle for the
remnants of mineral energy resources. Such events and wars are likely to surpass even the
current "oil conflicts" in the Middle East, North Africa and Latin America, in which the
United States and its European allies are directly involved.
Probably, Russia will again be hit, which remains the "last natural storeroom" for large
reserves of sufficiently cheap oil, natural gas and coal. Most likely, the "energy predators"
will try once again to control the richest natural resources of our country, which, under
various pretexts, will strive to declare "the heritage of all mankind". In fact, we will talk
about the banal energy robbery of our country, which will hide behind the fig leaf of
propaganda.
Another disappointing conclusion follows from the energy "poverty" of the "world of the
future": Russia today has to prepare for the fact that our "four hard-earned oil equivalent
per capita", which, as noted above, is the basic condition for survival in Russia's severe
climate should be in the future provided for the population of the country from sources other
than oil, natural gas and coal. The challenges facing the world are facing Russia, but what
the United States is the reason for the rejection of overconsumption turns out to be another
challenge for Russia in the face of cold and death by starvation.
Unfortunately, the "world of the future" does not promise to be a pleasant and comfortable
place to live. And we should prepare for such a negative scenario today.
Thank you for the thought provoking thoughts Opritov Alexander.
It is useful to hear these ideas from the perspective of those from various countries, such
as yours.
The data dovetails closely with what has been presented from other sources, by and large.
The geopolitical ramifications of these challenges is obviously paramount.
I am concerned that countries will be pressured to go to war over the shortfall in energy,
through desperation.
A few points about different countries-
The USA could likely decrease it energy use/capita considerably (perhaps 30%), without severe
economic repercussion. But it is not taking the issue seriously.
Some countries like Korea will have a very hard time decreasing consumption. They are cold,
and heavily industrialized. And rely almost entirely on imported fossil fuel.
I expect India, and China, to lean heavily toward suppliers of fuel as they plan their
position in the world and choose allies. Iran and Australia both seem to be prime suppliers
considering proximity.
Concerns over global warming will be swamped by concerns over energy shortage, despite the
severity of the change, such as food supply disruption and forced migration. These climate
problems will likely be much more severe after energy shortage problems develop due to the
lag in CO2 effects.
Mostly I agree with you.
It's hard to imagine the future.
Much will depend on politicians and the willingness of peoples to reduce consumption for the
sake of an acceptable standard of living in the future.
Passing the peak of energy consumption will lead to a decrease in global GDP.
This means a decrease in per capita consumption.
Reduced consumption = reduced demand = industrial workload = crisis.
I believe that in order to save people, they will live in multi-storey buildings, perhaps
without an elevator (of course, it may not be soon for 50 years), the transport will be
public, there will not be enough private cars.
In addition to the peak of hydrocarbons, the peak of copper, gold, silver, tin, and a lot
more is coming. How to solve these problems I don't want to dream
Post scriptum. The problem of CO2 and the problem of global warming in Russia is not a
popular topic. So much that everyone refuses to discuss it and even think about it.
Approximately as an alien topic.
Saudi
Arabia's crude oil exports to U.S. are falling sharply, with shipments so far this month at
just 1.6 million barrels, according to data compiled by
Bloomberg , versus 5.75 million barrels a year ago.
For the whole of January, Saudi Arabia exported just 2.69 million barrels of crude to the
United States. The decline follows Saudi Arabia's decision to cut its crude oil production --
primarily heavy crude grades -- by more than it agreed to at the December OPEC+ meeting as it
seeks higher oil prices.
One analyst told Bloomberg oil exports from the Kingdom to U.S. refiners could even fall to
zero but that was unlikely to happen.
"We could see Saudi oil imports declining to zero into the U.S. Gulf Coast," Andy Lipow from
Lipow Oil Associates said. "OPEC and non-OPEC members feel prices are too low, and they will do
what it takes to put the market back in balance."
Globalization was fueled by cheap oil. end of cheap oil means the end of globalization.
It looks like people started to notice the "gangster capitalism" nature of Trump administration.
If also raises the speculation that the end of "cheap oil" might signify the end of neoliberalism as a social system. At least
the "classic" version. Whether Trump inspired the evolution of neoliberalism into "national neoliberalism" improves the survival
chances of this social system remains to be seen.
Notable quotes:
"... The whole "political play" going on now seems to be Trump pressuring Saudi Arabia (and OPEC) for the assumable extensive spare capacity that they have. But the problem is, the reality is high oil prices were needed to avoid a deficit in the whole scheme of things. I still guess reality will be hard late 2019/20 as has always been my prediction. ..."
"... To avoid blackmail when it comes to oil the future; sooner or later there is going to be a transition to natural gas (for some decades) and renewable in the West and Asia first. That is how the story goes in my view. The transition to renewable is most likely not going to be smooth, but hurt someone (some part of the population and some countries maybe). Interesting future energy and other resources (e.g lithium, cobalt, nickel and rare magnet ingredients needed for batteries) are going to be even more in focus than today I guess. ..."
I think there are a lot of people that need a delusion check. Because a surplus of oil is
advocated by "western trustable sources" against the natural investment circle of the oil
industry does not automatically mean that the market balance is under control; it is in fact
never going to work.
The whole "political play" going on now seems to be Trump pressuring
Saudi Arabia (and OPEC) for the assumable extensive spare capacity that they have. But the
problem is, the reality is high oil prices were needed to avoid a deficit in the whole scheme
of things. I still guess reality will be hard late 2019/20 as has always been my prediction.
It is difficult to change my mind about the oil market; after all it is not supersonic
speed in this mature market. The digitalisation of data gathering (seismic and reservoir
control) together with horizontal wells represent probably huge gains and I would guess alone
can explain why for example Russia has been doing so well the last decade.
The next point is
that the world is not running out of oil yet, but potential oil reserves are not under
western control (most potential reserves are in Africa, Middle East, Ex USSR countries and
the Arctic). And that makes for an unstable political future between the west and the rest of
the world.
To avoid blackmail when it comes to oil the future; sooner or later there is going to be a
transition to natural gas (for some decades) and renewable in the West and Asia first. That
is how the story goes in my view. The transition to renewable is most likely not going to be
smooth, but hurt someone (some part of the population and some countries maybe). Interesting
future energy and other resources (e.g lithium, cobalt, nickel and rare magnet ingredients
needed for batteries) are going to be even more in focus than today I guess.
"... Forgot to add. If any are looking for a copy of that "The Gilded Age: A Tale of Today" book mentioned near the beginning of this article and do not want to fork over the hard stuff to Bezos, you can find it also at Project Gutenberg in several different formats here- http://www.gutenberg.org/ebooks/3178 ..."
"... When inequality reaches its zenith it will be in parallel with many other disasters that we know are coming ..."
"... When the average yearly salary is $31K? There is no disposable income, as that astounding collective debt figure attests. ..."
"... "Keep in mind that historically, the levelers of inequality have been war, financial crises, protracted battles by workers to get better incomes and workplace protections, and, of course, revolutions." ..."
"... So strikes will work -- which is why they are forbidden. And maybe it is time to get truly creative with shopping strikes and boycotts–Starbucks and Amazon would learn from being shunned or, even better, forced into bankruptcy. ..."
I sometimes wonder if our elite have taken to heart this section from George Orwell's
"1984"-
But the purpose of all of them was to arrest progress and freeze history at a chosen
moment. The familiar pendulum swing was to happen once more, and then stop. As usual, the
High were to be turned out by the Middle, who would then become the High; but this time, by
conscious strategy, the High would be able to maintain their position permanently.
And that is the real purpose of all this surveillance in our lives. The reason why the
governmental and commercial sector is silencing dissent by banishing it from all social
media. The sidelining of all democratic participation in western countries and entities like
the EU. To cement their overlordship.
It won't work. Why? Because of Newton's third law – For every action, there is an equal
and opposite reaction. Historically, the more repression there is, the bloodier the reaction
and the French revolution is the best example of this. Here is a good lesson for our elites.
Never cheat a person that has nothing to lose. That's good advice that.
Forgot to add. If any are looking for a copy of that "The Gilded Age: A Tale of Today"
book mentioned near the beginning of this article and do not want to fork over the hard stuff
to Bezos, you can find it also at Project Gutenberg in several different formats here-http://www.gutenberg.org/ebooks/3178
When inequality reaches its zenith it will be in parallel with many other disasters that
we know are coming: climate change with all of its severe storms and warming of the planet,
toxic plastic pollution, resource depletion, environmental degradation, loss of arable land,
loss of animals and fish, insect depletion, super bugs and antibiotic resistance, threat of
nuclear war and other wars, climate refugees, rising sea levels, and on and on and on. The
thing is that we may not live long enough to revolt against wealth inequality!
Yves Smith. Great article from the always insightful Nomi Prins. The figures on household
income and general indebtedness are something to commit to memory for the next time one of
our earnest upper-middle friends goes on and on about retraining and relocating. How? When
the average yearly salary is $31K? There is no disposable income, as that astounding
collective debt figure attests.
The note up top from YS is sobering indeed: "Keep in mind that historically, the levelers
of inequality have been war, financial crises, protracted battles by workers to get better
incomes and workplace protections, and, of course, revolutions."
Which is the least painful and most effective? Strikes. And general strikes. Now that
everything in the U S of A is on-line, monetized (including us), and dollar denominated, the
only recourse we have is to withhold labor. (Or to stop shopping.)
So strikes will
work -- which is why they are forbidden. And maybe it is time to get truly creative with
shopping strikes and boycotts–Starbucks and Amazon would learn from being shunned or,
even better, forced into bankruptcy.
We can already hear the whining from the uber-left's ivory tower as Fed Chair Jerome Powell
unleashed some common-sense on the latest fraud being thrust upon Americans - that of Modern
Monetary Theory (MMT).
As Bloomberg reminds, MMT argues that because America borrows in its own currency, it can
always print more dollars to cover its obligations. As a result, the thinking goes, the U.S.
can always run sustained budget deficits and rack up an ever-increasing debt burden. Helping
grease the wheels for some MMTers is the expectation that the Fed would keep rates low to
contain the cost of servicing America's obligations . With that in mind, Sen. David Perdue,
R-Ga., asked Powell about the theory, saying its advocates back a "spend-now spend-later
spend-often policy that would use massive annual deficits to fund these tremendously expensive
policy proposals." MMT advocates figure the Fed would be a partner in funding these programs
through easy monetary policy.
Powell's response was brief and to the point:
"The idea that deficits don't matter for countries that can borrow in their own currency I
think is just wrong..."
"And to the extent that people are talking about using the Fed -- our role is not to
provide support for particular policies," Powell said.
"Decisions about spending, and controlling spending and paying for it, are really for
you."
Simply put, Powell explained that the increasingly popular theory espoused by progressives
that the government can continue to borrow to fund social programs such as Medicare for
everyone, free college tuition and a conversion to renewable energy in the next decade is
unworkable and makes some "pretty extreme claims."
Earlier in the hearing Powell also noted that "U.S. debt is fairly high to the level of GDP
-- and much more importantly -- it's growing faster than GDP, really significantly faster. We
are going to have to spend less or raise more revenue."
In his book "A Time For Action" written in 1980 William Simon, a former Secretary of the
Treasury tells how he was "frightened and angry". In short, he sounded the trumpet about how
he saw the country was heading down the wrong path. William Simon (1927 – 2000) was a
businessman and a philanthropist.
Simon became the Secretary of the Treasury on May 8, 1974, during the Nixon administration
and was reappointed by President Ford and served until 1977. I recently picked up a copy of
the book that I had read decades ago and while re-reading it I reflected on and tried to
evaluate the events that brought us to today.
Out of this came an article reflecting on how the economy of today had been greatly shaped
by the actions that took place starting around 1979. Interest rates, inflation, and debt do
matter and are more significant than most people realize. Rewarding savers and placing a
value on the allocation of financial assets is important.
The path has again become unsustainable and many people will be shocked when the reality
hits, this is not the way it has always been. The day of reckoning may soon be upon us, how
it arrives is the question. Many of us see it coming, but the one thing we can bank on is
that after it arrives many people will be caught totally off guard. The piece below explores
how we reached this point.
1) It isn't a theory, just an explanation of the US monetary system and how it works. It
isn't advocating the system, it is just stating how it works and how one would need to
operate within it.
2) MMT states that money shouldn't be created (spent into the economy by the gov) unless
the necessary capacity, productivity, workers, resources and assets existed in the economy.
And, if they didn't, they'd have to be created first. This would prevent inflation, not
create it.
Most everyone is misinformed and hasn't done their homework as to what MMT is. The
Libtards have taken an MMT point out of context and run with it. PRINT MONEY! But they omit
the key MMT policy point of... "Print/spend ONLY ONLY ONLY if the productive capacity and
resources are already in the economy to balance any gov spending out." A slightly important
point that they conveniently overlooked due to their 2nd grade understanding of finance,
economics and accounting.
MMT simply doesn't work if a nation 'borrows' its own currency. However, if it does not,
then MMT would at least theoretically be correct because the issue of 'printing money'
(or creating credit) would not be tied to debt but would entail a balancing of the
beneficial and adverse effects of monetary inflation.
There is some evidence that you can print money and spend it and have a vibrant, powerful
economy. It depends on how you spend it. If it's spent on supportive infrastructure such as
energy, transportation, utilities, communications, etc. it's all upwards. If it's spent on
welfare, war machinery, and supporting the bureaucracy the system fails in one
generation.
Underlying the whole premise of MMT is the question; Does the market determine interest
rates or does the fed?
I know the fed determines the federal funds rate but are they the sole dictator of
interest rates? A large portion of our debt is purchased by both domestic and foreign
investors. These are independent people....as well as governments. Will they continue to buy
bonds at 2% interest from a country that has a debt-to-GDP ration of 300% and 10 trillion
dollar yearly deficits??
If US debt gets downgraded, can the fed over-ride the tide of reality and dictate low
interest rates? Can they print enough to buy them all or do they have to maintain a
functioning balance sheet as well?
cut spending - why does usa need fbi branches in every foreign country?
why do we need so many outdated military machines (ahem aircraft carriers)
why does health care and education cost so much (ahem we forget to talk about cost, only
how to pay the fee imposed by the business)
Much of our debt is result of party over country, pointless wars (that Iraq oil is now
controlled by Russia and china..so much for the return on investment there), Afghanistan is a
failed and foolish intervention - just ask russia, syria is a soverign nation leave them
alone, same as venezuala.
Retrench and let the world figure itself out - after pakistan and india nuke each other
back to stone age, lets hope for humanities sake we can get real global cooperative
leadership that doesnt include the capitalist big read white and blue **** smacking foreign
nations on the forehead to further the elites agenda.
Like a gilded coating that makes the dullest things glitter, today's thin veneer of
political populism covers a grotesque underbelly of growing inequality that's hiding in plain
sight. And this phenomenon of ever more concentrated wealth and power has both Newtonian and
Darwinian components to it.
In terms of Newton's first law of motion: those in
power will remain in power unless acted upon by an external force. Those who are wealthy will
only gain in wealth as long as nothing deflects them from their present course. As for Darwin,
in the world of financial evolution, those with wealth or power will do what's in their best
interest to protect that wealth, even if it's in no one else's interest at all.
In George Orwell's iconic 1945 novel, Animal Farm ,
the pigs who gain control in a rebellion against a human farmer eventually impose a
dictatorship on the other animals on the basis of a single commandment
: "All animals are equal, but some animals are more equal than others." In terms of the
American republic, the modern equivalent would be: "All citizens are equal, but the wealthy are
so much more equal than anyone else (and plan to remain that way)."
Certainly, inequality is the economic great wall between those with power and those without
it.
As the animals of Orwell's farm grew ever less equal, so in the present moment in a country
that still claims equal opportunity for its citizens, one in which
three Americans now have as much wealth as the bottom half of society (160 million people),
you could certainly say that we live in an increasingly Orwellian society. Or perhaps an
increasingly Twainian one.
After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an
unforgettable label on their moment and could do the same for ours. The Gilded Age: A Tale
of Today depicted the greed and political corruption of post-Civil War America. Its
title caught the spirit of what proved to be a long moment when the uber-rich came to dominate
Washington and the rest of America. It was a period saturated with robber barons, professional
grifters, and incomprehensibly wealthy banking magnates. (Anything sound familiar?) The main
difference between that last century's gilded moment and this one was that those robber barons
built tangible things like railroads. Today's equivalent crew of the mega-wealthy build
remarkably intangible things like tech and electronic platforms, while a grifter of a president
opts for the only new infrastructure in sight, a great wall to nowhere.
In Twain's epoch, the U.S. was emerging from the Civil War. Opportunists were rising from
the ashes of the nation's battered soul. Land speculation, government lobbying, and shady deals
soon converged to create an unequal society of the first order (at least until now). Soon after
their novel came out, a series of recessions ravaged the country, followed by a 1907 financial
panic in New York City caused by a
speculator-led copper-market scam.
From the late 1890s on, the most powerful banker on the planet, J.P. Morgan, was called upon
multiple times to bail out a country on the economic edge. In 1907, Treasury Secretary George
Cortelyou provided him with
$25 million in bailout money at the request of President Theodore Roosevelt to stabilize
Wall Street and calm frantic citizens trying to withdraw their deposits from banks around the
country. And this Morgan did -- by helping his friends and their companies, while skimming
money off the top himself. As for the most troubled banks holding the savings of ordinary
people? Well, they folded. (Shades of the 2007-2008 meltdown and bailout anyone?)
The leading bankers who had received that bounty from the government went on to cause the
Crash of 1929 .
Not surprisingly, much speculation and fraud preceded it. In those years, the novelist F. Scott
Fitzgerald caught
the era's spirit of grotesque inequality in The Great Gatsby when one of his characters
comments: "Let me tell you about the very rich. They are different from you and me." The same
could certainly be said of today when it comes to the gaping maw between the have-nots and
have-a-lots.
Income vs. Wealth
To fully grasp the nature of inequality in our twenty-first-century gilded age, it's
important to understand the difference between wealth and income and what kinds of inequality
stem from each. Simply put, income is how much money you make in terms of paid work or any
return on investments or assets (or other things you own that have the potential to change in
value). Wealth is simply the gross accumulation of those very assets and any return or
appreciation on them. The more wealth you have, the easier it is to have a higher annual
income.
Let's break that down. If you earn $31,000 a year, the median salary for an
individual in the United States today, your income would be that amount minus associated taxes
(including federal, state, social security, and Medicare ones). On average, that means you
would be left with about $26,000 before other expenses kicked
in.
If your wealth is $1,000,000, however, and you put that into a savings account paying
2.25%
interest , you could receive about $22,500 and, after taxes, be left with about $19,000,
for doing nothing whatsoever.
To put all this in perspective, the top 1% of Americans now take home, on average, more than
40 times the incomes of the bottom 90%. And if you head for the top 0.1%, those figures only
radically worsen. That tiny crew takes home more than 198 times the income of the
bottom 90% percent. They also possess
as much wealth as the nation's bottom 90%. "Wealth," as Adam Smith so classically noted
almost two-and-a-half-centuries ago in The Wealth of Nations , "is power," an adage that seldom, sadly, seems outdated.
A Case Study: Wealth, Inequality, and the Federal Reserve
Obviously, if you inherit wealth in this country, you're instantly ahead of the game. In
America, a third to nearly a half of all wealth is
inherited rather than self-made. According to a New York Times investigation, for
instance, President Donald Trump, from birth, received an estimated
$413 million (in today's dollars, that is) from his dear old dad and another
$140 million (in today's dollars) in loans. Not a bad way for a "businessman" to begin
building the empire (of bankruptcies
) that became the platform for a presidential campaign that
oozed into actually running the country. Trump did it, in other words, the old-fashioned
way -- through inheritance.
In his megalomaniacal zeal to declare a national emergency at the southern border, that
gilded millionaire-turned-billionaire-turned-president provides but one of many examples of a
long record of abusing power. Unfortunately, in this country, few people consider record
inequality (which is still growing) as another kind of abuse of power, another kind of great
wall, in this case keeping not Central Americans but most U.S. citizens out.
The Federal Reserve, the country's central bank that dictates the cost of money and that
sustained Wall Street in the wake of the financial crisis of 2007-2008 (and since), has finally
pointed out that such extreme levels of inequality are bad news for the rest of the country. As
Fed Chairman Jerome Powell said at a
town hall in Washington in early February, "We want prosperity to be widely shared. We need
policies to make that happen." Sadly, the Fed has largely contributed to increasing
the systemic inequality now engrained in the financial and, by extension, political system. In
a recent research paper , the Fed
did, at least, underscore the consequences of inequality to the economy, showing that "income
inequality can generate low aggregate demand, deflation pressure, excessive credit growth, and
financial instability."
In the wake of the global economic meltdown, however, the Fed took it upon itself to reduce
the cost of money for big banks by chopping interest rates to zero (before eventually raising
them to 2.5%) and buying $4.5 trillion in Treasury and mortgage bonds to lower it further. All
this so that banks could ostensibly lend money more easily to Main Street and stimulate the
economy. As Senator Bernie Sanders noted though, "The
Federal Reserve provided more than $16 trillion in total financial assistance to some of the
largest financial institutions and corporations in the United States and throughout the world a
clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone
else."
The economy has been treading water ever since (especially compared to the stock market).
Annual gross domestic product growth has not surpassed
3% in any year since the financial crisis, even as the level of the stock market
tripled , grotesquely increasing the country's inequality gap. None of this should have
been surprising, since much of the excess money went straight to big banks, rich investors, and
speculators. They then used it to invest in the stock and bond markets, but not in things that
would matter to all the Americans outside that great wall of wealth.
The question is: Why are inequality and a flawed economic system mutually reinforcing? As a
starting point, those able to invest in a stock market buoyed by the Fed's policies only
increased their wealth exponentially. In contrast, those relying on the economy to sustain them
via wages and other income got shafted. Most people aren't, of course, invested in the stock
market, or really in anything. They can't afford to be. It's important to remember that nearly
80% of the population lives paycheck to paycheck.
The net result: an acute post-financial-crisis increase in
wealth inequality -- on top of the income inequality that was global but especially true in the
United States. The crew in the top 1% that doesn't rely on salaries to increase their wealth
prospered fabulously. They, after all, now own
more than half of all national wealth invested in stocks and mutual funds, so a soaring
stock market disproportionately helps them. It's also why the Federal Reserve
subsidy policies to Wall Street banks have only added to the extreme wealth of those
extreme few.
The Ramifications of Inequality
The list of negatives resulting from such inequality is long indeed. As a start, the only
thing the majority of Americans possess a greater proportion of than that top 1% is a mountain
of debt.
The bottom 90% are the lucky owners of about three-quarters of the country's household debt.
Mortgages, auto loans, student loans, and credit-card debt are cumulatively at a
record-high $13.5 trillion .
And that's just to start down a slippery slope. As Inequality.org reports, wealth and
income inequality impact "everything from life expectancy to infant mortality and obesity."
High economic inequality and poor health, for instance, go hand and hand, or put another way,
inequality compromises the overall health of the country. According to academic findings,
income inequality is, in the most literal sense, making Americans sick. As one study put it ,
"Diseased and impoverished economic infrastructures [help] lead to diseased or impoverished or
unbalanced bodies or minds."
Then there's Social Security, established in 1935 as a federal supplement for
those in need who have also paid into the system through a tax on their wages. Today, all
workers contribute 6.2% of their annual earnings and employers pay the other 6.2% (up to a cap
of $132,900 ) into the Social
Security system. Those making far more than that, specifically millionaires and billionaires,
don't have to pay a dime more on a proportional basis. In practice, that means about 94%
of American workers and their employers paid the full 12.4% of their annual earnings toward
Social Security, while the other 6% paid an often significantly smaller fraction of their
earnings.
According to his
own claims about his 2016 income, for instance, President Trump "contributed a mere 0.002
percent of his income to Social Security in 2016." That means it would take nearly
22,000 additional workers earning the median U.S. salary to make up for what he doesn't
have to pay. And the greater the income inequality in this country, the more money those who
make less have to put into the Social Security system on a proportional basis. In recent years,
a staggering $1.4 trillion
could have gone into that system, if there were no arbitrary payroll cap favoring the
wealthy.
Inequality: A Dilemma With Global Implications
America is great at minting millionaires. It has the highest concentration of them, globally
speaking, at 41%. (Another 24% of that millionaires' club can be found in Europe.) And the top
1% of U.S. citizens earn 40 times the national average and
own about 38.6 % of the country's total wealth. The highest figure in any other developed
country is "only" 28%.
However, while the U.S. boasts of epic levels of inequality, it's also a global trend.
Consider this: the world's richest 1% own 45% of total wealth on
this planet. In contrast, 64% of the population (with an average of
$10,000 in wealth to their name) holds less than 2%. And to widen the inequality picture a bit
more, the world's richest 10%, those having at least $100,000 in assets, own 84% of total
global wealth.
The billionaires' club is where it's really at, though. According to Oxfam, the richest
42 billionaires have a combined wealth equal to that of the poorest 50% of humanity. Rest
assured, however, that in this gilded century there's inequality even among billionaires. After
all, the 10 richest among them possess $745
billion in total global wealth. The next 10 down the list possess a mere $451.5 billion , and why even
bother tallying the next 10 when you get the picture?
Oxfam also recently
reported that "the number of billionaires has almost doubled, with a new billionaire
created every two days between 2017 and 2018. They have now more wealth than ever before while
almost half of humanity have barely escaped extreme poverty, living on less than $5.50 a
day."
How Does It End?
In sum, the rich are only getting richer and it's happening at a historic rate. Worse yet,
over the past decade, there was an extra perk for the truly wealthy. They could bulk up on
assets that had been devalued due to the financial crisis, while so many of their peers on the
other side of that great wall of wealth were economically decimated by the 2007-2008 meltdown
and have yet to fully
recover .
What we've seen ever since is how money just keeps flowing upward through banks and massive
speculation, while the economic lives of those not at the top of the financial food chain have
largely remained stagnant or worse. The result is, of course, sweeping inequality of a kind
that, in much of the last century, might have seemed inconceivable.
Eventually, we will all have to face the black cloud this throws over the entire economy.
Real people in the real world, those not at the top, have experienced a decade of ever greater
instability, while the inequality gap of this beyond-gilded age is sure to shape a truly messy
world ahead. In other words, this can't end well.
I read a stat in Mother Jones magazine that 90% of Americans have an average income of
$31,000 a year and the richest .1 percent have an average income of $27 million dollars. So
how does one pay all these living expenses and various debts with $26,000 after taxes? The
Trump tax cuts just exacerbated the problem by giving more money to the wealthy and
practically nothing to the 90% (at the bottom, which is almost everyone else). A good book on
the subject of wealth inequality is "Billionaire's Ball."
from what I recall the global debt to GDP ratio is about 320% in Q4 2018. GDP growth will cease when debt expansion ceases (FWIW
I suspect widely acknowledged peak oil in the rear view mirror, so to speak, will likely play a role in the realization that event)
In 2008 the size of the US economy was $14.5 trillion. A decade later, the size of the economy is $19.7 trillion, so about
36% greater.
Over the same ten years the national debt has grown from $9.4 trillion to over $21 trillion- about 123% greater.
It's hard to pretend that's not a problem, but people still do try.
Interestingly enough .
Census Bureau, Treasury, EIA Detail American Insolvency
"And comparing the US primary energy consumption versus the Wilshire 5000 (representing the value of all publicly traded US
equity), a funny thing shows up. Flat to declining energy consumption vs. surging asset valuations this is typically understood
as a red flag for phony wealth creation via market manipulation, monetization, and banana republic central banking."
Is a slow recession a tragedy, with chaos necessarily baked into the equation?
If we are lucky, that will be the global challenge.
If not so lucky, recession will be depression.
Some places more than others, of course.
Russia may be be looking more solid than most in the 2030's.
Western Europe, not so good.
Overall, I was referring to the conditions that will likely ensue after peak fossil.
As very well stated in the post by Opritov Alexander above (and by Ron so many times), the hurdles to replace fossil energy are
insurmountable, by and large.
As you have pointed out before, there is a big risk for economic contraction around the time of peal oil.
I expect it to be severe in degree, especially among countries that are elderly, heavily indebted, and heavily dependent on imported
energy. And many of these places are your trading partners, no matter what country you hail from.
Indebtedness is not just a transitory or 'paper' issue, IMHO. The cost to attempt transition to non-fossil energy will be huge
(beyond huge). How do you buy a second home (renewable energy on a countrywide basis), when you are already maxed out on your
credit for the 30 yr loan on your current one (maintenance of your current economic activity and dependents)?
As a slight aside, GDP is not very useful when determining the wealth of a country, since it includes frivolous activity that
will evaporate in tough times. Financial transactions, hair dressers, restaurants, sports and music entertainment, weddings, luxury
items such as fancy cars, boats and fashion, advertising , are examples of GDP components that can evaporate almost immediately
when the times get tough and the velocity of money heads towards zero.
GDP considers natural disasters like earthquakes, floods, tsunamis and hurricanes as being favorable to the economy. Add to this
the fact that these disasters are hated by the common people who rightly pray that this destruction happens as seldom as possible.
Once again, due to the poor fundamentals of the GDP system, the entire science of economics is branded as being anti social. Once
again, the true economic fundamentals are not being considered or else the question of economics being an anti-social science
does not arise. In this article we will first consider the prevalent viewpoint and then we will debunk the myths pertaining to
it.
When a metric values natural disasters as favorable to the economy then you know somethings being missed. I would suggest that
repairing after a storm is not growth. GDP makes no distinction between Construction and Reconstruction.
My understanding is that there are proved undeveloped reserves, those require new
wells.
Dennis, I need to know just how you arrived at this understanding? It is my understanding
that these are infill wells. The word "infill" implies developed, not undeveloped.
1. n. [Enhanced Oil Recovery]
The addition of wells in a field that decreases average well spacing. This practice both
accelerates expected recovery and increases estimated ultimate recovery in heterogeneous
reservoirs by improving the continuity between injectors and producers. As well spacing is
decreased, the shifting well patterns alter the formation-fluid flow paths and increase sweep
to areas where greater hydrocarbon saturations exist.
Infill drilling does increase the ultimate recovery as it gets gaps near the top of the
reservoir that otherwise might be missed. But mostly it just pulls the oil out faster. That
is most of the oil recovered by infill drilling is not oil that would otherwise be
missed.
There are no longer any undeveloped fields in Saudi Arabia. These wells are in the very
well developed Ghawar, and I assume the field to the west is Khurais. Both fields are not
just developed, but overly developed. They have been doing infill drilling in Ghawar for
almost two decades. I assume these new Ghawar wells will be in the very southern two
fields.
From what I understand it was also stated by Schlumberger that they are in-fill (infill?)
wells Just sticking more straws in an almost empty bucket. It seems to me that that will
bring forward future production(to sustain a plateau) and the eventual decline rate in the
future will necessarily be steeper, like a bell curve vs a Seneca Cliff type curve.
I would suggest infill drilling is a good indicator of what KSA feels it's oil development
priorities are. One could make an assumption about why they feel that way. I assume it's
because they don't have anything better to do with the drilling rigs.
Ron, what is your opinion on Saudi Arabia? A I have said here before, I think that the Ghawar
could water out at any time, reducing Saudi output by somewhere in the region of 3 mbpd in
short order. It could happen tomorrow, next week, next year, who (outside of Aramco) knows?
Islandboy, Ghawar is not one field, it is five fields. From north to south there is Ain Dar,
Shedgum, Uthmaniyah, Hawiyah and Haradh. Ghawar was developed from north to south.
Ghawar is currently estimated to account for about six percent of the world's total
daily crude oil output. The field's production peaked at 5.7million barrels per day in 1981
and later slipped below the five million mark. The development of the southern Hawiyah and
Haradh areas during 1994 and 1996, however, raised the production to five million barrels per
day again.
Ain Dar, Shedgum, and Uthmaniyah are all in decline and likely in steep decline. Hawiyah
and Haradh likely have not yet peaked. However, it is production from Khurais and Manifa and
Shaybah that is keeping the decline in Saudi production from becoming obvious. All other
fields, other than the bottom two Ghawar fields, and these three latest developed fields, are
in steep decline.
Khurais and Manifa were in mothballs for decades. Then they were brought on line, at great
expense, to counter the decline in all the other super-giant fields. But the decline in these
old super-giants is getting steeper.
In the third decade of the XXI century, which is about to come, one of the main problems
facing humanity, again, as in the 60s, will be its energy supply, as well as the search for
the main "energy carrier of the future."
The three whales that the world's energy industry today holds: oil, natural gas and coal
are, by their nature, non-renewable sources of energy. True, with regard to oil and gas, this
thesis is actively debated at the academic level, but for practical purposes it is
indisputable: modern civilization consumes so much hydrocarbons that their natural
substitution, if it exists, is not able to compensate for this exemption. The energy sources
mentioned above in 2017 accounted for about 81% of world primary energy production, and they
still define the image of our modern industrial world, while all renewable energy sources
provide only about 14% of primary energy production, and about 5% The balance comes from
nuclear energy (International Energy Agency, 2017).
At the same time, the situation with renewable sources is not at all as rosy as it may
seem at first glance: out of 14% of renewable sources, 10% is the energy from burning wood
and biomass, and 2.5% is hydropower. At the same time, the "fashionable" in the last decade,
and having received at the same time gigantic, almost trillion-dollar investments in solar
and wind energy projects, are not as high as 2% in the overall balance of the production of
primary energy. At the same time, it is not even about the absolute figures for the
introduction of new capacities of green energy, which may seem impressive, but about the
exponential dynamics of the relationship between "oil-coal-gas" and "green" in the long term.
After all, a decade ago, in 2008, the world balance of power generation looked like this: 78%
were oil, natural gas and coal, 5% were atomic energy, 3% were hydropower, about 13.5% were
wood and biomass, and 0, 5% produced wind and solar energy. Surprisingly, over the past ten
years, the transition from "wood and straw" to the energy of oil, natural gas and coal, which
occurred naturally, turned out to be two and a half times more significant for the global
energy balance than the development of "green" energy technologies.
The phenomenon of such meager growth of "green" energy is interesting in itself: for the
first time the capitalist mode of production, in which investments in fixed assets imply
quick returns in the form of profits, gives an obvious, albeit programmed failure. Its
essence becomes clear if we take into account in the picture the "quiet" transition of the
world from "firewood and straw" to oil, gas and coal, which lasted throughout the decade of
2008–2018. This process, which no one financed in a targeted manner or advertised in
the world media or Western scientific publications, went forward thanks to economic
expediency. At the same time, the planting of green energy was accompanied not only by a
powerful public relations campaign and trillions of financing, but also forced almost all
countries to accept special, non-economic overpriced tariffs for the purchase of green energy
in order to somehow force capital to finance unprofitable production. energy with wind
turbines and solar panels.
World energy: a general view
Several reputable organizations are engaged in the problem of the global energy balance.
These include the United States Department of Energy (DOE), the International Energy Agency
(IEA), located in Paris, and the well-known oil company BP (ex-British Petroleum). Each of
these organizations publishes annual reports on the situation in the global energy industry
and the prospects for its development. These reports are compiled on the basis of an analysis
of the mass of primary information, often of an incomplete and contradictory nature.
Nevertheless, due to a certain averaging of all the initial data, the annual reports of these
organizations quite fully and clearly reflect the overall world dynamics. In this article, in
order to bring the data to one standard, we will rely on the annual reports of BP, unless
otherwise explicitly stated in the text.
In accordance with the latest available BP report, global energy consumption reached
13,511 million tons of oil equivalent in 2017 (TNE, eng. "Tonne of oil equivalent", TOE). At
the same time, over the decade between 2007 and 2017, world primary energy consumption grew
by an average of 1.5%. That is, the dynamics of energy consumption correlate well with the
observed growth rates of the global economy over the same period – an average of 3.2%
per year (World Bank and IMF, 2018).
The fluctuations of this second parameter, associated with economic crises and recessions
observed in the period under review, make it possible to evaluate the contribution of the
notorious "energy efficiency" to the global growth in demand
No, there does not even remotely a hint of abiotic oil. Read the last two paragraphs again.
That is what it hints to. An average growth of 1.5% in energy consumption and a growth of
3.2% in the global economy has been enabled by a continual growth in energy efficiency. This
cannot possibly continue, especially the 3.2% growth in global economy. When the global
economy does not grow it receeds. This is called a recession.
Looks like a glut of condensates has developed and is getting worse.
Another thing to ponder about shale oil: falling capex, but solid production growth And
that's after three bad years (2015, 2016 and 2017) and low current prices.
Do the US shale oil producers want to establish some kind of "world record" and then "The
last one out please turn off the lights."
How can such a miracle happen?
The US oil production is really Alice in Wonderland phenomenon.
> It is very likely that Russia+ Canada will peak within the next two years.
I agree that Russia is close to its peak. But, at the same time, Russia has a huge Arctic
territory with a very low density of population (due to harsh conditions), which probably is
not explored that well. Also with their gas reserves, they might be able to increase the
condensate production considerably, repeating the USA path.
The other possibility is Russia sliding in chaos after Putin retirement, as there is no
any politician of equal caliber able to pick up the helm among the current elite. And there
will be "external helpers" like after Brezhnev's death who will try to get some comprador at
the top. Also, the leadership change historically is a huge problem in Russia.
Russia is a kind of 'A riddle wrapped up in an enigma.' Everybody wrote Russia off in late
90th. It is difficult to make predictions about Russia.
If I remember correctly, Fernando Leanme used to work at Russia in the past, and he might
share his thoughts about this issue.
What is interesting is that due to the use of natural gas in transport, Russia does not
consume that much oil internally, which makes an important difference with KSA.
Increasing Russia's Arctic production is feasible, but this will take many years, and I don't
think it can offset decline to make much of a difference. Yamal has huge gas condensate
reservoirs located under the Cenomanian, but they need many more wells. I believe they can
produce 1 mmbopd of condensate, but that would take 15 to 20 years.
I believe Putin is smart enough to set up a successful replacement, and the Russian elite
will also be keen on a smooth transition because they think they are under attack (yes, they
are convinced the USA, Germany, France and others are very keen on making them submit).
1.Russians are not very happy with Putin
2. Most Russians will support him in any circumstances. This is a principle. Otherwise,
chaos.
3.95% Rosiyan has a negative attitude towards liberals, as well as to "democratic values"
(this is a declaration that has no common with reality)
4.Most Russians dissatisfied with property inequality that appeared in the last 25 years
5. The greatest dissatisfaction is the destruction of industry. The lack of productive labor.
(We live with the income of hydrocarbons, the country-gas station). The consequence of
globalism.
>>>
During 2016-2017 Rosneft and the Russian government have been elaborating in details
additional options for the development of unique Samotlor field. As a result a joint decision
was made for an investment incentive in the form of an annual mineral extraction tax
reduction of RUB 35 billion during 10 years.
The Board has confirmed the Company's obligations to drill over 2,400 wells during
2018-2027 that would provide additional output in the amount of more than 50 mtoe. The
extended Samotlor development program would result in an increase of tax liabilities to
budgets of all administrative levels to RUB 1.7 trln. The investment incentives should give
new momentum to the development of one of the largest fields in the country and bring
significant multiplicative effect for Russian economy.
<<<
2,400 wells in a decade is 240 a year. This article is discussing just Samotlor.
A conventional field drilling a well more often than once every two days. Quite a bit more
than that I imagine in the good time of the year with the swings in Siberian weather
conditions.
That's nuts. It's also going to shark fin at some point.
Interesting, Schlumberger said during q&a in their q3 they they had a contract for 400
wells 2019-2021 for the saudis, it was ghawar and one neighbouring field to the west that i
cant remember name of that all 400 wells were going into. They were also quite honest about
its purpose that it was to mitigate declines.
So that makes it pretty much exactly 50% of the russian drill rate per day in samotlor you
mention abowe.
I asked in previous thread why that many wells were needed if we are to believe saudis
200gb+ of world class reserves remaining. In my opinion i didn't get any answer to that
question.
Somebody way up above said because Russia uses natgas for transport they don't consume much
oil.
Gas consumption growth last year was 1.3% Oil consumption growth was 1%.
Russian car sales grew 18% last year after a double digit gain the previous year. Lada
dominates their sales, and as best I can see they are all petrol fueled. Hyundai and Kia are
a substantial presence as well, but I see no evidence in general of natgas dominating
transport.
American model sales seem at best obscure. It's Lada, Hyundai, Kia, BMW, VW.
The statement about Russia using natural gas heavily for transport is simply inaccurate.
Russia "only" consumes 3.2 million barrels per day of oil. But that's more because the
country does not have anywhere near the continent-wide car infrastructure and other wealthy
sprawl the United States built out.
We begin our investigation with a historical account of the rise of neoliberal hegemony.
Hegemony is a concept developed by Italian Marx- ist Antonio Gramsci. Gramsci was keen to
account for the definitive role that culture played in legitimizing and sustaining capitalism
and its exploitation of the working classes. In our own context of extreme economic inequality,
Gramsci's question is still pressing: How and why do ordinary working folks come to accept a
system where wealth is produced by their collective labors and energies but appropriated
individually by only a few at the top?
The theory of hegemony suggests that the answer to this question is not simply a matter of
direct exploitation and control by the capitalist class. Rather, hegemony posits that power is
maintained through ongoing, ever-shifting cultural processes of winning the consent of the
governed, that is, ordinary people like you and me.
In other words, if we want to really understand why and how phenomena like inequality and
exploitation exist, we have to attend to the particular, contingent, and often contradictory
ways in which culture gets mobilized to forward the interests and power of the ruling classes.
According to Gramsci, there was not one ruling class, but rather a historical blос.
"A moving equilibrium" of class interests and values.
Hegemony names a cultural struggle for moral, social, economic, and political leadership; in
this struggle, a field -- or assemblage -- of practices, discourses, values, and beliefs come
to be dominant. While this field is powerful and firmly entrenched, it is also open to
contestation.
In other words, hegemonic power is always on the move; it has to keep winning our consent
to survive, and sometimes it fails to do so. Through the lens of hegemony, we can think about
the rise of neoliberalism as an ongoing political project -- and class struggle -- to shift
society's political equilibrium and create a new' dominant field.
The book adhere to "classic" line of critique of neoliberalism as a new "secular religion" ( the author thinking is along the lines
of Gramsci idea of "cultural hegemony"; Gramsci did not use the term 'secular religion" at all, but this close enough concept) that
deified the market. It stress the role of the state in enforcing the neoliberalism.
The book adhere to "classic" line of critique of neoliberalism as a new "secular religion" ( the author thinking is along the
lines of Gramsci idea of "cultural hegemony"; Gramsci did not use the term 'secular religion" at all, but this is close enough
concept) that deified the market. It stresses the role of the state in enforcing the neoliberal ideology much like was the case
with Bolsheviks in the USSR:
Gramsci's question is still pressing: How and why do ordinary working folks come to accept a system where wealth is produced
by their collective labors and energies but appropriated individually by only a few at the top? The theory of hegemony suggests
that the answer to this question is not simply a matter of direct exploitation and control by the capitalist class. Rather,
hegemony posits that power is maintained through ongoing, ever-shifting cultural processes of winning the consent of the governed,
that is, ordinary people like you and me.
According to Gramsci, there was not one ruling class, but rather a historical bloc, "a moving equilibrium" of class interests
and values. Hegemony names a cultural struggle for moral, social, economic, and political leadership; in this struggle, a field
-- or assemblage -- of practices, discourses, values, and beliefs come to be dominant. While this field is powerful and firmly
entrenched, it is also open to contestation. In other words, hegemonic power is always on the move; it has to keep winning
our consent to survive, and sometimes it fails to do so.
Through the lens of hegemony, we can think about the rise of neoliberalism as an ongoing political project -- and class struggle
-- to shift society's political equilibrium and create a new dominant field. Specifically, we are going to trace the shift
from liberal to neoliberal hegemony. This shift is represented in the two images below.
Previous versions of liberal hegemony imagined society to be divided into distinct public and private spheres. The public
sphere was the purview of the state, and its role was to ensure the formal rights and freedoms of citizens through the rule
of law. The private sphere included the economy and the domestic sphere of home and family.
For the most part, liberal hegemony was animated by a commitment to limited government, as the goal was to allow for as
much freedom in trade, associations, and civil society as possible, while preserving social order and individual rights. Politics
took shape largely around the line between public and private; more precisely, it was a struggle over where and how to draw
the line. In other words, within the field of liberal hegemony, politics was a question of how to define the uses and limits
of the state and its public function in a capitalist society. Of course, political parties often disagreed passionately about
where and how to draw that line. As we'll see below, many advocated for laissez-faire capitalism, while others argued for a
greater public role in ensuring the health, happiness, and rights of citizens. What's crucial though is that everyone agreed
that there was a line to be drawn, and that there was a public function for the state.
As Figure 1.1 shows, neoliberal hegemony works to erase this line between public and private and to create an entire society
-- in fact, an entire world -- based on private, market competition. In this way, neoliberalism represents a radical reinvention
of liberalism and thus of the horizons of hegemonic struggle. Crucially, within neoliberalism, the state's function does not
go away; rather, it is deconstructed and reconstructed toward the new' end of expanding private markets.
This view correlates well with the analysis of Professor Wendy Brown book "Undoing the Demos" and her paper "Neoliberalism
and the End of Liberal Democracy" (pdf is freely available)
In this sense neoliberalism are just "Trotskyism for the rich" with the same utopian dream of global neoliberal revolution,
but much more sinister motives. And is as ruthless in achieving its goals, if necessary bring neoliberal "regime change" on the
tips of bayonets, or via 'cultural revolutions".
If we follow the line of thinking put forward by Professor Philip Mirowski's in his book "Never Let a Serious Crisis Go to
Waste: How Neoliberalism Survived the Financial Meltdown," we can say that neoliberals essentially "reverse-engineered" Bolsheviks
methods of acquiring and maintaining political power, replacing "dictatorship of proletariat" with the "dictatorship of financial
oligarchy".
I would say more: The "professional revolutionary" cadre that were the core of Bolshevik's Party were replaced with well paid,
talented intellectual prostitutes at specially created neoliberal think tanks. And later "infiltrated" in economic departments
(kind of stealth coup d'état in academia financed by usual financial players).
Which eventually created a critical mass of ideas which were able to depose New Deal Capitalism ideology, putting forward the
set of remedies that restore the power the financial oligarchy enjoyed in 1920th. Technological changes such as invention of computers
and telecommunication revolution also helped greatly.
At the same time unlike Bolsheviks, neoliberals are carefully hiding their agenda. Funny, neoliberalism is the only known to
me major ideology which the US MSM are prohibited to mention by name ;-)
The role of state under neoliberalism is very close to the role of state under Bolsheviks' "dictatorship of proletariats".
It no way this still a liberal democracy -- this is what Sheldon Wolin called "inverted totalitarism". Less brutal then Bolsheviks'
regime, but still far from real democracy. Under neoliberalism the state is a powerful agent needed to enforce markets on unsuspecting
population in all spheres of life, whether they want it or not (supported by 12" guns of neoliberal MSM battleships):
As Figure 1.1 shows, neoliberal hegemony works to erase this line between public and private and to create an entire society
-- in fact, an entire world -- based on private, market competition. In this way, neoliberalism represents a radical reinvention
of liberalism and thus of the horizons of hegemonic struggle. Crucially, within neoliberalism, the state's function does not
go away; rather, it is deconstructed and reconstructed toward the new' end of expanding private markets. Consequently, contemporary
politics take shape around questions of how best to promote competition. For the most part, politics on both the left and right
have been subsumed by neoliberal hegemony. For example, while neoliberalism made its debut in Western politics with the right-wing
administrations of Ronald Reagan and Margaret Thatcher, leaders associated with the left have worked to further neoliberal
hegemony in stunning ways. As we will explore in more depth below and in die coming chapters, both U.S. presidents Bill Clinton
and Barack Obama have governed to create a privatized, market society. In other words, there is both a left and a right hegemonic
horizon of neoliberalism. Thus, moving beyond neoliberalism will ultimately require a whole new field of politics.
One of the most interesting part of the book is the brief analysis of the recent elections (with very precise characterization
of Hillary Clinton defeat as the defeat of the "neoliberal status quo"). The author claims that Trump supporters were mainly representatives
of the strata of the US society which were sick-and-tied of neoliberalism (note the percentage of Spanish speaking electorate
who voted for Trump), but they were taken for a ride, as instead of rejection of globalism and free movement of labor, Trump actually
represented more right wing, more bastardized version of "hard neoliberalism".
In the period which followed the elections Trump_vs_deep_state emerged as a kind of "neoliberalism in one country" -- much
like Stalin's "socialism in one country". It and did not care one bit about those who voted for him during election . As in classic
"The Moor has done his duty, the Moor can go."
So in a way Trump represents the mirror image of Obama who in the same way betrayed his votes (twice) acting from "soft neoliberalism"
position, while Trump is acting from "hard neoliberalism" position.
On the other hand, we saw' the rise of the Tea Party, a right-wing response to the crisis. While the Tea Party was critical
of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was perfectly
embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-,
it represented a more authoritarian, right [wing] version of neoliberalism.
Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering.
Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. There were just too many fissures and fault lines in
the glossy, cosmopolitan world of left neoliberalism and marketized equality. Indeed, while Clinton ran on status-quo stories
of good governance and neoliberal feminism, confident that demographics and diversity would be enough to win the election,
Trump effectively tapped into the unfolding conjunctural crisis by exacerbating the cracks in the system of marketized equality,
channeling political anger into his celebrity brand that had been built on saying "f*** you" to the culture of left neoliberalism
(corporate diversity, political correctness, etc.) In fact, much like Clinton's challenger in the Democratic primary, Benie
Sanders, Trump was a crisis candidate.
... ... ...
In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as
Rottenberg argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism
that has many concerned about the rise of U.S. fascism.
We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and
left neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here.
As I suggested in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled
politics of both right and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized
equality. After all, as political philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive,
left neoliberalism.
While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking
with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected
the chance of a better world. They have not yet been offered one."'
"... While the Tea Party was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-, it represented a more authoritarian, right [wing] version of neoliberalism. ..."
"... Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering. Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. ..."
"... Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders' energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood" path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy. ..."
"... In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many concerned about the rise of U.S. fascism. ..."
"... We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism. ..."
"... While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the chance of a better world. They have not yet been offered one."' ..."
In Chapter 1, we traced the rise of our neoliberal conjuncture back to the crisis of liberalism during the late nineteenth and
early twentieth centuries, culminating in the Great Depression. During this period, huge transformations in capitalism proved impossible
to manage with classical laissez-faire approaches. Out of this crisis, two movements emerged, both of which would eventually shape
the course of the twentieth century and beyond. The first, and the one that became dominant in the aftermath of the crisis, was the
conjuncture of embedded liberalism. The crisis indicated that capitalism wrecked too much damage on the lives of ordinary citizens.
People (white workers and families, especially) warranted social protection from the volatilities and brutalities of capitalism.
The state's public function was expanded to include the provision of a more substantive social safety net, a web of protections for
people and a web of constraints on markets. The second response was the invention of neoliberalism. Deeply skeptical of the common-good
principles that undergirded the emerging social welfare state, neoliberals began organizing on the ground to develop a "new" liberal
govemmentality, one rooted less in laissez-faire principles and more in the generalization of competition and enterprise. They worked
to envision a new society premised on a new social ontology, that is, on new truths about the state, the market, and human beings.
Crucially, neoliberals also began building infrastructures and institutions for disseminating their new' knowledges and theories
(i.e., the Neoliberal Thought Collective), as well as organizing politically to build mass support for new policies (i.e., working
to unite anti-communists, Christian conservatives, and free marketers in common cause against the welfare state). When cracks in
embedded liberalism began to surface -- which is bound to happen with any moving political equilibrium -- neoliberals were there
with new stories and solutions, ready to make the world anew.
We are currently living through the crisis of neoliberalism. As I write this book, Donald Trump has recently secured the U.S.
presidency, prevailing in the national election over his Democratic opponent Hillary Clinton. Throughout the election, I couldn't
help but think back to the crisis of liberalism and the two responses that emerged. Similarly, after the Great Recession of 2008,
we've saw two responses emerge to challenge our unworkable status quo, which dispossesses so many people of vital resources for individual
and collective life. On the one hand, we witnessed the rise of Occupy Wall Street. While many continue to critique the movement for
its lack of leadership and a coherent political vision, Occupy was connected to burgeoning movements across the globe, and our current
political horizons have been undoubtedly shaped by the movement's success at repositioning class and economic inequality within our
political horizon. On the other hand, we saw' the rise of the Tea Party, a right-wing response to the crisis. While the Tea Party
was critical of status-quo neoliberalism -- especially its cosmopolitanism and embrace of globalization and diversity, which was
perfectly embodied by Obama's election and presidency -- it was not exactly anti-neoliberal. Rather, it was anti-left neoliberalism-,
it represented a more authoritarian, right [wing] version of neoliberalism.
Within the context of the 2016 election, Clinton embodied the neoliberal center that could no longer hold. Inequality. Suffering.
Collapsing infrastructures. Perpetual war. Anger. Disaffected consent. There were just too many fissures and fault lines in
the glossy, cosmopolitan world of left neoliberalism and marketized equality. Indeed, while Clinton ran on status-quo stories of
good governance and neoliberal feminism, confident that demographics and diversity would be enough to win the election, Trump effectively
tapped into the unfolding conjunctural crisis by exacerbating the cracks in the system of marketized equality, channeling political
anger into his celebrity brand that had been built on saying "f*** you" to the culture of left neoliberalism (corporate diversity,
political correctness, etc.) In fact, much like Clinton's challenger in the Democratic primary, Benie Sanders, Trump was a crisis
candidate.
Both Sanders and Trump were embedded in the emerging left and right responses to neoliberalism's crisis. Specifically, Sanders'
energetic campaign -- which was undoubtedly enabled by the rise of the Occupy movement -- proposed a decidedly more "commongood"
path. Higher wages for working people. Taxes on the rich, specifically the captains of the creditocracy.
Universal health care. Free higher education. Fair trade. The repeal of Citizens United. Trump offered a different response to
the crisis. Like Sanders, he railed against global trade deals like NAFTA and the Trans-Pacific Partnership (TPP). However, Trump's
victory was fueled by right neoliberalism's culture of cruelty. While Sanders tapped into and mobilized desires for a more egalitarian
and democratic future, Trump's promise was nostalgic, making America "great again" -- putting the nation back on "top of the world,"
and implying a time when women were "in their place" as male property, and minorities and immigrants were controlled by the state.
Thus, what distinguished Trump's campaign from more traditional Republican campaigns was that it actively and explicitly pitted
one group's equality (white men) against everyone else's (immigrants, women, Muslims, minorities, etc.). As Catherine Rottenberg
suggests, Trump offered voters a choice between a multiracial society (where folks are increasingly disadvantaged and dispossessed)
and white supremacy (where white people would be back on top). However, "[w]hat he neglected to state," Rottenberg writes,
is that neoliberalism flourishes in societies where the playing field is already stacked against various segments of society,
and that it needs only a relatively small select group of capital-enhancing subjects, while everyone else is ultimately dispensable.
1
In other words, Trump supporters may not have explicitly voted for neoliberalism, but that's what they got. In fact, as Rottenberg
argues, they got a version of right neoliberalism "on steroids" -- a mix of blatant plutocracy and authoritarianism that has many
concerned about the rise of U.S. fascism.
We can't know what would have happened had Sanders run against Trump, but we can think seriously about Trump, right and left
neoliberalism, and the crisis of neoliberal hegemony. In other words, we can think about where and how we go from here. As I suggested
in the previous chapter, if we want to construct a new world, we are going to have to abandon the entangled politics of both right
and left neoliberalism; we have to reject the hegemonic frontiers of both disposability and marketized equality. After all, as political
philosopher Nancy Fraser argues, what was rejected in the election of 2016 was progressive, left neoliberalism.
While the rise of hyper-right neoliberalism is certainly nothing to celebrate, it does present an opportunity for breaking
with neoliberal hegemony. We have to proceed, as Gary Younge reminds us, with the realization that people "have not rejected the
chance of a better world. They have not yet been offered one."'
Mark Fisher, the author of Capitalist Realism, put it this way:
The long, dark night of the end of history has to be grasped as an enormous opportunity. The very oppressive pervasiveness
of capitalist realism means that even glimmers of alternative political and economic possibilities can have a disproportionately
great effect. The tiniest event can tear a hole in the grey curtain of reaction which has marked the horizons of possibility under
capitalist realism. From a situation in which nothing can happen, suddenly anything is possible again.4
I think that, for the first time in the history of U.S. capitalism, the vast majority of people might sense the lie of liberal,
capitalist democracy. They feel anxious, unfree, disaffected. Fantasies of the good life have been shattered beyond repair for most
people. Trump and this hopefully brief triumph of right neoliberalism will soon lay this bare for everyone to see. Now, with Trump,
it is absolutely clear: the rich rule the world; we are all disposable; this is no democracy. The question becomes: How will we show
up for history? Will there be new stories, ideas, visions, and fantasies to attach to? How can we productively and meaningful intervene
in the crisis of neoliberalism? How can we "tear a hole in the grey curtain" and open up better worlds? How can we put what we've
learned to use and begin to imagine and build a world beyond living in competition? I hope our critical journey through the neoliberal
conjuncture has enabled you to begin to answer these questions.
More specifically, in recent decades, especially since the end of the Cold War, our common-good sensibilities have been channeled
into neoliberal platforms for social change and privatized action, funneling our political energies into brand culture and marketized
struggles for equality (e.g., charter schools, NGOs and non-profits, neoliberal antiracism and feminism). As a result, despite our
collective anger and disaffected consent, we find ourselves stuck in capitalist realism with no real alternative. Like the neoliberal
care of the self, we are trapped in a privatized mode of politics that relies on cruel optimism; we are attached, it seems, to politics
that inspire and motivate us to action, while keeping us living in competition.
To disrupt the game, we need to construct common political horizons against neoliberal hegemony. We need to use our common stories
and common reason to build common movements against precarity -- for within neoliberalism, precarity is what ultimately has the potential
to thread all of our lives together. Put differently, the ultimate fault line in the neoliberal conjiuicture is the way it subjects
us all to precarity and the biopolitics of disposability, thereby creating conditions of possibility for new coalitions across race,
gender, citizenship, sexuality, and class. Recognizing this potential for coalition in the face of precarization is the most pressing
task facing those who are yearning for a new world. The question is: How do we get there? How do we realize these coalitional potentialities
and materialize common horizons?
Ultimately, mapping the neoliberal conjuncture through everyday life in enterprise culture has not only provided some direction
in terms of what we need; it has also cultivated concrete and practical intellectual resources for political interv ention and social
interconnection -- a critical toolbox for living in common. More specifically, this book has sought to provide resources for thinking
and acting against the four Ds: resources for engaging in counter-conduct, modes of living that refuse, on one hand, to conduct one's
life according to the norm of enterprise, and on the other, to relate to others through the norm of competition. Indeed, we need
new ways of relating, interacting, and living as friends, lovers, workers, vulnerable bodies, and democratic people if we are to
write new stories, invent new govemmentalities, and build coalitions for new worlds.
Against Disimagination: Educated Hope and Affirmative Speculation
We need to stop turning inward, retreating into ourselves, and taking personal responsibility for our lives (a task which is ultimately
impossible). Enough with the disimagination machine! Let's start looking outward, not inward -- to the broader structures that undergird
our lives. Of course, we need to take care of ourselves; we must survive. But I firmly believe that we can do this in ways both big
and small, that transform neoliberal culture and its status-quo stories.
Here's the thing I tell my students all the time. You cannot escape neoliberalism. It is the air we breathe, the water in which
we swim. No job, practice of social activism, program of self-care, or relationship will be totally free from neoliberal impingements
and logics. There is no pure "outside" to get to or work from -- that's just the nature of the neoliberalism's totalizing cultural
power. But let's not forget that neoliberalism's totalizing cultural power is also a source of weakness. Potential for resistance
is everywhere, scattered throughout our everyday lives in enterprise culture. Our critical toolbox can help us identify these potentialities
and navigate and engage our conjuncture in ways that tear open up those new worlds we desire.
In other words, our critical perspective can help us move through the world with what Henry Giroux calls educated hope. Educated
hope means holding in tension the material realities of power and the contingency of history. This orientation of educated hope knows
very well what we're up against. However, in the face of seemingly totalizing power, it also knows that neoliberalism can never become
total because the future is open. Educated hope is what allows us to see the fault lines, fissures, and potentialities of the present
and emboldens us to think and work from that sliver of social space where we do have political agency and freedom to construct a
new world. Educated hope is what undoes the power of capitalist realism. It enables affirmative speculation (such as discussed in
Chapter 5), which does not try to hold the future to neoliberal horizons (that's cruel optimism!), but instead to affirm our commonalities
and the potentialities for the new worlds they signal. Affirmative speculation demands a different sort of risk calculation and management.
It senses how little we have to lose and how much we have to gain from knocking the hustle of our lives.
Against De-democratization: Organizing and Collective Coverning
We can think of educated hope and affirmative speculation as practices of what Wendy Brown calls "bare democracy" -- the basic
idea that ordinary' people like you and me should govern our lives in common, that we should critique and try to change our world,
especially the exploitative and oppressive structures of power that maintain social hierarchies and diminish lives. Neoliberal culture
works to stomp out capacities for bare democracy by transforming democratic desires and feelings into meritocratic desires and feelings.
In neoliberal culture, utopian sensibilities are directed away from the promise of collective utopian sensibilities are directed
away from the promise of collective governing to competing for equality.
We have to get back that democractic feeling! As Jeremy Gilbert taught us, disaffected consent is a post-democratic orientation.
We don't like our world, but we don't think we can do anything about it. So, how do we get back that democratic feeling? How do we
transform our disaffected consent into something new? As I suggested in the last chapter, we organize. Organizing is simply about
people coming together around a common horizon and working collectively to materialize it. In this way, organizing is based on the
idea of radical democracy, not liberal democracy. While the latter is based on formal and abstract rights guaranteed by the state,
radical democracy insists that people should directly make the decisions that impact their lives, security, and well-being. Radical
democracy is a practice of collective governing: it is about us hashing out, together in communities, what matters, and working in
common to build a world based on these new sensibilities.
The work of organizing is messy, often unsatisfying, and sometimes even scary. Organizing based on affirmative speculation and
coalition-building, furthermore, will have to be experimental and uncertain. As Lauren Berlant suggests, it means "embracing the
discomfort of affective experience in a truly open social life that no
one has ever experienced." Organizing through and for the common "requires more adaptable infrastructures. Keep forcing the existing
infrastructures to do what they don't know how to do. Make new ways to be local together, where local doesn't require a physical
neighborhood." 5 What Berlant is saying is that the work of bare democracy requires unlearning, and detaching from, our
current stories and infrastructures in order to see and make things work differently. Organizing for a new world is not easy -- and
there are no guarantees -- but it is the only way out of capitalist realism.
Getting back democratic feeling will at once require and help us lo move beyond the biopolitics of disposability and entrenched
systems of inequality. On one hand, organizing will never be enough if it is not animated by bare democracy, a sensibility that each
of us is equally important when it comes to the project of determining our lives in common. Our bodies, our hurts, our dreams, and
our desires matter regardless of our race, gender, sexuality, or citizenship, and regardless of how r much capital (economic,
social, or cultural) we have. Simply put, in a radical democracy, no one is disposable. This bare-democratic sense of equality must
be foundational to organizing and coalition-building. Otherwise, we will always and inevitably fall back into a world of inequality.
On the other hand, organizing and collective governing will deepen and enhance our sensibilities and capacities for radical equality.
In this context, the kind of self-enclosed individualism that empowers and underwrites the biopolitics of disposability melts away,
as we realize the interconnectedness of our lives and just how amazing it feels to
fail, we affirm our capacities for freedom, political intervention, social interconnection, and collective social doing.
Against Dispossession: Shared Security and Common Wealth
Thinking and acting against the biopolitics of disposability goes hand-in-hand with thinking and acting against dispossession.
Ultimately, when we really understand and feel ourselves in relationships of interconnection with others, we want for them as we
want for ourselves. Our lives and sensibilities of what is good and just are rooted in radical equality, not possessive or self-appreciating
individualism. Because we desire social security and protection, we also know others desire and deserve the same.
However, to really think and act against dispossession means not only advocating for shared security and social protection, but
also for a new society that is built on the egalitarian production and distribution of social wealth that we all produce. In this
sense, we can take Marx's critique of capitalism -- that wealth is produced collectively but appropriated individually -- to heart.
Capitalism was built on the idea that one class -- the owners of the means of production -- could exploit and profit from the collective
labors of everyone else (those who do not own and thus have to work), albeit in very different ways depending on race, gender, or
citizenship. This meant that, for workers of all stripes, their lives existed not for themselves, but for others (the appropriating
class), and that regardless of what we own as consumers, we are not really free or equal in that bare-democratic sense of the word.
If we want to be really free, we need to construct new material and affective social infrastructures for our common wealth. In
these new infrastructures, wealth must not be reduced to economic value; it must be rooted in social value. Here, the production
of wealth does not exist as a separate sphere from the reproduction of our lives. In other words, new infrastructures, based on the
idea of common wealth, will not be set up to exploit our labor, dispossess our communities, or to divide our lives. Rather, they
will work to provide collective social resources and care so that we may all be free to pursue happiness, create beautiful and/or
useful things, and to realize our potential within a social world of living in common. Crucially, to create the conditions for these
new, democratic forms of freedom rooted in radical equality, we need to find ways to refuse and exit the financial networks of Empire
and the dispossessions of creditocracy, building new systems that invite everyone to participate in the ongoing production of new
worlds and the sharing of the wealth that we produce in common.
It's not up to me to tell you exactly where to look, but I assure you that potentialities for these new worlds are everywhere
around you.
Interview is about forthcoming book "Peak
Trump" In "Peak Trump", Stockman goes after all the sacred cows: Military spending, entitlement spending, MAGA, Trump's tax cut,
the intelligence budget, and the Wall. Trump is a symptom of the problem. He wanted to drain the swamp but failed to do so. He never
really had a good chance of doing that, but he failed to make the most of the chance he had. We are where we are because of decades
of Congressional and monetary mismanagement
All in the name of empire... the Deep state in non-particular and Trump proved to be a "naked king"
At 15:49 min Ron Paul asks the question about Tulsi... She positioned herself as noninterventionists and has similar foreign policy
as Ron Paul used to have. Stockman answer was very interesting and informative.. MSM journalists are essentially federal contractor,
lobbyists of MIC.
He also mentioned that Trump falls from the bait. And the appointment of Elliot Abrams was real betrayal of his voters.
Notable quotes:
"... He was smart enough to understand that the commonplace observation codified as the Laffer Curve, while true, didn't mean that DC could just go on an endless spending spree and expect increased tax revenues to exceed the avarice of politicians, though. ..."
"... No, I don't think Stockman's rhetoric was a lie. He did end up getting shoved out of the Reagan regime, after all, precisely because he resisted giving every cabinet secretary all the money they wanted and, as you say, insisted that the tax cuts needed to be accompanied by spending cuts. ..."
"... But supply-side economics is, perversely, a departure from sound economic policy in the direction of central planning . Its premise is that instead of production being driven by diffuse demand, money should be concentrated in the hands of a few who "know better" what should be produced. ..."
"... And in practice, the "entrepreneurs" intended to benefit were the businesses who already had the clout to make themselves part of the political class, not the guy in his garage designing a better mousetrap. ..."
"... The Laffer Curve is an interesting but much over-used (and badly used) observation: There is a tax revenue curve with a top to it. That is, as you raise taxes, revenues go up ... until the taxation gets onerous enough that additional earnings beyond bare subsistence strike people as not worth the input, beyond which point tax INcreases produce revenue DEcreases. ..."
David Stockman was one of my conservative heroes during the Reagan years. He was the one person in the Administration who seemed
to have an honest understanding of economics. It's nice to see that his experiences with the reality of the DC swamp have made
him go all the way to describing himself as a libertarian, rather than a conservative.
He could have sold out, given up any modicum of principle, and simply become a multi-millionaire Republican Party establishment
hack.
I would venture to say he and I have some policy differences, but it's always nice to see when someone embraces their best,
rather than their worst, instincts.
My recollection of Stockman's economics from those years (based on e.g. The Triumph of Politics) was that he was all-in on
"supply side" economics, which is twaddle. He was smart enough to understand that the commonplace observation codified as
the Laffer Curve, while true, didn't mean that DC could just go on an endless spending spree and expect increased tax revenues
to exceed the avarice of politicians, though.
Yes, supply side is bogus, but my observations were that Stockman was quite critical of the spending increases that the Administration
put forth. He approved of the so called tax-cuts, but he did so with the understanding that there would be spending cuts along
with them.
My own recollections (I was alive back then, but not as politically conscious as I am now) were that Stockman was not endorsing
the supply side theory so much as his own idea that cuts in government spending were necessary, and that tax cuts would put pressure
on Congress and the administration to cut spending. The irony is that, for whatever reason, tax revenues overall increased by
60% in Reagan's two terms, yet spending increased almost 100%. This certainly disproves the idea that there was ever a revenue
problem, and that it has always been a spending problem.
In any event, Stockman was just about the only person with an official capacity in DC, who actually worked toward spending
cuts. Unless you are saying that his rhetoric was a lie, and he was just like all the others. If that is the case then, of course,
you could always be right.
No, I don't think Stockman's rhetoric was a lie. He did end up getting shoved out of the Reagan regime, after all, precisely
because he resisted giving every cabinet secretary all the money they wanted and, as you say, insisted that the tax cuts needed
to be accompanied by spending cuts.
But supply-side economics is, perversely, a departure from sound economic policy in the direction of central planning .
Its premise is that instead of production being driven by diffuse demand, money should be concentrated in the hands of a few who
"know better" what should be produced.
True, the central planning class in question was, broadly and not very honestly defined, "entrepreneurs" rather than government
bureaucrats, but the principle was the same. And in practice, the "entrepreneurs" intended to benefit were the businesses
who already had the clout to make themselves part of the political class, not the guy in his garage designing a better mousetrap.
"But supply-side economics is, perversely, a departure from sound economic policy"
Perhaps the most damning thing about it was that the stated goal was to increase the federal government's revenue. What person
in their right mind would wish to give even more money and power to the federal government?
The Laffer Curve is an interesting but much over-used (and badly used) observation: There is a tax revenue curve with a
top to it. That is, as you raise taxes, revenues go up ... until the taxation gets onerous enough that additional earnings beyond
bare subsistence strike people as not worth the input, beyond which point tax INcreases produce revenue DEcreases.
And that was just overnight. On Friday morning, another activist, Kimmeridge Energy
Management Co., announced it had taken a stake in PDC Energy Inc., an exploration and
production company with operations in Colorado and Texas. Kimmeridge wants PDC to overhaul
its financial priorities, costs, governance and maybe, given the line about "considering
all strategic alternatives," its entire identity.
I used two pieces of recent info to estimate the percenatge range drop associated with EVs in
cold weather.
Recently the AAA issued a report in which they stated that at 20F, the average percentage
range drop of the four EVs they tested at 20F was 40%. A few weeks ago in our local paper, a
reporter tested a Chevy Bolt at 14F and reported that the range drop was 47%.
The range of a vehicle is determined in a test lab at 68F. So a temp drop of 48F reduces
the range by 40%, based on the AAA tests. Assuming the efficiency drop is linear, that
translates into 0.833% drop for each 1 degF drop.
So the percentage range loss for the Bolt, which is 54 degs below the test temp, should be
approximately 0.833*54=45%. Reasonably close to the 47% reported.
A 40% to 47% range loss is major and I am now beginning to think that the Canadian/US
govt/Automakers should be providing this info to customers on the fuel economy label. A good
bogie cold temp would be 32F. I can hear the howls from the EV crowd. "Automakers in
Canada/US discouraging consumers from buying EVs."
Maybe Consumers Report might start doing cold weather tests on EVs and plug in hybrids
after the recent cold snap in US and Canada this winter. As noted above, some plug-in hybrids
turn on the gasoline engine to provide cabin heat in winter. Not sure what they do at 95F.
Does the engine drive the AC compressor?
The drop in range depends on the length of the trip.
In cold temperatures such as 14F the battery energy is used to warm the battery over the
first few miles and range is not very good if calculated over a 5 mile trip. Over the course
of a longer trip such as 100 miles the range loss is not as great.
It also depends how high one heats their car. I dress warmly when it is 14F outside rather
than my typical clothing inside my house.
If I didn't dress properly, my range would be lower.
Average temperature where I live was about 19 F in January (average monthly temperature in
2019), the range was about 24% lower over about 1500 miles driven compared to October 2018
results (1600 miles driven in October 2018).
There is a loss of range, but it is not as large as 47% based on my experience in a Tesla
Model 3.
In October the average was 241 Wh/mi and in January it was 300 Wh/mi.
Pharmaceutical pushers like Purdue Pharma "couldn't have done their dirty work" without
America's increasingly unbalanced economy
America's growing rate of economic inequality is more than a numerical ratio that worries
economists or a trendy political talking point. The phenomenon has been linked to human
tragedies ranging from higher murder
rates to growing
gaps in life expectancy .
Add death by opioids to the list.
In recent years, social scientists have been debating why more people have been dying from
drug overdoses. Does the increased availability of highly addictive opioids fully explain the
rise? Not entirely, it turns out.
Sociologist Shannon Monnat is author of a new study
with the Institute for New Economic Thinking that examines county-level drug deaths in the U.S.
Her research reveals that while overprescribing doctors, pharmaceutical pushers and illegal
dealers are highly significant, a big part of what makes a community susceptible to the opioid
scourge is recent patterns of economic distress -- the kind inflicted by decades of bad
policy.
A recent flurry of headlines about the billionaire Sackler family, whose members own Purdue
Pharma, the company that created the powerful opioid painkiller OxyContin, highlights the
ugliness of drug sales representatives promoting dangerously high doses to boost profits.
"Supply is certainly important," says Monnat, "but Big Pharma couldn't do its dirty work
without America's increasing economic inequality."
Monnat's research examines U.S. drug fatalities from 2000-02 and 2014-16, two-thirds of
which were caused by heroin, fentanyl, and prescription opiates. She concentrates on
non-Hispanic whites because other than American Indians, that group has suffered the highest
drug mortality rates of anybody over the last two decades.
Several of her findings complicate the common media narratives. Despite the characterization
of opioids as "hillbilly heroin," most deaths and the biggest increase in fatalities among
whites since 2000 were actually in urban counties. Rural areas saw fewer deaths overall, but
the rates varied widely from one region to another. Some rural counties have the highest opioid
mortality rates in the country, while others enjoy the lowest.
Why would opioids be raging through some predominately rural states, like Maine and
Kentucky, but not others, like Idaho and Iowa?
Among non-urban counties, drug mortality rates appear to spike in two types of places:
economically beaten-down communities centered on mining and distressed areas where people
increasingly depend on service jobs. In these corners of America, economic anxiety matters more
in terms of how many will die from opioid overdoses than supply factors, which tend to drive
death rates more around big cities.
Monnat explains how despair builds in areas like Appalachia, where residents have seen
mining jobs disappear and there are fewer ways for people without a college degree to make a
living. In regions where manufacturing jobs were once abundant, like Pennsylvania, people have
to rely on badly paid service jobs that offer few benefits.
Communities facing these challenges begin to implode. The best and brightest young people
tend to leave to find jobs elsewhere. Families break apart. The tax base shrinks and social
services disappear. Economic policies that support disinvestment in the public sphere, along
with those that disfavor workers and allow corporations -- like greedy pharmaceutical companies
-- to run roughshod over communities make everything worse. Distress spreads across
generations.
On the other hand, rural areas where people are more reliant on farming or where there are a
wider variety of jobs tend have a lower rate of death from opioids. The quality of labor
markets matters, it turns out. Monnat also thinks that that greater social cohesion in these
communities may help people stay more resilient when economic strains develop. Having a more
robust social safety net helps, too. Elsewhere, she has shown that places where religion
and sports are more of a focus also tend to have lower rates of drug fatalities. Maybe going to
church or rooting for the local team gives people meaning and a sense identity, which helps
them cope better when other sources of these human needs disappear.
The opioid crisis is really a "tale of two rural Americas," says Monnat. In places where
economic inequality has thrown more lives into chaos, a greater number of lives will be snuffed
out by this deadly strain of drugs. (Methamphetamines, she notes, cause slower deaths, so we
may not have the full story of their impact on drug fatalities yet).
Her findings suggest that no matter how well intentioned the efforts to limit supply or
provide treatment to the addicted, places where the economy isn't working for most people may
continue to see high opioid fatalities.
Research like hers underscores the reality that policymakers in both political parties are
going to have to move beyond the neoliberal framework popularized in the Reagan era that
promotes corporate deregulation, shrunken social safety nets, and trade and labor policies that
hurt ordinary workers. Such policies were meant to spark growth, but instead they have only
made a thin slice of people wealthy and socked America with inequality that has
disproportionately hit certain regions of the country.
Pro-worker policies, investments in public services like health and education, fairer tax
systems, and re-establishing sensible rules for how companies do business are all part of a
much-needed prescription for a healthier society.
We have a vicious circle going on here: the rich create drugs and in order to increase
profits from year to year describe the drugs as non-addictive, which proves false. The rich
pharmaceutical inventors and other distributors of drugs want more profits so they sell more
drugs again insisting on their non-addictiveness. The poor, who no longer have good-paying
jobs because these jobs have been moved overseas so that the companies can save money and
make bigger profit by paying overseas workers less, are filled with despair and depression
and are prescribed the "non-additive" drugs in order to maintain some degree of normality of
being. Hence, the pharmaceutical developers sell more and get richer and the drug users die a
miserable death too early. Nice, hey?
The opioid crisis is only one consequence of allowing selfish, ignorant libertarians to
make policy. Anyone older than 50 remembers a pre-Walmart country where most things were made
in the US. When most jobs are part-time, low-paid ones with no benefits, despair grows.
Alan Greenspan, Phil Gramm, Paul Ryan, and Christopher Cox, just to name a few, not to
mention the Cato Institute the members of which said things like:
Daniel J. Ikenson: "In fact, since China joined the WTO in 2001, U.S. exports to China
have more than doubled. And the notion that importing from and offshoring to China is
hollowing out American manufacturing is not supported by the facts."
Doug Bandow: "The silliest argument against PNTR is that Chinese imports would overwhelm
U.S. industry. In fact, American workers are far more productive than their Chinese
counterparts Moreover, Beijing's manufacturing exports to the United States remain small,
about half the level of those from Mexico."
Deroy Murdock professing that PNTR "will pressure China from inside and out" and that
"Americans will enjoy more Chinese-made apparel and appliances at reasonable prices if PNTR
passes."
I wish I had more time to read more on this. I wonder how deep the authors go in their
emphasis on "inequality" rather than "poverty" or "low incomes." I'm from the Boston area,
where the opioid crisis has hit hard, and there is low poverty but high inequality.
One thing about high inequality that I wish got discussed more here: it drives up the cost
of housing (and to a lesser extent, most other things), which totally undercuts the buying
power of wages. Massachusetts is moving toward a $15/hour statewide minimum wage (it's at
$12/hour now). I strongly suspect that residential rents will rise to suck up a large part of
that unless we have the kind of downturn that pushes luxury apartments into the lower rungs
of the market.
====One thing about high inequality that I wish got discussed more here: it drives up the
cost of housing (and to a lesser extent, most other things), which totally undercuts the
buying power of wages====
Thanks Joe. I agree with your comment completely. The cost of living drum is one I have
been banging on in comments on NC. In this country and the world we have a income and wealth
redistribution problem.
The solutions to the problem need to be addressed on multiple fronts. The fight for a
higher minimum wage, higher income taxes on the upper classes, and a wealth tax, etc, are
important but we also have to stop the soaring increase in cost of living. If we do not begin
to contain soaring prices for things such as housing, healthcare, transportation, college,
food, etc. where does it end?
In 1979 the average monthly rent in Chicago was $279. In 2019 the average rent in Chicago
is roughly $1200. Ten years from now when the average rent in Chicago is $2000 are we going
to raise the minimum wage to $20, $30? $30,000 for a new car, $40,000 for a new pickup truck,
$25,000 per year for college tuition and room and board, and soaring healthcare costs that
bankrupt many people.
To borrow concepts from I think Marx. What we are paying in the US for many basic needs is
exchange value and not use value. My father used to say that a car is something to take you
from Point A to Point B and it just depends on how much you want to pay. I live in the far
northwest suburbs of Chicago and I see a lot of GMC Yukons/Chevy Suburbans usually with one
person in it. A 2018 GMC Yukon is $50,000. That is obscene. Even if a person could afford it,
by paying it they are enabling the car manufacturers to charge what they want.
When I was in high school in the 70's you could buy a beater car for a couple thousand
dollars. Now?? Go to any used car lot but bring smelling salts with you. I would venture that
the supply of used cars far outstrips demand so something else is keeping car prices
high.
I am no economist or finance expert so I am light on solutions but something has to change
or the bubble will burst. As Lambert, Thomas Franks, and other have pointed out, many in
government are part of the affluent, credentialed, elitist upper classes so as I am not
optimistic for solutions from the government anytime soon. And I do not think socialist type
price controls are an answer but as I said that is out of my knowledge area.
Thanks again for your comment Joe! The other half of the inequality equation, costs of
living, needs to be addressed.
There is a good book called Dream Hoarders that discusses some of what I mentioned
above.
I will definitely check out that book. I thought I was the only one banging this
particular drum in comments. This problem is invisible to many because it disproportionately
affects the young (but is by no means limited to the young! I just listened to an NPR
interview with a retired woman who has to live with her brother! She cant even get subsidized
housing for retirees).
The cost of cars in inflation adjusted dollars is controversial because cars are just so
much more reliable now, apples and oranges comparisons are almost impossible. But the
national policy of encouraging SUV and pickup ownership is one of the most absurd aspects of
our national mismanagement. Imagine if you told someone in 1977 that the average car in the
21st century would be just as fuel inefficient (OK, not sure about the exact numbers).
As for rent control, what we had in Greater Boston before 1995 was both market driven
housing construction with few impediments to development and rent control. So there was
plentiful supply at reasonable cost. But rent control was abolished through a campaign funded
by small landlords who then took the opportunity to fight new construction so they could rent
gouge. Any incumbent fights competition and small landlords are no different. The insidious
thing was they mastered the language of community, preservation, smart growth, etc. that
appealed to the racist and classist sensibilities of many residents of affluent places like
Cambridge while giving them progressive cover.
Basically, this is a rehash of Monnat's little study which is far from convincing and
seems to be cherry-picking to support Case and Deaton's despair hypothesis. Case and Deaton
are more convincing.
If I was reviewing Monnat's paper, I would recommend major revisions to better explain how
slicing up her data pie does not render degrees of freedom impotent as far a significance
goes. So you can find both urban and rural counties with lots of ODs, and alas many more with
not so many – so what? That hardly justifies expounding on how economic factors cause
ODs.
This is why I condemn liberal/Dem ideology as much or more than Republican. Two major
parties to sell out Americans and America to corporations, banks, billionaires and an eternal
privatized war machine. Growth and progress ideologies building on and reinforcing the
pathological and ecocidal.
So god damned sure of themselves, so arrogant and condescending. Contempt does not even
begin to describe what I feel about the leadership of this empire.
Even now I can hear liberals and Dems justifying the economics that leads to such
destitution for so many.
In 1980, this particular letter to the editor was published in the NEJM. Two doctors
authored it. Everything said in it is true. I would not contest it.
"Addiction Rare in Patients Treated with Narcotics
Recently, we examined our current files to determine the incidence of narcotic addiction
in 39,946 hospitalized medical patients who were monitored consecutively. Although there were
11,882 patients who received at least one narcotic preparation, there were only four cases of
reasonably well documented addiction in patients who had no history of addiction. The
addiction was considered major in only one instance. The drugs implicated were meperidine in
two patients, Percodan in one, and hydromorphone in one. We conclude that despite widespread
use of narcotic drugs in hospitals, the development of addiction is rare in medical patients
with no history of addiction. Jane Porter; Herschel Jick; MD Boston Collaborative Drug
Surveillance Program, Boston University Medical Center, Waltham, MA.
It was cited a few times from 1981 to 1988 each year."In 1989, the numbers of citations
doubled and at certain points tripled. From 1981 to 2017, this letter was cited 608 times.
72.2% (439) of the citations, quoted the letter or used it as evidence addiction was rare in
patients when treated with opioids such as oxycodone. 80.8% or 491 of the citations failed to
note the patients described in the letter were hospitalized at the time they received the
prescription." The median number of citations for a NEJM letter is 11 times.
OxyContin was introduced in 1996 by Purdue Pharma and aggressively sold to doctors. Sold
as a less-addictive alternative to other painkillers as it was made in a time-release
formulation, allowing for a slow onset of the drug, and not a hit all at once which is more
likely to lead to abuse. When used as prescribed, Oxycontin was safe. When ground up, it's
slow release characteristics were marginalized. Shortly after 1996, Porter and Jick's letter
citations doubled and continued to be cited in a positive fashion with few negative citations
and a failure to mention the hospital setting where the drugs were administered.
In 2007 in the pharmaceutical industry, "the manufacturer of OxyContin and three senior
executives of Purdue Pharma plead guilty to federal criminal charges that they misled
regulators, doctors, and patients about the risk of addiction associated with OxyContin. Even
then the lobbying to restrict state laws regulating opioids continued. From 2006 to 2015,
pharmaceutical companies spent $880 million in lobbying state and federal legislatures and
contributing to campaigns to prevent laws restricting Opioid prescriptions. Their lobbying
expenditures has outstripped those advocating for greater controls on prescriptions by 200
times giving them greater influence at the state level.
In 2018 law makers questioned Miami-Luken and H.D. Smith wanting to know why millions of
hydrocodone and oxycodone pills were sent (2006 to 2016) to five pharmacies in four tiny West
Virginia towns having a total population of about 22,000. Ten million pills were shipped to
two small pharmacies in Williamson, West Virginia. The number of deaths increased along with
the company and wholesaler profits.
This crap does end up in rural areas and it does impact the poor. As tends to happen with
public health epidemics, overdoses have an outsize effect in certain regions. For instance,
the biggest spike in fatalities by percentage occurred in Nebraska, North Carolina, New
Jersey, Indiana, and West Virginia (33.3%, 22.5%, 21.1%, 15.1%, and 11.2% rises,
respectively). But areas like Wyoming, Utah, and Oklahoma experienced declines of 9.2% to
33%.
These are just bits and pieces of what I have written on the topic of opioids and its
impact all over America. "60% of opioid deaths occur in those who were given a prescription
by a physician. The other 40% of deaths are caused by people who obtained opioids by "doctor
shopping," and receive multiple scripts at once.
Usually someone will show up and start to argue with your comments or the numbers of
deaths.
Wonder if it is possible to recreate a list of all of those who have died because
opioids/fentanyl overdose?
Remembering those we have lost (especially in such high numbers) reminds us of the collective
and specific areas of communal loss in this country (i.e. West Virginia etc.) instead of the
same type of sad individualized they-should-have-known-better pretension that often masks
addiction/substance use in this country, especially as the aim of neoliberalism's second
tenant -- please die -- is always operating.
Also, a running list might allow for more examination of each current death in context
(pusher, supplier, distribution and invisible institutions enabling system to perpetuate for
profit).
Did anyone mention the clipper ship barons who made fortunes off opium? The original
families locked into Skull & Bones (arguably a foreign intervention linked to Marxism,
the Rothschilds and later the CFR, the Trilateralists, and the Rhodes gang)? Or the massive
trafficking in illicit narcotgics by the nation's intelligence agencies?
I don't know about Marxism of all things being a connection unless you mean Karl Marx
started his work after seeing the misery of the Industrial Revolution; a revolution partially
fueled by the Chinese money the British got after starting and winning the Opium Wars. So I
guess opium is partly responsible for Marxism.
I don't agree. what, they couldn't afford "better" drugs where you would not OD? The
consumerism is what causes OD. Cheaper drugs just make it easier.
The drug culture has been around since the mid-70's in terms of hard drugs. That
correlates well the surge in single mother births and divorces. Matter of fact, everything
goes back to the mid-70's.
Not quite. It's confusing correlation with causation. The social problems might have
increased because of the increase in hard drugs. Maybe, but drugs and addiction was always
prevalent.
The British had an awful problem with alcohol especially gin in the general population
1700's, and later in 1800's with morphine, opium, and cocaine. The Americans had similar
problems, although not with the extremely cheap gin that used to be sold in Britain. After
the American Civil War addiction to morphine increased with the millions of injured
soldiers/addicts.
All of the older hard drugs were sold over the counter and with no prescription. Indeed,
they were added to everyday medicine. Teething problems? Womanly complaints? 14 hour work
shifts at the factory? They had the medicine just for you! Coca-Cola had cocaine in it
originally and (I believe) a pharmacist created it.
It was with such legislation as the Food and Drug Safety Act in the early 1900s, the
general improvement in working conditions, and having all the old addicts die, hopefully of
old age, that decreased the levels of addiction. The problem never went away. The hard drugs
were always around and used. It only declined and shifted to the more socially acceptable
alcohol and nicotine. You might say that those manufacturers won the lobbying wars.
I realize that opiods are the topic here. But crystal meth has to be included in any
discussion regarding drugs and death. Also, I wonder if crystal meth and its cousins are more
prevalent in those places where opiods are less of an issue.
If it makes money, neoliberalism deregulated it. In the case of fentanyl, prescription
restrictions were ignored. FDA looked the other way. Manufacturers and prescribers got
richer.
China is now meeting the users demand for the drug. The enablers of this have all imbibed
the global aristocrat's contempt of the little people. Lexus lanes, housing, medical care,
student loans, casinos and drugs are all extortion schemes to extract what little wealth that
is left. Poor Americans are dying earlier with $15,000 of debt.
I just copied this from Quora, posted as part of a long comment by a person who understands
the basics of the oil biz.
"Oil is becoming difficult to extract, and this operation is becoming increasingly expensive.
While it is true that the use of fracking has enabled the extraction of previously
inaccessible deposits, this just buys us a little more time. As it is, a Goldman Sachs study
found that the cost of extracting crude oil went up over 15% a year in the decade prior to
the economic slowdown (and is still rising by possibly 10% a year)."
Obviously enough, the cost of getting tight oil out is declining, but tight oil is only a
small part of total oil production. I'm not sure about the costs of tar sands oil, it may be
declining in real terms, or rising. I haven't seen anything recent on the costs of tight
oil.
Hopefully somebody in the biz will have something to say about the cost of conventional
oil production is changing, based on their personal knowledge.
If it is going up anywhere close to ten percent a year, in real terms, world wide, the
price of oil will HAVE to get back into the hundred dollar plus range within five or six
years, maybe sooner.. economic troubles can lead to some countries selling for less than
production costs.
My opinion is since the crack in 2014 aproximately all exploration offshore stopped, there
have been some discoveries near exsisting infrastructure that some have been built out as
tieback. In General even with cut in drilling cost , subsea tecnology , remote controlled
platforms a brent price of 65 usd bbl will make some profit for oil Companies but you will
never see a huge increase in activity to find billions of new barrels that is needed. There
is also a fact less discoveries are made each 100 wells drilled and size declining in
average. This trend together with increase labour cost , everything else in general will
demand higher oil price to solve a global supply crize..
This doesn't explain why the Saudi's spend billions building and operating peripheral water
injection systems and refineries that can handle oil with vanadium. If they truly have 266
billion barrels in the ground, all they would have to do is drill some wells and millions of
cheap, extra barrels/day would gush out of the ground.
They say, total new shale oil produced in March will be 628,526 barrels per day. (Net
increace+Legacy decline)
Net Increase will be 84,406 barrels per day.
Legacy Decline will be 544,119 barrels per day
Therefore for every 1 barrel per day increase, 7.45 barrels of new oil had to be produced.
Therefore for every 1 barrel per day increase, 7.45 barrels of new oil had to be
produced.
This is simply mind-blowing. And the more oil they produce, the more oil they need to
produce to keep from going negative. How long can they keep this up?
https://www.rigzone.com/news/permian_oil_and_gas_production_to_hit_new_records-21-feb-2019-158209-article/
Seems EIA predict production in Permian will increase from 3.98 MMbpd to 4.02 MMbpd next
month. Guess it have been mostely flat at least US production have been 11.9 MMbpd since
January. Think than an increase of 40 000 /3 month = 13. 333 x12 = 160 000 barrels for 2019
increase seems reasonable. World demand seems increase by 1.5-2.0 MMbpd. Hopefully Permian
production will increase significant when tje new pipeline is compleated 4th Quartile 2019
but that remaind to see.
Reviewing this past weekly(2/15) oil inventory report reveals import of 7.5 million
barrels/day and 7.0 million barrels/day for the past 4 weeks. Yet I hear how we are down to
perhaps 1-2 million/day and even that we are a net exporter. Could someone Help me understand
what is going on to this non oil person! Thanks in advance
I'm not one of the experts, but I can nevertheless answer your question!
Short answer:
The fossil fuel industry is in bed with certain politicians whose mascot is the elephant,
and together they put out a continuous stream of half facts, cherry picked facts, and
outright lies in furtherance of their own ends.
You're at the right place to get the straight dope. HERE.
Crude imports on line 5 as 7,522 kbpd, crude exports on line 9 are 3,607 kbpd for net
crude imports on line 4 of 3,915 kbpd.
Other supply includes products and natural gas liquids. It shows net imports on line 21 of
-2,809 kbpd. Total net imports of Crude and Petroleum Products on line 33 are 1,106 kbpd.
Why on earth would Saudi stocks be falling at such a rate? If Saudi is concerned about low
oil prices, they do not need to cut production, they only need to cut exports.
Saudi has 266 billion barrels of oil in the ground, and in the dead of winter, their
lowest crude burn season, their stocks are falling? Something just don't add up here.
Saudi Crude Exports Slump to 6.2M B/D in 1H February: Kpler
Shipments tumble by 1.34m b/d in 1H February, compared with same period in January,
consultant says in report.
BBG #OOTT
Are there any (public) estimates of how much SA produce vs. draw from inventory to cover
their exports or are all these charts based on their own reported figures?
There are several issues with the reported numbers that appears odd to me.
I found, back when I was reporting JODI data, that for OPEC, they used the "direct
communication" data rather than the "secondary sources" data for their OPEC production data.
But that was several years ago.
It's just their own reported figures. I know that the secondary sources quoted in OPEC MOMR
use tanker tracking and reported refinery runs to check OPEC production but beyond that I
don't know.
In summary, while I have not proven that Saudi has 270 billion barrels of proved oil
reserves, I think the evidence points in that direction. And if you accept a much lower
number, you essentially accept that there is a vast conspiracy involved in hiding the real
numbers.
An old post by me, maybe I got the idea from Robert Rapier. I hadn't realized he had
written something on this at the time. (If so I apologize to Mr. Rapier for the lack of
citation.)
I don't find Mr. Rapier's logic even close to impeccable.
Mr Rapier does not address a number of issues which concern Saudi reserves in his article.
For instance, KSA reserves are known to consist mostly of a relatively small number of giant
fields, as compared to the USA which has a much larger geographic area, many small fields and
perhaps close to a million wells drilled.
In KSA most of its oil resources are concentrated in about a fifth of its 830,000 square
mile geographic area. It has conducted a systematic and thorough search using seismic,
drilling and other tools to explore for other resources. I believe their best undeveloped
findings have been deeper gas in the known oily areas. The Shaybah oil field, said to be the
last of the elephants, was discovered in 1968. Remote and relatively expensive, it was not
developed until 1998. Likewise, the development of Ghawar also proceeded slowly, with the
last southern parts not being developed until around 2000.
The manner in which the country's resources have been developed has not been addressed. In
the USA every promoter with access to OPM has drilled, including many wells of questionable
economics. Would the LTO currently developing here be brought on at all, or very slowly
anywhere else? Is LTO really economic at today's prices?
In KSA the government owned oil company has systematically developed their resources, and
by most accounts they have been thorough, methodical, and have used cutting edge technology.
In the early 2000's they combined advanced seismic, drilling, and completion technologies to
create multi-lateral super wells which have been used to develop Shaybah as well as to
rejuvenate many older worn out fields such as Abqaiq. These super wells have allowed KSA to
maintain its massive production but when these traps have been depleted there is not likely
to be an encore.
The nature of the giant Saudi fields is different from the USA. Ghawar has been described
as the perfect trap. With high perm and porosity KSA expects to produce a large percentage of
original oil in place. The old reserve reports Rapier referenced also expected to recover
high percentages of original oil. Technology has certainly increased the amount of oil KSA
will recover but I believe they are looking at increasing recovery by a few, maybe up to 10
percentage points in each field. Their best result, is pulling forward production with their
super wells, not creating recoverable oil from resources such as shale which were previously
considered uneconomic.
Rig counts in KSA were around 10 for much of the 90's. They have increased sharply since
with the push to maintain their production around 10 million bpd. Current levels of around
130 rigs seem needed to maintain 10, not 25.
Of course, the underlying problem comparing USA reserves with KSA is the geology, and I am
not a geologist, but my understanding is that the persian gulf area is unique and not
comparable to USA.
EIA used to publish stats regarding number of US oil wells, gas wells and average TD per
well.
I guess there are over one million active oil/gas wells in US, including Alaska and GOM.
There are over 100K "shale wells already and US is adding 10K +/- per year.
Schlumberger had a graphic awhile back comparing the drilling intensity of the US to both
Russian and the Middle East. Was an eye opener.
After reviewing recent comments, I see an additional area to address, that of the D&M
reserve review. As one who used to do audits, I can tell you that auditors rely heavily on
management to present them with a basis for their opinion. Auditors cannot review everything,
and most are familiar with some of the noted failures such as Enron and Billie Sol Estes.
One of the old standard auditor jokes goes like this.
A prospective client interviews three firms and asks each the same question: What is 2
plus 2.
First firm answer is : We pride ourselves on our expertise, the answer is 4. They do not get
the job.
Second firm: We would like to research this question and provide you with a suitable answer.
No job.
Third firm: What did you have in mind? Job!
A bigger question is why would KSA want to overstate its reserves. At its face value, the
answer is they would not, lower reserves should lead to higher prices realized from their
oil. I don't think it is that simple. The Saudi regime is an oppressive dictatorship that
oddly relies on extensive welfare type payments to maintain power. They do have a national
interest in overstating their reserves, its sort of an Emperor's new clothes thing.
And if you accept a much lower number, you essentially accept that there is a vast
conspiracy involved in hiding the real numbers.
That sentence is total nonsense. In 1980 ARAMCO suggested that quotas would be allocated
on the amount of proven reserves each country has. That is, the greater their proven
reserves, the higher their quota would be. Within the next few years, every OPEC nation
started increasing their "proven reserves" with a pencil. And their reserves just kept
growing and growing and growing. They never did allocate quotas based on proven reserves, but
that did not deter any of them from continually increasing their numbers.
But it is just downright silly to suggest that there is a conspiracy to hide their true
reserves. Of course their true reserves, like those of Iran, Iraq, Kuwait and the UAE are
closely garded secret while their published reserves are published everywhere. But no
conspiracy is needed to keep their true reserves a secret. All they have to do is deny all
other published numbers. Besides, most OPEC officials really believe those numbers. It is not
really hard to believe something you really desire to believe.
I find it astonishing that you Dennis, or Robert, thinks a conspiracy is needed to claim
those absurded numbers. No, no, no. It's just a gross exaggeration, nothing more. A gross
exaggeration does not require a conspiracy and it is just absurd to claim it does.
Saudi Arabia published the first audit of its vast oil reserves since it nationalized its
energy industry about 40 years ago, saying its reserves total 268.5 billion, slightly more
than the 266.3 billion figure that the government published previously.
The audit, conducted by Dallas-based consultant DeGolyer & MacNaughton Corp., is the
first since Riyadh fully nationalized Saudi Aramco between 1976 and 1980, and it comes as the
kingdom tries to generate interest in Aramco ahead of a potential initial public
offering.
"This certification underscores why every barrel we produce is the most profitable in the
world, and why we believe Saudi Aramco is the world's most valuable company and indeed the
world's most important," Saudi Energy Minister Khalid Al-Falih said in a statement posted on
the state news agency's website.
This is a link from DeGolyer & MacNaughton about their audit on Saudi oil reserves. There
is no field by field split of the reserves or the quality – heavy, light, sweet etc
Feb 12, 2019
https://www.demac.com/dm-confirms-independent-assessment-of-reserves-in-saudi-arabia-for-the-saudi-arabian-oil-company/
DeGolyer and MacNaughton is pleased to acknowledge the recent completion of the first
contemporary independent assessment of reserves in Saudi Arabia for the Saudi Arabian Oil
Company. The study encompassed a highly detailed independent analysis of a massive dataset
and onsite review. More than 60 geophysicists, petrophysicists, geologists, simulation
engineers, reserves engineering specialists, and economists were involved in the 30-month
effort.
In 1943, one of our founders, Everette DeGolyer, surveyed the Middle East and Persian Gulf
area as part of the war effort. Mr. DeGolyer was quoted at the time as declaring, "The oil in
this region is the greatest single prize in all history." At the time of this survey, Mr.
DeGolyer's estimates and predictions that the Middle East would become the center of the
world's oil production were considered by some to be massive exaggerations, but his work has
since been found to be quite conservative. DeGolyer and MacNaughton's work in the Kingdom of
Saudi Arabia continues Mr. DeGolyer's legacy of knowledge and integrity, and the firm remains
at the forefront of the petroleum consulting services industry.
Below is a compilation of article links where you can find further information regarding
our most recent work in Saudi Arabia. At this time, DeGolyer and MacNaughton will make no
further comments on this extensive project.
More than 60 geophysicists, petrophysicists, geologists, simulation engineers, reserves
engineering specialists, and economists were involved in the 30-month effort.
All audits are paid for, so I guess that means we cannot believe any of them.
A reputable firm does not lie when they make these evaluations, they make their best
estimate as their reputation for honesty is the core of their business.
Just like tobacco danger audits funded by the tobacco industry were entirely credible
because the analyzing firms had to be so very careful about their reputation.
I also recall the brain cancer/cellphone linkage study was funded by Motorola and
challenging it on that basis never really got traction.
Why do they want to produce from the neutral zone – not really necessary the next 50
years with that reserves?
Why do they produce the expensive off shore fields? They could wait for a few decades more
before spending this money.
Normally, a tapped giant field produces for 50-60 years – so with an original 4-500
GB ressources(this survey + everything they produced already) they should have capacity for
up to 20 or 25 mb / day. They have erverything tapped they have, not some giant fields
untapped as reserve.
Russia produces 11 mb/day from reserves of round about 100GB.
Exactly, why would you develop more expensive and complicated offshore if you have
"unlimited" resources left in cheap and easily accessible already developed areas?
Dont they need that money to pave the streets with gold, balance the budget, keep people
happy? What king or politician would make that desicion? Lets develop the more expensive
stuff we dont need so i have less money to throw around.. makes sense?
Schlumberger mentioned in their q3 in the q&a they had contact for drilling 400 infill
wells for saudi during the next 3 years think starting year was 2019. Why is that needed if
these unlimited reserves are there?
Or should we look at it the different way, 400 new holes unlocks these reserves or perhaps
even more future reserves?
The Saudis have had 270B barrels of oil since the 80s even though they've been producing
3-4B/yr. An independent audit found, miraculously, that they still have 270B barrels of oil.
As a small business owner I can tell you that my books can be audited and deemed in good
order, and the auditor will never have gone back in the warehouse to see if there is actually
any of the stock that I have listed in the books. The Saudis will have 270B barrels of oil,
until, one day, they have none.
It's the 270 GB that implies they are lying – how much is unknown.
Reserve growth and production never is hand in hand – it would be slowly decrease to
200 during the 90s, increase to 300 with higher oil prices for reclassifying marginal fields
or introduction of new recovery technic, and reducing again.
Or a bump up with the discovery of a new field (this is always good for propaganda
reasons).
Instead it was constant 270 over almost 40 years – not believable. And the audit was
too near at this 270 – a 300 or a 250 would have been more believable.
So we still know nothing yet – perhaps it's 150, perhaps even 300.
Mamdouh G Salameh's Response to Robert Rapier's article
Jeffrey J. Brown
9:35 AM
From Oilprice.com (Dr Mamdouh G Salameh):
In a paper titled:"Saudi Proven Crude Oil Reserves: The Myth & the Reality Revisited"
I gave at the 10th IAEE European Energy Conference in Vienna, 7-10 September 2009, I reached
the conclusion that Saudi proven crude oil reserves actually range from 90-125 billion
barrels (bb) and not the 264 bb the Saudis were claiming then. That was 2009.
However, there has recently been claims that an independent audit has put Aramco's Oil
Reserves at $270 billion Barrels". It transpired that the audit was neither independent nor
unbiased since some of the companies that conducted the audit (DeGolyer, MacNaughton, and
Baker Hughes' Gaffney, Cline, and Associates) have or have had service contracts with Saudi
Aramco, so it can't truly be classified as an independent audit.
Still, I decided to make a new estimate of Saudi proven reserves by adding Saudi
production since the discovery of oil in 1938 till now (for which we have figures) and then
deducting them from Saudi claimed proven reserves along with an annual depletion rate of
Saudi aging fields averaging 5%-7% for the same period. My calculations came to around 70-74
bb of remaining reserves compared with the figure in 2009 allowing for production since
2009.
The fact that Saudi Arabia's proven reserves remained virtually constant year after year
despite sizeable annual production and a lack of major new discoveries since 1965 is due to
the Saudis increasing the oil recovery factor (R/F) and the oil initially in place (OIIP) to
offset the annual production. The Saudis have been declaring an R/F of 52% or even higher
when the global average is 34%-35%. They have also increased the OIIP from 700 bb to 900 bb
on the basis of Saudi Aramco projecting new discoveries which are yet to be discovered.
Venezuela does have the world's largest proven reserves estimated at 303 bb and growing.
However, the United States Geological Survey (USGS) estimates that there may be more than 513
bb of extra-heavy crude oil and bitumen deposits in Venezuela's Orinoco belt region. The fact
that the bulk of the reserves consists of extra-heavy oil doesn't detract from the fact that
they are proven and have been refined in Venezuela's own refineries in Texas and sold in the
United States as gasoline and diesel. Moreover, it is virtually no different from Canada's
tar sand oil.
Your argument that the rise of oil prices to triple digits has made Venezuela's extra
heavy oil economical to produce applies also to Canada's tar sand oil and US shale oil
(though shale oil is light).
Your argument that Saudi barrels were deemed to be economical to produce even before oil
prices spiked is a valid one but it misses the point about reserves. Irrespective of whether
crude oil reserves consist of light or medium or heavy or extra-heavy crude, once they are
proven they are all categorized as oil reserves. Of course, cost of production is a very
important factor in the economics of oil and the profitability of production. In this regard,
the production of Venezuela's extra-heavy oil at current prices is not different from an
economic point of view from US shale oil production or Canadian tar sand oil production.
Finally, the claimed audit about Saudi reserves smacks of a blatant attempt by Saudi
Aramco abetted by foreign oil companies which are beneficiaries of Saudi Aramco largess to
resurrect the IPO of Saudi Aramco. The IPO is dead and buried. We now know that the
withdrawal of the IPO was because of risk of American litigation related to the 9/11
destruction of the World Trade Centre in New York and question marks about the true size of
Saudi proven oil reserves. However, when Saudi King Salman called off the IPO, he justified
his decision by saying that he didn't want to expose Saudi Aramco's finances or reserves to
be scrutiny. His words speak volumes about Saudi reserves.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
The data suggest that on a net exports basis, after subtracting out rising domestic
liquids consumption, Saudi Arabia has been supply constrained since 2005.
Their net exports of total petroleum liquids (BP data base) increased from 7.1 million bpd
in 2002 to 8.7 million bpd in 2005, but their net exports have been below the 2005 level for
12 straight years, through 2017, averaging only 7.9 million bpd for 2006 to 2017
inclusive.
Note the large increase in Saudi net exports from 2002 to 2005 as annual Brent crude oil
prices approximately doubled from $25 in 2002 to $55 in 2005.
However, as annual Brent crude oil prices doubled again, from $55 in 2005 to $110 for 2011
to 2013 inclusive, Saudi net exports averaged only 8.0 million bpd during this three year
period of triple digit oil prices, versus 8.7 million bpd in 2005.
"... But I must admit that a million barrels of ethanol means we need somewhere around seven hundred to eight hundred thousand barrels of gasoline a day less, so this must have a serious effect in terms of depressing the price of crude, and the price of gasoline. I can't seem to find any good figures on the elasticity of gasoline, except long term estimates, but the effect has to be real, even if it IS hard to measure accurately ..."
Just to keep it on the radar screen, the USA produces approx 1 Mbpd corn ethanol, utilizing
close to 40% of the USA corn crop acreage equivalent. This production is still
subsidized.
Oil producers facing a challenging pricing environment are in direct competition with corn
farmers, who face their own perennial economic challenges.
Is prime farmland being used (and subsidized) for corn ethanol a clever use of scarce
economic and environmental resources in a time when oil production from hydraulic fracturing
has emerged as a major energy source?
The moonshine to gasoline industry is an ecological and economic disaster, in every respect
except one. It makes and has made a lot of money for farmers in the corn biz, farm equipment
manufacturers and dealers, and business men in the processing and shipping end of the biz.
First class fuck up for everybody else, excepting certain politicians.
But I must admit that a million barrels of ethanol means we need somewhere around seven
hundred to eight hundred thousand barrels of gasoline a day less, so this must have a serious
effect in terms of depressing the price of crude, and the price of gasoline. I can't seem to
find any good figures on the elasticity of gasoline, except long term estimates, but the
effect has to be real, even if it IS hard to measure accurately.
It should also be acknowledged that the leftover mash is a superb livestock feed, and
worth quite a bit of money, on your feedlot operation, if you happen to have access to it in
bulk at wholesale prices.So this feed stock certainly offsets some of the higher price
farmers must pay for corn to feed it directly.
So, so long as we continue to eat lots of beef, the picture is not quite as bad as it
looks, at first glance.
But the rational thing to do, if we were actually rational, would be to spend the money on
efficiency and conservation, rather than moonshine. The corn and equipment and processing
guys would still be doing their NORMAL business, and ALL of us would be a little better off,
economically and environmentally.
It doesn't look too absurd.
But some numbers are not consistent. 50 billion in 4 yrs is 3.4 mbpd, rather a lot less
than quoted 4.Unless you count the 750K bpd condensate. Then . . . it's ballpark.
That's really the big story of Iran. 750K bpd condensate vs 0 in 1979. The final sentence
says they doubled gasoline output, also likely high vapor pressure pentane plus from the gas
field. Sanctions are not going to hurt these guys. They have plenty of money, especially when it
all becomes cryptorubles.
Russia has half the reserves of Iran and produces round about 11 mb/day – so they can
get up to 20? It's all conventional oil, mostly in giant fields so this should be possible.
Would be a death blow to their rival Saudi Arabia.
Crude imports on line 5 as 7,522 kbpd, crude exports on line 9 are 3,607 kbpd for net
crude imports on line 4 of 3,915 kbpd.
Other supply includes products and natural gas liquids. It shows net imports on line 21 of
-2,809 kbpd. Total net imports of Crude and Petroleum Products on line 33 are 1,106 kbpd.
"... Administration bloat and academic decline is another prominent feature of the neoliberal university. University presidents now view themselves as CEO and want similar salaries. ..."
This book is the collection of more than dozen of essays of various authors, but even the
Introduction (Privatizing the Public University: Key Trends, Countertrends, and Alternatives)
is worth the price of the book
Trends in neo-liberalization of university education are not new. But recently they took a
more dangerous turn. And they are not easy to decipher, despite the fact that they are
greatly affect the life of each student or educator. In this sense this is really an
eyes-opening book.
In Europe previously higher education as assessable for free or almost free, but for
talented student only. Admission criteria were strict and checked via written and oral
entrance exams on key subjects. Now the tend is to view university as business that get
customers, charge them exorbitant fees and those customers get diploma as hamburgers in
McDonalds at the end for their money. Whether those degree are worth money charged, or not
and were suitable for the particular student of not (many are "fake" degrees with little or
no chances for getting employment) is not university business. On the contrary marketing is
used to attract as many students as possible and many of those student now remain in debt for
large part of their adult life.
In other words, the neoliberalization of the university in the USA creates new, now
dominant trend -- the conversion of the university into for-profit diploma mills, which are
essentially a new type of rent-seeking (and they even attract speculative financial capital
and open scamsters, like was in case of "Trump University" ). Even old universities with more
than a century history more and more resemble diploma mills.
This assault on academic freedom by neoliberalism justifies itself by calling for
"transparency" and "accountability" to the taxpayer and the public. But it operates used
utter perversion of those terms. In the Neoliberal context, they mean "total surveillance"
and "rampant rent-seeking."
Neoliberalism has converted education from a public good to a personal investment in the
future, a future conceived in terms of earning capacity. As this is about your future earning
potential, it is logical that for a chance to increase it you need to take a loan.
Significantly, in the same period per capita, spending on prisons increased by 126 percent
(Newfield 2008: 266). Between the 1970s and 1990s there was a 400 percent increase in charges
in tuition, room, and board in U.S. universities and tuition costs have grown at about ten
times the rate of family income (ibid.). What these instances highlight is not just the
state's retreat from direct funding of higher education but also a calculated initiative to
enable private companies to capture and profit from tax-funded student loans.
The other tendency is also alarming. Funds now are allocated to those institutions that
performed best in what has become a fetishistic quest for ever-higher ratings. That creates
the 'rankings arms-race.' It has very little or nothing to do with the quality of teaching of
students in a particular university. On the contrary, the curriculums were "streamlines" and
"ideologically charged courses" such as neoclassical economics are now required for
graduation even in STEM specialties.
In the neoliberal university professors are now under the iron heel of management and
various metrics were invented to measure the "quality of teaching." Most of them are very
perverted or can be perverted as when a measurement becomes a target; teachers start to focus
their resources and activities primarily on what 'counts' rather than on their wider
competencies, professional ethics and societal goals (see Kohn and Shore, this volume).
Administration bloat and academic decline is another prominent feature of the neoliberal
university. University presidents now view themselves as CEO and want similar salaries. The
same is true for the growing staff of university administrators. The recruitment of
administrators has far outpaced the growth in the number of faculty – or even students.
Meanwhile, universities claim to be struggling with budget crises that force to reduce
permanent academic posts, and widely use underpaid and overworked adjunct staff – the
'precariat' paid just a couple of thousand dollars per course and often existing on the edge
of poverty, or in real poverty.
Money now is the key objective and the mission changed from cultural to "for profit"
business including vast expenses on advancement of the prestige and competitiveness of the
university as an end in itself. Ability to get grants is now an important criteria of getting
the tenure.
What is this amazingly accurate indicator of a coming recession? The unemployment rate
trend. I first came across this idea on the Philosophical Economics blog ,
whose author has adopted the pseudonym Jesse Livermore, in honor of the 20th-century
investor.
This Livermore conducted a rigorous analysis in search of the perfect recession indicator.
He evaluated several potential signals, including real retail sales growth, industrial
production growth, real S&P 500 earnings-per-share growth, employment growth, real personal
income growth, and housing starts growth. While some of these indicators were promising, none
of them compared to the predictive ability of the unemployment rate trend.
Note that it's the unemployment rate trend that's the great predictor of a recession and not
the unemployment rate itself. The unemployment rate is a lagging indicator of a recession. In
other words, the rate goes up significantly only after a recession is in effect.
But before the unemployment rate moves significantly higher, the unemployment rate trend
must change from downward to upward. And that's what Livermore found was a great leading
indicator, or predictor, of an economic recession. This change in trend is determined by simply
seeing when the latest unemployment rate is higher than the 12-month simple moving average of
previous monthly unemployment rates.
So how well does this predictor work? Over the last 70 years, a change in the unemployment
rate trend predicted every recession that occurred. In two cases, the recession came
immediately after the change in the unemployment rate trend. In other cases, the trend changed
several months in advance of the start of a recession.
The U.S. hasn't experienced an economic recession since the Great Recession of 2008 and
2009. Unemployment rates remain low. However, the U.S. unemployment rate for January, which was
reported in early February, moved higher than the 12-month simple moving average of previous
monthly unemployment rates.
The subtle signal that has proven to be accurate at predicting the onset of a recession has
flashed. And if a recession is indeed on the way, the bull market will soon end.
One
drawback
Is there a catch? Yep. While the unemployment rate trend has been uncannily accurate at
indicating recessions, it also sometimes provides a false signal. In other words, the trend
changes but a recession doesn't occur.
This scenario happened as recently as September 2016. The unemployment rate rose above the
12-month simple moving average for previous unemployment rates for one month. A recession
didn't ensue, though, and the bull market kept on trucking.
Late last year, the S&P 500 ( ^GSPC ) tumbled 20% from its Oct. 3 intraday high
to its Dec. 24 intraday. And despite the market's sharp 17% rally from those lows, Bond king
Jeffrey Gundlach says we're in a bear market and that we could see new lows.
"A bear market has nothing to do with this 20% arbitrary thing," Gundlach, the CEO of $121
billion DoubleLine Capital, told Yahoo Finance in an exclusive interview. "It has to do with
something crazy happening first, and then the crazy thing gives it up. And yet more traditional
things continue to march on. But one by one they give it up." December's dip buyers will
sell at lower levels
The market has since been saved by the Fed's pivot to be "patient" on monetary policy and
the subsequent rally in the bond market, all of which has kept interest rates low. For now.
"If the long end of rates starts to rise, as I expect, and if we break through 3.50% on the
30-year, I think it's over," Gundlach added. "Because the competition from the bond market,
particularly against a climate of limiting one of the engines of stock price appreciation,
which is buybacks , is thought to be potentially in jeopardy."
Gundlach believes that investors who bought during December's dip will likely end up selling
at a lower point.
The ability of those in power to manipulate
the ways ordinary people think, act and vote has allowed for an
inverted totalitarianism
which turns the citizenry into their own prison wardens, allowing those with real power to continue doing as they please unhindered
by the interests of the common man.
In neoliberal MSM there is positive feedback loop for "Trump is a Russian agent" stories. So the meme feeds on itself.
Notable quotes:
"... And yet the trending, most high-profile stories about Trump today all involve painting him as a Putin puppet who is working to destroy America by taking a weak stance against an alarming geopolitical threat. This has had the effect of manufacturing demand for even more dangerous escalations against a nuclear superpower that just so happens to be a longtime target of U.S. intelligence agencies. ..."
"... the mass media is not in the business of reporting facts, it's in the business of selling narratives. Even if those narratives are so shrill and stress-inducing that they imperil the health of their audience. ..."
"... Trump is clearly not a Russian asset, he's a facilitator of America's permanent unelected government just like his predecessors, and indeed as far as actual policies and administration behavior goes he's not that much different from Barack Obama and George W Bush. Hell, for all his demagogic anti-immigrant speech Trump hasn't even caught up to Obama's peak ICE deportation years ..."
"... Used to be that the U.S. mass media only killed people indirectly, by facilitating establishment war agendas in repeating government agency propaganda as objective fact and promulgating narratives that manufacture support for a status quo which won't even give Americans health insurance or safe drinking water ..."
"... Now they're skipping the middle man and killing them directly by psychologically brutalizing them so aggressively that it ruins their health, all to ensure that Democrats support war and adore the U.S. intelligence community . ..."
"... The social engineers responsible for controlling the populace of the greatest military power on the planet are watching France closely, and understand deeply what is at stake should they fail to control the narrative and herd ordinary Americans into supporting U.S. government institutions. ..."
"... The ability of those in power to manipulate the ways ordinary people think, act and vote has allowed for an inverted totalitarianism which turns the citizenry into their own prison wardens, allowing those with real power to continue doing as they please unhindered by the interests of the common man. ..."
The always excellent Moon of Alabama blog has just
published a sarcasm-laden piece documenting the many, many aggressive maneuvers that this administration has made against the
interests of Russia, from pushing for more NATO funding to undermining Russia's natural gas interests to bombing Syria to sanctioning
Russian oligarchs to dangerous military posturing.
<picture deleted>
And yet the trending, most high-profile stories about Trump today all involve painting him as a Putin puppet who is working
to destroy America by taking a weak stance against an alarming geopolitical threat. This has had the effect of manufacturing demand
for even more dangerous escalations against a nuclear superpower that just so happens to be a longtime target of U.S. intelligence
agencies.
If the mass media were in the business of reporting facts, there would be a lot less "Putin's puppet" talk and a lot more "Hey,
maybe we should avoid senseless escalations which could end all life on earth" talk among news media consumers. But there isn't,
because the mass media is not in the business of reporting facts, it's in the business of selling narratives. Even if those narratives
are so shrill and stress-inducing that they imperil the health of their audience.
Like His Predecessors
Trump is clearly not a Russian asset, he's a facilitator of America's permanent unelected government just like his predecessors,
and indeed as far as actual policies and administration behavior goes he's
not that much different
from Barack Obama and George W Bush. Hell, for all his demagogic anti-immigrant speech Trump
hasn't even caught up to Obama's peak ICE deportation years.
If the mass media were in the business of reporting facts, people would be no more worried about this administration than they
were about the previous ones, because when it comes to his administration's actual behavior, he's just as reliable an upholder of
the establishment-friendly status quo as his predecessors.
Used to be that the U.S. mass media only killed people indirectly, by facilitating establishment war agendas in repeating
government agency propaganda as objective fact and promulgating narratives that manufacture support for a status quo which won't
even give Americans health insurance or safe drinking water.
They do this for a reason, of course. The Yellow Vests protests in France have continued unabated for their
ninth consecutive week , a decentralized populist uprising resulting from ordinary French citizens losing trust in their institutions
and the official narratives which uphold them.
The social engineers responsible for controlling the populace of the greatest military power on the planet are watching France
closely, and understand deeply what is at stake should they fail to control the narrative and herd ordinary Americans into supporting
U.S. government institutions. Right now they've got Republicans cheering on the White House and Democrats cheering on the U.S.
intelligence community, but that could all change should something happen which causes them to lose control over the thoughts that
Americans think about their rulers.
Propaganda is the single most-overlooked and under-appreciated aspect of human society. The ability of those in power to manipulate
the ways ordinary people think, act and vote has allowed for an
inverted totalitarianism
which turns the citizenry into their own prison wardens, allowing those with real power to continue doing as they please unhindered
by the interests of the common man.
The only thing that will lead to real change is the people losing trust in corrupt institutions and
rising like lions against them. That gets increasingly likely as those
institutions lose control of the narrative, and with trust in the mass media at an all-time low, populist uprisings restoring power
to the people in France, and media corporations
acting increasingly weird and insecure , that looks more and more likely by the day.
While the S&P 500 advanced 2.5 percent in the past five days to cap its seventh weekly
gain in the past eight, the index's next leg up would have it confront the round-number
milestone that's marked the demise of three prior rallies since October.
The explanation for the skittishness is valuation. If the S&P 500 tops 2,800, its
valuation based on 2019 average per-share earnings estimates will be 16.5 times forward
earnings -- that's the average reading over the past five years, demarcating a level at which
some analysts say stocks become expensive
... ... ...
Despite that, the S&P 500 climbed 6.9 percent in the five weeks since the earnings
season kicked off, the best start to any reporting period since the results came in for the
third quarter of 2014.
"... The CAPE aims to correct for those distortions. It smooths the denominator by using not current profits, but a ten-year average, of S&P 500 earnings-per-share, adjusted for inflation. Today, the CAPE for the 500 reads 29.7. It's only been that high in two previous periods: Before the crash of 1929, and during the tech bubble from 1998 to 2001, suggesting that when stocks are this expensive, a downturn may be at hand. ..."
"... is 36.1% higher ..."
"... Here's the problem that the CAPE highlights. Earnings in the past two decades have been far outpacing GDP; in the current decade, they've beaten growth in national income by 1.2 points (3.2% versus 2%). That's a reversal of long-term trends. ..."
"... Right now, earnings constitute an unusually higher share of national income. That's because record-low interest rates have restrained cost of borrowing for the past several years, and companies have managed to produce more cars, steel and semiconductors while shedding workers and holding raises to a minimum. ..."
"... t's often overlooked that although profits grow in line with GDP, which by the way, is now expanding a lot more slowly than two decades ago, earnings per share ..."
"... The reason is dilution. Companies are constantly issuing new shares, for everything from expensive acquisitions to stock option redemptions to secondary offerings. New enterprises are also challenging incumbents, raising the number of shares that divide up an industry's profits faster than those profits are increasing. Since total earnings grow with GDP, and the share count grows faster than profits, it's mathematically impossible for EPS growth to consistently rise in double digits, although it does over brief periods––followed by intervals of zero or minuscule increases. ..."
"... The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably high profits are artificially depressing the former. and that profits are bound to stagnate at best, and more likely decline. ..."
"... In an investing world dominated by hype, the CAPE is a rare truth-teller ..."
For the past half-decade, a controversial yardstick called the CAPE has been flashing red,
warning that stock prices are extremely rich, and vulnerable to a sharp correction. And over
the same period, the Wall Street bulls and a number of academics led by Jeremy Siegel of the
Wharton School, have been claiming that CAPE is a kind of fun house mirror that makes
reasonable valuations appear grotesquely stretched.
CAPE, an acronym "Cyclically-adjusted price-to-earnings ratio," was developed by economist
Robert Shiller of Yale to correct for a flaw in judging where stock prices stand on the
continuum from dirt cheap to highly expensive based on the current P/E ratio. The problem:
Reported earnings careen from lofty peaks to deep troughs, so that when they're in a funk,
multiples jump so high that shares appear overpriced when they're really reasonable, and when
profits explode, they can skew the P/E by creating the false signal that they're a great
buy.
The CAPE aims to correct for those distortions. It smooths the denominator by using not
current profits, but a ten-year average, of S&P 500 earnings-per-share, adjusted for
inflation. Today, the CAPE for the 500 reads 29.7. It's only been that high in two previous
periods: Before the crash of 1929, and during the tech bubble from 1998 to 2001, suggesting
that when stocks are this expensive, a downturn may be at hand.
The CAPE's critics argue that its adjusted PE is highly inflated, because the past decade
includes a portion of the financial crisis that decimated earnings. That period was so unusual,
their thinking goes, that it makes the ten-year average denominator much too low, producing
what looks like a dangerous number when valuations are actually reasonable by historical norms.
They point to the traditional P/E based on 12-month trailing, GAAP profits. By that yardstick
today's multiple is 19.7, a touch above the 20-year average of 19, though exceeding the
century-long norm of around 16.
I've run some numbers, and my analysis indicates that the CAPE doesn't suffer from those
alleged shortcoming, and presents a much truer picture than today's seemingly reassuring P/E.
Here's why. Contrary to its opponents' assertions, the CAPE's earnings number is not
artificially depressed. I calculated ten year average of real profits for six decade-long
periods starting in February of 1959 and ending today, (the last one running from 2/2009 to
2/2019). On average, the adjusted earnings number rose 22% from one period to the next. The
biggest leap came from 1999 to 2009, when the 10-year average of real earnings advanced
42%.
So did profits since then languish to the point where the current CAPE figure is
unrealistically big? Not at all. The Shiller profit number of $91 per share is 36.1%
higher than the reading for the 1999 to 2009 period, when it had surged a record 40%-plus
over the preceding decade. If anything, today's denominator looks high, meaning the CAPE of
almost 30 is at least reasonable, and if anything overstates what today's investors will reap
from each dollar they've invested in stocks.
Indeed, in the latest ten-year span, adjusted profits have waxed at a 3.2% annual pace,
slightly below the 3.6% from 1999 to 2009, but far above the average of 1.6% from 1959 to
1999.
Here's the problem that the CAPE highlights. Earnings in the past two decades have been
far outpacing GDP; in the current decade, they've beaten growth in national income by 1.2
points (3.2% versus 2%). That's a reversal of long-term trends. Over our entire 60 year
period, GDP rose at 3.3% annually, and profits trailed by 1.3 points, advancing at just 2%. So
the rationale that P/Es are modest is based on the assumption that today's earnings aren't
unusually high at all, and should continue growing from here, on a trajectory that outstrips
national income.
It won't happen. It's true that total corporate profits follow GDP over the long term,
though they fluctuate above and below that benchmark along the way. Right now, earnings
constitute an unusually higher share of national income. That's because record-low interest
rates have restrained cost of borrowing for the past several years, and companies have managed
to produce more cars, steel and semiconductors while shedding workers and holding raises to a
minimum.
Now, rates are rising and so it pay and employment, forces that will crimp profits. I
t's often overlooked that although profits grow in line with GDP, which by the way, is now
expanding a lot more slowly than two decades ago, earnings per share grow a lot
slower, as I've shown, lagging by 1.3 points over the past six decades.
An influential study from 2003 by Rob Arnott, founder of Research Affiliates, and co-author
William J. Bernstein, found that EPS typically trails overall profit and economic growth by
even more, an estimated 2 points a year.
The reason is dilution. Companies are constantly issuing new shares, for everything from
expensive acquisitions to stock option redemptions to secondary offerings. New enterprises are
also challenging incumbents, raising the number of shares that divide up an industry's profits
faster than those profits are increasing. Since total earnings grow with GDP, and the share
count grows faster than profits, it's mathematically impossible for EPS growth to consistently
rise in double digits, although it does over brief periods––followed by intervals
of zero or minuscule increases.
The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably
high profits are artificially depressing the former. and that profits are bound to stagnate at
best, and more likely decline. The retreat appears to have already started. The Wall
Street "consensus" Wall Street earnings forecast compiled by FactSet calls for an EPS decline
of 1.7% for the first quarter of 2017, and zero inflation-adjusted gains for the first nine
months of the year.
In an investing world dominated by hype, the CAPE is a rare truth-teller .
US reserves are estimated by some to about 50 billion barrels. Oil production, along with
reserve estimates, are growing in the US for one reason and one reason only, the advent of shale
oil. Reserve estimates before 2008 were based on conventional oil.
Onshore conventional oil production in the USA is in steep decline. Shale oil production is
intrinsically connected with financing and it produce along with oil a stream of junk bonds. At
some point investors might do not want them of the bubble start deflating. Then what.
Notable quotes:
"... Next three years for Shale Drillers may be a problem. I believe something like $150B in debt comes due between now and 2023. That's a lot of debt to roll over, as well as take on more debt to fund CapEx. ..."
"Dennis, with his calculation of a peak in 2025 + or – 3 years is about right."
That really depends on how much debt the Shale Drillers can take on, and presumes there is
not another global recession before 2025. Next three years for Shale Drillers may be a
problem. I believe something like $150B in debt comes due between now and 2023. That's a lot
of debt to roll over, as well as take on more debt to fund CapEx.
Without constant US Shale
production increases, world production peaks.
US reserves are estimated by some to about 50 billion barrels. Oil production, along with
reserve estimates, are growing in the US for one reason and one reason only, the advent of shale
oil. Reserve estimates before 2008 were based on conventional oil.
Onshore conventional oil production in the USA is in steep decline. Shale oil production is
intistically connected with financing and it produce along with oil a stream of junk bonds. At
some point investors might do not want them of the bubble start deflating. Then what.
Hugo Wrote:
"Dennis, with his calculation of a peak in 2025 + or – 3 years is about right."
That really depends on how much debt the Shale Drillers can take on, and presumes there is
not another global recession before 2025. Next three years for Shale Drillers may be a
problem. I believe something like $150B in debt comes due between now and 2023. That's a lot
of debt to roll over, as well as take on more debt to fund CapEx. Without constant US Shale
production increases, world production peaks.
"... I have been suspicious for some time that production numbers can be corrupted by fuzzy definitions. ..."
"... You can see how the definitions are going to blur and they're going to allow declaring oil production numbers to be anything that they want them to be. ..."
I have been suspicious for some time that production numbers can be corrupted by fuzzy
definitions. Iran is being sanctioned, but Iran shares that enormous gas field under the
Persian Gulf with Qatar. Gas production yields condensate and it yields NGLs.
High vapor pressure NGLs get labeled liquefied petroleum gas, and that is used for
transportation fuel in India. Pentane Plus is used or called something akin to natural
gasoline.
You can see how the definitions are going to blur and they're going to allow declaring oil
production numbers to be anything that they want them to be. Iran is using this to dodge
sanctions, or they did use it when condensate was not restricted. Don't recall if that
loophole was closed in the current sanctions. That would be a good thing to know.
The same thing can happen with shale. We hear all sorts of talk about how much gas is
being flared and how much gas is being captured, and you know perfectly well there has to be
condensate involved. There was an article a year or so ago about NGL capture in the Bakken,
but I don't recall any follow-up. It shouldn't take too much of a stretch on the part of
state regulators to find a way to count the high vapor pressure portion of NGL as oil.
You can see how the definitions are going to blur and they're going to allow declaring
oil production numbers to be anything that they want them to be.
Exactly. And this, in turn, allows Wall Street to suppress the price of "prime oil"
using fake production numbers, fake storage glut (which is essentially condensate glut)
and similar tricks. Please note that the US refineries consume mainly "prime oil" while
the USA mainly produces (and tries to export at a discount) "subprime oil."
Pretty polished and sophisticated racket. It might well be that shale oil companies are
partially financed from those Wall Street profits as nobody in serious mind expect those
loans to be ever repaid.
So OPEC cuts are the only weapon that OPEC countries have against this racket.
In any case, I think all those nice charts now need to be split into "prime oil" and
subprime oil parts and analyzed separately. In the current conditions, treating "heavy
oil" and condensate as a single commodity looks to me like pseudoscience.
I do not follow Laredo Petroleum closely, however their recent year-end results and
operations summary contained disclosures that may affect north American shale production more
broadly, or perhaps they are company specific, I don't know.
Laredo is a nice sized E&P producing around 70,000 boepd in the permian, mostly in
Glasscock and Regan counties. Much of their production is horizontal Wolfcamp.
Laredo has been disappointed with its oil production recently, as well as an increasing
GOR.
"Laredo has taken action to address the reduced oil productivity experienced in 2018 that
we believe was impacted by the tighter spacing of some wells drilled in 2017 and 2018.
Responding to these results, the Company began widening spacing on wells spud in the first
quarter of 2019. Laredo expects this shift in development strategy to drive higher returns
and increased capital efficiency versus 2018 as widening spacing is anticipated to address
one of the causes of higher oil decline rates."
They have changed their developmental strategy to widen spacing to improve recovery and
mitigate the increasing GOR. They have also reduced their capex by around 35 % from $575
million in 2018 to a planned $365 million in 2019.
"Responding to the current commodity price environment of WTI strip pricing of
approximately $54 per barrel, Laredo expects to invest approximately $365 million in 2019,
excluding non-budgeted acquisitions. This budget includes approximately $300 million for
drilling and completion activities and approximately $65 million for
production facilities, land and other capitalized costs. Laredo anticipates adjusting capital
spending levels to match operating cash flow if operating cash flow does not meet budgeted
expectations. Should operating cash flow exceed budget expectations, free cash flow could be
used to complete additional wells, repurchase stock or pay
down debt.
By the third quarter of 2019, enabled by the Company's operational flexibility, Laredo
anticipates reducing activity from the current three horizontal rigs and two completion crews
to operating one horizontal rig and utilizing a single completion crew, as needed. The
front-loaded completion schedule and disciplined reduction in activity should drive free cash
flow generation in the second half of 2019 that is expected to balance capital expenditures
with cash flow from operations for full-year 2019."
Of course this is just one producers take on productivity concerns. Link below.
Interesting. They are more a gas company than an oil company with only 23000 of the 70000
BOEs being oil. Interestingly, they are forecasting oil production to decline 5% year over
year while BOEs rises high single digits, showing how gas to oil keeps rising.
As such a tiny oil producer (23000 barrels) its pretty meaningless in the grand scheme,
but very interesting nonetheless. Thanks for sharing.
"... The unplanned shutdown takes out another 1 million barrels a day of heavy oil from the market, Alex Schindelar, executive editor of content & strategy at Energy Intelligence Group tweeted Thursday, adding that the heavy crude oil market was already tight because of the OPEC output cuts and U.S. sanctions on both Iran and Venezuela. ..."
Saudi Aramco halts oil output at the world's largest offshore oilfield: report
Saudi Aramco halted oil output this week at Safaniyah, the world's largest offshore
oilfield, Energy Intelligence reported Thursday, citing sources familiar with the matter,
according to a tweet from Amena Bakr, senior correspondent at the news and research service
provider. Further information was only available through subscription-based Energy
Intelligence.
The potential impact on oil prices depends on how long output at the oilfield is down,
said Phil Flynn, senior market analyst at Price Futures Group.
"The thinking is that the field produces heavy crude, and the world is short of that [type
of] oil."
The unplanned shutdown takes out another 1 million barrels a day of heavy oil from the
market, Alex Schindelar, executive editor of content & strategy at Energy Intelligence
Group tweeted Thursday, adding that the heavy crude oil market was already tight because of
the OPEC output cuts and U.S. sanctions on both Iran and Venezuela.
In electronic trading, March WTI oil CLH9, +1.06% was at $54.51 a barrel, after settling
at $54.41 on the New York mercantile Exchange.
Okay, you will have to read the article to see how Robert arrived at his conclusion. But
his conclusion is:
So, I have no good reason to doubt Saudi Arabia's official numbers. They probably do
have 270 billion barrels of proved oil reserves.
I find his logic horribly flawed. Robert compares Saudi's growing reserve estimates with
those of the USA.
First, the US Securities and Exchange Commission have the strictest oil reporting laws in
the world, or did have in 1982. Also, better technology has greatly improved reserve
estimates. And third, the advent of shale oil has dramatically added to US reserve
estimates.
Saudi has no laws that govern their reserve reporting estimates.
From Wikipedia, US Oil Reserves: Proven oil reserves in the United States were 36.4
billion barrels (5.79×109 m3) of crude oil as of the end of 2014, excluding the
Strategic Petroleum Reserve. The 2014 reserves represent the largest US proven reserves since
1972, and a 90% increase in proved reserves since 2008.
Robert says US reserves are 50 billion barrels. I don't know where he gets that number but
it really doesn't matter. Oil production, along with reserve estimates, are growing in the US
for one reason and one reason only, the advent of shale oil. Reserve estimates before 2008
were based on conventional oil. Onshore conventional oil production in the USA is in steep
decline.
Robert Rapier is brillant oil man, but a brilliant downstream oil man. Refineries are his
forte. He should know better than the shit he produced in that article.
100 percent of Saudi Arabia's reserves are based on conventional oil. Their true reserves
are very likely somewhere in the neighborhood of 70 billion barrels.
As Ron Patterson explained several times here, OPEC members cheat. They cut from the
elevated, unsustainable level, achieved specifically to accommodate cuts.
So "after cut" level is often not that different from a reasonable "normal," sustainable
production level in their current production conditions, plus some, related to previously
delayed maintenance, shutdowns.
Four years of capital underinvestment bite production both in OPEC and non-OPEC. So
talking about excess capacity is somewhat problematic and we now need to distinguish between
"prime oil" and "subprime oil."
Most people who talk about "excess capacity" are interested in lower oil price (the list
includes US and EU governments ) That's why condensate and other "subprime oil" is counted in
total oil output. Supply of "prime oil" now is stressed.
In other words, everything connected with oil is now politically charged. That means that
it is not wise to take IEA data and their forecasts at face value. It should be viewed as an
opinion of the agencies deeply (institutionally) interested in the low oil price.
You need the ability to read between the lines, much like readers of the press in the
USSR. And as several experts here do. You need the acute ability to cut through "official
bullsh*t".
And neutral expert opinion is very difficult to come by. That's why this blog has so much
value.
Heads up. Some scroll upwards there is a quoted article from oilprice.com.
The writer is Nawar Alsaadi. I suspect we fell victim of presumption. He has an Arabic
sounding name, and that leads us to suspect he knows something about oil.
Look into this guy. There's nothing ugly or horrible about his background, but there is
nothing in it that shouts out expert. He is a writer. Including publishing fiction.
He's also "with" some investment firm. Turns out he's president and CEO of the firm and
conveniently an employee count is not easily found.
I'm curious – does anybody know, by the data trends, which OPEC country is likely to
run so low on oil that they become a net importer, next? I do understand this event may take
some time to occur.
If you take a look at PXD announcements, I reach the conclusion that Permian is slowing. Like
Dennis Coyne, I look at growth after fourth quarter 2018. Oil production in fourth quarter is
199.2 Kilo barrels/day. The guidance for 2019 is between 203 to 213 Kilo barrels/day. PXD is
spending 300 MM dollars for gas processing and water treatment infrastructure.
OPEC says they have 1214.21 billion barrels of proven reserves. And they say non-OPEC has
268.56 billion barrels of proven reserves. Average OPEC C+C production, over the last four
years, has been 12.78 billion barrels per year according to the EIA. The EIA says the average
non-OPEC C+C production over the last four years has been 16.8 billion barrels per year.
Okay, here is the killer. If those numbers are correct then the average non-OPEC nation
has an R/P ratio of 16 while the average OPEC nation has an R/P ratio of 95. If you think
those R/P ratio numbers are even remotely correct then I have a bridge I would like to sell
you.
I agree that the R/P numbers seem very suspicious. But if this is true then OPEC reserves
are closer to 400-500 billion barrels not 1.2 trillion barrels. That would give us another
trillion barrels at best to consume in the future in addition to the 1.3 trillion already
consumed. This brings the URR to 2.2-2.5 trillion barrels at best including extra heavy. What
do you think of the URR of 3.1 trillion barrels that is commonly assumed? Also canadian tar
sands and venezuelan heavy oil have very low EROI which brings down the extractable oil
reserves further. Do you think that is taken into account?
For motor vehicle type uses the efficiency is just terrible compared to electric and I doubt much improvement is likely
there
I am not so sure. It looks like hybrid cars are very competitive with the EV. The efficiency of Tesla and similar EV is grossly
overrated. You have losses in the transmission line, losses in the charger, losses in the battery. Plus if the mechanical transmission
is used, you have losses in transmission during driving (substantial).
The ~56kwh Roadster battery takes ~70kwh to charge. (approx) So ~20% of the electricity you pay for is lost to heat. How much
is the charger and cabling, and how much the batteries, I have no idea.
Here is a very simple calculation. Tesla with the air conditioner on auto 73F and external temperature 60F (minimal use of
the air conditioner) consumes around 300 watts/mile. Double this for temperatures below freezing point or temperatures above 90F.
The cost per mile at 15 cents per Kwh and 20% loss is 5.4 cent.
Hybrid SUV like RAV4 hybrid (which is a much better and safer car, especially in winter) with an average of 35 miles per gallon
and the price of gas at $2.5 per gallon has cost 7.1 cents per mile.
That means that Tesla provides just 24% economy, which is completely eaten by the higher cost of Tesla (say, $44K vs. $29K
).
Assuming mileage 200K at the end of the life of each car, this $15K difference adds 7.5 cents per mile.
Which means that at those price levels Tesla is competitive only if electricity is free.
I'm not really sure of the significance of that. Using fossil fuel products as combustible fuel limits the efficiency at which
one can obtain useful work from the fuel. That efficiency number is really only useful when comparing one source to another and
the ffs pretty much will operate in the 40%=/- range for most stationary applications. For motor vehicle type uses the efficiency
is just terrible compared to electric and I doubt much improvement is likely there. That rejected energy is just a fixture of
the way energy is extracted through combustion so I doubt it has any meaning except for how much you are overheating a river near
a coal or NG power plant.
For motor vehicle type uses the efficiency is just terrible compared to electric and I doubt much improvement is likely
there
I am not so sure. It looks like hybrid cars are very competitive with the EV.
The efficiency of Tesla and similar EV is grossly overrated. You have losses in the transmission line, losses in the charger,
losses in the battery. Plus if the mechanical transmission is used (for example 10:1 fixed gearbox like in Tesla), you have losses
in transmission and motor during driving (say 10%). So total efficiency of electricity usage would be around 70%, which is high,
by not that high. Atkinson-cycle ICE engines used in hybrids have ~40% efficiency.
The ~56kwh Roadster battery takes ~70kwh to charge. (approx) So ~20% of the electricity you pay for is lost to heat. How much
is the charger and cabling, and how much the batteries, I have no idea.
Here is a very simple calculation. Tesla with the air conditioner on auto 73F and external temperature 60F (minimal use of
the air conditioner) consumes around 300 watts/mile. Double this for temperatures below freezing point or temperatures above 90F.
The cost per mile at 15 cents per Kwh and 20% loss is 5.4 cent.
Hybrid SUV like RAV4 hybrid (which is a much better and safer car, especially in winter) with an average of 35 miles per gallon
and the price of gas at $2.5 per gallon has cost 7.1 cents per mile.
That means that Tesla provides just 24% economy, which is completely eaten by the higher cost of Tesla (say $44K vs. $29K ).
Assuming mileage 200K at the end of the life of each car, this $15K difference adds 7.5 cents per mile.
Which means that at those price levels Tesla is competitive only if electricity is free.
Your calculations are probably correct, but there are other considerations. For instance, UK oil production peaked in 1999
at around 3 million barrels per day, it has now fallen to 1 million. At $50 oil, it costs us $25 million per day to import the
oil we consume over our production. Our wealth is draining away in a trade deficit that has increased with declining oil and gas
production.
The Tesla Model 3 is perfectly safe in winter, and is a far nicer car than a RAV4 hybrid. The appropriate comparison would
be to Volvo XC60: https://www.edmunds.com/volvo/xc60/2018/hybrid/
What about road clearances? What about the ability to lock differential when driving on steep ice-covered incline ?
There are also "known unknown" related to lithium battery use (Panasonic cells) at low and very low temperatures. As no Tesla
3 is 8 years old yet, it difficult to say whether the battery can last till the end of the warranty period in continental climate
weather conditions (very cold in winter, very hot in summer).
Looks like if you cool a lithium battery below zero F and try to drive before it warmed to 70F the longevity of battery decreases.
Higher temperatures also have negative effect (
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4526891/
)
As the operating temperature of LiB changes from 25 to 55 °C, the degradation rate of maximum charge storage after 260 cycles
is found to increase from 4.22% to 13.24%. At the component level, for the same change in the operating temperature, the degradation
rate of the Warburg element resistance after 260 cycles increases from 49.40% and 584.07% (Fig. 10) which is the highest change;
and that for the cell impedance ranks second, increasing from 33.64% to 93.29% (Fig. 8). As for the charge transfer rate, the
change in its degradation rate decreases from 68.64% to 56.19% (Fig. 7).
Simply turning on the electric vehicles AAA studied in 20 degree weather revealed a 12 percent loss in range. On a vehicle
like the Chevy Bolt, with an EPA rating of 238 miles per charge, that would drop range to 209 miles.
Brannon said using climate control revealed an even bigger surprise: Range dipped by an average 41 percent -- which would
bring an EV like the Bolt down to just 140 miles per charge.
For the Chevrolet Volt, engineers combat cold-weather energy draining by engaging ERDTT – Engine Running Due To Temperature.
This runs the Volt's supplementary gasoline engine to ensure enough power is available to run the defroster. But the all-electric
Tesla doesn't have this option.
At low temperatures lithium battery can't be charged so if in normal conditions Tesla recaptures energy for the battery during
regenerative braking (regen) this is not the case anymore. That further decreases range.
Even with other sources stating that cold weather lowers the Model S range by only a quarter, Rob said drivers should anticipate
on using an average of 40-percent more power. When the roads are icy or wet, increase this by another 25-percent.
"Expect to lose about 10 miles of real range for every 10 degree drop," said Rob. "Plan your charging and driving accordingly
– don't cut it close."
If you run out of energy at -5F, the car needs to be tolled.
If you try to keep battery warm your battery will be drained during parking, unless you are connected to the charger.
At low temperatures (especially with front wind) and during initial warm up of the cabin the heater consumes around 5KWH further
draining the battery.
At 90F loss of range is less then in winter -- about 20%, but at 100F it is similar and the effect of battery longevity are
also similar and negative.
So in areas with continental climate EVs make much less sense then say in California.
As I have suggested, works fine in winter. As long as one doesn't ride in the car naked during the winter, losses from using
the heater are not that great. So far the lowest temperatures the car has seen parked overnight outside have been about minus
15 F for a low with an average of about minus 10 F, battery lost about 250 Wh each hour on average. Battery capacity is about
78,000 Wh. Average temperature where I live is about 19 F in Jan. In Jan I drove about 1500 miles and averaged about 300 Wh per
mile vs 245 Wh/mile in October (1600 miles). That is my experience in average winter weather where temperature averaged 19 F in
Jan 2019. Range decreased by about 22%. My experience is that range also decreases in a hybrid during winter( I have been driving
Toyota hybrids since 2004).
Have driven plenty in snow and ice with the Model 3 this winter, take it to a ski area almost every weekend, the more snow
the better ;-)
Judging from people experiences there are some undeniable problem with driving Tesla 3 in winter.
The construction of door handles in Tesla3 is a problematic for winter. Frameless windows also represent a problem.
Some pretty educational videos:
1. People are running of energy with Tesla 3 parked at airport for a week or so at cold weather. You need to leave at least
15 km per day in battery in cold weather, or you are in trouble. 30 if weather is very cold. Looks like Tesla 3 tries to heat
battery all the time to avoid damage from low temperatures.
2. To drive Tesla 3 in cold weather you need to "preheat" the car until battery reaches "working temperature" range:
https://www.youtube.com/watch?v=D2gmphV8IZQ
3. ~52 miles commute to work in cold weather is all that can be made safely. In video below only 43 miles left at the end (the
car was not connected to the charger during the working day):
https://www.youtube.com/watch?v=Uvybhb8P894
4. A very short round trip with a preheated car, which was parked outside) reveals problems some problems with handling.
https://www.youtube.com/watch?v=E2Qjt0obVfI
Ample supply of heat from ICE engine helps steering. Tesla does not have it and it looks like it became very stiff.
It is actually amazing that lithium batteries (which are electrolyte based) work that well at such low temperatures. So in
way Tesla experiment opens new frontier for lithium batteries.
This fallacious narrative of the U.S. tight oil industry overcoming the oil price crash of
2014 through innovation and better efficiency is the product of bundling various tight oil
basins under one umbrella and the presentation of the resulting production data as a proof U.S.
shale resiliency.
To properly understand the impact of the oil price crash of 2014 on U.S. tight oil
production one must focus on shale basins with sufficient operating history prior to the oil
price crash and examine their performance post the crash.
To that end, the Bakken and the Eagle Ford are the perfect specimen.
The Bakken and the Eagle Ford are the two oldest tight oil basins in the United States, with
the former developed as early as 2007 and the latter in 2010.
Examining the production performance of these two basins in the 4 years preceding the oil
crash and contrasting it to the 4 years subsequent to it, offers important insight as to the
resiliency of U.S. tight oil production in a low oil price environment.
... ... ...
Both the Bakken and the Eagle Ford grew at a phenomenal rate between 2010 and
2014. The Eagle Ford grew from practically nothing in 2010 to 1.3M barrels by 2014, while the
Bakken grew five fold from 190K barrels to 1.08M barrels. Following the collapse in oil prices
in late 2014, the Bakken and Eagle Ford growth continued for another year, albeit at a slower
pace, as the pre-crash momentum carried production to new highs. However, by 2016, both the
Bakken and the Eagle Ford went into a decline and have hardly recovered since. It took the
Bakken three years to match its 2015 production level, meanwhile the Eagle Ford production
remains 22% below its 2015 peak. During the pre-crash years these two fields grew by a combined
yearly average of 600K to 700K barrels from 2012 to 2014. Post the oil price collapse, this
torrid growth turned into a sizable decline by 2016 before stabilizing in 2017.
Growth in both fields only resumed in 2018 at a combined yearly rate of 210K barrels, a 70%
reduction from the combined fields pre-crash growth rate.
The dismal performance of these two fields over the last few years paints a different
picture as to U.S. tight oil resiliency in a low oil price environment. The sizable declines,
and muted production growth in both the Bakken and the Eagle Ford since 2014 discredit the leap
in technology and the efficiency gains narrative that has been espoused as the underlying
reason beyond the strong growth in U.S. oil production. As we expand our look into other tight
oil basins, it becomes apparent that it was neither technology or efficiency that saved the
U.S. tight oil industry, although these factors may have played a supporting role. In simple
terms, the key reason as to the strength of U.S. production since the 2014 oil crash is better
rock, or rather, the commercial exploitation of a higher quality shale resource, namely the
Permian oil field.
... ... ...
The Permian oil field, unlike the Bakken and the Eagle Ford, was a relative latecomer to the
U.S. tight oil story. It was only in 2013, only a year before the oil crash, that the industry
commenced full scale development of that giant field's shale resources. Prior to 2013, the
Permian lagged both the Bakken and the Eagle Ford in total tight oil production and growth. As
can be seen from the preceding graph, the oil crash had only a minor dampening effect on the
Permian oil production growth. By 2017, Permian tight oil growth resumed at a healthy clip, and
by 2018, Permian tight oil production growth shattered a new record with production
skyrocketing by 860K barrels in a single year to 2.76M barrels. This timely unlocking and
exploitation of the Permian oil basin masked to a large degree the devastation endured by the
Bakken and the Eagle Ford post 2014. In essence, the U.S. tight oil story has two phases
masquerading as one: the pre-2014 period marked by the birth and rise of the Bakken and Eagle
Ford, and the post-2014 period, marked by the rise of the Permian.
To speak of the U.S. tight oil industry as one is to mistake a long-distance relay race
for the accomplishment of a single runner.
The performance divergence between the Bakken, Eagle Ford, and the Permian has major
implications as to the likelihood of U.S. tight oil production suppressing oil price over the
medium and long term. A close examination of U.S. tight oil production data leads to a single
indisputable conclusion: without the advent of the Permian, the U.S. tight oil industry would
have lost the OPEC lead price war. Hence, it's a misnomer to treat the U.S. tight oil industry
as a monolith, in many ways, the Bakken and the Eagle Ford tight oil fields are as much a
victim of the Permian success as the OPEC nations themselves.
... ... ...
Considering that the majority of U.S. tight oil production growth is
generated by a single field, the Permian, changes in the growth outlook of this basin have
major implications as to the evolution of global oil prices over the short, medium and long
term. Its important to keep in mind that the Permian oil field, despite its large scope, is
bound to flatten, peak and decline at some point. While forecasters differ as to the exact year
when the Permian oil production will flatten, the majority agree that a slowdown in Permian oil
production growth will take place in the early 2020s.
According to OPEC (2018 World Oil Outlook), the Permian basin oil production curve is likely
to flatten by 2020, with growth slowing down from 860K barrels in 2018 to a mere 230K barrels
by 2020:
...OPEC+ production
cuts could erase the supply surplus in the near future. Saudi Arabia has promised to cut
more than required, lowering output in January by 350,000 bpd while also promising another
500,000 bpd cut by March.
"[C]ore-OPEC producers are adopting a 'shock and awe' strategy and exceeding their cut
commitment," Goldman Sachs said in a note, predicting that Brent oil prices will average $67.50
per barrel in the second quarter.
To accommodate steadily rising barrels of light oil, OPEC and its non-OPEC partners have
backed out their own supplies in order to prevent a crash in prices. But many OPEC members
produce medium and heavier blends.
The quantity of global supply may not be vastly different, but the quality of the crude
slate has changed dramatically. Refiners cannot easily swap out one type for another. The
upshot is that the world is seeing a glut of light oil at a time when supply of medium and
heavier barrels are relatively tight.
... ... ...
U.S. sanctions against Venezuela and Iran are magnifying this trend, knocking even more
medium and heavier barrels off of the market.
... ... ...
The IEA said that these quality differences could cause some problems this year. "In
quantity terms, in 2019 the US alone will grow its crude oil production by more than
Venezuela's current output," the agency wrote in its Oil Market Report published Wednesday. "In
quality terms, it is more complicated. Quality matters."
"... By Richard Murphy, a chartered accountant and a political economist. He has been described by the Guardian newspaper as an "anti-poverty campaigner and tax expert". He is Professor of Practice in International Political Economy at City University, London and Director of Tax Research UK. He is a non-executive director of Cambridge Econometrics . He is a member of the Progressive Economy Forum. Originally published at Tax Research UK ..."
"... Like much of political economy, this is a story of power. In the first instance this was professional power. The big firms did, as professional institutes developed, have the means to dominate them. They were in the capital cities where those institutes were usually based. They had the means to release partner time to manage those institutes' affairs. They had the motive to do so. That was ring-fencing their profit. The big firms, then, used their power to set the rules for their professions. ..."
"... Have been reading The Billion-Dollar Whale about the 1MDB mega-heist, facilitated by auditors and bank compliance officers at every step as the Malaysian people were fleeced of billions to pay for sickening rounds of parties, yachts, champagne baths, jewelry, gambling, and garish mansions. "Odious debt" if ever there were. ..."
"... Good topic to cover. The accounting firms are right up there with the ratings agencies as 'high priests' of capital whose blessing is required if your are to be welcome into the halls of power. ..."
A
Study in Professional Power: Why Do the Big 4 Accountants Survive? Posted on
February
13, 2019 by Yves Smith Yves here. While many
people go into "my eyes glaze over" mode when the topic of accountants comes up, you ignore them at your peril. In the US, boards
and executives escape liability if they can say they were acting on the advice of professionals. Lawyers are the main liability shields
for corporate bigwigs, but pliant accountants are also very helpful.
And why don't shareholders who've been hurt due to professionals signing off on crooked corporate conduct sue? They can't. As
we wrote in ECONNED:
Legislators also need to restore secondary liability. Attentive readers may recall that a Supreme Court decision in 1994 disallowed
suits against advisors like accountants and lawyers for aiding and abetting frauds. In other words, a plaintiff could only file
a claim against the party that had fleeced him; he could not seek recourse against those who had made the fraud possible, say,
accounting firms that prepared misleading financial statements. That 1994 decision flew in the face of sixty years of court decisions,
practices in criminal law (the guy who drives the car for a bank robber is an accessory), and common sense. Reinstituting secondary
liability would make it more difficult to engage in shoddy practices.
In other words, the only party that can sue an accounting firm for engaging in fraudulent conduct is his immediate client .who
almost certainly is in on the con. Lovely.
By Richard Murphy, a chartered accountant and a political economist. He has been
described by the Guardian newspaper
as an "anti-poverty campaigner and tax expert". He is Professor of Practice in International Political Economy at City University,
London and Director of Tax Research UK. He is a non-executive director of
Cambridge Econometrics . He is a member of the
Progressive Economy Forum. Originally published at
Tax Research UK
I was asked very recently why it was that the big 4 firms of accountants survive. This is an issue I have been considering with
Len Seabrooke and Saila Stausholm at Copenhagen Business School. The academic paper on the subject is in progress. Let me offer a
plain English perspective for now.
Like much of political economy, this is a story of power. In the first instance this was professional power. The big firms
did, as professional institutes developed, have the means to dominate them. They were in the capital cities where those institutes
were usually based. They had the means to release partner time to manage those institutes' affairs. They had the motive to do so.
That was ring-fencing their profit. The big firms, then, used their power to set the rules for their professions.
Leading the way at a technical level as well, in a profession lead from these firms and not by either government or academia,
these firms also innovated in ways that ring fenced their market. I suspect that this may have provided the strongest incentive for
the creation of consolidated accounts – which were not a universal requirement for group companies until the 1940s. When consolidated
accounts required that multinational groups be treated as single entities their auditors, who I strongly suspect sold its benefit
to governments who then made it a legal requirement, could in turn demand that they were the sole group auditor. The global spread
of a select few firms was guaranteed. The rise of the global firm was the consequence.
These firms succeeded. The firms then sold consultancy advising other companies to copy the success of their global company clients
by also becoming global using a structure that guaranteed market growth in auditing for the big accountants. The market for the big
audit firms was reinforced.
As this was happening in the 50s and 60s another phenomena was growing, which was the tax haven. Slowly at first, but steadily
as the British empire (in particular) receded, the opportunity to hide nefarious activity, as well as profits and so tax bills in
such places, grew. Did the big firms go there before their clients? Or did they have to go because some clients had already gone?
It's a question to be answered. But if the firms were to maintain their demand that they must be sole auditor, worldwide, at least
in name, then if the global entities they were helping spawn moved to tax havens then they too had to go there.
And they did not miss the opportunity. Already used to lobbying and forming opinion on legislation in the countries from which
they originated, and well aware of the coercive power this gave them over their clients, the governments of new tax havens must have
seemed easy pickings to the big accountants of the day. And so they were. Whole rafts of legislation were influenced by such firms
as they peddled in tax havens the secrecy that opposed the transparency they sold elsewhere. The opportunities must have seemed unlimited.
But the timeline has now reached the 70s, and life was not so good for accountants. Airlines failed back then, with people noticing
that their accounts gave no hint that they owned or used planes. In contrast, aeroplane engine makers were claiming that they had
value when the products they were developing at enormous cost for the time were unlikely to push anything into the sky. Accounts
were not providing a true and fair view.
In the face of significant threats to the profession from an outraged public (well, at least those parts losing money as a result
of these failings) the big firms reclaimed the initiative. Accounting standards – supposedly written in the public interest and for
the benefit of all stakeholders – were created and governments that were too trusting by half gave them the force of law. The power
of the big accountants was reinforced, rather than diminished, by the accounting debacles of that era. Now they could write the rules;
say they had the power of law; force them onto their clients and the rest of the profession; and in the process pull themselves ahead
of the competing pack. They could do that by advising on the very rules they had created; by claiming to be the only people who could
audit them; and by making sure that because some only applied to larger enterprises the knowledge of their use did not trickle down
into the profession as a whole.
And they exploited this to the full. The era of capital market liberalisation and globalisation simply provided greater opportunity
to do this, whilst the new and more relaxed ethics of this period promoted the use of tax havens in ways previously unforeseen, and
the firms jumped with both feet into this market as well, producing tax avoidance schemes by the bucket load.
And things only got better. Although the accountants failed miserably to deliver what they promised when accounting standards
were first developed, because they entirely ignored the needs of almost all users of accounts, their capture of the process was so
complete that when the European Union was looking for a set of single accounting standards they adopted the Big 4 created International
Financial Reporting Standards as quasi law, which has now led to their adoption in more than a hundred countries worldwide, with
a parallel process taking place in the USA, Japan and other influential markets. The ability of these firms to control the world's
view of capitalism appeared complete, and they reaped the rewards.
And then some cracks appeared. There was a global financial crisis, which accounts had not anticipated. And there was a global
loss of tax revenue, which accountants appear to have facilitated through tax havens. And rather annoying people pointed out both
failings. You would have thought that the fundamental failure of their product, in the form of accounting standards, and the fundamental
failure of their ethics, evidenced by their use of tax havens and sale of tax avoidance products, would have done for these firms.
Nothing, however, could be further from the truth, hence the question I was asked. How are they surviving?
Let me reiterate how we got here, because the clue is in the process.
They captured the profession, long ago.
Then they captured government, and used it to create laws that suited their purposes in influential countries like the USA
and UK.
They used this law to reinforce their own audit market.
And as a result they also created the image of the modern firm, which they then sold to aspiring rivals, who were required
to replicate it, and so provide yet more fee income to these firms.
In the process they captured the tax havens and their legislatures, and used them for their own purposes.
So complete was the capture that their accounting standards became de facto law. And when the EU wanted to extend that right
to create de facto law with regard to accounting standards, the big accountants were again given the chance to write the rules.
The result is that the big four are now integral to company law, auditing law, accounting law, the law of many tax havens, the
structure of the accounting profession and the structure of many of its clients. Their desire to protect their ability to make supernormal
profit has created a situation where the entire process of law surrounding companies has been captured for their benefit, and the
behaviour of whole markets has been distorted in their favour as a result.
But what they did to achieve this result was display an ability to innovate. Whenever under criticism, they delivered an alternative.
When their ethics were questioned, they produced a supposed new standard. When the market demand that they change, for example post
Enron, that's what they appeared to do, enough to keep people at bay. And all the time, chameleon like, they emerged from each threat
with their power reinforced because they are so integral to the process of corporate regulation that government has effectively abandoned
to them.
That is how they have survived. But that also suggests how the process is changed. Government has to reclaim this process.
It has to audit.
It has to create company law.
It has to say for whose benefit company law is created, and that is not the accountants any more.
And it has to determine who will write the alternatives. None of that will be easy. But with adequate investment it is entirely
possible. These firms have captured significant parts of the processes of capitalism for their own ends. If we are to still have
mixed economies, and I think we should, then this process of capture has to be disrupted, in the public interest. It is only by doing
so that the power of the Big 4 will be challenged. Nothing else will change it.
That's the issue we face. And since there is no challenge right now the Big 4 will go on. And on. Which is right now just as they
want it.
Have been reading The Billion-Dollar Whale about the 1MDB mega-heist, facilitated by auditors and bank compliance officers
at every step as the Malaysian people were fleeced of billions to pay for sickening rounds of parties, yachts, champagne baths,
jewelry, gambling, and garish mansions. "Odious debt" if ever there were.
"In the process they captured the tax havens and their legislatures, and used them for their own purposes." That is certainly
the case in Mauritius where the former deputy PM and finance minister, Xavier-Luc Duval, worked for KPMG in London and Port-Louis.
In the UK, Patricia Hewitt left the cabinet and Commons to head public policy and affairs for one of the Big Four.
It's not just the legislatures, the former CFO to the royal family, Sir Michael Peat,was senior partner at KPMG. So was his
great grandfather, a scion of the Barclay banking family and founder of Peat Marwick. Former KPMG employees hold and have held
senior regulatory positions in the UK. KPMG seems to be the go to firm.
2. Cape Town HQD and dual listed in Frankfurt and Joburg, retailer Steinhoff International has shed over 90% of its market
value due to an "accounting scandal" (with ordinary pensioners losing billions in the process).
3. The Guptas, through their companies and aided by their man Jacob Zuma as state president, brazenly looted state coffers
on a massive scale.
As the enablers-in-chief, KPMG is woven into the common thread running across all these scandals. Not to worry though, they've
thrown a few executives under the bus and are currently on a charm offensive reminding the public just how ethical a bunch they
all are in spite of providing cover for these nefarious activities and will surely emerge from this with their "power reinforced".
PS: Steinhoff has set up an "ethics hotline" run by who? KPMG, wonders truly never cease
I know Steinhoff well from my time at HSBC in Johannesburg and London, 2003 – 6. It had yet to become the plaything of Wiese.
KPMG is similar woven into UK scandals.
You are right to use the term "enabler in chief". It's the entire professional services industry. Law firms, too. The UK Big
Four are now setting up legal, advertising and corporate finance practices.
I was at the Blue Eagle, soon to be ABSA red in the rest of Africa, from 2014 – 6. A friend was fired from the nest after querying
why one of the Big Four was hired to manage its client on boarding remediation at a higher cost and on a longer timescale than
her team could do. The management wanted the Big Four as a firewall. Ironically, she joined one of the Big Four a few months later.
Her settlement, which included a gagging order, precluded her from working for six months.
This is a topic that gets raised now and them (more often recently) in the UK – that auditors/accountants should bear responsibility
for fraud etc., and should not be just mindless box tickers.
A question for those of us not in the know. With Neoliberalism you can say that it has an intellectual back-office with places
like the Chicago school of economics. Is there an intellectual back-office of sorts for accountancy that enable these Big Four
to justify their accountancy rules as well? Or do they get to make it up as they go along?
Having the government do audits will make things worse. In the US, the PCAOB is the Big Four's cartel enforcer. The PCAOB should
be dissolved and the law changed to facilitate suits against CPAs. Let the plaintiff's bar discipline the CPA profession.
Uncle Sam had the FED create stress tests. Why? To convince the public the FED had things under control and the banking system
is sound. Why would government audits be better than the stress tests?
Uncle Sam could break up the Big Four into the not so sweet 16. Will it? Or does the Big Four do exactly what Uncle Sam wants?
Are the "problems" we see, feature or bug?
Yes, the plaintiffs bar worked very well in my early days as a CPA. Particularly because CPAs, like other professionals, had
PERSONAL liability and could not hide behind the corporate wall. This is one of those things that worked very well in real life
but someone (if it wasn't economists it was persons of the same ilk) proved it was theoretically impossible. Hence, all professionals
are now corporations where before they weren't even allowed to be called a business. From the perspective of a professional accountant
with years of watching how the system works we are, ironically, failing because of accountability. We have a smoothly functioning
form of capitalism that manifests in "Heads I win, tails you lose". That fundamental principal has been ignored from the late
'70s to today at our extreme peril culminating in the GFC where it was taken to the extreme of "Heads I win, tails I win more
and you lose more.
Good topic to cover. The accounting firms are right up there with the ratings agencies as 'high priests' of capital whose
blessing is required if your are to be welcome into the halls of power.
For anyone interested, NN Taleb writes eloquently about two subjects which are germane: experts and skin in the game, for the
same reasons as the author of this piece. The Big Four are so-called experts and they have no skin in the game. This as Taleb,
makes us all fools who have been hoodwinked because failure to understand that abuses of these two issues is what has ruined capitalism
in our lifetimes. Like the frog put in a pot of water which is slowly heated, I watched this happen over my career. It is our
formerly functioning capitalist system that is the frog in the water.
Thanks for this. There have always been some accounting practices that were supposedly "Generally Accepted" that made me scratch
my head as they didn't seem to lead to any greater transparency, and in fact often quite the opposite.
"... they expect maybe 200 kb/d higher output in the GOM and my interpretation of George Kaplan's and SouthLaGeo's recent comments is that flat or possibly declining GOM output is a more likely scenario. ..."
The EIA's STEO released today. https://www.eia.gov/outlooks/steo/
They forecast US C+C production to increase +0.79 million barrels per day during 2019
From Dec 2018 11.93 million barrels per day
To Dec 2019 12.72 million barrels per day
The EIA's forecast might not be too far off, but I think they expect maybe 200 kb/d
higher output in the GOM and my interpretation of George Kaplan's and SouthLaGeo's recent
comments is that flat or possibly declining GOM output is a more likely scenario.
"... Erdogan has used it in Turkey ( less than three years ago ) and it was a common line in the forgotten 1930s used by none other than Mussolini. And now I quote Trump's US secretary of state Michael Pompeo on Maduro : "Now it is time for every other nation to pick a side either you stand with the forces of freedom, or you're in league with Maduro and his mayhem." ..."
"... Rigged elections? No doubt about it, although al-Sisi still maintains that his last triumph at the polls – a cracking 97 per cent – was a free and fair election. President Trump sent his "sincere congratulations" . Political prisoners? Well, the total is 60,000 and rising . Oh yes, and Maduro's last victory – a rigged election if ever there was one, of course – was a mere 67.84 per cent. ..."
"... Now the Americans are negotiating with the "terrorist" Taliban in Qatar so they can get the hell out of the Graveyard of Empires after 17 years of military setbacks, scandals and defeats – not to mention running a few torture camps which even Maduro would cough to look at. ..."
Erdogan has used it in Turkey ( less than
three years ago ) and it was a common line in the forgotten 1930s used by none other than
Mussolini. And now I quote Trump's US secretary of state
Michael Pompeo on Maduro : "Now it is time for every other nation to pick a side either you
stand with the forces of freedom, or you're in league with Maduro and his mayhem."
You get the point. Now is the time for all good people to stand alongside the United States,
the EU, the nations of Latin America – or do you support the Russkies, Chinese, Iranian
headbangers, the perfidious Corbyn and (of all people) the Greeks? Talking of the Greeks,
European pressure on Alexis Tsipras to conform to the EU's support for Guaido – proving
that the EU can indeed bully its smaller members – is a good argument for Brexiteers
(though far too complex for them to understand).
But first, let's take a look at our favourite tyrant, in the words of all who oppose him.
He's a powerful dictator, surrounded by generals, suppressing his people, using torture, mass
arrests, secret police murders, rigged elections, political prisoners – so no wonder we
gave our support to those who wish to overthrow this brutal man and stage democratic
elections.
Not a bad precis of our current policy towards the Maduro regime. But I am referring, of
course, word-for-word, to the west's policy towards the Assad regime in Syria. And our support
for opposition democracy there wasn't terribly successful.
We were not solely responsible for the
Syrian civil war – but we were not guiltless since we sent an awful lot of weapons to
those trying to overthrow Assad. And last month the notepad of US national security advisor
John Bolton appeared to boast a plan to send
5,000 US troops to Colombia
And now let's tick the box on another Maduro-lookalike – at least from the west's
simplistic point of view: the military-backed elected field marshal-president al-Sisi of Egypt,
whom we love, admire and protect. Powerful dictator? Yup. Surrounded and supported by generals?
You bet, not least because he locked up a rival general before the last election. Suppression?
Absolutely – all in the interest of crushing "terrorism", of course.
Mass arrests? Happily yes, for all the inmates of Egypt's savage prison system are
"terrorists", at least according to the field marshal-president himself. Secret police murders?
Well, even forgetting the young Italian student suspected by his government to have been
allegedly tortured and bumped off by one of Sisi's top Egyptian cops, there's a roll call of
disappeared activists.
Rigged elections? No doubt about it, although al-Sisi still maintains that his last
triumph at the polls – a cracking 97 per cent – was a free and fair election.
President Trump sent his
"sincere congratulations" . Political prisoners? Well, the total is
60,000 and rising . Oh yes, and Maduro's last victory – a rigged election if ever
there was one, of course – was a mere 67.84 per cent.
As the late sage of the Sunday Express , John Gordon, might have said: it makes you
sit up a bit. So, too, I suppose, when we glance a bit further eastwards to Afghanistan, whose
Taliban rulers were routed in 2001 by the US, whose post-9/11 troops and statesmen ushered in a
new life of democracy, then corruption, warlordism and civil war.
The "democracy" bit quickly came unstuck when "loya jurgas", grand councils, turned into
tribal playpens and the Americans announced that it would be an exaggeration to think that we
could achieve "Jeffersonian democracy" in Afghanistan. Too true.
Now the Americans are negotiating with the "terrorist" Taliban in Qatar so they can get the hell out
of the Graveyard of Empires after 17 years of military setbacks, scandals and defeats –
not to mention running a few torture camps which even Maduro would cough to look at.
Now all this may not encourage you to walk down memory lane. And I haven't even listed the
sins of Saddam, let alone our continuing and cosy relationship – amazing as it still
seems – with that Gulf state whose lads strangled, chopped up and secretly buried a
US-resident journalist in Turkey.
Now just imagine if Maduro, tired of a journalist critic slandering him in Miami, decided to
lure him to the Venezuelan embassy in Washington and top the poor guy, slice him up and bury
him secretly in Foggy Bottom. Well now, I have a feeling that sanctions might have been applied
to Maduro a long time ago. But not to Saudi Arabia, of course, where we are very definitely not
advocating democracy.
"Now is the time for democracy and prosperity in Venezuela," quoth John Bolton this week.
Oh, yes indeed. Maduro runs an oil-soaked nation yet its people starve. He is an unworthy,
foolish and vain man, even if he's not Saddamite in his crimes. He was rightly described by a
colleague as a dreary tyrant. He even looks like the kind of guy who tied ladies to railway
lines in silent movies.
So good luck to Guaido. Palpably a nice guy, speaks eloquently, wise to stick to aid for the
poor and fresh elections rather than dwell on just how exactly Maduro and his military chums
are going to be booted out.
In other words, good luck – but watch out. Instead of pleading with those who will not
support him – the Greeks, for example – he might take a closer look at who his
foreign friends are. And do a quick track record on their more recent crusades for freedom,
democracy and the right to life. And by the way, I haven't even mentioned Libya.
Trigger warning: This post contains the discussion of depression and other mental
health issues, and suicide. If you or anyone you know needs help or support for a mental
health concern, please don't suffer in silence. Many countries have confidential phone
helplines (in Australia you can call Lifeline on 13 11 14, for example);this organisationprovides
worldwide support, whilethis websitecompiles a
number of helpline sites from around the world.
I am writing today from a place of anger; from a rage that sits, simmering on the surface of
a deep well of sadness. I didn't know Dr. Malcolm Anderson, the senior accountancy lecturer
from Cardiff University whose death, after falling from the roof of his university building,
was last week ruled
a suicide . I obviously have no way to know the complexity of his feelings or what sequence
of events led up to his decision to end his own life. However, according to the results of an
inquest, we can know what Dr. Anderson wanted his university to understand about his death
– that it was, at least in part, because of the pressures of his academic work.
The media reports that Dr. Anderson had recently been appointed to Deputy Head of his
department, significantly increasing his administrative load. Nonetheless, he was still
teaching 418 students and needed to mark their work within a 20-day turnaround. To meet that
deadline, he would have needed to work approximately 9 hours a day without food or toilet
breaks, for 20 days straight, and not do ANY other kind of work during that time (such as the
admin that comes with being a Deputy Head). Practically impossible, given he was also a human
being, with a home life, and physical needs like food, in addition to work
responsibilities.
His wife, Diane, has been quoted saying that Dr. Anderson worked very long hours and often
took marking to family events. She has said that although he was a passionate educator who won
teaching awards every year, he had been showing signs of stress and had spoken to his managers
about his difficulty meeting deadlines. A colleague told the inquest that he was given the same
response each time he asked for help, and staffing cuts had continued.
A Marked
Problem
... ... ...
And look, I get it. To someone outside the academy, I'm sure the perception
remains that academics sit in leather armchairs, gazing out the gilded windows of our ivory
towers, thinking all day.
That has not been my experience, nor that of anyone I know.
My colleagues and peers have, however , experienced levels of anxiety and
depression that are
six times higher than experienced in the general population (Evans et al. 2018). They
report
higher levels of workaholism , the kind that has a negative and unwanted effect on
relationships with loved ones (Torp et al. 2018). The picture is often even bleaker for
women
,
people of colour , and other non-White, non-middle-class, non-males. So whether you think
academics are 'delicate woeful souls' or not, it's difficult to deny that there is a real
problem to be tackled here.
Obviously, marking load is only one issue amongst many faced in universities the world over.
But it's not bad as an illustration, partly because it's quantifiable . It's somewhat
ironic that the neoliberal metrics that we rail against, the audit culture that causes these
kinds of examples to happen, could also help us describe to others why they are a problem for
us. So quantifiability brings us to neoliberalism. How did neoliberalism become so pervasive
that it's almost impossible to imagine how the world could look different?
Neoliberalism,
then and now
These last two weeks I've been working out of the Stockholm Centre for Organisational Research in Sweden,
which, by coincidence, is where Professor Cris Shore , anthropologist of
policy and the guest on our next podcast episode is
currently based. I was chatting to him the other day about the interview we recorded last
December, which centres around many of the ideas I'm discussing in this blog post. I had to
admit, I hadn't realised until we did that interview how angry many people still feel towards
the
Thatcher government for introducing neoliberal ideologies and practices into the public
sector. Despite doing a Ph.D. about modern university life, it hadn't fully registered for me
that events of the past , specifically the histories of politics and economics in 'the
West', were such active players in the theatre of higher education's present .
To understand today's neoliberal universities, let's explore a little history in the UK and
the US, two of the biggest influencers in the global higher education sector today. In 1979,
Margaret Thatcher rose to power on a platform of reviving the stagnant British economy by
introducing market-style competition into the public sector. This way, she claimed, she was
ensuring, that "the state's power [was] reduced and the power of the people, enhanced"
(Edwards,
2017) . For universities, this meant increased "accountability" and quality assurance
measures that would
drag universities out of their complacency .
Meanwhile, in the US, Ronald Reagan was also arriving at neoliberalism via a different path.
Americans historically don't trust central government (Roberts,
2007) , so in 1981, Reagan introduced tax cuts (especially for the rich) for the first time
in American history, therefore "protecting" the American people from the rapacious spending
habits of the state (Prasad,
2012) . In American universities, this manifested over the next 30 years in reduced public
spending on higher education, transferring the costs for tuition to student-consumers, and
encouraging partnerships with industry and endorsements from philanthropists (often with
agendas) to cover research costs (Shumway, 2017) .
Then in the 90s, there was a moral panic about the public sector caused by scandals such as
" the collapse of Barings
Bank in 1995 , the failures of the medical profession revealed by investigations into the
serial murders by Dr
Harold Shipman , and the numerous cases of child abuse
that have plagued the Catholic Church " (Shore, 2008) . Frankly, it
seems pretty understandable that people were looking for greater transparency, a bit of
accountability, and a whole lot less of, "leave it to the professionals, they seem like alright
blokes, don't they?" from their public sector.
The official rationale for [neoliberal ideologies and actions] appears benign and
incontestable: to improve efficiency and transparency and to make these institutions more
accountable to the taxpayer and public (and no reasonable person could seriously challenge
such commonsensical and progressive objectives). The problem, however, is that audit confuses
'accountability' with 'accountancy' so that 'being answerable to the public' is recast in
terms of measures of productivity, 'economic efficiency' and delivering 'value for money'
(VFM).
The trouble with neoliberalism and its offshoot, New Public Management , is that
much like the Newspeak of
Orwell's 1984 , the words that were used to sell it – quality, accountability,
transparency etc. – in practice, mean the opposite of what they appear to mean.
For example, as Chris Lorenz (2012) points out in an article that convincingly compares New Public
Management in universities to the outcomes of a Communist regime , there has been no
evidence, statistical or otherwise, that increasing 'quality control measures' in universities
has actually improved quality in universities by any objective criteria – and often just
the opposite.
What has "improved" in universities because of neoliberal practices is efficiency,
often through measures like restructures and reviews. Again, taking steps to save money and
time sounds like a positive. However, the problem with 'efficiency' is that, unlike its
counterpart 'effectiveness' (the ability to bring about a specific effect), 'efficiency' has no
end point – it is a goal unto itself. As Lorenz phrases it, "efficient, therefore, is
never efficient enough," (2012, p. 607).
Bringing this back, then, to issues of mental health and increasing workloads on campus. Liz
Morrish of Academic
Irregularities pointed out last week that when tragedies such as the death of Malcolm
Anderson occur in universities, the most common response is for said university to announce a
review. As anticipated, two days after the results of Dr. Anderson's inquest were first
reported in the media, Cardiff University
announced that they would be reviewing the 'support, information, advice and specialist
counselling' available to all staff, but also urged any academic "who has any concerns
regarding workload, to raise them with their line manager, in the first instance, so all
available advice and support can be offered."
This platitude has been taken by many online as exactly that – a platitude. Several commenters
on Twitter have pointed out that providing more mental health support doesn't actually
reduce workload, while others have noted that there has been no discussion by Cardiff U of
attempting to fix the underlying cause. I agree with them, and it's part of the reason I'm so
angry. Malcolm Anderson could easily be any one of us.
Yet, I have to admit, I'd also hate to be part of the executive team at Cardiff University
right now. Can you imagine the anguish of knowing that someone had taken their life, and held
you directly responsible? You'd have to feel so helpless, so powerless in the shadow of
neoliberal forces that permeate every last aspect of the global higher education sector. I
don't know, I haven't been a Vice Chancellor, maybe you wouldn't have to feel that way. But
it's easy to imagine how one could.
The path to neoliberal hell is paved with good
intentions
So, what's the answer? I wish I knew. What I do know is that anthropological thinking has a
lot to offer in the exploration of big immutable mobiles
2 like neoliberalism. As Sherry Ortner asks in her 2016 article " Dark anthropology and
its others: Theory since the eighties ", who better to question the power structures
inherent in 'dark' topics such as neoliberalisation or colonialism than anthropologists? Yet,
she urges an approach that also acknowledges the possibility of goodness in the world,
quoting from the opening to Michael Lambek's Ordinary Ethics as rationale:
Ethnographers commonly find that the people they encounter are trying to do what they
consider right or good, are being evaluated according to criteria of what is right and good,
or are in some debate about what constitutes the human good. Yet anthropological theory tends
to overlook all this in favor of analyses that emphasize structure, power, and interest.
(Lambeck, 2010, p. 1)
And this is where I have to deviate from the majority of the neoliberal university critiques
I've read. In these pieces, it's all too common to read criticisms of academic managers, or
administrators, or university 'service providers' as if they are The Reason that neoliberal
ideologies get enacted in university contexts. But usually, they're just human beings too, also
subject to KPIs and managerial demands and neoliberal ideologies.
Having worked at different times as an educator, a researcher, and a communications manager
in various universities for more than 10 years, and now having conducted fieldwork at a
university for my PhD, I have had the chance to observe and conduct research on at least nine
different university campuses, in at least five countries. Based on those experiences, I am in
complete agreement with Lambek: the majority
3 of non-academics that I have encountered, in every type of department, and at every
level of universities from Level 1 administrative officers to Presidents and Vice Chancellors,
"are trying to do what they consider right or good" (2010, p. 1).
They demonstrate, both through words and their actions, their beliefs that education is
valuable, and that students are important as human beings, not just as cash cows. They are
often working long hours themselves, trying to keep up with the demands that neoliberal
university life is placing on them. I just can't get on board with the idea that they are,
universally, the villains of the neoliberal horror story.
It seems much more likely, to me, that neoliberal ideologies continue to get enacted and
reinforced by academic managers because these practices have become the norm. Throughout and
because of the historical growth pattern neoliberalism has experienced, these ideologies have
put down roots, and these roots have become so entangled with other aspects of university life
as to be inseparable. For many working-aged people, neoliberalism is the water we were born
swimming in. Even presented with its inadequacies, it's difficult to imagine an
alternative.
What I can agree with the critics about, however, is that non-academics often don't
understand or appreciate – or perhaps remember (if they had worked in that capacity in
the past) – the demands of being an academic, just like academics don't tend to
understand or appreciate the demands that non-academics within the university are facing.
In their recently published book
Death of the Public University (2017), Susan Wright and Cris Shore refer to the idea of
'Faculty Land' – a place synonymous with 'La La Land', where non-academic employees of
universities think academics live. This really resonates with what I saw on fieldwork at
an international university in Vietnam, but not only from administrators – academics
too.
As I've said in a previous
post , all the actors in universities are trying to abrogate responsibility sideways or
upwards until they can only blame 'the neoliberal agenda', and once they get there, all they
can see is a towering, monolithic idea , and it becomes like trying to have a fist fight
with a cloud. Most people don't ever get to that point though, because the world feels more controllable if
we believe that there is another human to blame .
The thing is though, blaming others almost never works . It doesn't make things
better, it just creates a greater divide between groups, encourages isolationism and othering,
and decreases the likelihood that either side will ever want to work together to fix the
problem.
Dr Anderson's tragic death, and the similarly tragic statistics that tell us that the
collective mental health of our academics is in crisis, should be a wake up call to all
of us who work or study in universities, in any capacity. Whether it will be remains to be
seen.
Again: If you or anyone you know needs help or support for a mental health concern,
please don't suffer in silence . Sometimes talking about things with an objective
outsider can help.
If you work in a university with a counselling service, consider seeking them out.
Many have emergency sessions set aside each day.
Many countries have confidential phone helplines (in Australia you can call
Lifeline on 13 11 14, for example).
If you (or your department) have the financial means, psychologists who
specialise in working with HDR students and academics, such asDr Shari Walsh of Growth
Psychologysometimes offer Skype appointments. (I have had Skype sessions with
Shari myself; she's lovely. PS. I don't get anything out of plugging her services, I
just think what she offers is valuable.)
Yes, I know, this is a structural problem and we shouldn't have to take care of it as
individuals (see Grace Krause's moving
poem about this here ). But in the meantime, while we work on that, please seek help
if you need it .
"... Neoliberalism has transformed education from a social good into a production process where the final product is a reserve army of workers for the information economy. What David Harvey calls the "state-finance nexus" pushes universities to play the part by withholding state funds until they expand their enrollment and increase the number of college graduates entering the workforce.[13] In 2012, the Obama Administration identified increasing the number of undergraduate STEM degrees by one million over the next decade as a 'Cross-Agency Priority Goal' on the recommendation of the President's Council of Advisors on Science and Technology (PCAST). ..."
"... The present relationship between the university and the state flows from the dynamics of financialization. As financialization transforms the role of the United States in the global economy, it appropriates higher education to suit the needs of finance capital. Compared to the ever-expanding administrative apparatus responsible for managing contracts and investments, programs outside of STEM and business fields are considered superfluous. Humanities programs are often downsized and tenure tracks closed to push professors into permanent part-time employment arrangements.[15] Meanwhile, schools like Northeastern and MIT are surrounded by high-tech and business firms that rely on students and research facilities for cheap labor and productive capital. ..."
"... The position of financial and credit institutions as the financiers of America's productive infrastructure has far-reaching consequences for social institutions like universities with the potential to absorb surplus capital in the form of credit or produce the 21st-century 'information' workforce. Students, and faculty at universities like Northeastern will struggle against market pressures on universities to attract outside investors while downsizing education for as long as the U.S. economy is dominated by finance. ..."
Last month at Northeastern University, the adjunct union reached a
tentative agreement with the university administration to avert a planned walkout after
more than a year of unsuccessful negotiations. Those familiar with the adjunct campaign know
that adjunct professors are contingent workers who comprise more than half of the teaching
staff at Northeastern and are paid a couple thousand dollars for each class that they teach.[1]
From a budgetary standpoint, contingent workers are economical because they are easily replaced
and therefore can be paid less. Still, at a school like Northeastern University with an
operating budget of more than $2.2 billion, it is hard to argue that more than half of all
professors need to earn poverty wages for the school to remain profitable.[2]
In today's neoliberal landscape -- a term which refers to the coordinated effort by capital
and financial interests after the 1980s to privatize public institutions and deregulate markets
-- Northeastern is not unusual in its treatment of adjunct professors. The neoliberal
university model of high tuitions, bloated administrative departments, and upscale student
facilities -- along with assaults on the job security and pay of professors -- is the new norm.
It is the image of a thoroughly financialized economy that has transformed the relationship
between universities and the state.
From the 19th century through the 1970s, the relationship between universities and the state
remained constant. There was an informal arrangement of mutual independence: Academics operated
autonomously with state funding on the understanding that they were willing to pursue research
in which the state had an interest, such as medicine or space exploration.[3] Underlying this
arrangement was the assumption that as a social good, education should drive public research
and development.
The story of how universities became neoliberalized begins with the economic crisis of the
1970s and the subsequent free-market discourse that invoked capitalism's insatiable need for
economic growth in order to equate the interests of working people with the interests of
financiers.
In the three decades after World War II, the U.S. established economic hegemony over the
global capitalist world. The Fordist
compromise between strong manufacturers and a strong, suburbanizing working class yielded
unprecedented wage growth.[4] However, the Fordist model could not last forever. As a general
rule, whenever compound economic growth falls below three percent, people
begin to get scared . In order to sustain three percent compound growth, there must be no
barriers to the continuous expansion and reinvestment of capital.
The suburbanization of postwar America did sustain high demand for American-made automobiles
and home products, but reinvestment in manufacturing eventually became difficult for capital
because a widely-unionized and militant working class created a labor shortage (i.e. near-full
employment) which drove up wages and hurt profitability.[5][6] To the extent that productivity
could be improved by technological innovations, organized labor insisted on "productivity
agreements" that ensured that machines would not be used to undermine wages or benefits. To
make matters worse for U.S. manufacturers, monopolies like the Big Three auto companies were
broken by foreign imports from a newly rebuilt Europe and Japan.[7]
In The Grundrisse , Karl Marx remarked that "every limit [to capital accumulation]
appears as a barrier to be overcome."[8] For Marx, sustained capital accumulation requires an
"industrial reserve army" to keep the cost of labor (i.e. wages) from impeding profitability.
To restore profits, American capital had to discipline labor by drawing from the global working
population. The Immigration and Nationality Act of 1965 addressed U.S. labor scarcity by
abolishing immigration quotas based on nationality so that cheap labor would flood the market
and drive down wages.[9] However, it proved more effective for manufacturing capital to simply
relocate to countries with cheaper labor, and throughout the 1970s and 1980s capital did just
that -- first to South Korea and Thailand, and then to China as wages in those countries became
too high.[10]
"Globalization" entailed removing barriers to international capital relocation such as
tariffs and quotas in order to construct a global market where liquid money capital could flow
internationally to wherever it yielded the most profits. Of course, wage suppression eventually
lowers consumer demand. The neoliberal solution was for financial institutions to sustain
middle-class purchasing power through credit. In The Enigma of Capital , David Harvey
writes that "the demand problem was temporarily bridged with respect to housing by
debt-financing the developers as well as the buyers. The financial institutions collectively
controlled both the supply of, and demand for, housing!"[11]
The point of this history though, is that the financialization of the American economy,
through which financial markets came to dominate other forms of industrial and agricultural
capital, served as the backdrop for the transformation of higher education into what it is
today. Neoliberal ideology reframed the social value of higher education as a tool for building
the next workforce to serve the new "information economy" -- a term that emerged in the midst
of globalization to describe the role of U.S. suburban professionals in the global economy.
Simultaneously, finance capital repurposed universities as points of capital accumulation and
investment.
The discourse around the information economy sought to rationalize the offshoring of
manufacturing from the U.S. The idea was that due to globalization, America has reached a stage
of development where its participation in the global economy is as a white-collar work force,
specializing in technology and the spread of information.[12] In this telling, there is nothing
to critique about the deindustrialization of the American economy because it was inevitable. It
was then simple to realign the social goals of universities with the economic goals of Wall
Street because the state repression of radical civil rights movements on the Left and the
emergent free-market discourse of the Right formed a widespread perception of the state as
inherently
problematic . State research and development at universities was easily dismissed as
inefficient, which cleared space for a neoliberal redefinition of higher education.
Neoliberalism has transformed education from a social good into a production process
where the final product is a reserve army of workers for the information economy. What David
Harvey calls the "state-finance nexus" pushes universities to play the part by withholding
state funds until they expand their enrollment and increase the number of college graduates
entering the workforce.[13] In 2012, the Obama Administration identified increasing the number
of undergraduate STEM degrees by one million over the next decade as a 'Cross-Agency Priority
Goal' on the
recommendation of the President's Council of Advisors on Science and Technology
(PCAST).
At the same time that neoliberalism transforms education into a production process for
high-tech workers, it transforms the university itself into a site for surplus capital
absorption through the construction of new labs, facilities, and houses to draw wealthy
students and faculty capable of attracting federal grants. In December 2015, Northeastern filed
a letter of intent with the Boston Redevelopment Authority to propose building a residence hall
for approximately 800 students. The Boston Globe
reported that the project is currently under review by American Campus Communities, the
largest developer of private student housing in the U.S. To an economizing university
administrator, private developers are very appealing because they assume the debt generated by
construction projects. The circular process whereby a large university endowment comprised of
financial assets is used to contract a debt-financed independent developer reveals how
neoliberalism integrates universities into the circulatory system of capital as circuits of
accumulation and investment.[14]
The present relationship between the university and the state flows from the dynamics of
financialization. As financialization transforms the role of the United States in the global
economy, it appropriates higher education to suit the needs of finance capital. Compared to the
ever-expanding
administrative apparatus responsible for managing contracts and investments, programs
outside of STEM and business fields are considered superfluous. Humanities programs are
often
downsized and tenure tracks closed to push professors into permanent part-time employment
arrangements.[15] Meanwhile, schools like Northeastern and MIT are surrounded by high-tech and
business firms that rely on students and research facilities for cheap labor and productive
capital.
The position of financial and credit institutions as the financiers of America's
productive infrastructure has far-reaching consequences for social institutions like
universities with the potential to absorb surplus capital in the form of credit or produce the
21st-century 'information' workforce. Students, and faculty at universities like Northeastern
will struggle against market pressures on universities to attract outside investors while
downsizing education for as long as the U.S. economy is dominated by finance.
"... To that end, the senator from Florida on Tuesday unveiled a proposal to limit corporate buybacks. Unlike a plan pitched by Bernie Sanders and Chuck Schumer earlier this month, Rubio's plan would seek to end preferential tax treatment of share buybacks, by decreeing that any money spent on buybacks would be considered - for tax purposes - a dividend paid to shareholders, even if individual investors didn't actually part with any stock. ..."
"... Any tax revenue generated by these changes could then be used to encourage more capital investment, Rubio said. As part of the proposal, Rubio would make a provision in the tax law that allows companies to deduct capital investment permanent (that provision is currently set to expire in 2022). ..."
"... But before lawmakers take their next steps toward regulating how and when companies should return excess capital to shareholders, they might want to take a look at a column recently published by WSJ's "Intelligent Investor" that expounds a concept called "the bladder theory." ..."
"... But the law most likely to govern here is the Law of Unintended Consequences. ..."
"... That companies bought back a record $1 trillion worth of stock last year while employers like GM slashed jobs and closed factories has stoked criticisms of the Trump tax cuts, but as the gulf between the rich and the poor grows ever more wide (a phenomenon for which we can thank the Federal Reserve and other large global central banks) it's worth wondering: facing a simmering backlash to one of the most persistent marginal bids in the market place, have investors already become too complacent about proposals like Rubio's? ..."
"... Worse, since they're largely funded by increased corporate debt (!) they amount to corporate strip-mining by senior management. This is disgraceful and dangerous. The debt will bust some corporations when the inevitable next downturn comes. ..."
"... This buyback cancer, which has grown rapidly because of corrupt SEC thinking and perverse tax incentives, requires urgent treatment. ..."
For better or worse, Republican Senator and one-time presidential candidate Marco Rubio
isn't about to let
the Democrats own the fight to curtail one of the most flagrant examples of post-crisis
corporate excess. And if he can carve out a niche for himself that might one day help him
credibly pitch himself as a populist firebrand, much like the man who went on to claim the
presidency after defeating him in the Republican primary, well, that sounds to us like a
win-win.
To that end, the senator from Florida on Tuesday unveiled a proposal to limit corporate
buybacks. Unlike a plan pitched by Bernie Sanders and Chuck Schumer earlier this month, Rubio's
plan would seek to end preferential tax treatment of share buybacks, by decreeing that any
money spent on buybacks would be considered - for tax purposes - a dividend paid to
shareholders, even if individual investors didn't actually part with any stock.
According to CNBC
, the plan calls for every shareholder to receive an imputed portion of the funds equivalent to
the percentage of company stock they own, which, of course, isn't the same thing as directly
handing capital to shareholders (it simply changes the tax rate that the company buying back
the shares would pay).
Ultimately, Rubio hopes that these changes would discourage companies from buying back
stock. Those companies that continued to buy back shares would help contribute to higher
revenues by increasing the funds that can be taxed, while also raising the rate at which this
money can be taxed. Any tax revenue generated by these changes could then be used to encourage
more capital investment, Rubio said. As part of the proposal, Rubio would make a provision in
the tax law that allows companies to deduct capital investment permanent (that provision is
currently set to expire in 2022).
But before lawmakers take their next steps toward regulating how and when companies should
return excess capital to shareholders, they might want to take a look at a column recently
published by WSJ's
"Intelligent Investor" that expounds a concept called "the bladder theory."
Overall, however, buybacks (and dividends) return excess capital to investors who are free
to spend or reinvest it wherever it is most needed. By requiring companies to hang onto their capital instead of paying it out, Congress might
- perhaps - encourage them to invest more in workers and communities.
But the law most likely to govern here is the Law of Unintended Consequences. The history of investment by corporate managers with oodles of cash on their hands isn't
encouraging. Hugh Liedtke, the late chief executive of Pennzoil, reportedly liked to quip
that he believed in "the bladder theory:" Companies should pay out as much cash as possible,
so managers couldn't piss all the money away.
That companies bought back a record $1 trillion worth of stock last year while employers
like GM slashed jobs and closed factories has stoked criticisms of the Trump tax cuts, but as
the gulf between the rich and the poor grows ever more wide (a phenomenon for which we can
thank the Federal Reserve and other large global central banks) it's worth wondering: facing a
simmering backlash to one of the most persistent marginal bids in the market place, have
investors already become too complacent about proposals like Rubio's?
We ask only because
the Dow soared more than 350 points on Tuesday, suggesting that, even as Rubio added a
bipartisan flavor to the nascent movement to curb buybacks, investors aren't taking these
proposals too seriously - at least not yet.
Celotex
This still doesn't address the insider trading aspect of stock buybacks, with insiders front-running the buyback.
vladiki
No one's arguing that if a company's groaning with cash then buybacks make sense. But it's the other 95% of of them that
are the problem. Compare the 20 year graphs of buybacks with corporate profits, corporate debt, corporate tax paid, corporate
dividends paid.
They tell you what everyone in higher management knows - that they're a tax-free dividend mechanism pretending to be
"capital rationalisation".
Worse, since they're largely funded by increased corporate debt (!) they amount to corporate strip-mining by senior
management. This is disgraceful and dangerous. The debt will bust some corporations when the inevitable next downturn comes.
This buyback cancer, which has grown rapidly because of corrupt SEC thinking and perverse tax incentives, requires
urgent treatment.
james diamond squid
Everyone is in on this ponzi. I'm expecting tax deductions for buying stocks/homes.
Microsoft co-founder Bill Gates does not think the way
to increase U.S. tax
revenue is through policies like raising the tax rate on the wealthy to 70 percent – as
has been floated by some Democratic lawmakers like New York Rep. Alexandria Ocasio-Cortez.
During a podcast interview with
The Verge , Gates responded to a question about whether raising the top rate to 70 percent
in order to fund social programs – like infrastructure initiatives – appeals to him
by saying government can be more effective in running social programs, but that's not the best
way to raise revenue.
"You finally have some politicians who are so extreme that I'd say, 'No, that's even
beyond,'" Gates said. "You do start to create tax dodging and disincentives, and an incentive
to have the income show up in other countries and things."
Gates added that the country's richest people often don't pay the highest rate because their
wealth doesn't always show up as income, it can be in the value of their stock, for
example.
"So it's a misfocus," he added. "If you focus on that, you're missing the picture."
The billionaire businessman, however, does believe there are ways to make the current tax
code more progressive. Some of those ways include more progressive policies regarding the
estate tax, the tax on capital, or reforming FICA and Social Security taxes. Independent
Vermont Sen. Bernie Sanders recently released a proposal to expand the estate tax to a rate of
77
percent for those passing on assets in excess of $1 billion.
Bill Gates also called modern
monetary theory (MMT) – which asserts that because the government controls its own
currency, there is no need to worry about balancing the budget – "some crazy talk."
Ocasio-Cortez recently indicated she was open to supporting MMT.
Gates is one of the richest people in the world. He has said, despite the fact that he has
paid more in taxes than most, he should be
paying more .
Venezuela production should take a larger drop in February. Today Interim President
Guaidó announced Feb 23 would be the day a big push would be made to push humanitarian
aid columns into Venezuela. Collection points for food and medicine are now available in
Colombia and Brazil, and others are being prepared.
Maduro moved 700 special forces (FAES) which are usually kept serving as death squads in
large cities, to cover the bridges between Ureña in Venezuela and Cucuta in Colombia,
with orders to fire on the humanitarian relief trucks. Guaidó responded the border was
plenty long and Maduro lacked enough FAES and Cubans to stop the relief from crossing the
border. He also pointed out that if Maduro had to use death squads to patrol the border it
meant he didn't trust the Army, the National Guard or the National Police, so he asked for
volunteers inside Venezuela to help overcome Maduro's thugs with sheer numbers.
Today it became very common to see an individual scream "Maduro!" and the crowd respond "f
k you!". It's the way people pass the time at metro stations and while waiting in line. And
the police seem to have abandoned the usurper, because they seldom do anything about it.
IMHO there is no economics, only "political economy" and mathiness and "cult of measurement" especially with all those some
fuzzy metrics currently in use, are just a part of the ideological smokescreen over "naked neoliberalism." Like shaman dances
around the fire. Impressive and useless simultaneously.
In other words, many current practitioners of neoliberal economic theories (including but not limited to neoclassical
economics) are practicing pseudoscience and are, directly or indirectly, bought and paid by financial oligarchy. That does not
exclude possibility of some, occasional, useful insight.
Notable quotes:
"... The counterargument that I will elaborate here, is that neoliberalism and social democracy should be treated as two distinct and internally consistent thought and value systems. The integrity of the two ideologies must neither be reduced to practices/policies, which occasionally may overlap, nor to individual representatives, who, over the course of a lifetime, can move from one pole to the other. ..."
"... Robbins Report ..."
"... Underpinning this analysis is a bleak diagnosis of what purpose the university system and its employees serve. It is a diagnosis that Fuller, by his own admission, has gleaned from the Virginia-style neoliberal Gordon Tullock. ..."
"... The task assigned to the university, i.e. to certify bodies of trustworthy knowledge, is not called for by any intrinsic property of that knowledge (it being true, safe etc.), but is rather a form of rent-seeking. The rent is extracted from the university's state-induced monopoly over the access rights to future employment opportunities. Rent-seeking is the raison-d'être of the university's claim to be the royal road to knowledge. ..."
"... Granted, the cynical reading of the university system as a rent-seeking diploma-mill has a ring of truth to it when we, for instance, think of how students are asked to pay higher and higher tuition fees, while the curriculum is successively being hollowed-out. ..."
"... this is the result of the consecutive waves of university reforms since the 1990s to ground knowledge production on market principles. If university employees behave like self-interested rent-seekers, it is because they are forced to do so by the incentive structures that have been imposed on them. ..."
"... Thirty years of neoliberal politics have created the conditions under which categories such as "human capital" and "rent-seeking" start to make good sense... ..."
The counterargument that I will elaborate here, is that neoliberalism and social democracy
should be treated as two distinct and internally consistent thought and value systems. The
integrity of the two ideologies must neither be reduced to practices/policies, which
occasionally may overlap, nor to individual representatives, who, over the course of a
lifetime, can move from one pole to the other.
Neoliberalism and the university system
Fuller's argument pivots on the mixed legacy of Lionel Robbins. On the one hand, Robbins'
credentials as a neoliberal are firmly established by his decision to recruit Friedrich Hayek
to the LSE. On the other hand, Robbins authored the government report whereby many regional
universities in the UK were founded, in keeping with a classic social democratic agenda of
enrolling more students from the working class. This encourages Fuller to draw an arc from the
1963 Robbins
Report to university reforms of a more recent date (and with a more distinct,
neoliberal flavour).
The common denominator of all the reforms, Fuller says, is the ambition to enhance human
capital. Alas, the enhancement of human capital is blocked on all sides by incumbent traditions
and rent-seeking monopolies. From this problem description – which Fuller attributes to
the neoliberals, but which is also his own – follows the solution: to increase the
competition between knowledge providers. Just as the monopoly that Oxbridge held over higher
education was offset by the creation of regional universities in the 1960s, so is the current
university system's monopoly over knowledge acquisition sidelined by reforms to multiply and
diversify the paths to learning.
Underpinning this analysis is a bleak diagnosis of what purpose the university system and
its employees serve. It is a diagnosis that Fuller, by his own admission, has gleaned from the
Virginia-style neoliberal Gordon Tullock.
The task assigned to the university, i.e. to certify
bodies of trustworthy knowledge, is not called for by any intrinsic property of that knowledge
(it being true, safe etc.), but is rather a form of rent-seeking. The rent is extracted from
the university's state-induced monopoly over the access rights to future employment
opportunities. Rent-seeking is the raison-d'être of the university's claim to be the
royal road to knowledge.
In this acid bath of cynicism, the notions of truth and falsehood are dissolved into the
basic element that Tullock's world is made up of – self-interest. This reasoning lines up
with a 19 th century, free market epistemology, according to which the evolutionary
process will sift out the propositions that swim from those that sink. With a theory of
knowledge like that, university-certified experts have no rationale for being. Their knowledge
claims are just so many excuses for lifting a salary on the taxpayers' expense. It bears to
stress that this argument can easily be given a leftist spin, by emphasising the pluralism of
this epistemology. This resonates with statements that Steve Fuller has made elsewhere , concerning the
claimants of alternative facts.
Granted, the cynical reading of the university system as a rent-seeking diploma-mill has a
ring of truth to it when we, for instance, think of how students are asked to pay higher and
higher tuition fees, while the curriculum is successively being hollowed-out. However, as was
pointed out to Fuller by many in the audience in Lancaster, this is the result of the consecutive waves of university
reforms since the 1990s to ground knowledge production on market principles. If university employees behave like self-interested
rent-seekers, it is because they are forced to do so by the incentive structures that have been imposed on them.
Thirty years of neoliberal politics have created the conditions under which categories such
as "human capital" and "rent-seeking" start to make good sense...
... ... ...
The author would like to thank Adam Netzén, Karolina Enquist Källgren and
Eric Deibel for feedback given on early drafts of this blog post, and especially Steve Fuller,
for having invited a response to his argument.
"... Higher education was being made to conform to the norms of efficiency, value for money, customer service, audit and performance targets. One of the consequences of this was the substitution of the authority of the academic, which is based on his or her professional knowledge of the discipline, for the authority of the line manager. ..."
"... I don't think that there has been a more sinister assault on academic freedom than this colonisation of higher education by neoliberalism. It justifies itself by calling for "transparency" and "accountability" to the taxpayer and the public. But it operates with a perverted sense of these words (since what it really means is "discipline and surveillance" and "value for money"). ..."
"... Let me explain. One of the central aspects of neoliberalism is the disappearance of the distinction between the worker and the capitalist. In the neoliberal setting, the worker is not a partner of exchange with the capitalist. She does not sell her labour-power for a wage. ..."
"... The labourer's ability to work, her skill, is an income stream. It is an investment on which she receives a return in the form of wages. The worker is capital for herself. She is a source of future earnings. In the neoliberal market, as Michel Foucault remarks, everyone is a capitalist. ..."
"... Neoliberalism has converted education from a public good to a personal investment in the future, a future conceived in terms of earning capacity. ..."
Many
of the students I have taught in Britain and South Africa see higher education as a place where
they "invest" in themselves in the financial sense of the word. "Going to university," one
student said, was a way of "increasing" his "value" or employability in the labour market.
This perception of the university has not arisen by chance.
Capitalism entered a new phase with the Thatcher and Reagan governments in Britain and the
United States during the 1980s. The managerial practices used to run businesses were applied to
the public sector, in particular to education and healthcare.
This reform of the public sector (called "new public management")
introduced a new way of thinking about the university.
Higher education was being made to conform to the norms of efficiency, value for money,
customer service, audit and performance targets. One of the consequences of this was the
substitution of the authority of the academic, which is based on his or her professional
knowledge of the discipline, for the authority of the line manager.
Since then, everything has come to depend on audits and metric standards of so-called
quality assessment (student satisfaction, pass rates, league tables, et cetera). Academics have
little, if any, say on whether departments should continue to exist, what degrees and courses
should be on offer and even what kind of assessment methods should be used.
I don't think that there has been a more sinister assault on academic freedom than this
colonisation of higher education by neoliberalism. It justifies itself by calling for
"transparency" and "accountability" to the taxpayer and the public. But it operates with a
perverted sense of these words (since what it really means is "discipline and surveillance" and
"value for money").
Its effect, if not its aim, has been to commodify higher education and produce a new kind of
social identity. This is the identity of the self as entrepreneur.
Let me explain. One of the central aspects of neoliberalism is the disappearance of the
distinction between the worker and the capitalist. In the neoliberal setting, the worker is not
a partner of exchange with the capitalist. She does not sell her labour-power for a wage.
The labourer's ability to work, her skill, is an income stream. It is an investment on which
she receives a return in the form of wages. The worker is capital for herself. She is a source
of future earnings. In the neoliberal market, as Michel Foucault remarks, everyone is a
capitalist.
Neoliberalism has converted education from a public good to a personal investment in the
future, a future conceived in terms of earning capacity.
How did we get to this situation?
The modern university came into existence at the start of the 19th century as an extension
of the state. The aim of the state during the colonial and imperial age was to constitute the
identity of the national subject. As a public institution, the university was designed to teach students to see their life in
a specific way. They would learn to see that it is only as members of a national community and
culture that their individual life has a meaning and worth. This was the aim of the educational programme that German philosophers such as Wilhelm von
Humboldt and Johann Gottlieb Fichte envisaged for the University of Berlin. For them, science
was in the service of the moral and intellectual education of the nation.
Established in 1810, the University of Berlin was the first modern university. It was
founded on the principles of academic freedom, the unity of research and teaching, and the
primacy of research over vocational training. It functioned as the prototype for universities in both the United States and Europe during
the second half of the 19th century.
Once transnational corporations started to control more capital than nation-states in the
1980s, the university ceased to be one of its principal organs. It lost its ideological mission
and entered the market as a corporation. It started to encourage students to think of
themselves as customers rather than as members of a nation. This history shows that the university is today the site of two competing social
identities.
On the one hand, because of globalisation, the student who enters university sees herself as
someone who is there to increase her human capital, as an enterprise to invest in.
It must be remarked that, for the entrepreneur (taken as a social figure) who invests in
herself, differences of class, religion, ethnicity or race are phantasms of a bygone age. The
differences in the name of which wars were waged and social movements organised in the past
have no more meaning in her eyes than cheap advertising.
There is, for her, something improper or inauthentic about them, as Giorgio Agamben says of
the new petty bourgeoisie in The Coming Community. Like Britain's former prime minister, David
Cameron, she is sceptical of multiculturalism.
On the other hand, the university has not ceased to draw on its modern role as a producer,
protector and inculcator of national identity and culture. Much of what is going on today in
South African universities under the name of decolonisation and Africanisation draws on this
heritage and understanding of the modern university, even if tacitly. That is why students will
politicise themselves by identifying with an ethnicity or nationality.
Nationalism was an emancipatory political project during the anti-colonial struggles of the
second half of the 20th century. It was not tribalist or communalist.
According to Eric Hobsbawm in Nations and Nationalism since 1780, its aim was to extend the
size of the social, cultural and political group. It was not to restrict it or to separate it
from others. Nationalism was a political programme divorced from ethnicity.
Is this political nationalism a viable way of resisting neoliberalism today? Can it gainsay
the primacy of economic rationality and the culture of narcissist consumerism, and restore
meaning to the political question concerning the common good? Or has nationalism irreversibly become an ethnic, separatist project? It is not easy to say. So far, we have witnessed one kind of response to the social
insecurities generated by the global spread of neoliberalism. This is a return to ethnicity and
religion as havens of safety and security.
When society fails us owing to job insecurity, and, concomitantly, with regard to housing
and healthcare, one tends to fall back on one's ethnicity or religious identity as an ultimate
guarantee.
Moreover, nationalism as a political programme depends on the idea of the state. It holds
that a group defined as a "nation" has the right to form a territorial state and exercise
sovereign power over it. But given the decline of the state, there are reasons to think that
political nationalism has withdrawn as a real possibility.
By the "decline of the state" I do not mean that it no longer exists. The state has never
been more present in the private life of individuals. It regulates the relations between men
and women. It regulates their birth and death, the rearing of children, the health of
individuals and so forth. The state is, today, ubiquitous.
What some people mean by the "decline of the state" is that, with the existence of
transnational corporations, it is no longer the most important site of the reproduction of
capital. The state has become managerial. Its function is to manage obstacles to liberalisation
and free trade.
Perhaps that is one of the challenges of the 21st century. How is a "nation" possible, a
"national community" that is not defined by ethnicity, on the one hand, and, on the other, that
forsakes the desire to exercise sovereign power in general and, in particular, over a
territorial state?
The university is perhaps the place where such a community can begin to be thought.
Rafael Winkler is an associate professor in the philosophy department at the University
of Johannesburg
While U.S. politicians from both parties have given standing ovations for the
U.S. oil and gas industry , investors appear to be losing their enthusiasm. The so-called
shale revolution, the fracking miracle, may have resulted in record oil and gas production in
North America, but the real miracle -- in which shale companies make money fracking that oil
and gas -- has yet to occur.
It looks like economics is decelerating, but unpredictable future events such as the possibility of a jump in oil prices due to
Venezuela are much more important than the view on the road from the back mirror. Also, Trump is a pretty unpredictable fellow ;-) will
he use US strategic petroleum reserve to compensate for shortages or not. Or will he allow the oil price to spike depressing the economic
activity... Another interesting question is whether the levitation of shale oil companies continue despite a mountain of junk bonds
debt handing over them (shale oil production produces two streams: one stream is shale oil and gas, and another is junk bonds)
Yet another "known unknown" is how strong the backlash against neoliberalism is mounting, which might suppress the most parasitic
part of the US financial industry (which means 80% of it). Italy is about to return to Glass Steagall type of regulations of financial
industry , so the USA might be next ;-)
In this sense it is very interesting to see what level of popular support Warren candidacy might attract. I would call it a new
forward looking indicator :-)
All this makes current data point prediction more of an exercise in astrology with past economic indicators playing the role of
starts. Of course, this is less blatant astrology the Wall street analysts predicting S&P500 for the of the year, but still. Who would
predict that after 2008 we will have 10 years expansion that might continue further?
Also, for chartists, the key assumption is that "trend is your friend." And if the pendulum for financial regulation starting to
swing back, the US GDP will suffer.
Notable quotes:
"... Clearly something is causing employment "quality" to fall apart. Even a downward revision won't likely help the quality. ..."
"... Corporate consumption IMO has been the big bubble this cycle. I know people have been wondering where the bubble has been well, there you go. It also connects more to the service sector decline initially rather than a broad base industrial decline. So the U-6 says the labor market has weakened some, yet industrial indicators on average only began to weaken lately and don't indicate recession. ..."
"... With a January population increase of 151,000 partially offsetting that, that meant the number of employment aged individuals who were not in the labor force was down by 639,000 from previously published figures to 95,010,000, the labor force participation rate increased from 63.1% to 63.2%, and the employment to population ratio, which we could think of as an employment rate, increased from 60.6% in December to 60.7% in January, all despite fewer workers being employed. ..."
"... U-6, which includes those "employed part time for economic reasons", from 7.6% of the labor force in December to 8.1% in January however, we can expect most of that to be reversed in February ..."
U6 underemployment rate rose 0.5% from 7.6% to 8.1%
Here are the headlines on wages and the broader measures of underemployment:
Wages and participation rates
Not in Labor Force, but Want a Job Now: declined -73,000 from 5.327 million to 5.254 million
Part time for economic reasons: rose +490,000 from 4.657 million to 5.147 million
Employment/population ratio ages 25-54: rose +0.2% from 79.7% to 79.9%
Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $.03 from $23.09 to $23.12, up +3.4% YoY. (Note:
you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages
for nonsupervisory personnel, to come closer to the situation for ordinary workers.)
Is a recession close? The more leading numbers in the report tell us about where the economy is likely to be a few months
from now. These were mixed, with at very least a decelerating bias.
the average manufacturing workweek fell -0.1 hours from 40.9 hours to 40.8 hours. This is one of the 10 components of the
LEI.
Manufacturing jobs rose by +13,000. YoY manufacturing is up +261,000.
construction jobs rose by +52,000. YoY construction jobs are up +338,000.
temporary jobs rose by +1000. YoY these are up +146,000.
the number of people unemployed for 5 weeks or less rose by +199,000 from 2,126,000 to 2,325,000. The post-recession low was
set eight months ago at 2,034,000.
Holding Trump accountable on manufacturing and mining jobs. Trump specifically campaigned on bringing back manufacturing and mining
jobs. Is he keeping this promise?
Manufacturing jobs rose an average of +22,000/month in the past year vs. the last seven years of Obama's presidency in which
an average of +10,300 manufacturing jobs were added each month.
Coal mining jobs fell -100 for an average of +150/month vs. the last seven years of Obama's presidency in which an average
of -300 jobs were lost each month
November was revised upward by +20,000, but December was revised downward by -90,000, for a net change of -70,000. Other important
coincident indicators help us paint a more complete picture of the present:
Overtime declined -0.1 hour from 3.6 hours to 3.5 hours.
Professional and business employment (generally higher-paying jobs) rose by 30,000 and is up +546,000 YoY.
the index of aggregate hours worked for non-managerial workers rose by 0.2%.
the index of aggregate payrolls for non-managerial workers rose by 0.3%.
Other news included:
the alternate jobs number contained in the more volatile household survey decreased by -438,000 jobs. This represents an increase
of only 981,000 jobs YoY vs. 2,817,000 in the establishment survey.
Government jobs rose by +8,000.
the overall employment to population ratio for all ages 16 and up fell -0.1% to 60.7% m/m and is up 0.3% YoY.
The labor force participation rate rose was unchanged at 63.2% and is up +0.4% YoY.
SUMMARY
The establishment and household surveys told very different stories this month, encapsulated by the 304,000 monthly gain in the
former vs. a -438,000 decline in the latter. While the former is up almost 3 million in the last 12 months, the latter fell below
a 1 million gain over the same period. To some extent this is due to the government shutdown affecting the household report, but
not the establishment report (per the BLS). But it doesn't explain everything.
Most importantly, of the four leading components in the establishment survey, one fell (the manufacturing work week), and two
of the other three (manufacturing, and temporary jobs), while positive, showed sharply decelerating growth. On the other hand, the
very lagging measure of wage growth did continue to rise at a 3.4% clip, and the prime age participation ratio also rose to an expansion
high. Since the December report was excellent in virtually all respects, to some extent January is probably just a giveback. But
all the same, there are plenty of cautionary signals in this report going forward.
likbez , February 5, 2019 2:31 pm
A single datapoint without at least 12 months graphs tells us nothing. Please provide them too.
Bert Schlitz , February 5, 2019 3:15 pm
Clearly something is causing employment "quality" to fall apart. Even a downward revision won't likely help the quality.
If I had to guess, corporate consumption via capital income is collapsing which outside 1973 (and a lessor extent 1969) is
usually a laggard. 1973 has similar vibes with NFP with the slower than expected decline in single persons consumption and its
relation to industrial production. NFP had some big tops as well then. Looks like single person consumption is more related to
industrial production's decline that corporate consumption.
Corporate consumption IMO has been the big bubble this cycle. I know people have been wondering where the bubble has been
well, there you go. It also connects more to the service sector decline initially rather than a broad base industrial decline.
So the U-6 says the labor market has weakened some, yet industrial indicators on average only began to weaken lately and don't
indicate recession.
Also remember that the peak of the millies is structurally starting to hit the LFPR. I wondered last month if the Boomer connection
with retirements to future hiring wasn't goosing NFP, it was and the collapse in corporate consumption is making employers leery,
which is causing part time hiring to boom, workers you can easily get rid of in a few months.
as i noted on an earlier thread, the seasonally adjusted job count in the establishment survey was boosted by warm weather
right up to the survey date that delayed normal wintertime layoffs in construction, leisure and hospitality and other seasonal
work meanwhile, there was so much screwy with the household survey i would just about dismiss it completely here's what i had
on that:
(NB the household survey was impacted by the effects of the government shutdown during the survey week, wherein those on temporary
layoff were supposed to be counted as unemployed )
Reflecting the effects of the government shutdown, the January household survey indicated that the seasonally adjusted extrapolation
of those who reported being employed fell by an estimated 251,000 to 156,694,000, while the estimated number of those unemployed
rose by 241,000 to 6,535,000; which led to a rounded 11,000 decrease in the total labor force however, those numbers were skewed
from what they should have been because a number of federal workers were classified as employed but absent from work, who also
should have been classified as unemployed on temporary layoff about those "employed" workers, the BLS says "they are accepted
as recorded" & that "no ad hoc actions are taken to reassign survey responses" further complicating the January results, the benchmark
revision to 2018's civilian noninstitutional population indicated that December's population had been overstated by 800,000, which
meant that all the population dependent metrics had to be adjusted for that revision.
With a January population increase of 151,000 partially offsetting that, that meant the number of employment aged individuals
who were not in the labor force was down by 639,000 from previously published figures to 95,010,000, the labor force participation
rate increased from 63.1% to 63.2%, and the employment to population ratio, which we could think of as an employment rate, increased
from 60.6% in December to 60.7% in January, all despite fewer workers being employed.
At the same time, the increase in the number unemployed was large enough to increase the unemployment rate, as it rose from
3.9% to 4.0%, and it would have even been higher had the aforementioned furloughed federal employees been properly classified
meanwhile, the number of those who reported they were forced to accept just part time work, which includes many of those federal
employees, rose by 490,000, from 4,657,000 in December to 5,147,000 in January, which was enough to increase the alternative measure
of unemployment, U-6, which includes those "employed part time for economic reasons", from 7.6% of the labor force in December
to 8.1% in January however, we can expect most of that to be reversed in February
"... But otherwise, quite correct. Raise payments on deposits and get more deposits. Raise charges on loans and get fewer loans. I might note that the Fed has supposedly paused rate hikes, but deposits are still exiting the system faster than loans. This result can be had via Fred. Thus the curve is getting more3 inverted. ..."
Large Excess Reserves and the Relationship between Money and Prices - FRB Richmond
At the same time that it has been normalizing its balance sheet, the Fed also has been
raising its target for interest rates. The ability to pay interest on reserves has been
crucial to allowing the Fed to raise its target rate while there are still significant excess
reserves in the banking system. Despite these rate increases, due to various secular reasons,
interest rates are expected to remain historically low for a long time.
--------------
I sample the current expectation, and it is a bit more detailed. The expectation is that
the curve will remain inverted, generally with a zero near the five yer mark, if I judge from
the Treasury curve where the curve has been inverted with a zero near the five yer mark.
The ten year rate will remain historically higher than the five year rate for some time,
evidently. If we measure interest rate as the per annum percent of Real GDP devoted to
nominal federal interest charges, then the interest rate was higher than it has ever been
going back to 1972, briefly (four months ago) , and now occupies the second highest level
since just before the 92 recession, at about 3.5% of GDP. These result can be had in Fred by
dividing nominal interest payments by real GDP.
But otherwise, quite correct. Raise payments on deposits and get more deposits. Raise
charges on loans and get fewer loans. I might note that the Fed has supposedly paused rate
hikes, but deposits are still exiting the system faster than loans. This result can be had
via Fred. Thus the curve is getting more3 inverted.
Why do we know the curve will invert? It is the law, when the Fed loses deposits, loan
charges drop, not rise as would be normal. That is why we all expect the curve to remain
inverted, the law. The law is specifically designed so the Fed holds the current low rate as
long as possible, then does the sudden regime change. The law, written into the law, a rule
requires that we spend time with an inverted yield curve before price adjustment. I emphasis
the law because it is actually typed out, signed and enforced publicly.
The law requires the Fed hold the curve as long as possible, mainly so the pres and
Congress have time to react to changes in term of trade. So, like under Obama, we hold the
line on rates until Obama and the Repubs agree on a tax and spending plan going forward, then
the treasury curve gains traction again. Te law, it is not under debate unless you want to be
arreswted.
This 20 year old satire looks like it was written yesterday...
Notable quotes:
"... In the past, the underworld was ill-equipped to handle the new breed of sinners flooding our gates -- downsizing CEOs, focus-group coordinators, telemarketing sales representatives, and vast hordes of pony-tailed entertainment-industry executives ..."
"... Among the tortures the Corpadverticus Circle of Total Bastards boasts: the Never-Ending Drive-Thru Bank, the Bottomless Pit of Promotional Tie-In Keychains, and the dreaded Chamber of Emotionally Manipulative Home Shopping Network Products. ..."
"... condemned TV-exercise-show personalities, clad in skin-tight Spandex outfits soaked in flesh-dissolving acid, are forced to exercise for centuries on end ..."
"... In a nearby area, corporate raiders are forced to carry the golf clubs of uneducated Hispanic migrant workers from hole to hole for eternity, withering under a constant barrage of verbal abuse ..."
"... "In life, I was a Salomon Brothers investment banker," one flame-blackened shade told reporters. "When I arrived here, they didn't know what to do with me. They put me in with those condemned to walk backwards with their heads turned all the way around on their necks, for the crime of attempting to see the future. But then I sent a couple of fruit baskets to the right people, and in no time flat, I secured a cushy spot for myself in the first circle of the Virtuous Unbaptized. Now that was a sweet deal. But before long, they caught on to my game and transferred me here to the realm of Total Bastards. I've been shrieking for mercy like a goddamn woman ever since." ..."
After nearly four years of construction at an estimated cost of 750 million souls,
Corpadverticus, the new 10th circle of Hell, finally opened its doors Monday.
Tenth Circle Added To Rapidly Growing Hell
The Blockbuster Video-sponsored circle, located in Nether Hell between the former eighth and
ninth levels of Malebolge and Cocytus, is expected to greatly alleviate the overcrowding
problems that have plagued the infernal underworld in recent years. The circle is the first
added to Hell in its countless-millennia history.
"A nightmarishly large glut of condemned spirits in recent years necessitated the expansion
of Hell," inferno spokesperson Antedeus said. "The traditional nine-tiered system had grown
insufficient to accommodate the exponentially rising numbers of Hellbound."
Adding to the need for expansion, Antedeus said, was the fact that a majority of the new
arrivals possessed souls far more evil than the original nine circles were equipped to handle.
"Demographers, advertising executives, tobacco lobbyists, monopoly-law experts retained by
major corporations, and creators of office-based sitcoms–these new arrivals represent a
wave of spiritual decay and horror the likes of which Hell has never before seen," Antedeus
said.
Despite the need for expansion, the plan faced considerable resistance, largely due to the
considerable costs of insuring construction projects within the Kingdom Of Lies. Opposition
also came from Hell purists concerned about the detrimental effect a tenth level would have on
the intricate numerology of Hell's meticulously arranged allegorical structure. In 1994,
however, funding was finally secured in a deal brokered between Blockbuster CEO Wayne Huizenga
and Satan himself.
Prior to the construction of the tenth circle, many among the new wave of sinners had been
placed in such circles as Hoarders and Squanderers, Sowers of Discord, Flatterers and Seducers,
Violent Against Art, and Hypocrites. Hell authorities, however, say that the new level, the
Circle of Total Bastards, located at the site of the former Well of Giants just above the
Frozen Lake at Hell's center, better suits their insidious brand of evil.
Frigax The Vile, a leading demonic presence, is one of the most vocal supporters of the new
circle.
" In the past, the underworld was ill-equipped to handle the new breed of sinners
flooding our gates -- downsizing CEOs, focus-group coordinators, telemarketing sales
representatives, and vast hordes of pony-tailed entertainment-industry executives
rollerblading and talking on miniaturized cell-phones at the same time. But now, we've finally
got the sort of top-notch Pits of Doom necessary to give such repellent abominations the
quality boilings they deserve."
Pausing to tear off the limbs of an Access Hollywood host, Frigax added, "We're all
tremendously excited about the many brand-new forms of torture and eternal pain this new
level's state-of-the-art facilities will make possible."
Among the tortures the Corpadverticus Circle of Total Bastards boasts: the Never-Ending
Drive-Thru Bank, the Bottomless Pit of Promotional Tie-In Keychains, and the dreaded Chamber of
Emotionally Manipulative Home Shopping Network Products.
The Circle also features a Hall of Aerobics, where condemned TV-exercise-show
personalities, clad in skin-tight Spandex outfits soaked in flesh-dissolving acid, are forced
to exercise for centuries on end , covered in vomit and prodded with the distended ribs of
skeletal, anorexic demons, accompanied by an unending, ear-splittingly loud dance-remix version
of the 1988 Rick Astley hit "Together Forever."
In a nearby area, corporate raiders are forced to carry the golf clubs of uneducated
Hispanic migrant workers from hole to hole for eternity, withering under a constant barrage of
verbal abuse from their former subservients as crows descend from trees to peck at their
eyes. In one of the deepest and most profane portions of the circle, unspeakable acts are said
to be committed with a mail-order Roly-Kit.
"In life, I was a Salomon Brothers investment banker," one flame-blackened shade told
reporters. "When I arrived here, they didn't know what to do with me. They put me in with those
condemned to walk backwards with their heads turned all the way around on their necks, for the
crime of attempting to see the future. But then I sent a couple of fruit baskets to the right
people, and in no time flat, I secured a cushy spot for myself in the first circle of the
Virtuous Unbaptized. Now that was a sweet deal. But before long, they caught on to my game and
transferred me here to the realm of Total Bastards. I've been shrieking for mercy like a
goddamn woman ever since."
His face contorted in the Misery of the Damned, a Disney lawyer said: "It's hell
here–there are no executive lounges, I can't get any decent risotto, and the suit I have
to wear is a cheap Brooks Brothers knock-off. I'm beeped every 30 seconds, and there's no way
to return the calls. Plus, I'm being boiled upside down in lard while jackals gnaw at the soles
of my feet. If I could just reach the fax machine on that nearby rock, I could contact some
well-placed associates and work something out, but it's just out of my grasp, and it's out of
ink and constantly blinking the message, 'Replace Toner Cartridge, Replace Toner Cartridge,
Replace Toner Cartridge.'"
He then resumed screaming in agony.
Grogar The Malefic, a Captain in Hell's elite Demon Corps and supervisor in charge of
admissions for the new circle, said Hell's future looks bright, thanks to the new circle.
"Things are definitely looking up," Grogar said. "We're now far better equipped, and we're
ready to take on the most Unholy Atrocities humanity has to offer."
"We're really on the grow down here," Grogar added. "This is an exciting time to be in
Hell."
"... Unfettered individual creativity may have fostered some great – if fetishised – art, as well as rapid mechanical and technological developments. But it has also encouraged unbridled competition in every sphere of life, whether beneficial to humankind or not, and however wasteful of resources. ..."
"... At its worst, it has unleashed quite literally an arms race, one that – because of a mix of our unconstrained creativity, our godlessness and the economic logic of the military-industrial complex – culminated in the development of nuclear weapons. We have now devised the most complete and horrific ways imaginable to kill each other. We can commit genocide on a global scale ..."
"... Those among the elites who understand that neoliberalism has had its day are exploiting the old ideology of grab-it-for-yourself capitalism while deflecting attention from their greed and the maintenance of their privilege by sowing discord and insinuating dark threats. ..."
"... The criticisms of the neoliberal elite made by the ethnic nationalists sound persuasive because they are rooted in truths about neoliberalism's failure. But as critics, they are disingenuous. They have no solutions apart from their own personal advancement in the existing, failed, self-sabotaging system. ..."
"... This trend – what I have previously ascribed to a group I call the "dissenters" – understands that radical new thinking is required. But given that this group is being actively crushed by the old neoliberal elite and the new authoritarians, it has little public and political space to explore its ideas, to experiment, to collaborate, as it urgently needs to. ..."
Ok neoliberalism is bad and is collapsing. We all understadn that. The different in opinions
here is only in timeframe of the collapse and the main reason (end of cheap oil, WWIII, etc).
But so far no plausible alternative exists. Canwe return to the New Deal, if top management
betrayed the working class and allied with capital owners in a hope later to became such
capital owners themselves (and many did).
The experience of the USSR tells as that each Nomenklatura (technocratic elite with the goal
of "betterment" of people) degrade very quickly (two generations were enough for Bolshevik's
elite for complete degradation) and often is ready switch sides for the place in neoliberal
elite.
So while after 2008 neoliberalism exist in zombie states (which is more bloodthirsty then
previous) they issue of successor to neoliberalism is widely open.
In one sense, their diagnosis is correct: Europe and the [neo]neoliberal tradition are
coming apart at the seams. But not because, as they strongly imply, European politicians are
pandering to the basest instincts of a mindless rabble – the ordinary people they have so
little faith in.
Rather, it is because a long experiment in Neoliberalism has finally run its course.
Neoliberalism has patently failed – and failed catastrophically.
... ... ...
Neoliberalism, like most ideologies, has an upside. Its respect for the individual and his
freedoms, its interest in nurturing human creativity, and its promotion of "universal values"
over tribal attachment have had some positive consequences.
But neoliberal ideology has been very effective at hiding its dark side – or more
accurately, at persuading us that this dark side is the consequence of neoliberalism's
abandonment rather than inherent to the neoliberal's political project.
The loss of traditional social bonds – tribal, sectarian, geographic – has left
people today more lonely, more isolated than was true of any previous human society. We may pay
lip service to universal values, but in our atomised communities, we feel adrift, abandoned and
angry.
Humanitarian resource grabs
The neoliberal's professed concern for others' welfare and their rights has, in reality,
provided cynical cover for a series of ever-more transparent resource grabs. The parading of
neoliberalism's humanitarian credentials has entitled our elites to leave a trail of carnage
and wreckage in their wake in Afghanistan, Iraq, Libya, Syria and soon, it seems, in Venezuela.
We have killed with our kindness and then stolen our victims' inheritance.
Unfettered individual creativity may have fostered some great – if fetishised
– art, as well as rapid mechanical and technological developments. But it has also
encouraged unbridled competition in every sphere of life, whether beneficial to humankind or
not, and however wasteful of resources.
At its worst, it has unleashed quite literally an arms race, one that – because of
a mix of our unconstrained creativity, our godlessness and the economic logic of the
military-industrial complex – culminated in the development of nuclear weapons. We have
now devised the most complete and horrific ways imaginable to kill each other. We can commit
genocide on a global scale .
Meanwhile, the absolute prioritising of the individual has sanctioned a pathological
self-absorption, a selfishness that has provided fertile ground not only for capitalism,
materialism and consumerism but for the fusing of all of them into a turbo-charged
neoliberalism. That has entitled a tiny elite to amass and squirrel away most of the planet's
wealth out of reach of the rest of humanity.
Worst of all, our rampant creativity, our self-regard and our competitiveness have blinded
us to all things bigger and smaller than ourselves. We lack an emotional and spiritual
connection to our planet, to other animals, to future generations, to the chaotic harmony of
our universe. What we cannot understand or control, we ignore or mock.
And so the neoliberal impulse has driven us to the brink of extinguishing our species and
possibly all life on our planet. Our drive to asset-strip, to hoard resources for personal
gain, to plunder nature's riches without respect to the consequences is so overwhelming, so
compulsive that the planet will have to find a way to rebalance itself. And if we carry on,
that new balance – what we limply term "climate change" – will necessitate that we
are stripped from the planet.
Nadir of a dangerous arrogance
One can plausibly argue that humans have been on this suicidal path for some time.
Competition, creativity, selfishness predate neoliberalism, after all. But neoliberalism
removed the last restraints, it crushed any opposing sentiment as irrational, as uncivilised,
as primitive.
Neoliberalism isn't the cause of our predicament. It is the nadir of a dangerous arrogance
we as a species have been indulging for too long, where the individual's good trumps any
collective good, defined in the widest possible sense.
The neoliberal reveres his small, partial field of knowledge and expertise, eclipsing
ancient and future wisdoms, those rooted in natural cycles, the seasons and a wonder at the
ineffable and unknowable. The neoliberal's relentless and exclusive focus is on "progress",
growth, accumulation.
What is needed to save us is radical change. Not tinkering, not reform, but an entirely new
vision that removes the individual and his personal gratification from the centre of our social
organisation.
This is impossible to contemplate for the elites who think more neoliberalism, not less, is
the solution. Anyone departing from their prescriptions, anyone who aspires to be more than a
technocrat correcting minor defects in the status quo, is presented as a menace. Despite the
modesty of their proposals, Jeremy Corbyn in the UK and Bernie Sanders in the US have been
reviled by a media, political and intellectual elite heavily invested in blindly pursuing the
path to self-destruction.
Status-quo cheerleaders
As a result, we now have three clear political trends.
The first is the status-quo cheerleaders like the European writers of neoliberalism's latest
– last? –
manifesto . With every utterance they prove how irrelevant they have become, how incapable
they are of supplying answers to the question of where we must head next. They adamantly refuse
both to look inwards to see where neoliberalism went wrong and to look outwards to consider how
we might extricate ourselves.
Irresponsibly, these guardians of the status quo lump together the second and third trends
in the futile hope of preserving their grip on power. Both trends are derided indiscriminately
as "populism", as the politics of envy, the politics of the mob. These two fundamentally
opposed, alternative trends are treated as indistinguishable.
This will not save neoliberalism, but it will assist in promoting the much worse of the two
alternatives.
Those among the elites who understand that neoliberalism has had its day are exploiting
the old ideology of grab-it-for-yourself capitalism while deflecting attention from their greed
and the maintenance of their privilege by sowing discord and insinuating dark threats.
The criticisms of the neoliberal elite made by the ethnic nationalists sound persuasive
because they are rooted in truths about neoliberalism's failure. But as critics, they are
disingenuous. They have no solutions apart from their own personal advancement in the existing,
failed, self-sabotaging system.
The new authoritarians are reverting to old, trusted models of xenophobic nationalism,
scapegoating others to shore up their own power. They are ditching the ostentatious,
conscience-salving sensitivities of the neoliberal so that they can continue plundering with
heady abandon. If the ship is going down, then they will be gorging on the buffet till the
waters reach the dining-hall ceiling.
Where hope can reside
The third trend is the only place where hope can reside. This trend – what I have
previously ascribed to a group I call the "dissenters" – understands that radical new
thinking is required. But given that this group is being actively crushed by the old neoliberal
elite and the new authoritarians, it has little public and political space to explore its
ideas, to experiment, to collaborate, as it urgently needs to.
Social media provides a potentially vital platform to begin critiquing the old, failed
system, to raise awareness of what has gone wrong, to contemplate and share radical new ideas,
and to mobilise. But the neoliberals and authoritarians understand this as a threat to their
own privilege. Under a confected hysteria about "fake news", they are rapidly working to snuff
out even this small space.
We have so little time, but still the old guard wants to block any possible path to
salvation – even as seas filled with plastic start to rise, as insect populations
disappear across the globe, and as the planet prepares to cough us out like a lump of infected
mucus.
We must not be hoodwinked by these posturing, manifesto-spouting liberals: the philosophers,
historians and writers – the public relations wing – of our suicidal status quo.
They did not warn us of the beast lying cradled in our midst. They failed to see the danger
looming, and their narcissism blinds them still.
We should have no use for the guardians of the old, those who held our hands, who shone a
light along a path that has led to the brink of our own extinction. We need to discard them, to
close our ears to their siren song.
There are small voices struggling to be heard above the roar of the dying neoliberal elites
and the trumpeting of the new authoritarians. They need to be listened to, to be helped to
share and collaborate, to offer us their visions of a different world. One where the individual
is no longer king. Where we learn some modesty and humility – and how to love in our
infinitely small corner of the universe.
Jonathan Cook won the Martha Gellhorn Special Prize for Journalism. His books include
"Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East"
(Pluto Press) and "Disappearing Palestine: Israel's Experiments in Human Despair" (Zed Books).
His website is www.jonathan-cook.net .
With the growing movement towards nuclear war, we have indeed reached the nadir. It is
important to see how humanity got here, for the signs are ominous.
The pattern of history is clear. Power (manifested as interest) has been present in every
conflict of the past – no exception. It is the underlying motivation for war.
Other
cultural factors might change, but not power. Interest cuts across all apparently unifying
principles: family, kin, nation, religion, ideology, politics – everything. We unite
with the enemies of our principles, because that is what serves our interest. It is power,
not any of the above concepts, that is the cause of war.
Maybe it is just me but I didn't see any actual solution or much of anything in his third
group. You know, the one with all the "correct" answers. All I saw was that it was a glorious
vision without all the failings of the other two while rejecting all the badthink.
Every major tragedy in human history starts out with people thinking they have a system
better than all the previous that ever occurred. It too soon becomes a religion that needs to
defend itself by executing all the blasphemers.
Maybe it is just me but I didn't see any actual solution or much of anything in his
third group. You know, the one with all the "correct" answers. All I saw was that it was a
glorious vision without all the failings of the other two while rejecting all the
badthink.
Exactly.
I've been waiting for the author, or some from his "group", to post here at least a LINK
to that solution, even a suggestion, of theirs. Hell, even the proper analysis of what's not
right. A foundation of sort.
So far, as you said, nothing.
Anon[248], February 3, 2019 at 5:29 am GMT
Levy another Jewish "intellectual" shilling for globalization and open borders - for Western nations only, to hasten their
demise. What else is new?
"... Living standards are more than a house with indoor plumbing automatic heat, and lights at the flip of a switch. Its being able to talk with interested people about interesting topics. About being able to see interesting things when looking at the window, or walking, or riding. ..."
Have you ever been to
Kansas? Might as well move to Mexico, or Puerto Rico.
Kansas has gotten worse because of cost cutting. Cost cutting means living costs are less
because the standard of living is less.
Living standards are more than a house with indoor plumbing automatic heat, and lights at
the flip of a switch. Its being able to talk with interested people about interesting topics. About being able to see interesting things when looking at the window, or walking, or
riding.
It tried to be connected to the world. If the politics were say 1870, they would want 600kph
high speed train service so a day trip to a city like St Louis or Chicago was
reasonable.
Nations should explore better system to break US hegemony
"The US dollar is used for the international oil and gas trade and a wide part of global
trade. This gives the US an exorbitant privilege to sanction countries it opposes.
..
The latest sanctions on Venezuela's state-owned oil company aim to cut off source of foreign
currency of Venezuelan strongman Nicolas Maduro's government and eventually force him to step
down.
..
A new mechanism should be devised to thwart such a vicious circle"
My question is really about those at the top of the power pyramid (those few hundred
families who own the controling share of the wealth of the world) -- those who position
idiots like Bolton to do their work, do they comprehend 'exergy' decline ?
If we can, then can they not? I agree with Parenti that they are not
'somnambulists'. They are strategists looking out for their own interests, and that means
scrutinising trends in political movements, culture, technology and, well, just about
everything. I find it hard, the idea that all these people -- people who have seen their
businesses shaped by resource discovery, exploitation and then depletion, have no firm grasp
on the realities of dwindling returns on energy.
The models were drawn up 47 years ago. I think that some of them at least, do
understand that economic growth is coming to a halt, and have understood for decades. If true
then they are planning that transition in their favour.
These hard to swallow facts about oil are still on the far fringes of any political
conversation. The neoliberal cultists are deaf to them for obvious reasons; the socialist
idealists believe that a 'New Deal' can lead us off the death train, but mostly ignore the
intractable relationship between energy decline and financial problems; even the anarchists
want their work free utopia run by robots and AI but stop short of asking whether solar
panels and wind turbines can actually provide the power for all that tech. It's the news that
nobody wants to think about, but which they will be forced to thinking about in the very near
future.
The Twitter feed 'Limits to Growth' has less than 800 followers (excellent though it
is).
I do not want to get into the mind of the Walrus of Death Bolton! I do not want to know
what he does, as he does. But at lower levels of government, and corporatism, there is an
awareness of surplus energy economics. And as Nafeez has also pointed out, the military (the
Pentagon) are taking an interest. And though it could rapidly change, who really appreciates
the nuances of EROEI? I'm guessing at less than a single percent of all populations? And how
many include its effects in a integrated political sense?
Its appreciation is sporadic: ranging from tech-utopia hopium to a defeated fatalism of
the inevitability of collapse. Unless and until people want to face the harshness of the
reality that capitalism has created: we are going to be involved in a marginal analysis.
There are very few people who have realised that capitalism is long dead.
Dr Tim Morgan estimates that world capitalism has conservatively had $140tn in stimulus
since 2008 -- without stimulating anything or reviving it at all. In fact, that amounts to
the greatest robbery in history -- the theft of the future. Inasmuch as they can, those
unrepayable debts -- transferred to inflate the parasitic assets of capitalists -- will be
socialised. Except they cannot be. Not without surplus energy.
Brexit, gilets jaunes, Venezuela, unending crises in MENA, China's economic slowdown, etc
-- all linked by EROEI.
It is a common socio-politico-economic energy nexus -- but linked together by whom? And
the emergent surplus energy-mind-environmental ecology nexus? All the information is
available. The formation of a new political manifesto started in the 1960s with the New Left
but it seems to have been in stasis since. Perhaps this might stimulate the conversation.
According to Nate Hagens: there is 4.5 years of human muscle power leveraged by each
barrel of oil. We are all going to be working for a very long time to pay back the debts
the possessing classes have built up for us -- with absolutely no marginal utility for
ourselves.
We are subsidising our own voluntary slavery unless we develop an emergent ecosocialist
and ecosophical alternative to carbon capitalism. We cannot expect paleoconservative carbon
relics like Bolton -- or anyone else -- to do it for us. The current political landscape is
dominated by a hierarchical, vested interest, carbon aristocracy. We can't expect that to
change for our benefit any time ever. Expect the opposite.
Graeber has a point, though. We could already have a post-scarcity, post-production society
but for the egregious maldistribution of resources and employment. Andre Gorz said as much 50
years ago (Critique of Economic Reason). Why do we organise around production: it makes no
sense but for the relations of production are, and remain, the relations of hierarchical
rule. So long as we assign value to a human life on the basis of meritocratic productivity --
we will have dehumanisation, marginalisation, and subjugation (haves and have nots). So why
not organisation around care, freedom and play?
Such a solution would require the transversalistion of society and not-full-employment: so
that no part of the system is subordinate, and no part is privileged. All systems and
sub-ordinate (care) systems would be co-equal, of corresponding value and worth. So, without
invoking EROEI, that would go a long way to solve our exergy, waste, pollution, and
inequality problems. It is the profligate, unproductive superstructure: supporting rentier,
surplus energy accumulating, profit-seeking suprasocieties -- that squanders our excess
energy and puts expansive spatio-temporal pressures on already stretched biophysical
ecological systems that engenders potential collapse. It is their -- the possessing classes
-- assets that are being inflated, at our environmental expense. When it comes to
survivability, we cannot afford a parasitic globalised superstructure draining the host --
the ecologically productive base. Without the over-accumulation, overconsumption, and wastage
(the accursed share) associated with the superstructure of the advanced economies -- and
their cultural, credit, military imperialisms I expect we could live quite well. Without the
pressures of globalised transportation networks, and unnecessary military budgets -- the
pressure on oil is minimised. It could be used for the 1001 other uses it has, rather than
fuelling Saudi Eurofighters bombing Yemeni schoolchildren, for instance. The surplus energy
could be used to educate, clothe and feed them instead. That would be a better use of
resources, for sure.
If we took stock of what we really have, and what we really are -- a form of spiritual
neo-self-sufficiency, augmented and extended into co-mutual care and freedom valorising
ecologies we wouldn't need to chase the perceived loss all over the globe, killing everything
that moves. The solutions are not hard, they are normative, once we are shocked out of this
awful near-life trance state of separationism. Thanks for the link.
It seems to me that there are two parallel arguments going on.
One is about social organisation, attitudes towards and policies determining work, money,
paid employment, technological development and the distribution of weath.
The other is fundamentally based on the laws of thermodynamics and concerns resource limits,
energy surpluses, the role of 'stored sunlight' in producing things and doing work for each
other, pollution and projections about these into the future.
I am surprised that Graeber (just as an example) seems to basically ignore the second of
these even though he clearly is an incisive thinker and makes good points about the first. It
is taken as a given that, theoretically at least, human civilisation could re-organise around
a new ethic, transform the economy into a 'caring economy', re-structure money, government
and do away with militarism. In terms of what to do now, as an individual, what choices to
make, it is disconcerting to me when talk of these ideals seems to ignore those latter
questions about overshoot.
I wonder if the egalitarian nature of much of indiginous North American society was
inescapably bound with the realities of a low population density, low technology,
intimate relationship with the natural world and a culture completely steeped in reverence
for Mother Earth.
The talk I hear from Bastani or Graeber along the lines of 'we could be flying around in jet
packs on the moon, if only society was organised sensibly' rings hollow to me.
Welcome to my world! Apart from as a managerial tool, systems thinking has yet to catch on
in the wider population. According to reductive materialism: there are two unlinked
arguments. According to Dynamic Systems Theory (DST) there is only one integrated argument --
with two inter-connected correlative aspects. We can only organise around what we can
energetically afford. Consequently, we cannot organise around what we cannot afford -- that
is, global industrialised production with a supervenient elitist superstructure.
Let's face it : ethical arguments carry little weight against organisation around
hierarchical rule. The current talk of an ethical capitalism -- in mixed economies with
'commons' elements -- is an appeasement. and distractional to the gathering and ineluctable
reality.
The current (2012) EROI for the UK is 6.2:1 -- barely above the 'energy cliff' of 5:1. The
GDP 'growth' and bullshit jobs are funded by monetised debt (we borrow around £5 to
make every £1 -- from Tim Morgan's SEEDS). From the Earth Overshoot Day website: the UK
is in economic overshoot from May 8th onward.
These are indicators that we will not be "flying jetpacks on the moon": even if we
reorganise. Everyone, and I mean everyone, will have to make do with less. A lot less.
Everything would have to be localised and sustainable. Production would be minimised, and not
at all full. Two major systems of production -- food (agroecology) and energy -- would have
to be sustainable and self-sovereign. And financialisation and the rentier, service economy?
Now you can see why no one, not even Dave the crypto-anarchist, is talking about reality.
Elitism, establishment and entitlement do not figure in an equitable future. We can't afford
it, energetically or ethically.
So when will the debate move on? Not any time the populace is bought into ideational
deferred prosperity. All the time that EROEI is ignored as the fundamental concept governing
dwindling prosperity -- no one, and I mean no one, will be talking about a minimal surplus
energy future. The magic realism is that the economic affordances of cheap oil (unsustainably
mimicked by debt-funding) will return sometime, somehow (the technocratic superfix). The
aporia is that the longer the delay, the less surplus energy we will have available to
utilise. Something like the Green New Deal -- that has been proposed for around two decades
now -- may give us some quality of life to sustain. Pseudo-talk of a Customs Union, 'clean'
coal, and nuclear power, will not.
An integrated reality -- along the model of Guattari's 'Three Ecologies' -- of mind,
economy, and environment is well, we are not alone, but we are ahead of the curve. The other
cultural aporia is that we need to implement such vision now. Actually, about thirty years
ago but let's not get depressive!
We are going to need that cooperative organisation around care and freedom just to get
through the coming century.
As mentioned elsewhere here, Venezualan oil deposits are not all that the hype cracks them up
to be. They are mostly oil sands that produce little in the way of net energy gain after the
lengthy process of extraction.The Venezuala drama is about the empire crushing democracy
(i.e. socialism), not oil. [not that this detracts from Kit's essential point in the
article].
The Left (as well as the Right), by and large have not come to terms with the realities of
the decline in net surplus energy that is unfolding around the world and driving the
political changes that we see. So they still view geopolitics in terms of the oil economy of
pre-2008.
The productive economies of Europe are falling apart (check Steve Keen's latest on Max and
Stacy -- although even i he doesn't delve into the energy decline aspect).
The carbon density of the global economy has not changed in the 27 years since the founding
of the UNFCCC.
The Peak Oil phenomenon was oversimplified, misrepresented and misunderstood as a simple
turning point in overall oil production. In truth it was a turning point in energy
surplus.
I predict that by the end of this or next year, everyone will be talking about ERoEI.
Everyone will realise that there is no way out of this predicament. Maybe there are ways to
lessen the catastrophe, but no way to avert it. This will change the conversation, and even
change what 'politics' means (i.e. you cannot campaign on a 'new start' or a 'better,
brighter future' if everyone knows that that physically cannot happen).
Everyone will understand that their civilisation is collapsing.
Does Bolton understand this?
If you were referring to my earlier comments about Venezuelan extra heavy crude: it's
still massively about the oil. The current carbon capitalist world system does not understand
surplus energy or EROEI, as it is so fixated on maximal short term returns for shareholders.
It can't comprehend that their entire business model is unsustainable and self cannibalising.
Which is bad for us: because carbon net-energy (exergy) economics it is foundational to all
civilisation. The ignorance of it and subsequent environmental and social convergence crises
threatens the systemic failure of our entire civilisation. The Venezuelan crisis affects us
all: and is symptomatic of a decline in cheap oil due to rapidly falling EROEI.
I can't find the EROEI specifically for Venezuelan heavy oil: but it is only slightly more
viscous than bitumen -- which has an EROEI of 3:1. Let's call it 4:1: the same as other tight
oils and shale. Anything less than 5:1 is more or less an energy sink: with virtually no net
energy left for society. The minimum EROEI for societal needs is 11:1. Does Bolton understand
this? Francis hit the nail on the head there.
Do any of our leaders? No. If they did, a transition to decentralisation would be well
under way. Globalised supply chains are systemically threatened and fragile. A globalised
economy is spectacularly vulnerable. Especially a debt-ridden one. Which way are our leaders
trying to take us? At what point will humanity realise we are following clueless Pied Pipers
off the Seneca Cliff -- into globalised energy oblivion?
The rapid investment -- not in a post-carbon transition -- but in increased
militarisation, and resource and market driven aggressive foreign intervention policies
reveal the mindset of insanity. As people come to understand the energy basis of the world
crisis: the fact of permanent austerity and increased pauperisation looms large. What will
the outcome be when an armed nuclear madhouse becomes increasingly protectionsist of their
dwindling share? Too alarmist, perhaps? Let's play pretend that we can plant a few trees and
captive breed a few rhinos and it will all be fine. BAU?
The world runs on cheap oil: our socio-politico-economic expectations of progress depend
on it. Which means that the modern human mind is, in effect, a thought-process predicated on
cheap oil. Oleum ergo sum? Apart from the Middle East: we are already past the point where
oil is a liability, not a viability. Debt funding its extraction, selling below the cost of
production -- both assume the continual expansion of global GDP. Oil is a highly subsidised
-- with our surplus socialisation capital -- negative asset. We foot the bill. A bill that
EROEI predicts will keep on rising. At what point do we realise this? Or do we live in hopium
of a return to historical prosperity? Or hang on the every word of the populist magic realism
demagogue who promises a future social utopia?
EROEI = Energy Returned on Energy Invested (also known as EROI = Energy Return on Investment)
EROEI refers to the amount of usable energy that can be extracted from a resource compared
to the amount of energy (usually considered to come from the same resource) used to extract
it. It's calculated by dividing the amount of energy obtained from a source by the amount of
energy needed to get it out.
An EROEI of 1:1 means that the amount of usable energy that a resource generates is the
same as the amount of energy that went into getting it out. A resource with an EROEI of 1:1
or anything less isn't considered a viable resource if it delivers the same or less energy
than what was invested in it. A viable resource is one with an EROEI of at least 3:1.
The concept of EROEI assumes that the energy needed to get more energy out of a resource
is the same as the extracted energy ie you need oil to extract oil or you need electricity to
extract electricity. In real life, you often need another source of energy to extract energy
eg in some countries, to extract electricity, you need to burn coal, and in other countries,
to extract electricity you need to build dams on rivers. So comparing the EROEI of
electricity extraction across different countries will be difficult because you have to
consider how and where they're generating electricity and factor in the opportunity costs
involved (that is, what the coal or the water or other energy source -- like solar or wind
energy -- could have been used for instead of electricity generation).
That is probably why EROEI is used mainly in the context of oil or natural gas
extraction.
The US military-industrial complex is rejoicing at the prospect of money
rained down as a result of this withdrawal from the INF treaty. But in Europe (with the
exception of Romania and Poland), nobody is too keen to welcome US missiles that have no
defense against Russian hypersonic weapons. NATO's trans-Atlantic arms lobby will try to push
as many European countries as possible towards a new Cold War, with US weapons deployed and
aimed at Moscow. It will be fun to see the reactions of European citizens facing the prospect
of being annihilated by Russian missiles simply to please the CEOs and shareholders of Lockheed
Martin and Raytheon. No doubt there will be some European politicians in countries like Poland
keen to scream about the "Russian threat", ready to throw tens of billions worth of Polish
taxpayers' money into useless and ineffective projects for the purposes of pleasing their
American friends.
Are US generals even aware of how idiotic it is for the US to withdraw from the INF for
Washington? Moscow is already ahead in the development of such systems, both land-based but
above all sea- and air-launched, without forgetting the hypersonic variants of its conventional
or nuclear missiles. Washington has a huge gap to close, exacerbated by the fact that in spite
of heavy spending over many years, there is little to show for it as a result of massive
corruption in the research-and-development process. This is not to mention the fact that there
are few European countries willing to host offensive missile systems aimed at Russia. In
reality, there is little real advantage for Washington in withdrawing from the INF treaty,
other than to enrich arms manufacturers. It diminishes US military options strategically while
expanding those of Beijing and Moscow, even as the latter oppose Washington's unilateral
withdrawal from the treaty.
The hope of expanding the INF treaty to include the US, Russia, China and the EU appears
slim due to Washington's intransigence. Washington only aims to increase expenditure for the
development of weapons prohibited by the treaty, and in strategic terms, improbably hopes to
find some Asian and European countries willing to host these systems aimed against China and
Russia.
The world is certainly more dangerous following Washington's decision, heading in a
direction where there are less and less rules while there are more nuclear powers. For decades,
the United States has been trying to achieve nuclear supremacy by overcoming the limitations of
MAD, whereby Washington would be able to carry out a decapitating nuclear first strike without
worrying about an opponent's ability to launch a retaliatory second strike. It is precisely
this type of thinking that is bringing humanity closer to the brink of destruction from a
nuclear accident or miscalculation. The miniaturization of nuclear warheads and the apparently
limited nature of "tactical nukes" further encourages the justification for using such
weapons.
Moscow's decision in 2007 to develop state-of-the-art weapons and focus on new technologies
like hypersonic missiles guarantees that Russia and her allies have an effective deterrent
against the attempts of the US to alter the nuclear balance of power, which otherwise threatens
the future of humanity.
The withdrawal from the INF treaty is another worrying sign of the willingness of the US to
push the world to the brink of catastrophe, simply for the purposes of enriching the CEOs and
shareholders of it arms manufacturers through a nuclear arms race.
A historic interfaith covenant was signed in the Middle East on Monday, and the mainstream
media in the United States has been almost entirely silent about it.
Sheikh Ahmed al-Tayeb is considered to be the most important imam in Sunni Islam, and he
arrived at the signing ceremony in Abu Dhabi with Pope Francis
"hand-in-hand in a symbol of interfaith brotherhood" . But this wasn't just a ceremony for
Catholics and Muslims. According to
a British news source , the signing of this covenant was done "in front of a global
audience of religious leaders from Christianity, Islam, Judaism and other faiths"...
The pope and the grand imam of al-Azhar have signed a historic declaration of fraternity,
calling for peace between nations, religions and races, in front of a global audience of
religious leaders from Christianity, Islam , Judaism and other faiths.
Pope Francis
, the leader of the world's Catholics, and Sheikh Ahmed al-Tayeb, the head of Sunni Islam's
most prestigious seat of learning, arrived at the ceremony in Abu Dhabi hand-in-hand in a
symbol of interfaith brotherhood.
In other words, there was a concerted effort to make sure that all of the religions of the
world were represented at this gathering.
According to
the official Vatican website , a tremendous amount of preparation went in to the drafting
of this document, and it encourages believers from all religions "to shake hands, embrace one
another, kiss one another, and even pray" with one another
The document, signed by Pope Francis and the Grand Imam of al-Azhar, Ahmed el-Tayeb, was
prepared "with much reflection and prayer", the Pope said. The one great danger at this
moment, he continued, is "destruction, war, hatred between us." "If we believers are not able
to shake hands, embrace one another, kiss one another, and even pray, our faith will be
defeated", he said. The Pope explained that the document "is born of faith in God who is the
Father of all and the Father of peace; it condemns all destruction, all terrorism, from the
first terrorism in history, that of Cain."
There is a lot of language about peace in this document, but it goes way beyond just
advocating for peace.
Over and over again, the word "God" is used to simultaneously identify Allah and the God of
Christianity. Here is just one example
We, who believe in God and in the final meeting with Him and His judgment, on the basis of
our religious and moral responsibility, and through this Document, call upon ourselves, upon
the leaders of the world as well as the architects of international policy and world economy,
to work strenuously to spread the culture of tolerance and of living together in peace; to
intervene at the earliest opportunity to stop the shedding of innocent blood and bring an end
to wars, conflicts, environmental decay and the moral and cultural decline that the world is
presently experiencing.
On top of that, the document also boldly declares that "the diversity of religions" that we
see in the world was "willed by God"
Freedom is a right of every person: each individual enjoys the freedom of belief, thought,
expression and action. The pluralism and the diversity of religions, colour, sex, race and
language are willed by God in His wisdom, through which He created human beings. This divine
wisdom is the source from which the right to freedom of belief and the freedom to be
different derives. Therefore, the fact that people are forced to adhere to a certain religion
or culture must be rejected, as too the imposition of a cultural way of life that others do
not accept;
In essence, this is saying that it is the will of God that there are hundreds of different
religions in the world and that they are all acceptable in His sight.
We know that the elite want a one world
religion , but to see the most important clerics from both Catholicism and Islam make such
a dramatic public push for it is absolutely stunning.
You can find the full text of the covenant that they signed
on the official Vatican website . I have also reproduced the entire document below...
* * *
INTRODUCTION
Faith leads a believer to see in the other a brother or sister to be supported and loved.
Through faith in God, who has created the universe, creatures and all human beings (equal on
account of his mercy), believers are called to express this human fraternity by safeguarding
creation and the entire universe and supporting all persons, especially the poorest and those
most in need.
This transcendental value served as the starting point for several meetings characterized by
a friendly and fraternal atmosphere where we shared the joys, sorrows and problems of our
contemporary world. We did this by considering scientific and technical progress, therapeutic
achievements, the digital era, the mass media and communications. We reflected also on the
level of poverty, conflict and suffering of so many brothers and sisters in different parts of
the world as a consequence of the arms race, social injustice, corruption, inequality, moral
decline, terrorism, discrimination, extremism and many other causes.
From our fraternal and open discussions, and from the meeting that expressed profound hope
in a bright future for all human beings, the idea of this Document on Human Fraternity was
conceived. It is a text that has been given honest and serious thought so as to be a joint
declaration of good and heartfelt aspirations. It is a document that invites all persons who
have faith in God and faith in human fraternity to unite and work together so that it may serve
as a guide for future generations to advance a culture of mutual respect in the awareness of
the great divine grace that makes all human beings brothers and sisters.
DOCUMENT
In the name of God who has created all human beings equal in rights, duties and dignity, and
who has called them to live together as brothers and sisters, to fill the earth and make known
the values of goodness, love and peace;
In the name of innocent human life that God has forbidden to kill, affirming that whoever
kills a person is like one who kills the whole of humanity, and that whoever saves a person is
like one who saves the whole of humanity;
In the name of the poor, the destitute, the marginalized and those most in need whom God has
commanded us to help as a duty required of all persons, especially the wealthy and of
means;
In the name of orphans, widows, refugees and those exiled from their homes and their
countries; in the name of all victims of wars, persecution and injustice; in the name of the
weak, those who live in fear, prisoners of war and those tortured in any part of the world,
without distinction;
In the name of peoples who have lost their security, peace, and the possibility of living
together, becoming victims of destruction, calamity and war;
In the name of human fraternity that embraces all human beings, unites them and renders them
equal;
In the name of this fraternity torn apart by policies of extremism and division, by systems
of unrestrained profit or by hateful ideological tendencies that manipulate the actions and the
future of men and women;
In the name of freedom, that God has given to all human beings creating them free and
distinguishing them by this gift;
In the name of justice and mercy, the foundations of prosperity and the cornerstone of
faith;
In the name of all persons of good will present in every part of the world;
In the name of God and of everything stated thus far; Al-Azhar al-Sharif and the Muslims of
the East and West, together with the Catholic Church and the Catholics of the East and West,
declare the adoption of a culture of dialogue as the path; mutual cooperation as the code of
conduct; reciprocal understanding as the method and standard.
We, who believe in God and in the final meeting with Him and His judgment, on the basis of
our religious and moral responsibility, and through this Document, call upon ourselves, upon
the leaders of the world as well as the architects of international policy and world economy,
to work strenuously to spread the culture of tolerance and of living together in peace; to
intervene at the earliest opportunity to stop the shedding of innocent blood and bring an end
to wars, conflicts, environmental decay and the moral and cultural decline that the world is
presently experiencing.
We call upon intellectuals, philosophers, religious figures, artists, media professionals
and men and women of culture in every part of the world, to rediscover the values of peace,
justice, goodness, beauty, human fraternity and coexistence in order to confirm the importance
of these values as anchors of salvation for all, and to promote them everywhere.
This Declaration, setting out from a profound consideration of our contemporary reality,
valuing its successes and in solidarity with its suffering, disasters and calamities, believes
firmly that among the most important causes of the crises of the modern world are a
desensitized human conscience, a distancing from religious values and a prevailing
individualism accompanied by materialistic philosophies that deify the human person and
introduce worldly and material values in place of supreme and transcendental principles.
While recognizing the positive steps taken by our modern civilization in the fields of
science, technology, medicine, industry and welfare, especially in developed countries, we wish
to emphasize that, associated with such historic advancements, great and valued as they are,
there exists both a moral deterioration that influences international action and a weakening of
spiritual values and responsibility. All this contributes to a general feeling of frustration,
isolation and desperation leading many to fall either into a vortex of atheistic, agnostic or
religious extremism, or into blind and fanatic extremism, which ultimately encourage forms of
dependency and individual or collective self-destruction.
History shows that religious extremism, national extremism and also intolerance have
produced in the world, be it in the East or West, what might be referred to as signs of a
"third world war being fought piecemeal". In several parts of the world and in many tragic
circumstances these signs have begun to be painfully apparent, as in those situations where the
precise number of victims, widows and orphans is unknown. We see, in addition, other regions
preparing to become theatres of new conflicts, with outbreaks of tension and a build-up of arms
and ammunition, and all this in a global context overshadowed by uncertainty, disillusionment,
fear of the future, and controlled by narrow-minded economic interests.
We likewise affirm that major political crises, situations of injustice and lack of
equitable distribution of natural resources – which only a rich minority benefit from, to
the detriment of the majority of the peoples of the earth – have generated, and continue
to generate, vast numbers of poor, infirm and deceased persons. This leads to catastrophic
crises that various countries have fallen victim to despite their natural resources and the
resourcefulness of young people which characterize these nations. In the face of such crises
that result in the deaths of millions of children – wasted away from poverty and hunger
– there is an unacceptable silence on the international level.
It is clear in this context how the family as the fundamental nucleus of society and
humanity is essential in bringing children into the world, raising them, educating them, and
providing them with solid moral formation and domestic security. To attack the institution of
the family, to regard it with contempt or to doubt its important role, is one of the most
threatening evils of our era.
We affirm also the importance of awakening religious awareness and the need to revive this
awareness in the hearts of new generations through sound education and an adherence to moral
values and upright religious teachings. In this way we can confront tendencies that are
individualistic, selfish, conflicting, and also address radicalism and blind extremism in all
its forms and expressions.
The first and most important aim of religions is to believe in God, to honour Him and to
invite all men and women to believe that this universe depends on a God who governs it. He is
the Creator who has formed us with His divine wisdom and has granted us the gift of life to
protect it. It is a gift that no one has the right to take away, threaten or manipulate to suit
oneself. Indeed, everyone must safeguard this gift of life from its beginning up to its natural
end. We therefore condemn all those practices that are a threat to life such as genocide, acts
of terrorism, forced displacement, human trafficking, abortion and euthanasia. We likewise
condemn the policies that promote these practices.
Moreover, we resolutely declare that religions must never incite war, hateful attitudes,
hostility and extremism, nor must they incite violence or the shedding of blood. These tragic
realities are the consequence of a deviation from religious teachings. They result from a
political manipulation of religions and from interpretations made by religious groups who, in
the course of history, have taken advantage of the power of religious sentiment in the hearts
of men and women in order to make them act in a way that has nothing to do with the truth of
religion. This is done for the purpose of achieving objectives that are political, economic,
worldly and short-sighted. We thus call upon all concerned to stop using religions to incite
hatred, violence, extremism and blind fanaticism, and to refrain from using the name of God to
justify acts of murder, exile, terrorism and oppression. We ask this on the basis of our common
belief in God who did not create men and women to be killed or to fight one another, nor to be
tortured or humiliated in their lives and circumstances. God, the Almighty, has no need to be
defended by anyone and does not want His name to be used to terrorize people.
This Document, in accordance with previous International Documents that have emphasized the
importance of the role of religions in the construction of world peace, upholds the
following:
– The firm conviction that authentic teachings of religions invite us to remain
rooted in the values of peace; to defend the values of mutual understanding, human fraternity
and harmonious coexistence; to re-establish wisdom, justice and love; and to reawaken
religious awareness among young people so that future generations may be protected from the
realm of materialistic thinking and from dangerous policies of unbridled greed and
indifference that are based on the law of force and not on the force of law;
– Freedom is a right of every person: each individual enjoys the freedom of belief,
thought, expression and action. The pluralism and the diversity of religions, colour, sex,
race and language are willed by God in His wisdom, through which He created human beings.
This divine wisdom is the source from which the right to freedom of belief and the freedom to
be different derives. Therefore, the fact that people are forced to adhere to a certain
religion or culture must be rejected, as too the imposition of a cultural way of life that
others do not accept;
– Justice based on mercy is the path to follow in order to achieve a dignified life
to which every human being has a right;
– Dialogue, understanding and the widespread promotion of a culture of tolerance,
acceptance of others and of living together peacefully would contribute significantly to
reducing many economic, social, political and environmental problems that weigh so heavily on
a large part of humanity;
– Dialogue among believers means coming together in the vast space of spiritual,
human and shared social values and, from here, transmitting the highest moral virtues that
religions aim for. It also means avoiding unproductive discussions;
– The protection of places of worship – synagogues, churches and mosques
– is a duty guaranteed by religions, human values, laws and international agreements.
Every attempt to attack places of worship or threaten them by violent assaults, bombings or
destruction, is a deviation from the teachings of religions as well as a clear violation of
international law;
– Terrorism is deplorable and threatens the security of people, be they in the East
or the West, the North or the South, and disseminates panic, terror and pessimism, but this
is not due to religion, even when terrorists instrumentalize it. It is due, rather, to an
accumulation of incorrect interpretations of religious texts and to policies linked to
hunger, poverty, injustice, oppression and pride. This is why it is so necessary to stop
supporting terrorist movements fuelled by financing, the provision of weapons and strategy,
and by attempts to justify these movements even using the media. All these must be regarded
as international crimes that threaten security and world peace. Such terrorism must be
condemned in all its forms and expressions;
– The concept of citizenship is based on the equality of rights and duties, under
which all enjoy justice. It is therefore crucial to establish in our societies the concept of
full citizenship and reject the discriminatory use of the term minorities which engenders
feelings of isolation and inferiority. Its misuse paves the way for hostility and discord; it
undoes any successes and takes away the religious and civil rights of some citizens who are
thus discriminated against;
– Good relations between East and West are indisputably necessary for both. They
must not be neglected, so that each can be enriched by the other's culture through fruitful
exchange and dialogue. The West can discover in the East remedies for those spiritual and
religious maladies that are caused by a prevailing materialism. And the East can find in the
West many elements that can help free it from weakness, division, conflict and scientific,
technical and cultural decline. It is important to pay attention to religious, cultural and
historical differences that are a vital component in shaping the character, culture and
civilization of the East. It is likewise important to reinforce the bond of fundamental human
rights in order to help ensure a dignified life for all the men and women of East and West,
avoiding the politics of double standards;
– It is an essential requirement to recognize the right of women to education and
employment, and to recognize their freedom to exercise their own political rights. Moreover,
efforts must be made to free women from historical and social conditioning that runs contrary
to the principles of their faith and dignity. It is also necessary to protect women from
sexual exploitation and from being treated as merchandise or objects of pleasure or financial
gain. Accordingly, an end must be brought to all those inhuman and vulgar practices that
denigrate the dignity of women. Efforts must be made to modify those laws that prevent women
from fully enjoying their rights;
– The protection of the fundamental rights of children to grow up in a family
environment, to receive nutrition, education and support, are duties of the family and
society. Such duties must be guaranteed and protected so that they are not overlooked or
denied to any child in any part of the world. All those practices that violate the dignity
and rights of children must be denounced. It is equally important to be vigilant against the
dangers that they are exposed to, particularly in the digital world, and to consider as a
crime the trafficking of their innocence and all violations of their youth;
– The protection of the rights of the elderly, the weak, the disabled, and the
oppressed is a religious and social obligation that must be guaranteed and defended through
strict legislation and the implementation of the relevant international agreements.
To this end, by mutual cooperation, the Catholic Church and Al-Azhar announce and pledge to
convey this Document to authorities, influential leaders, persons of religion all over the
world, appropriate regional and international organizations, organizations within civil
society, religious institutions and leading thinkers. They further pledge to make known the
principles contained in this Declaration at all regional and international levels, while
requesting that these principles be translated into policies, decisions, legislative texts,
courses of study and materials to be circulated.
Al-Azhar and the Catholic Church ask that this Document become the object of research and
reflection in all schools, universities and institutes of formation, thus helping to educate
new generations to bring goodness and peace to others, and to be defenders everywhere of the
rights of the oppressed and of the least of our brothers and sisters.
In conclusion, our aspiration is that:
this Declaration may constitute an invitation to reconciliation and fraternity among all
believers, indeed among believers and non-believers, and among all people of good will;
this Declaration may be an appeal to every upright conscience that rejects deplorable
violence and blind extremism; an appeal to those who cherish the values of tolerance and
fraternity that are promoted and encouraged by religions;
this Declaration may be a witness to the greatness of faith in God that unites divided
hearts and elevates the human soul;
this Declaration may be a sign of the closeness between East and West, between North and
South, and between all who believe that God has created us to understand one another,
cooperate with one another and live as brothers and sisters who love one another.
This is what we hope and seek to achieve with the aim of finding a universal peace that all
can enjoy in this life.
It's not One World Religion, for crying out loud. It's actually a great statement. The
Pope is trying to protect Christians living in Muslim or Jewish lands and the Iman Muslims
living in Christian or Jewish lands. If there were a Rabbi signing it, he would have wanted
to protect Jews living in Christian lands (and possibly Muslim lands but frankly I think Jews
are happy to have all Mideast Jews driven to Israel so I don't think they currently care much
about that).
One World Religion requires the same religion for everyone. Secular humanism is the One
World Religion. It is sold as actually not being a religion, the better to fool the masses.
But it is entirely a religion. And the Beast will rise from Secular Humanism, as will the
Mark of the Beast.
Christianity will definitely not be part of the One World Religion.
"... Last night, President Trump reserved a few minutes of his State of the Union address to praise his tax reform law, which turned a year old last month. To promote its passage, Mr. Trump and his congressional allies promised Americans that drastically lowered corporate tax rates would bring home large sums of capital that had been stashed overseas and finance a surge of domestic investment. ..."
"... Why would any multinational corporation pay America's 21 percent tax rate when it could pay the new "global minimum" rate of 10.5 percent on profits shifted to tax havens, particularly when there are few restrictions on how money can be moved around a company and its foreign subsidiaries? ..."
"... For starters, the law's repatriation deal did prompt a brief surge in offshore profits returning to the United States. But the total sum returned so far is well below the trillions many proponents predicted, and a large chunk of the returned funds have been used for record-breaking stock buybacks, which don't help workers and generate little real economic activity. ..."
"... Bottom line: the Trump tax cut is a giveaway to corporations that doesn't promote investment here ..."
The Global Con Hidden in Trump's Tax Reform Law, Revealed
Why would any multinational corporation pay the new 21 percent rate when it could use the new
"global minimum" loophole to pay half of that?
By Brad Setser
Last night, President Trump reserved a few minutes of his State of the Union address
to praise his tax reform law, which turned a year old last month. To promote its passage, Mr.
Trump and his congressional allies promised Americans that drastically lowered corporate tax
rates would bring home large sums of capital that had been stashed overseas and finance a
surge of domestic investment.
"For too long, our tax code has incentivized companies to leave our country in search of
lower tax rates," he said, pitching voters in the fall of 2017. "My administration rejects
the offshoring model, and we have embraced a brand-new model. It's called the American
model."
The White House argued they wanted a system that "encourages companies to stay in America,
grow in America, spend in America, and hire in America." Yet the bill he signed into law
includes a sweetheart deal that allows companies that shift their profits abroad to pay tax
at a rate well below the already-reduced corporate income tax -- an incentive shift that
completely contradicts his stated goal.
Why would any multinational corporation pay America's 21 percent tax rate when it
could pay the new "global minimum" rate of 10.5 percent on profits shifted to tax havens,
particularly when there are few restrictions on how money can be moved around a company and
its foreign subsidiaries?
These wonky concerns were largely brushed aside amid the political brawl. But now that a
full year has passed since the tax bill became law, we have hard numbers we can evaluate.
For starters, the law's repatriation deal did prompt a brief surge in offshore profits
returning to the United States. But the total sum returned so far is well below the trillions
many proponents predicted, and a large chunk of the returned funds have been used for
record-breaking stock buybacks, which don't help workers and generate little real economic
activity.
And despite Mr. Trump's proud rhetoric regarding tax reform during his State of the Union
address, there is no wide pattern of companies bringing back jobs or profits from abroad. The
global distribution of corporations' offshore profits -- our best measure of their tax
avoidance gymnastics -- hasn't budged from the prevailing trend.
Well over half the profits that American companies report earning abroad are still booked
in only a few low-tax nations -- places that, of course, are not actually home to the
customers, workers and taxpayers facilitating most of their business. A multinational
corporation can route its global sales through Ireland, pay royalties to its Dutch subsidiary
and then funnel income to its Bermudian subsidiary -- taking advantage of Bermuda's corporate
tax rate of zero.
Where American Profits Hide
[Graph]
No major technology company has jettisoned the finely tuned tax structures that allow a
large share of its global profits to be booked offshore. Nor have major pharmaceutical
companies stopped producing many of their most profitable drugs in Ireland. And Pepsi, to
name just one major manufacturer, still makes the concentrate for its soda in Singapore, also
a haven.
Eliminating the complex series of loopholes that encourage offshoring was a major talking
point in the run-up to the 2017 tax bill, but most of them are still in place. The craftiest
and largest corporations can still legally whittle down their effective tax rate into the
single digits. (In fact, the new law encourages firms to move "tangible assets" -- like
factories -- offshore).
Overall, the Tax Cuts and Jobs Act amounted to a technocratic sleight of hand -- a scheme
set to shift an even greater share of the federal tax burden onto the shoulders of American
families. According to the Treasury Department's tally for fiscal year 2018, corporate income
tax receipts fell by 31 percent, an unprecedented year-over-year drop in a time of economic
growth (presumably a time when profits and government revenue should rise in tandem).
These damning results, to be sure, don't make for a good defense of what came before the
new law. In theory under the old system, American-based firms still owed the government a cut
of their global profits. In practice, large firms could indefinitely defer paying this tax
until the funds could be repatriated -- usually when granted a tax holiday by a friendly
administration.
Over a generation, this political dance was paired with rules that made it relatively easy
for firms to transfer their most prized intellectual property -- say, the rights to popular
software or the particular mix of ingredients for a hot new drug -- to their offshore
subsidiaries. Taken together, they created a tax nirvana of sorts for multinational
corporations, particularly in intellectual-property-intensive industries like tech and
pharmaceuticals. But it wasn't enough.
For their next trick, the companies worked with their political allies to favorably frame
the 2017 tax debate. When he was the House speaker, Paul Ryan was fond of talking about $3
trillion in "trapped" profits abroad. But those profits weren't actually, physically, sitting
in a few tax havens.
Dwarf Economies, Giant American Profits
[Graph]
They were largely invested in United States bank accounts, securities and bonds issued by
the Treasury or other companies headquartered in the States. As Adam Looney -- a Brookings
Institution fellow and former Treasury Department official -- has explained, companies that
needed to finance a new domestic investment could simply issue a bond effectively backed by
its offshore cash. (For instance, Apple could bring its "trapped" funds onshore by selling a
bond to Pfizer's offshore account, or vice versa.)
Put plainly, they got the best of both worlds: Uncle Sam could tax only a small slice of
their books while they traded with one another based on the size of the entire pie.
The scale of the tax shifting has become so immense that some economists believe curbing
it could raise reported G.D.P. by well over a percentage point -- something Mr. Trump, who's
been absorbed by opportunities to brag about the economy, should notionally welcome.
President Trump's economic advisers and the key architects of the bill on Capitol Hill
must have known their reform wasn't going to end business incentives that hurt American
workers. Honest reform would have meant closing corporate loopholes -- a move they originally
promised to make.
Should the opportunity present itself, perhaps to the next president, there are a couple
of viable options for a fundamental tax overhaul that wouldn't require reinstating the 35
percent corporate tax rate.
One of several possibilities is to return to a system of global taxation without the
deferrals that enabled empty repatriations. That would mean profits sneakily booked tax-free
in Bermuda would be taxed every year at 21 percent. Profits booked in Ireland -- or other
low-tax nations -- would be taxed at the difference between Ireland's rate and America's
rate.
It's an approach that would protect small and midsize American companies while cracking
down on bad corporate actors with enough fancy accountants and lawyers to rig the game to
their advantage. And it would be far better than the fake tax reform passed a year ago.
This is very good from the essential Brad Setser, our leading expert on international
trade and money flows. Bottom line: the Trump tax cut is a giveaway to corporations that
doesn't promote investment here 1/
The Global Con Hidden in Trump's Tax Reform Law, Revealed
Why would any multinational corporation pay the new 21 percent rate when it could use the
new "global minimum" loophole to pay half of that?
2:14 PM - 6 Feb 2019
@Brad_Setser also gets at something I've been trying to explain: corporate cash "overseas"
isn't really a stash of money that can be brought home, it's an accounting fiction that lets
them avoid taxes, with no real consequences for investment 2/
And this chart, showing the predominance of tax avoidance in overseas "investment", is a
classic 3/
If Trump runs of the defense of neoliberalism platform he will lose. But Trump proved to be a bad, superficial politician,
Republican Obama so to speak, so he may take this advice from his entourage. Trump proved to be a puppet of MIC and
Israel, his tax cuts had shown that he is a regular "trickle down" neoliberal. So he attraction to voters is down
substantially. Now
Polling is unambiguous here. If you define the "center" as a position
somewhere between those of the two parties, when it comes to economic issues the public is overwhelmingly left of center; if anything,
it's to the left of the Democrats. Tax cuts for the rich are the G.O.P.'s defining policy, but two-thirds of voters believe that taxes
on the rich are actually too low, while only 7 percent believe that they're too high. Voters support Elizabeth Warren's proposed tax
on large fortunes by a three-to-one majority. Only a small minority want to see cuts in Medicaid, even though such cuts have been central
to every G.O.P. health care proposal in recent years.
Notable quotes:
"... Insiders have suggested that Trump plans to explicitly run against socialism in 2020. In fact, in playing up the dangers of socialism, he may be positioning himself to run against Bernie Sanders in 2020. ..."
"... Sanders's rebuttal to Trump's address gave us a preview of how he plans to respond to the mounting attacks on socialism from the Right. President Trump said tonight, quote, "We are born free, and we will stay free," end of quote. Well I say to President Trump, people are not truly free when they can't afford to go to the doctor when they are sick. People are not truly free when they cannot afford to buy the prescription drugs they desperately need. People are not truly free when they are unable to retire with dignity. People are not truly free when they are exhausted because they are working longer and longer hours for lower wages. People are not truly free when they cannot afford a decent place in which to live. People certainly are not free when they cannot afford to feed their families. ..."
"... As Dr Martin Luther King Jr said in 1968, and I quote, "This country has socialism for the rich, and rugged individualism for the poor." What Dr. King said then was true, and it is true today, and it remains absolutely unacceptable. ..."
"... In essence what we're seeing here is Bernie Sanders challenging the popular equation of capitalism with democracy and freedom. This is the same point Bernie has been making for decades. "People have been brainwashed into thinking socialism automatically means slave-labor camps, dictatorship and lack of freedom of speech," he said in 1976. This Cold War dogma swept the pervasive reality of capitalist unfreedom - from the bondage of poverty to the perversions of formal democracy under the pressure of a dominant economic class - under the rug. In a 1986 interview, Bernie elaborated: ..."
"... All that socialism means to me, to be very frank with you, is democracy with a small "d." I believe in democracy, and by democracy I mean that, to as great an extent as possible, human beings have the right to control their own lives. And that means that you cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank or corporation. So, if you believe in political democracy, if you believe in equality, you have to believe in economic democracy as well. ..."
"... The rise of neoliberalism and the fall of the Soviet Union relieved the capitalist state's elite of the need to keep shoring up the equation between capitalism and freedom. Capitalists and their ideology had triumphed, hegemony was theirs, and socialism was no real threat, a foggy memory of a distant era. But forty years of stagnating wages, rising living costs, and intermittent chaos caused by capitalist economic crisis remade the world - slowly, and then all at once. When Bernie Sanders finally took socialist class politics to the national stage three years ago, people were willing to listen. ..."
Trump Is Right to Be Afraid of Socialism
BY MEAGAN DAY
... I think he's scared," said Ocasio-Cortez of Trump's socialism remarks. "He sees that everything is closing in on him. And
he knows he's losing the battle of public opinion when it comes to the actual substantive proposals that we're advancing to the
public." Given the remarkable popularity of proposals like Bernie's Medicare for All and tuition-free college and Ocasio-Cortez's
70 percent top marginal tax rate, she's probably onto something.
Insiders have suggested that Trump plans to explicitly
run against socialism in 2020. In fact, in playing up the dangers of socialism, he may be positioning himself to run against Bernie
Sanders in 2020. That would be a smart move, since Bernie is the most popular politician in America and could very well be
Trump's direct contender in the general election, if he can successfully dodge attacks from the establishment wing of the Democratic
Party in the primary.
Sanders's rebuttal to Trump's address gave us a preview of how he plans to respond to the mounting attacks on socialism
from the Right. President Trump said tonight, quote, "We are born free, and we will stay free," end of quote. Well I say to President
Trump, people are not truly free when they can't afford to go to the doctor when they are sick. People are not truly free when
they cannot afford to buy the prescription drugs they desperately need. People are not truly free when they are unable to retire
with dignity. People are not truly free when they are exhausted because they are working longer and longer hours for lower wages.
People are not truly free when they cannot afford a decent place in which to live. People certainly are not free when they cannot
afford to feed their families.
As Dr Martin Luther King Jr said in 1968, and I quote, "This country has socialism for the rich, and rugged individualism
for the poor." What Dr. King said then was true, and it is true today, and it remains absolutely unacceptable.
In essence what we're seeing here is Bernie Sanders challenging the popular equation of capitalism with democracy and freedom.
This is the same point Bernie has been making for decades. "People have been brainwashed into thinking socialism automatically
means slave-labor camps, dictatorship and lack of freedom of speech," he said in 1976. This Cold War dogma swept the pervasive
reality of capitalist unfreedom - from the bondage of poverty to the perversions of formal democracy under the pressure of a dominant
economic class - under the rug. In a 1986 interview, Bernie elaborated:
All that socialism means to me, to be very frank with you, is democracy with a small "d." I believe in democracy, and by
democracy I mean that, to as great an extent as possible, human beings have the right to control their own lives. And that means
that you cannot separate the political structure from the economic structure. One has to be an idiot to believe that the average
working person who's making $10,000 or $12,000 a year is equal in political power to somebody who is the head of a large bank
or corporation. So, if you believe in political democracy, if you believe in equality, you have to believe in economic democracy
as well.
For more than four decades, Bernie made these points to relatively small audiences. In 2016, everything changed, and he now
makes them to an audience of millions.
The rise of neoliberalism and the fall of the Soviet Union relieved the capitalist state's elite of the need to keep shoring
up the equation between capitalism and freedom. Capitalists and their ideology had triumphed, hegemony was theirs, and socialism
was no real threat, a foggy memory of a distant era. But forty years of stagnating wages, rising living costs, and intermittent
chaos caused by capitalist economic crisis remade the world - slowly, and then all at once. When Bernie Sanders finally took socialist
class politics to the national stage three years ago, people were willing to listen.
Bernie has been so successful at changing the conversation that the President now feels obligated to regurgitate Cold War nostrums
about socialism and unfreedom to a new generation.
Good, let him. Each apocalyptic admonition is an opportunity for Bernie, and the rest of us socialists, to articulate a different
perspective, one in which freedom and democracy are elusive at present but achievable through a society-wide commitment to economic
and social equality. We will only escape "coercion, domination, and control" when we structure society to prioritize the well-being
of the many over the desires of the greedy few.
Mr. Bill said in reply to anne... February 06, 2019 at 03:29 PM
A lot of the opinion part of what Paul Krugman says, in this article, maybe, doesn't ring quite true, although I don't dispute
the facts.
Poll after poll show that 75% of us agree on 80% of the issues, regardless of which political tribe we identify with.
I tend to think that the real problem is that neither the GOP, which represents the top 1% of the economically comfortable, nor the
Democrats who represent the top 10%, are representative of the majority of Americans.
Frantically trying to slice and dice the electorate into questionably accurate tranches, ignores the elephant in the room, Paul.
As neocolonial empire of it s own (albeit the one that is vassal of the USA) yes it does,
especially in xUSSR state where EU wants to capture the makets. Ukraine is a nice example
here.
Does the European Union generate external instability?
The historic achievement of peace within a Europe of universal norms is belied by the external
instability engendered by violent and incoherent interventions.
By Branko Milanovic
The European Union is justly admired for making war among its members impossible. This is no
small achievement in a continent which was in a state of semi-permanent warfare for the past
two millennia.
It is not only that we cannot even imagine the usual 19th and 20th century antagonists, such
as France and Germany, going to war ever again. The same is true of other, lesser-known
animosities which have led periodically to bloodlettings: between Poles and Germans, Hungarians
and Romanians, Greeks and Bulgarians. Unthinkable is also the idea that the United Kingdom and
Spain could end up, regarding Gibraltar, in a reprise of the Falklands/Malvinas war.
Destabilised
But creating geopolitical stability internally has not, during the last two decades, been
followed by external geopolitical stability along the fringes of the union. Most of the big EU
member states (UK, Poland, Italy, Spain) participated, often eagerly, in Operation Iraqi
Freedom, which led to the deaths of some half a million people, destabilised the middle east
even further and produced Islamic State.
Then, seemingly not having learned from this fiasco, France and Italy spearheaded another
regime change, this time in Libya. It ended in anarchy, another civil war, two competing
governments and a UN Security Council deadlocked for years to come -- since it is clear that
China and Russia will not in the foreseeable future vote to allow another western military
intervention.
The wars along the long arc from Libya to Afghanistan, in which EU powers participated, were
the proximate cause of large refugee flows a few years ago, which continue even now. (As I have
written elsewhere, the underlying cause of migration is the large gap in incomes between
Europe, on the one hand, and Africa and the 'greater middle east', on the other, but the sudden
outbursts were caused by wars.)
The next example of generating instability was Ukraine, where the then government of Viktor
Yanukovych, having only postponed the signing of an EU agreement, was driven out of power in
2014 in a coup-like movement supported by the union. It is sure that a reasonable
counterfactual, with the same EU-Ukraine agreements being signed and without a war in eastern
Ukraine and with Crimea still part of Ukraine, would have been much preferable to the current
situation, which threatens to precipitate a war of even much greater dimensions.
Finally, consider Turkey, in an association agreement with the European Economic Community
since 1963, and thus in a membership-awaiting antechamber for more than half a century. The
initial period in power of Recep Tayyip Erdoğan was marked by pro-European policies, a
desire to create an 'Islamic democracy', in the mould of the Christian democracies of Italy and
Germany, and civilian control over the army. But realisation that, because of its size and
probably because of its dominant religion, Turkey would never be recognised as part of Europe
led Erdoğan, gradually, to move in an altogether different direction -- with an almost
zero chance that he would come back to his original pro-European stance.
The endless waiting period, with similarly protracted negotiations over what are now 35
chapters which need to be agreed between candidate countries and all 28 (or soon 27) members,
is what lies behind the frustration with the EU in the Balkans. Long gone are the days when
Greece could become a member after a couple of months (if that) of negotiations and an
agreement between the French president, Valéry Giscard d'Estaing, and the German
chancellor, Helmut Schmidt. The European bluff -- it neither has the stick nor the carrot --
albeit long hidden behind the veil of negotiations, was recently called by the Kosovo
leadership, when it engaged in a trade war with Serbia. The EU could express its 'regrets' but
it was squarely ignored. In the past, nether Kosovo nor any other Balkan state would have dared
to defy Europe so openly.
Slow and hesitant
It all means that Europe needs a much better thought-out external policy with respect to its
neighbours. There are already some signs that it is moving in that direction but it is doing so
too slowly and hesitantly. A multilateral compact with Africa is needed to regulate migration
from a continent with the fastest rising population and lowest incomes. Much more European
investment -- in hard stuff, not conferences -- is needed. Rather than complaining about
China's Belt and Road initiative, Europe should imitate it -- and, if it desires to counteract
Chinese political influence, invest its own money to make more African friends. A similar set
of much more proactive policies is required within the framework of the Mediterranean
initiative, while military options in the region should be forsworn no less clearly than they
are within the union.
When it comes to the potential members, as in the Balkans or the western republics of the
former Soviet Union, interminable talks should be replaced by either special association with
no expectation of EU membership or clearer, time-limited negotiations leading to membership.
Both would manage expectations better and avoid the build-up of resentment and frustration.
The most important challenge is the relationship with Turkey. The EU does not have a
blueprint for a Turkey after Erdoğan; nor can it offer anything to the Turkish secular
opposition, as it is not clear within itself whether it wants Turkey in or out. It should be
rather obvious that a European Turkey, with its vast economic potential and influence in the
middle east, would be a huge economic and strategic asset. Such a Turkey would also behave
differently in Syria and in Anatolia, because it would have an incentive to follow European
rules.
This rethinking of the EU's neighbourhood policy thus calls, in short, for three things:
greater economic aid to Africa, no support for wars or regime change, and much clearer rules
and time-limits for membership talks.
Perhaps, you ascribe to the EU successes that it did not create.
The formation of the EU is not the vehicle that created, nor sustained, the uneasy peace.
I suggest it was the resolution of WW2 that has determined the current state of
tolerance.
I fear that the formation of the EU, in the end, will be the cause of a re-instigation of
the age old skirmishes that have plagued the world, as you say, for two millennia.
The destruction of the Middle East by the West, not just the EU but the US, is a
foolishness of biblical proportions.
The EU's disposition of Greece and Brexit are red flags that the EU is an unsustainable
contrivance that will eventually, come undone. The mercantilist wars between France, England,
Spain, Germany, Italy, etc, may rise again. Hopefully, I'm wrong.
We just got done conquering Iraq. We haven't stayed to loot the oil.
The US has NOT successfully conquered Iraq (has not pacified the country). Oil is not like
a bag of diamonds, which you can grab and run. In order to steal a worthwhile amount of the
greasy stuff, you have to make a substantial investment up front, in wells and shipping
terminals. Not even the greediest thief will risk his money if there is even the slightest
chance that his wells and terminals will be blown up by righteous nationalists. This is why
the US hasn't stolen much from Iraq.
So now you believe we're going to Venezuela to take their crappy heavy oil?
That the US hasn't been able to steal much from Iraq tells us little about whether the
Americans have larcenous motives with regard to Venezuela. Especially as Trump has been
talking loudly about the oil.
It would be easier for us just to build a pipeline to Alberta and import all their
cheap, shut-in heavy crude.
Wages are rising at the fastest pace in decades, and growing for blue collar workers, who I
promised to fight for, faster than anyone else. Nearly 5 million Americans have been lifted off
food stamps. The United States economy is growing almost twice as fast today as when I took
office, and we are considered far and away the hottest economy anywhere in the world.
Unemployment has reached the lowest rate in half a century. African-American, Hispanic-American
and Asian-American unemployment have all reached their lowest levels ever recorded.
Unemployment for Americans with disabilities has also reached an all-time low. More people are
working now than at any time in our history -- 157 million.
We passed a massive tax cut for working families and doubled the child tax credit.
We virtually ended the estate, or death, tax on small businesses, ranches, and family
farms.
We eliminated the very unpopular Obamacare individual mandate penalty -- and to give
critically ill patients access to life-saving cures, we passed right to try.
My Administration has cut more regulations in a short time than any other administration
during its entire tenure. Companies are coming back to our country in large numbers thanks to
historic reductions in taxes and regulations.
We have unleashed a revolution in American energy -- the United States is now the number one
producer of oil and natural gas in the world. And now, for the first time in 65 years, we are a
net exporter of energy.
After 24 months of rapid progress, our economy is the envy of the world, our military is the
most powerful on earth, and America is winning each and every day. Members of Congress: the
State of our Union is strong. Our country is vibrant and our economy is thriving like never
before.
On Friday, it was announced that we added another 304,000 jobs last month alone -- almost
double what was expected. An economic miracle is taking place in the United States -- and the
only thing that can stop it are foolish wars, politics, or ridiculous partisan
investigations.
If there is going to be peace and legislation, there cannot be war and investigation. It
just doesn't work that way!
... ... ...
Both parties should be able to unite for a great rebuilding of America's crumbling
infrastructure.
I know that the Congress is eager to pass an infrastructure bill -- and I am eager to work
with you on legislation to deliver new and important infrastructure investment, including
investments in the cutting edge industries of the future. This is not an option. This is a
necessity.
The next major priority for me, and for all of us, should be to lower the cost of healthcare
and prescription drugs -- and to protect patients with pre-existing conditions.
Already, as a result of my Administration's efforts, in 2018 drug prices experienced their
single largest decline in 46 years.
But we must do more. It is unacceptable that Americans pay vastly more than people in other
countries for the exact same drugs, often made in the exact same place. This is wrong, unfair,
and together we can stop it.
... ... ...
he final part of my agenda is to protect America's National Security.
Over the last 2 years, we have begun to fully rebuild the United States Military -- with
$700 billion last year and $716 billion this year. We are also getting other nations to pay
their fair share. For years, the United States was being treated very unfairly by NATO -- but
now we have secured a $100 billion increase in defense spending from NATO allies.
As part of our military build-up, the United States is developing a state-of-the-art Missile
Defense System.
Under my Administration, we will never apologize for advancing America's interests.
For example, decades ago the United States entered into a treaty with Russia in which we
agreed to limit and reduce our missile capabilities. While we followed the agreement to the
letter, Russia repeatedly violated its terms. That is why I announced that the United States is
officially withdrawing from the Intermediate-Range Nuclear Forces Treaty, or INF Treaty.
Perhaps we can negotiate a different agreement, adding China and others, or perhaps we can't
-- in which case, we will outspend and out-innovate all others by far.
As part of a bold new diplomacy, we continue our historic push for peace on the Korean
Peninsula. Our hostages have come home, nuclear testing has stopped, and there has not been a
missile launch in 15 months. If I had not been elected President of the United States, we would
right now, in my opinion, be in a major war with North Korea with potentially millions of
people killed. Much work remains to be done, but my relationship with Kim Jong Un is a good
one. And Chairman Kim and I will meet again on February 27 and 28 in Vietnam.
Two weeks ago, the United States officially recognized the legitimate government of
Venezuela, and its new interim President, Juan Guaido.
... ... ...
Our approach is based on principled realism -- not discredited theories that have failed for
decades to yield progress. For this reason, my Administration recognized the true capital of
Israel -- and proudly opened the American Embassy in Jerusalem.
Our brave troops have now been fighting in the Middle East for almost 19 years. In
Afghanistan and Iraq, nearly 7,000 American heroes have given their lives. More than 52,000
Americans have been badly wounded. We have spent more than $7 trillion in the Middle East.
As a candidate for President, I pledged a new approach. Great nations do not fight endless
wars.
When I took office, ISIS controlled more than 20,000 square miles in Iraq and Syria. Today,
we have liberated virtually all of that territory from the grip of these bloodthirsty
killers.
Now, as we work with our allies to destroy the remnants of ISIS, it is time to give our
brave warriors in Syria a warm welcome home.
I have also accelerated our negotiations to reach a political settlement in Afghanistan. Our
troops have fought with unmatched valor -- and thanks to their bravery, we are now able to
pursue a political solution to this long and bloody conflict.
In Afghanistan, my Administration is holding constructive talks with a number of Afghan
groups, including the Taliban. As we make progress in these negotiations, we will be able to
reduce our troop presence and focus on counter-terrorism. We do not know whether we will
achieve an agreement -- but we do know that after two decades of war, the hour has come to at
least try for peace.
... ... ...
My Administration has acted decisively to confront the world's leading state sponsor of
terror: the radical regime in Iran.
To ensure this corrupt dictatorship never acquires nuclear weapons, I withdrew the United
States from the disastrous Iran nuclear deal. And last fall, we put in place the toughest
sanctions ever imposed on a country.
by Tyler Durden
Wed, 02/06/2019 - 19:44 251 SHARES
Jeffrey Epstein, the disgraced New York financier who served 13 months in prison for
soliciting an underaged girl for prostitution, has served his time, and despite all of the
negative press surrounding his "Lolita Express" and the many celebrities and politicians -
including former
President Bill Clinton and disgraced actor Kevin Spacey - who have reportedly traveled to
his "orgy island", he will likely live out his life as a free man (unless new offenses are
committed).
But thanks to a series published by the Miami Herald last year that
delved into how prosecutors worked with powerful defense attorneys to ensure Epstein received
such a lenient sentence. The expose shed a light on the role played by Alex Acosta, who went on
to become Trump's Secretary of Labour, in handing down the light sentence. Acosta was the US
Attorney for the Southern District of Florida at the time Epstein's sentence was handed
down.
Now, thanks to those stories, the DOJ has reportedly opened an investigation into the
conduct of DOJ attorneys in the case, and whether they committed "professional misconduct" in
their working relationship with Epstein's attorneys.
The probe was opened in response to a request lodged by Sen. Ben Sasse, a a Nebraska
Republican and member of the Senate Judiciary Committee, who raised questions about the case
after reading the Herald's stories about how Acosta and other DOJ attorneys worked with defense
attorneys to cut a lenient plea deal for Epstein back in 2008, per the Herald.
At the time, the FBI was run by Robert Mueller.
Though the reasons for the lenient deal could be rooted in the natural advantages of the
wealthy, one Twitter user who did a deep dive into a cache of redacted FBI Vault documents
released last year raised the possibility that Epstein could have been an informant for the
FBI, providing information on executives from failed investment bank Bear Stearns in exchange
for the lenient sentence (though there's nothing in his guilty plea that suggested he provided
information).
To be sure, records show that Epstein passed a polygraph test showing that he didn't know
any of the girls he solicited were under the age of 18 at the time. Also, the case has taken on
renewed importance since opposition research shops
tried to link President Trump to Epstein during the campaign.
While that hasn't been conclusively proven, it could have been part of a separate agreement
that has yet to be disclosed.
It is very sad that FBI has decided to just prosecute this EVIL MAN and Child Pedophilia
enabler, just because Muller is investigating Trump. They are all in on it. They are
sick.
If I was one of the victims or the mother, I would do anything to destroy this man. Yes, I
know that Catholic church is also as guilty. But this sick faced Epstein with his evil smile,
has ruined many lives for his famous clients.
Child pedophilia is a disease wired in the brain and the only way to get rid of them, is
to execute them. There is no other solution. Imagine about the father who walked into his
house and witnessed his son getting raped by his sitter (man).
From a personal experience, when a burglar came to rub our house "As a minor not even a
teenage, I woke up with this stranger molesting me.". I had no idea what he was doing, but
that event gave me insomnia for the rest of my life.
So did Epstein provide the FBI with information for prosecutions? Doesn't seem like it.
Epstein knows the Clintons, Prince Andrew, Trump, and many others and they pressured the govt
to back off. Without any facts, the FBI cooperation story is just spin. His connected friends
have a lot to lose if he talks. I doubt that Mr. Epstein will live a long life.
Remember all those people on Clinton team who were interviewed by the FBI and granted
immunity? I remember. The crowd here was excited - oh, they are going to indict her today,
oh, they are going to drag her off tomorrow first thing... Turned out, all those immunities
were granted to protect them from future prosecutions.
Nothing may come out of this. Nothing, perhaps, will ever come out of this. The victim of
all these witch hunting is sitting in the President's chair; and when he is not interested in
getting justice for himself, or to uphold justice for the people, why should I worry about
justice for this world?
Failed Bureau of Investigation. Once a political organization, always a political
organization. I feel for the rank and file who's lives are determined by a few!
If this happened, if they focused on just WHAT THE **** HAPPENED in the Epstein case, I
might be a believer in our justice system. Even if it was just a minute. It could sweep up
Trump. It could flush the Clintons straight to hell.
"... Who provided former British spy Christopher Steele with the salacious and unverified information in the dossier? That's one question I'd like clarity on ..."
"... And it would also be interesting to hear from Sergei Millian, who is widely reported to be an unwitting source of information contained in the dossier, which was compiled by former British spy Christopher Steele. ..."
"... There is a reason why Republicans did not do so when they controlled the house. Think Uniparty! The Dems and Reps are two faces of the same party! The Uniparty did not want this to happen! Now that the Reps are minority, they can act like Reps because majority Dems won't grant their request! See how that works!!!! ..."
"... Think Uniparty! Then everything will suddenly start to make sense to you! ..."
"... Democrat politicians are lying to the people who care about MUH RUSSIA. These politicians don't care about it. They never did. From the start it was nothing more than a way to keep a certain powerful faction of their party in line by dangling MUH RUSSIA keys in front of them. ..."
"... They can't stop because the mindless rage monsters they whipped up (aka the shrieking base of the ever-growing left wing of the Party that lives on Cuntbook and Twatter) will turn on them if they do ..."
Making matters more interesting, Republicans today also put forward a motion to subpoena
around a dozen witnesses. Those people, including officials involved in the FBI's Russia
investigation as well as people likely to be familiar with the compilation of the Steele
dossier. Of course, those people may not say what the Democrats want to hear so the Democrats
rejected the motion.
It's actually a brilliant idea – we need more interviews. I think the Republicans
should pounce on this opportunity to question these witnesses. Hopefully, they will ask some
poignant questions we still don't have answers to.
Who provided former British spy Christopher Steele with the salacious and unverified
information in the dossier? That's one question I'd like clarity on.
"Since the Democrats previously sought testimony from these individuals, such as James
Baker and Sergei Millian, we assume they still want to speak to them," said Jack Langer,
spokesman for committee Republican Rep. Devin Nunes.
"It's even possible some witnesses can help explain the 'more than circumstantial
evidence' of Trump-Russia collusion that the Democrats claimed to have found two years ago
but, inexplicably, never revealed to Committee Republicans or anyone else."
James Baker is the former FBI General Counsel who was close friends with former FBI
Director James Comey. Baker is now the subject of a leak investigation. He reportedly accepted
documents from Perkins Coie, the law firm used by the Democratic National Committee and the
Hillary Clinton campaign to pay for the unverified dossier.
And it would also be interesting to hear from
Sergei Millian, who is widely reported to be an unwitting source of information contained
in the dossier, which was compiled by former British spy Christopher Steele.
These witnesses would surely have some interesting information to share if they were under
questioned by the committee. I'm not sure it's information that would benefit Schiff's claim
that there was collusion between the Trump campaign and Russia. But I'm certain it would shed
light on what really happened with the dossier and the internal machinations of the FBI's probe
into the campaign.
Read the press release below from the House Intelligence
Committee:
Republicans on the House Permanent Select Committee on Intelligence issued the following
statement today on sending the transcripts of interviews from the committee's Russia
investigation to the Special Counsel's office.
Republicans are happy the Democrats are joining us in reiterating what the Republican-led
committee already voted to do in September 2018 -- make all the transcripts available to the
executive branch, including the Special Counsel's office, as part of the process of
publishing them for the American people to see.
In light of the unacceptable delay in the Director of National Intelligence's
declassification review, we hope the Democrats will now join us in further increasing
transparency by voting to immediately publish all the unclassified transcripts that we
previously sent to the executive branch.
Additionally, we call on our Democratic colleagues to grant our request to subpoena
numerous witnesses whose testimony the Democrats had previously sought in connection with the
committee's Russia investigation.
... Republicans today also put forward a motion to subpoena around a dozen witnesses.
Those people, including officials involved in the FBI's Russia investigation as well as
people likely to be familiar with the compilation of the Steele dossier. ...
It's a damn shame they didn't make that motion a month ago when they were in the majority
on the committee.
There is a reason why Republicans did not do so when they controlled the house. Think
Uniparty! The Dems and Reps are two faces of the same party! The Uniparty did not want this
to happen! Now that the Reps are minority, they can act like Reps because majority Dems won't grant
their request! See how that works!!!!
This is how deep state protects it crime family members Rep and Dems! Think Uniparty! Then everything will suddenly start to make sense to you!
freedommusic
Attorney General and Secretary of Homeland Security Submit Joint Report on Impact of Foreign Interference on Election and
Political/Campaign Infrastructure in 2018 Elections
Although the specific conclusions within the joint report must remain classified, the Departments have concluded there is
no evidence to date that any identified activities of a foreign government or foreign agent had a material impact on the
integrity or security of election infrastructure or political/campaign infrastructure used in the 2018 midterm elections for
the United States Congress.
So no Russian interference in the 2018 election. What about any domestic interference? I don't see that mentioned...
deepelemblues
MUH RUSSIA has been a never-ending chain of diminishing returns for two and three quarter years
Democrat politicians are lying to the people who care about MUH RUSSIA. These politicians don't care about it. They
never did. From the start it was nothing more than a way to keep a certain powerful faction of their party in line by
dangling MUH RUSSIA keys in front of them. Jingle-jangle, jingle-jangle...
They can't stop because the mindless rage monsters they whipped up (aka the shrieking base of the ever-growing left
wing of the Party that lives on Cuntbook and Twatter) will turn on them if they do with a tantrum of historic
proportions
Your average black Democrat voter don't care about this MUH RUSSIA ********
Your average hispanic Democrat voter don't care about this MUH RUSSIA ********
Your average white Democrat voter don't care about this MUH RUSSIA ********
Only the hyperpoliticized REEEEEEEEEEEEEEEEEEEEE machines whose entire lives are wrapped up in DUH STRUGGLE care about
this MUH RUSSIA ********
TeraByte
I can only refer to history
https://en.wikipedia.org/wiki/Proscription
In the Roman Empire enemies of the state were blacklisted and they simply vanished.
The Sum of Some Global Fears
Setting the table for a smorgasbord recession.
By Paul Krugman
The last global economic crisis, for all its complex detail, had one big, simple cause: A
huge housing and debt bubble had emerged in both the United States and Europe, and it took the
world economy down when it deflated.
The previous, milder recession, in 2001, also had a single cause: the bursting of a bubble
in technology stocks and investment (remember Pets.com?).
But the slump before that, in 1990-91, was a messier story. It was a smorgasbord recession
-- a downturn with multiple causes, ranging from the troubles of savings and loan institutions,
to a glut of office buildings, to falling military spending at the end of the Cold War.
The best guess is that the next downturn will similarly involve a mix of troubles, rather
than one big thing. And over the past few months we've started to see how it could happen. It's
by no means certain that a recession is looming, but some of our fears are beginning to come
true.
Right now, I see four distinct threats to the world economy. (I may be missing others.)
China: Many people, myself included, have been predicting a Chinese crisis for a long time
-- but it has kept not happening. China's economy is deeply unbalanced, with too much
investment and too little consumer spending; but time and again the government has been able to
steer away from the cliff by ramping up construction and ordering banks to make credit
ultra-easy.
But has the day of reckoning finally arrived? Given China's past resilience, it's hard to
feel confident. Still, recent data on Chinese manufacturing look grim.
And trouble in China would have worldwide repercussions. We tend to think of China only as
an export juggernaut, but it's also a huge buyer of goods, especially commodities like soybeans
and oil; U.S. farmers and energy producers will be very unhappy if the Chinese economy
stalls.
Europe: For some years Europe's underlying economic weakness, due to an aging population and
Germany's obsession with running budget surpluses, was masked by recovery from the euro crisis.
But the run of good luck seems to be coming to an end, with the uncertainty surrounding Brexit
and Italy's slow-motion crisis undermining confidence; as with China, recent data are ugly.
And like China, Europe is a big player in the world economy, so its stumbles will spill over
to everyone, the U.S. very much included.
Trade war: Over the past few decades, businesses around the world invested vast sums based
on the belief that old-fashioned protectionism was a thing of the past. But Donald Trump hasn't
just imposed high tariffs, he's demonstrated a willingness to violate the spirit, if not the
letter, of existing trade agreements. You don't have to be a doctrinaire free-trader to believe
that this must have a depressing economic effect.
For now, corporate leaders reportedly believe that things won't get out of hand, that the
U.S. and China in particular will reach a deal. But this sentiment could turn suddenly if and
when business realizes that the hard-liners still seem to be calling the shots.
The shutdown: It's not just the federal workers not getting paid. It's also the contractors,
who will never get reimbursed for their losses, the food stamp recipients who will be cut off
if the stalemate goes on, and more. Conventional estimates of the cost of the shutdown are
almost surely too low, because they don't take account of the disruption a nonfunctioning
government will impose on every aspect of life.
As in the case of a trade war, business leaders reportedly believe that the shutdown will
soon be resolved. But what will happen to investment and hiring if and when corporate America
concludes that Trump has boxed himself in, and that this could go on for many months?
So there are multiple things going wrong, all of which threaten the economy. How bad will it
be?
The good news is that even taking all these negatives together, they don't come close to the
body blow the world economy took from the 2008 financial crisis. The bad news is that it's not
clear what policymakers can or will do to respond when things go wrong.
Monetary policy -- that is, interest rate cuts by the Federal Reserve and its
counterparts abroad -- is normally the first line of defense against recession. But the Fed has
very limited room to cut, because interest rates are already low, and in Europe, where rates
are negative, there's no room at all.
Fiscal policy -- temporary hikes in government spending and aid to vulnerable workers -- is
the usual backup to monetary easing. But would a president who's holding federal workers
hostage in pursuit of a pointless wall be willing to enact a sensible stimulus? And in Europe,
any proposal for fiscal action would probably encounter the usual German nein.
Finally, dealing effectively with any kind of global slump requires a lot of international
cooperation. How plausible is that given who's currently in charge?
Again, I'm not saying that a global recession is necessarily about to happen. But the risks
are clearly rising: The conditions for such a slump are now in place, in a way they weren't
even a few months ago. Reply
Tuesday, January 29, 2019 at 11:07 AM
As Karl Marx wrote in the middle of the nineteenth century: Imbalances in pre-capitalist
economies do not produce aggregate demand crises and collapses. Why don't they? Because
Pharaoh can always command that another pyramid be built, the king can always set out on
another crusade, and the bishop can always build another cathedral. The expenditures that
provide employment for those not producing the consumption-goods-in-demand only have to make
profit-and-loss sense under the capitalist mode of production. Capitalist economies suffer
Hayek-Minsky crises when deluded financial markets suddenly recognize that they have been
over optimistic, have over invested, and need to shift investment-goods production back down
not to normal but way below normal. And the collapse comes as near-universal bankruptcy and
financial disruption prevents any such smooth expenditure-shifting. That Hayek-Minsky
overinvestment crisis is what Paul Krugman, I, and other China-pessimists have been fearing
for two decades now. But perhaps socialism with Chinese characteristics is insufficiently
capitalist for that Hayek-Minsky logic to apply, and Paul and I and others should have been
paying more attention to Uncle Karl. * **
Let us get Delong to write about a public banking system, not-for-profit, that provides
basic banking services to account holders and has the credit-creating privilege to fund
mortgages, durable goods lending, educational support lending with the goal of supporting
medium term basic consumption needs of the population while even offering to pay a good
interest on the monies held in these personal accounts.
He needs to think more about why credit creation by the public's government cant
supplement the private wielding of this privilege (held by banks now, which he ponts out is a
source of instability of great risk) as done in the US type countries.
The Chinese have moved to a mixed view, coming from one pole; we can have a mix too?
I'd suspect we would do it better because of our form of government and freedoms. We need
more people like him thinking about this mix. And more people like Bernie Sanders who
mobilizes such discussions into public discourse.
The state must control the commanding heights of the credit system
And use that control for the common good
Btw
The citizenry needs a place to store money form
Wealth against devaluation
Nothing more nothing less
A rate of real interest equal to the rate of change in labor productivity should
be.limited to stored income directly from labor earnings
Not earning on earnings
Or the Pharoah can increase military spending. Like Rome. A corruption of the human
conscience that lasted for over one thousand years, compared to our puny 250 years.
I am a critic of Dr. De Long, with a memory of his ambition exceeding his reasoning. In his
former life, he was a China dove, selling the neoliberal nostrum of free trade at the
pinnacle of power.
A Walmartian apologist without the requisite wisdom.
Part of their criticism of China was its alleged overinvestment in "pyramids" in the form of
ghost cities, empty buildings, and fast trains without passengers.
Turns out that even if true, that was a pretty clever economic plan.
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments. You can have considerable private property and enrichment
under that "insufficiently capitalistic" umbrella.
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments. You can have considerable private property and enrichment
under that "insufficiently capitalistic" umbrella.
[ Chinese monetary and fiscal policy are primarily directed rather than general. So that a
region, urban or rural, or class of companies or class of households will be the focus. China
is presently building entire cities...
As for building pyramids, building usually anticipates use so that a project may take time
to be well "occupied" or "utilized" but as I track projects the use comes and comes. The
Chinese are just now completing a global positioning system and while the system adds to that
of the United States use is increasing dramatically in China and beyond. This year there will
be between 2 and 3 satellite launches weekly on average, but the Chinese anticipate need.
]
Yes
Building for future use that will come in time
The discount in the delay only applies if superior sides of finds are passed over
Ie if there's slack the opportunity cost is
Not a real cost
Every development system faces an unknowable path of innovation and pattern development
Vieeeing development at the firm level is never optimal.
Yes full best use utilization earlier is
Improving outcomes and clearly a constant goal of development
But real cost is measured by alternative projects not actual built because the chosen project
crowds it out
With slack this can be avoided by increasing use of existing but unde utlized productive
factors
Notice the causal circle here
Better utilization all the way around
In a a system with unknown unknowns
And real time planning constraints
We just do the best we can 24/7/365
Were Chinese planners to work according to demonstrated present need alone, most of Chinese
infrastructure would not be built. Planning means anticipation for the Chinese and I can
assure any reader who has not been to, say, Shanghai that the supposed pyramids that have
been built are repeatedly proven useful to essential.
I remember an especially fierce typhoon approaching the southern coast of China west of
Hong Kong not long after new rail lines had been completed. The Chinese emergency authorities
evacuated some 4 million people in 24 hours to avoid the storm and there was no difficulty.
The return was also smooth and fast.
Article after article in the Western press about China will argue that projects are
"pyramids," and far too expensive, in the building and in use, even for pyramids, and Chinese
planners seldom respond, but later a high-speed rail system extending from Hong Kong to
Beijing will come to be so well traveled that there will be complaints in the Hong Kong press
about all those bustling "mainland" commuters (880,000 passengers in the opening 2 weeks).
The bridge-tunnel system extending across the bay from Hong Kong to Macao? Well, the
Chinese want an urban area extending from Hong Kong to Macao...
Keynes used the narrative about burying stuff and paying people to dig it up as a way to
support demand and physical distributions of flow where needed.
I wonder what he might have said if he faced a population of this size. I think he would
understand what the chinese officials have done.
Keynes used the narrative about burying stuff and paying people to dig it up as a way to
support demand and physical distributions of flow where needed.
I wonder what he might have said if he faced a population of this size. I think he would
understand what the Chinese officials have done.
[ What the Chinese have done is create moderately prosperous lives for hundred of millions
of people, so in a sense stuff has been buried and dug up but this was wildly productive
stuff. Forty-two years of real GDP growth at 9.5% yearly and per capita GDP growth at 8.4%
yearly with the "slow" GDP growth of 2018 at 6.6%.
Life expectancy increased by 11 years from 1977 through 2016, and was 7.7 years higher
than that in India in 2016 and within 2.4 years of that in the United States. ]
I think what you meant to say that American capitalists made a deal with a communist
dictatorship to undermine the labor movement in the Western economies, resulting in a
transfer of wealth from the Western middle class to the Chinese peasantry and the
capitalists. Labor arbitrage.
You always claim that the pittance to the peasants justifies the destruction of American
labor. You are a neoliberal apologist of the worst kind. You must have tenure.
Conjecture China should still be developing at 9 percent...
[ This must be explained. After all, what about India or Brazil or South Africa or
Indonesia or Mexico or Nigeria...?
Chinese planners projected yearly growth at 6.5% through this current 5 year period. The
gains that are being aimed for take more application of technology, more advanced technology,
and specific programs for the poorer regions. ]
And the chinese may have acknowleged the need to move a bit more slowly, urbanization brings
environmental issues that ought to be balanced and rapid change threatens a much needed
balance.
And perhaps they are getting more stable, so to speak, in anticipation of inroducing a
retirement earning system, like our social security system. I assume they will do this as it
is one way to boost consumerism and reconcile the ageing society pressures (fewer next
generation people to take care of the elderly as they ply their urban lives means the old
needs an income stream to buy services). So they need to take care more not to dissipate
resources wastefully or public sentiments until they are ready - so going a but more slowly
might help.
Also, in thinking about the rate of Chinese growth slowing from a 42 year average of 9.5% to
6.5%, the emphasis that is being placed in China on clean or green growth might slow the rate
at least in transition years. I think that Dean Baker wrote on this growth characteristic a
few years ago and I will find the paper.
Make no mistake however, green growth is being emphasized through China.
Simply accelerate the green transition in as much as its about new and different machines.
[ Agreed, which is just what China is now doing in regard to electric vehicles. This year
will be a fine test of how fast China and grow as a greening economy, for President Xi is
going to publish a paper this week focusing on just how necessary green growth is for
China.
I have the paper from Dean Baker, but an unconvinced that a green transition for an
economy means slower growth:
They way our economists measure the value of these "pyramids" is hopelessly inadequate. E.g.
where is the accounting that measures the opportunities opened to young people from remote
villages engaged in small-scale agriculture.
And to your other point, they measure each project at a firm level (would a private
company be making a profit from this?) and miss the projects effect on the larger
economy.
And to make them (our economists) look even worse, even by their own measures most of
these projects are quite successful.
Maybe they should be looking at China and trying to learn something. Wait, hasn't someone
been saying that?
They way our economists measure the value of these "pyramids" is hopelessly inadequate. E.g.
where is the accounting that measures the opportunities opened to young people from remote
villages engaged in small-scale agriculture....
Oh they are looking at China and learning plenty about how a dictatorship can control the
population and repress opposition. I cannot believe the ignorant, glowing discussion of
Chinese fascism on this site in defense of disproven economic principles, actually quoting
Marx, the disprover.
A sense of what green infrastructure development has meant in urban China comes from American
company 3M recording a revenue decline because the sales of masks to protect against smog in
Chinese cities has fallen so steeply. Turning coal use to natural gas, makes lots and lots of
difference...
The stats should put a value on pollution reduction
[ That has been a thought for years and years, but has gone nowhere. I am interested in
what is counted in GDP, with a green emphasis being reflected by other data. Weighing turtles
against shovels is of no consequence. ]
As I understand it, the Chinese government has kept a tight rein on their financial system
and its allocation of investments....
[ Not company by company control, but control of investment direction coupled with
monitoring of company performance. China has been increasingly emphasizing the importance of
advanced technology investment (research and development).
The United States years ago blocked China from participation in the International Space
Station program. China then began to develop a space station of its own and is already
offering access internationally. China just sent a satellite and rocket and lander and rover
to explore the far side of the moon. The intent late this year is to land again on the moon
and this time to retrieve samples of the crust and return them to earth. ]
Returning to earth, there is scarcely a day when the Chinese leadership does not call
attention to the severe poverty ending programs that will hopefully have set an economic
floor for Chinese through the entire country. That means infrastructure through the poorer
regions of the country or those regions that are considered economically viable with
assistance. As for pyramids, that means building houses and all that is necessary for housing
to be viable from roads and power and communications to schools and health care facilities
and investing in jobs.
Yes simply expanding payments to households will increase GDP
How much real how much just nominal is a good question
Tra Dr could go put of wack of course
But so what
China is a developing nation
Short run
Trade deficits are not a problem at full tilt domestic production
"Fauxcahontas " is never going to live this one down.
In a report published Tuesday night, just before President Trump started his State of the
Union,
the Washington Post revealed that it had discovered a document where 2020 Democratic
presidential contender Elizabeth Warren, who was exposed by a DNA test that backfired late last
year for having a negligible amount of Native American heritage, listed her race as "American
Indian" on a registration card for the Texas State Bar in the mid-1980s.
The card lists Warren's name, gender and the address for the University of Texas law school
in Austin, where she was working at the time. On the line for "race," Warren wrote: "American
Indian." Meanwhile, lines for "National Origin" and "Physical handicap" were left blank.
As
WaPo explains, "the card is significant" because, for the first time, it shows that Warren
"directly claimed the identity."
One spokeswoman said Warren was sorry for "not more mindful of this" (presumably referring
to the risks that this would all blow up in her face later in life), when she was younger, and
for falsely identifying as a Native American for more than two decades.
"I can't go back," Warren told WaPo.
According to WaPo, the card, dated April 1986, is the first document to surface showing
Warren claiming Native American heritage in her own handwriting. Her office didn't deny the
authenticity of the document.
WaPo explained that it found the card through an open-records request.
Using an open records request during a general inquiry, for example, The Post obtained
Warren's registration card for the State Bar of Texas, providing a previously undisclosed
example of Warren identifying as an "American Indian."
The card was filled out by Warren after she was admitted to the Texas bar. Her reasons for
joining the bar are unclear: Though, at the time, she was doing legal work on the side, the
work wasn't anything that required her to be admitted to the bar. The date on the card
coincided with her fist self-identified listing as a "minority" by the Association of American
Law Schools, where she reported herself as a minority in the directory every year beginning in
1986 (the year the Association started listing minority law professors). Her name dropped off
that list in 1995.
Warren also famously had her ethnicity changed to Native American from "White" in December,
1989 while working at UPenn, two years after she was hired. She also listed her ethnicity as
Native American when she started working at Harvard Law School in 1995.
In a sign that Warren's listing herself as Native American may have been more an act of
self-delusion than an attempt to give herself a leg up in the world of academia, the card
explicitly states that "the following information is for statistical purposes only and will not
be disclosed to any person or organization without the express written consent of the
attorney."
Back in October, Warren's decision to release her DNA test results revealed that she had a
negligible level of Native American heritage (possibly as little as 1/1,024 Native) while the
stunt - which backfired spectacularly - angered leaders of the Cherokee nation, who, as WaPo
explained, typically exercise tight control over the process of connecting individuals with the
tribe. Warren's apology for that incident hasn't been uniformly accepted, and there are still
some who want to see a more thorough apology from Warren.
Whether this is enough to sink her primary bid remains to be seen. But one thing is for
sure: We imagine President Trump will be weighing in with some more prospective campaign
materials.
When you overemphasize and exaggerate identity politics beyond all reason, you're bound to
get plenty of people playing these angles. She's already benefited from it, so too *******
bad.
Obama graduated from Columbia University in 1983 with a degree in political science and
graduated magna cum laude from Harvard Law School in 1991.
Trump graduated from the undergraduate school of finance and commerce at Penn
(Wharton school), but he did not graduate at the top of his class or with honors. He did NOT
graduate at the top of his class at Wharton undergrad or grad, as the Liar in Chief has
frequently quipped. It is believed he was in the bottom third of the undergraduate class.
It is illegal under federal law to release any former student's records to
reporters or members of the public without that person's specific, written permission. Obama
hasn't released them, but neither have other presidential candidates released their college
records.
Trump has not released his records from Penn either. But of course he is your Orange
Geezus, so this is an inconvenient truth for you
So Trump imposed sanction on the USA too. Of he hopes that Strategic petroleum reserve will
compensate for shortages... If Venezuela color revolution develops into Libya scenario, which
they could oil output can be suppressed for years to come. In other words Trump really has
chances to became Republican Obama.
Moreover, not only are the effects of the sanctions more far-reaching, but also more
immediate than first thought. At first, the U.S. seemed to exempt shipments that were underway,
outlining a sort of phased approach that would allow a handful of American refiners to
gradually unwind their oil purchase from Venezuela. The phased approach, which was supposed to
be extended into April, would help "to minimize any immediate disruptions," U.S. Secretary of
Treasury Steven Mnuchin said in late January.
But that now does not appear to be what is unfolding. PDVSA has demanded upfront payment,
likely because it fears not being paid at all or having the revenues steered to the opposition.
Indeed, the U.S. effort to steer PDVSA and its revenues into the hands of the U.S.-backed
opposition leader Juan Gauidó appears to be a decisive turning point.
Oil tankers linked to Chevron, Lukoil and Respsol are delayed, redirected or sitting
offshore because of lack of payment. The WSJ says that several of those tankers had recently
sent oil to Corpus Christi, Texas, but are now anchored off the coast of Maracaibo sitting
idle. "This is an absolute disaster," Luis Hernández, a Venezuelan oil union leader,
told the WSJ. "There's almost no way to move the oil."
Unable to sell any oil, Maduro's regime could quickly run out of cash. The result could be a
humanitarian catastrophe, a merciless and destructive objective that the Trump administration
seems to have in mind. The U.S. government is essentially betting that by driving the country
into the ground, the military and the people will turn on Maduro. It could yet turn out that
way, but it could also deepen the misery and exact an unspeakable toll on the Venezuelan
population, the very people the Trump administration says it is trying to help.
In the meantime, oil exports are likely heading into a freefall. The WSJ says that labor
problems, including "mass defections of workers" are accelerating declines. PDVSA could soon
run out of refined fuel.
Officials with knowledge of the situation told the WSJ that Venezuela's oil production has
likely already fallen well below 1 million barrels per day (mb/d), down more than 10 percent
– at least – from December levels.
Wood Mackenzie estimates that production
probably stands a little bit higher at about 1.1 mb/d, but that it could soon fall to 900,000
bpd.
... ... ...
That would push up oil prices significantly. But the U.S. government has blown past the
point of no return, leaving it with no other options except to escalate. That means that
Venezuela is set to lose a lot more oil than analysts thought only two weeks ago .
CLEVELAND -- In a devastatingly sad overestimation of his influence in the professional
world, local father Bruce Tenety, 54, expressed the heartbreaking belief Monday that his
connections could help his son Justin, a recent college graduate, find a job. "You know, I
actually have a friend in the media business, and if you shoot him an email and meet up for
coffee, he just might be able to hook you up with something," said Tenety, who depressingly
appeared to be under the impression that this tenuous contact from a conference he attended
three years ago would not only remember his name, but would also be willing to extend an offer
of employment to a 23-year-old he knows nothing about.
"I also know a guy who works at a PR firm in Mayfield Heights. Old Gary definitely owes me
one from back in the day.
Hell, you could probably call him up right now and get an interview this week. Just tell him
you're Bruce's kid."
At press time, sources confirmed Tenety had noticed his name was suspiciously absent from
the references section on his son's most recent job application.
"Stocks have reached a permanently high plateau", "subprime is contained", "there's no
icebergs this far south" and now "The Fed's balance sheet is not the threat that people seem to
think it is."
Man's ability to willfully ignore 'downside possibilities' and remain cognitively dissonant
far longer than logic (or their pocketbook) should allow seems to know no bound and none other
than
The Federal Reserve's Bill Dudley just unleashed what could be the piece de resistance of
"nothing to see here, move along" agitprop.
Great Picture' Cowboying a Nuke while discussing confidence in the FED, quite appropo'
!
TRUTH @ 9:00; Plus this week, Friday will be Huge !
Should a seated President jail someone that attempted his Assassination, or a Former
President that planned to Nuke the Yellowstone Super Volcano Caldera, or someone that sold
email password to China and CC copied all 'to and from' messages including those highly
Confidential, or blame a former President for planning 911 False Flag attack, or expose
Planned Parenthoods first Amputating tongues for silently shipping in bulk, or expose
Democrat history of Decades of Projecting blame while committing War Crimes, or end 19 Year
War in Afghanistan ( Longest War ) then Syria against Last Night's Congressional Vote to keep
status quo, or 'take a knee' and quit being President !
Tax havens are used as an instrument to increase the profitability of US multinationals at the expense of
the public, according to investigative economist and lawyer James Henry.
He told RT that there's a tiny group of the world's elite professionals, banks, law firms, and accounting
firms that make a nice living from the global tax haven industry. Multinational companies, and their
shareholders to some extent, have benefitted from the fact that they were able to park US profits
offshore and avoid paying US corporate income tax.
"The rest of us who have to pay for the taxes that corporations are not paying, are seeing the
race to the bottom, we're seeing many countries around the world slashing corporate taxes and putting
more of the costs of the government on ordinary taxpayers,"
said Henry, a senior advisor at the Tax
Justice Network.
He explained that America's wealthy kleptocrats, tax-dodgers, and particularly multinational companies
have been massively parking money offshore. By 2017, US multinationals have
"accumulated about $2.6
trillion offshore while they didn't have to pay the 35 percent US corporate tax,"
the economist
said.
Henry points out that the Trump administration has slashed that tax to about 15 percent and now they
have eight years to pay it while not even being required to repatriate the money hoarded offshore.
"The new tax bill was a disaster but it did benefit the major companies by allowing them to get
their $2.6 trillion back home tax free,"
Henry said.
The senior fellow at Yale noted that bringing the tax rate back to less than five percent from the
current fifteen, would mean
"a $600 – 800 billion gift to the wealthiest companies on the planet."
Ninety percent of corporate shares are owned by the top one percent, he said.
Tax havens are used as an instrument to increase the role of profitability of the US multinationals
and the oil companies all use tax havens aggressively to reduce taxation, according to Henry.
In general, since the financial crisis the world has increased its debt levels to an unprecedented
proportion. So, the countries tended to borrow to fill the gap.
"It would go a long way over time
toward chipping away from the massive debt burden that we have."
The US has actually become a safe haven of its own, Henry said, adding that there's no beneficial
ownership reporting, no country by country reporting.
"The US has some of the most aggressive
enablers on the planet – accounting firms and law firms that are enabling this activity. A lot of
multinationals that have been exploiting the tax haven system are US companies like Apple, Google, and
Microsoft."
While historically the US has always been a proponent of a progressive taxation lately that's been
lagging, he stressed.
The original bronze disks of Rome circulated as currency. The metal money of U.S.
Confederacy circulated that is until the Confederacy became no more.
The point? Money's true nature is law. When a country collapses, then its money
collapses.
Paper money that was good? Lincoln's greenbacks circulated at par. Massachusetts Bills
circulated as money and prevented Oligarchs from England and their attempted takeover. The
colony used the money to make iron goods (like Cannons) and do commerce.
The real statement is this: Money when it becomes unlawful, always collapses.
Massive money printing can happen when too many loans are made, as in the case today as
all private bank credit notes come into being with loan activity -- a little more that
98%.
Driving a currency down with shorts causes new money to be loaned into existence, which in
turn is the underlying cause of hyperinflations. The new credit creation covers the short.
This mechanism always goes along with exchange rate pressures, where your country has to pay
a debt in a foreign currency.
If you had an internal gold currency, which is recognized internationally, then your debts
would be paid in gold, which would collapse your country into depression instead of
inflation.
Bottom line is that money's true nature is law, and making claims about "paper" or "metal"
obscures this fact.
Since both the Fed and your local bank create money from nothing
They also impose some obligations: repayment of principle and interest. Since we
can't create money from nothing, this payback has to come from money somehow created by the
banks as well.
I'm less worried about "disappearing" tax money than I am about misallocated spending
and its consequences -- eg the 'black budget' of the NSA and 'deep state' generally.
Can't we worry about everything ?
Good point about the 'black budget'. But the last time some sort of DOD audit was
attempted the Pentagon accountants' offices got hit by a missile, I mean airliner, on
911.
"... By Steve Roth, publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha. Twitter: @asymptosis. Originally published at Evonomics ..."
"... And they're dead wrong that there's no difference between the two. Buybacks steal money not so much from corporate wages, but much more obviously and explicitly: from taxes that contribute to our common public purse. ..."
"... noblesse oblige ..."
"... Given the legal ability of corporate managers to use corporate funds to actively manipulate stock prices for their private benefit, how many of those corporate managers use their 'omniscience' to goose their private benefits and just how closely has the SEC been watching for insider trading? Martha Stewart learned her lesson in a show trial for our entertainment, but are we really supposed to believe she is the only person making use of inside knowledge to do a little private stock dealing? ..."
"... Our Society gives a special place to business enterprise on the theory that it benefits us all through innovation in products, their production, and distribution, and that business provides a livelihood for our people. Corporations receive disproportionate benefits protecting them from risk in their ventures. Stock buybacks and financial manipulations undermine the creative impetus [such as there were] that once drove corporate management, or more accurately they redirect that 'creative impetus' toward schemes for most efficiently looting what past managers built. ..."
The Real
Reason Stock Buybacks Are a Problem Posted on February 5,
2019 by Yves
Smith Yves here. Even though this article on stock buybacks by Steve Roth, cross posted
below after this lenghty introduction, makes an important central point, I believe it is
missing the forest for the trees. Roth acts as if stock buybacks are merely an alternative to
dividends (or investing or paying workers more). It's far worse than that. Since the crisis,
many companies have been borrowing to buy back stock. And why is that? Duh, because executives
have big time incentives to goose the stock price, and stock buybacks have become a socially
acceptable way to manipulate share prices.
We have from time to time published the work of William Lazonick, who has made a much more
comprehensive critique of stock buybacks, with considerable underlying data. It's great to see
his ideas finally going mainstream with the publication of an op-ed in the
New York Times by Chuck Schumer and Bernie Sanders (odd couples like that tell you the
tectonic plates are moving), and more important, their plan to introduce legislation to curb
buybacks. As they sketched out:
Our bill will prohibit a corporation from buying back its own stock unless it invests in
workers and communities first, including things like paying all workers at least $15 an hour,
providing seven days of paid sick leave, and offering decent pensions and more reliable
health benefits.
In other words, our legislation would set minimum requirements for corporate investment in
workers and the long-term strength of the company as a precondition for a
corporation entering into a share buyback plan. The goal is to curtail the overreliance on
buybacks while also incentivizing the productive investment of corporate capital.
As you'll see, this is actually a modest proposal, although forcing companies to take care
of workers before they engage in share price manipulation is an important reordering of
priorities.
By way of contrast, here is the key section of a 2018 post by Lazonick, who also gives
credit to the Congresscritters who have been dogging this abuse for some time:
For the Republican corporate tax cut to result in job creation, Congress must follow it up
with legislation to rein in these distributions to shareholders. There is a straightforward
and practical way to accomplish this objective: Congress should ban corporations from doing
stock buybacks, more formally known as open-market stock repurchases. As if more evidence
were needed, here are three reasons to expect that corporations will use the Republican tax
break to do stock buybacks.
First, the stock-based
compensation of senior executives incentivizes them to do distributions to shareholders.
Annual mean remuneration of CEOs of the same 475 companies listed on the S&P 500 from
2007 through 2016 ranged from $9.4 million in 2009, when the stock market was in the dumps,
to $20.1 million in 2015, when the stock market was booming. The vast majority of this total
remuneration, ranging from 53 percent in 2009 to 77 percent in 2015, was in the form of
realized gains from stock-based options and awards.
Second, for more than three decades, executives of major U.S. corporations have preached,
conveniently masking their self-interest, that the paramount responsibility of their
companies is to " create value " for shareholders.
Most recently, from 2007 through 2016, stock repurchases by 461 companies on listed on the
S&P 500 totaled $4 trillion, equal to 54 percent of profits. In addition, these companies
declared $2.9 trillion in dividends, which were 39 percent of profits. Indeed, top corporate
executives are often willing to incur debt, lay off employees, cut wages, sell assets, and
eat into cash reserves to "maximize shareholder value."
Third, in recent years hedge fund activists have ramped up the pressure on companies to do
buybacks. With their immense war chests of billions of dollars of assets under management,
these corporate
predators have used the proxy voting system, " wolfpack " collaboration
among hedge funds, and direct engagement with management, which was once illegal, to
participate in the looting of the U.S. business corporation.
Repurchases done on the open market, which constitute the vast majority of all buybacks,
are nothing but manipulation of the stock market. So why are companies allowed to do them?
Because of the 1980 election of Ronald Reagan as president on a platform of market
deregulation. In November 1982, after Reagan had appointed Wall Street banker John Shad as
chairman of the Securities and Exchange Commission (SEC), the agency adopted
Rule 10b-18 , which permits a company to do buybacks that can amount to hundreds of
millions of dollars per day, trading day after trading day, without fear of being charged
with stock-price manipulation. Rule 10b-18, which remains in force 35 years later, is a
license to loot the U.S. business corporation.
The argument for rescinding Rule 10b-18 is overwhelming. As research I've done with the
Institute for New Economic Thinking documents, buybacks wreak immense damage on households,
companies, and the economy. The profits that major corporations reinvest in productive
capabilities form the
foundation for a prosperous middle class. Buybacks deprive companies of that investment
capital, instead serving as a prime mode of making the richest households richer while
eroding middle-class employment opportunities.
Moreover, the justification for buybacks rests on the faulty
ideology that, for the sake of economic efficiency, companies should be run to "maximize
shareholder value." Agency theory, the academic thinking that underpins this ideology,
assumes that only
shareholders take the risk of investing in the productive capabilities of companies. In
fact, public shareholders do not as a rule provide financial capital to companies. They
simply buy and sell
outstanding shares. The true investors in productive capabilities are "households as
workers," whose skills and efforts generate the company's innovative products, and
"households as taxpayers," who devote a portion of their incomes to fund public investments
in infrastructure and knowledge that companies need to be competitive.
Finally, the insidious Rule 10b-18 that for more than three decades has encouraged massive
stock-market manipulation is just an ill-considered SEC regulation, adopted as part of Reagan
"voodoo economics." The justification for Rule 10b-18 has never been debated, nor have its
provisions been legislated, by Congress. That may, however, finally be changing. A number of
U.S. senators, including Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.),
Brian Schatz (D-Hawaii),
and Cory Booker (D-N.J.),
have voiced criticisms of buybacks, as has former Vice President Joseph Biden
.
The most persistent challenge to this corrupt practice has come from Sen. Tammy Baldwin (D-Wis.), who in
2015 wrote
two highly critical letters to
former SEC Chairman Mary Jo White, and who has recently challenged the
prescription drug lobby group PhRMA to reconcile its claim that the pharmaceutical companies
need high drug prices to fund research and development with the fact that the major companies
spend virtually all their profits on buybacks and dividends.
It has hit the point where the biggest buyers of US stocks in aggregate are the companies
that once issued them. This is not how a well functioning economy operates.
By Steve Roth, publisher of Evonomics. He is a Seattle-based serial entrepreneur, and a
student of economics and evolution. He blogs at Asymptosis, Angry Bear, and Seeking Alpha.
Twitter: @asymptosis. Originally published at Evonomics
Bernie Sanders and Chuck Schumer's New York Times op-ed, " Limit Corporate
Stock Buybacks ," has thrown internet gasoline on the buyback debate. The left is waving
the flag, and the right is trying to tear it down.
The core Sanders/Schumer argument: buybacks extract money from firms, money that could be
used to pay workers more, and fund productive investment (including worker training and
upskilling).
The counterargument: how are buybacks any different from dividend distributions that way?
Both transfer cash from firms to households. We don't hear people complaining about dividend
distributions stealing money from workers and investment.
That counterargument is absolutely right, even while it's completely wrong. Because both
sides miss the overwhelming effect of stock buybacks (vs dividends). Buybacks are a massive tax
dodge for shareholders.
Imagine Megacorp wants to transfer a billion dollars to its shareholders (notably including
the huge shareholders in its C suite and on its corporate board). Whether they distribute
dividends or buy back shares, either way Megacorp has a billion dollars less on its balance
sheet. Its book value drops by $1B.
But what happens on the household, shareholder side? With a dividend distribution it's
simple; households get $1B in taxable dividend income. With a buyback, households that sell
shares also receive $1B in cash, but they give up their shares, which obviously have value.
That's where the (perfectly legal) tax avoidance lies -- perhaps best explained by
example:
Suppose the average shareholder's shares were purchased for $20 each. That's the
shareholders' tax basis. If Megacorp pays $25 a share (for 40M shares), the shareholders who
sell have cap gains of $5 a share -- $200M in taxable income -- versus $1B if the same cash is
paid out via dividends.
Dividends and long-term cap gains in the U.S. are currently taxed using the same rates and
brackets: 15% if your income is above $38K, 20% if it's above $425K. If Megacorp chooses a $1B
stock buyback, our imagined shareholders pay $40M in taxes (at the 20% rate), versus $200M in
taxes on a dividend distribution.
Neither of these has any effect on corporate taxes, by the way. C-corporation profits (as
opposed to S corporations and other "pass-throughs") are taxed at the corporate level, whether
they get distributed or not, and no matter which distribution method is used.
There are other important problems with buybacks, mainly having to do with boards' and C
suites' greater discretion over the timing and amounts of buybacks, and the potential for
self-dealing price manipulation. (Contra Schumer and Sanders' odd bank-shot approach to this problem,
we could just repeal Rule 10B-18 .)
But the right is right: Buybacks are no more pernicious than dividends in "stealing money"
from firms, that could otherwise be used for worker pay and productive investment.
And they're dead wrong that there's no difference between the two. Buybacks steal money
not so much from corporate wages, but much more obviously and explicitly: from taxes that
contribute to our common public purse.
There is another consideration – back when marginal taxes at the highest bracket
were much higher, one of the limits of executive compensation was the fact that even if they
engaged in such behvaiour, most of this would be taxed away.
1. A straight up ban on stock buybacks, as they seem to be mainly an instrument for
maximizing executive compensation by boosting EPS and share price, which are common metrics
used to pay executives. They also result in debt from buybacks and less capital for actually
meaningful investments.
2. The "Carried Interest" loophole should be immediately eliminated. This will also
discourage "vulture private equity" as well, a social drain on society.
3. Taxes should be steeply progressive. This is to act as a deterrence against rent
seeking. Perhaps the standard deduction could be increased even for ordinary working class
citizens. Capital gains should be taxed at a comparable rate to labour or even higher (as the
top 10% control 85% of stocks anyways).
4. A special high net worth enforcement unit should be set up in tax collection agencies
around the world. This is to identify and catch high net worth individuals who engage in tax
evasion and possibly aggressive tax planning as well.
5. Tax incentives should encourage corporations to invest in things that are actually
productive, such as R&D, capital expenditures, and employee training. One key issue is
that company executives know that share buybacks are the easiest way to maximize executive
compensation and that they will often only be there for a few years. Competing through a
superior product/service, developing R&D, good corporate culture, etc, is "hard" for
executives and may not lead to a return. Plus it is often short term pain, long term
gain.
6. Corporate governance clearly needs reform and I think that we may need something far
more independent on boards than what is currently there. Often executives have a bias towards
voting for high compensation knowing that they will someday face similar boards. They also
tend to support management or be appointed to be "yes people" as opposed to be
independent.
The biggest issue though is that our society's rich have no sense of noblesse
oblige anymore. Their goal is to maximize their own compensation at society's expense.
Tools like shareholder buybacks and private equity are just a cover for those objectives.
If we want to get fussed over taxes and tax evasion, domestic stock buybacks, capital
gains taxes, and dividend taxes seem like small potatoes compared to the games international
corporations play to realize their profits in countries that don't tax them.
I fail to see the monstrous tax dodge because the analysis fails to consider the integral
of tax payments over the life of the stock.
Whomever sold the current shareholders their stock at $20 must have paid capital gains on
that sale , unless it IPO'd at 20.
So there are effectively two cases. The first is that it IPO'd at 20. In this case, the
shareholders put in the first 800M, and it doesn't seem unfair to tax them only on the
additional 200M the company made.
The second is that it IPO'd at zero. Then the total amount of capital gains tax as it
changed hands up to $20 (where current shareholders bought it) is on $800M. So again, taxing
only $200M doesn't seem unfair.
For ipo prices between 0 and 20 you just have a combination of the two arguments.
One might conclude that the dividend tax double-taxes early share gains.
Why capital gains tax should be less than income tax makes no sense or obvious fairness.
You might want to argue that dividend double-taxation isn't such a bad thing and effectively
compensates for a low capital gains rate.
But the buyback isn't per se a tax dodge any more than the capital gains tax in the first
place. And it would probably be conceptually cleaner just to raise the capital gains
rate.
I didn't address this, and should have. He really is making a mountain out of a
molehill.
Only about 1/4 of US stocks are held by taxable investors (the households he mentions).
Retirement accounts including public and private pension funds, foundations, endowments, and
foreign investors are all tax exempt. So any of them could have been the seller to the
taxable household back in the day.
You could argue that dividends get taxed at current rate, whereas capital gains from
selling shares taxes at the rate at the time of the sale. Ergo, shareholders can wait for a
decrease in capital gains taxes to sell and functionally dodge the taxes they would have paid
if they received a dividend. However, it's still a weak argument as the capital gains rate
could easily go up, and/or the value of the stock itself could fall for some other, unrelated
reason. Yves' and Lazonick's critiques are much more relevant.
It's laudable and important to force companies to properly compensate workers before
initiating stock buybacks. This won't solve he problem of using funds for buybacks instead of
capital investments, R&D etc. To accomplish that we also need to un-Bork anti-trust law
and actually have companies that are honestly competing with each other.
To what extent have stock buybacks enabled corporate managers to leverage income streams
in the corporations they 'manage' to increase corporate debt through bond issues? What
happens to a corporation when it's revenue streams are impacted by ups-and-downs of the
economy? Hasn't Professor Hudson gone on at length describing the instability such debt
creates for a business? Dividends can move up-and-down with revenue streams, but bonds must
be paid or there is a corporate cash flow problem. For a small business that means bankruptcy
while for large corporate players I think that means takeover and merger further
consolidating our monopoly and monopsony bloated Corporations. After all these years of stock
buybacks and consolidation how much cash flow remains to leverage?
Given the legal ability of corporate managers to use corporate funds to actively
manipulate stock prices for their private benefit, how many of those corporate managers use
their 'omniscience' to goose their private benefits and just how closely has the SEC been
watching for insider trading? Martha Stewart learned her lesson in a show trial for our
entertainment, but are we really supposed to believe she is the only person making use of
inside knowledge to do a little private stock dealing?
Worry about stock buybacks now? Too little and I fear much too late. How many of our great
corporations are little more than Potemkin fronts for hollowed out shells of debt feeding a
massive transfer of the wealth our country built over many generations into the hands of the
obscenely wealthy?
Our Society gives a special place to business enterprise on the theory that it
benefits us all through innovation in products, their production, and distribution, and that
business provides a livelihood for our people. Corporations receive disproportionate benefits
protecting them from risk in their ventures. Stock buybacks and financial manipulations
undermine the creative impetus [such as there were] that once drove corporate management, or
more accurately they redirect that 'creative impetus' toward schemes for most efficiently
looting what past managers built.
The bottom line is that this preoccupation with the 'headline number' for the current month
as a single datapoint that is promoted by Wall Street and the Government for official economic
data is misleading.
The effective method of considering a heavily adjusted and revised data series like this is
with a trend analysis of at least seven to twelve observations, and more if you can get
them.
But, that makes for a much less interesting and convenient narrative.
And as for the median wage and income -- it is still too weak to sustain an economic
recovery.
Stocks were a bit weak today, despite all this fabulous economic data, having exhausted the
sugar rush that was spoonfed to them by their friendly neighborhood Federal Reserve.
Looks like pendulum moved in opposite direction and neoliberals (and first of all financial
oligarchy) might be crashed by the return of the New Deal style regulations as well as higher
taxes on incomes. the latter measure is popular even in the USA.
Notable quotes:
"... By Don Quijones of Spain, Mexico, and the UK, and an editor at Wolf Street. Originally published at Wolf Street ..."
"... The bill will face stiff opposition from the domestic banking sector as well as the European Commission, which in 2017, under pressure from Europe's banking lobbies, abandoned its own pledge to break-up too-big-to-fail lenders. ..."
"... Since the global financial crisis, big banks on both sides of the Atlantic have been fighting tooth and nail all regulatory attempts to split their deposit-taking commercial units from their riskier investment banking units. ..."
By Don Quijones of Spain, Mexico, and the UK, and an editor
at Wolf Street. Originally published at
Wolf Street
On Friday, Italy's coalition government
unveiled new banking regulations that it hopes to pass in the coming months, including a
rule that would separate banks' commercial and investment arms. It would be the Italian
equivalent of the Glass-Steagall Act, the 1933 U.S. law that separated commercial banks that
took deposits, made loans, and processed transaction, from riskier investment banking
activities. The law was designed to protect deposits. Its repeal in 1999 led to the
consolidation of the U.S. banking sector, unfettered risk-taking by deposit-taking banks, and
arguably the Financial Crisis just eight years later.
... ... ...
The bill will face stiff opposition from the domestic banking sector as
well as the European Commission, which in 2017, under pressure from Europe's banking lobbies,
abandoned its own pledge to break-up too-big-to-fail lenders.
Since the global financial crisis, big banks on both sides of the Atlantic have been
fighting tooth and nail all regulatory attempts to split their deposit-taking commercial units
from their riskier investment banking units. Such legislation would would make each entity
smaller. And that is not in the interests of the big banks, nor the ECB, which
hopes to breathe life into a new generation of trans-European super-banks by serving as
matchmaker to Europe's largest domestic lenders.
"And you could say in some respects this 'shadow behind the power' that makes money off war, period, no matter who's the belligerent,
makes money off that volatility now, especially with computers that are able to assist them in doing so, like currency manipulation,
for example, or just general speculation. And they don't care about what they're doing to the real economy, because they're raking
in the dough."
Lawrence Wilkerson, former chief of staff to Colin Powell
"There are those contentious and disorderly people, who engage in useless speculation and deceptive talk, and focus on divisive
points of dispute... All things are good to the pure of heart, but to these corrupt and disbelieving controversialists nothing
can be good, since both their minds and and their hearts are corrupted. They may say that they know God, but by their actions
they deny Him, being corrupt and disobedient, and of no use for any good purpose."
Titus 1:10,15-16
It is enlightening to see that even in the earliest of times there were those who made a trade out of controversy, and of spreading
hatred and fear. There are those now who seek to inflame controversy, for their own purposes and those of their paymasters. Nowhere
is this more apparent now than in our polarized political landscape, and most social discourse in the mainstream and on that modern
public forum, the Internet.
Even those who think of themselves as good can get caught up in it. It is one of the greatest of ironies, that we become what
we hate, because that is where we place our attention, and thereby our hearts..
There are sites and places that one can go to and be almost certain of a type of hateful and divisive focus, of easily provoked
anger, and contempt for others, of incivility and almost childlike tantrums, with sweeping generalizations, conclusions and condemnations.
They are 'playing to the mob' and venting their own disquiet hearts.
This is not the same as reform, or of the calling out of injustice to the light. This is the madness that makes a fog in the minds
and the hearts, which serves one to escape the pain of thinking.
Why do we go to these sites, and listen to them, and repeat their deceptive assertions, if not for the thrill of a temporary distraction?
And so often we excuse our participation, saying we only wish to 'inform' others, while poisoning the minds of our friends and our
children.
The weather started getting rough...
But if we are honest, we know that there is no good in this, no good fruits, because there is no love in them. It is difficult to
see at times, because deceit can be cleverly phrased and our emotions are powerfully engaging.
When in doubt always step back and ask, if not of yourself then of the Lord, where is the love in this, where is the fruitfulness
of good works? Is this serving good, or passionate anger of the self and its wrath?
By their actions they show what they are. And these produce nothing good, but only add to the destruction and confusion, for money,
or for the sick release of their own disturbed and disordered minds and hearts, with which they infect many.
Speaking of infections, the Fed's turn to dovishness has reignited the animal spirits of the Bubbleonians™.
Stocks continued moving hired, fueled by a renewed optimism of the 'Fed Put' which is another term for the official backstopping
of speculation in financial assets.
Follows the excerpt from his latest Gartman letter.
We remain positive of equities because of what we have said time and time again each
morning for the past several weeks and which needs to be re-said here this morning yet again
for nothing has changed: the Fed has indeed "changed" its monetary policies and this change
was made clear by Mr. Powell's comments of now more than a month ago and made clearer midweek
last week following the FOMC meeting .
In a flash, the US has scrapped the 1987 Intermediate-Range Nuclear Forces (INF) Treaty,
which safeguarded Europe and the world from a deadly US-Russia arms race. This is particularly
bad news for Europeans.
Russia must be feeling a lot like the Native Indians these days with regards to treaties
signed with the duplicitous Americans. For the second time in as many decades, the US has gone
back on its word, removing another pillar from the global arms reduction architecture.
The Trump administration, in its infinite wisdom, announced on the weekend it
would freeze US participation in the INF " for 180 days ," which, from a military perspective,
must be interpreted to mean forever. In the spirit of reciprocity, Vladimir Putin, expressing
regret that Russia " could not save " the Cold War treaty, said he would be forced to follow
suit.
The Russian leader emphasized, however, that Moscow would not deploy intermediate or smaller
range weapons " until the same type of American weapons " were placed in Europe or elsewhere in
the world.
This latest ratcheting up of tensions between Moscow and Washington was wholly avoidable
– that is, if avoiding confrontation is a goal of the US. Clearly, it is not. The
unpredictable hotheads now dictating foreign policy in the Trump administration, particularly
National Security Advisor John Bolton, a veteran hawk who the Washington Post recently
called a " serial arms control killer, " have somehow concluded that playing a game of
nuclear chicken on the European continent with Russia is the best way to resolve bilateral
issues.
The White House appears to be incensed over Russia's upgrade of a cruise missile, the
'9M729', which it claims exceeds the 500-km flight threshold set down by the treaty. The INF
treaty specifically banned the development, deployment, and testing of ground-based missiles
with a range between 500km and 5,500km (310-3,400 miles).
In fact, the development of this weapon has so irked the Trump administration that last year
the US Ambassador to NATO, Kay Bailey Hutchison, warned
Russia that if it did not halt its development NATO would be forced to " take out " the
missile. Although Hutchison later backtracked on the hyperbole, saying she did not mean to
suggest a preemptive strike on Russia, the remark nevertheless underscored the gravity of the
situation.
The obvious question is: does the US have legitimate grounds to be concerned over this
cruise missile, one of the latest in a series of new weapon systems to be
rolled out by the Russian military? Well, if they did have real cause for concern, they
deliberately missed several opportunities to examine the weapon firsthand. In fact, Moscow
invited US Secretary
of State Mike Pompeo to attend a public presentation where Russian military brass were on hand
to field queries about the missile. Yet the Americans snubbed the event, which could have
persuaded them to think twice before dumping a landmark arms control treaty.
On this point, it would have been refreshing to hear some impartial European voices weighing
in on the matter. After all, in the event of another arms race between the US and Russia, the
European continent will once again be forced to wear a large crosshairs on its back. Instead,
EU leaders predictably approached the issue from the American stance, parroting the narrative
that Russia, the perennial bogeyman, is in violation of the INF.
German Chancellor Angela Merkel, for example, without providing a shred of evidence,
said ,
"It is clear to us that Russia has violated this treaty the important thing is to keep the
window for dialogue open."
Immediately assuming Russia's guilt seems to be a non-starter for any sort of productive
negotiations.
What's behind America's madness?
In order to get a clearer picture of what exactly is motivating Washington's reckless
behavior, it is essential to remember that the Trump administration's withdrawal from the INF
is just the latest in a long string of aggressive moves against Russia . Indeed, this is not
the first time Washington has torn up an arms agreement with Moscow.
In 2002, the Bush administration terminated the 1972 Anti-Ballistic Missile Treaty (ABM
Treaty), which maintained something of a suicide pact between the Cold War nuclear rivals known
as 'mutually assured destruction'. From there it has been all downhill for bilateral
relations.
With the ABM Treaty swept away, the Bush and subsequent Obama administration proceeded to
unilaterally build – despite repeated offers from Moscow to cooperate on the system
– a US missile defense shield in Eastern Europe, just a stone's throw from the Russian
border. In May 2016, NATO announced its missile defense base in Romania was fully operational.
Following the announcement, Mikhail Ulyanov, head of the Russian Foreign Ministry's department
for arms control issues, warned that not only did the
US missile defense system threaten the strategic balance between nuclear powers, the launchers
in Romania could easily be re-fitted with offensive cruise missiles, thereby turning a shield
into a sword at a moment's notice.
In other words, Washington is now accusing Moscow of violating an arms control treaty that
it itself had most likely violated almost three years ago.
Pierre-Emmanuel Thomann, a geopolitics analyst from Paris 8 University, told RT this is the
desired outcome Washington was looking for, which already decided " beforehand to get out of
the treaty " irrespective of possible concessions from Moscow.
" The US already destabilized the nuclear balance when they decided to get out of the ABM
treaty in 2002, and when you look at a map the United States [is] putting missile defense
bases all around Eurasia, creating a feeling of encirclement in Russia and China ," Thomann
said.
This leads us to another possible reason why the Trump administration made the rash decision
to kill the INF treaty, and that is due to the huge strides made by the Chinese military of
late. Last year, as just one example, a Chinese firm reportedly completed the successful
launch of a supersonic missile, which the Chinese government said could compete on
international markets.
China, which is not bound by the conditions set down by the INF, has undergone breakneck
militarization ever since. Yes, the United States became an existential threat to Beijing when
the Obama administration announced the so-called '
pivot to Asia '. This disastrous doctrine saw a large chunk of US naval forces enter the
Pacific theater. Thus, Washington may be trying to bring the Chinese and Russians into some
sort of new three-way arms control treaty, but if that were true, it seems to be going about it
in the worst possible way.
Whatever the ultimate cause may be, the United States and its quest for global supremacy, in
cooperation with the European Union, which behaves like a powerless vassal state inside of the
'American empire', must assume a heavy part of the blame for the increasingly perilous state of
global relations today.
Konstantin Kosachev, head of the foreign affairs committee in the upper house of Russia's
parliament, adequately summed up the fate of the world following the latest US withdrawal from
yet another arms reduction pact.
" I 'congratulate' the whole world ," Kosachev told the Russian Senate.
" The United States has taken another step toward its destruction today. "
The greater the hawkishness, the greater the ignorance .
Notable quotes:
"... As one Washington Post headline observed at the time based on hard data : The less Americans know about Ukraine's location, the more they want to intervene . And now insert most any third world country targeted by Washington over the past few decades. ..."
"... What a pack of turds and this is supposed to be the political elite in this country ..."
As one Washington Post
headline observed at the time based on hard data : The less Americans know about Ukraine's
location, the more they want to intervene . And now insert most any third world country
targeted by Washington over the past few decades.
"The responses from members of Congress painted a shocking picture of ignorance,
hypocrisy"
Lets just stop at ignorance, that pretty much covers it. What a pack of turds and this is
supposed to be the political elite in this country. Would it even be possible to have an
intelligent conversation with this rabble? Would you want to try?
This latest ratcheting up of tensions between Moscow and Washington was wholly avoidable
– that is, if avoiding confrontation is a goal of the US. Clearly, it is not. The
unpredictable hotheads now dictating foreign policy in the Trump administration, particularly
National Security Advisor John Bolton, a veteran hawk who the Washington Post recently
called a " serial arms control killer, " have somehow concluded that playing a game of
nuclear chicken on the European continent with Russia is the best way to resolve bilateral
issues.
Is anyone else tired of the longest, least productive waste of war in American history ? What
have we achieved, where are we going with this ? More war.
We are being fed a fairy tale of war about what men, long dead, did. And the reason they did
it. America is being strangled by the burden of belief that now is like then.
By the patrician men and women administrators, posturing as soldiers like the WW2 army, lie
for self profit. Why does anyone believe them ? Korea, Vietnam, Iraq, each an economic
decision, rather than a security issue.
Capitalists need their options regulated and their markets ripped from their control by the
state. Profits must be subject to use it to a social purpose or heavily taxed. Dividends
executive comp and interest payments included
Well done! Much clearer than your usual. There are several distinct motivations for taxes. We
have been far enough from fairness to workers, for so long, that we need to use the tax
system to redistribute the accumulated wealth of the plutocrats.
So I would say high marginal rates are a priority, which matches both objectives. Wealth
tax is needed until we reverse the massive inequality supported by the policies of the last
40 years.
Carbon tax and the like are a different thing, use of the tax code to promote a particular
policy and reduce damage to the commons.
"...we need to use the tax system to redistribute the accumulated wealth of the plutocrats.
So I would say high marginal rates are a priority..."
Forgive me, but high marginal rates (which I hugely favor) don't "redistribute the
accumulated wealth" of the plutocrats. If such high marginal rates are ever enacted, they'll
apply only to the current income of such plutocrats.
You merged paragraphs, and elided the next one. The way I see it, high rates are a
prerequisite to prevent the reaccumulation of obscene wealth, and its diversion into
financial gambling.
But yes that would be a very slow way to redistribute what has already accumulated.
Didn't mean to misinterpret what you were saying, sorry. High rates are not only "a
prerequisite to prevent the reaccumulation of obscene wealth," they are also a reimposition
of fair taxation on current income (if it ever happens, of course).
Wealth tax is needed until we reverse the massive inequality supported by the policies of the
last 40 years. Carbon tax and the like are a different thing, use of the tax code to promote
a particular policy and reduce damage to the commons.
"
more wisdom as usual!
Although wealth tax will be unlikely, it could be a stopgap; could also be a guideline to
other taxes as well. for example, Elizabeth points out that billionaires pay about 3% of
their net worth into their annual tax bill whereas workers pay about 7% of their net worth
into their annual tax bill. Do you see how that works?
it doesn't? this Warren argument gives us a guideline. it shows us where other taxes
should be adjusted to even out this percentage of net worth that people are taxed for. Ceu,
during the last meltdown 10 years or so ago, We were collecting more tax from the payroll
than we were from the income tax. this phenomenon was a heavy burden on those of low net
worth. All this needs be resorted. we've got to sort this out.
and the carbon tax? may never be; but it indicates to us what needs to be done to make
this country more efficient. for example some folks, are spending half a million dollars on
the Maybach automobile, about the same amount on a Ferrari or a Alfa Romeo Julia
quadrifoglio, but the roads are built for a mere 40 miles an hour, full of potholes.
What good is it to own a fast car like that when you can't drive but 40 -- 50 miles an
hour? and full of traffic jams. something is wrong with taxation incentives. we need to get a
better grid-work of roads that will get people there faster.
Meanwhile most of those sports cars just sitting in the garage. we need a comprehensive
integrated grid-work of one way streets, roads, highways, and interstates with no traffic
lights, no stop signs; merely freeflow ramp-off overpass interchanges.
Jesus Christ said, in so many words, that a man's worth will be judged by his generosity and
his avarice.
" 24And the disciples were amazed at His words. But Jesus said to them again, "Children,
how hard it is to enter the kingdom of God! 25It is easier for a camel to pass through the
eye of a needle than for a rich man to enter the kingdom of God." 26They were even more
astonished and said to one another, "Who then can be saved?"
New York collected $2.3 billion less income-tax revenue than predicted for December and
January, a development that Governor Andrew Cuomo blamed on wealthy residents leaving for
second homes in Florida and other states that received more favorable treatment in the tax law
enacted by President Donald Trump and the Republican Congress.
The shortfall will require a new look at the $175 billion budget Cuomo submitted to the
legislature last month, he said. If the trend continues, the governor said it would affect
spending on high-expense items such as health, education, infrastructure and a planned
middle-class tax cut.
"There is no doubt that the budget we put forward is not supported by the revenue," the
Democratic governor said during a news conference in Albany. "If even a small number of
high-income taxpayers leave, it has a great effect on this tax base. You are relying on a very
small number of people for the vast amount of your tax dollars."
While acknowledging that stock market volatility is among several factors that may have
suppressed income-tax revenue in the past two months, the governor placed most of the blame on
Trump and the Republican-dominated Congress of 2017, which enacted a tax plan limiting federal
deductions on real estate and other local taxes.
Related: New York's Income-Tax Revenue Falls 'Abruptly' Under Forecast
"It was politically diabolical and also highly effective," Cuomo said. "And if your goal is
to help Republican states and hurt Democratic states this is the way to do it."
Internally, a national currency has a value corresponding to demand placed by the
government, such as money for the taxes the state requires of its people. The ups and downs
of Lincoln's Greenback fiat currency, especially its interaction with the value of gold,
demonstrates how currency is tied to confidence in the government, as you suggest.
Externally, a nation's currency usually has value to the extent that a nation has
something to offer others, which makes the currency useful for making a desired purchase.
Today, the "desired purchase" is oil. The dollar is valued because you need dollars to buy
oil, as formerly enforced by diplomatic pressure. Because of US sanctions, trade in oil is
now beginning using rubles, yuan, and most unforgivably, Venezuelan currency! (Like Iraq,
Libya and Syria). If this keeps up, countries will no longer need dollars for their oil, and
$ will have to compete internationally based on other considerations. That won't be pretty.
IMHO, US leaders have dangerously eroding the dollar's pre-eminence by profligate use of
sanctions.
I need to remedy my own deficiencies in this area, but advocates of Modern Monetary
Theory, like Michael Hudson, Steve Keene, and like-minded economists who often post at
nakedcapitalism, make a strong case for a fiat money system, issued and controlled by
state banks, in contrast to the private banks as now.
But objecting to the fact that private bankers charge us interest, and act above the law
and democratic accountability, is such a quaint complaint.
If you are dealing with Goldman Sachs that last thing is to expect moral behaviour from them. They are financial
preduitors and generally dealing with them for smaller clients is a very dangerous undertaking, if you ask me.
Notable quotes:
"... Three months ago, when the loan market was freezing up, Goldman struck an unusual deal with a group of hedge funds to offload a buyout loan from its books, saving the bank and the funds from potential losses. What was odd, is that Goldman was also serving as the underwriter to the company issuing the loans...while at the same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of its own client. ..."
"... Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to hedge-fund sharks who stand to reap major profits if the company collapses as a result of the incremental debt: according to Bloomberg , United Natural had hired Goldman Sachs for the takeover and is now demanding at least $52 million - and potentially much more - from the bank. ..."
"... "I have never experienced this kind of egregious and immoral behavior from a bank in my entire life," United Natural Chief Executive Officer Steve Spinner told Bloomberg in an interview after his company filed the suit Wednesday in a state court in New York. Goldman, which until that moment had been retained by United Natural , vowed to vigorously fight the case, calling it "entirely without merit." ..."
"... Indeed, as Bloomberg notes, " again and again, the contracts have played strange roles in debt transactions, sometimes straining allies or encouraging unlikely alliances. " ..."
"... According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way that allowed hedge funds to reap a windfall from their CDS bets, as first reported by Bloomberg in October . United Natural said it initially heeded Goldman's advice, agreeing to the changes so it could complete the takeover of grocery chain Supervalu. ..."
"... Where things got complicated, is that Goldman enlisted the help of hedge funds that had been betting on Supervalu's demise. Those funds now stand to benefit if United Natural struggles to repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld fees, burdened it with additional interest expenses and relied on "scare tactics" by a senior banker to back it into a corner ..."
"I Have Never Experienced This Kind Of Immoral Behavior From A Bank In My Entire Life":
Goldman Slammed In Latest CDS Scandal
Not a month seems to pass any more without a major bank or hedge fund getting in hot water
for using CDS in a way that was never intended, and now it's Goldman's turn, again.
Three months ago, when the loan market was
freezing up, Goldman struck an unusual deal with a group of hedge funds to offload a buyout
loan from its books, saving the bank and the funds from potential losses. What was odd, is that
Goldman was also serving as the underwriter to the company issuing the loans...while at the
same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of
its own client.
Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant
of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to
hedge-fund sharks who stand to reap major profits if the company collapses as a result of the
incremental debt:
according to Bloomberg , United Natural had hired Goldman Sachs for the takeover and is now
demanding at least $52 million - and potentially much more - from the bank.
Worse, the distributor of natural and organic foods, specialty foods is absolutely furious
at the bank that until recently was its strategic advisor:
"I have never experienced this kind of egregious and immoral behavior from a bank in my
entire life," United Natural Chief Executive Officer Steve Spinner told Bloomberg in an
interview after his company filed the suit Wednesday in a state court in New York. Goldman,
which until that moment had been retained by United Natural , vowed to vigorously fight the
case, calling it "entirely without merit."
As hinted above, Wall Street's latest drama once again revolves around the increasingly
dysfunctional credit-default swaps market, where hedge funds and others wager on the ability of
companies to keep up with their borrowings, only the traditional role of CDS as bankruptcy
hedges has long ago given way to more "creative" applications. Indeed, as Bloomberg notes, "
again and again, the contracts have played strange roles in debt transactions, sometimes
straining allies or encouraging unlikely alliances. "
According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way
that allowed hedge funds to reap a windfall from their CDS bets, as first
reported by Bloomberg in October . United Natural said it initially heeded Goldman's
advice, agreeing to the changes so it could complete the takeover of grocery chain
Supervalu.
Where things got complicated, is that Goldman enlisted the help of hedge funds that had been
betting on Supervalu's demise. Those funds now stand to benefit if United Natural struggles to
repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld
fees, burdened it with additional interest expenses and relied on "scare tactics" by a senior
banker to back it into a corner.
In the beginning it was nothing but rainbows and roses: United Natural, which is a supplier
to Whole Foods, announced the $2.9 billion Supervalu acquisition in July, and with the market
soaring and credit and loan spreads near all time tights, not a cloud appeared on the horizon.
And, as so often happens, the company announced that Goldman Sachs would act as lead
underwriter to sell the billions in debt needed to fund the deal. But just a few months later,
as equities first tumbled and shortly thereafter credit markets - especially in the leveraged
loan market - froze up, the investment bank faced the prospect of being saddled with millions
in losses unless it found a way to offload the loan from its books.
Meanwhile, hedge funds were facing major losses too after having bet against Supervalu's
debt by loading up on CDS, but the company's sale threatened to create a situation known as an
orphaned CDS contract, a situation similar to the infamous McClatchy fiasco (one which we
profiled extensively in "
Orphan CDS, Manufactured Credit Events, Insufficient Deliverables: What The Hell Is Going On In
The CDS Market ?"). Because new debt being issued to purchase Supervalu would have paid
down the grocer's obligations, it could have made swaps linked to Supervalu effectively
worthless - referencing an entity with no significant borrowings - even as the default risk of
the purchaser, United Natural, soared. However, due to the specific nature of the CDS contract,
there was no continuity in tracking the referenced entity, as such those who were betting on a
Supervalu default would end up with nothing, even if the successor company did eventually file
for bankruptcy.
It is here that Goldman had an "epiphany", one which would kill two birds with one
stone.
The key was to restore the value of the roughly $470 million of net CDS wagers linked to
Supervalu's debt. While the cost of the Supervalu derivatives had plunged through most of last
year, by tweaking the loan docs to make Supervalu a co-borrower on the new financing, Goldman
sparked a surge in the value of the swaps.
That, along with several other concessions, not only rescued hedge funds from getting wiped
out on their SVU CDS, but more importantly, helped Goldman fill its order book for the loan and
eliminate its exposure risk.
And while Goldman was the clear winner here, helping a couple of millionaire credit PMs
avoid major losses for 2018 while avoiding taking a loss on its buyout loan exposure, United
Natural claims that Goldman left it exposed to a group of lenders whose interests are at odds
with its own and who are motivated to create roadblocks aimed at forcing a default so that they
can notch further gains in the CDS market.
That may be difficult to prove, especially since Goldman can claim that without the contract
fudge, the deal may never have been funded. Still, United Natural alleges that it never
received a final list of funds participating in the loans and, had it known, would've raised
concerns, even though without making the concessions to hedge funds, Goldman would have
struggled to place the deal.
United Natural meanwhile claims that it went along with the changes after warnings from
Stephan Feldgoise, who helps oversee Goldman's mergers business in the Americas. The bank
allegedly warned that if the company didn't adjust the terms, it might "scare off" investors,
trigger "blowback" from its own shareholders and "things would get ugly."
What Goldman apparently did not explain is that the one entity most on the hook - in terms
of both P&L and reputation - was Goldman. Which is why Feldgoise and Bank of America, to
co-lead arranger on the loan, are also named as defendants.
As Bloomberg concludes, it's another twist in Feldgoise's time at Goldman Sachs, which
ironically, included a stint as chairman of the firm's global fairness committee. Curiously, in
mid-2017, division chiefs announced he would be departing the bank, stepping down from his post
in senior management to become an advisory director. Yet he's still at the bank, now in a
heated battle with a client for whom he's handled various deals. That said, with the millions
in fees from the United Natural-Supervalu deal, at least Feldgoise's tenure at Goldman is
secure. Worst case, he can always get a job at one of the many hedge funds that made a killing
on SVU CDS thanks to the Goldman fudge.
"I have never experienced this kind of egregious and immoral behavior from a bank in my
entire life," United Natural Chief Executive Officer Steve Spinner
Well, Steve, perhaps you should have been paying more attention for the last 11 years.
The manufacturing economy that made America great in the 1950s is back (not). Unemployment
has been vanquished (not). We are "energy independent" (not). The once-again rising stock
market is proof-of-life for US business prospects (not). We have the best medical care and
higher ed in the world (cough cough). It would all come as a surprise to the people dining on
dog food with ketchup out in the flyover precincts - but they are not exactly the types to sit
around and listen to Don Lemon and Jeffrey Toobin dissect the speech post-game.
Following the new-ish tradition of a designated opposition respondent to the SOTU,
Democratic sore loser Stacy Abrams (Georgia Governor's race, 2018), will virtue-signal her
party's dedication to identity politics, concealing its dark connection to the Wall Street / K
Street grift machine, and to the Neocon war hawks so eager to manufacture failed states in
parts of the world that are too bothersome to try to get along with. I suppose she will try to
revive the Russian collusion angle, with a spin on how the Georgia election of 2018 was also
rigged by malign forces to prevent her victory.
Mostly though, Ms. Abrams will extol the wonders and marvels of free health care and free
college for all under the coming 2020 Democratic Party landslide, a comfy-cozy future of
women-led caring-and-sharing, plus the promise of punishing taxes-to-come on super-rich toffs
like Mr. Trump. The media will eat it up. Ms. Abrams will then be promoted as the next
vice-president. The party's strategy is to get every female voter in America on-board along
with its supplemental People-of-Color-and-LBGTQ army for a surefire electoral victory. I can
see that possibly working, but is it a good fate for the country to be literally divvied up
between a women's party and a men's party?
It's conceivable, in a nation that absolutely can't make sense of itself , that Mr. Trump's
annual report to congress will be as incomprehensible as this year's Superbowl halftime show
.
Even the weather in Atlanta was a complete mystery with Maroon 5's front man, Adam Levine,
capering half-naked in tattoo drag amid artificial fires-of-hell, and then local hero rapper
Big Boi's triumphal entry in a limo, nearly lost inside what looked like the pelt of a giant
ground sloth - an eight-year-old's idea of what it means to be important. Or maybe it was just
all code for two sides of the climate change debate.
You can be sure the atmosphere will be frosty to the max when the Golden Golem of Greatness
lumbers down the aisle of congress's house on Tuesday night. I wouldn't be surprised if the
Democratic majority turns its backs on him during the always excruciating preliminaries and
then just walks out of the chamber. Don't expect the usual excessive rounds of applause from
the president's own party this time, either, in the big, half-empty room. They don't know what
to do about him at this point... or what to do with themselves, for that matter.
The running theme for State of the Union (SOTU) messages going back to Ronald Reagan is
American Wonderfulness , so expect at least forty minutes of national self-esteem therapy,
which nobody will believe. Throw in another ten minutes of elevating sob stories about "special
guests" up in the galleries. But leave a little time for Mr. Trump to roll a few cherry bombs
down the aisles. He must be good and goddam sick of all the guff shoveled at him for two
years.
Financial industry has inherent trend toward parasitism and gangsterism and as such should be
as tightly regulated as gambling. Probably even more. But under neoliberalism where financial
oligarchy a the ruling class this is a pipe dream. I do not see any significant countervailing
force other the far right nationalism. Far right nationalism has power to brake bankers spine,
but usually they allied with them (fascism)
Those that have been following events for several years know they are under attack by an
enemy that has no face and means to do them great harm. Nothing less than their sovereignty and
freedom is at stake.
Absolute control over people and resources is the ultimate goal.
...the bankers want to show up after the population has lost everything in a collapse,
to be their savior and gain control of everyone by offering resources in exchange for
compliance.
In the end these bankers are just people . They yield NO power other than a
cheap magi c trick called money. They are simply losers pulling levers behind the curtain .
They are terrified of real people. They are terrified of being exposed. They are worthless
conjurers of useless paper. Their power is a cheap spell. They always have known that once
people are aware of the trick, they are done. They are afraid of elevated souls. They are
afraid of the awakened. They are terrified of the big red pill that is coming for the masses. Game over.
"... And oh yes, there is this famous outcry 'costs will come down!' almost like it's some kind of birthright, and that repeating it ad-infinitum ad- nauseum – is supposed to make it true. No, costs do not have to come down. Power systems (battery, ICE, whatever) are not the same thing as the last 3 decades of improvement in electronics. Energy does not equal technology. Historically, costs for metals used in energy systems have outdistanced standard inflation by many hundreds of percent. The following elements have increased in price from 1980 to 2018; copper 200%, nickle 55.4%, iron ore 504.2%, lithium +800%, manganese 0% (unchanged), cobalt 534%. It doesn't look to me like 'costs are-a commin' down!!', in fact quite the opposite. ..."
Mining lithium consumes huge amounts of diesel and natural gas. As the cost of these fuels go
up, so must the produced metal. And not just in the mining operation, but in building roads
to the mines, and other processing infrastructure. I think it is very clear that these
operations cannot be powered by solar or wind.
Automobile lithium packs have to be exchanged every couple of years in a car, costing 10s
of thousands of dollars. Because of this, many electric car owners get rid of their ride when
the battery expires. A whole new business has arisen, that of selling used Teslas minus the
battery. It is already possible to buy a relatively recent model 3 'shell' (stripped of
battery, but has everything else and is fully functional) for as low as $6,000. Essentially
we are now seeing that service life of the vehicle shell is contingent on the economics of
the battery that powers it. Perhaps it makes sense to low-cash buyers to buy a used shell and
re-battery it, which is contingent on the original owner to take a substantial hit to the
pocket book.
And oh yes, there is this famous outcry 'costs will come down!' almost like it's some
kind of birthright, and that repeating it ad-infinitum ad- nauseum – is supposed to
make it true. No, costs do not have to come down. Power systems (battery, ICE, whatever) are
not the same thing as the last 3 decades of improvement in electronics. Energy does not equal
technology. Historically, costs for metals used in energy systems have outdistanced standard
inflation by many hundreds of percent. The following elements have increased in price from
1980 to 2018; copper 200%, nickle 55.4%, iron ore 504.2%, lithium +800%, manganese 0%
(unchanged), cobalt 534%. It doesn't look to me like 'costs are-a commin' down!!', in fact
quite the opposite.
Now as for lithium specifically – no, 'there aint' lots of it, as some here want so
desperately to believe. From Metalary – 'There's only a limited supply of this element,
because it only makes up 0.0007 percent of the Earth's crust. Chile produces most of the
element for the world market, with Australia coming in second. In the US you can only find a
single mine in the whole country. It doesn't occur naturally in elemental form, either.'
' What these things all mean is that the demand for lithium-ion batteries will rise even
further. The price of LITHIUM CARBONATE IS UP 47% FROM 2015 and the year 2017 will see
increased sales of pure electric cars. Add the fact that Li-ion batteries are also used for
mobile devices such as smartphones, tablets, laptops, and other wearable devices, and the
demand for the commodity will surely increase as well.' Clearly, from all of the above, there
is only one direction for lithium prices and it will rocket up accordingly.
EV, if it is here to stay, will remain as a status item of very limited quantity as
governed by sales prices equivalent to the upper echelon of the luxury car market. Battery
materials costs, which in lithium format are not and will not decrease going forward, will
permanently keep it there.
Okay, I am not taking sides in this cat fight. But I would like someone to give some stats on
the lifetime of lithium batteries along with the cost of replacing them. And a link
supporting your stats.
I googled it and got this.
The typical estimated life of a Lithium-Ion battery is about two to three years or. 300
to 500 charge cycles, whichever occurs first. One charge cycle is a period of use from
fully charged, to fully discharged, and fully recharged again.
But I could find nothing on the replacement cost of a Tesla battery.
The Model 3 Long Range warranty is for at least 70 percent range at 120K miles
Tesla sells a Model S (and X I assume) warranty for at least 70 percent capability for 8
years and unlimited miles.
Based on this, I find it very hard to believe your statement of "Automobile lithium packs
have to be exchanged every couple of years in a car, costing 10s of thousands of dollars.
"
Here's an example of Tesla owners debating battery replacement costs. Main takeaways: it
costs a lot, and you really aren't expected to have to do it. The battery should last the
life of the car. If it does not for some reason, your vehicle is essentially totaled.
I have a 2013 Leaf, battery still has about 90% of life, so even if it degrades another 10%
in the next six years, it'll still be usable, for twelve years of use, which I would guess is
about average life span for a car. My guess is the battery tech has improved in the interim.
Price to replace it is around $7K. Keep in mind I've never had to change the oil, flush the
radiator or any of that other maintenance crap that sucks up a lot of time also.
Seems unlikely that majority of the middle class can afford EV's. Most new vehicles are sold
using a lot of debt. as loan durations increase. I believe the current trend to sell
inventory is with 84 month loans and there is increasing interest in 96 month loans as
interest rates move higher. Also dealer inventories have been very high since 2017:
https://www.autonews.com/article/20181015/RETAIL01/181019834/inventory-matches-slowing-market
I just don't believe the average Joe can afford an EV. In additional the US grid would
need add a heck of lot of infrastructure and power plants to support an EV transportation
system. My guess it would probably cost at least $1T USA (which we don't have). Since most of
the new power comes from NatGas, switching to EVs is re-arranging Deck chairs on the Titanic:
switching from Oil to NatGas for transportation. To move to a renewable power source to
support EV transportation is probably around $10T for the US, which is economically
unobtainable considering the looming debt & demographic problems.
Realistically the bucket bottom of the US Economy is likely to fall out during the 2020's,
as Debt & Demographics overwhelm the economy. US Nat Debt is now over $22T and increasing
by more than $1T per year ($1.4T in 2018). There is at least $100T in underfunded
entitlements & pensions. Its not as if the USA is going to go Soylent green on its
retirees to solve its financial problems.
That said EVs are dumb idea considering the amount of resources needed. The obvious choice
would be to focus on mass transportation and rebuilding the oil rail network that was
destroyed by air travel. It would made a lot of sense to start rebuilding rail &
railstations decades ago rail improvements take long time it has to be integrated with
working rail-lines (ie you cannot shutdown a highway or rail line to make improvements: You
have to work around the traffic). If every major town and city was connected it could bring
in local freight & move passengers. People could use their ICE vehicles to commute the
short distance to the nearest rail station. it would also reduce the need for long haul
trucking and switch most of the trucking to just local delivery.
The only reason people want EV is so they don't have to change!
Well said Tech Guy, absolutely 100% endorse what you've written above.
You're 'spot-on' in your assessment of costly infrastructure issues, unsustainable
government debts, and demographic problems. These factors will constrain EV production to
those that can afford them, which isn't the impoverished middle class anymore. EV's will
therefore remain a purchase option only for an upper-middle to upper-high class range
demographic.
You guys focus too much on the US. What I want to know is how do you expect for EVs to get
charged in Spain, and what are we supposed to do stretch battery life when we have 35 deg C
in long summer days and -5 deg C winter nights. And where is the country supposed to get that
electricity when the idiots who run the government don't like nuclear, nor natural gas?
Stephen Hren Wrote:
"Ethanol production consumes 40% of our corn crop."
Yup. Ethanol is just a subsidy to corn growers & its an energy sink since it take more
energy to fertialize, plant, harvest, ferment & distill than you get out with combustion.
Not to mention the depletion of aquifiers and fertializer\herbicide\pesticide runoffs that
end up in rivers, lakes and oceans.
Stephen Hren:
"As the switch to EVs continues, this food will be available to people rather than ICEs"
Nope. Most people cannot afford them, and EVs and Ethanol use the same power source:
NatGas. EVs will never go mainstream and probably largely disappear in the 2020s. Probably
Hybrids will remain on the market (for those that can afford them). Considering the entire US
vehicle economy survives on subprime auto loans, its just a matter of time before it just
implodes. The only people that can afford EVs are those making more than $100K per year.
"The study shows that the average buyer of a regular Ford Focus was 46 years old and had a
household income of $77,000 per year, as compared to the an annual household income of
$199,000 for the average, 43-year-old owner of Ford Focus electric."
The number of used cars sold are expected to reach 39.5 million, while new car sales are
expected to decline to 17.1 million. You have declining new car sales, probably because of
affordability.
"... Big oil has its benefits, and this benefit fits into big oil's need for future existence. When the price of oil goes up, then what's the projected stock price of Exxon or Chevron? They will be back into the mode they were in decades ago, start to finish. ..."
Motiva had previously upgraded refinery capacity to accept light oil, Exxon keeps adding
more, and now Chevron will, no doubt, expand.
Maybe the big oil will buy up some more of the weaker Permian players, which could slow
down the insane growth; and make the Permian more of a feeder for their refineries than an
export source. I really can't imagine that they are spending billions on refineries with the
expectation that it may start to expire in five years. Exxon and Chevron are already two of
the top ten producers in the Permian, and they can get bigger, if they want to.
Gobbling up most of these producers would only amount to a snack for them. And doing it
while the pure Permian producers a floating in the doldrums of 2019 would fit perfectly.
That could affect projections for US shale growth. The refiners would look at it over a
longer term usage, and not how much they can ship out. However, it could still lower net
imports. Win, win.
Thus, possibly saving West Texas from extinction, and move away from boom or bust some.
Add pipelines to the East and West coast, and upgrade refineries, and you have a longer term
solution.
With Canadian and Mexican heavy oil and sprinkle in some EOR, we could get by for a longer
period of time. Peak oil is a meaningful event, but it does not, absolutely, have to affect
the US for a while.
On a different topic, a Japanese company is interested in becoming an Eagle Ford player.
Japan needs LNG. Eagle Ford has a largely untapped huge gas window. So, even if we do not use
the planned upgraded ports for oil, we may still be using them for LNG.
Ok, it's only a dream, now, but the parts are beginning to come together. Big oil has
its benefits, and this benefit fits into big oil's need for future existence. When the price
of oil goes up, then what's the projected stock price of Exxon or Chevron? They will be back
into the mode they were in decades ago, start to finish.
This rings true to me. The big boys have few other options left for expansion (Guyana, Mexico
and/or Brazil if they can work their way through the corruption) other than the Permian. Oil
prices are likely to remain volatile for the foreseeable future, generating occasional buying
opportunities for companies with lots of cash on hand. Kind of the way the tech giants like
Apple and Amazon and Facebook bought up all the small fry app/tech companies for lack of
anything better to do with their money. If this happens I would expect a slower pace of
development to emerge for tight oil over the next decade and a longer tail.
Yeah, that's what I'm thinking. Make peak closer to the time period of somewhere pretty
close. I think we better move, we may be sitting to close to that smelly fan.
Chevron's holdings are the size of Yellowstone, and Exxon is not far behind. Will they
pick up any additional acreage if the get a good buy? Does a dog bark?
This says nothing about the quality of rock, but lists acreage by the top holders. Oxy,
ConocoPhillips, and EOG will be more conservative in development, and are not really prime
acquisition targets. But adding them and Exxon and Chevron, you get most of the acreage.
Energen and Diamondback have merged.
Leach, chairman and chief executive officer of Concho Resources, cited statistics
indicating Permian Basin crude production is expected to climb from the current 4 million
barrels a day to 6 million barrels a day in just six years. That, he told the sold-out crowd
at the Horseshoe, would comprise 7 percent of total world oil production and 40 percent of
U.S. production. In addition, the Permian Basin could see 45,000 new high-paying technical
jobs on top of the 50,000 jobs that have been created since about 2000.
"Companies operating here today will be investing $50 billion a year in drilling and
completing wells," leading to over $1 trillion in spending in that same timeframe, he said.
That has created numerous opportunities throughout the Permian Basin, but also significant
challenges, he said.
When he and other leaders of local oil companies review their business plans and consider
their greatest concerns, he said it's not sand or pipeline capacity or technology.
"Collectively, they say it's schools, roads, doctors and housing."
Neoliberalism like Bolshevism is sticky, so the collapse "USSR-style" is a real possibility if nationalist sentiments explode
in the USA. But I would give it 40 years instead of 20. This forecast has a distinct advantage that nobody will remember it in 40
years ;-)
I think the U.S. is at most 20 years away from severe dysfunction at every level of society,
and possibly even civil war and break up.
I mention this only because I can sense a certain desperation in your post and why not
counter it with pessimistic reality? The U.S. is not the only country in the world. 95% of
the world's population, and 80% of it's economy, is outside the U.S.
The unipolar moment of American dominance is over, finished, never to return. Still
possible to have a decent life for awhile, but we'll see. Just remember, Europeans believed
in the early 20th century that they would rule the world for centuries to come, if not
millenia. They had no reason to believe otherwise. Look how that turned out.
The problem is that the decline of the conventional fields does not sleep...
Notable quotes:
"... If it takes more energy to extract the oil from shale than you get from the oil you pump out then it is a sink, not a source. For instance it would be extremely difficult to extract oil from offshore shale. You would have to ship the sand out by barge, build huge platforms for every well to hold all that fracking equipment and so on. ..."
"... Return on investment is the primary problem with shale. If it cost more in time and energy than you receive from the extracted producte, it will stay in the ground. Anyway, that's just my unprofessional opinion. Some of the professionals on this blog may have a better educated opinion. ..."
"... New shale production, which is subject to extraordinarily fast decline in and of it self, would have to be brought online fast enough to offset both its own decline PLUS the decline of the worlds giant conventional legacy oil fields. ..."
"... Even if it's profitable to do so, and in large enough quantities, at some particular price, this does not necessarily mean that it will be possible to muster enough capital, equipment, skilled labor, and political will to make it happen FAST ENOUGH to offset conventional legacy oil declining production. ..."
"... I have read from news lately a more strict requirements from investors, banks, hedge funds makes it reasonable that investment in shale oil compeared to 2018.budget will be reduced by 19%. ..."
"... I doubt there will be lots of investments in US shale with oil price in range 50-60 USD, because there is significant documentation only a very limited part ( decreasing) within core area is profitable as of now. Beside this a oil price in range 50-60.WTI or 55- 65 usd each barrel Brent is not enough to pay the cost of exploration drilling offshore, build new infra structure. ..."
New here, been lurking for a while. I'm a geologist with a small oil and gas exploration and
operating company. We explore conventional only. I have however read all your predictions of
peak oil etc. but don't you think that given higher prices, other basins world wide that are
similar to the Permian could be successfully exploited for years to come holding off peak oil
for decades? I'm no expert but I would venture there are hundreds of basins that could as
good or better than the Permian. Just in the U.S., we have the Permian, Bakken, Niobrara,
Eagleford and about a dozen others. Surely our success could be duplicated on a global scale
if the price was right.
There is the Vaca Muerte in Argentina, but probably under the scale of the Eagle Ford. There
are a LOT of contraints holding the dead cow back. A lot of countries I have heard of that
have gas potential, e.g. China, even UK. But, I have not heard of a lot of oil potential. The
way my limited understanding goes, the play has to be new enough on the geological age, to
still have oil. As in, the Eagle Ford has three windows which depend on geological age, and
pressure. The oil window is younger, the condensate and gas windows are older. I think the
Permian will have areas, too. But, I received my geology degree from a cracker jacks box
but your last sentence may hold some
validity. For that matter, I don't think shale has given up completely after the first go
round, if the price is right. Would that delay peak to another date? Quien sabe. Money talks.
What price? I know I would keep an ICE around for long trips at $200 a barrel for the
convenience. Food may be higher, though.
Speaking as a geologist, this is incorrect. Thermal maturity depends on far more than age. The Utica gas window is 300 million years older than the eagle fords gas window, just for
example.
Yes, of course there are more shale sources out there. But perhaps not as many as you think.
All reservoir rock is not so tight as to hold most of its oil in place. There is, or rather
was, lots of oil in West Texas but not much shale oil. The same is true for Southern
California. I suspect most of the Middle east is similar.
Also there is the cost. If it takes more energy to extract the oil from shale than you get
from the oil you pump out then it is a sink, not a source. For instance it would be extremely
difficult to extract oil from offshore shale. You would have to ship the sand out by barge,
build huge platforms for every well to hold all that fracking equipment and so on.
There are lots of shale oil sources in Russia. And if prices get high enough, they will
probably try to extract it. Imagine hauling train loads of sand to the north slope of Alaska,
then trucking it over the tundra by truck to every well. You would have similar problems in
Western Siberia.
Return on investment is the primary problem with shale. If it cost more in time and energy
than you receive from the extracted producte, it will stay in the ground. Anyway, that's just
my unprofessional opinion. Some of the professionals on this blog may have a better educated
opinion.
"If it cost more in time and energy than you receive from the extracted producte, it will
stay in the ground."
@Ron Patterson, you seem to be saying that extraction will go forward as long as there is
the potential for *any* marginal return, at least expressed in money if not in EROEI. So for
example, as long as I can charge $101 for a barrel of oil that cost me $100 to get out of the
ground, I'll keep doing it (or someone else will). Do you really think this is the case, or
is there a threshold/floor below which it won't make economic sense due to produce oil? Due
perhaps to knock-on factors in the larger economy? Obviously I'm no expert on any of this, so
please take it easy on me in any replies. Thanks!
Phil, I really have no idea at what point oil companies will decide it is not worth the
effort due to low profits or other causes, they will cease drilling. However it must be noted
that a majority of oil companies producing shale oil today are doing it at a loss. Of course
they all expect to be making money sometime soon. They expect prices to rise so they are just
trying to hang on until they are profitible.
So you see it is just not that simple. They may produce oil at a loss for some time before
they fold. But obviously they cannot produce oil at a loss forever. There are many factors
that govern their decision to fold their tents and walk away. I think it is impossible to
predict exactly at what or when that point is. At least it is beyond my ability to do so.
I don't have any better idea how much shale oil is out there, or whether it can be produced
profitably, than you do.
But I will add this much to the discussion. Even if it is out there , and can be produced profitably, this is no guarantee that shale
oil can prevent peak oil happening.
New shale production, which is subject to extraordinarily fast decline in and of it self,
would have to be brought online fast enough to offset both its own decline PLUS the decline
of the worlds giant conventional legacy oil fields.
Even if it's profitable to do so, and in large enough quantities, at some particular
price, this does not necessarily mean that it will be possible to muster enough capital,
equipment, skilled labor, and political will to make it happen FAST ENOUGH to offset
conventional legacy oil declining production.
It's been a while since I paid much attention to the actual numbers, but I know you are
well acquainted with them.
So what's your estimate, these days, of the conventional legacy oil decline rate? Have you
raised it or lowered it recently?
As I have read from news lately a more strict requirements from investors, banks, hedge funds
makes it reasonable that investment in shale oil compeared to 2018.budget will be reduced by
19%.
One significant player will reduce their number if riggs from 24 to 18 as they expect
oil price WTI in 2019 to be in mid 50 usd range.
To me it seems the confident among investors
to US shale have changed significant espesialy 4th quartile of 2018. Now they only want to
support projects that give cash return , seems they are tiered of promises as there have been
to much of and shale oil depth have never been higher.
Since oil demand is linked to groth
in world economy that is also same for interest of liability. EIA , and some other analyst
like Rystad sees US shale production in 2019 will continue with strong increase and predict
we only have seen the beginning. After working within oil and gaz projects in many years I
know the oil majours dont want to loose money ,when a project seems not profittable they stop
until oil price incresse or they get cost down.
I doubt there will be lots of investments in
US shale with oil price in range 50-60 USD, because there is significant documentation only
a very limited part ( decreasing) within core area is profitable as of now. Beside this a
oil price in range 50-60.WTI or 55- 65 usd each barrel Brent is not enough to pay the cost of
exploration drilling offshore, build new infra structure.
"... Production is likely to head south, so nobody will get it. Perfect storm. Iran sanctions, Saudis are going to cut to 10.1 instead of 10.3, Venezuela production to plummet, and US oil is on a hiatus. What a glut. ..."
Production is likely to head south, so nobody will get it. Perfect storm. Iran
sanctions, Saudis are going to cut to 10.1 instead of 10.3, Venezuela production to plummet,
and US oil is on a hiatus. What a glut.
Karl- I see that you asked 'what' rather than when.
Seneca Cliff refers to a very rapid decline in a feature (such as global oil production)
after it has achieved a peak. This is as opposed to a very slow decline.
Obviously for oil, a fast decline would be catastrophic.
US production will be close to flat 2019, and if ports are not improved much until late
2020, then 2020 will not be great. After that, I don't see it catching up.
As stated many times on 'theoildrum', State of the art EOR projects deplete oilfields, who
without EOR would go in terminal decline much earlier, very rapidly. So a world oilproduction
cliff cannot be ruled out, especially if money reserves from oil companies dry up.
Oil prices are likely to rise if there is a shortage of oil, this will mean oil companies
will have plenty of financial resources as long as demand is sufficient to consume the oil
produced. Not suggesting there will not be a decline, just unlikely there will be a cliff
unless oil prices drop, so far there is no evidence of a cliff and given World stock level
trend, prices are unlikely to drop further and are more likely to increase in the future.
But to repeat a cliché: depletion never sleeps. Already about fifteen years ago EOR
projects were started that extracted oil from (quite) 'past peak' or 'on plateau production'
oilfields. EOR projects in case of 'quite past peak' fields, to get 'the last recoverable'
barrel out resulting in oil production/day far less than peak production.
I know, the recoverable quantity increases with rising oilprices and better extraction
techniques, but still the production/day way past peak will be much less than on peak.
What will happen when oilprices don't increase a lot for the next ten years, for a
combination of reasons ?
At a certain point in time all the money in the world couldn't prevent world production
decline and the further that point will be in the future, the steeper will be the decline I
think. So better sooner than later oilprices begin to increase significantly, to buy some
time for the transition to EV's, etc.
I am not an expert in engineering nor in geology, far from that, just expressing a feeling
that I got after having read the many posts on theoildrum regarding this matter.
When Hawaii congresswoman Tulsi Gabbard
announced her candidacy for the presidency on CNN last month, I had a feeling I'd be
writing about her a fair bit. Not because I particularly want her to be president, but because
I knew her candidacy would cause the narrative control mechanizations of the political/media
class to overextend themselves , leaving them open to attack, exposure, and the weakening of
their control of the narrative.
Mere
hours before her campaign officially launched, NBC News published an astonishingly blatant smear piece titled "Russia's
propaganda machine discovers 2020 Democratic candidate Tulsi Gabbard," subtitled "Experts who
track websites and social media linked to Russia have seen stirrings of a possible campaign of
support for Hawaii Democrat Tulsi Gabbard." One of the article's authors shared it on Twitter with the
caption, "The Kremlin already has a crush on Tulsi Gabbard."
The article reported that media outlets tied to the Russian government had been talking a
lot about Gabbard's candidacy, ironically citing as an example an RT article which
documented the attempts by the US mainstream media to paint Gabbard as a Kremlin agent. The
article's authors cited the existence of such articles combined with the existence of "chatter"
about Gabbard on the anonymous message board 8chan (relevant for God knows what reason) as
evidence to substantiate its blaring headline. Even more hilariously, the source for its weird
8chan claim is named as none other than Renee DiResta of the narrative control firm New
Knowledge, which was
recently embroiled in a scandal for staging a "false flag operation" in an Alabama Senate
race which gave one of the candidates the false appearance of being amplified by Russian
bots.
This pathetic, juvenile language from one of the authors of that astronomically awful NBC
News article gives you a sense of what they're trying to accomplish here. Smear campaign
fully underway https://t.co/jvl5pFRr0P
This article is of course absurd. As we
discussed recently , you will always see Russia on the same US foreign policy page as
anti-interventionists like Tulsi Gabbard, because Russia, like so many other nations, opposes
US interventionism. To treat this as some sort of shocking conspiracy instead of obvious and
mundane is journalistic malpractice. There are many, many very good reasons to oppose the war
agendas of the US-centralized empire, none of which have anything to do with having any loyalty
to or sympathies for the Russian government.
But we will continue to see this tactic used again and again and again against any and all
opposition to US-led interventionism for as long as the Russiagate psyop maintains its grip
upon western consciousness. And make no mistake, these smears have everything to do with
anti-interventionism and nothing to do with Russia. There will never, ever be an antiwar voice
who the political/media class and their centrist followers espouse as good and valid; they'll
never say "Ahh, finally, someone who hates war and also isn't aligned with Russia! We can get
behind this one!" That will never, ever happen, because it is the opposition to war and
interventionism itself which is being rejected, and in the McCarthyite environment of Russia
hysteria, tarring it as "Russian" simply makes a practical excuse for that rejection.
All the biggest conflicts in the world can be described as unipolarism vs multipolarism: the
unipolarists who support the global hegemony of the US-centralized empire at any cost, versus
the multipolarists who oppose that dominance and support the existence of multiple power
structures in the world. The governments of Russia, China, Iran and their allies are
predominantly multipolarist in their geopolitical outlook, and they tend to be more in favor of
non-interventionism, since unipolarity can only be held in place by brute force and aggression.
Unipolarists, therefore, can always paint western anti-interventionists as Russian assets,
since the Russian government is multipolarist and opposed to the interventionism of the
unipolarists.
The nonstop propaganda campaign to keep the coals of Russia hysteria burning white hot at
all times can therefore be looked at first and foremost as a psychological operation to kill
support for multipolarism around the world. It can of course be used to manufacture consent for
escalations against Russia, China, Syria, Venezuela, Iran etc as needed, but it can also be
used to attack the ideology of anti-interventionism itself by smearing anyone who opposes
unipolar oppression and aggression as an agent of a nefarious oppositional government.
The social engineers have succeeded in constructing a narrative control device which
encapsulates the entire agenda of the unipolar world order in a single bumper sticker-sized
talking point: "Russia opposes Big Brother, therefore anyone who opposes Big Brother is
Russian." This device didn't take an amazing intellectual feat to create; all they had to do
was recreate the paranoid insanity of the original cold war, and they already had a blueprint
for that. It was simply a matter of shepherding us back there.
After the fall of the Soviet Union, there emerged a popular notion of a " peace dividend " in which defense
spending could be reduced in the absence of America's sole rival and the abundant excess funds
used to take care of the American people instead. The only problem was that a lot of people had
gotten very rich and powerful as a result of that cold war defense spending, and it wasn't long
before they started circulating the idea of using America's newly uncontested might for a very
expensive campaign to hammer down a liberal world order led by the beneficent guidance of the
United States government. Soon the neoconservatives were pushing their unipolarist narratives in high levels
of influence with great effect, and shortly thereafter they got their " new Pearl
Harbor " in the form of the 9/11 attacks which justified an explosion in defense spending,
interventionism and expansionism, just as the neoconservative Project for a New American
Century had called
for . And the rest is history.
And now our collective consciousness is planted right back in the center of that paranoid,
hawkish political environment of the first cold war. The main difference now is of course that
Russia is nothing remotely like a superpower today, and that the establishment Russia narrative
is made entirely out of narrative, but the most important difference is that this time the
establishment narratives are not taking place within the hermetically sealed bubbles of major
news media corporations. People are able to communicate with each other and share information
far more easily than they were prior to the fall of the Berlin wall, and westerners are able to
easily access Russian media and anti-interventionist narratives if they want to.
Whoever controls the narrative controls the world, as I never tire of saying. This
difficulty in replicating the hermetically sealed media environment of the original cold war
poses a severe challenge for narrative control, and it is for this reason reason that there is
now so much skepticism of the establishment Russia narrative. It is also the reason for the
establishment's aggressive maneuvers to censor the internet, to demonize Russian media, and to
smear anti-interventionist perspectives.
But we can't keep living this way. We all know this, deep down. The people at the helm of
the unipolar world order are advancing an ecocidal world economy which is stripping the earth
bare and filling the air with poison while at the same time pushing more and more aggressively
against the multipolarist powers, one of which happens to have thousands of nuclear warheads at
its disposal. The unipolarity so enthusiastically promoted by the neoconservatives and their
fellow travelers has reached the end of the line after just a few short years, and now it's
time to dispense with it and try something else. They will necessarily smear us with everything
but the kitchen sink for saying so, but we are right and they are wrong. The state of the world
today proves this beyond a doubt.
* * *
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How come Poland's at 6% & Lithuania is at 29%? Don't they both import American LNG?
And how come Estonia is at 3%? Sounds like the Estonians import Russian gas. Bulgaria's at
37%. Now what were the assurances John McCain gave Sofia regarding alternative gas options to
Southstream? Please spell them out for me again, I'm pretty slow, you know!
What is so ridiculously ClusterFrack-Failed about this, is that BGR nixed a CNG Pipeline
Deal with RUS under pressure from the EU_EXECUTIVES.
Instead of Jobs and Transit Fee Income, BGR will have to stand in line and pay more for
CNG since TRK picked up the Pipeline. The Southeastern EUROZONE are STILL going to Import
that same RUS_CNG.
The project created controversy due to non-compliance with European Union competition and energy
legislation, in particular the Third Energy Package , which
stipulates the separation of companies' generation and sale operations from their
transmission networks.
It was seen as rival to the Nabucco pipeline project. Construction
of the Russian onshore facilities for the pipeline started in December 2012. The project
was cancelled by Russia in December 2014 following obstacles from Bulgaria and the EU, the
2014 Crimean
crisis , and the imposition of European sanctions on Russia. The project has been
replaced by proposals of Turkish Stream and Tesla pipeline .
There was no crime until the investigations started...
Special Counsel Robert Mueller's indictment of Roger Stone may be the most
peculiar document to emerge from the Trump–Russia "collusion" saga. It is an instant
classic in the Mueller genre: lots of heavy breathing, then sputtering anti-climax.
After a 20-page narrative about Russian cyber-ops, WikiLeaks' role as a witting
anti-American accomplice, and Trump supporters enthralled by thousands of hacked Democratic
emails and visions of the Clinton campaign's implosion, Stone, a comically inept hanger-on,
ends up charged with seven process crimes. No espionage, no conspiracy, no commission of any
crime until the investigations started.
This is not to say that obstruction of congressional investigations is trifling. Nor is it
to say the accused has a good chance of beating the case. Some of Stone's alleged lies were
mind-bogglingly stupid. Why deny written communications with people you've texted a zillion
times? Why deny conversations with interlocutors (such as Trump-campaign CEO Steve Bannon) who
have no reason to risk a perjury charge to protect you? And don't even get me started on the
witness-tampering count, which, if I were Mueller, I'd have hesitated to include for fear of
suggesting an insanity defense. ( Do it for Nixon? Pull a "Frank Pentangeli"? )
That said, the case is overcharged. The tampering count carries a 20-year penalty. Adding an
obstruction or false-statements count (five years each) would have given Stone (who is 66 years
old) prison exposure of up to 25 years. The most central "colluder" in the Mueller firmament to
be bagged so far, George Papadopoulos, was sentenced to a grand total of two weeks'
imprisonment. Surely a quarter-century of "potential" incarceration would have sufficed to give
prosecutors the "this is serious stuff" headline they crave while allowing for the more
representative sentence Stone will eventually receive -- who knows, maybe three weeks? But true
to form, Mueller instead included six of these five-year counts -- so the press can report that
Stone faces up to 50 years in the slammer.
This inflated portrait of Stone as a major criminal was further bloated by the scene of his
arrest : a well-armed battalion of FBI agents sent to apprehend him as the media, conveniently
on hand at 6 a.m., took it all in. But Stone is just a cameo. The big picture is the
overarching Trump–Russia investigation. It's still being inflated, too.
Prosecutors ordinarily do not write an elaborate narrative about crimes they cannot prove.
Here, though, Mueller uses Stone as the pretext to spell out the Big Collusion Scheme:
Candidate Donald Trump instructs Stone to coordinate with WikiLeaks on the dissemination of
Clinton dirt stolen by Russia; Stone directs his associate, Jerome Corsi, to have Corsi's man
in London, Ted Malloch, make contact with WikiLeaks chief Julian Assange, who is holed up at
the Ecuadorian embassy in London. Malloch must have succeeded, because next thing you know,
Corsi is reporting back to Stone: Our friends the Russian hackers have given WikiLeaks all this
damaging information on Hillary, including the Podesta emails; it will all be rolled out in
October, right before the election.
It's a sensational story. Only . . . it's just a story.
Mueller doesn't even pretend he can prove it. No shame in that: During a long investigation,
prosecutors always develop a theory of the case. Often, the hypothesis doesn't pan out. No
problem. You narrow your indictment down to what you can prove and call it a day. In Stone's
case, that would dictate omitting the ambitious collusion narrative and stripping down to a
two-page obstruction-of-Congress indictment. Instead, Mueller gives us the fever dream: Stone
as a key cog in the collusion wheel. Where reality intrudes, the prosecutors float suggestions
they cannot prove or leave out key details that blow up the narrative.
The special counsel could have contented himself with easy-to-prove false-statements charges
against Stone: lying about whether his WikiLeaks communications were documented in writing;
lying about whether he asked his friend Randy Credico to pass a request for specific Hillary
Clinton information to Assange; lying about whether he ever told the Trump campaign about his
WikiLeaks conversations with Credico.
But no, Mueller strains to accuse Stone of falsely denying that he had a second WikiLeaks
"intermediary" -- whom the indictment indicates was Jerome Corsi , Stone's Infowars associate.
Depending on how charitable you want to be, this claim is either risibly weak, flatly wrong, or
dependent on a distortion of the word "intermediary." To repeat, the "intermediary" thread adds
nothing to the case against Stone. It is a pretext for weaving the collusion narrative without
having to prove it.
To amplify the indictment a bit with reporting by the Daily
Caller 's Chuck Ross , Credico -- a left-wing comedian and radio host -- got access to
Assange through a radical lawyer, Margaret Ratner Kunstler , who has
done work for WikiLeaks. That apparently did not happen until shortly before August 25, 2016,
when Assange appeared as a guest on Credico's radio show. According to the indictment, Credico
first texted Stone about Assange's imminent appearance on August 19.
Prosecutors, however, suggest that Stone had a line into Assange and WikiLeaks starting at
least two months earlier. "By in or around June and July 2016," goes the slippery allegation,
Stone was telling Trump officials he had information that WikiLeaks possessed damaging Hillary
Clinton documents. In Mueller's telling, this makes Stone seem like a potentially valuable
WikiLeaks insider when, on July 22, WikiLeaks began publishing thousands of DNC emails.
Immediately, a "senior Trump campaign official was directed to contact STONE about any
additional releases and what other damaging information [WikiLeaks] had regarding the Clinton
campaign."
If not from Credico, from whom, pray tell, did Stone learn what WikiLeaks was up to? Who is
the other intermediary?
In truth, he didn't need one. He had two sources of information about WikiLeaks -- neither
of them Corsi, neither of them sensibly thought of as an "intermediary." These sources go
unmentioned in the indictment. Worse, while the prosecutors finger Corsi as Stone's hidden
"intermediary," their evidence does not support this claim -- and they know it, so they fudge
it.
Let's start with the two sources Mueller omits.
Turns out it is not just Stone who was alerted long before the Democratic convention that
WikiLeaks might have damaging information on Clinton. Everyone on the planet who cared to be
informed about such things knew. On June 12, 2016, in an
interview that was widely
reported , Assange said that WikiLeaks planned to expose documents relating to Hillary
Clinton that could affect the 2016 election. Was Stone, the self-styled dark-politics devotee,
pressing sources for an entrée into WikiLeaks? Sure he was. But that doesn't mean he had
one. And he didn't need one in order to direct the Trump campaign's attention to WikiLeaks;
Assange was calling the world's attention to himself.
The second omitted source? It was James Rosen, then a top reporter at Fox News -- though
Rosen seems to have had no idea he was playing that role. To understand what happened, we need
to consider the July 25 Stone–Corsi email that the indictment treats like a smoking gun
-- but consider it in the context of an earlier July 25 email that the indictment fails to
include.
As noted above, on July 22, someone very high up in the Trump campaign -- perhaps the
candidate himself, though we are not told -- ordered a top campaign official to reach out to
Stone. Just three days later, Stone sent Corsi an email with the subject line "Get to
[Assange]." Stone exhorted Corsi to try to reach the WikiLeaks leader "at Ecuadorian Embassy in
London and get the pending emails . . . they deal with the [Clinton] Foundation allegedly "
(emphasis added).
So why did Stone believe WikiLeaks had Clinton Foundation documents? Well, Stone is
acquainted with Charles Ortel , an
investor who dabbles in investigative journalism and has focused intently on the Clinton
Foundation. Ortel has occasional correspondence with James Rosen. In an email exchange on July
25, Rosen told Ortel, "Am told WikiLeaks will be doing a massive dump of HRC emails related to
the CF [i.e., the Clinton Foundation] in September." Ortel proceeded to forward this email to
Stone. Only after seeing Rosen's email did Stone contact Corsi to say that Assange "allegedly"
had Clinton Foundation emails that Corsi should try to acquire.
Obviously, Stone did not need a WikiLeaks intermediary to give him a heads-up about a
possible Clinton Foundation dump. He happened upon that information indirectly from a member of
the press (Rosen), through an acquaintance (Ortel). And he did not need Corsi as an
intermediary -- Stone is the one who alerted Corsi, not the other way around.
The indictment says that, shortly after receiving Stone's July 25 email imploring him to
make contact with Assange, Corsi forwarded it to a "supporter of the Trump campaign" in the
United Kingdom -- reported by Chuck Ross to be Ted Malloch, a London-based American who used to
be a business professor at
Oxford and has ties to British populists. Subsequently, on Sunday July 31, Stone emailed
Corsi to "call me MON," stressing that Corsi's associate should "see [Assange]."
Well, did that happen? Did Corsi's man Malloch make contact with WikiLeaks?
If you read nothing but Mueller's indictment, you assume he must have. After all, the next
thing we are told about is Corsi's email report to Stone on Tuesday, August 2. Corsi (then
vacationing in Italy) wrote: "Word is friend in embassy [i.e., Assange] plans 2 more dumps, one
shortly after I'm back [which was to be in mid August]. 2nd in Oct. Impact planned to be very
damaging." Corsi added:
Time to let more than [Podesta] to be exposed as in bed w enemy if they are not ready to
drop HRC [Clinton]. That appears to be game hackers are now about. Would not hurt to start
suggesting HRC old, memory bad, has stroke -- neither he nor she well. I expect that much of
next dump focus, setting stage for foundation debacle.
The implication is clear: Malloch must have reached Assange, gotten the critical
information, and passed it along to Corsi so it could be communicated to Stone and the Trump
campaign. Corsi is the intermediary! Coordination! Collusion!
But Mueller is hiding the ball again. The indictment makes no mention of the facts that
Malloch
denies knowing anything about WikiLeaks , that Corsi denies having any sources with inside
knowledge about WikiLeaks, and that prosecutors appear to accept these denials.
So how did Corsi get the "2 more dumps" of information (or gossip) that he dished to Stone?
He made it up -- or, more benignly, he claims to have figured it out on his own. Reportedly , Mueller's prosecutors were as
frustrated as they were incredulous over Corsi's unlikely claim. But they don't have a better
explanation. In the negotiations over a plea offer (on a charge of lying to investigators),
which Corsi has resisted, Mueller's prosecutors drafted an agreed-upon "
Statement of the Offense ." In it, Corsi was to admit that "his representations to [Stone],
beginning in August 2016, that he had a way of obtaining confidential information from
[WikiLeaks] were false."
Corsi is another strange character in this drama. He is a notorious bomb-thrower, and his
memory is spotty. But one can understand why the special counsel seems to accept his story
about not having a WikiLeaks source: His information was spectacularly wrong. He surmised that
Assange would release information that Mrs. Clinton and her husband, former president Bill
Clinton, had serious medical problems; this would be a prelude to devastating disclosures about
the Clinton Foundation. Corsi's fever dream never came true, either.
But how can Corsi have been Stone's intermediary to WikiLeaks if he had no way of obtaining
confidential information from WikiLeaks?
Stone, meantime, points out that neither he nor Corsi made reference to Podesta's emails. He
denies any awareness that Assange had them, and plausibly contends that the reference to
Podesta in his conversation with Corsi (and in his later tweet on August 21 that "the Podesta's
[ sic ] in the barrel" was coming) related to a lobbying company started by John Podesta and
his brother Tony. That company had done work for the same Kremlin-backed Ukrainian political
party served by Paul Manafort -- Trump's campaign manager, and Stone's former business partner.
It was at the very time when Stone and Corsi were discussing WikiLeaks and Podesta that a July
31 New
York Times exposé appeared, outlining Manafort's lobbying entanglements with these
Ukrainians. Tellingly, Mueller does not contend that Stone's denial of foreknowledge about
WikiLeaks' Podesta dump is false.
Again, understand: It is not just that Mueller can't prove Corsi was Stone's intermediary.
Mueller has no need to try to prove it. He has an overwhelming obstruction and
witness-tampering case against Stone without it. The indictment's "intermediary" plot line is
just a device for prosecutors to spin the Trump–Russia–WikiLeaks collusion yarn.
They are careful not to plead it in a conspiracy count; just an "introductory" narrative -- no
formal charge, no burden to prove it, and no need to reveal stubborn facts that undermine it.
Since it is superfluous to the process charges against Stone, he may not even challenge it.
Maybe he will plead guilty, and the narrative will stand as the government's unrebutted version
of events.
And this is just the indictment of a bit player. Makes you look forward to the special
counsel's final report, no?
Mueller is famous for charging crimes that do not exist. The plurality of this cases are
overturned on appeal. For those of you who wonder that is 75% plus.
That alone begs the question of why he has not been disbarred.
Money quote: " neoliberalism is the fight of finance to subdue society at large, and to
make the bankers and creditors today in the position that the landlords were under
feudalism."
Notable quotes:
"... ... if you take the Bible literally, it's the fight in almost all of the early books of the Old Testament, the Jewish Bible, all about the fight over indebtedness and debt cancellation. ..."
"... neoliberalism is the fight of finance to subdue society at large,and to make the bankers and creditors today in the position that the landlords were under feudalism. ..."
"... They call themselves free marketers, but they realize that you cannot have neoliberalism unless you're willing to murder and assassinate everyone who promotes an alternative ..."
"... Just so long as you remember that most of the strongest and most moving condemnations of greed and money in the ancient and (today) western world are also Jewish--i.e. Isaiah, Jeremiah, Micah, the Gospels, Letter of James, etc. ..."
"... The history of Jewish banking after the fall or Rome is inextricable from cultural anti-judaism of Christian west and east and de facto marginalization/ghettoization of Jews from most aspects of social life. The Jewish lending of money on interest to gentiles was both necessary for early mercantilist trade and yet usury was prohibited by the church. So Jewish money lenders were essential to and yet ostracized within European economies for centuries. ..."
"... Now Christianity has itself long given up on the tradition teaching against usury of course. ..."
"... In John, for instance most of the references to what in English is translated as "the Jews" are in Greek clearly references to "the Judaeans"--and especially to the ruling elite among the southern tribe in bed with the Romans. ..."
Just finished reading the fascinating
Michael Hudson interview I linked to on previous thread; but since we're discussing Jews
and their religion in a tangential manner, I think it appropriate to post here since the
history Hudson explains is 100% key to the ongoing pain us humans feel and inflict. My
apologies in advance, but it will take this long excerpt to explain what I mean:
"Tribes: When does the concept of a general debt cancellation disappear historically?
"Michael: I guess in about the second or third century AD it was downplayed in the Bible.
After Jesus died, you had, first of all, St Paul taking over, and basically Christianity was
created by one of the most evil men in history, the anti-Semite Cyril of Alexandria. He
gained power by murdering his rivals, the Nestorians, by convening a congress of bishops and
killing his enemies. Cyril was really the Stalin figure of Christianity, killing everybody
who was an enemy, organizing pogroms against the Jews in Alexandria where he ruled.
"It was Cyril that really introduced into Christianity the idea of the Trinity. That's
what the whole fight was about in the third and fourth centuries AD. Was Jesus a human, was
he a god? And essentially you had the Isis-Osiris figure from Egypt, put into Christianity.
The Christians were still trying to drive the Jews out of Christianity. And Cyril knew the
one thing the Jewish population was not going to accept would be the Isis figure and the
Mariolatry that the church became. And as soon as the Christian church became the
establishment rulership church, the last thing it wanted in the West was debt
cancellation.
"You had a continuation of the original Christianity in the Greek Orthodox Church, or the
Orthodox Church, all the way through Byzantium. And in my book And Forgive Them Their Debts,
the last two chapters are on the Byzantine echo of the original debt cancellations, where one
ruler after another would cancel the debts. And they gave very explicit reason for it: if we
don't cancel the debts, we're not going to be able to field an army, we're not going to be
able to collect taxes, because the oligarchy is going to take over. They were very explicit,
with references to the Bible, references to the jubilee year. So you had Christianity survive
in the Byzantine Empire. But in the West it ended in Margaret Thatcher. And Father
Coughlin.
"Tribes: He was the '30s figure here in the States.
"Michael: Yes: anti-Semite, right-wing, pro-war, anti-labor. So the irony is that you have
the people who call themselves fundamentalist Christians being against everything that Jesus
was fighting for, and everything that original Christianity was all about."
Hudson says debt forgiveness was one of the central tenets of Judaism: " ... if
you take the Bible literally, it's the fight in almost all of the early books of the Old
Testament, the Jewish Bible, all about the fight over indebtedness and debt
cancellation. "
Looks like I'll be purchasing Hudson's book as he's essentially unveiling a whole new,
potentially revolutionary, historical interpretation.
@ karlof1 with the Michale Hudson link....thanks!!
Here is the quote that I really like from that interview
"
Michael: No. You asked what is the fight about? The fight is whether the state will be taken
over, essentially to be an extension of Wall Street if you do not have government planning.
Every economy is planned. Ever since the Neolithic (era), you've had to have (a form of)
planning. If you don't have a public authority doing the planning, then the financial
authority becomes the planners. So globalism is in the financial interest –Wall Street
and the City of London, doing the planning, not governments. They will do the planning in
their own interest. So neoliberalism is the fight of finance to subdue society at
large,and to make the bankers and creditors today in the position that the landlords were
under feudalism.
"
karlof1, please email me as I would like to read the book as well and maybe we can share a
copy.
And yes, it is relevant to Netanyahoo and his ongoing passel of lies because humanity has
been told and been living these lives for centuries...it is time to stop this shit and grow
up/evolve
@13 / 78 karlof1... thanks very much for the links to michael hudson, alastair crooke and the
bruno maraces articles...
they were all good for different reasons, but although hudson is being criticized for
glossing over some of his talking points, i think the main thrust of his article is very
worthwhile for others to read! the quote to end his article is quite good "The question is,
who do you want to run the economy? The 1% and the financial sector, or the 99% through
politics? The fight has to be in the political sphere, because there's no other sphere that
the financial interests cannot crush you on."
it seems to me that the usa has worked hard to bad mouth or get rid of government and the
concept of government being involved in anything.. of course everything has to be run by a
'private corp' - ie corporations must run everything.. they call them oligarchs when talking
about russia, lol - but they are corporations when they are in the usa.. slight rant..
another quote i especially liked from hudson.. " They call themselves free marketers,
but they realize that you cannot have neoliberalism unless you're willing to murder and
assassinate everyone who promotes an alternative ." that sounds about right...
@ 84 juliania.. aside from your comments on hudsons characterization of st paul "the
anti-Semite Cyril of Alexandria" further down hudson basically does the same with father
coughlin - https://en.wikipedia.org/wiki/Charles_Coughlin..
he gets the anti-semite tag as well.. i don't know much about either characters, so it's
mostly greek to me, but i do find some of hudsons views especially appealing - debt
forgiveness being central to the whole article as i read it...
it is interesting my own view on how money is so central to the world and how often times
I am incapable of avoiding the observation of the disproportionate number of Jewish people in
banking.. I guess that makes me anti-semite too, but i don't think of myself that way.. I
think the obsession with money is killing the planet.. I don't care who is responsible for
keeping it going, it is killing us...
Just so long as you remember that most of the strongest and most moving condemnations
of greed and money in the ancient and (today) western world are also Jewish--i.e. Isaiah,
Jeremiah, Micah, the Gospels, Letter of James, etc.
The history of Jewish banking after the fall or Rome is inextricable from cultural
anti-judaism of Christian west and east and de facto marginalization/ghettoization of Jews from
most aspects of social life. The Jewish lending of money on interest to gentiles was both
necessary for early mercantilist trade and yet usury was prohibited by the church. So Jewish
money lenders were essential to and yet ostracized within European economies for
centuries.
Now Christianity has itself long given up on the tradition teaching against usury of
course.
I too greatly admire the work of Hudson but he consistently errs and oversimplifies
whenever discussing the beliefs of and the development of beliefs among preNicene followers
of the way (as Acts puts is) or Christians (as they came to be known in Antioch within
roughly eight or nine decades after Jesus' death.) Palestinian Judaism in the time of Jesus
was much more variegated than scholars even twenty years ago had recognized. The gradual
reception and interpretation of the Dead Sea Scrolls in tandem with renewed research into
Phili of Alexandria, the Essenes, the so-called Sons of Zadok, contemporary Galilean zealot
movements styles after the earlier Maccabean resistance, the apocalyptism of post exilic
texts like Daniel and (presumably) parts of Enoch--all paint a picture of a highly diverse
group of alternatives to the state-Church once known as Second Temple Judaism that has been
mistaken as undisputed Jewish "orthodoxy" since the advent of historical criticism.
The
Gospel of John, for example, which dates from betweeen 80-120 and is the record of a much
earlier oral tradition, is already explicitly binitarian, and possibly already trinitarian
depending on how one understands the relationship between the Spirit or Advocate and the Son.
(Most ante-Nicene Christians understood the Spirit to be *Christ's* own spirit in distributed
form, and they did so by appeal to a well-developed but still largely under recognized strand
in Jewish angelology.)
The "theological" development of Christianity occurred much sooner
that it has been thought because it emerged from an already highly theologized strand or
strands of Jewish teaching that, like Christianity itself, privileged the Abrahamic covenant
over the Mosaic Law, the testament of grace over that of works, and the universal scope of
revelation and salvation as opposed to any political or ethnic reading of the "Kingdom."
None
of these groups were part of the ruling class of Judaean priests and levites and their
hangers on the Pharisees.
In John, for instance most of the references to what in English is
translated as "the Jews" are in Greek clearly references to "the Judaeans"--and especially to
the ruling elite among the southern tribe in bed with the Romans.
So the anti-Judaism/Semiti
of John's Gispel largely rests on a mistranslation. In any event, everything is much more
complex than Hudson makes it out to be. Christian economic radicalism is alive and well in
the thought of Gregory of Nysa and Basil the Great, who also happened to be Cappadocian
fathers highly influential in the development of "orthodox" Trinitarianism in the fourth
century.
I still think that Hudson's big picture critique of the direction later Christianity
took is helpful and necessary, but this doesn't change the fact that he simplifies the
origins, development, and arguably devolution of this movement whenever he tries to get
specific. It is a worthwhile danger given the quality of his work in historical economics,
but still one has to be aware of.
This is a classic, textbook example of financial astrology... You probably should read it in full to appreciate the depth of junk
science here. But this is financial casino my friends, and they try to entice you with naked girls and drinks...
A gain in January has foretold an annual gain 87 percent of the time with only 9 major errors going back to 1950, according
to the Stock Trader's Almanac.
The S&P 500 was up 7.9 percent in January, its best performance for the first month of the year since 1987.
Some market pros are skeptical of the January barometer, but Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac, says
it makes sense because that's when Wall Street expectations are reset for the year.
Stocks had their best January gains in more than 30 years, and that should mean 2019 will be a pretty good year for the
market.
That's what the widely watched January barometer tells you - as goes January, so goes the year. According to Stock Trader's Almanac,
going back to 1950, that metric of January's performance predicting the year has worked 87 percent of the time with only nine major
errors, through 2017. In the years January was positive, going back to 1945, the market ended higher 83 percent of the time, according
to CFRA.
But the indicator also signaled a positive year last year, and the market suffered an unusual late-year sell-off, wiping out all
of the gains. The S&P 500 ended 2018 down 6.6 percent, despite rising 5.6 percent in January. But the S&P also defied history with
a terrible December decline of 9.6 percent , the biggest loss for the final month of the year since 1931.
This January, the S&P 500 was up 7.9 percent. The best January performance since 1987, when it rose 13.2 percent. It was its best
overall month since October 2015.
Some market pros worry the sharp snapback in stocks since the late December low means January could be stealing the gains from the
rest of the year. Some also believe there could be another test at lower levels in the not too distant future. Yet, Wall Street forecasters
have a median target of 2,950 for the S&P 500 at year end, a big leap from the current 2,704.
"I'm still struck between the contrast of a year ago and now," said James Paulsen, chief investment strategist at Leuthhold Group.
"We came in last year with nothing but optimism. At this point last year, we had synchronized global growth, confidence had spiked
to record post-war highs, and everyone knew we had this steroid-induced earnings boost coming. The thought was how could stocks lose,
and of course they did."
The market has sprung back from December's low, with the S&P gaining 15 percent since Dec. 26.
"This year, we came in with nothing but bad news - the economy was slowing down. ... The rest of the world is slowing. We have trade
wars. We have the shutdown, and analysts are revising earnings lower," Paulsen added. "We're worried about a recession and a bear
market. It's strikingly different, and yet it's kind of like how can stocks win, but they are and I think they will."
Strategists also point to the differences in the way the market traded in each January. This January has been full of volatile swings,
with ultimately larger gains than losses. Last year, the market was at the end of a long smooth glide path higher.
Last year didn't work
Stocks did well through most of January 2018, but by the end of the month, a correction started. "On January 30, in 2018, it was
the first 1 percent decline in 112 days. That was basically the start of the fall off the cliff. In terms of percent gains, this
January is similar to last, but in terms of where we've come from, it's very different. That was one of the calmest advances in history,"
said Frank Cappelleri, executive director at Instinet.
Cappelleri said it's important to put this year's market move in context, when considering the January barometer. "You have one of
the biggest snapbacks after a very bad December, so the odds were in the market's favor to do better than that. I think maybe you
have to look where we are now. You're up 15, 20 percent from the low depending on where you look. Are we going to go up that much
more for the rest of the year?" he said.
Paulsen sees the gains continuing, after a possible pause. "I think it's going to continue to be a fairly good year, and I think
we probably go up and get close to the highs or 3,000 on the S&P, and I'm not expecting hardly anything on the economy, and earnings
are going to be weak, if not flat or maybe down," Paulsen said.
He said the slowing economy and a potential U.S.-China trade deal could push the dollar down and that would be a positive for stocks.
At the same time, the Fed has paused in interest rate hikes and may even stop its balance sheet unwind.
Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac, said there's another set of statistics that are in the market's favor
for a positive 2019, though they also failed last year. He said for the years when the S&P 500 was positive in the first five days
of the year, plus gained during the Santa rally period, and was up for the month of January, the S&P 500 had a positive year 27 out
of 30 times. It also had an average gain of 17.1 percent in those years, since 1950.
Nick 29 minutes ago
Job growth is solid. Unemployment remains near all time lows even while labor force participation increases. Wage growth outpaced
inflation last year. The economy is humming right along...its just the liberal media wants to bombard us with articles claiming
the Trump recession is imminent.
I'm surprised they actually published an article sayings its going to be a good year.
Parade of eminent astrologists ;-) Those financial prostitutes of casino capitlism, aka financial analysts most often are wrong
year after year, but still have a solid coverage by the neoliberal media due to the shire wieght of the companies they represent. This
bets are not connected with some kind of possible financial loss so they just talking up this firms portfolio, which of course is heavily
tilted in favor of stocks. God even Vanguard retirement 2015 fund has 40% in stock, while formula 100-age would give you less then 35%.
If this is bullish bias I do not know what is. Of course, they play with "other people money" and commissions are everything...
Notable quotes:
"... Their guesses about a great market in 2018 was kind of a miss. But they only had like 340 days so far. They still have 25 days left to turn in around. ..."
"... These guys are seldom right. I've been tracking these predictions more closely since 2014, usually 12-15 of the large financial institutions. Last year's average consensus was the SP at 2874. We closed Tuesday (Dec 4) at 2700. ..."
"... The average of the figures cited in the article is 3068. I think that is wishful thinking considering the slow downs in many sectors, slowing GDP and a flattening yield curve. ..."
"... With regard to upside potential, these all sound wildly optimistic to me. Ten years of printing money out of thin air and exploding deficits does not a future robust economy make, IMO. ..."
"... They cannot say 2500 cause people will not invest (and no commissions); they have to say equal or higher than today. To me it is screaming between the lines the index will hit 2500. ..."
"... So all of them predict the S&P will be higher then it is today even though many are saying we are already in a Bear Market...these people only make money if the market goes up so don't trust them! ..."
Morgan Stanley (Target: 2,750; EPS: $176) -- Beware tightening financial conditions and decelerating growth. (Price
target as of December 17)
Bank of America (Target: 2,900; EPS: $170) -- 'Wildcards' will make for more volatility. (Price target as of November
20)
Jefferies (Target: 2,900; EPS: $173) -- It's a 'mature, not end of, cycle.' (Price target as of December 9)
Oppenheimer (Target: 2,960; EPS: $175) -- Negative sentiment is 'setting the stage for upward surprises' (Price target
as of December 31)
Goldman Sachs (Target: 3,000; EPS: $173) -- Get defensive. (Price target as of December 14)
David
Kostin, chief equity strategist at Goldman Sachs, has a main message for investors going into 2019: Start getting defensive.
Barclays (Target 3,000; EPS $176) -- Growth will revert to trend. (Price target as of November 19)
Wells Fargo Securities (Target: 3,079*; EPS: $173) -- Sell-off will create 'double-digit opportunity' (*Note: Harvey
reduced his price target for 2019 to 2,665 and expected EPS to $166 as of December 21)
Citi (Target: 3,100; EPS: $172.50) -- Bearish sentiment makes for bullish outcomes. (*Levkovich
reduced his S&P 500 price
target for the year-end 2019 to 2,850 as of December 31, 2018)
JP Morgan (Target 3,100; EPS $178) -- A pain trade to the upside. (Price target as of December 7)
BMO (Target 3,150; EPS $174) -- Take a longer-term perspective. (Price target as of November 16)
UBS (Target: 3,200; EPS $175) -- A rough 2018 should make for a better 2019. (Price target as of November 13)
Deutsche Bank (Target: 3,250; EPS: $175) -- A while to "regain its prior peak." (Price target as of November 19)
Credit Suisse (Target: 3,350*; EPS $174) -- Bet on multiples expanding. (*Golub
reduced his S&P 500 price target
for the year-end 2019 to 2,925 as of December 18, 2018)
Joseph, 2 months
ago
So their best guess is a relatively flat to roughly a 20% gain...thanks for narrowing it down. Their guesses about a great market in 2018 was kind of a miss. But they only had like 340 days so far. They still have 25 days
left to turn in around.
M 2 months ago
These guys are seldom right. I've been tracking these predictions more closely since 2014, usually 12-15 of the large financial
institutions. Last year's average consensus was the SP at 2874. We closed Tuesday (Dec 4) at 2700.
We will need a 7% Santa Claus
rally to get there.
In 2017 the consensus was 2367; the year closed at 2673.
2016 was very close with a predicted average of 2223
and a close of 2238.
However, the market was far behind until the post-election rally.
The average of the figures cited in the article is 3068. I think that is wishful thinking considering the slow downs in
many sectors, slowing GDP and a flattening yield curve. I'll take 3068, but not going to bet a lot of money on it.
Omnipotent, 2 months ago
With regard to upside potential, these
all sound wildly optimistic to me. Ten years of printing money out of thin air and exploding deficits does not a future robust
economy make, IMO.
Linda, 2 months ago
Wall Street Strategists predicted G20 China meeting was the best news for markets and were looking for strong upside , market
tanked 800 points 2 days after. Enough said .
Gilad, 2 months ago
They cannot say 2500 cause people will not invest (and no commissions); they have to say equal or higher than today. To me it
is screaming between the lines the index will hit 2500.
PathFinder ofWhatis, 2 months ago
Not a single prediction says the market will finally have a Bear Market decline of 20%.... even after a 10 year Bull Market?
Is that called Group Think?
Todd2 months ago
So all of them predict the S&P will be higher then it is today even though many are saying we are already in a Bear Market...these
people only make money if the market goes up so don't trust them!
Wait long enough, and great ideas come
back around, although not necessarily wearing the same garb.
Elizabeth Warren has just come out
for a 2% wealth tax
(above $50 million).* But this is simply an annualized version of my lump sum stochastic
jubilee .
What's the advantage of redistributing the whole thing every 50 years (on
average) vs a steady trickle? A periodic reset would interrupt long run processes of wealth
inequality more fully than a tax, so long as the rate of return on financial assets is high
enough to compensate for the extra annual pinch, which it most likely would be, since wealth
holders would demand a higher rate of return. It would also be a lot more fun.
On the other
hand, it would be more complicated to administer and might be resisted by force.
On balance, I'd go for the jubilee, but I'll take Warren's version as a close second.
*There's also an extra 1% on wealth in excess of $1 billion, but this is largely
symbolic.
Guess no one plays board games anymore. But there was a time when most people were
familiar with the game Monopoly. And it is a pretty good teaching tool regarding end stage
capitalism and extreme unequal distribution of wealth. At first the game is fun. Everyone has
a grand time. But near the end of the game just a couple of people have all the property with
hotels on everything. Every time you roll the dice, no matter where you land you have to pay
one of those assholes. There is no escape and there is no doubt who is going to win. If you
insist on keeping the game going you will have to spread the wealth around. Otherwise you
will have to dump the whole board and start over.
SW,
Maybe we could program an every loop redistribution tax (maybe every so many times around) to
keep the game going almost forever. Guaranteed to get Democratic presidential candidates'
endorsement. :-O
likbez , January 30, 2019 2:01 am
Those are funny ideas, if we think about who controls the government.
As neoliberal oligarchs are the real winners of each Presidential election theoretically it
might be logical to have Election tax: a "wealthy tax" after each Presidential election.
Say, 10% for those who continued to the winner, and 5% for those who contributed to the
loser, and 2.5% for whose who did not make any election contributions :-)
"... By Enrico Sergio Levrero, Associate Professor of Economics, Roma Tre University. Originally published at the Institute for New Economic Thinking website ..."
In contrast to Keynes's emphasis on the monetary nature of interest rates, the modern theory
of central banking focuses on a benchmark rate for monetary policy that reflect "fundamental
forces" supposedly unaffected by monetary factors. Its theoretical underpinning stems from
Wicksell's analysis of the relationship between market and natural interest rates as restated
in the so-called New Keynesian theory which combines real-business-cycle general equilibrium
models with imperfect competition and nominal rigidities.
Here, at least in the short run, discrepancies between the actual and natural interest rate
are deemed to lead to a rate of price inflation different from the desired and expected one. If
some kind of price rigidity is present, the interest rate difference will also lead to a
discrepancy between actual and potential output. The resulting rule for monetary policy is that
authorities should credibly commit themselves to following the natural rate of interest (NRI).
They must therefore forecast this "neutral" rate, namely, the real rate that, if maintained,
would keep the economy at its production potential over time.
Despite the mainstream consensus on this approach,
determining the "equilibrium interest rate" is a murky business . A first problem is that,
while the "benchmark rate" ought to be based on sound theoretical foundations that allow a
meaningful interpretation of its behaviour, all sorts of definitions of it appear in the
literature when assuming real shocks away from balanced growth. They reflect the theory's
reliance on notions of perfect or imperfect competition in commodities and factor markets as
well as the possible influence of transitory or only permanent components of the natural
rate.
The result is usually a view in which we have a "short-run" natural rate of interest that
varies (usually pro-cyclically) during the cycle, resembling Dennis Robertson's old
prescription that monetary policies should follow temporary shifts of the demand for and supply
of loanable funds, along with a long – run natural rate that corresponds to
potential output for a given degree of market imperfections when both causal shocks
and lags of adjustment are averaged out.
The two approaches lead to divergent monetary policies. If you try to conduct policy by
reference to the long run notion of the natural rate determined by the steady state IS
curve when all the lags and random shocks disappear, you will not favour sharp changes in the
short-term interest rate during the cycle. By contrast, if you rely on a "short run" natural
rate that could fall during a crisis, you would see a slow decrease in the policy rates as too
little to stimulate economic activity.
Compounding these difficulties is the variability induced by the estimation methods of the
natural rate of interest. The benchmark rate of the monetary policy should in fact be readily
computable from observable economic data, but its counterfactual nature inevitably leads to a
variety of estimation methods with results that recall the early criticism by Myrdal and
Lindahl that Wicksell's natural rate is not an operational notion in the sense that it was
incapable of practical application. With each the econometric method raising special problems
of its own, the resulting variety and uncertainty of the value of the natural rate cannot but
pose significant challenges for practical monetary policy.
The divergent estimates of the NRI advanced during the recent 2008 crisis are a case in
point. The estimates vary hugely, with model-based and filtering methods producing higher
volatility than semi-structural approaches or peak-to-peak averages. Some estimates of the NRI
provided negative values on average and not only as a possible (short-lived) effect of
temporary shocks, whereas others suggested that the NRI remained close to but higher than zero.
These differences imply drastically different evaluations of the stance of monetary policy as
policymakers weighed whether it made sense to drive the nominal policy rates towards their zero
lower bound.
But the limits of the NRI as a benchmark for monetary policy are not only statistical or
related to the difficulty of distinguishing among the kind and persistency of economic shocks.
They pertain to the theory itself, specifically to model specification and the alleged
independence of the average or normal interest rate from monetary policy.
Firstly, New-Classical and New-Keynesian models focus on the volatility of output, that is,
its variance, on the assumption that the output gap will be closed by market forces. This hides
the fact that potential output may fall during the crisis due to the destruction of productive
capacity stemming from a fall in effective demand. This would break down the distinction
between short-lived demand shocks on the one hand and supply shocks on the other, thus
complicating any estimate of the NRI and raising questions about its theoretical relevance.
Secondly, in both the theoretical models and estimate procedures, an inverse relation
between the interest rates and components of aggregate demand is postulated as well as between
the former and the price level, although such relations are acknowledged as being weak and
doubtful. In practice, output elasticity with respect to interest rates appears low and
asymmetric, and investments in fixed capital are determined mainly by expected changes in
aggregate demand. Moreover, the Gibson paradox and its modern restatement in the price puzzle
suggest that a direct relation between prices and the interest rate may exist due to prices
adjusting to the monetary costs of production which include the pure remuneration of capital,
that is interest costs. All this implies that, if, after a fall in the interest rate, we
observe a fall in prices (or una tantum a lower rate of inflation), this would not
signal that the NRI should be lower. Nor should a low elasticity of output to the interest rate
be interpreted as a reliable sign that the natural rate of interest has fallen.
But a more fundamental criticism can be advanced concerning the sheer existence of a natural
rate of interest determined by "productivity and thrift" independent of the monetary policy.
New-Keynesian models restate the loanable funds theory, viewing the market rate of interest as
determined by the supply of and demand for credit, with the natural rate of interest set by the
supply of and demand for savings when output is at its potential level. This theory was already
criticised by Keynes, who questioned whether investments adjust to savings through changes in
interest rates. On the grounds of the principle of effective demand, Keynes argued that savings
equalise investments by means of income changes and considered the notion of the NRI as not
useful. He instead viewed the rate of interest as a monetary phenomenon to which capital
profitability would adjust. He also argued that credit is not an alternative to savings but the
necessary preparation for them and that until potential output is achieved, investments are
financed by the finance process and income changes rather than by any previous saving
supply.
This criticism of Keynes and his idea that there is no mechanical tendency to full
employment was strengthened later by the Cambridge capital controversy which showed that it was
impossible to derive a decreasing demand curve for investments with regard to the interest rate
-- a decreasing curve which is at the root of the neoclassical mechanism guaranteeing the
tendency of actual output toward potential output. Unless a single commodity economy is
assumed, a surrogate production function cannot in fact be derived due to the phenomena of
re-switching and reverse capital deepening. Moreover, in the market for savings and investment,
there may be multiple equilibria, the capital-labour ratio is not necessarily higher for a
lower interest rate, and changes in the rate of interest out of equilibrium may be so strong
that they question the validity of the theory.
If we put aside the loanable funds theory, due prominence can be given to Keynes's idea that
the rate of interest is a highly conventional phenomenon. It opens the way for levels of rates
of interest that are shaped by monetary authorities that affect income distribution, and this
possibility casts a different light on the purposes and channels of transmission of the
monetary policies. Of course, monetary policy is not advanced in a vacuum but takes into
account the course of money wages and, more generally, the economic and financial conditions of
the country involved. Yet, the benchmark rate to which monetary authorities anchor their
decisions does not appear to reflect "fundamental forces" acting independently of monetary
factors, and therefore those decisions cannot be conceived simply as a technical device used to
find out the "true" natural interest rate.
Summing up, estimates of the NRI are misleading both on empirical and theoretical grounds
and monetary policy is not neutral, primarily because it may influence the division of the
surplus product among different classes and social groups. Quite paradoxically, however, the
tricky nature of those estimates, with their consequent downward revision during the crisis due
to their sensitivity to current economic conditions, has been used by Central Banks to pursue a
regime of low interest rates that was required by the macroeconomic situation of industrialized
countries after the 2008 crisis. The cost of doing this has been to hide the asymmetric effects
and delay in the transmission of monetary policy, since the scant reactivity of output to the
fall in interest rates has been explained precisely by appeals to an alleged fall in the
natural rate of interest even to negative values due to reaching the zero-lower bound for
policy nominal interest rates. This makes a murky business even more opaque.
"A first problem is that, while the "benchmark rate" ought to be based on sound
theoretical foundations that allow a meaningful interpretation of its behaviour, all sorts of
definitions of it appear in the literature when assuming real shocks away from balanced
growth."
Has anyone ever shown that in fact the diff eqs being used actually are insensitive to
small perturbations? That the solutions are actually numerically stable? If they're not --
and in general, this is something that has to be shown for the constrained parameters -- the
rest is a waste.
If it's not a concave system, but the solutions are saddle points, for example given the
number of parameters and the equations steady state solutions don't require "shocks" at all
to be unstable but are inherently unstable. And most systems are unstable
All systems with non-linear feedback (eg: Fear and Greed), are Chaotic, not Unstable. A
system with Unstable but not Chaotic behavior falls to a predictable state.
It is arguable that Greed is feed-forward, possibly in all cases. Fear is both, feed
forward and feedback. For example fear of the unknown is feed forward, fear of loss generally
feedback.
A classic fear which is both, feed forward and feedback, is fear of unwanted pregnancy. It
is well know that fears of unwanted pregnancy are always handled rationally. /s.
Chaotic would mean no discernible pattern. Unstable would mean it has patterns that lurch
from some state to some other state, but which are discernible.
I'm very rusty, but I do believe that money, or capital, is itself a good, so it follows
that an interest rate is little more than the price of money. And which rate is the natural
rate, the inter bank rate, mortgage rates, brokers call, maybe the whatever a payday lender
charges? All those rates just reflect different markets, or am I really wrong?
This article is implying that there is no natural rate of interest.
That would imply that money is not subject to the laws of supply and demand so is not a
good.
Accepting that would kick away one of the pillars of Liberalism and neoclassical
economics. It would also reveal that money and capital are not equivalent, except to a
banker.
He gets close to saying that the idea is sheer ideology, serving a normalizing function
kind of like the "state of nature" in classical political theory, e.g. Rousseau or Locke,
that would be used to justify a set of political institutions. But he won't allow himself a
paragraph to step away from econospeak long enough for the point to become fully salient.
Amen. The fundamental flaw is the concept of perpetual growth. Lots of fancy words for a
pseudo science. At least meteorological predictions get judged, not fudged.
The US' recent multidimensional asymmetric offensive against all manner of Russian interests
isn't the random symptom of psychotic Russophobia that it's being presented as, but is part of
a comprehensive strategy for pressuring Moscow to abandon its close cooperation with China
& Iran in exchange for a "New Détente", a scenario that shouldn't be ruled out if
Trump gets his way during the upcoming meeting with President Putin.
Many people are struggling to find any rhyme or reason behind the US' anti-Russian moves
over the past couple of years, especially the ones that Trump was supposedly forced into by the
"deep state" out of the mistaken belief that it would relieve the fake news-driven Russiagate
pressure on his administration, but the answer to it all is a lot simpler than it appears. The
fact of the matter is that everything that's happening is intentional and part of a
comprehensive strategy for getting Russia to abandon its close cooperation with China &
Iran in response to the US' multidimensional asymmetric offensive against its interests,
although it's proven itself to be a failed plan that requires urgent reform. Whether it's the
West's "Russian propaganda" witchhunt or the
Skripal chemical weapons false flag scandal
, every single anti-Russian move that's been undertaken in the last few years is designed to
advance this objective.
Taking Apart The Multipolar TriangleIran:
There was
crediblespeculation right after Trump's
2016 victory that his administration would try to split the Russian-Chinese-Iranian
multipolar triangle in Eurasia, and that's exactly what the President and his team are trying
to do, albeit in a different fashion than what people might have expected. Trump rightly calculated
that Obama's unprecedented outreach to Iran through the 2015 nuclear deal was being taken
advantage of by Tehran and that the Islamic Republic never had any serious intentions in
agreeing to the tacit
quid-pro-quo being offered at the time to replace Saudi Arabia as America's preferred
regional partner. Accordingly, he decided to pivot away from his predecessor's policy and use
nothing but "muscular means" to coerce Iran into
submitting to the US' military might, which is a work in progress and one that will
certainly be made all the more difficult by Tehran's mastery of asymmetrical
responses.
China:
As for China, Trump also learned from the mistake of his predecessor who at one time offered
the People's Republic a global partnership through the so-called " G-2 "
or "
Chimerica " concept but was rebuffed by a Beijing that's both too proud to share world
leadership with America and also reluctant into being tricked to take on responsibilities that
it didn't agree to or anticipate at the time.
It wasn't coincidental that the G-2's failure was soon thereafter followed up by China's
announcement of its One Belt One Road (OBOR) global vision of New Silk Road connectivity in
order to economically reform the structural basis for the "Washington Conesus" and consequently
facilitate the emerging
Multipolar World Order .
Trump's Kraken -like answer to
this challenge was to continue with Obama's Hybrid War policy in targeting the most
vulnerable "Global South" transit states for China's transnational infrastructure
megaprojects simultaneously with the commencement of a
trade war against the People's Republic.
Russia:
Iran's full-blown ideological resistance to striking a "deal with the devil" and China's
unflinching commitment to challenging the US' unipolar dominance of the world mean that there's
no realistic chance that either of them will budge from their previous refusals to abandon the
other in exchange for an alleviation of American pressure on their countries, thereby pointing
Trump in Russia's direction because he considers it to be the "weakest link" in this multipolar
arrangement.
After all, Russia has always insisted with total sincerity that it wants nothing more than
an equal relationship with what it still continues to call its "Western partners", which
logically entails them respecting the country's so-called "sphere of influence" in the former
Soviet space. Previous US administrations smacked away Russia's olive branch every time it was
offered, but Trump seemed to actually be interested in cutting a deal with Moscow before the
"deep state" intervened to stop him.
The "Deep State's" Folly
Ironically, that move might go down in history as the last possible chance that the US had
to realistically bring Russia back into the "Washington Consensus" by peaceful means, as Moscow
signaled that it was prepared to enter into a so-called "New Détente" with Washington
that would have obviously involved mutual "concessions/compromises". That "lost opportunity"
might never be regained because Russia's resolve has since hardened after feeling betrayed by
Trump and subject to his administration's humiliating punishments for not submitting to America
without any preconditions ("mutual concessions/compromises"), which is what the "deep state"
wanted after making the massive error of judgement in convincing themselves through
"groupthink" that President Putin would follow in Yeltsin's footsteps and surrender if the
powerful "oligarchic" class put enough pressure on him to do so in exchange for lifting the
sanctions. That ship has sailed and what's happening now is a combination of scorn and
strategy.
The US will never forgive President Putin for refusing to bow down to the Obama-era
liberal-globalist "deep state" that sabotaged Trump's outreach plan, which is why it's getting
so nasty in carrying out witch hunts against Russian media and expelling the country's
diplomats on unproven pretexts. For the "deep state", this is "personal", though while Trump
seems to understand the "effectiveness" of "playing dirty" as a form of psychological warfare
against the Russian leadership, he's never publicly swayed from his campaign pledge to cut a
deal with Russia if it was possible (i.e. the "deep state" lets him or he goes around their
backs). It's with this backdrop in mind that Trump invited
President Putin to the White House for a forthcoming meeting that will presumably be about
"ironing out their differences" and advancing the presumably mutual goal of a so-called "New
Détente", albeit not on the one-sided unconditional terms that the "deep state" is
obsessed with.
Describing The "New Détente"
Trump realized that Russia is digging in its heels by deepening its partnerships with China
and Iran in response to the "deep state's" multidimensional asymmetric aggression and that this
policy has been nothing but counterproductive to America's predominant New Cold War interest in
"containing" China. Furthermore, the President seems to have convinced the "patriotic" and
"pragmatic" elements of the "deep state" that this is the case and that it's impossible for
America to make any tangible progress in stopping the Silk Road if it has to multitask between
"containing" China, Iran, and Russia in vastly different theaters and with completely different
methods. It's much better, the billionaire businessman likely reckoned, to walk back some of
his administration's unnecessarily aggressive moves in Europe and perhaps elsewhere as part of
his country's "mutual concessions/compromises" with Russia for a "New Détente" than to
continue with this completely failed policy of pressure.
What the US wants from Russia in exchange is simple, and it's that it expects Moscow to
scale back its strategic partnerships with Tehran & Beijing and to not interfere with
Washington's "containment" campaigns against both of them. Russia is already passively
allowing the US and its allies to "contain" Iran in Syria out of self-interested prudence
in preventing
World War III , but it has yet to pull back from its Silk Road relationship with China.
It's unclear exactly how the US envisions Russia doing this in a "plausibly deniable" way that
mirrors the Iranian approach and avoids provoking a hostile reaction from China, but whatever
it is that Washington has in mind, it hopes that Moscow will agree to it so that President
Putin can forget about international drama and completely focus on fulfilling the
comprehensive domestic reform agend a that he plans to carry out during his fourth and final term.
It's impossible to speculate on whether Russia is even interested in such a scenario at this
point in time given all that's transpired between it and the West in the past year alone, but
playing "devil's advocate" for a moment, there might be another enticing reason aside from the
domestic one why Moscow might decide to "play ball". The increasing polarization of the world
economic system into globalization-spreading China and protectionist-espousing America is
broadly returning International Relations to its Old Cold War-era bipolarity in advance of its
eventual transition to multipolarity, and it's here where Russia could play a pivotal role in
leading a new Non-Aligned Movement ( Neo-NAM )
that helps other countries "
balance " their relations with both superpowers. The US might begrudgingly be forced under
the current circumstances and the objective limits of its power to accept the relative
curtailment of its influence over some countries by Russia so long as Moscow fulfills a similar
role vis-à-vis them and China.
The Great Unknown
It's a risky gamble because a Russian-led Neo-NAM could just as easily tilt the strategic
balance of global influence in the New Cold War towards China as it could towards America, but
Washington is wagering that Moscow might conclude that its self-interest could best be
protected by maintaining "harmony" between the two superpowers in Eurasia, thus enabling the US
to focus more on destabilizing the Silk Road through Hybrid Wars in Africa and the parts of the
supercontinent not covered by this "balancing bloc". Russia's low-cost but high-impact
"balancing" investments could yield enormous dividends for its influence, while any prospective
de-escalation in Europe due to the "New Détente" would free up the country's resources
to focus more on carrying out President Putin's ambitious domestic reform agenda and delivering
on the campaign promises that he made his countrymen in order to
sustainably guarantee his legacy .
Concluding Thoughts
To reiterate what was just written, there is no way to know for certain whether the US'
latest gambit in trying to reach a "New Détente" with Russia will succeed or not, but it
needs to be recognized that the multidimensional asymmetric aggressions that it's waged against
its rival's interests will eventually take their financial toll and that President Putin might
find it increasingly challenging to execute his comprehensive reform agenda on the home front
unless he cuts some kind of deal. This doesn't imply that Russia is at risk of "selling out" to
the US, but just that President Putin is accountable first and foremost to his people and then
only secondly to his country's international partners.
If the Kremlin concludes that Russia's interests would best be advanced through engaging in
a series of "mutual concessions/compromises" with the US as part of a "New Détente",
then it won't hesitate to make that move; likewise, if the savvy Russian leader recognizes that
he's being "taken for a ride" by Trump and that his "counterpart" is offering him a lopsided
deal that's doomed to make his country America's "junior partner" in Eurasia, then he won't
think twice about walking away with no "deal". Ultimately, everything depends on whatever deal
Trump puts on the table and whether he can convince President Putin that his newfound
truce with the
neoconservatives translates into being able to get the "deep state" to abide by the terms
of any prospective agreement.
If Russia is swayed by the carrot-and-stick combination of the Trump Administration's
possibly sincere commitment to a "New Détente" in exchange for an alleviation of
multisided and sometimes humiliating pressure against it, then the geopolitical implications
would be profound since Moscow would be ascending into the perfect position for "balancing"
Eurasian affairs . It wouldn't just have China's tacit support for this initiative but
America's too because each superpower would appreciate Moscow becoming a "balancing" force
vis-à-vis the other and freeing them up to focus on their rival in other areas of
concern, mostly in Africa. As such, Russia could count on being courted by both of them and
finally fulfilling its grand strategic goal to "balance" Eurasia, though provided that this
speculative deal goes through in the first place and is actually respected by the US
afterwards.
Just one more to a long list of Trump appointments. I believe Trump is some kind of pervert, like the ones that like
to get whipped, only Trump likes to get stabbed in the back. XXX , 34 minutes ago
He does what Sheldon and Bibi tell him.
You think you're so ******* smart, but this some how eludes you?
YYY, 3 hours ago (Edited)
Donald Trump's House of Cons, Clowns, Crappolas, Criminals, and Conspirators:
"... The Trump administration's $1.5 trillion in tax cuts appears to have not made any major impact on businesses' capital investment or hiring plans, according to a new survey. ..."
"... "A large majority of respondents, 84%, indicate that one year after its passage, the corporate tax reform has not caused their firms to change hiring or investment plans," NABE President Kevin Swift said in a release. "Fewer firms increased capital spending compared to the October survey responses, but the cutback appeared to be concentrated more in structures than in information and communication technology investments." ..."
"... The lower tax rates did have an impact in the goods-producing sector, NABE found, with 50% of respondents reporting increased investments at their companies, and 20% saying they redirected hiring and investments to the US from abroad. ..."
The Trump administration's $1.5 trillion in tax cuts
appears to have not made any major impact on businesses' capital investment or hiring plans,
according to a new survey.
A quarterly poll from the National Association for Business Economics
published Monday found that some companies reported accelerating investments because of
lower corporate taxes, but a whopping 84% of respondents said they had not changed their plans.
That's up slightly from 81% in the previous survey published in October,
Reuters reports.
The White House had said the massive stimulus package, which cut the corporate tax rate to
21% from 35%, would boost business spending and job growth. The tax cuts that came into effect
in January 2018 were the biggest overhaul of the U.S. tax code in more than 30 years.
"A large majority of respondents, 84%, indicate that one year after its passage, the
corporate tax reform has not caused their firms to change hiring or investment plans," NABE
President Kevin Swift said in a release. "Fewer firms increased capital spending compared to
the October survey responses, but the cutback appeared to be concentrated more in structures
than in information and communication technology investments."
The lower tax rates did have an impact in the goods-producing sector, NABE found, with 50%
of respondents reporting increased investments at their companies, and 20% saying they
redirected hiring and investments to the US from abroad.
An analysis of how S&P 500 firms were reacting to the tax cut by researchers at the
University
of Michigan found that 4% of the sample said in Q1 of 2018 they would pay some of their tax
savings back to workers, and 22% mentioned in earnings conference calls they would increase
investment because of the tax cuts.
Though for small businesses, a new survey from the
National Federation of Independent Business released earlier this month found 61% of owners
reported making capital investments, unchanged from last month but 5 points higher than in
August. In December, 35% of small-business owners reported increasing employee compensation and
24% reported planned increases in the next few months.
The first question to ask is: do those suckers need stocks at all?
That's all nice. But what if we are facing 2008 style event in a year or two?
The question here is why you need to risk retirement money in the casino? And stock market including all stock funds is a casino.
No questions about it.
Why if you are really close to, say, 65 it is necessary to take additional risk.
If you have enough money this is stupid (pure greed is often punishable, at least accounting to teaching of Prophets). You probably
can benefit from reading Other People's Money: The Real Business of Finance by John Kay first. Before jumping into this water.
If you don't -- you need to be twice more careful -- please remember that such people most often are victims of grave own errors,
and/or fraud. So the cure might be worse then the disease. May be relocation to cheaper state and cutting some expenses (one car instead
of two, one bedroom instead of two bedroom, etc) is a safer solution then gambling.
In any case, if you keep money in the stock fund despite your age (I think around 17% of old Americans have all their retirement
savings in stock funds, or individual stocks ;-) and another financial bubble burst again (and this is a guaranteed event under neoliberalism)
recovery might take much longer then you expect, and you might need to take losses to make ends meet.
So the really important question here is not what funds you need to select from a thousand of names (there are more mutual funds
then stocks, I think). That's just another variety of gambling.
They real question is whether you need to play this game or not.
What if the current decline is not just a blip is a warning that more substantial trouble lies ahead?
Neoliberal with its hypertrophied and parasitic finance industry tend to produce Minsky moments (called bubble burst for non-specialists)
with surprising regularity: savings and loan crisis (1986-1995), dot-com bubble (2000-2002), Great recession (2008-?), so there is no
guarantee that we will not have yet another similar event in the next couple of years.
Target date funds might be a safer bet if you are old and still really want to play in a casino in hope to compensate inadequate
size on your retirement portfolio. For example, its Vanguard Target Retirement 2015 Fund (VTXVX) contains 40% stocks. While classic
100-your age allocation formula for 65-year person imply 35% stocks allocation. So you see that even Vanguard is a little bit too aggressive
here.
Also if you bought S&P500 at its 2000 peak (around 1500) your return for 18 years would still be 2.5% (4.5% with dividend reinvested).
So if you are much younger then 65 it is important to compare long-term record with S&P500 and age and track record of the manager (change
of the manager in an actively managed fund often badly affects that fund performance).
Start with low costs. Cheaper funds actually tend to beat their competitors even before expenses. SEE ALSO:
The 27 Best Mutual Funds in 401(k) Retirement Plans Buy funds the managers own. If the manager(s) of a fund won't invest
in the fund themselves, why should you? Look in the prospectus for managers who put at least $1 million in their fund, as the managers
of the five recommended funds in this article have done.
Chose funds that have a good corporate culture. Does the fund firm consider you a customer to be fleeced or a partner in investing?
Figuring this out is difficult, but low costs and manager investment are two indicators. My favorite big firms are
Vanguard ,
American Funds and
T. Rowe Price .
Consider long-term, risk-adjusted returns. You can do this by looking at Morningstar's star ratings, Sharpe ratios, alphas or
Sortino ratios. All of these provide measures of risk-adjusted returns. They're all slightly different, but higher is always better.
Reduce your risk. I think the market will remain highly volatile in 2019. Standard deviation, a measure of volatility, is an excellent
predictor of how a fund will behave in unstable markets. The higher a fund's standard deviation, the more volatile it has been. It's
my favorite risk metric. Downside capture, which measures how a fund has done in bad markets, is also worth a close look.
Following are my picks for 2019 among actively managed stock funds. It's no accident that they're all either value funds or foreign
funds. My strong hunch is that a bear market next year will lead to a change in leadership among stock sectors, as is often the case
during and after a selloff. Look for growth stocks' decade-long dominance over value stocks to end, and
value
stocks to outperform . Likewise, I think foreign stocks will finally begin to outperform domestic stocks.
April 1 If you turned 70˝ in 2018, April 1 is the deadline to take
your
first required minimum distribution from your IRA or 401(k). First-timers get this one-time extension on their RMD (subsequent
RMDs must be taken by December 31). To figure a first RMD due on April 1, 2019, divide the account's 2017 year-end balance by a life
expectancy factor based on your birthday in 2018. Find the factor in IRS Publication 590-B. If you turn 70˝ in 2019, you might consider
taking your first RMD this year, says Bradford. By delaying the first RMD to the following year, you have to take both your first
and second RMDs in the same year.
Keep in mind that while Roth IRAs don't have RMDs for the original owner, Roth 401(k)s do have RMDs. But if you are working past
age 70˝, you can skip the RMD from your current employer's 401(k) if you don't own 5% or more of the company. You'll still need to
take RMDs from your IRAs and any 401(k)s you hold from prior employers, though. ... ... ... April 1 If you turned 70˝ in 2018, April
1 is the deadline to take
your
first required minimum distribution from your IRA or 401(k).
First-timers get this one-time extension on their RMD (subsequent RMDs must be taken by December 31). To figure a first RMD due
on April 1, 2019, divide the account's 2017 year-end balance by a life expectancy factor based on your birthday in 2018. Find the
factor in IRS Publication 590-B. If you turn 70˝ in 2019, you might consider taking your first RMD this year, says Bradford. By delaying
the first RMD to the following year, you have to take both your first and second RMDs in the same year.
Keep in mind that while Roth IRAs don't have RMDs for the original owner, Roth 401(k)s do have RMDs.
But if you are working past age 70˝, you can skip the RMD from your current employer's 401(k) if you don't own 5% or more of the
company. You'll still need to take RMDs from your IRAs and any 401(k)s you hold from prior employers, though.
You must make your RMD by December 31, and it's best not to wait until the last minute. It can take a little while for your IRA
or 401(k) administrator to process the request. Plus, you need to leave enough time for any trades to settle so there's enough cash
for the withdrawal -- especially around the holidays, when the markets are closed or close early. "We suggest moving forward in the
beginning to mid December," says Keith Bernhardt, vice president of retirement income at
Fidelity .
Find out how the administrator determines which investments to sell. Some IRA or 401(k) administrators automatically take the RMD
money pro rata from each of your investments unless you specify otherwise, and they could end up selling stocks or funds at a loss
to make your payment. You could elect a fixed percentage from a few investments or have 100% taken from cash.
If you choose the cash option, the IRA administrator may need to send you an alert beforehand in case you need to sell shares
first
The problem is that the lower average price of oil, the less capex are for the year. And that creates problems in two to three
years period.
As long as shale oil producers are capable to produce junk bond, they will continue extraction even in prize zone below $60,
where they can't recover the costs. Cheerleaders from IEA will continue to produced nice rising curves.
Rather than troubling you by disagreeing, Tom, may I request, instead, your
basis for selecting $70 as the point where the economy and oil producers meet? My method uses step-wise
accumulation of production, from lowest cost to highest cost, to reach the required 100 MMB/D of worldwide
total demand. The reputable numbers for that exercise suggest lower than $60/B. As Canadian Oil Sands producers
will confirm, the producer does not always cover his cost. So the $60 number is higher than the practical top.
(This explains why the actual average price over history is $40.)
The reality is that as long as you have spare
producing capacity, which we always do, that can produce oil at less than $10/B as your competition, you can
forget recovering your higher cost unless you can hoodwink the traders. Of course, the hoodwinked traders'
motto is "Fooled me once, shame on you! Fooled me twice, shame on me!
Nicely put, William.
The niggling thing about the $40 average price over history is that the bulk of the
easy, cheap oil appears to be extracted already. Low-hanging black oil fruit already harvested.
Which means that extraction costs will increase.
So... while $40 is historically accurate for oil, that number is not static, and
seems it must inevitably rise, as it becomes increasingly expensive to extract the black oil fruit from further up
the tree - easy pickings gone already.
U.S. Shale Oil pundits generally seem to agree that $50 or
so is the breakeven point for WTI region light tight oil. Removing existing and earlier compounded debts from the
equation, I reckon that sounds about correct. Add in debts though, and it's probably closer to $80.
If anybody here hasn't heard my hundreds of ad nauseum comments this
entire dang year about my
hope
for
$65 oil [Brent] for 2018 and my
hope
for
$70 oil [Brent] for 2019, please raise your hand, and I can
reiterate
yet again
.
Meanwhile, I'll gently remind that I already warned repeatedly this
year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the harder the
eventual crash would likely be.
And over to the news, would everyone kindly lay off guzzling the pots
of coffee and
stop artificially panicking. Near as I can
tell,
$70
- ish oil for 2019 still seems about the right balance
between
the global economy and oil producers.
I hope
the current over-reaction on the
oil
price See Saw
will settle back to around $70 by end of
this year or early next year.
Just
my opinion; as always, you are free to disagree.
hellenicshippingnews.com said yesterday , that the average
price for WTI had been $65 and $72 for Brent in year 2018 , with a high at 3rd October and low at 24th December
.
Overall , I would predict a lower average for 2019 , than for 2018 ; average
prices like during years 2015 and 2016 ($50) .
Opec+ might throttle supply , but if Iran sanctions will screw further ,
Opec+ will be able to push more oil onto the markets .
Venezuela might get online again , since I can't believe , that China and
Russia will stay neutral in regards to their investments .
Brazil will deliver more , and Mexico probably could reduce domestic oil
theft .
Canada is only capable to throttle production , due to authoritie's measures
, if drillers are left to heir own devices , the production in Canada will rise again .
Without any governmental regulations worldwide (International Socialism) oil
could cost even $20 and less .
Nevertheless , WTI and Brent likely are worth more than many crudes , since
they have short ways to their markets : The lower the transportation costs , the higher the oil price .
Electric Vehicles are still not yet deployed much , but in 10 years may make
up to 10% of cars in use worldwide .
Power-To-Gas and -To-Gasoline will likely become deployed in the next 10
years to come , increasing the pressure on crude oil prices .
If anybody here hasn't heard my hundreds of ad nauseum comments
this entire dang year about my
hope
for
$65 oil [Brent] for 2018 and my
hope
for
$70 oil [Brent] for 2019, please raise your hand, and I can
reiterate
yet again
.
Meanwhile, I'll gently remind that I already warned repeatedly
this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the
harder the eventual crash would likely be.
And over to the news, would everyone kindly lay off guzzling the
pots of coffee and
stop artificially panicking. Near
as I can tell,
$70
- ish oil for 2019 still seems about the right balance
between
the global economy and oil producers.
I
hope the current over-reaction on the
oil
price See Saw
will settle back to around $70 by
end of this year or early next year.
Just
my opinion; as always, you are free to disagree.
What are your thoughts on the recent news regarding Shale wells drying fast
than they should...I read in WSJ.
Also, $70 doesn't looks that impossible too...yes.
Summer Driving Season and if and when a thaw between
U.S. and China's trade war....can certainly take oil to the said level.
Without any governmental regulations worldwide (International
Socialism) oil could cost even $20 and less
.
Oil could only cost $20, if Saudi Arabia decided to
supply the world with oil by itself - a large amount of our oil supply is from offshore Nigeria, Angola, Gulf
of Mexico (Mexico - USA), North Sea, Brazil, Oil sands, Oil shale, - these locations require $60 oil minimum.
Oil could only cost $20, if Saudi Arabia decided to supply the world
with oil by itself - a large amount of our oil supply is from offshore Nigeria, Angola, Gulf of Mexico
(Mexico - USA), North Sea, Brazil, Oil sands, Oil shale, - these locations require $60 oil minimum.
Well....Mr.
@William
Edwards
here have explained the pricing in a very cogent manner. I'd find the link of the discussion and
post it.here.
If you are buying oil indexes price of
oil is important. If you are buying stocks the question is, will prices go up or down on stocks. There are a
lot of companies that are making a profit at the lower prices. Furthermore there is a lot of companies with
significant cash on hand. They also have low P/E, some in single digits and others in low double digits.
Combine this with the fact that with a little research many of these stocks are rated sells or at best hold and
analysts are rating them as bearish or extremely bearish, there is a good opportunity for some significant
increase. Especially in a market that is still very high. Granted if the market tumbles again, it is hard to
go against the tide. Looks like there is a lot of money to be made in some of these stocks. Some of them will
assuredly be targets for bigger companies wanting to consolidate acreage, others wanting stronger positions in
the Permian, Eagle Ford and SCOOP/STACK plays. Over the next month and maybe 2 there will be a lot of money
made. There is also a lot of insider trading going on, such as the purchase of $4 million in CHK by an exec.
Not a fan of CHK but there are a lot of people who have made a lot of money on them in recent weeks. The
reality is oil prices probably won't plunge even if the stock market goes south in an ugly fashion again, and
with Saudis, Iran and reduction in rigs in the shale plays across America, market sentiment will probably carry
prices at least through mid-Feb. That is plenty of time for oil and gas stocks to claw back some gains based
on the big fall they have had. Just my thoughts after 40 years of working in and watching this industry.
If anybody here hasn't heard my hundreds of ad nauseum comments
this entire dang year about my
hope
for
$65 oil [Brent] for 2018 and my
hope
for
$70 oil [Brent] for 2019, please raise your hand, and I can
reiterate
yet again
.
Meanwhile, I'll gently remind that I already warned repeatedly
this year that $80 is simply not sustainable, and that the higher that oil goes above $70 then the
harder the eventual crash would likely be.
And over to the news, would everyone kindly lay off guzzling the
pots of coffee and
stop artificially panicking. Near
as I can tell,
$70
- ish oil for 2019 still seems about the right balance
between
the global economy and oil producers.
I
hope the current over-reaction on the
oil
price See Saw
will settle back to around $70 by
end of this year or early next year.
Just
my opinion; as always, you are free to disagree.
Rather than troubling you by disagreeing, Tom, may I
request, instead, your basis for selecting $70 as the point where the economy and oil producers meet? My method
uses step-wise accumulation of production, from lowest cost to highest cost, to reach the required 100 MMB/D of
worldwide total demand. The reputable numbers for that exercise suggest lower than $60/B. As Canadian Oil Sands
producers will confirm, the producer does not always cover his cost. So the $60 number is higher than the
practical top. (This explains why the actual average price over history is $40.) The reality is that as long as
you have spare producing capacity, which we always do, that can produce oil at less than $10/B as your
competition, you can forget recovering your higher cost unless you can hoodwink the traders. Of course, the
hoodwinked traders' motto is "Fooled me once, shame on you! Fooled me twice, shame on me!
Rather than troubling you by disagreeing, Tom, may I request, instead,
your basis for selecting $70 as the point where the economy and oil producers meet? My method uses
step-wise accumulation of production, from lowest cost to highest cost, to reach the required 100 MMB/D
of worldwide total demand. The reputable numbers for that exercise suggest lower than $60/B. As Canadian
Oil Sands producers will confirm, the producer does not always cover his cost. So the $60 number is
higher than the practical top. (This explains why the actual average price over history is $40.) The
reality is that as long as you have spare producing capacity, which we always do, that can produce oil at
less than $10/B as your competition, you can forget recovering your higher cost unless you can hoodwink
the traders. Of course, the hoodwinked traders' motto is "Fooled me once, shame on you! Fooled me twice,
shame on me!
Nicely put, William.
The niggling thing about the $40 average price over history is that the bulk
of the easy, cheap oil appears to be extracted already. Low-hanging black oil fruit already harvested.
Which means that extraction costs will increase.
So... while $40 is historically accurate for oil, that number is not static,
and seems it must inevitably rise, as it becomes increasingly expensive to extract the black oil fruit from
further up the tree - easy pickings gone already.
U.S. Shale Oil pundits generally seem to agree that $50
or so is the breakeven point for WTI region light tight oil. Removing existing and earlier compounded debts
from the equation, I reckon that sounds about correct. Add in debts though, and it's probably closer to $80.
The niggling thing about the $40 average price over history is that
the bulk of the easy, cheap oil appears to be extracted already. Low-hanging black oil fruit already
harvested.
Which means that extraction costs will increase.
So... while $40 is historically accurate for oil, that number is not
static, and seems it must inevitably rise, as it becomes increasingly expensive to extract the black oil
fruit from further up the tree - easy pickings gone already.
U.S. Shale Oil pundits generally seem to agree that $50 or so is the
breakeven point for WTI region light tight oil. Removing existing and earlier compounded debts from the
equation, I reckon that sounds about correct. Add in debts though, and it's probably closer to $80.
May I differ on one point? Low-hanging fruit is forever!
I do no know for sure, since my x-ray vision fails below 5000 ft, how much cheap oil lies below the Saudi (and
Iraq and Iranian) deserts. But I do know two things. 1) I have been told for forty years that the proven
reserves in Saudi Arabia are 300 Billion barrels. It has not changed even though 10,000,000 B/D are pumped out
continuously. But I do not have to know. I only need to know if it will ever run out. I am sure that it will
not. The oil under the desert will, someday, be worth no more than the sand that covers the desert. 2) Quantity
of reserves is like spare capacity. As long as there is enough, it matters not how much more than "enough"
exists. As long as the Middle East reserves are not running at full capacity and fully depleted, $10 oil will
be available. Must I remind you that the stone age did not run out of stones? Or the nuclear age run out of
uranium? Better replaces inferior.
"... This interview with Henry Giroux was conducted by Mitja Sardoč, of the Educational Research Institute, in the Faculty of the Social Sciences, at University of Ljubljana, Slovenia. ..."
"... Not only does it define itself as a political and economic system whose aim was to consolidate power in the hands of a corporate and financial elite, it also wages a war over ideas. In this instance, it has defined itself as a form of commonsense and functions as a mode of public pedagogy that produces a template for structuring not just markets but all of social life. ..."
"... In this sense, it has and continues to function not only through public and higher education to produce and distribute market-based values, identities, and modes of agency, but also in wider cultural apparatuses and platforms to privatize, deregulate, economize, and subject all of the commanding institutions and relations of everyday life to the dictates of privatization, efficiency, deregulation, and commodification. ..."
"... Since the 1970s as more and more of the commanding institutions of society come under the control of neoliberal ideology, its notions of common sense – an unchecked individualism, harsh competition, an aggressive attack on the welfare state, the evisceration of public goods, and its attack on all models of sociality at odds with market values – have become the reigning hegemony of capitalist societies. ..."
"... What many on the left have failed to realize is that neoliberalism is about more than economic structures, it is also is a powerful pedagogical force – especially in the era of social media – that engages in full-spectrum dominance at every level of civil society. ..."
"... Neoliberalism's promotion of effectiveness and efficiency gives credence to its ability to willingness and success in making education central to politics ..."
"... The Crisis of Democracy, ..."
"... At the core of the neoliberal investment in education is a desire to undermine the university's commitment to the truth, critical thinking, and its obligation to stand for justice ..."
"... Neoliberalism considers such a space to be dangerous and they have done everything possible to eliminate higher education as a space where students can realize themselves as critical citizens ..."
"... It is waging a war over not just the relationship between economic structures but over memory, words, meaning, and politics. Neoliberalism takes words like freedom and limits it to the freedom to consume, spew out hate, and celebrate notions of self-interest and a rabid individualism as the new common sense. ..."
"... Equality of opportunity means engaging in ruthless forms of competition, a war of all against all ethos, and a survival of the fittest mode of behavior. ..."
"... First, higher education needs to reassert its mission as a public good in order to reclaim its egalitarian and democratic impulses. Educators need to initiate and expand a national conversation in which higher education can be defended as a democratic public sphere and the classroom as a site of deliberative inquiry, dialogue, and critical thinking, a site that makes a claim on the radical imagination and a sense of civic courage. ..."
"... The ascendancy of neoliberalism in American politics has made visible a plague of deep-seated civic illiteracy, a corrupt political system and a contempt for reason that has been decades in the making. ..."
"... It also points to the withering of civic attachments, the undoing of civic culture, the decline of public life and the erosion of any sense of shared citizenship. As market mentalities and moralities tighten their grip on all aspects of society, democratic institutions and public spheres are being downsized, if not altogether disappearing. ..."
"... First, too little is said about how neoliberalism functions not simply as an economic model for finance capital but as a public pedagogy that operates through a diverse number of sites and platforms. ..."
"... I define neoliberal fascism as both a project and a movement, which functions as an enabling force that weakens, if not destroys, the commanding institutions of a democracy while undermining its most valuable principles ..."
"... As a movement, it produces and legitimates massive economic inequality and suffering, privatizes public goods, dismantles essential government agencies, and individualizes all social problems. In addition, it transforms the political state into the corporate state, and uses the tools of surveillance, militarization, and law and order to discredit the critical press and media, undermine civil liberties while ridiculing and censoring critics. ..."
This interview with Henry Giroux was conducted by Mitja Sardoč, of the Educational Research Institute, in the Faculty of the
Social Sciences, at University of Ljubljana, Slovenia.
Mitja Sardoč: For several decades now, neoliberalism has been at the forefront of discussions not only in the economy and
finance but has infiltrated our vocabulary in a number of areas as diverse as governance studies, criminology, health care, jurisprudence,
education etc. What has triggered the use and application ofthis'economistic'ideologyassociatedwith the promotion of effectiveness
and efficiency?
Henry Giroux: Neoliberalism has become the dominant ideology of the times and has established itself as a central feature
of politics. Not only does it define itself as a political and economic system whose aim was to consolidate power in the hands
of a corporate and financial elite, it also wages a war over ideas. In this instance, it has defined itself as a form of commonsense
and functions as a mode of public pedagogy that produces a template for structuring not just markets but all of social life.
In this sense, it has and continues to function not only through public and higher education to produce and distribute market-based
values, identities, and modes of agency, but also in wider cultural apparatuses and platforms to privatize, deregulate, economize,
and subject all of the commanding institutions and relations of everyday life to the dictates of privatization, efficiency, deregulation,
and commodification.
Since the 1970s as more and more of the commanding institutions of society come under the control of neoliberal ideology,
its notions of common sense – an unchecked individualism, harsh competition, an aggressive attack on the welfare state, the evisceration
of public goods, and its attack on all models of sociality at odds with market values – have become the reigning hegemony of capitalist
societies.
What many on the left have failed to realize is that neoliberalism is about more than economic structures, it is also is a
powerful pedagogical force – especially in the era of social media – that engages in full-spectrum dominance at every level of civil
society. Its reach extends not only into education but also among an array of digital platforms as well as in the broader sphere
of popular culture. Under neoliberal modes of governance, regardless of the institution, every social relation is reduced to an act
of commerce.
Neoliberalism's promotion of effectiveness and efficiency gives credence to its ability to willingness and success in making
education central to politics. It also offers a warning to progressives, as Pierre Bourdieu has insisted that the left has underestimated
the symbolic and pedagogical dimensions of struggle and have not always forged appropriate weapons to fight on this front."
Mitja Sardoč: According to the advocates of neoliberalism, education represents one of the main indicators of future economic
growth and individual well-being.How – and why – education became one of the central elements of the 'neoliberal revolution'?
Henry Giroux: Advocates of neoliberalism have always recognized that education is a site of struggle over which there are
very high stakes regarding how young people are educated, who is to be educated, and what vision of the present and future should
be most valued and privileged. Higher education in the sixties went through a revolutionary period in the United States and many
other countries as students sought to both redefine education as a democratic public sphere and to open it up to a variety of groups
that up to that up to that point had been excluded. Conservatives were extremely frightened over this shift and did everything they
could to counter it. Evidence of this is clear in the production of the Powell Memo published in 1971 and later in The Trilateral
Commission's book-length report, namely, The Crisis of Democracy, published in 1975. From the 1960s on the, conservatives,
especially the neoliberal right, has waged a war on education in order to rid it of its potential role as a democratic public sphere.
At the same time, they sought aggressively to restructure its modes of governance, undercut the power of faculty, privilege knowledge
that was instrumental to the market, define students mainly as clients and consumers, and reduce the function of higher education
largely to training students for the global workforce.
At the core of the neoliberal investment in education is a desire to undermine the university's commitment to the truth, critical
thinking, and its obligation to stand for justice and assume responsibility for safeguarding the interests of young as they
enter a world marked massive inequalities, exclusion, and violence at home and abroad. Higher education may be one of the few institutions
left in neoliberal societies that offers a protective space to question, challenge, and think against the grain.
Neoliberalism considers such a space to be dangerous and they have done everything possible to eliminate higher education
as a space where students can realize themselves as critical citizens, faculty can participate in the governing structure, and
education can be define itself as a right rather than as a privilege.
Mitja Sardoč: Almost by definition, reforms and other initiatives aimed to improve educational practice have been one of
the pivotal mechanisms to infiltrate the neoliberal agenda of effectiveness and efficiency. What aspect of neoliberalism and its
educational agenda you find most problematic? Why?
Henry Giroux: Increasingly aligned with market forces, higher education is mostly primed for teaching business principles
and corporate values, while university administrators are prized as CEOs or bureaucrats in a neoliberal-based audit culture. Many
colleges and universities have been McDonalds-ized as knowledge is increasingly viewed as a commodity resulting in curricula that
resemble a fast-food menu. In addition, faculty are subjected increasingly to a Wal-Mart model of labor relations designed as Noam
Chomsky points out "to reduce labor costs and to increase labor servility". In the age of precarity and flexibility, the majority
of faculty have been reduced to part-time positions, subjected to low wages, lost control over the conditions of their labor, suffered
reduced benefits, and frightened about addressing social issues critically in their classrooms for fear of losing their jobs.
The latter may be the central issue curbing free speech and academic freedom in the academy. Moreover, many of these faculty are
barely able to make ends meet because of their impoverished salaries, and some are on food stamps. If faculty are treated like service
workers, students fare no better and are now relegated to the status of customers and clients.
Moreover, they are not only inundated with the competitive, privatized, and market-driven values of neoliberalism, they are also
punished by those values in the form of exorbitant tuition rates, astronomical debts owed to banks and other financial institutions,
and in too many cases a lack of meaningful employment. As a project and movement, neoliberalism undermines the ability of educators
and others to create the conditions that give students the opportunity to acquire the knowledge and the civic courage necessary to
make desolation and cynicism unconvincing and hope practical.
As an ideology, neoliberalism is at odds with any viable notion of democracy which it sees as the enemy of the market. Yet, Democracy
cannot work if citizens are not autonomous, self-judging, curious, reflective, and independent – qualities that are indispensable
for students if they are going to make vital judgments and choices about participating in and shaping decisions that affect everyday
life, institutional reform, and governmental policy.
Mitja Sardoč: Why large-scale assessments and quantitative data in general are a central part of the 'neo-liberal toolkit'
in educational research?
Henry Giroux: These are the tools of accountants and have nothing to do with larger visions or questions about what matters
as part of a university education. The overreliance on metrics and measurement has become a tool used to remove questions of responsibility,
morality, and justice from the language and policies of education. I believe the neoliberal toolkit as you put it is part of the
discourse of civic illiteracy that now runs rampant in higher educational research, a kind of mind-numbing investment in a metric-based
culture that kills the imagination and wages an assault on what it means to be critical, thoughtful, daring, and willing to take
risks. Metrics in the service of an audit culture has become the new face of a culture of positivism, a kind of empirical-based panopticon
that turns ideas into numbers and the creative impulse into ashes. Large scale assessments and quantitative data are the driving
mechanisms in which everything is absorbed into the culture of business.
The distinction between information and knowledge has become irrelevant in this model and anything that cannot be captured by
numbers is treated with disdain. In this new audit panopticon, the only knowledge that matters is that which can be measured. What
is missed here, of course, is that measurable utility is a curse as a universal principle because it ignores any form of knowledge
based on the assumption that individuals need to know more than how things work or what their practical utility might be.
This is a language that cannot answer the question of what the responsibility of the university and educators might be in a time
of tyranny, in the face of the unspeakable, and the current widespread attack on immigrants, Muslims, and others considered disposable.
This is a language that is both afraid and unwilling to imagine what alternative worlds inspired by the search for equality and justice
might be possible in an age beset by the increasing dark forces of authoritarianism.
Mitja Sardoč: While the analysis of the neoliberal agenda in education is well documented, the analysis of the language
of neoliberal education is at the fringes of scholarly interest. In particular, the expansion of the neoliberal vocabulary with egalitarian
ideas such as fairness, justice, equality of opportunity, well-being etc. has received [at best]only limited attention. What factors
have contributed to this shift of emphasis?
Henry Giroux: Neoliberalism has upended how language is used in both education and the wider society. It works to appropriate
discourses associated with liberal democracy that have become normalized in order to both limit their meanings and use them to mean
the opposite of what they have meant traditionally, especially with respect to human rights, justice, informed judgment, critical
agency, and democracy itself. It is waging a war over not just the relationship between economic structures but over memory,
words, meaning, and politics. Neoliberalism takes words like freedom and limits it to the freedom to consume, spew out hate, and
celebrate notions of self-interest and a rabid individualism as the new common sense.
Equality of opportunity means engaging in ruthless forms of competition, a war of all against all ethos, and a survival of
the fittest mode of behavior.
The vocabulary of neoliberalism operates in the service of violence in that it reduces the capacity for human fulfillment in the
collective sense, diminishes a broad understanding of freedom as fundamental to expanding the capacity for human agency, and diminishes
the ethical imagination by reducing it to the interest of the market and the accumulation of capital. Words, memory, language and
meaning are weaponized under neoliberalism.
Certainly, neither the media nor progressives have given enough attention to how neoliberalism colonizes language because neither
group has given enough attention to viewing the crisis of neoliberalism as not only an economic crisis but also a crisis of ideas.
Education is not viewed as a force central to politics and as such the intersection of language, power, and politics in the neoliberal
paradigm has been largely ignored. Moreover, at a time when civic culture is being eradicated, public spheres are vanishing, and
notions of shared citizenship appear obsolete, words that speak to the truth, reveal injustices and provide informed critical analysis
also begin to disappear.
This makes it all the more difficult to engage critically the use of neoliberalism's colonization of language. In the United States,
Trump prodigious tweets signify not only a time in which governments engage in the pathology of endless fabrications, but also how
they function to reinforce a pedagogy of infantilism designed to animate his base in a glut of shock while reinforcing a culture
of war, fear, divisiveness, and greed in ways that disempower his critics.
Mitja Sardoč: You have written extensively on neoliberalism's exclusively instrumental view of education, its reductionist
understanding of effectiveness and its distorted image of fairness. In what way should radical pedagogy fight back neoliberalism
and its educational agenda?
Henry Giroux: First, higher education needs to reassert its mission as a public good in order to reclaim its egalitarian
and democratic impulses. Educators need to initiate and expand a national conversation in which higher education can be defended
as a democratic public sphere and the classroom as a site of deliberative inquiry, dialogue, and critical thinking, a site that makes
a claim on the radical imagination and a sense of civic courage. At the same time, the discourse on defining higher education
as a democratic public sphere can provide the platform for a more expressive commitment in developing a social movement in defense
of public goods and against neoliberalism as a threat to democracy. This also means rethinking how education can be funded as a public
good and what it might mean to fight for policies that both stop the defunding of education and fight to relocate funds from the
death dealing military and incarceration budgets to those supporting education at all levels of society. The challenge here is for
higher education not to abandon its commitment to democracy and to recognize that neoliberalism operates in the service of the forces
of economic domination and ideological repression.
Second, educators need to acknowledge and make good on the claim that a critically literate citizen is indispensable to a democracy,
especially at a time when higher education is being privatized and subject to neoliberal restructuring efforts. This suggests placing
ethics, civic literacy, social responsibility, and compassion at the forefront of learning so as to combine knowledge, teaching,
and research with the rudiments of what might be called the grammar of an ethical and social imagination. This would imply taking
seriously those values, traditions, histories, and pedagogies that would promote a sense of dignity, self-reflection, and compassion
at the heart of a real democracy. Third, higher education needs to be viewed as a right, as it is in many countries such as Germany,
France, Norway, Finland, and Brazil, rather than a privilege for a limited few, as it is in the United States, Canada, and the United
Kingdom. Fourth, in a world driven by data, metrics, and the replacement of knowledge by the overabundance of information, educators
need to enable students to engage in multiple literacies extending from print and visual culture to digital culture. They need to
become border crossers who can think dialectically, and learn not only how to consume culture but also to produce it. Fifth, faculty
must reclaim their right to control over the nature of their labor, shape policies of governance, and be given tenure track lines
with the guarantee of secure employment and protection for academic freedom and free speech.
Mitja Sardoč: Why is it important to analyze the relationship between neoliberalism and civic literacy particularly as an
educational project?
Henry Giroux: The ascendancy of neoliberalism in American politics has made visible a plague of deep-seated civic illiteracy,
a corrupt political system and a contempt for reason that has been decades in the making.
It also points to the withering of civic attachments, the undoing of civic culture, the decline of public life and the erosion
of any sense of shared citizenship. As market mentalities and moralities tighten their grip on all aspects of society, democratic
institutions and public spheres are being downsized, if not altogether disappearing.
As these institutions vanish – from public schools and alternative media to health care centers– there is also a serious
erosion of the discourse of community, justice, equality, public values, and the common good. At the same time reason and truth are
not simply contested, or the subject of informed arguments as they should be, but wrongly vilified – banished to Trump's poisonous
world of fake news. For instance, under the Trump administration, language has been pillaged, truth and reason disparaged, and words
and phrases emptied of any substance or turned into their opposite, all via the endless production of Trump's Twitter storms and
the ongoing clown spectacle of Fox News. This grim reality points to a failure in the power of the civic imagination, political will,
and open democracy. It is also part of a politics that strips the social of any democratic ideals and undermines any understanding
of education as a public good. What we are witnessing under neoliberalism is not simply a political project to consolidate power
in the hands of the corporate and financial elite but also a reworking of the very meaning of literacy and education as crucial to
what it means to create an informed citizenry and democratic society. In an age when literacy and thinking become dangerous to the
anti-democratic forces governing all the commanding economic and cultural institutions of the United States, truth is viewed as a
liability, ignorance becomes a virtue, and informed judgments and critical thinking demeaned and turned into rubble and ashes. Under
the reign of this normalized architecture of alleged common sense, literacy is regarded with disdain, words are reduced to data and
science is confused with pseudo-science. Traces of critical thought appear more and more at the margins of the culture as ignorance
becomes the primary organizing principle of American society.
Under the forty-year reign of neoliberalism, language has been militarized, handed over to advertisers, game show idiocy, and
a political and culturally embarrassing anti-intellectualism sanctioned by the White House. Couple this with a celebrity culture
that produces an ecosystem of babble, shock, and tawdry entertainment. Add on the cruel and clownish anti-public intellectuals such
as Jordan Peterson who defend inequality, infantile forms of masculinity, and define ignorance and a warrior mentality as part of
the natural order, all the while dethroning any viable sense of agency and the political.
The culture of manufactured illiteracy is also reproduced through a media apparatus that trades in illusions and the spectacle
of violence. Under these circumstances, illiteracy becomes the norm and education becomes central to a version of neoliberal zombie
politics that functions largely to remove democratic values, social relations, and compassion from the ideology, policies and commanding
institutions that now control American society. In the age of manufactured illiteracy, there is more at work than simply an absence
of learning, ideas or knowledge. Nor can the reign of manufactured illiteracy be solely attributed to the rise of the new social
media, a culture of immediacy, and a society that thrives on instant gratification. On the contrary, manufactured illiteracy is political
and educational project central to a right-wing corporatist ideology and set of policies that work aggressively to depoliticize people
and make them complicitous with the neoliberal and racist political and economic forces that impose misery and suffering upon their
lives. There is more at work here than what Ariel Dorfman calls a "felonious stupidity," there is also the workings of a deeply malicious
form of 21 st century neoliberal fascism and a culture of cruelty in which language is forced into the service of violence
while waging a relentless attack on the ethical imagination and the notion of the common good. In the current historical moment illiteracy
and ignorance offer the pretense of a community in doing so has undermined the importance of civic literacy both in higher education
and the larger society.
Mitja Sardoč: Is there any shortcoming in the analysis of such a complex (and controversial) social phenomenon as neoliberalism
and its educational agenda? Put differently: is there any aspect of the neoliberal educational agenda that its critics have failed
to address?
Henry Giroux: Any analysis of an ideology such as neoliberalism will always be incomplete. And the literature on neoliberalism
in its different forms and diverse contexts is quite abundant. What is often underplayed in my mind are three things.
First, too
little is said about how neoliberalism functions not simply as an economic model for finance capital but as a public pedagogy that
operates through a diverse number of sites and platforms.
Second, not enough has been written about its war on a democratic notion
of sociality and the concept of the social.
Third, at a time in which echoes of a past fascism are on the rise not enough is being
said about the relationship between neoliberalism and fascism, or what I call neoliberal fascism, especially the relationship between
the widespread suffering and misery caused by neoliberalism and the rise of white supremacy.
I define neoliberal fascism as both
a project and a movement, which functions as an enabling force that weakens, if not destroys, the commanding institutions of a democracy
while undermining its most valuable principles.
Consequently, it provides a fertile ground for the unleashing of the ideological
architecture, poisonous values, and racist social relations sanctioned and produced under fascism. Neoliberalism and fascism conjoin
and advance in a comfortable and mutually compatible project and movement that connects the worse excesses of capitalism with fascist
ideals – the veneration of war, a hatred of reason and truth; a populist celebration of ultra-nationalism and racial purity; the
suppression of freedom and dissent; a culture which promotes lies, spectacles, a demonization of the other, a discourse of decline,
brutal violence, and ultimately state violence in heterogeneous forms. As a project, it destroys all the commanding institutions
of democracy and consolidates power in the hands of a financial elite.
As a movement, it produces and legitimates massive economic
inequality and suffering, privatizes public goods, dismantles essential government agencies, and individualizes all social problems.
In addition, it transforms the political state into the corporate state, and uses the tools of surveillance, militarization, and
law and order to discredit the critical press and media, undermine civil liberties while ridiculing and censoring critics.
What critics
need to address is that neoliberalism is the face of a new fascism and as such it speaks to the need to repudiate the notion that
capitalism and democracy are the same thing, renew faith in the promises of a democratic socialism, create new political formations
around an alliance of diverse social movements, and take seriously the need to make education central to politics itself.
Was it conspiracy or idiocy that led to the failure of U.S. intelligence agencies to detect
and prevent the Sept. 11, 2001, attacks on the World Trade Center and Pentagon headquarters?
That's one of the questions at the heart of "The Watchdogs Didn't Bark: The CIA, NSA, and the
Crimes of the War on Terror," by John Duffy and Ray Nowosielski. In their careful and thorough
investigation of the events leading up to the attacks, the authors uncover a story about the
Central Intelligence Agency's neglect, possible criminal activities and a cover-up that may
have allowed al-Qaida to carry out its plans uninhibited by government officials.
In the latest installment of "Scheer Intelligence," the journalists tell Truthdig Editor in
Chief Robert Scheer how an interview with Richard Clarke, the counterterror adviser to
Presidents Bill Clinton and George W. Bush, led them to a jaw-dropping revelation regarding two
hijackers involved in the infamous attacks. As it turns out, Khalid Muhammad Abdallah
al-Mihdhar and Nawaf al-Hazmi, two men linked to al-Qaida, were staying at an FBI informant's
home in San Diego in 2000, and they were being tracked by the National Security Agency. Despite
knowledge of the men's ties to the terrorist organization responsible for 9/11, neither was
investigated by the FBI. Clarke and others believe that this may have had to do with a CIA
attempt to turn the two men into agency informants.
"When we sat down with Clarke he told us he couldn't see any other explanation but that
there was an op [and] that it never made it to the White House because it would have had to
go through him," says Nowosielski.
"And his friend [then CIA Director] George Tenet was responsible for malfeasance and
misfeasance in the runup to 9/11."
Once the plans for the 9/11 attack must have become clear to the CIA, why didn't the agency
prevent it from taking place? Duffy and Nowosielski come to the simple, shocking conclusion
that because the CIA is prohibited from operating on U.S. soil, those involved in the operation
chose to avoid prosecution rather than come clean.
In a well-documented case study that touches senior government officials, including current
special counsel Robert Mueller and other high-level individuals, crucial questions arise about
who is responsible for allowing "a plot that resulted in 3,000 murders" and led to ongoing U.S.
military entanglements in the Middle East to move forward.
However, our country's recent crimes and the people behind them, including President Bush,
are currently being "whitewashed" by our national obsession with Donald Trump, the authors
warn.
"All the crimes of the war on terror, the torture, Abu Ghraib, it's all just gone -- the
unnecessary invasion of the war in Iraq, it's all just sort of under the rug now because of
Trump," Duffy says.
Listen to their discussion to learn more about the stunning investigation into the tragedy
that changed the course of our nation's history and the Americans who could have thwarted the
attacks but decided to cover their own backs instead. You can also read a transcript of the
interview below the media player .
RS : Hi, this is Robert Scheer with another edition of "Scheer Intelligence," where the
intelligence comes from my guests. And the title is really appropriate for the book we're going
to talk about today, "The Watchdogs Didn't Bark: The CIA, NSA, and the Crimes of the War on
Terror." And the authors are John Duffy and Ray Nowosielski. And they are investigative
reporters, and the watchdogs here are the people in our intelligence agencies that are supposed
to be protecting the nation. And this book cuts very deeply into the unsolved mystery of how
9/11 happened. Why weren't we better prepared to prevent it? It's one of the most important
events in American history; it certainly has shaped our lives in terms of a surveillance state,
our rights and everything else, up to the present. And this book, I think, represents the most
exhaustive and well-documented effort to get to the bottom of the whole thing. You're very
careful in what you do and do not assert about 9/11, what we don't know about it, and
particularly the role of George Tenet, who was then head of the CIA, and the role of the CIA in
-- what is the right word? -- obscuring the story, even keeping information from the White
House, from the FBI. So give me the gist of the book.
RN : This is Ray. The book is largely about looking at this case study of the failure
leading up to 9/11, the people who were involved in that failure, how that came about, and how
they were successful, to the present day, in managing to obscure the public from really fully
understanding that this was, in the words of one of our sources, really just a handful of
people. And the most jarring thing is that they're still, in some cases, working today in I
guess Trump's CIA. And we sort of document through the second half of the book what damage was
done to America because they remained in their positions.
JD: This is John. And intelligence was gathered around the time of the millennium that led
people in the Bin Laden unit at the CIA to monitor a meeting in Malaysia that was a gathering
of these al-Qaida figures. In monitoring this --
RS : That was in the year 2000, right?
JD : Yes. Right at the outset of the year. In monitoring this meeting, they became aware of
the fact that one of the attendees had a multiple-entry visa to the United States. That man's
name was Khalid al-Mihdhar. He would eventually be on the plane that crashed into the Pentagon;
he was one of the hijackers. So this starts the whole thing there, the fact that the CIA
becomes aware of this information; the Bin Laden unit, counterterror center, and then all the
way up to George Tenet are aware of this information. There's a lot of ins, outs, and
what-have-yous about where that information goes, but it ultimately does not go over to the
FBI's counterterror division in New York, much to the protest of the FBI agents who were
detailed to the CIA's Bin Laden unit. And it did not make it to the White House counterterror
czar, Richard Clarke, who very much finds this to be, like, the crux of the whole story -- the
fact that this information was kept from his office for basically a year and eight months, up
until the success of the attacks. The crux is there, that they had this information, these guys
were coming into the country, they had just left the terror planning summit, and this
information was being held close by the Bin Laden unit, by the counterterror center, and by
George Tenet. The reason for that is unknown; the speculation that Richard Clarke has was that
George Tenet and these people in the Bin Laden unit and counterterror center thought having
these al-Qaida people in the United States, they could possibly go through Allied proxies in
the Saudi intelligence to try to get close to these guys, monitor them, potentially find out
information from them or even try to flip them. That's Richard Clarke's speculation as to why
this was kept from him for so long. Ultimately, the attack was successful; that they all just
did their best to bury all this and, you know, hope no one noticed.
RS : Let me just start off with something that was confusing to me in reading your book.
Because the FBI generally comes off looking pretty good in your book, and the real problem is
with the CIA, and to a lesser degree, with the NSA. And in the San Diego story, and this is
covered in the 9/11 Commission Report and others, the two San Diego guys -- they are staying at
the home of an FBI informant at first. So when you say the FBI was not informed, weren't some
of these calls actually made from the home of an FBI asset?
RN : It's interesting when you know, A, that according to our NSA sources they were able to
be pinged every time that Mihdhar and Hazmi, the two hijackers, called from that house that you
mentioned in San Diego, back to Yemen. That somebody in the NSA was getting an alert as that
was happening each time, and was aware of those connections. But that the house that was being
used for the phone call was that of an FBI informant, Abdussattar Shaikh. And Abdussattar was
somebody the FBI recruited who was inside a popular mosque in San Diego, and who they thought
might be able to feed them warnings of anybody who might be a radical Muslim terrorist. And
Abdussattar claims that he simply missed the warning signs of the two tenants that he had in
his home. I mean, it's kind of interesting. He's also, he's not just an FBI informant, he's
also a Saudi, which kind of points to Richard Clarke's conjecture, which he first laid out to
us when we sat down in his office in 2009. And that was that once the CIA monitored the meeting
in Malaysia, knew that these two guys were connected to Bin Laden and were of interest, and saw
that they were heading to the United States, in Clarke's words, they might well have thought
that the best way to try to recruit these guys to feed information was not to send a blue-eyed,
blonde-haired, American CIA agent to go to meet them. But, instead, to use our partners in
Saudi Arabia and Saudi intelligence -- which George Tenet, the head of the CIA, happened to be
very close with -- to try to recruit them. So I actually focus more on the fact that this guy
was introduced to this house by a gentleman who's been determined to be a Saudi agent, a guy
named Omar al-Bayoumi, and that this guy then was perhaps working dually for Saudi intel and as
an FBI asset. And everyone sort of focuses on, oh, Abdussattar Shaikh was an FBI asset, so that
seems to put blame at the feet of the FBI. Could be; could be, but I would also focus on that
Saudi angle, because it recurs so often.
RS : Well, it also goes to the question of the efficiency of the surveillance society.
Because after all, these phone calls could be intercepted. You know, they did; they could
follow this trail. And phone calls are being made back to a suspect residence in Yemen and so
forth, from the home of an FBI recruit. And I'm just wondering, there's been a lot of
discussion, some of the people that you quote in your book have made this point -- you collect
this haystack of information that doesn't lead you to the needle in the haystack. And so here
these phone calls were, clearly could be intercepted. They didn't require any special act of
Congress or anything else. This was not a case of their arms being tied, the intelligence
agencies. But they're not even looking at their own data. Isn't that the takeaway from the
first part of this story? These guys are acting suspiciously in San Diego, they have a
suspicious background, they've participated in a suspicious conference, they're staying at the
home of an FBI informant, and they're making calls that would basically outline what was going
to happen in this disastrous attack -- and no one noticed. Or the ones who noticed didn't tell
other people.
JD : I think what is likely to have happened there is, so those calls were going back, and I
think it was about seven or eight calls. And Khalid al-Mihdhar's wife still lived at that
house, and he was calling her from San Diego. So I don't think any deep operational details
were being discussed in those calls, but that doesn't really matter; the fact that they're
calling that home from America is a big deal. And how that would work at the NSA is there's
someone who is tasked all day with basically monitoring the electronic signals going into and
out of this house in Yemen, and when they see this coming in from the United States, that
should ring a really big alarm bell. Now, that person working that desk would have to seek
approval from the chop chain, which are these NSA managers. In order for anything to happen
with that information, it has to get passed up and then brought to a FISA court, brought to the
FBI. And if these managers within the NSA basically say, don't worry about it, sit on it, just
collect it, sit on it -- and if they don't allow any action, then there will be no action. And
it's just going to stay housed right there, in that particular data stovepipe at the NSA. If
Richard Clarke's speculation is true, that there was this attempt to recruit these guys in the
U.S. with Saudi proxies, part of that plan would have been George Tenet speaking to someone at
the NSA, or one of George Tenet's people speaking to someone at the NSA. Basically saying, hey,
before you go out getting any FISA warrants or chasing anything down regarding this specific
house, come to us first. So if there is some operation going on, it would stand to reason that
part of that operation would be not allowing these pings at this particular desk to turn into
any action.
RS : For people listening, let me make clear, this is an incredibly detailed, researched
book, which relies very heavily on intelligence veterans. No one less so than Richard Clarke,
who's come up so far; another is former colonel Larry Wilkerson, obviously a key person. And
what is very dramatic in your book is, where your story really comes to life for you guys as
journalists, is when Richard Clarke -- you say you go in there to interview him, and you tell
your crew, put the sound on as we go in. And you go in, and you think you're going to have to
ask a lot of questions to get -- and for people who don't know, Richard Clarke ever since the
early '70s was a major figure in the intelligence community. And at this point, when you're
talking to him, he's been around the block, he's seen everything. And he was a close friend of
George Tenet, who was head of the CIA; they considered themselves allies. And you're going in
to get this interview, and you think you're going to have to weasel information out of him. And
he just hits you over the head with an assertion that, really, is the thrust of this book. So
why don't you take us to that moment?
RN : What we discovered on the day that we walked into Richard Clarke's conference room was
that he'd been ready for probably about a year to talk about this, and no major journalists had
called him up to ask him about this subject. Nobody had ever asked him. So going back, you
know, he started in the Reagan State Department; he worked under George H.W.; Clinton, when
these Al Qaeda terrorist attacks began in the early nineties, recognized that there needed to
be a new position within his Cabinet, and he called it the counterterror czar, the
counterterror adviser. And he created that position for Richard Clarke. As you mentioned,
Clarke was close friends with George Tenet, who also was sort of on the National Security
Council under Clinton early on, and then got named the head of the CIA in the midst of
Clinton's first term. George W. Bush and company come in, early 2001; as it turned out, nine
months ahead of this ticking clock towards 9/11. And Richard Clarke is told that he's
essentially being demoted. He's still going to be the counterterror advisor, but it's not a
Cabinet-level position. And so now he's kind of essentially going through the extra layer of
Condoleezza Rice. But George Tenet still very much has Bush's ear. And that's kind of the back
story there; then after, you know, on 9/11 Richard Clarke by nearly all accounts was running
the response that morning, on that critical day; he was the top man for counterterror. Over
time, he starts to get rubbed the wrong way by the fact that the Bush administration
inexplicably is not really terribly still concerned about Al Qaeda after 9/11. But then Clarke
leaves, and he writes a bestselling book. And he testifies before the 9/11 commission and
becomes the only person to apologize to the families, to admit that there was a failure at all.
But cut to a few years down the line, and he releases another book in 2008 that doesn't become
a bestseller. And it's called "Your Government Failed You." And it includes a section on
Mihdhar and Hazmi that he calls "Straining Credulity," in which he says that he does not
believe in conspiracy theories, but in this one particular case, he's weighed it every which
way and he can't see another way to explain it but by. But he sort of saved us speculation, and
so we saw that part in his book and we thought, well, we've been itching -- we'd collected
enough info by that time, and talked with enough people, that we thought: something happened
here with these two hijackers that flew over to the U.S. Something happened when they arrived.
And the big question was, if this was an operation by the CIA, did they let Clinton know? Did
they then let Bush know when he came in? What was the deal there? And Richard Clarke would be
the man in a position to answer that. And so you're right, that's where our journey really --
that's where we launched. Because we'd been looking into it for a few years, but when we sat
down with Clarke, that was when he told us he couldn't see any other explanation but that there
was an op, that it never made it to the White House because it would have had to go through
him. And his friend George Tenet was responsible for malfeasance and misfeasance in the runup
to 9/11.
JD : And he also, in part of that description, said that a lot of the CIA reports that would
have, any other day, come directly to his computer -- when he flicked it on in the morning, it
would be right there waiting for him -- just on this specific case with these two individuals,
he was removed from the chain of information. And so he felt that he was getting minutiae
concerning terrorism from around the world in, like, tiny micro-detail on everything except
this, and that must have meant he was intentionally pulled out of the chain by someone. And
that that would have taken high-level order. And when asked, you know, how high level, he said
that it must have come from the director, referring to George Tenet.
RS : So let's cut to the chase here. There's an old caution, don't attribute to conspiracy
what can be explained by ordinary stupidity. Or laziness, or incompetence. Is this a case where
George Tenet, the admired at that time head of the CIA, was just incompetent, stupid,
indifferent? Is there something more at work? Did the CIA welcome such an attack as a boon for
the military-industrial complex, as some people allege? What's going on here? How could this
major tragedy event be visited upon the United States, the head of our intelligence agency
knows that there are these suspect characters there, and he doesn't bother to tip off the FBI,
let alone the White House? And after all, the FBI is in charge of domestic surveillance;
they're the ones that have to go arrest these guys, you know, at least confront them, see what
they're doing. I have to tell people listening to this, this is a very careful, indeed
conservative, in the best sense of the word, book. This is not a book you can just dismiss by
saying it's got some wild, interesting theory. No -- you err, I would say, on the side of
caution, in a way.
JD : We err on the side of caution all the time, and we're not going to try to say something
that we can't really, really defend. If we start from a position that there's some level of
merit to what Clarke is suggesting, that there is this operation going on to try to monitor
these hijackers domestically by the CIA, as opposed to handing it off to the FBI -- presuming
he's right on that, there is this --
RS : Can I just add a little note that Wilkerson actually goes further.
JD : Wilkerson later suggests that he heard it mentioned after the fact, in about 2003 or
2004, when he is at the CIA. The invasion of Iraq has begun, and they're waiting for updated
satellite information, everyone's kind of standing around just kind of BS'ing. And he basically
overhears a conversation about how, oh man, Tenet tried to flip these guys in the U.S. and then
had to hide it because it all went wrong, and it would have come back to bite him. And yeah,
Wilkerson basically claims to have overheard high-level people speaking about that, just sort
of in a B.S. session.
RN : Well, and not really, not overheard; it's more like, he claimed multiple, very
high-level under Tenet sources, that he was close with at that time, who were in these "yak-yak
sessions," that he calls them. And they each claimed to be aware of the reality of this,
supposedly.
JD : You're asking, like, how nefarious it is. In the first period of all this, presuming
that it's true, presuming that there's this operation going on to try to flip these guys or
follow them or whatever, gather information on them domestically, you can imagine that, OK,
they're going to have some sort of setup in which to monitor these guys, or they're using Saudi
proxies perhaps, or other proxies, and they're following them. Then we get to this point where,
well, the attack succeeds on September 11, so how the heck does that happen? If you have this,
if you're monitoring these guys and then they do this, where does the ball get dropped? And our
book does go into that a bit, and we definitely say, like, there's this moment where they must
have said: OK. This isn't working, it's not happening, there has got to be a point where they
say, abandon ship. But what do they do? How do they abandon ship? They need to somehow turn
this over to the FBI to wrap it up for them. And the way they seem to do this is not by being
honest and saying, hey, we were trying to do this and it didn't work, but here's the
information -- go get 'em. They definitely don't do that.
RS : The "trying to do this" -- you mean to turn these terrorists into agents for
themselves? --
JD : So what I'm saying is, if at some point when it's not working, when the flip hasn't
happened, when whatever goal they set for themselves, when they haven't achieved it, a time
must come for them to wrap up this operation. A time must -- you can't just let them go all the
way and succeed in their attack, you would think.
RN : But I think what you're asking is the intention of the operation, which would seem --
well, the CIA was created in order to prevent future Pearl Harbors. So I guess, giving them the
benefit of the doubt, the intention of the operation would theoretically have been to monitor
these guys so as to figure out what they're doing here in the U.S.
JD : Yes, yes. We're giving them the benefit of the doubt there. And then we look at the
emails and cable traffic we can find in that summer, and we watch as -- there's no search for
these guys, there's no FBI search for these guys until August 23rd of 2001. And that's the
point where, surreptitiously, someone stationed at Alec Station, the Bin Laden unit, CIA, who's
going through old cable traffic, goes: Oh my gosh! I found a cable that these guys came to the
United States. And she alerts the FBI, and the FBI begins their domestic search. I guess what
I'm suggesting is, a time would have come when they, when whoever is running this operation at
the CIA, whatever the architecture of that operation looks like, they would have seen these
things happening. They would have seen the connections they were making with these other guys
coming to the United States. And a time would have come for them to say: OK. We have to pass
this off to the FBI to shut it down. And it does --
RS : But wait a minute. When you say OK, and they've seen things -- they see people who are
identified as terrorists, part of this terrorist network, traces back to Al Qaeda. And they are
learning about airplanes and how to fly them, and flight paths, and everything. And you're
telling me that they say, well, you know, maybe we're not going to actually recruit them, maybe
we're -- we better do something. Why aren't they saying, holy cow, these guys can do great
damage to this country! We got to call, what, the local San Diego police, at least, to get them
to check them out! No?
RN : OK, so these guys arrive in early 2000. What happens in October 2000? The U.S.S. Cole
is attacked in Yemen. FBI agents working that from top levels of the New York office of the FBI
find a very direct connection not only to Al Qaeda, but to that same planning meeting that the
CIA monitored. The same one where Mihdhar and Hazmi were at that planning meeting. So not only
do you have an inclination -- oh, these guys are Al Qaeda, they're probably not here to, in the
words of one person, go to f'ing Disneyland. They're here for something nefarious -- but now,
after October 2000, for the entire year up to 9/11, the CIA has the knowledge that these two
individuals that were at this meeting, that the meeting spawned the U.S.S. Cole attack, which
killed 17 dead servicemen. So I think at that point, yeah, calling the local San Diego police
would probably make a lot of sense.
RS : OK, and what about the FBI informant who was their link in San Diego? Why isn't he
telling anyone, or why doesn't the FBI know?
JD : You have to be careful to separate what's going on at different agencies. An FBI
informant's not necessarily reporting to the CIA, and the CIA informant's not reporting to the
FBI. And then you also have to understand that the FBI has national headquarters and then a
bunch of different field offices throughout the country. And you have field office reports
coming in, like the Phoenix memo from Ken Williams mentioning that there's these, all these
Muslim guys trying to learn to fly. You've got what Coleen Rowley exposes out of Minnesota,
when they bust Zacarias Moussaoui, and how they're trying to get into his laptop, and they're
being hampered by FBI headquarters. So I mean, you don't know what came from Abdussattar. But I
don't want to move too far into the weeds and off the general thrust of your original question.
And I think what you come down to is a fork in the road. At some point, either the CIA running
this operation has to wrap it up, or this major attack is going to succeed. If you ask
yourself, well, why didn't they wrap it up -- because obviously they didn't, and the attack did
succeed–so if you ask yourself why didn't they, there's one potential answer, which is
that they were afraid of being prosecuted. Because they had been running an illegal operation
in the United States. So their own fear for their own lives, freedom, careers, all that
stuff–
RS : For people who don't understand the law, you have to explain, the CIA was prevented
from running this kind of operation domestically. This is supposed to be up to the FBI.
JD : It is a crime for them to operate within the United States.
RN : And what Richard Clarke told us, we don't know how much of the information, like the
Phoenix memo and these other things that Duffy just mentioned, got to George Tenet. But what we
do know, the existence of Mihdhar and Hazmi in this country should have made it to him by that
point. Because his own CIA counterterror office had informed the FBI in August, and a search
had begun. So that information should have been in Tenet's head. We know that he was briefed
about Zacarias Moussaoui acting weird at a flight school in Minnesota. And he comes to the --
oh, man --
JD : September 4th principals meeting.
RN : -- September 4th principals meeting in the White House. Clarke has been pushing the
entire Bush administration, the entire eight, nine months, to be able to brief them on Al Qaeda
and make the case for why the administration should take this seriously. And he's finally got
that meeting, and George Tenet is sitting there, and he doesn't say a word. And he was later
asked by investigators why not, and he gave this really bizarre non-answer, which was just
like: it just wasn't the right time, right place, I just can't take you any further than that.
And they let him get away with leaving it at that, but Richard Clarke says the reason he
doesn't tell us at that point, he believes, is because Clarke would have had him brought up on
charges that day for malfeasance and misfeasance in withholding that information. Because
remember, that would also make his people culpable for the Cole, because they would have known
about the planning session for the Cole nine months before that one happened, too. So it looks
like --
JD : And then they would have been guilty of obstruction of justice for all of the hiding of
these figures once the FBI investigation into the Cole happened. So they have a long list of
things they become guilty of should they just turn this over and say, like: Ah, hey guys,
there's these guys, you should probably go do something about it. Now, that's one explanation.
Other people have other explanations. But as I said, we don't make accusations that we cannot
really, firmly back up. So this time, that's pretty much the one we typically go with.
RS : Two people in your book who take it further are Richard Clarke and Larry Wilkerson. Two
of the most highly experienced, knowledgeable individuals to come out of our whole military
intelligence complex. And they, put it in human terms, they say they don't know how these
people sleep at night. Wilkerson, even more than Clarke, suggests that these people could have
prevented 9/11, and knew about it. Now, I just want to ask you about one other person. Again,
the book is devastating; it's called "The Watchdogs Didn't Bark: The CIA, NSA, and the Crimes
of the War on Terror," John Duffy and Ray Nowosielski. But let me push it one step further to
the contemporary moment. The book is kind of easy on the FBI. But the fact is the FBI was
really the agency that should have been following these terrorists when they're in the United
States. But one guy who comes up in current making of history, and who was head of the FBI at a
critical point, is Mueller, who's now running the Russian, interference in our election
investigation. What was his role? I'd like to conclude on that, because he's a major figure
right now, the head of this special investigation. What was his role in this?
RN : I mean, it is important to remember that the guy came in, I think it was maybe 10 days
before 9/11, and took over the FBI. So he was, among the CIA, NSA, and FBI, he was able to be
the only one at the leadership helm in the post-9/11 days and months who you couldn't really
lay any culpability at his door for any kind of failure. Remember, the CIA director George
Tenet, he's right at the table with the President; he's a Cabinet-level guy. The FBI director,
it's not the same way. The FBI director reports to the Attorney General in the Department of
Justice, and the Attorney General gets the direct seat. We make the case in the book that when
George Tenet, in the week after 9/11, made the big play, the big power grab for the CIA, what
we call the wish list of every CIA director accumulated over the whole history of the agency,
and essentially puts it out there to Bush and says, these are the powers we need now to make
sure this kind of thing doesn't happen -- he gets his green light. Mueller, on the other hand
-- well, a couple things happen. For one thing, the stories–the CIA is better at keeping
their skeletons hidden, for a while. So the first stories that come out that start to paint a
picture of blame regarding 9/11, they're all pointing towards the FBI. Coleen Rowley comes out,
and she points a finger at Mueller in May of 2002, and that sort of gets the ball rolling on
the "it was the FBI's fault" story, which really didn't get corrected for quite a number of
years. So our sources tell us Mueller was playing defense, he was willing to kind of go along
as the Bush administration pushed that–we kind of know what happened here, so we don't
need to investigate this much further; you should be putting your FBI resources towards
preventing future attacks. And I can certainly understand why a man like Robert Mueller in that
position would say, would not want to be the guy that missed the next one. So from what we can
tell, and from what our sources told us, it does seem that he sort of wrapped up the 9/11
investigation, or just ended it midway. But what was happening was, we talked with Pat DeMoro
-- he was one of our sources -- and he took us inside, he ran the 9/11 criminal investigation;
remember, this was a crime, right. At least 19 guys, probably a lot more, were involved in a
plot that resulted in 3,000 murders. So he was investigating that, and he was finding over
about a two-year period, there would be leads that would point towards Saudi facilitators to
the hijackers, Saudi helpers, Saudi royal money coming over. And every time he found these, he
had to report them up to Bob Mueller. Bob Mueller would theoretically report them to the
Attorney General, who would theoretically report them to Bush. And yet the end result of this
was that Bush invades Iraq, and the U.S. public never heard about these Saudi connections
until, officially, until just a couple of years ago, really.
JD : And you have said that our book comes off pretty light on the FBI, and I think the
crucial difference to make clear is that most of the people we're talking about within the FBI
are from particularly one field office. We're talking about John O'Neill's people out of New
York, who are counterterror investigators. That's most of the people we're dealing -- we're
not, we mention a few other people from FBI headquarters, but we don't necessarily mention them
in the best light. And one of the big failures of the FBI is the search to find al-Mihdhar and
al-Hazmi, once they are made aware that they're in the country a couple weeks before 9/11. And
that is a huge story there, and we could only write so much book. So we don't want to just sit
here and say, like, oh, the FBI is great and did everything right; we focus specifically on a
handful of people who did do their damnedest to unearth the conspirators behind the Cole
attack, and to pass information about the presence of al-Mihdhar and al-Hazmi over to FBI
investigators in New York in the runup to 9/11. So we don't want to necessarily sit here and
say the FBI was perfect and did everything right; we're talking about a handful of
individuals.
RS : And as you've just indicated, your style and the character of this book is quite
scholarly. It's very thoughtful, it's incredibly well documented. And you got people really on
the inside, in the know, to trust you and to talk honestly about it. You've done the gumshoe
journalism, you took 10 years, you checked every record. What has been the critical
response?
RN : Well, we should have put Trump's picture on the cover. [Laughs] I think that would have
helped.
RS : That's a pretty profound observation, in a way. Because there's a whole bunch of people
now who think all of our troubles in this country started and will end with Trump. And it
really whitewashes everybody else.
JD : It's whitewashing a lot of people. There's, all of a sudden people who a few years ago
we were like, this is the worst person on earth! -- like George W. Bush, is now just being
embraced by Democrats as some, like, affable guy. All the crimes of the war on terror, the
torture, Abu-Ghraib, it's all just gone -- the unnecessary invasion of the war in Iraq, it's
all just sort of under the rug now because of Trump.
RS : Yeah, those were the adults watching the store. Everybody is angry that Trump doesn't
have adults watching the store, and now he just got in trouble with his Secretary of Defense,
pushing him out, and now that guy is whitewashed, right? He was considered a mad dog at one
point. So you're right; your book has run into a head storm of indifference to anything that
happened before Trump. But I'm asking a very pointed question. What happens? You guys spent
over 10 years on this, right?
RN : Yeah. And you know, our goal was not to get famous. [Laughs] We really did want
accountability for this small group of people that we thought, these people cannot stay in the
CIA, right? We're not going to keep letting them run the War on Terror, are we? And maybe if
people just know about this, or if we can just prove it–if we talk with enough insiders,
if we get enough documents together, if we write a book. It turns out, no. There's going to be
no accountability, and they're going to, the few that remain now at high levels of the CIA are
going to continue to do what they do, and no one's going to know about it except for folks that
listen to your show, so thank you.
RS : Well, they're going to write the history. I mean, the amazing thing–you think of
a movie like "Zero Dark Thirty," you know; and you quote John Kiriakou in your book, and he was
in the CIA; he was actually very successful in being involved with the capture of the highest
person connected with al-Qaida, and so forth. And they spun a myth that the torture worked, and
you needed torture, and blah blah blah. And it basically went unchallenged. So these people who
either lied, or just lied by not talking, even to the FBI or the White House -- they get to
control the narrative. And then a book like yours comes out, and -- I'm asking a very serious
question. What has been the response of The New York Times, The Washington Post?
JD : [Laughing] We're still waiting to hear what The Washington Post and The New York Times
think. We've gotten a lot of praise from people who have read it, but we're not getting any
really major national or international reviews. Well, one thing we like to do, you mentioned
"Zero Dark Thirty." And the main character, played by Jessica Chastain, is sort of an
amalgamation of a handful of people who did work at the CIA, most prominently a woman by the
name of Alfreda Bikowsky, who is mentioned very prominently in our book. We want people to know
her name, Alfreda Bikowsky, because it's a name that was sort of an open secret in the media
in, you know, New York, Washington, for many, many years. Her involvement goes from the
pre-9/11 period there at Alec Station through torture and drone killings, and we want to make
sure that her name gets out there so she can't hide in the shadows.
RN : Her name was never mentioned in any media until it came out on our website. It was 11
years, 10 months from the first alleged crime she'd committed that we documented, until her
name came out on our website.
JD : We just like to throw her name out there every once in a while, and make sure more and
more people hear it.
RS : Ah, that should be enough to inspire people to get a copy of "The Watchdogs Didn't
Bark: The CIA, NSA, and the Crimes of the War on Terror." It's written by John Duffy and Ray
Nowosielski. It's a very, very important book. This is the yeoman journalistic work on the
story, and it's informed by people on the inside who really witnessed it, and were shocked by
what they saw, high-level people. So I recommend the book. I want to thank you guys for coming
on. OK, that's it for this edition of Scheer Intelligence. Our engineers at KCRW are Kat Yore
and Mario Diaz. Our producers are Joshua Scheer and Isabel Carreon. I'm Robert Scheer, and
we're doing this broadcast from the University of Southern California Annenberg School for
Communication and Journalism, where Sebastian Grubaugh, as he often does, has made the show
work, and I want to thank him.
"... The Bilderberg set call people like you either their "dogs" (if you are in politics or the military) or the "dead." ..."
"... What do you mean "where criminals mingle with ministers". That is assuming that ministers are not criminals. Considering that there will be ministers from the USA, Canada, France, Germany, Italy, Japan and the UK, I'd suggest that there is a near 100% certainty that some, if not all, the ministers there are criminals. ..."
"... That one group of almost-certainly-criminals meets another group of almost-certainly-criminals is hardly surprising. That the whole shebang is protected by the host's police force is even less so ..."
Convicted criminals. Such as disgraced former CIA boss,
David Petraeus, who's just been handed a $100,000
(Ł64,000) fine and two years' probation for leaking classified information.
Petraeus now works for the vulturous private equity firm KKR, run by Henry Kravis, who does arguably Bilderberg's best impression
of Gordon Gecko out of Wall Street. Which he cleverly combines with a pretty good impression of an actual gecko.
... ... ...
"Can I go now?" Another no. So I continued my list of criminals. I moved on to someone closer to home:
René Benko, the Austrian real estate baron, who had a conviction
for bribery upheld recently by the supreme court. Which didn't stop him making the cut for this year's conference. "You know Benko?"
The cop nodded. It wasn't easy to see in the glare of the searchlight, but he looked a little ashamed.
... ... ...
I decided to reward their vigilance with a chat about HSBC. The chairman of the troubled banking giant, Douglas Flint, is a regular
attendee at Bilderberg, and he's heading here again this year, along with a member of the bank's board of directors, Rona Fairhead.
Perhaps most tellingly, Flint is finding room in his Mercedes for the bank's busiest employee: its chief legal officer, Stuart Levey.
A Guardian editorial this week branded HSBC "a bank beyond shame" after it announced plans to cut 8,000 jobs in the UK, while
at the same time threatening to shift its headquarters to Hong Kong. And having just been forced to pay Ł28m in fines to Swiss regulators
investigating money-laundering claims. The big question, of course, is how will the chancellor of the exchequer,
George Osborne, respond to all this? Easy – he'll
go along to a luxury Austrian hotel and hole up with three senior members of HSBC in private. For three days.
High up on this year's conference agenda is "current economic issues", and without a doubt, one of the biggest economic issues
for Osborne at the moment is the future and finances of Europe's largest bank. Luckily, the chancellor will have plenty of time at
Bilderberg to chat all this through through with Flint, Levey and Fairhead. And the senior Swiss financial affairs official, Pierre
Maudet, a member of the Geneva state council in charge of the department of security and the economy. It's all so incredibly convenient.
Let's see, maybe because we have read over their leaked documents from the 1950s in which they discussed currency manipulation
and GATT. Everything they have discussed in their meetings over the past decades has almost come to fruition. There are elected
officials meeting with criminals such as HSBC. Did you even read the article? If you did, and you are not het up or whatever you
call it, then you are of a peasant mentality, and there is no use talking to you.
The Bilderberg set call people like you either their "dogs" (if you are in politics or the military) or the "dead." I won't
be looking for your response because you have confirmed that you do not matter.
Carpasia -> MickGJ 12 Jun 2015 10:52
Thank you for your comment, my good man. Hatred is human, and helps us all to avoid pain, for pain, especially unnecessary
pain, is allowed to be hated by the agreement of all, if nothing else is. I would hate to be beaten by Nazis. Thus, I would avoid
going to a place where that could occur. That is how hatred works for me. It is the only way it can work, and not be pernicious
to the self and others.
I distrust the international order as it is the means, harnessed by money, whether corporate or state or individual or monarchical,
by which this world is being destroyed. Could things have been better? Jesus is on one end of the spectrum, and Lord Acton on
the other, of the spectrums of viewpoints from which that could be properly assessed.
If the corruption at the heart of the international
order is not regulated properly, this world will come to an end, not the end of the world itself, but the end of the world as
we know it. This is happening now. The world is finite.
I am not a xenophobe. In my experience, the people that are most likely to hurt me, and thus deserve fear, are those closest.
Perhaps that is a cynical way of describing it, but anyone who thinks honestly about it would accede to the notion that it is
the people who "love" us that hurt us the most, for we agree too be vulnerable to them. It is the matrix of love.
As for Austria and Bavaria, I have visited both places and they were, both, the cleanest locales I have ever seen, with Switzerland
having to be mentioned in the same breath, of course.
I take a certain liberty in writing. I am not damning the human race, or strangers to me. If I did not entertain, but caused
offence, I apologize to you. I do not possess omniscience, and my words will have to speak for themselves.
Thank you, again.
DemonicWarlordSlayer 12 Jun 2015 08:02
"How Geo Bush's Grandfather Helped Hitler's Rise to Power" in the UK Guardian >
"Did Geo H W Bush Coordinate a JFK Hit Team" at Veterans Today >
"9/11 Conspiracy Solved, Names, Connections, Details" on youtube....dot-to-dot of the
Demonic Warlord's Crimes Against Humanity....end feudalism.
Carpasia 12 Jun 2015 07:09
Excellent article.
I visited Austria once, and I know of what he speaks. It was the one place I have ever visited that I thought I would be jailed
if I littered. I was wandering at the time, but I tentatively had a meal of chicken and departed henceforth.
Austrians are an interesting lot, to be sure. That they are perfect goes without saying. Their main virtue is that they do
not travel, and that strangers, which we call tourists these days, are not welcomed. If only we were all like that, the world
would be a far better place.
Austrians do everything well, including crime. Some of the greatest crimes in the world have been committed by Austrians, but
their crimes did not include not having their papers.
During World War 2, and I pass over Hitler, the German machine of death had an unusually high proportion of Austrians in commanding
roles assisting it. It can not be explained away by saying they were some kind of faux Germans, and so it matters not. Indeed,
if anything, Germans are faux Austrians, looked at in the broad brush of history. Men of many nations joined the Germans and adorned
themselves with the Death's Head, but many Austrians might as well have tattooed it onto their foreheads. I know of what I speak,
for I read on it, and will justify if questioned.
Reinhard Heydrich is an epitome of this, in the true sense of the word. Kurt Waldheim was another, too young too rise too far
before the Ragnarok of May of 1945, but government of the world was not out of his reach, a man who had materially assisted the
transportation of the Jews of Thessaloniki to the gas chambers of Auschwitz and, when challenged, was unrepentant, not as a racist,
but as something worse even, as a man whose great virtue was that he followed orders. It is order that the Austrians value over
everything. Even crime is ordered.
In the common-law west we think criminals are disordered beasts to be locked up. We do not give them papers. They are registered
only to warn us of their existence, and we do not like to let them travel, as much as we could benefit by their absence, because
we think they flee to license, and we think it wrong to inflict them upon innocents abroad. In Austria, the criminal is the man
with no papers. If he has papers, all is well, and he is no criminal, whatever he has done.
colingorton 12 Jun 2015 03:19
What do you mean "where criminals mingle with ministers". That is assuming that ministers are not criminals. Considering that
there will be ministers from the USA, Canada, France, Germany, Italy, Japan and the UK, I'd suggest that there is a near 100%
certainty that some, if not all, the ministers there are criminals.
That one group of almost-certainly-criminals meets another group of almost-certainly-criminals is hardly surprising. That the
whole shebang is protected by the host's police force is even less so.
How far can all this mutual back scratching go? It seems that the only alternative left is far too drastic, but there really
seems to be no place for a legal alternative, does there?
"... Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating" impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community via exclusion ..."
"... In his talk, Rajan focused on three questions related to current populist discontent: 1. Why is anger focused on trade? 2. Why now? 3. Why do so many voters turn to far-right nationalist movements? ..."
"... Frankly, "crony capitalism" has always been the primary one, as even Adam Smith noted ..."
"... Communities have become politically disempowered in large part because they have become economically disempowered. ..."
The wave of populist nationalism that has been sweeping through Western democracies
in the past two years is "a cry for help from communities who have seen growth bypass them."
So said Raghuram Rajan, the former governor of the Reserve Bank of India, during a keynote address he gave at the Stigler Center's
conference on the political
economy of finance that took place in June.
Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating"
impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites
following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community
via exclusion.
In his talk, Rajan focused on three questions related to current populist discontent: 1. Why is anger focused on trade? 2. Why
now? 3. Why do so many voters turn to far-right nationalist movements?
"Pointing fingers at these communities and telling them they don't understand is not the right answer," he warned. "In many ways,
the kind of angst that we see in industrial countries today is similar to the bleak times [of] the 1920s and 1930s. Most people in
industrial countries used to believe that their children would have a better future than their already pleasant present. Today this
is no longer true." ...
There's quite a bit more. I don't agree with everything he (Raghuram) says, but thought it might provoke discussion.
The understanding of exploitation of wage earning production workers is a better base then the 18th century liberal ideal of equality
Exploitation and oppression are obviously not the same even if they make synergistic team mates more often then not.
So long as " them " are blatantly oppressed it's easy to forget you are exploited. Unlike oppression exploitation can be so
stealthy.
So not part of the common description of the surface of daily life
Calls for equality must include a careful answer to the question "Equal with who ? "
Unearned equality is not seen as fair to those who wanna believe they earned their status. Add in the obvious : to be part
of a successful movement aimed at exclusion of some " thems " or other is narcotic
Just as fighting exclusion can be a narcotic too for " thems "
But fighting against exclusion coming from among a privileged rank among the community of would be excluders.
That is a bummer. A thankless act of sanctimony. Unless you spiritually join the " thems"
Now what have we got ?
Jim Crow thrived for decades it only ended when black arms and hands in the field at noon ...by the tens of millions were no
longer necessary to Dixie
"Pointing fingers at these communities and telling them they don't understand is not the right answer," he warned. "In many ways,
the kind of angst that we see in industrial countries today is similar to the bleak times [of] the 1920s and 1930s. Most people
in industrial countries used to believe that their children would have a better future than their already pleasant present. Today
this is no longer true." ...
I thought this sort of thinking was widely accepted only in 2016 we were told by the center left that no it's not true.
"Rajan, a professor of finance at the University of Chicago Booth School of Business, spoke about the "concentrated and devastating"
impact of technology and trade on blue-collar communities in areas like the Midwest, the anger toward "totally discredited" elites
following the 2008 financial crisis, and the subsequent rise of populist nationalism, seen as a way to restore a sense of community
via exclusion."
Instead the center left is arguing that workers have nothing to complain about and besides they're racist/sexist.
'"These communities have become disempowered partly for economic reasons but partly also because decision-making has increasingly
been centralized toward state governments, national governments, and multilateral [agreements]," said Rajan. In the European
Union, he noted, the concentration of decision-making in Brussels has led to a lot of discontent.'
I'd suggest that this part is not true. Communities have become politically disempowered in large part because they have
become economically disempowered. A shrinking economy means a shrinking tax base and less funds to do things locally. Even
if the local government attempts to rebuild by recruiting other employers, they end up in a race to the bottom with other communities
in a similar situation.
I'd also suggest that the largest part of the "discontent" in the EU is not because of any "concentration of decision-making",
but because local (and regional, and national) politicians have used the EU as a convenient scapegoat for any required, but unpopular
action.
Newly elected Representative Alexandria Ocasio-Cortez recently
said that Modern Monetary Theory (MMT) absolutely needed to be "a larger part of our
conversation." Her comment shines a spotlight on MMT. So what is it? According to Wikipedia , it is:
"a macroeconomic theory that describes the currency as a public monopoly and unemployment as
the evidence that a currency monopolist is restricting the supply of the financial assets
needed to pay taxes and satisfy savings desires."
It is uncontroversial to say that the Federal Reserve has a monopoly on the dollar. So let's
look at the second proposition. Unemployment, MMT holds, is evidence that the supply of dollars
is restricted.
In other words, more money causes more employment!
This does not sound very different from what the New Keynesians say. Keith analyzed former
Fed Chair Janet Yellen's seminal paper on the economics of labor for
Forbes :
"Here is their [Yellen and co-author Ackerloff] tenuous chain of logic:
Disgruntled employees don't work hard, and may even sabotage machinery.
So companies must overpay to keep them from slacking.
Higher pay per worker means fewer workers, because companies have a finite budget.
Yellen concludes -- you guessed it:
inflation provides corporations with more money to hire more people."
As a footnote, MMT is referred to as neo-Chartalism, and there is some evidence that Keynes
was influenced by Chartalism (which goes back to at least
1905).
On Thursday, Marketplace published a piece on
MMT . Things are heating up for this hot new (old) idea. Marketplace presented a "bathroom
sink" model of the economy (yes, really!)
To wrap your brain around this concept, picture a bathroom sink. Think of the government and
its ability to create more money whenever it needs to as the faucet and that bucket area of the
sink where the water goes as the economy.
The government controls how much money, or water, is flowing into the economy. It spends
money into the economy by building interstates or paying farm subsidies or funding
programs.
"And so as those dollars reach the economy, they begin to fill up that bucket, and what you
want to do is be very mindful about how full that bucket is getting or you're going to get an
inflation problem," [Bernie Sanders economic advisor Stephanie] Kelton said.
Inflation is where the sink overflows. If that happens, Kelton said there are two ways to
fix it: "You can slow the flow of dollars coming into that bucket. That means the government
then has to start slowing it's [sic] rate of spending, or you can open up the drain and let
some of those dollars out of the economy. And that's what we do when we collect taxes."
This sounds a lot like the Quantity Theory of Money (QTM). This view often paints a picture
of pouring water into a container. The higher the water level, the higher the general price
level.
QTM by itself does not promote the idea that more money causes more employment. Only that
more money causes more rising prices. But Keynes did. And the New Keynesians like Yellen
do.
So what makes MMT unique?
According to Stephanie Kelton, in the Marketplace article:
"If you control your own currency and you have bills that are coming due, it means you can
always afford to pay the bills on time," Kelton said. "You can never go broke, you can never be
forced into bankruptcy. You're nothing like a household."
Keynes taught us about government deficits to bolster employment and government deficits to
respond to a crisis. MMT teaches us how to get to the next level. The voters want free goodies.
Traditional economics says "there ain't no such thing as a free lunch."
MMT says "oh yes there is!"
At least until you get to too much inflation . The Monetarists would agree, don't print too
much money or you get too much inflation . Much of the gold community also agrees. If you print
too much money, then you get skyrocketing inflation .
Never mind that this prediction was proven wrong in the post-2008 policy response. We want
to highlight that the Keyesians, the Monetarists, the MMTers, and even many Austrians largely
agree. The problem with too much money printing is too much inflation . They quibble about what
is too much, but they agree on the "bathroom sink" model of the economy.
In the words of early 20 th century physicist Wolfgang Pauli, QTM "is not even
wrong ."
We define inflation as the counterfeiting of credit. That is, fraudulently taking money from
a saver. It is called borrowing , but the borrower hasn't got the means or intent to repay.
Additionally, when everyone thinks that the government's debt paper is money , the saver
doesn't even know or consent to the borrowing.
There are lies, damnlies, and statistics. Then there are a few pugnacious, in your face,
gaslighting make-you-believe-in-unreality cargo cults. We will explore this in full, below.
During World War II, the US military set up operations on certain Pacific islands. They
built landing strips, where they landed planes bringing in supplies and men. They hired the
local tribesmen as labor, and paid them stuff that was ordinary to Americans, but wondrous to
the islanders. Like canned food. The islanders really looked forward to when a plane would
land, and they would get some cargo.
After the war, the US military pulled up stakes and left. But the islanders still wanted the
cargos. So they set up these elaborate charades, with tiki torches instead of flashlights, and
coconut shell mockup headphones. They went through the motions that they thought the Americans
did. To try to bring back the cargos.
Huh. What does that remind you of? An elaborate charade, with bogus props, going through the
motions of a civilization they don't understand to try to produce desired results -- free
goodies?
Modern Monetary Theory is a cargo cult.
It's ironic that the name includes the word modern . If we said that a pile of greasy rags
sealed in a dark closet would spontaneously generate rats, would you call that a modern theory?
If we said that sickness is caused by bad humors, and the cure is bloodletting by leaches,
would you say this is modern ? How about the idea that the Sun and the planets orbit the Earth.
Is this modern , too?
Not only are these not modern -- they are, in fact, old ideas that were tossed into the
garbage heap -- they are not theories either. A theory is an explanation of reality, which
integrates many observed facts and contradicts none. Modern Monetary Theory is neither modern
nor a theory .
MMT is not an attempt to explain reality, but to deny it.
Even a child understands something. Even people in the ancient world understood it, too. If
you lend a bushel of wheat to your neighbor, and he does not repay it, you suffer a loss. You
are worse off, compared to before. And so is the borrower (who at the least ruins his
credit).
MMT is based on denying this universal truth. Common sense says that if Peter lends to Paul,
and Paul does not repay, then Peter is impoverished. Common sense says that Peter would not
lend to Paul if he knew that Paul would renege on his obligation.
MMT says that a modern economy has a modern currency, which is just the state's paper. And
in a modern economy, the modern state can print more with no concerns other than "overflowing
the bathroom sink". Get that, the only concern is prices could rise too fast. And so long as
this does not occur, then the state can get away with it. Only, there is nothing to get away
with. It's perfectly fine.
In a cargo cult, the people did not recognize the difference between fake coconut shell
headphones, and real headphones. Or flashlights and tiki torches. So they made crude copies as
best they could. They went through the motions to summon the sky gods to come down to earth,
with cargo.
Let's look at the mental gymnastics. They imbued magical -- that is outside the principle of
cause and effect -- characteristics to their props. Failing to understand that airplanes are
created by men, and that it takes a great deal of planning (not to mention wealth) to fly a
plane full of cargo from America to the middle of the Pacific, they imagined that, somehow, the
act of using the headphones and the flashlights caused the plane and its cargo to come. The
headset is tokenized, viewed as a magical talisman.
What a cargo cult does to headphones, MMT does to money. First, the cargo cult substitutes
coconut shells held together with twisted vine for headphones. What they wear when attempting
to summon the sky gods is not a headset, but a surrogate. MMT (as does Keynesianism and
Monetarism) substitutes government debt paper for money.
As an aside, even a gold-redeemable certificate is not money. Think about it. You can bring
this piece of paper to the teller window. You push it across the counter. The teller pushes
back the gold coin. If the word for the paper is money, then what is the word for the gold for
which it redeems?
Anyways, modern monetary systems use irredeemable paper. It's not gold-redeemable, but even
worse. And they treat this paper as if it were money .
And it goes even farther. Previous theories felt the need to at least pay lip service to
repaying debt. They couldn't quite get to the point of openly admitting that the debt is never
to be repaid. Keynes famously quipped that, "in the long run, we are all dead," creating
ambiguity about the intention to repay. Monetarists generally promote the idea that if the
economy grows fast enough, the debt will shrink as a proportion of GDP.
The Keynesians don't have the intention to repay. And the Monetarists don't look at
Marginal
Productivity of Debt , which would show them that their idea isn't working. But they don't
go as far as the MMT'ers.
MMT says that the government is unlike deadbeat-debtor Paul. There is no need for the
government to repay. It's the same as the cargo cult. The cargo cult has no concept for
capital. The islanders do not produce in excess of what they consume, accumulating tools and
technology to increase their productivity. They subsist, and assume that this is how the world
works.
MMT has no concept for capital either. It puts blinders on, declaring that consumer prices
are the only thing to measure. The only risk is if they rise too fast. And the MMT'ers refuse
to see anything else.
In our discussion of Yield Purchasing Power , we
introduced a farmer who sells off the back 40 (acres), chops down the apple orchard to sell the
fruitwood, tears down the old barn to sell the planks, and even dismantles the tractor. And why
does he do this? He gets cash in exchange. And the cash is far in excess of his crop yield. Why
struggle and sweat to produce $20,000 a year by growing food, when you can sell off the piece
of the farm for $20,000,000.
The monetary system incentivizes the farmer to trade productive capital for paper credit
slips. The incentive is that this paper has a greater purchasing power than what he can earn by
operating the farm. He can trade his farm for far more groceries, than the food he could grow
on it.
This is the same old game. But MMT gives it a new name -- and asserts a bolder defense.
MMT'ers don't want to see, and they want you not to see, that the lender gives up good capital
but the borrower is just consuming it.
MMT justifies the naked consumption of capital.
Supply and Demand Fundamentals
The prices of the metals rose this week, especially on Friday. The exchange rate of gold
went up twenty two US dollars, and that of silver 41 US cents.
As we will discuss below, we think that there is a rethinking of gold occurring in the
market. And we don't just mean celebrities like Sam Zell buying gold for the first time.
There is a sense of déjà vu. Starting in mid-2004, the Fed went on one of its
rate-hiking sprees. It did not manage to get as high as the previous peak of 6.5%, set prior to
the previous crisis. In 2006, this rate topped out at 5.25%. In both the crisis of 2001, and
the crisis of 2008, the Fed had begun cutting rates before the official indication of recession
, and the cuts occurred more rapidly than the preceding hikes.
The cuts were too little and/or too late to avert disaster.
The problem is that during the period of low rates, firms are incentivized to borrow. They
finance projects which generate a low rate of return. These projects would not be financed, but
for the even-lower cost of borrowing. When rates rise, it does not increase the rate of return
produced by marginal projects (likely the opposite). So borrowers are squeezed.
The Fed eventually comes along with its fix -- even lower rates. While this is too late to
save firms that are teetering into default, it does enable the next wave of borrowing for
even-poorer-projects.
And now, here we are. Since its first tepid hike in December 2005, the Fed has been hiking
for just over three years so far. It has hit a rate well under half of the peak of 2006-2007.
The president has publicly urged the Fed to reverse policy course. And the Fed said it is
listening to the market, and may have paused hiking for now.
Meanwhile, the Fed Funds rate may be lower than the previous peak but it is much higher than
it was from the end of 2008 through the end of 2015. For seven years, it was basically zero.
Nobody knows how many dollars' worth of projects were financed that were only justified, only
possible, due to this zero interest-rate policy. But it was surely a lot (we would guess at
least trillions).
And now the rate is up to 2.25%. Many of those projects are no longer justified, and can no
longer service the debt that finances them.
And none of this is a secret. It is well known to the borrowers, of course. And their
creditors. And the Fed. And hedge funds and other sophisticated speculators. And not just in
general theory, but lists of specific companies and the rollover dates of their bond
issues.
Rollover is key to this. After decades of falling interest, everyone has learned the game of
using short-term financing. But the risk is that it must be rolled over. And when it is rolled,
the previous low-rate is replaced with the higher, current rate. And that's when we find out
which businesses can still pay.
So what will the Fed do? The next programs will have a new name, but the Fed must lower the
cost of capital if it wants to keep the game going.
Is this time going to be the total collapse of the dollar? We don't believe so, as there is
still a lot of capital remaining and more is flooding in as people abandon the
dollar-derivative currencies. So we think of it as déjà vu, the Fed is likely to
do something similar to last time.
And that is an environment where even the non-goldbugs see clear and compelling arguments
for owning gold.
It could be that the timing is not now. It could be that it will take months or years to
arrive at this point. We make no predictions of timing. However, we note that the Monetary
Metals Gold Fundamental Price has been in a rising trend since mid-October. Its low was on
October 9 ($1,266).
Silver is similar, but a bit different. The low in its fundamental occurred in late November
($14.37). But it's up like a rocket since then, now about two bucks higher.
We are at an interesting point.
Let's take a look at the only true picture of the supply and demand fundamentals of gold and
silver. But, first, here is the chart of the prices of gold and silver.
Can the elite be afflicted by some mass disease. Is Neoconservatism a deadly infection ?
Theoretically Democracy depends on information freely available and responsibility of the citizenry to make decisions based on
that information. The political elites have made certain precious little of reliable, unclouded and relevant information ever gets
broadcast even while popularizing, promoting and rewarding every form of misrepresentation, ignorance and irresponsibility. In
other words they spearheaded a dangerous disease to stay in power. And eventually got infected themselves.
Notable quotes:
"... "But what if the elites get things wrong? What if the policies they promulgate produce grotesque inequality or lead to permanent war? Who then has the authority to disregard the guardians, if not the people themselves? How else will the elites come to recognize their folly and change course?" ..."
"... That is how they maintain control and manipulate government to facilitate their own interests to the detriment of the rest of society. Bretix and President Trump have upset their apple cart, which they felt certain was invulnerable and immune to challenge. ..."
"... The elites aren't interested in polls showing Americans want out of Syria and Afghanistan, are they? Can't have mere citizens having influencing decisions like that. ..."
"... An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those institutions have indoctrinated rather than educated. ..."
"... As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think - to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil - begin to have real effect. ..."
"But what if the elites get things wrong? What if the policies they promulgate produce
grotesque inequality or lead to permanent war? Who then has the authority to disregard the
guardians, if not the people themselves? How else will the elites come to recognize their
folly and change course?"
What if, on election day, you only have a choice between 2 candidates. Both favoring all
the wrong choices, but one tends to talk up Christianity and family and the other talks up
diversity.
And both get their funding from the very wealthy and corporations. And any 3rd choices
would be "throwing your vote away". How would you ever get to vote for someone who might
change course?
Democracy has little to actually do with choice or power.
mlopez, January 18, 2019 at 6:22 pm
GB may not have been any utopia in 1914, but it was certainly geo-politically dominant. It's common people's social,
economic and cultural living standards most assuredly was vastly improved over Russian, or European peasants. There can be no
serious comparison with third world countries and regions.
As for the US, there can be absolutely no debate about its own dominance, or material standard of living after 1945 as
compared to any where else in the world. More importantly, even uneducated and very contemporary observers were capable of
recognizing how our elites had sold out their interests in favor of the furtherance of their own.
If we are on about democratic government, then it's been generations since either country and their peoples have had any
real democracy. Democracy depends on information freely available and responsibility of the citizenry to make decisions based
on that information. The political elites have made certain precious little of reliable, unclouded and relevant information
ever gets broadcast even while popularizing, promoting and rewarding every form of misrepresentation, ignorance and
irresponsibility.
That is how they maintain control and manipulate government to facilitate their own interests to the detriment of the
rest of society. Bretix and President Trump have upset their apple cart, which they felt certain was invulnerable and immune
to challenge.
Hello / Goodbye, January 19, 2019 at 11:40 am
The elites aren't interested in polls showing Americans want out of Syria and Afghanistan, are they? Can't have mere
citizens having influencing decisions like that.
Patzinak, January 19, 2019 at 5:07 pm
What ineffable flummadiddle!
Prominent Brexiteers include Boris Johnson (dual UK/US citizenship, educated in Brussels and at Eton and Oxford, of mixed
ancestry, including a link - by illegitimate descent - to the royal houses of Prussia and the UK); Jacob Rees-Mogg (son of a
baron, educated at Eton and Oxford, amassed a solid fortune via hedge fund management); Arron Banks (millionaire, bankroller
of UKIP, made to the Brexit campaign the largest ever political donation in UK politics).
So much for "the elite" being against Brexit!
But the main problem with Brexit is this. Having voted by a slim margin in favour of Brexit, the Great British Public
then, in the general election, denied a majority to the government that had undertaken to implement it, and elected a
Parliament of whom, by a rough estimate, two thirds oppose Brexit.
It ain't that "the elite" got "things wrong". It's that bloody Joe Public can't make his mind what to do - and go through
with it.
Rossbach, January 20, 2019 at 2:14 pm
"Whether the imagined utopia of a dominant Great Britain prior to 1914 or a dominant America after 1945 ever actually
existed is beside the point."
It wasn't to restore any defunct utopia that led people to vote for Brexit or Donald Trump; it was to check the descent of
the Anglosphere into the totalitarian dystopia of forced multi-cultural globalism that caused voters to reject the EU in
Britain and Hillary Clinton in the US. It is because they believed that only with the preservation of their national
independence was there any chance or hope for a restoration of individual liberty that our people voted as they did.
Ratings System, January 17, 2019 at 1:27 pm
It's why they won't enjoy their privileges much longer. That stale charade can't and won't last.
We don't have a meritocracy. We have a pseudo-meritocracy with an unduly large contingent of aliens, liars, cheats,
frauds, and incompetents. They give each other top marks, speak each other's PC language, and hire each other's kids. And
they don't understand why things are falling apart, and why they are increasingly hated by real Americans.
A very nasty decade or two is coming our way, but after we've swept out the filth there will be a good chance that
Americans will be Americans again.
Paul Reidinger, January 17, 2019 at 2:03 pm
An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of
the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those
institutions have indoctrinated rather than educated.
As their more recent alumni move into government, media and cultural production, the primitiveness of their views and
their inability to think - to say nothing of their fundamental ignorance about our civilization other than that it is bad and
evil - begin to have real effect. The new dark age is no longer imminent. It is here, and it is them. I see no way to
rectify the damage. When minds are ruined young, they remain ruined.
"... According to Oreshkin, the US should stop trying to blame the troubles of "open societies" on someone else, but look for the root of its problems at home. ..."
"... "Look at what is happening in America. Over the past 30 years real income of the middle class and below haven't grown almost at all. The expenses for healthcare and education have risen trifold, even taking inflation in account," Oreshkin told RT during a press conference in Davos. " Naturally, it has led to the growth of dissent in America, becoming one of the factors in Donald Trump, with all his peculiar rhetoric, becoming the president ." ..."
"... The Russian then hit the bullseye: "the problems are within the US. An external enemy, which impedes them and causes all the trouble in the US – whether Russia or China – is just substitution of concepts. " ..."
"... "Until every country realizes that the problems exist, above all, in themselves and not in some external forces, such mindset will persist and we'll continue to hear such statements," Oreshkin added, yet we are confident that anyone who relayed his important message would be dubbed a Kremlin agent and branded fake news ..."
Yet while Soros' aggressive
3295-word attack on China took many by surprise, what was just as notable was China's
response to Soros' scathing criticism: there was none.
In fact, China made it quite clear that in its opinion, Soros is no longer relevant saying
that " statements by certain people, which portray black as white and distort facts, are
completely pointless and not worthy of even a rebuttal. "
Of course, the best way for Beijing to respond to Soros' damning insinuations and
accusations is merely to ignore them, while implicitly stating that Soros is not only senile
but ideologically motivated and "distorting the facts", in short: not even worthy of a
rebuttal.
That said, Soros took aim not only at China, but also Russia, saying "I've been
concentrating on China, but open societies have many more enemies, Putin's Russia foremost
among them."
And unlike China, Russia's response to Soros' remarks was somewhat more explicit, with
Russia's Minister for Economic Development Maksim Oreshkin saying that " Washington should
focus on actually fixing its domestic problems instead of searching for external enemies to
blame them on ."
According to Oreshkin, the US should stop trying to blame the troubles of "open societies"
on someone else, but look for the root of its problems at home.
"Look at what is happening in America. Over the past 30 years real income of the middle
class and below haven't grown almost at all. The expenses for healthcare and education have
risen trifold, even taking inflation in account," Oreshkin told
RT during a press conference in
Davos. " Naturally, it has led to the growth of dissent in America, becoming one of the factors
in Donald Trump, with all his peculiar rhetoric, becoming the president ."
The Russian then hit the bullseye: "the problems are within the US. An external enemy,
which impedes them and causes all the trouble in the US – whether Russia or China –
is just substitution of concepts. "
The official warned that such an approach – expressed by Soros and other figures of
the US elite – sows nothing but confrontation, which ultimately harms the US itself end
impedes economic growth worldwide.
"Until every country realizes that the problems exist, above all, in themselves and not in
some external forces, such mindset will persist and we'll continue to hear such statements,"
Oreshkin added, yet we are confident that anyone who relayed his important message would be
dubbed a Kremlin agent and branded fake news.
"... The return to the industrial relations and tax policies of the early 19th century has been spearheaded by people who speak the language of equality, respect, participation, and transparency. ..."
"... Branko Milanovic is the author of Global Inequality: A New Approach for the Age of Globalization and of the forthcoming Capitalism, Alone, both published by Harvard University Press. He is senior scholar at the Stone Center on Socio-Economic Inequality at the Graduate Center, City University of New York. An earlier version of this post has previously appeared in Milanovic's blog . ..."
The return to the industrial relations and tax policies of the early 19th century has
been spearheaded by people who speak the language of equality, respect, participation, and
transparency.
You will find me eager to help you,
but slow to take any step.
-- Euripides, Hecuba
Thousands of people with a combined wealth of several
hundred billion dollars, perhaps even close to a trillion, are gathering this week in Davos.
Never in world history, quite possibly, has the amount of wealth per square foot been so high.
This year, for the seventh or eighth consecutive time, one of the principal topics addressed by
these captains of industry, billionaires, employers of thousands of people across the four
corners of the globe, is inequality. Even the new "hot" topics of the day -- trade wars and
populism -- are in turn related, or even caused by inequality of income, wealth, or political
power.
Only in passing, and probably on the margins of the official program, will the global elites
gathered in Davos get into a discussion of the tremendous monopoly and monopsony power their
companies have. Neither will they publicly mention companies' ability to play one jurisdiction
against another in order to avoid taxes, ban organized labor within their ranks, use government
ambulance services to carry workers who have fainted from the heat (to save expenses on air
conditioning), make their workforce complement its wages through private charity donations, or
perhaps pay an average tax rate of between 0-12 percent.
Some participants, if they are from the emerging market economies, can also exchange
experiences on how to delay payments of wages for several months while investing these funds at
high interests rates, save on labor protection standards, or buy privatized companies for a
song and then set up shell companies in the Caribbean or Channel Islands.
It is just that somehow, the "masters of the universe" who gather annually in Davos never
managed to find enough money, or time, or perhaps willing lobbyists to help with the policies
many will agree, during the official sessions, should be adopted. For example, increasing taxes
on the top 1 percent and on large estates, providing decent wages or not impounding wages,
reducing gaps between CEO compensation and average pay, spending more money on public
education, making access to financial assets more attractive to the middle and working class,
equalizing taxes on capital and labor, reducing corruption in government contracts and
privatizations.
Actually, when policies that are supposed to make some headway in counteracting rising
inequality are finally proposed, such as the one made by Rep. Alexandria Ocasio-Cortez (D-NY)
of 70 percent marginal tax on extra high-incomes (above $10 million annually), they are
quick to argue that such policies will do more harm than good. One is left, to put it
mildly, puzzled: If they are against a most obvious and rather modest proposal, what policies
do they have in mind to fight inequality? In reality they have none, except for the vacuous
talk of "social inclusion," "prosperity for all" and "trickle-down economics."
Not surprisingly, nothing has been done since the Global Financial Crisis to address
inequality. Rather, the opposite has happened. Donald Trump has, as promised, passed a historic
tax cut for the wealthy; Emmanuel Macron has discovered the attraction of latter-day
Thatcherism; the Chinese government has slashed taxes on the rich and
imprisoned the left-wing students at Peking University who supported striking workers. In
Brazil, Jair Bolsonaro seems to consider praise for torture and the rising stock market as the
ideal mélange of modern capitalism.
Bizarrely, this return to the industrial relations and tax policies of the early 19th
century has been spearheaded by people who speak the language of equality, respect,
participation, and transparency. The annual gathering in Davos, in that regard, is not just a
display of the elites' financial superiority. It is also supposed to showcase their moral
superiority. This is in line with a longstanding trend: Over the past fifty years, the language
of equality has been harnessed in the pursuit of the most structurally inegalitarian policies.
It is much easier (and profitable), apparently, to call journalists and tell them about
nebulous schemes whereby 90 percent of wealth will be -- over an unknown number of years and
under unknowable accounting practices -- given away as charity than to pay suppliers and
workers reasonable rates or stop selling user data. They are loath to pay a living wage, but
they will fund a philharmonic orchestra. They will ban unions, but they will organize a
workshop on transparency in government.
And next year, as inequality continues to rise and the state of Western middle classes
continues to deteriorate, the same elites will be back in Davos, talking about inequality and
populism in grave tones. A new record in dollar wealth per square foot may be reached, but the
topics of discussion within the conference halls, and on the margins, will remain the same.
Branko Milanovic is the author of Global Inequality: A New Approach for the Age of
Globalization and of the forthcoming Capitalism, Alone, both published by Harvard University
Press. He is senior scholar at the Stone Center on Socio-Economic Inequality at the Graduate
Center, City University of New York. An earlier version of this post has previously appeared in
Milanovic's blog .
"... In January 2009, as the financial crisis was still unfolding, there was a widespread fear at the annual Davos meeting that the bonanza was about to end. But as concerns over an immediate social backlash receded somewhat and the vast accumulation of wealth on the heights of society continued, thanks to the massive injection of cheap money by the US Fed and other major central banks, it appeared that all was still for the best in the best of all possible worlds. ..."
"... As the Guardian ..."
"... Financial Times ..."
"... The "Davos people" gave their answer to this reform agenda when they handed the platform for the keynote address to the newly installed extreme right wing and fascistic president of Brazil, the former military commander, Jair Bolsonaro, after giving it to another right-wing authoritarian Donald Trump the previous year. ..."
"... Bolsonaro's remarks were music to their ears as he set out his agenda for a "new Brazil" by creating new market opportunities, lower taxes on business and a "much-needed overhaul" of the country's pension system. And they would have been mindful that these measures come with a commitment for the suppression of the working class. ..."
"... The red-carpet treatment for Bolsonaro sent a message to the working class the world over: this is how your demands will be met. ..."
"... In the lead up to the meeting, David Lipton, the deputy managing director of the International Monetary Fund issued a warning that "history suggests" an economic downturn "somewhere over the horizon." ..."
This year's gathering of the global elites at the World Economic Forum's annual meeting in
Davos, Switzerland, is perhaps best summed up in the phrase: The chickens are coming home to
roost.
For almost five decades, the WEF has been at the centre of the promotion of the free market
policies that have funnelled trillions of dollars into the hands of the world's wealthiest
individuals and led to the widening of social inequality to historically unprecedented levels
-- an institutionalised process that accelerated to new levels after the meltdown of 2008.
In January 2009, as the financial crisis was still unfolding, there was a widespread
fear at the annual Davos meeting that the bonanza was about to end. But as concerns over an
immediate social backlash receded somewhat and the vast accumulation of wealth on the heights
of society continued, thanks to the massive injection of cheap money by the US Fed and other
major central banks, it appeared that all was still for the best in the best of all possible
worlds.
No longer. Social anger and the class struggle are intensifying around the world. As the
Guardian columnist Aditya Chakrabortty commented, the Davos billionaire is now
experiencing a new and unsettling emotion: fear. As they face a world order crumbling
before them, the Davos plutocrats are "terrified" and "whatever dog-eared platitudes they may
recycle for the TV cameras, what grips them is the havoc far below."
Surrounding the Davos gathering, there were attempts to introduce a course correction. In a
column produced for the meeting, Financial Times economics commentator Martin Wolf
pointed to the responsibility of the global elites for the elevation of populist and
authoritarian political leaderships and insisted that law-governed democracies had to be made
to work better. "Davos people," he concluded, "please note: this is your clear
responsibility."
The international charity Oxfam issued a report showing that 26 billionaires held as much
wealth as the bottom 50 percent of the world's population, some 3.8 billion, that wealth
accumulation at the top was increasing at the rate of $2.5 billion per day and called or a new
"human economy" to be financed through increased wealth taxes.
The "Davos people" gave their answer to this reform agenda when they handed the platform
for the keynote address to the newly installed extreme right wing and fascistic president of
Brazil, the former military commander, Jair Bolsonaro, after giving it to another right-wing
authoritarian Donald Trump the previous year.
Bolsonaro's remarks were music to their ears as he set out his agenda for a "new Brazil"
by creating new market opportunities, lower taxes on business and a "much-needed overhaul" of
the country's pension system. And they would have been mindful that these measures come with a
commitment for the suppression of the working class.
As the Davos summit opened, the WSWS noted that the present regime of the world capitalist
order, dominated and controlled by the global billionaires and their financial markets, was as
incapable of any reform as pre-1789 France or the pre-1917 czarist autocracy in Russia both of
which responded to social opposition with increased repression. The red-carpet treatment
for Bolsonaro sent a message to the working class the world over: this is how your demands will
be met.
... ... ...
Hanging over the entire gathering was the worsening global economic outlook and the
consequences of even a minor downturn under conditions of deepening trade conflicts, above all
the US trade war against China, the palpable breakdown of long established political structures
and the rising tide of social anger and class struggle.
In the lead up to the meeting, David Lipton, the deputy managing director of the
International Monetary Fund issued a warning that "history suggests" an economic downturn
"somewhere over the horizon."
But under conditions of deepening distrust in government institutions there was no guarantee
that the regulatory regimes put in place after the finance crisis "will be sufficient to keep a
'garden variety' recession from becoming another full-blown systemic crisis."
Another warning came in the form of a letter written by billionaire investor Seth Klarman,
which, the New York Times reported, was passed around amid the Davos attendees. Its
central focus was on the impact of rising class struggles. "It can't be business as usual amid
constant protests, riots, shutdown and escalating social tensions," he wrote. Citing the
"yellow vest" movement in France, he continued on this theme: "Social cohesion is essential for
those who have capital to invest."
Klarman is among those who are aware that the measures taken by financial authorities over
the past decade to combat the effects of the financial crisis are contributing to the creation
of a new one as debt levels rise. "The seeds of the next major financial crisis may well be
found in today's sovereign debt levels," he wrote. "There is no way to know how much debt is
too much, but America will inevitably reach an inflection point whereupon a suddenly a more
skeptical market will refuse to continue to lend to us at rates we can afford."
And such a crisis will have immediate political effects, as Klarman and others recognise.
"It's not hard to imagine worsening social unrest among a generation," he wrote," that is
falling behind economically and feels betrayed by a massive national debt without any obvious
benefit to them."
But a social order in which, as Oxfam reports, 82 percent of all the wealth created in 2017
went to the top global 1 percent is organically incapable of responding to deepening opposition
other than with repression, underscoring the analysis of the International Committee of the
Fourth International that present political situation is above all characterised by revolution
versus counter-revolution.
A FRIEND OF mine, who runs a large television production company in the car-mad city of Los
Angeles, recently noticed that his intern, an aspiring filmmaker from the People's Republic of
China, was walking to work.
WHEN HE OFFERED to arrange a swifter mode of transportation, she declined. When he asked
why, she explained that she "needed the steps" on her Fitbit to sign in to her social media
accounts. If she fell below the right number of steps, it would lower her health and fitness
rating, which is part of her social rating , which is monitored by
the government. A low social rating could prevent her from working or traveling abroad.
China's social rating system, which was announced by the ruling Communist Party in 2014,
will
soon be a fact of life for many more Chinese.
By 2020, if the Party's plan holds, every footstep, keystroke, like, dislike, social media
contact, and posting
tracked by the state will affect one's social rating.
Personal "creditworthiness" or "trustworthiness" points will be used to reward and punish individuals
and companies by granting or denying them access to public services like health care, travel,
and employment, according to a plan released last year by the municipal government of Beijing.
High-scoring individuals will find themselves in a "green channel," where they can more easily
access social opportunities, while those who take actions that are disapproved of by the state
will be "unable to move a step."
Big Brother is an emerging reality in China. Yet in the West, at least, the threat of
government surveillance systems being integrated with the existing corporate surveillance
capacities of big-data companies like Facebook, Google, Microsoft, and Amazon into one gigantic
all-seeing eye appears to trouble very few people -- even as countries like
Venezuela have been quick to copy the Chinese model.
Still, it can't happen here, right? We are iPhone owners and Amazon Prime members, not
vassals of a one-party state. We are canny consumers who know that Facebook is tracking our
interactions and Google is selling us stuff.
Yet it seems to me there is little reason to imagine that the people who run large
technology companies have any vested interest in allowing pre-digital folkways to interfere
with their 21st-century engineering and business models , any more than
19th-century robber barons showed any particular regard for laws or people that got in the way
of their railroads and steel trusts.
Nor is there much reason to imagine that the technologists who run our giant consumer-data
monopolies have any better idea of the future they're building than the rest of us do.
Facebook, Google, and other big-data monopolists already hoover up behavioral markers and
cues on a scale and with a frequency that few
of us understand . They then analyze, package, and sell that data to their partners.
A glimpse into the inner workings of the global trade in personal data was provided in early
December in a 250-page report released by a British parliamentary committee that included
hundreds of emails between high-level Facebook executives. Among other things, it showed how
the company engineered sneaky ways to obtain
continually updated SMS and call data from Android phones . In response, Facebook
claimed that users must
"opt-in" for the company to gain access to their texts and calls.
The machines and systems that the techno-monopolists have built are changing us faster than
they or we understand. The scale of this change is so vast and systemic that we simple humans
can't do the math -- perhaps in part because of the way that incessant smartphone use has
affected our ability to pay attention to anything longer than 140 or 280 characters.
As the idea of a "right to privacy," for example, starts to seem hopelessly old-fashioned
and impractical in the face of ever-more-invasive data systems -- whose eyes and ears, i.e.,
our smartphones, follow us everywhere -- so has our belief that other individual rights, like
freedom of speech , are somehow sacred.
Being wired together with billions of other humans in vast networks mediated by thinking
machines is not an experience that humans have enjoyed before. The best guides we have to this
emerging reality may be failed 20th-century totalitarian experiments and science fiction. More
on that a little later.
The speed at which individual-rights-and-privacy-based social arrangements collapse is
likely to depend on how fast Big Tech and the American national security apparatus consummate a
relationship that has been growing ever closer for the past decade. While US surveillance
agencies do not have regular real-time access to the gigantic amounts of data collected by the
likes of Google, Facebook, and Amazon -- as far as we know, anyway -- there is both anecdotal
and hard evidence to suggest that the once-distant planets of consumer Big Tech and American
surveillance agencies are fast merging into a single corporate-bureaucratic life-world, whose
potential for tracking, sorting, gas-lighting, manipulating, and censoring citizens may result
in a softer version of China's Big Brother.
These troubling trends are accelerating in part because Big Tech is increasingly beholden to
Washington, which has little incentive to kill the golden goose that is filling its tax and
political coffers. One of the leading corporate spenders on lobbying services in Washington,
DC, in 2017 was Google's parent company, Alphabet, which, according to the Center for
Responsive Politics, spent more than $18
million . Lobbying Congress and government helps tech companies like Google win large
government contracts. Perhaps more importantly, it serves as a shield against attempts to
regulate their wildly lucrative businesses.
If anything, measuring the flood of tech dollars pouring into Washington, DC, law firms,
lobbying outfits, and think tanks radically understates Big Tech's influence inside the
Beltway. By buying The Washington Post , Amazon's Jeff Bezos took direct control of
Washington's hometown newspaper. In locating one of Amazon's two new headquarters in nearby
Northern Virginia, Bezos made the company a major employer in the area -- with 25,000 jobs to
offer.
Who will get those jobs? Last year, Amazon Web Services announced the opening of the new AWS
Secret Region, the result of a 10-year, $600 million contract the company won from the CIA in
2014. This made Amazon the sole provider of cloud services across "the full range of data
classifications, including Unclassified, Sensitive, Secret, and Top Secret," according to an
Amazon corporate press release.
Once the CIA's Amazon-administered self-contained servers were up and running, the NSA was
quick to follow suit, announcing its own integrated big-data project. Last year the agency
moved most of its data into a
new classified computing environment known as the Intelligence Community GovCloud, an
integrated "big data fusion environment," as the news site NextGov described it, that allows
government analysts to "connect the dots" across all available data sources, whether classified
or not.
The creation of IC GovCloud should send a chill up the spine of anyone who understands how
powerful these systems can be and how inherently resistant they are to traditional forms of
oversight, whose own track record
can be charitably described as
poor .
Amazon's IC GovCloud was quickly countered by Microsoft's secure version of its Azure
Government cloud service, tailored for the use of 17 US intelligence agencies. Amazon and
Microsoft are both expected to be major bidders for the Pentagon's secure cloud system, the
Joint Enterprise Defense Initiative -- JEDI -- a winner-take-all contract that will likely be
worth at least $10 billion.
With so many pots of gold waiting at the end of the Washington, DC, rainbow, it seems like a
small matter for tech companies to turn over our personal data -- which legally speaking, is
actually their data -- to the spy agencies that guarantee their profits. This is the threat
that is now emerging in plain sight. It is something we should reckon with now, before it's too
late.
IN FACT, BIG tech and the surveillance agencies are already partners...
...
THE FLIP SIDE of that paranoid vision of an evolving American surveillance state is the
dream that the new systems of analyzing and distributing information may be forces for good,
not evil. What if Google helped the CIA develop a system that helped filter out fake news, say,
or a new Facebook algorithm helped the FBI identify
potential school shooters before they massacred their classmates? If human beings are
rational calculating engines, won't filtering the information we receive lead to better
decisions and make us better people?
Such fond hopes have a long history. Progressive techno-optimism goes back to the origins of
the computer itself, in the correspondence between Charles Babbage, the 19th-century English
inventor who imagined the "difference engine" -- the first theoretical model for modern
computers -- and Ada Lovelace, the brilliant futurist and daughter of the English Romantic poet
Lord Byron.
"The Analytical Engine," Lovelace wrote, in one of her notes on Babbage's work, "might act
upon other things besides number, where objects found whose mutual fundamental relations could
be expressed by those of the abstract science of operations, and which should be also
susceptible of adaptations to the action of the operating notation and mechanism of the engine.
Supposing, for instance, that the fundamental relations of pitched sounds in the science of
harmony and of musical composition were susceptible of such expression and adaptations, the
engine might compose elaborate and scientific pieces of music of any degree of complexity or
extent."
This is a pretty good description of the principles of digitizing sound; it also eerily
prefigures and predicts the extent to which so much of our personal information, even stuff we
perceive of as having distinct natural properties, could be converted to zeros and ones.
The Victorian techno-optimists who first envisioned the digital landscape we now inhabit
imagined that thinking machines would be a force for harmony, rather than evil, capable of
creating beautiful music and finding expressions for "fundamental relations" of any kind
according to a strictly mathematical calculus.
The idea that social engineering could help produce a more efficient and equitable society
was echoed by early 20th-century American progressives. Unlike 19th- and early 20th-century
European socialists, who championed the organic strength of local communities, early
20th-century American progressives like Herbert Croly and John Dewey put their faith in the
rise of a new class of educated scientist-priests who would re-engineer society from the top
down according to a strict utilitarian calculus.
The lineage of these progressives -- who are not identical with the "progressive" faction of
today's Democratic Party -- runs from Woodrow Wilson to champions of New Deal bureaucracy like
Franklin D. Roosevelt's secretary of the interior, Harold Ickes. The 2008 election of Barack
Obama, a well-credentialed technocrat who identified
very strongly with the character of Spock from Star Trek , gave the old-time
scientistic-progressive religion new currency on the left and ushered in a cozy relationship
between the Democratic Party and billionaire techno-monopolists who had formerly fashioned
themselves as government-skeptical libertarians.
"Amazon does great things for huge amounts of people," Senate minority leader Chuck Schumer
told Kara Swisher of Recode in a
recent interview , in which he also made approving pronouncements about Facebook and
Google. "I go to my small tech companies and say, 'How does Google treat you in New York?' A
lot of them say, 'Much more fairly than we would have thought.'"
But the cozy relationship between mainstream Democrats and Silicon Valley hit a large-sized
bump in November 2016, when Donald Trump defeated Hillary Clinton -- in part through his
mastery of social media platforms like Twitter. Blaming the election result on Russian bots or
secret deals with Putin betrayed a shock that what the left had regarded as their cultural
property had been turned against them by a right-wing populist whose authoritarian leanings
inspired fear and loathing among both the technocratic elite and the Democratic party base.
Yet in the right hands, progressives continued to muse, information monopolies might be
powerful tools for re-wiring societies malformed by racism, sexism, and transphobia. Thinking
machines can be taught to filter out bad information and socially negative thoughts. Good
algorithms, as opposed to whatever Google and Facebook are currently using, could censor
neo-Nazis, purveyors of hate speech, Russian bots, and transphobes while discouraging voters
from electing more
Trumps .
The crowdsourced wisdom of platforms like Twitter, powered by circles of
mutually credentialing blue-checked "experts," might mobilize a collective will to justice,
which could then be enforced on retrograde institutions and individuals
. The result might be a better social order, or as data scientist Emily Gorcenski put it ,
"revolution."
The dream of centralized control over monopolistic information providers can be put to more
prosaic political uses, too -- or so politicians confronted by a fractured and tumultuous
digital media landscape must hope. In advance of next year's elections for the European
Parliament, which will take place in May, French President Emmanuel Macron signed a deal with
Facebook in which officials of his government will meet regularly with Facebook executives to
police
"hate speech."
The program, which will continue through the May elections, apparently did little to
discourage fuel riots by the " gilets jaunes ," which have set Paris and other French cities
ablaze, even as a claim that a
change in Facebook's local news algorithm was responsible for the rioting was quickly
picked up by French media figures close to Macron.
At root, the utopian vision of AI-powered information monopolies programmed to advance the
cause of social justice makes sense only when you imagine that humans and machines "think" in
similar ways. Whether machines can "think," or -- to put it another way, whether people think
like machines -- is a question that has been hotly debated for the past five centuries. Those
debates gave birth to modern liberal societies, whose foundational assumptions and guarantees
are now being challenged by the rise of digital culture.
...
THE ORIGIN OF the utilitarian social calculus and its foundational account of thinking as a
form of computation is social contract theory. Not coincidentally, these accounts evolved
during the last time western societies were massively impacted by a revolution in
communications technology, namely the introduction of the printing press , which brought both
the text of the Bible and the writings of small circles of Italian and German humanists to all
of Europe. The spread of printing technologies was accompanied by the
proliferation of the simple hand mirror , which allowed even ordinary individuals to gaze
at a "true reflection" of their own faces, in much the same way that we use iPhones to take
selfies.
Nearly every area of human imagination and endeavor -- from science to literature to
painting and sculpture to architecture -- was radically transformed by
the double-meteor-like impact of the printing press and the hand mirror , which together
helped give rise to scientific discoveries, great works of art, and new political ideas that
continue to shape the way we think, live, and work.
The printing press fractured the monopoly on worldly and spiritual knowledge long held by
the Roman Catholic Church, bringing the discoveries of Erasmus and the polemics of Martin
Luther to a broad audience and fueling the Protestant Reformation, which held that ordinary
believers -- individuals, who could read their own Bibles and see their own faces in their own
mirrors -- might have unmediated contact with God. What was once the province of the few became
available to the many, and the old social order that had governed the lives of Europe for the
better part of a millennium was largely demolished.
In England, the broad diffusion of printing presses and mirrors led to the bloody and
ultimately failed anti-monarchical revolution led by Oliver Cromwell. The Thirty Years' War,
fought between Catholic and Protestant believers and hired armies in Central and Eastern
Europe, remains the single most destructive conflict, on a per capita basis, in European
history, including the First and Second World Wars.
The information revolution spurred by the advent of digital technologies may turn out to be
even more powerful than the Gutenberg revolution; it is also likely to be bloody. Our inability
to wrap our minds around a sweeping revolution in the way that information is gathered,
analyzed, used, and controlled should scare us. It is in this context that both right- and
left-leaning factions of the American elite appear to accept the merger of the US military and
intelligence complex with Big Tech as a good thing, even as centralized control over
information creates new vulnerabilities for rivals to exploit .
The attempt to subject the American information space to some form of top-down,
public-private control was in turn made possible -- and perhaps, in the minds of many on both
the right and the left, necessary -- by the collapse of the 20th-century American institutional
press. Only two decades ago, the social and political power of the institutional press was
still so great that it was often called "the Fourth Estate" -- a meaningful check on the power
of government. The term is rarely used anymore, because the monopoly over the printed and
spoken word that gave the press its power is now gone.
Why? Because in an age in which every smartphone user has a printing press in their pocket,
there is little premium in owning
an actual, physical printing press . As a result, the value of "legacy" print brands has
plummeted. Where the printed word was once a rare commodity, relative to the sum total of all
the words that were written in manuscript form by someone, today nearly all the words that are
being written anywhere are available somewhere online. What's rare, and therefore worth money,
are not printed words but fractions of
our attention .
The operative, functional difference between today's media and the American media of two
decades ago is not the difference between old-school New York Times reporters and new-media
bloggers who churn out opinionated "takes" from their desks. It is the difference between all
of those media people, old and new, and programmers and executives at companies like Google and
Facebook. A set of key social functions -- communicating ideas and information -- has been
transferred from one set of companies, operating under one set of laws and values, to another,
much more powerful set of companies, which operate under different laws and understand
themselves in a different way .
According to Section 230 of the Communications Decency Act, information service providers
are protected
from expensive libel lawsuits and other forms of risk that publishers face. Those protections
allowed Google and Facebook to build their businesses at the expense of "old media" publishers,
which in turn now find it increasingly difficult to pay for original reporting and writing.
The media once actively promoted and amplified stories that a plurality or majority of
Americans could regard as "true." That has now been replaced by the creation and
amplification of extremes . The overwhelming ugliness of our public discourse is not
accidental; it is a feature of the game, which is structured and run for the profit of
billionaire monopolists, and which
encourages addictive use .
The result has been the creation of a socially toxic vacuum at the heart of American
democracy, from which information monopolists like Google and Facebook have sucked out all the
profit, leaving their users ripe for top-down surveillance, manipulation, and control.
TODAY, THE PRINTING press and the mirror have combined in the iPhone and other personal
devices, which are networked together. Ten years from now, thanks to AI, those networks, and
the entities that control them -- government agencies, private corporations, or a union of both
-- may take on a life of their own.
Perhaps the best way to foresee how this future may play out is to look back at how some of
our most far-sighted science fiction writers have wrestled with the future that is now in front
of us.
...
Yet even classic 20th-century dystopias like Aldous Huxley's Brave New World or George
Orwell's 1984 tell us little about the dangers posed to free societies by the fusion of big
data, social networks, consumer surveillance, and AI.
Perhaps we are reading the wrong books.
Instead of going back to Orwell for a sense of what a coming dystopia might look like, we
might be better off reading We , which was written nearly a century ago by the Russian novelist
Yevgeny Zamyatin. We is the diary of state mathematician D-503, whose experience of the highly
disruptive emotion of love for I-330, a woman whose combination of black eyes, white skin, and
black hair strike him as beautiful. This perception, which is also a feeling, draws him into a
conspiracy against the centralized surveillance state.
The Only State, where We takes places, is ruled by a highly advanced mathematics of
happiness, administered by a combination of programmers and machines. While love has been
eliminated from the Only State as inherently discriminatory and unjust, sex has not. According
to the Lex Sexualis, the government sex code, "Each number has a right towards every other
number as a sex object." Citizens, or numbers, are issued ration books of pink sex tickets.
Once both numbers sign the ticket, they are permitted to spend a "sex hour" together and lower
the shades in their glass apartments.
Zamyatin was prescient in imagining the operation and also the underlying moral and
intellectual foundations of an advanced modern surveillance state run by engineers. And if 1984
explored the opposition between happiness and freedom, Zamyatin introduced a third term into
the equation, which he believed to be more revolutionary and also more inherently human:
beauty. The subjective human perception of beauty, Zamyatin argued, along lines that Liebniz
and Searle might approve of, is innately human, and therefore not ultimately reconcilable with
the logic of machines or with any utilitarian calculus of justice.
...
Against a centralized surveillance state that imposes a motionless and false order and an
illusory happiness in the name of a utilitarian calculus of "justice," Basile concludes,
Zamyatin envisages a different utopia: "In fact, only within the 'here and now' of beauty may
the equation of happiness be considered fully verified." Human beings will never stop seeking
beauty, Zamyatin insists, because they are human. They will reject and destroy any attempt to
reorder their desires according to the logic of machines.
A national or global surveillance network that uses beneficent algorithms to reshape human
thoughts and actions in ways that elites believe to be just or beneficial to all mankind is
hardly the road to a new Eden. It's the road to a prison camp. The question now -- as in
previous such moments -- is how long it will take before we admit that the riddle of human
existence is not the answer to an equation. It is something that we must each make for
ourselves, continually, out of our own materials, in moments whose permanence is only a
dream.
People do not understand that Facebook is actually a surveillance company. Everything else is
a side business. From comments: "Facebook basically steals ad revenue from idiot companies who
think the clicks are real. THEYRE NOT. Bots clicking on your ad does nothing for your
business!!
The team detailed their findings in a 70-page report published on their website.
Facebook has been lying to the public about the scale of its problem with fake accounts,
which likely exceed 50% of its network. Its official metrics -- many of which it has stopped
reporting quarterly -- are self-contradictory and even farcical. The company has lost control
of its own product.
Ultimately, this is just the latest sign that Facebook - formerly one of the world's most
successful companies - is doomed to go the way of CompuServe and AOL.
PlainSite is a project launched by the Think Computer Corporation and Think Computer
Foundation which aims to make "data accessible to the public free of charge" and "lets ordinary
citizens impact the law- making process," according to Bloomberg. Aaron Greenspan recently told
his story about how he fit into the history of Facebook's founding at Harvard on a podcast .
Facebook's fraudulent numbers hurt its customers (advertisers) by overstating the
effectiveness of Facebook's product, the company said.
Fake accounts affect Facebook at its core in numerous ways:
Its customers purchase advertising on Facebook based on the fact that it can supposedly
target advertisements at more than 2 billion real human beings. To the extent that users
aren't real, companies are throwing their money down the drain.
Fake accounts click on advertising at random, or "like" pages, to throw off antifraud
algorithms. Fake accounts look real if they do not follow a clear pattern. This kind of
activity defrauds advertisers, but rewards Facebook with revenue.
Fake accounts often defraud other users on Facebook, through scams, fake news, extortion,
and other forms of deception. Often, they can involve governments
" Zuckerberg's creation is a reflection of his own flaws. It is a mirror of his own
personality and the insecurity and endless need of approval he has sought his whole life
leading to its creation. It is Zuckerberg made virtually. It is not a success nor is it a
triumph, it is a window into a flawed psyche. It spreads as an infection because it is."
Q: I am 62. Last year, I got a Social Security calculation showing that when I am
66-plus-years-old, I will receive $400-plus in Social Security benefits per month. Because of
my health, I started to work only three days a week. Will this reduce the amount of my
benefits? If l decide to quit my job, but not apply for my Social Security benefits until I'm
66-plus, will it reduce my monthly Social Security benefits?
A: Social Security calculates your monthly benefit by taking your highest 35 years of
earnings and your age, says Rick Fingerman, a managing partner with Financial Planning
Solutions. "So, if you stop working before your full retirement age or FRA, as you suggest, you
could see a lower benefit if you do not have 35 years of higher earnings already."
The same answer applies if you quit your job altogether at 62 and wait until 66 to collect,
he says.
One option, says Fingerman, could be if you were going to wait until your FRA and you have a
spouse that is already collecting on their own benefit. "You might receive a higher monthly
benefit on their record as you would get 50% of what they are receiving, which could be more
than the $400 a month under your own benefit," he says.
Of course, nobody can predict exactly how long they'll live -- the average man and woman
turning 65 today can expect to live until age 84 and 86, respectively, according to the Social
Security Administration. However, if you're facing health issues and don't expect to live that
long, it may be wiser to claim as early as possible rather than waiting until you have only a
few years left to enjoy your benefits.
... ... ...
Your
full retirement age (FRA) is the age at which you'll receive 100% of the benefits to which
you're entitled. So if your FRA is 67, and you wait until then to claim, you'd receive $1,300
per month. If you claim at 62, your benefits will be cut by 30% -- leaving you with just $910
per month.
... ... ...
If you wait until your FRA to claim, you'll receive 100% of your entitled benefits. But if
you wait beyond that age, you'll receive a bonus on top of your full amount to make up for all
the months you weren't receiving benefits at all. If your FRA is, say, 67 and you wait to claim
benefits until 70, you'll receive a 24% bonus over your full amount. So if you would have
received $1,300 per month by claiming at 67, you'd receive $1,612 by waiting until 70. (Keep in
mind, too, that this bonus maxes out at age 70, so there's no additional benefit to waiting to
claim until after that age.)
This can be a lifesaver for those who are
seriously behind on saving for retirement . If you're going to rely on Social Security to
make ends meet, it's in your best interest to maximize those benefits.
The amount you receive in benefits will be locked in once you claim. If you delay and
receive that boost, you'll continue receiving that boost for the rest of your life. Likewise,
if you claim early and your benefits are reduced, you'll receive those smaller checks for life.
So delaying can play out in your favor if you spend several decades in retirement -- the longer
you live, the more you will receive over your lifetime.
While delaying claiming benefits by a few years will result in bigger checks, you may not
actually receive more over a lifetime than you would if you had claimed earlier. Although
you're receiving more each month, that's just to make up for the years you weren't receiving
any benefits at all. If you don't reach your "break even age" -- or the age at which you've
received more over a lifetime by waiting to claim than you would have received by claiming
early -- it may not be worth it to wait.
For example, say your FRA is 67. If you claim early at 62, you'd receive $910 per month (or
$10,920 per year), and if you delay until 70, you'd receive $1,612 per month ($19,344 per
year). Here's how much you'd have received in total benefits at different ages:
Age at Death
Total Lifetime Benefits When Claiming at 62
Total Lifetime Benefits When Claiming at 70
70
$87,360
N/A
75
$141,960
$96,720
80
$196,560
$193,440
85
$251,160
$290,160
Source: Author's calculations
So in this scenario, you'll have to live past age 80 in order to "break even" and earn more
in lifetime benefits by delaying rather than claiming early. That can be a good thing if you
expect to live a long time, but if you don't expect to live past 80, it may be more
advantageous to claim earlier rather than later.
"... To this point, there is essentially zero evidence of the promised investment boom. There was respectable growth in investment in the first two quarters of 2018, but growth slowed to just 1.1 percent in the third quarter. ..."
"... In any case, there is zero evidence that the tax cut is leading to the sort of investment boom that will qualitatively boost the rate of productivity and GDP growth and provide workers with substantially higher pay. ..."
"... (irrational) confidence level is an important economic factor. ..."
"... What has been destructive in major recessions has not been "misdirected investment", it has been the leveraged and/or fraudulent financial manipulations which maximize profit but which cause rapid collapse when conditions turn bad. Again, interest rates have in practice not been a main factor in this. ..."
"... Keynes was adamantly against high interest rates and he favored usury laws: "the rate of interest is not self-adjusting at a level best suited to the social advantage but constantly tends to rise too high, so that a wise Government is concerned to curb it by statute and custom and even by invoking the sanctions of the moral law." The General Theory, p. 351. ..."
"... "The evidence is not consistent with the idea that central banks can control economies with interest rates." ..."
"... A much larger threat to world economies (than interest rates) is the huge capital investments in petroleum assets. At some point, those investments will need to be unwound in an orderly fashion but it doesn't seem that anyone is considering how to do that. ..."
(This piece was originally posted on my Patreon page .)
Jim Tankersley had a nice piece
in the New York Times last week pointing out that the tax cut pushed through by the Republicans in 2017 is leading to a sharp drop
in tax revenue. While this was widely predicted by most analysts, it goes against the Trump administration's claims that the tax
cut would pay for itself.
Looking at full-year data for calendar year 2018, Tankersley points out that revenue was $183 billion (5.6 percent) below what
the Congressional Budget Office (CBO) had projected for the year before the tax cut was passed into law. This is a substantial falloff
in revenue by any standard, but there are two reasons the picture is even worse than this falloff implies.
The first is that we actually did see a jump in growth in 2018 pretty much in line with what the Trump administration predicted.
The tax cut really did stimulate the economy. It put a lot of money in the economy (mostly going to those at the top) and people
spent much of this money. The result was that the growth rate accelerated from around 2.0 percent the prior three years to over 3.0
percent in 2018. (We don't have 4 th quarter data yet, which may be delayed by the shutdown, but growth should be over
3.0 percent.)
The jump in growth in 2018 means that the drop in revenue was not due to the economy being weaker than expected, it was due to
the fact that the tax rate had fallen by a larger amount than the boost to growth. In fairness to the Trump administration, they
had also projected a falloff
in revenue due to the tax cut in 2018, but not one that was as large as what we saw.
... ... ...
To this point, there is essentially zero evidence of the promised investment boom. There was respectable growth in investment
in the first two quarters of 2018, but growth slowed to just 1.1 percent in the third quarter. It is likely to be even weaker
in the fourth quarter due to the drop in world oil prices (less oil drilling), although we won't get these data until the shutdown
is over. In any case, there is zero evidence that the tax cut is leading to the sort of investment boom that will qualitatively
boost the rate of productivity and GDP growth and provide workers with substantially higher pay.
In this context, the deficits from the Trump tax cut are a problem. If the economy is bumping up against its limits and the labor
market is close to full employment, it means a much larger share of output is going to the consumption of the wealthy. That both
means less private consumption for everyone else, and it makes it more difficult to have major initiatives that involve substantial
spending, such as a Green New Deal or Medicare for All.
The long and short is that the revenue data for 2018 looks pretty bad on its face. It looks even worse on a closer examination.
...and perhaps this funny (American?) idea - that economics only exist in order to have some ''Boom'' going -- forever -- and
ever - (which everybody knows is NOT possible) - is the root of US problem??!
Deficits are not a problem, period. They are a benefit because they keep the boom going, just as lower interest rates forestall
a recession. Keynes pointed this out 80 years ago: "Thus the remedy for the boom is not a higher rate of interest but a lower
rate of interest! For that may enable the so-called boom to last. The right remedy for the trade cycle is not to be found in abolishing
booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom."
The General Theory of Employment, Interest and Money, p. 322.
Keeping us out of a recession/slump ought to be the focus of economic policy, not hypothetical questions about the economy
"bumping up against its limits" which anti-Keynesians have been obsessed with for years.
Keeping out of bubbles is what keeps us out of slumps (in most cases). The usual pattern is that as conditions improve people
put confidence where it does not belong and extend leverage, then financial collapse makes things look bad for everyone - the
general (irrational) confidence level is an important economic factor.
Interest rates have an effect on speculation - when rates are low people have to turn to riskier things to make money, and
leverage is cheap. Stock prices were very low in 1981 because interest rates were very high and they are very high now partly
because interest rates have been very low. The effect on speculation may be a valid reason to raise rates - of course the imaginary
threat of inflation is not.
But history indicates it is not a huge effect. The Fed did raise discount rate through 1928 and 1929 up to 6% and this did
not seem to slow the development of the stock-market bubble. It is unlikely that the Fed can kill a bubble or boom now by raising
at much lower levels. The housing bubble of 2006 was a matter of bad regulation. The Fed was involved in encouraging and then
disregarding the bubble, but not by manipulating interest rates. Greenspan was always a cheerleader of deregulation.
"Moreover, even if over-investment in this sense was a normal characteristic of the boom, the remedy would not lie in clapping
on a high rate of interest which would probably deter some useful investments and might further diminish the propensity to consume,
but in taking drastic steps, by redistributing incomes or otherwise, to stimulate the propensity to consume.
"It may, of course, be the case -- indeed it is likely to be -- that the illusions of the boom cause particular types of capital-assets
to be produced in such excessive abundance that some part of the output is, on any criterion, a waste of resources; -- which sometimes
happens, we may add, even when there is no boom. It leads, that is to say, to misdirected investment." The General Theory p.321
"Thus an increase in the rate of interest, as a remedy for the state of affairs arising out of a prolonged period of abnormally
heavy new investment, belongs to the species of remedy which cures the disease by killing the patient." The General Theory p.323.
Causing a recession in order to kill a bubble is madness.
I am not recommending killing a boom or bubble with interest rates. On the contrary I am always recommending against relying
on manipulating interest rates to regulate the economy, whether it is to prevent inflation, real or imaginary, or to stimulate
the economy in case of recession. While Keynes conjectured that interest rates could have effects, he certainly was very clear
in not expecting that they would be sufficient to control the business cycle - see pp. 319-320, the end of Ch. 12 and ch. 24.
What has been destructive in major recessions has not been "misdirected investment", it has been the leveraged and/or fraudulent
financial manipulations which maximize profit but which cause rapid collapse when conditions turn bad. Again, interest rates have
in practice not been a main factor in this.
"While Keynes conjectured that interest rates could have effects, he certainly was very clear in not expecting that they would
be sufficient to control the business cycle"
Really? Then why did he include "Interest" in the title of his magnum opus?
Keynes was adamantly against high interest rates and he favored usury laws: "the rate of interest is not self-adjusting
at a level best suited to the social advantage but constantly tends to rise too high, so that a wise Government is concerned to
curb it by statute and custom and even by invoking the sanctions of the moral law." The General Theory, p. 351.
Further, he railed against using high interest rates to limit the boom: "The austere view, which would employ a high rate of
interest to check at once any tendency in the level of employment to rise appreciably above the average of, say, the previous
decade, is, however, more usually supported by arguments which have no foundation at all apart from confusion of mind." The General
Theory, p. 327-8.
The rate of interest is critical to economic growth which is why the Fed's role is so important.
The evidence is consistent with what Keynes said about high interest rates - the high rates in the 70's to 80's failed to prevent
inflation but caused unemployment to go to 10.8%. The Fed failed utterly in both of its two objectives during that time. Since
2008 record low rates have not produced the claimed boost in investment and growth. This is especially obvious in Europe and Japan
where conditions are worse than in the US despite negative interest rates. This is also consistent with Keynes' expectation that
interest rates would not be sufficient to overcome variations in the perceived marginal efficiency of capital. The evidence is
not consistent with the idea that central banks can control economies with interest rates, or even that their actions are always
constructive. That idea was not Keynes'.
"The evidence is not consistent with the idea that central banks can control economies with interest rates."
That is a bridge too far, and Keynes disagrees:
"There is, indeed, force in the argument that a high rate of interest is much more effective against a boom than a low rate
of interest against a slump." The General Theory, p. 320.
Slowing a boom with higher interest rates is indeed feasible and that has been Fed doctrine for decades. Obviously, higher
interest rates reduce consumption and investment so growth must slow. The high inflation of the 1970s was due to the OPEC oil
shocks, not excessively rapid growth of the economy. In fact, growth had been faster in the 1960s with much lower inflation.
I understand why this economic discussion focuses only on interest rates but it leaves out a larger issue. That fact that,
on CNBC and elsewhere, financial analysts obsess over interest rates, taxes, and the price of oil in relation to the market illustrates
the cluelessness of the financial community. They all applaud "deregulation" without ever specifying which regulations. Do they
mean all regulations?
Trump's deregulation of methane emissions, for example, will create future costs that are exponentially larger than any immediate
savings to frackers and oil companies. That's just one example. Trump's environmental deregulatory agenda is stupidity writ large.
A much larger threat to world economies (than interest rates) is the huge capital investments in petroleum assets. At some
point, those investments will need to be unwound in an orderly fashion but it doesn't seem that anyone is considering how to do
that. Eventually, probably sooner than expected, a tipping point will be reached when mass realization of the threat climate
change poses to our survival generates a mass panicked exit from petroleum assets which will create a financial crash that dwarfs
what we saw in 2008.
Do you remember "Limits to Growth"? Doomsday scenarios have been around for a long time especially in regard to the national
debt which supposedly will cause the collapse of our economy sometime soon. I am skeptical about that.
[Video] He views housing prices as a leading indicator, but he is not ready to forecast
slowdown yet. Yes Home
Sales Sank 6.4% in December . No, a recession isn't about to hit. The International Monetary
Fund still thinks the global economy will grow
a respectable 3.5% this year . By with the recent downgrade risks are higher and probably
highest since 2010.
As for 2019 he said we are always at risk entering the recession. He thinks that as in June
there will be the longest recession, that might be time for a recession including in housing
market. Inverted curve is a sign of such comes are coming.
Housing market is closing down and that can lead to recession, but he is not giving it
probability higher that 50 for this year. He also mentions that real interest rate of short end
there are not much above inflation.
Yale Economics Professor and Nobel Laureate Robert Shiller spoke with Yahoo Finance at
Davos, telling Editor-in-Chief Andy Serwer: "People are starting to think housing is expensive,
and that could lead to a turnaround and a drop in home prices. But I'm not ready to forecast
that yet."
Interesting discussion... He said tariff might not work as expected. He does not think
recession in probable in 2018 but later it might became inveitable
14% are functionally illiterate. Those people are at he bottom and will stay at the
bottom.
David Rubenstein, Co-Founder and Co-Executive Chairman of The Carlyle Group, sits down for a
one on one with Yahoo Finance editor-in-chief Andy Serwer at the World Economic Forum's annual
meeting in Davos, Switzerland. They discuss U.S.-China relations, Alexandria Ocasio-Cortez,
income inequality, the government shutdown, and more.
Speaking at a panel discussion on the first day of the
World Economic Forum (WEF) , Dalio said: "The US, Europe, China – all of those will
experience a greater level of slowing, probably a greater level of disappointment.
"I think there's a reasonable chance that by end of that, monetary policy and fiscal policy
will have to become easier relative to what is now discounted in the markets.
He added: " What scares me the most longer-term is that we have limitations to monetary
policy, which is our most valuable tool, at the same time as we have greater political and
social antagonism.
"So the next downturn worries me the most. There are a lot of parallels with the late
1930s.
"In 1929-1932 we had a debt crisis, and interest rates hit zero. Then there was a lot of
printing of money and purchases of financial assets which drives financial assets higher.
"It creates also a polarity, a populism and an antagonism. We also had at that time the
phenomenon of a rising power, like China, dealing with conflict with an existing power.
"These types of political issues are now very connected to economic issues in policy."
Asked at the summit
in Switzerland about increasing debt levels and signs of a global slowdown, Dalio said the
world economy was in the later stages of a short-term debt cycle.
He said there had been an "inappropriate, mistaken desire to tighten monetary policy at a
level that was faster than what the capital markets could handle."
He said: "W hen we cut corporate taxes and made interest rates low enough that it was
attractive enough to buy financial assets, particularly by companies having mergers and
acquisitions, that caused a lot of growth in corporate debt. And that growth in corporate debt
was used to finance the purchases. That is going to be less."
He suggested a slowdown could increase the link between politics and economic policy, and
predicted increased debate over a 70% income tax rate next year.
yesterday How does he on
one hand say that the Fed has little room to lower rates in case of a downturn and at the
same time blame the Fed for raising rates in order to prepare for such an eventuality?
Seriously, I'm asking. I'm not wagging my finger at him, because I sure don't pretend to
know more than he does. I asking somebody to further explain, because I don't get it. I'm
raising my hand in class. Anybody? 2 days ago democracy has become a slave
for finance - that is what an actual worry is brought in by fitting words - 26 people own
more than 4billion other people 2 days ago The rich have to pay higher
marginal tax rates. Period. "To those who are given much, much is expected." - Former NY
governor Elliott Spitzer. yesterday Of course. If we
had been unable to loosen monetary policy after Bush crashed the economy, we would have
been in the 2nd great depression. Trump is hurtling us towards the next economic disaster,
but without the tools to dig out. And his comments that the fed is raising interest rates
too fast is counter productive (like everything else Trump does). 2 days ago How He hedging when people
panic about his bias comment ??
Remember ... He is a Hedge Fund manager , makes money from panic and quick market moves
!
enough said ...
I
yesterday So what does all that mean for the economy and stock market? With a growing
disparity in distribution of income something needs to change before we start to see social
and political upheaval. The top 1% to 5% can't get 80% of all the wealth.
"... the Davos crew is trying to combat populism, according to The Washington Post . It is kind of amazing that the rich people at Davos would not understand how absurd this is. ..."
"... The real incredible aspect of Davos is that so many political leaders and news organizations would go to a meeting that is quite explicitly about rich people trying to set an agenda for the world. ..."
"... It is important to remember, the World Economic Forum is not some sort of international organization like the United Nations, the OECD, or even the International Monetary Fund. It is a for-profit organization that makes money by entertaining extremely rich people. The real outrage of the story is that top political leaders, academics, and new outlets feel obligated to entertain them. ..."
"... Davos ought to be treated as a conspiracy against labor, representative government, environmental regulation and decent living standards, but of course our admiring national press corps doesn't see it that way -- their bosses attend, after all. ..."
"... It may be best to avoid the term "populist" because it tends to be applied indiscriminately to the likes of Trump and to leftist reformers. Or if it is used for Trump it should be "fake populist". Opposition to corporatist globalization can be populistic, but Trump's version so far has been mostly fake. ..."
"... Two kinds of populism: rightwing populism (which often looks like fascism) and leftwing populism. They are quite different critters and they don't have a lot to do with each other though they agree on a few things. ..."
"... People REALLY need to re-read 1984 & refresh their memories of Orwellian good-is-bad brainwashing ..."
"... Trump is a rightwing populist, but it is very confusing. In the US anyway and often in general, rightwing populists are NOT the enemies of the rich. Note Mussolini and Hitler. Fascism really is a type of rightwing populism. ..."
"... Rightwing populism pretends to be for the people and is to some extent (protectionism, isolationalism, nationalism) but in a lot of other ways, it's just fake and it's always a cover for class rule and rule by the rich. ..."
"... The rich will go to fascism or rightwing populism if they get a threat from the Left (read Trotsky), but they don't really like them very much, think they are classless brutes, barbarians, racists, bigots, etc. ..."
"... They're not worried about Donnie. He's no class traitor. They're worried about the populism of the Left and possibly about rightwing populism in Europe. Bolzonaro and Trump are hardly threats to capital. ..."
"... He pretends to be a populist because it helps him. For example, he doesn't care about illegal immigration. He's been happy to hire undocumented workers his whole life, even now in office. But it gets his base fired up so he rails about immigration. He has no ideology, he will use whatever helps him. ..."
"... Rightwing populism is NOT cool in my boat. Rightwing populism is Bolsonaro. It's Duterte too, but that's a bit different, he's a bit more pro-people. Erdogan is a rightwing populist too, but he's rather socialist. Marie Le Pen is out and out socialist and she gets called rightwing populist. Orban is 5X more socialist than Venezuela and he gets called rightwing populist. It's all very confusing. ..."
"... But in the US and Latin America, rightwing populism is ugly stuff all right, and it tends to be associated with fascism! ..."
Let's see, cattle ranchers are against vegetarianism, coal companies are against restricting CO2 emissions, and the Davos crew
is trying to combat populism, according to
The Washington Post . It is kind of amazing that the rich people at Davos would not understand how absurd this is.
Yeah, we get that rich people don't like the idea of movements that would leave them much less rich, but is it helpful to their
cause to tell us that they are devoting their rich people's conference to combating them? The real incredible aspect of Davos
is that so many political leaders and news organizations would go to a meeting that is quite explicitly about rich people trying
to set an agenda for the world.
It is important to remember, the World Economic Forum is not some sort of international organization like the United Nations,
the OECD, or even the International Monetary Fund. It is a for-profit organization that makes money by entertaining extremely rich
people. The real outrage of the story is that top political leaders, academics, and new outlets feel obligated to entertain them.
And the fact that so many Americans -(and especially American workers) still mistake Von Clownstick as a so called ''Populist''
- and being on their side - is... unbearable!
He IS in fact a rigthwing populist of a sort. That's what rightwing populism in the US looks like, and what it's always looked
like. Bunch of crap huh? Gimme Marie Le Pen any day.
"The real incredible aspect of Davos is that so many political leaders and news organizations would go to a meeting that is
quite explicitly about rich people trying to set an agenda for the world." \
Agreed - like how people almost worship British Royals.. or American celebrities... and yet, unfortunately, isn't it true that
the greedmongers at Davos are not "trying," but rather "largely succeeding" at setting said world agenda?
Nothing to see here, folks, move right along . . .
Davos and TED Talks. One entertains the rich, the other the smart. The skiing is better at Davos, the ideas are better at a
TED Talk. Just remember, most of the rich aren't smart and most of the smart aren't rich. So it's all rather silly, 'though it's
easier to get rich if you're smart than it is to get smart if you're rich. Don't ask me how I know that, but I'll tell you, if
you have an ounce of human kindness in you, learning the second half of that lesson is more painful than the first.
None of this would be half as much fun outside the glare of publicity, or if not heavily spiced with the envy of the excluded.
Ishi--I don't disagree with you. Just not as stupid as the Davos drivel. Perhaps I should have said 'less bad' ideas, but I
liked the cadence of 'better' and 'better.' Gotta have cadence if you want to get the People Marching.
Davos ought to be treated as a conspiracy against labor, representative government, environmental regulation and decent
living standards, but of course our admiring national press corps doesn't see it that way -- their bosses attend, after all.
Firstly we have to treat the so called ''Populists'' as a conspiracy against labor - because they pretended in the utmost conspirational
way to be on labors side.
While It always was as clear as mud that Davos was a Party of the Rich!
It may be best to avoid the term "populist" because it tends to be applied indiscriminately to the likes of Trump and to
leftist reformers. Or if it is used for Trump it should be "fake populist". Opposition to corporatist globalization can be populistic,
but Trump's version so far has been mostly fake.
You guys need to read up. Two kinds of populism: rightwing populism (which often looks like fascism) and leftwing populism.
They are quite different critters and they don't have a lot to do with each other though they agree on a few things.
That's basically my take, too. The term is purposely misused by the propagandists to get normal people thinking "Populism"
must be something they don't like. People REALLY need to re-read 1984 & refresh their memories of Orwellian good-is-bad brainwashing.
[and even "brainwashing" is an orwellian term! Brain-NUMBING, maybe... but nothing's getting cleaned, that's for sure]
Nope US rightwing populism has often looked a lot like Trump's crap. I mean some of it was better. I have a soft spot for Huey
Long. But in the US, rightwing populism just helps the rich mostly and it tends to be fascist.
''The term is purposely misused by the propagandists to get normal people thinking "Populism" must be something they don't
like'' You mean some con-artists have conned people who liked the term ''Populism'' into liking idiocy - racism and nationalism?.
Trump is a rightwing populist, but it is very confusing. In the US anyway and often in general, rightwing populists are
NOT the enemies of the rich. Note Mussolini and Hitler. Fascism really is a type of rightwing populism.
Rightwing populism pretends to be for the people and is to some extent (protectionism, isolationalism, nationalism) but
in a lot of other ways, it's just fake and it's always a cover for class rule and rule by the rich.
The rich will go to fascism or rightwing populism if they get a threat from the Left (read Trotsky), but they don't really
like them very much, think they are classless brutes, barbarians, racists, bigots, etc.
But the rich allow them because they think they can control them and not let them get out of hand. This is what happened in
Germany. This is what often happens actually.
In a sense, rightwing populism IS fake populism because it pretends to be for the people while often fucking them over with
rightwing class rule via fascism. It's still populism, it's just not for the people. It's fraudulent, iike most rightwing bullshit.
- AND! -
to suggest - or imply? - that the type of ''Populism'' Trump -(and other so called ''Populists) represent - IS to ''leave the
Davos Crowd much less rich'' -
could be the funniest thing ever written on this blog?
They're not worried about Donnie. He's no class traitor. They're worried about the populism of the Left and possibly about
rightwing populism in Europe. Bolzonaro and Trump are hardly threats to capital.
He pretends to be a populist because it helps him. For example, he doesn't care about illegal immigration. He's been happy
to hire undocumented workers his whole life, even now in office. But it gets his base fired up so he rails about immigration.
He has no ideology, he will use whatever helps him.
and to makes sure not to be misunderstood - I also think Davos is ''pathetic'' and ''hypocritical'' - and everything
else one wants to throw at it -
BUT as one of my favorite American Philosophers said:
"Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity."
And I think he meant the current ''Populists'' of this planet! -(and lets include especially the Brazilian one too)
But isn't it GREAT- that also ''the rich'' are starting to battle morons and a...holes like Baron von Clownsticks -(or the
nationalistic idiots in the UK - or the Neo Nazis in Germany?) -
For I while I thought I was left ALL alone in order to battle the type of ''Populism''- which is nothing else than the sick
racist phantasies of some nationalistic a...holes?
Rightwing populism is NOT cool in my boat. Rightwing populism is Bolsonaro. It's Duterte too, but that's a bit different,
he's a bit more pro-people. Erdogan is a rightwing populist too, but he's rather socialist. Marie Le Pen is out and out socialist
and she gets called rightwing populist. Orban is 5X more socialist than Venezuela and he gets called rightwing populist. It's
all very confusing.
But in the US and Latin America, rightwing populism is ugly stuff all right, and it tends to be associated with fascism!
Billionaire Michael Dell, chief executive officer of the eponymous technology giant, rejected a suggestion by U.S. Representative
Alexandria Ocasio-Cortez of a 70-percent marginal tax rate on the wealthiest Americans.
"No, I'm not supportive of that," Dell said at a Davos panel on making digital globalization inclusive. "And I don't think it
will help the growth of the U.S. economy. Name a country where that's worked."
She may not be in Davos, but the New York representative's influence is being felt on the slopes of the Swiss Alps. Three weeks
after Ocasio-Cortez floated the idea in an interview on "60 Minutes" to raise the top marginal tax rate on Americans' income of more
than $10 million to 70 percent, it was a hot topic at the gathering of the global financial and political elite.
... ... ...
"My wife and I set up a foundation about 20 years ago and we would've contributed quite a bit more than a 70 percent tax rate
on my annual income," Dell said. "I feel much more comfortable with our ability as a private foundation to allocate those funds than
I do giving them to the government."
Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology who was on the panel with Dell, said such a rate worked
in the U.S. after World War II. But other executives were opposed, including Salesforce.com Inc. Co-Chief Executive Officer Keith
Block.
... ... ...
Billionaire investor Ray Dalio suggested that the idea may have legs in the run-up to the U.S. presidential election. Discussing
the outlook for a slowing world economy Tuesday, Dalio said that next year will see "the beginning of thinking about politics and
how that might affect economic policy beyond. Something like the talk of the 70 percent income tax, for example, will play a bigger
role." He didn't mention Ocasio-Cortez by name.
Currently in the U.S., the top marginal tax rate is 37 percent, which takes effect on income of more than $510,300 for individuals
and $612,350 for married couples, according to the Tax Foundation.
The fortunes of a dozen attendees at the World Economic Forum in 2009 have soared by a combined $175 billion, a Bloomberg analysis
found. The same cannot be said for people on the other end of the social spectrum: A report from Oxfam on Monday revealed that the
poorest half of the world saw their wealth fall by 11 percent last year.
Under neoliberalism 301K investors are overinvested in stock market essentially feeding Wall Street sharks. The net result even
in case of investing strictly in S&P500 are not that great. From 2000 to 2019 S&P rose from approximately 1400 to 2600 or 1200
points in 18 years. That's around 4.7% per year. Adding dividends that's around 6%. As you add money each year for this 18 years period you will realize only half of this return or 3% a year which is close to 30 years bond return (they are tax free, unlike S&P500) and barely beats inflation.
401K was an ingenious design to enrich Wall Street the staple on neoliberal attack on middle class
Notable quotes:
"... Samuelson was responding to my recent publications advocating expanded insurance, futures, and options markets to mitigate the financial risks – for example, those related to housing prices and occupational incomes – that ordinary people face. He said that these markets could, if pitched to the general population, turn into "casino markets," with people using them to gamble, rather than to protect themselves. ..."
Advising people simply to hold the market is advising them to
free-ride on the wisdom of others who do not follow such a strategy. If
everyone
followed Bogle's advice,
market prices would turn into nonsense and would provide no direction to economic activity.
3
I remember exactly when I began to appreciate the complexity of
the moral issues money management entails: October 8, 2009. I received a phone call from the eminent MIT economist
Paul Samuelson, who had been my teacher when I was a graduate student in the early 1970s. He was 94 years old at
the time, and two months later he died. I was so impressed by the call that I took notes on it in my diary.
Samuelson was responding to my recent publications
advocating expanded insurance, futures, and options markets to mitigate the financial risks – for example, those
related to housing prices and occupational incomes – that ordinary people face. He said that these markets could,
if pitched to the general population, turn into "casino markets," with people using them to gamble, rather than to
protect themselves.
He then brought up the example of Bogle, who "gave up a billion
dollars for a concept," Samuelson said. "He could easily have cashed this in," but he didn't. "The miracle that
was Vanguard came from Bogle's principles."
I thought he was right. In the long run, markets reward
principled people. But there is still need for an expanded set of risk markets, because these markets can – and do
– carry out useful functions, including risk management, incentivization, and orienting business.
The problem is that attention to these markets requires
intelligent and hard-working people to help others in their investing. Theirs is not a zero-sum game, for they
help direct resources to better uses. And these people must be paid. Even Vanguard, which now has a number of
different index funds, hires investment managers and charges a management fee, albeit a low one.
Not every fund needs a low fee. We live in a world where
constant and rapid change and innovation require more attention, and attention is costly. While many financial
managers are at times unscrupulous, a higher management fee is not always a sign that something is wrong.
But Bogle is still a hero of mine, because he provided an
honest product and was motivated by a sincere desire to help people. And he should be a hero to all, because he
showed that markets eventually recognize integrity.
"... The disorder is described as a specific type of anxiety in which symptoms "were specific to the election of Trump and the resultant unpredictable sociopolitical climate," and according to the 2018 surveys Americans are feeling significantly more stressed by the future of their country and the current political environment than they were last year. ..."
A new, updated data
set is now available on a psychological phenomenon that has been labeled "Trump Anxiety
Disorder" or "Trump Hypersensitive Unexplained Disorder," and it says that the phenomenon only
got worse in 2018.
The disorder
is described as a specific type of anxiety in which symptoms "were specific to the election
of Trump and the resultant unpredictable sociopolitical climate," and according to the 2018
surveys Americans are feeling significantly more stressed by the future of their country and
the current political environment than they were last year.
"As the possibility of a Hillary Clinton victory began to slip away -- and
the possibility of a Donald
Trump presidency became more and more certain -- the contours of the new age of American
anxiety began to take
shape . In a 2017 column, Washington Post columnist Dana Milbank
described this phenomenon as "Trump Hypertensive Unexplained Disorder": Overeating.
Headaches. Fainting. Irregular heartbeat. Chronic neck pain. Depression. Irritable bowel
syndrome. Tightness in the chest. Shortness of breath. Teeth grinding. Stomach ulcer.
Indigestion. Shingles. Eye twitching. Nausea. Irritability. High blood sugar. Tinnitus.
Reduced immunity. Racing pulse. Shaking limbs. Hair loss. Acid reflux. Deteriorating vision.
Stroke. Heart attack. It was a veritable organ recital.
Two years later, the physiological effects of the Trump administration aren't going away.
A growing body of research has tracked the detrimental impacts of Trump-related stress on
broad segments of the American population, from
young adults to
women , to racial
and LGBT communities .
"... That works out to be 320,000 barrels per day. Saudi production increased by 384,000 barrels per day during November. So Saudi's November increase was mostly just emptying their storage tanks. ..."
That works out to be 320,000 barrels per day. Saudi production increased by 384,000 barrels per day during November. So
Saudi's November increase was mostly just emptying their storage tanks.
And from looking at your chart, it looks like the 135,000 barrel per day increase in October was from the same source.
Saudi cuts start from a base of 10,633,000 barrels per day. That is almost their exact production in October. And your chart
shows Saudi inventories had been dropping for months. Saudi had obviously been preparing to "cut" production from a level of production
they reached by emptying their storage tanks.
Credit Suisse came out today with a doozy of a 90-page "study" looking at global debt
levels. A shout out like this in the report does nothing to engender confidence in risk assets:
"Defaults are likely to rise in segments of the corporate debt markets once economic growth
weakens more markedly or if monetary policy tightens further; in such a situation, an unwinding
of positions could generate significant market stress due to illiquidity."
Credit Suisse Chairman Urs Rohner suggests on the first page of the report that a full-scale
global debt blowup is unlikely. But the overall scope of the report is bearish to stocks, trust
this writer who read the study in its entirety.
"While we don't presently observe conditions to look for a 'buying opportunity' or a
'bottom' from a full-cycle standpoint, we do observe conditions that are permissive of a
scorching market rebound, even if it only turns out to be the 'fast, furious, prone to
failure' variety. We wouldn't dream of removing our safety nets against a market decline that
I continue to expect to draw the S&P 500 toward the 1000 level by the completion of this
cycle. Still, we've prepared for the possibility of unusual volatility here, most likely
including one or more daily moves in the range of 4-6%, potentially to the upside. Yes, that
means one or more daily moves on the order of 100-150 points on the S&P 500 and 900-1300
points on the Dow. You think I'm kidding."
– John P. Hussman, Ph.D., Interim comment, Pre-open, 12/26/18
In recent days, we've heard a number of analysts gushing that the S&P 500 is vastly
cheaper than it was only a few months ago. It's worth noting that they're actually referring to
an index that is now less than 10% below the steepest speculative extreme in history. The chart
below puts current valuations into perspective, using our Margin-Adjusted P/E, which is better
correlated with actual subsequent 10-12 year market returns than the price/forward operating
earnings ratio, the Shiller CAPE, the Fed Model, and a wide range of alternative valuation
measures that Wall Street uses to reassure investors that valuations are anything less than
obscene.
As market conditions currently stand, valuations remain extreme and market internals remain
negative. So aside from the likelihood of a knee-jerk market spike on any variant of the word
"deal," we continue to be in a trap-door situation with respect to market risk. Though we did
take the edge off of our negative outlook to allow for a scorching relief rally, my present
view is that the overall function of that relief rally has been served.
...
One of the more cringe-worthy features of the behavior of investment professionals here is
the spectacle of Wall Street analysts touting the "reasonableness" of valuations on the basis
of year-ahead earnings expectations that they themselves are responsible for fabricating. Just
as in 2000 and 2007, instead of the investment profession acting as a historically-informed
buffer to defend investors against reckless speculation, extrapolative projections like these
are actually endorsed and encouraged by the very people who should know better. The chart below
is thanks to TopDownCharts .
...though we're inclined to wait for more data, and to look for greater deterioration before
identifying a recession, it's important to remember how quickly the data can shift. The amount
of time between the peak in economic confidence and the beginning of a recession is usually
very short. In general, a uniform deterioration in financial, employment and economic
confidence measures, even compared with 6 months earlier, strongly amplifies the risk of a
recession, and there's not much lead time at all. Put simply, we want to have a reliable set of
confirming evidence, but it's also important to remember how quickly that evidence can emerge
.
Questions we hear a lot
Given the volatility of the financial markets in recent months, my sense is that the best
comments to offer are those that relate to these questions:
Bull market or bear
market?
My impression is that the recent bull market peaked on September 20, 2018, which is also
when we observed the largest preponderance of historically useful top signals we've ever seen.
As I noted at the time, the only other point that came close was March 24, 2000, the date of
the 2000 bubble peak. Still, the primary usefulness of a bull/bear label is to emphasize the
potential for steep market losses over the completion of the cycle. As long as one recognizes
that risk, there's no need for labels.
It's probably better to recognize that the market remains hypervalued and that market
internals remain unfavorable. If internals improve at high valuations, our outlook is likely to
shift to something that might be described as "constructive with a safety net." If they improve
at substantially lower valuations, we're likely to move to an unhedged or aggressive stance.
For now, there's so much downside risk that we'd view an improvement in internals as a "bear
market rally," but whatever one might call it, we'd likely be constructive with a safety net.
Even that, I suspect, is likely to emerge from lower levels.
Buy stocks or buy bonds?
My impression is that neither provides much prospect for meaningful returns, and 10% off the
most obscene valuations in U.S. history isn't what I'd call a "bargain." With the yield curve
as flat as we currently observe, the main reason to own bonds is based on the likelihood of a
decline in yields in the event of economic weakness. There's some potential for that, but I'd
lean toward a mix of Treasury bills, modest bond market durations, high credit-quality, and
hedged equity. Our estimated return/risk profile for precious metals shares is also fairly
strong here, but given the volatility of those shares, I'd characterize that as a constructive
situation rather than an aggressive one. None of these is without risk.
Recession or
continued expansion?
We're seeing a good deal of weakness in our leading measures, and a lot of the regional
purchasing managers indices and Fed surveys are deteriorating as well, but we don't have a
sufficient basis for an outright recession warning. This expansion is very long in the tooth,
unemployment is quite low, and the underlying structural growth factors are dismal. So my sense
is we're far closer to a recession than to 4% real GDP growth "as far as the eye can see."
Given the other factors already in place, be particularly watchful for an ISM Purchasing
Managers Index below 50, a move above 4% in unemployment, and a slowdown in employment growth
below about 1.4% year-over-year. A decline in aggregate hours worked versus 3-months earlier
along with a steep drop in consumer confidence, particularly about 20 points below its 12-month
average, would all be strong confirming evidence of an economic downturn.
More rate hikes
or a new round of QE?
On December 19, Fed Chair Jerome Powell observed "We've reached the bottom end of the range
of what the Committee believes might be neutral." I think that is exactly right. As I observed
in the December comment, the combination of low structural economic growth and modest inflation
pressure is fairly consistent with the current level of short-term interest rates. Long-term
rates would normally be higher in the context of current data, but given the deterioration in
leading economic measures (remember, payroll employment and the unemployment rate are two of
the most lagging economic measures available), there's little compelling upward pressure.
Don't take hope in Fed intervention to support the market, other than knee-jerk reactions.
First, remember that the Fed eased persistently throughout the 2000-2002 and 2007-2009
collapses with no effect. When investors are inclined toward risk-aversion, safe liquidity is a
desirable asset, not an inferior one. My view is that it's essential to monitor market
internals directly. We don't disclose the details of our own measures, but I've discussed
uniformity, divergence, breadth, leadership, price-volume sponsorship, credit spreads, and
other factors often enough that the central concept should be clear: when investors are
inclined toward speculation, they tend to be indiscriminate about it.
If and when internals improve, virtually anything the Fed does will likely be associated
with market gains. If internals continue to indicate risk-aversion among investors, then those
knee-jerk "clearing rallies" would best be used as opportunities to sell marginal stock
holdings and tighten up hedges.
My impression is that Jerome Powell is highly aware of how loose the cause-and-effect links
are between monetary policy and the real economy. But apart from noting that the Fed's
workhorse economic model estimates only a 0.2% change in the unemployment rate after 3 years in
response to each $500 billion in asset purchases, there's nothing in his past speeches that
indicates an intellectual opposition to QE. It's not at all clear that the Fed recognizes its
role in creating repeated cycles of bubble and collapse. So we have to allow for another round
of QE in response to the next recession. Again, the appropriate response on our part will be to
align ourselves with market internals. A favorable shift would likely encourage a constructive
or aggressive investment outlook, particularly if valuations have retreated substantially at
that point.
Inflation or deflation?
One of the key features of the recent speculative episode has been yield-seeking speculation
by investors starved for safe yields. In response, Wall Street and corporate America provided
more "product" in the form of low-grade covenant-lite debt. Indeed, the median rating on U.S.
corporate debt now stands just one notch above junk. In an economic decline, one should expect
a disruptive wave of defaults, with far lower recovery rates than in previous economic
cycles.
Now, defaults tend to be deflationary, so what you tend to see is an upward spike in the
yields on junk bonds and corporate debt but a downward trend in the yields of securities viewed
as being without credit risk, which has historically included Treasury securities. The question
is what happens when we begin to run trillion dollar deficits.
In the event of a deflationary economic decline, even one where defaults are higher as a
result of all the yield-seeking and low-grade debt issuance of recent years, another round of
QE seems likely. Our response to that prospect is simple – we'll take our cue from market
internals, particularly given that the entire net total return of the S&P 500 since 2007
occurred when our measures of internals have been favorable, and most of the 2007-2009 collapse
occurred when they were not. As I've regularly noted, our problem during the recent half-cycle
had nothing to do with valuations or market internals, but with our bearish response to
"overvalued, overbought, overbullish" syndromes.
Meanwhile, it's also important to allow for an inflationary economic decline, which would
result from a public loss of faith in the ability of the government to run a stable debt/GDP
relationship. In that event, all bets on QE are off, and the country will just face a difficult
situation, as it has periodically faced before.
The best indicator of inflation is inflation. It's difficult to forecast inflation with
macroeconomic variables, because large shifts in inflation are typically linked to discrete
events that provoke a loss of confidence in price stability itself, like the trifecta of Great
Society deficits, Nixon closing the gold window, and an oil embargo, or the combination of
money printing and a supply shock, like using deficit finance to pay striking workers in the
Ruhr. Not surprisingly, we'll infer that shift in confidence from uniformity in the behavior of
inflation-sensitive asset prices.
There's no economic factor that predicts the rate of inflation better than the rate of
inflation itself (and related uniformity in the behavior of inflation-sensitive securities
including precious metals, exchange rates, bond prices, commodities, TIPS, and related
securities). Just like a shift in market internals, it may be difficult to predict, but it's
fairly easy to align yourself with it.
I know that many observers are quietly repeating Milton Friedman's phrase that "inflation is
always and everywhere a monetary phenomenon." The problem is, you won't reliably see that in
the data. As a former economics professor, I get it. The quiet job of the economics profession
is to indoctrinate teenagers with purely theoretical models by showing them line-drawings.
Nobody ever asks them to spend time staring at actual numbers.
So they become adults – and sometimes even Fed governors – who take theoretical
diagrams as reality, for example, the notion that the Phillips curve is a relationship between
unemployment and general price inflation, when there's utterly no evidence for it. In fact, as
I've regularly argued, when you actually look at A.W. Phillips' data (a century of British
unemployment and wage data during a period of stable general prices under the gold standard),
the Phillips Curve is actually a relationship between unemployment and real wage inflation.
Of course, money creation and general price inflation are undoubtedly linked when money
creation hits the pace of the Weimar Republic or Zimbabwe. But for the U.S., there's no
economic factor that predicts the rate of inflation better than the rate of inflation itself
(and related uniformity in the behavior of inflation-sensitive securities including precious
metals, exchange rates, bond prices, commodities, TIPS, and related securities). Just like a
shift in market internals, it may be difficult to predict, but it's fairly easy to align
yourself with it.
Somebody explain to me why you pay 2 x sales for the S&P 500 when the risks on
economic growth are on the downside. Please explain Wall Street. Please explain how this is
cheap when the price to sales ratio is in bubble territory.
In the America of today social justice warriors virtue signaling their tolerance for others
have been repeatedly and quite often exposed for the bigots, sexists, and racists that they
really are.
DFGTC
"Those whom the gods are about to destroy, they first make mad ..."
while we are waiting for the final FINAL report of the endless interminable Mueller
investigation, perhaps best to review the Mueller report of Feb. 16 2018, and the conclusions
it drew: it identified 13 Russian nationals who were part of an organized effort based in the
Internet Research Agency. Those 13 Russians were named and indicted; if they step foot in any
Western space, they will be arrested and charged.
Oh, and the Americans? none named, none charged, none involved, concludes the Mueller
team. This likely presages the wet firecracker of the Mueller final report, and its look into
the media echo chamber's bottomless rumour mill.
just as good as you , 1 week ago
You seem to have forgotten the 33 indictments of 'Americans'. You seem to have forgotten
the 4 guilty pleas, and the 7 jail terms.
Yada yada yada.
Moseby1 , 1 week ago
Who do you think you're kidding?
Paul Manafort
Rick Gates
George Papadopoulos
Michael Flynn
Michael Cohen
Richard Pinedo
Alex Van Der Zwaan
Konstantin Killmnik
Kudos. I was just getting tired of typing the list, hence the "Yada yada yada".
Thanks.
Andy_Waxman1 , 1 week ago
Some of it happened pre-campaign, some of it is seriously dumb (Manafort not reporting
that he had a contract with the Ukraine), but much is Crimes of the Investigation - that is,
a crime caused by investigation. 'You told us you met with him Tuesday, but you met with him
Friday, you lied to the FBI, federal crime!' Like John Kelly. The actual meeting wasn't a
crime, though. Someone else tried to dangle a poll, "most of which was public," said the NYT.
Double dumb.
At this point the Collusion Narrative is like the Pee Tape, waaaaay more Liberal
Wishful Fantasy than proof. So far, there's no there there. Just endless breathless NYT CNN
and Globe headlines. 'Nuclear war this weekend with NK!' Remember that one? Right wing
Birthers were fringe. Left wing Haters are MSM. Big hat, no cattle. Waiting for Bob M.
A nice example of checkbook journalism... Previously there were a difference between a
Professor and a prostitute. Now it completely disappeared.
Notable quotes:
"... I canceled my subscription to the Globalist and Mail it'll expire at the end of this month but I must say, I'm going to miss reading all the comedy I have found in this paper, particularly in its comment sections. ..."
"... At this point I think it would be much worse if Trump isn't a Russian agent. At least being a Russian agent would make the ruination of the US a valid goal. If he truly isn't an agent, he's just ruining the US for the fun of it? ..."
"... Trump is not an enemy of America. He is America at its strongest and most sinister form, just the way Wall Street likes it. If Americans want a better society, they'd better stop asking to be led by grifters and take the lead themselves. ..."
Jared Yates Sexton is an associate professor at Georgia Southern University. He is the
author ofThe People Are Going to Rise Like the Waters Upon Your Shore: A Story of
American Rage.
This is, above all, a very real and very dangerous crisis. The time to wring our hands and
hide behind faith and disbelief are over. To fully counter this possible betrayal we must look
it dead in the face and begin to change our perception of what is feasible.
Mr. Trump has
capitalized on the good faith of the American people. In order to start healing, we must accept
that, with this administration, with this group, with this movement that Mr. Trump embodies,
almost anything is possible.
Opiedog , 3 days ago
What you are witnessing is the decline in American influence and might. This is very
similar to the decline of the Roman Empire. Slow degradation of social norms. Donald is not
the cause of this but we are in real time witnessing the decline of America.
Ramsey0 , 6 days ago
I canceled my subscription to the Globalist and Mail it'll expire at the end of this month
but I must say, I'm going to miss reading all the comedy I have found in this paper, particularly
in its comment sections.
dbns , 1 week ago
At this point I think it would be much worse if Trump isn't a Russian agent. At least
being a Russian agent would make the ruination of the US a valid goal. If he truly isn't an
agent, he's just ruining the US for the fun of it?
MG-TD , 1 week ago
Where is James Bond when you need him?
Unlimited reader , 6 days ago
I'm waiting eagerly for Bruce Willis to show up and save the USA
Globu , 1 week ago
Why the surprise? Mr. Trump is the very embodiment of the same cutthroat capitalism that
has defined America since colonization, slavery and the Trail of Tears.
Trump is not an enemy of America. He is America at its strongest and most sinister form, just
the way Wall Street likes it. If Americans want a better society, they'd better stop asking
to be led by grifters and take the lead themselves.
M. Gavin , 1 week ago
One can see why this is in the Opinion section. It's melodramatic, devoid of facts, offers
no reliable sources, fails to demonstrate motives, etc., etc. It's less obvious why the Globe
would publish it at all, because "news" like this we can get listening to the barber.
tinman1957 , 1 week ago
This guy isn't offering any news or opinion of concern he is just venting his hatred.
Andrew Smith , 1 week ago
The author is an associate professor of creative writing at a community college and it
shows.
Globu , 1 week ago
"Special to the Globe" always translates to chequebook journalism.
wellworn , 6 days ago
He is an associate professor of Writing and Linguistics; there is nothing in the profile
to suggest "creative" writing. I suspect that you creatively included the word to discredit
the very plausible premise that trump is an agent working for Russia; he certainly is not
working for the United States of America.
Personally I believe trump should be thoroughly investigated by the House committee to
look at his tax returns and banking records to determine how much money trump and company
have earned from Russian sources.
wglenm , 1 week ago
Who chooses the opinion pieces for this newspaper? This article is a completely one sided
joke.
just as good as you , 1 week ago
It IS - as you admit - an OPINION.
bdtaylor , 1 week ago
if Trump is such a boob, m_oron, rube and nitwitt that CNN and MSNBC make him out to be,
then how has he managed to fool the most sophisticated surveillance network in the world:
namely the CIA and NSA. if Trump was a Russian "Manchurian" candidate, does anyone actually
think the CIA and NSA wouldn't have figured that out 2 years ago?
All we have are platitudes and no real evidence. Is their a bunch of corrupt people and
dealing around Trump, yup (Michael Cohen, Maniford and probably others) is their actual
Russian "conspiracy" NOPE.
This entire RussiaGate conspiracy was started by Robby Mook and John Podesta of the DNC
(with the support of Clinton) to justify the embarrassment of losing to Trump in 2016.
Imagine losing to Trump a complete political novice that Hillary outspent 2.5x (she spent
almost $1Bil USD and still LOST).
Turn on your critical thinking and this entire RussiaGate is one big joke.
"... Checking facts and adding context is what journalists are paid to do. It's in the first line of the job description. Yet, amazingly, almost nobody in the American media did that. ..."
"... That's a shame, because there was a lot to check. The full video of what happened on Friday in Washington is well over an hour long. The four minutes that made Twitter don't tell the story, but instead distorted the story. A longer look shows that the boys from Covington Catholic in Kentucky weren't a roving mob looking for a fight. They were, in fact -- and it shows it on the tape -- standing in place waiting to be picked up by a bus. ..."
"... As they waited there, members of a group called the Black Hebrew Israelites, a black supremacist organization, began taunting them with racial epithets. Nathan Phillips, the now-famous American Indian activist, also approached them, pounding his drum. The footage seems to suggest the boys were unsure whether Phillips was hostile or taking their side against the Black Hebrew Israelites. But in any case, there is no evidence at all that anyone said, "build a wall." ..."
"... So, what really happened on Friday? Watch and decide for yourself. There's plenty of video out there, and some of it is fascinating. What we know for certain at this point is that our cultural leaders are, in fact, bigots. They understand reality on the basis of stereotypes. When the facts don't conform to what they think they know, they ignore the facts. They see America not as a group of people or of citizens, but as a collection of groups. Some of these groups, they are convinced, are morally inferior to other groups. They know that's true. They say it out loud. That belief shapes almost all of their perceptions of the world. ..."
Once footage emerged of the entire incident, however, it became clear that the left had
gotten it completely wrong ; Phillips had approached the teens - many wearing MAGA hats, while
a group of Black Israelites considered to be a hate group by the Anti-Defamation League hurled
racial insults at the students.
After the truth emerged, famous liberals who were previously frothing at the mouth went on a
mad scramble to delete their tweets full of hate, slander and disinformation . The internet
never forgets, however, and neither does Tucker Carlson:
If you were on social media over the weekend, you probably saw the video. It was
shot Friday afternoon , on the steps of the Lincoln Memorial. It seemed to show a group
of teenage boys taunting an elderly American Indian man who was holding a drum.
The young men
had come to Washington from a Catholic school in Kentucky to demonstrate in the March for
Life . Some of them wore "Make America Great Again" hats. They seemed menacing. Within
hours, the video was being replayed by virtually every news outlet in America. The American
Indian man with the drum in the video is called Nathan Phillips. He described the young men
he encountered, the ones in the hats, as aggressive and threatening -- essentially shock
troops for Donald Trump.
"I heard them saying, 'Build that wall. Build that wall,'" Phillips said. "This is
indigenous land. We're not supposed to have walls here."
It's hard to remember the last time the great American meme machine produced a clearer
contrast between good and evil -- it was essentially an entire morality play shrunk down to
four minutes for Facebook.
On one side, a noble tribal elder, weather-beaten, calm and wise. He looks like a living
icon. You could imagine a single tear sliding slowly down his cheek at the senselessness of
it all.
On the other side, you had a pack of heedless, sneering young men from the south, drunk on
racism and white privilege. The irony is overwhelming: The indigenous man's land had been
stolen by the very ancestors of these boys in MAGA hats. Yet they dare to lecture him about
walls designed to keep people who look very much like him out what they were calling "their"
country.
It was infuriating to a lot of people. At the same time, it was also strangely comforting
to the people who watched it from Brooklyn and L.A. The people who run this country have long
suspected that middle America is a hive of nativist bigotry. And now they had proof of that.
It was cause for a celebration of outrage. There's nothing quite as satisfying as having your
own biases confirmed.
But did the video really describe what happened? That should have been the first question
journalists asked. Checking facts and adding context is what journalists are paid to do. It's
in the first line of the job description. Yet, amazingly, almost nobody in the American media
did that.
That's a shame, because there was a lot to check. The full video of what happened on
Friday in Washington is well over an hour long. The four minutes that made Twitter don't tell
the story, but instead distorted the story. A longer look shows that the boys from Covington
Catholic in Kentucky weren't a roving mob looking for a fight. They were, in fact -- and it
shows it on the tape -- standing in place waiting to be picked up by a bus.
As they waited there, members of a group called the Black Hebrew Israelites, a black
supremacist organization, began taunting them with racial epithets. Nathan Phillips, the
now-famous American Indian activist, also approached them, pounding his drum. The footage
seems to suggest the boys were unsure whether Phillips was hostile or taking their side
against the Black Hebrew Israelites. But in any case, there is no evidence at all that anyone
said, "build a wall."
So, what really happened on Friday? Watch and decide for yourself. There's plenty of video
out there, and some of it is fascinating. What we know for certain at this point is that our
cultural leaders are, in fact, bigots. They understand reality on the basis of stereotypes.
When the facts don't conform to what they think they know, they ignore the facts. They see
America not as a group of people or of citizens, but as a collection of groups. Some of these
groups, they are convinced, are morally inferior to other groups. They know that's true. They
say it out loud. That belief shapes almost all of their perceptions of the world.
It's not surprising, then, that when a group of pro-life Catholic kids who look like
lacrosse players and live in Kentucky are accused of wrongdoing, the media don't pause for a
moment before casting judgment. Maggie Haberman of the New York Times suggested the boys
needed to be expelled from school. Ana Navarro of CNN called the boys racists and "asswipes"
and then went after their teachers and parents.
Others called for violence against them . CNN legal analyst Bakari Sellers suggested one
of the boys should be, "punched in the face." Former CNN contributor Reza Aslan agreed. Aslan
asked on Twitter, "Have you ever seen a more punchable face than this kid's?" Longtime CNN
contributor Kathy Griffin seemed to encourage a mob to rouse up and hurt these boys,
tweeting, "Name these kids. I want names. Shame them. If you think these effers wouldn't dox
you in a heartbeat. Think again." She repeated her demand again later: "Names please. And
stories from people who can identify them and vouch for their identity. Thank you."
Hollywood film producer Jack Morrissey tweeted that he wanted the boys killed: "MAGA kids
go screaming, hats first, into the woodchipper." He paired that with a graphic photo. Actor
Patton Oswalt linked to personal information about one of the boys, in case anyone wanted to
get started on that project. Meanwhile, Twitter, which claims to have a policy against
encouraging violence, stood by silently as all this happened.
But in case you think the response was entirely from the left, you should know that the
abuse was bipartisan. This wasn't just left versus right. It was the people in power
attacking those below them as a group. Plenty of Republicans in Washington were happy to
savage the Covington kids, probably to inoculate themselves from charges of improper thought.
Bill Kristol asked his Twitter followers to consider "the contrast between the calm dignity
and quiet strength of Mr. Phillips and the behavior of MAGA brats who have absorbed the
spirit of Trumpism."
So what's actually going on here? Well, it's not really about race. In fact, most of the
stories about race really aren't about race. And this is no different. This story is about
the people in power protecting their power, and justifying their power, by destroying and
mocking those weaker than they are.
And then when the actual facts emerged, Kristol quietly deleted his tweet. He never
apologized, of course. He hasn't apologized for the Iraq war, either. There's no need. People
keep giving him money.
The National Review, meanwhile, ran a story entitled, "The Covington Students Might As
Well Have Just Spit on the Cross." That story has since been pulled too, but not before the
author admitted he never even bothered to watch all the videos. He knew what he knew. That
was enough.
What was so interesting about the coverage of Friday's video was how much of it mentioned
something called "privilege." Alex Cranz, an editor at Gizmodo, for example, wrote, "From
elementary school through college, I went to school with sheltered upper middle-class white
boys who could devastate with a smirk. A facial gesture that weaponized their privilege.
Infuriatingly you can't fight that effing smirk with a punch or words. We saw that as Trump
smirked his way through the election and we'll see it as that boy from Kentucky's friends,
family, and school protect him. I effing hate that smirk. It says 'I'm richer, I'm white, and
I'm a guy.'"
What's so fascinating about all these attacks is how inverted they are. These are high
school kids from Kentucky. Do they really have more privilege than Alex Cranz from Gizmodo?
Probably not. In fact, probably much less. They're far less privileged than virtually
everyone who called for them to be destroyed, based on the fact that they have too much
privilege.
Consider Kara Swisher, for example, an opinion columnist at the New York Times. Swisher
went to Princeton Day School and then Georgetown, then got a graduate degree at Columbia.
She's become rich and famous, in the meantime, by toadying for billionaire tech CEOs. She's
their handmaiden. Nobody considers her very talented. And yet she's somehow highly
influential in our society. Is she more privileged than the boys of Covington Catholic in
Kentucky? Of course she is. Maybe that's why she feels the need to call them Nazis, which she
did, repeatedly.
So what's actually going on here? Well, it's not really about race. In fact, most of the
stories about race really aren't about race. And this is no different. This story is about
the people in power protecting their power, and justifying their power, by destroying and
mocking those weaker than they are.
Why? It's simple. Our leaders haven't improved the lives of most people in America. They
can't admit that because it would discredit them. So, instead they attack the very people
they've failed. The problem, they'll tell us, with Kentucky, isn't that bad policies have
hurt the people who live there. It's that the people who live there are immoral because
they're bigots. They deserve their poverty and opioid addiction. They deserve to die
young.
That's what our leaders tell themselves. And now, that's what they're telling us. Just
remember: they're lying.
The International Monetary Fund just uncorked a sobering outlook on the global
economy and asset markets for the elite billionaires huddled up in Davos,
Switzerland for the World Economic Forum to ponder.
In its latest World Economic Update report, the IMF said Monday the global
economy is projected to grow at a meager 3.5% this year and only accelerate to
3.6% in 2020. The outlooks for 2019 and 2020 are 0.2 percentage point and 0.1
percentage point below the IMF's projections issued in October.
Hat tips to the ongoing U.S. trade war with China, tightening financial
conditions globally and more volatile risk asset markets.
The finer points:
The IMF pretty much had nothing good to say on
the outlooks for developed and emerging markets. Although that is nothing unusual
for the IMF -- who often takes a cautious stance on its outlooks for economies and
financial markets -- it may give many investors a wake up call amid a somewhat hot
start to the stock market in 2019.
Of note, U.S. growth is seen slowing to 2.5% in 2019 and dipping to 1.9% in 2020
at the hands of the unwinding of fiscal stimulus (see Trump tax cuts), higher
interest rates and the U.S. trade war with China. The IMF tossed the U.S. a bone
by noting the pace of expansion is above the country's estimated potential growth
in both years.
As for Europe, the IMF is now more bearish on growth compared to its October
outlook. Growth for emerging and developing Europe in 2019 is forecast to cool to
0.7% (from 3.8% in 2018) and then bounce to 2.4% in 2020. Previously, the IMF was
looking for growth of 2% and 2.8% in 2019 and 2020, respectively. Lackluster
growth in Italy, France and Germany as well as policy tightening in Turkey are
the main culprits for the IMF's European growth downgrade.
Growth in emerging and developing Asia is expected to drop from 6.5% in 2018 to
6.3% in 2019 and reach 6.4% in 2020, said the IMF. The IMF expects growth in
China to be 6.2% both in 2019 and 2020 versus 6.6% in 2018.
Interestingly, the IMF incorporates the impact of continued tariffs by the U.S.
on China and vice versa in its baseline forecast. In other words, the
organization does not expect there to be a trade truce between the countries on
their self-imposed March 1 deadline.
For the investors out there:
For those bulls that have returned
to beaten up stocks in January, the IMF does its best to squash the hopium
infiltrating your brains. "A range of catalyzing events in key systemic economies
could spark a broader deterioration in investor sentiment and a sudden, sharp
repricing of assets amid elevated debt burdens. Global growth would likely fall
short of the baseline projection if any such events were to materialize and
trigger a generalized risk-off episode," cautioned the IMF.
China's growth slowdown is also a risk that the IMF suggests investors don't
fully appreciate.
"As seen in 2015–16, concerns about the health of China's economy can trigger
abrupt, wide reaching sell-offs in financial and commodity markets that place its
trading partners, commodity exporters, and other emerging markets under
pressure," the IMF pointed out.
The bottom line:
The IMF isn't exactly super plugged into global
asset markets in the same vein as forecasters at Goldman Sachs and Morgan
Stanley. But their latest assessment of the global economy and risk markets
offers up a good counterbalance to the enthusiasm that has begun to creep back
into financial markets after the October 2017 through December 2018 rout.
Happy trading, folks.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on
Twitter
Sovereign Wealth Funds aren't immune to losses. They load up on assets in volume. Don't
forget they have to exchange their currency for dollars or whatever currency is needed to buy
whatever they are buying. Currency moves against their position. They are forced to sell or
just eat the losses. But can't unload a large position in an illiquid market unless CB's
start bailing out SWF by buying their assets at any price. Stock market crash wouldn't be the
death of civilization and that's exactly why we will get another crash and soon. Might be the
death of a few SWF's but not civilization. Might be the death of 2/3 of shale oil yet not the
end of civilization. But you can only load up so much debt on a economy that is reaching
energy limits. There will be a debt cleansing and soon. A lot of stuff we have now will be
going away. Peoples current level of living standards are going to change and change in a big
way. Not the end of civilization even though for some it will seem like it is.
They don't sell. The oil flows, they buy more, the loss is erased by added oil money.
Besides which, how can there be intolerable selling pressure if the owners of 23% of all
shares in the world keep buying?
Numbers on a screen are never going to kill billions of people. The numbers will just be
changed by decree, and systemically in cooperation with all CBs.
Only oil can't be addressed. Oil scarcity eliminates food from shelves and stomachs, no
matter what money is created to pay truckers. The truckers can have all the money in the
world and if there is no diesel available for the tank, the food doesn't move.
watcher, your general theory has been shown correct for a number of years.
But it also requires a certain amount of global consensus between CB's, nations, et al
taking coordinated actions to keep a global corpse-economy rolling. This is not an assumption
that can be made under all circumstances.
the theory also doesn't entire hold true for countries that are being exiled from this
consensus, or otherwise aren't being allowed to participate (for whatever reason) in the
forever-money you are referring to – essentially stranded on the rocks of collapse
– Venezuela; Brazil; Iran; Syria – and innumerable small countries. Yes those
countries with SWF and the Big Economies are still doing fine – but if their satellite
countries raise enough of a stink, it could unravel the consensus.
the rise of right-wing nationalist governments around the world is a strong indicator of
this new trend.
Well, there is certainly danger in absolutism as to . . . in all circumstances and at all
times this theory must apply blah blah.
The central reality is that oil is everything. Has been since 1925 or so as its relentless
power widened (widened, rather than "grew"). Caused Japan to bomb Pearl Harbor. Determined
victory in Europe. Stressed the Soviet Union to its end. Has defined for 60ish years the
Middle East as the flashpoint for global nuclear war.
CBs will probably communicate and cooperate from now on, since the systemic risk to their
power unfolded in 2008. They kept the wheels turning the past 10 years. They don't have
control of the SWFs, the new force in the universe that has appeared as a consequence of
simply them getting bigger. They started in the 1990s, but it took until now for them to grow
as oil money flowed to them. Now . . . 23% of all common stock shares on the planet. But
though CBs don't have control of SWFs, they share the common goal of status quo
maintenance.
As for the rise of nationalism (of any sort, Italy's nationalism is hardly right wing, nor
was/is Greece's), this is something that for some reason instantly captured the disapproval
of the left wing. It has not been thought through. Nationalism is the only possible mechanism
for STOPPING the CBs from cooperating and instead actually acting in their own country's best
interests, rather than imposing their orchestrated global control on society.
Nationalism is the force that threatens Deep States. This is not a bad thing. Unless you
want perpetual slavery to the power of CBs.
Limits to growth and or oil scarcity creates the environment for Nationalism. Oil scarcity is
a direct threat to debt money. CB's are ultimately playing a losing hand of extend and
pretend. Ultimately debt money is going bye-bye. Debt money doesn't work in an energy
contracting environment. Interest on debt will be outlawed by government decree. Bond markets
will disappear. Things will be funded without interest payments for awhile until that too
doesn't work. But until then there will most certainly be a lot of can kicking.
all I'm saying is that you've stated repeatedly that only "natural scarcity" will cause any
sort of decline – and in your own response to that statement you actually agree with
and confirm an opposing view – that a breakdown of global consensus between SWF, CBs,
and powerful Nationalist Govt's could and probably will unravel the "oil must flow at all
costs" dictum that has prevailed for the past 10 years. And this will happen BEFORE the gas
lines. Many groups are already not getting what they want – yet no gas lines –
except maybe South Sudan – and once they've been trimmed and skimmed enough –
they'll begin to crack. and if those groups hold state power – they will use the power
of the state to try and impose their will. good, bad, indifferent, left right, whatever.
With American markets shut for a holiday, there seemed to be little to inspire either
contracts on the S&P 500 Index or the Stoxx Europe 600 Index, with the latter paring the
worst of an early drop but still ending slightly down. News that the IMF was cutting its global
growth
forecast to the weakest in three years -- in part because of softening demand in Europe --
merely cemented an already downbeat mood. Bonds across the region were mixed.
"... Currently, the S&P 500 (as of 1/18/19) is trading at 2,670 with Q4-2018 trailing reported earnings estimated to be $139.50. ( S&P Data ) This puts the 10-year average trailing P/E ratio of the S&P at a rather lofty 28.86x. ..."
I'm referring to what many retirees are most afraid of: Running out of money before they
die. An Allianz Life
survey found that far more retirees are afraid of outliving their money than they are of
dying -- 61% to 39%. This ever-present background fear is especially rearing its ugly head
right now, given the bear market that too many came out of nowhere.
Retirement planning projections made at the end of the third quarter, right as the stock
market was registering its all-time highs, now need to be revised.
The reason not to give up hope is that the stock market typically recovers from bear
markets in a far shorter period of time than most doom and gloomers think. Consider what I
found when measuring how long it took, after each of the 36 bear markets since 1900 on the
bear market calendar maintained by Ned Davis Research Believe it or not, the average recovery
time was 'just' 3.2 years."
Mark correctly used total return numbers in his calculations, however, while his data is
correct the conclusion is not.
Here is why.
While Mark is discussing the recovery of bear markets (getting back to even) it is based on
a "buy and hold" investing approach.
However, Mark's error is that he is specifically discussing "retirees" which are
systematically withdrawing capital from their portfolios, paying tax on those withdrawals (from
retirement accounts) and compensating for adjustments to the cost of living (not to mention
spiraling "health care" costs.)
These are the same problems which plague most of the "off the shelf" financial plans
today:
Faulty assumptions based on average historic rates of returns rather than variable rates
of return, and;
Not accounting for the current level of market valuations at the outset of the planning
process.
To explain the problems with both Mark's assumptions, and the vast majority of financial
plans spit out of computer programs today, let's turn to some previous comments from
Michael Kitces.
"Given the impact of inflation, it's problematic to start digging into retirement
principal immediately at the start of retirement, given that inflation-adjusted spending
needs could quadruple by the end of retirement (at a 5% inflation rate). Accordingly, the
reality is that to sustain a multi-decade retirement with rising spending needs due to
inflation, it's necessary to spend less than the growth/income in the early years, just to
build enough of a cushion to handle the necessary higher withdrawals later!
For instance, imagine a retiree who has a $1,000,000 balanced portfolio, and wants to plan
for a 30-year retirement, where inflation averages 3% and the balanced portfolio averages 8%
in the long run. To make the money last for the entire time horizon, the retiree would start
out by spending $61,000 initially, and then adjust each subsequent year for inflation,
spending down the retirement account balance by the end of the 30th year."
Michael's assumptions on expanding inflationary pressures later in retirement is correct,
however, they don't take into account the issue of taxation. So, let's adjust Kitces' chart and
include not only the impact of inflation-adjusted returns but also taxation. The chart below adjusts the 8% return structure for inflation at 3% and also adjusts the
withdrawal rate up for taxation at 25%. By adjusting the annualized rate of return for the impact of inflation and taxes, the life
expectancy of a portfolio grows considerably shorter. While inflation and taxes are indeed important to consider, those are not the biggest threat
to retiree's portfolios.
There is a massive difference between 8% "average" rates of return and 8% "actual"
returns.
The Impact Of Variability
Currently, the S&P 500 (as of 1/18/19) is trading at 2,670 with Q4-2018 trailing
reported earnings estimated to be $139.50. (
S&P Data ) This puts the 10-year average trailing P/E ratio of the S&P at a rather
lofty 28.86x.
We also know that forward returns from varying valuation levels are significantly varied
depending on when you start your investing. As shown in the chart below, from current valuation
levels, forward returns from the market have been much closer to 2% rather than 8%.
As evidenced by the graph, as valuations rise future rates of annualized returns fall. This
should not be a surprise as simple logic states that if you overpay today for an asset, future
returns must, and will, be lower.
Math also proves the same. Capital gains from markets are primarily a function of market
capitalization, nominal economic growth plus the dividend yield. Using the Dr. John Hussman's
formula we can mathematically calculate returns over the next 10-year period as follows:
(1+nominal GDP growth)*(normal market cap to GDP ratio / actual market cap to GDP
ratio)^(1/10)-1
Therefore, IF we assume that
GDP maintains, 4% annualized growth indefinitely
Which means recessions have been eliminated, AND
Current market cap/GDP stays flat at 1.25, AND
The current dividend yield remains at 2%:
We would get forward returns of:
(1.04)*(.8/1.25)^(1/30)-1+.02 = 4.5%
But there's a "whole lotta ifs" in that assumption.
More importantly, if we assume that inflation remains stagnant at 2%, as the Fed hopes, this
would mean a real rate of return of just 2.5%.
This is far less than the 8-10% rates of return currently promised by the Wall Street
community. It is also why starting valuations are critical for individuals to understand when
planning for the accumulation phase of the investment life-cycle.
Let's take this a step further. For the purpose of this article, we went back through
history and pulled the 4-periods where trailing 10-year average valuations (Shiller's CAPE)
were either above 20x earnings or below 10x earnings. We then ran a $1000 investment going
forward for 30-years on a total-return, inflation-adjusted, basis.
At 10x earnings, the worst performing period started in 1918 and only saw $1000 grow to a
bit more than $6000. The best performing period was actually not the screaming bull market that
started in 1980 because the last 10-years of that particular cycle caught the "dot.com" crash.
It was the post-WWII bull market that ran from 1942 through 1972 that was the winner. Of
course, the crash of 1974, just two years later, extracted a good bit of those returns.
Conversely, at 20x earnings, the best performing period started in 1900 which caught the
rise of the market to its peak in 1929. Unfortunately, the next 4-years wiped out roughly 85%
of those gains . However, outside of that one period, all of the other periods fared worse than
investing at lower valuations. (Note: 1993 is still currently running as its 30-year period
will end in 2023.)
The point to be made here is simple and was precisely summed up by Warren Buffett:
"Price is what you pay. Value is what you get."
This idea becomes much clearer by showing the value of $1000 invested in the markets at both
valuations BELOW 10x trailing earnings and ABOVE 20x. I have averaged each of the 4-periods
above into a single total return, inflation-adjusted, index, Clearly, investing at 10x earnings
yields substantially better results.
Not surprisingly, the starting level of valuations has the greatest impact on your future
results.
But, most importantly, starting valuations are critical to withdrawal rates
When we adjust the spend down structure for elevated starting valuation levels, and include
inflation and taxation, a much different, and far less favorable, financial outcome emerges
– the retiree runs out of money not in year 30, but in year 18.
"And, if you're retired and withdrawing from your portfolio, the 'sequence-of-return' risk
– the problem of the early years of withdrawals coinciding with a declining portfolio
– can upend your entire retirement. That's because a portfolio in distribution that
experiences severe declines at the beginning of the distribution phase, cannot recover when
the stock market finally rebounds. Because of the distributions, there is less money in the
portfolio to benefit from stock gains when they eventually materialize again.
I showed that risk in a previous
article where I created the following chart representing three hypothetical portfolios
using the '4% rule' (withdrawing 4% of the portfolio the first year of retirement and
increasing that withdrawal dollar value by 4% every year thereafter). I cherry-picked the
initial year of retirement, of course (2000), so that my graphic represents a kind of worst
case, or at least a very bad case, scenario. But investors close to retirement should keep
that in mind because current stock prices are historically high and bond yields are
historically low. That means the prospects for big investment returns over the next decade
are dim and that increasing stock exposure could be detrimental to retirement plans once
again. In my example, decreasing stock exposure benefits the portfolio in distribution phase,
and that could be the case for retirees now."
As John correctly notes, there is a case for owning stocks in a retirement portfolio, just
maybe not as much as your "run of the mill" financial plan suggests. To wit:
"Returns from cash and bonds may not keep up with inflation, after all. But stock returns
might fall short too. And if stocks do lag, they probably won't do so with the limited
volatility that bonds tend to deliver, barring a serious bout of inflation. So, if you're
within a decade of retirement, it may be time to think hard about how much stock exposure is
enough. The answer might be less than you think for a portfolio in distribution phase."
Questions Retirees Need To Ask About Plans
Importantly, what this analysis reveals, is that "retirees" SHOULD be worried about bear
markets. Taking the correct view of your portfolio, and the risk being undertaken, is critical
when entering the retirement and distribution phase of the portfolio life cycle.
More importantly, when building and/or reviewing your financial plan – these are the
questions you must ask and have concrete answers for:
What are the expectations for future returns going forward given current valuation
levels?
Should the withdrawal rates be downwardly adjusted to account for potentially lower
future returns?
Given a decade long bull market, have adjustments been made for potentially front-loaded
negative returns?
Has the impact of taxation been carefully considered in the planned withdrawal rate?
Have future inflation expectations been carefully considered?
Have drawdowns from portfolios during declining market environments, which accelerates
principal bleed, been considered?
Have plans been made to harbor capital during up years to allow for reduced portfolio
withdrawals during adverse market conditions?
Has the yield chase over the last decade, and low interest rate environment, which has
created an extremely risky environment for retirement income planning been carefully
considered?
What steps should be considered to reduce potential credit and duration risk in bond
portfolios?
Have expectations for compounded annual rates of returns been dismissed in lieu of a plan
for variable rates of future returns?
If the answer is "no" to the majority of these questions then feel free to contact one of the CFP's
in our office who take all of these issues into account.
With debt levels rising globally, economic growth on the long-end of the cycle, interest
rates rising, valuations high, and a potential risk of a recession, the uncertainty of
retirement plans has risen markedly. This lends itself to the problem of individuals having to
spend a bulk of their "retirement" continuing to work.
Two previous bear markets have devastated the retirement plans of millions of individuals in
the economy today which partly explains why a large number of jobs in the monthly BLS
employment report go to individuals over the age of 55.
So, not only should retirees worry about bear markets, they should worry about them a
lot.
The insidious and hidden tax - inflation. Retirement is mostly fantasy - it is always
being one step away from poverty. Even after decades of sacrifice and saving.
the nikkei topped out in 1989 and still hasn't recovered nearly 30 years later. most old
farts, including family members, aren't balanced, they are almost totally in stocks because
they believe that the fed guarantees the s&p only goes up. if someday it doesn't, too bad
for them.
The only way to retire [ unless you are very wealthy ] from the system is to adopt a
self-reliant lifestyle where your cost of living is way down. A single adult, in fair
condition, living a self reliant lifestyle can live comfortably on 15k per year. Thats
assuming no debt. To do that privately, you'll need about 400-600k, the right piece of land [
paid for ], and a whole mess of specific skills.
You wont be laying on your ***. This isnt your father's retirement of leisure. This is a
shifting of focus away from contribution / compensation through the system and towards
independence and literal "Self" reliance.
bull, bear who gives a ****? Only an idiot eats up the seed capital in pensions. All that
does is set down a death date you better follow thru with- With a bullet if neccesary.
Did they pick only companies that existed and survived the 30-year duration, in which case
they may not be representative of the market? Or did they use index, in which case there is
no complementary aggregate P/E ratio to account for dividends - or did they ignore dividends
altogether?
Very easy to calculate amortization of a retirement boodle. Just go online to a mortgage
amortization calculator. 1) Put in the initial amount of the retirement stake (= the amount
of a mortgage to be paid off, e.g. $1 million) 2) Punch in the projected interest rate (= the
interest on the mortgage). This will be the amount the retirement boodle pays in
interest/dividends over time as it's being drawn upon 3) Punch in the number of years the
retirement principle will have to pay out (= the number of years the mortgage is for). Crunch
these with the calculator provided and you'll get the amount the account will pay out each
month (= monthly payment of a mortgage with interest). Simple and free. The only uncertain
thing is the interest/dividend rate of the account. But one can be conservative (Say 2-3%)
and still get a very accurate monthly payout figure.
Also, nothing personal, but why should I take investment advice from someone who is still
working or paid to give it? I could never figure that one out.
If I were an investment genius, I would be rich, retired long before reaching age 65, and
avoiding people who need investment advice.
Retirees shouldn't worry about bear markets because retirees should never be in the equity
market in the first place. Especially during the times of rate normalization, where
sell-siders view every utterance by the Fed as 'dovish', and algos need ultra-volatility to
keep in business.
Assume $1 million in savings and Social Security of $25,000/yr based on a life of very
decent wages. At 4%, very easy to earn during normalized rates from fixed income, that's
$65,000/yr with NO principal reduction. Paltry for NYC or CA, but very decent for a
comfortable life almost everywhere else for an old person with no debts.
""Overall, between bank accounts and retirement savings, the median American household
currently holds about $11,700 , according to MagnifyMoney. Almost 30 percent of households
have less than $1,000 saved, MagnifyMoney finds, though the amount varies drastically by
age.Aug 28, 2018""
The article says, " For instance, imagine a retiree who has a $1,000,000 balanced portfolio, and wants to
plan for a 30-year retirement . . . "
It's not aimed at the median American household. The median American household doesn't
have a financial advisor, portfolio, or any hope for a retirement that goes beyond a $1,800 a
month Social Security check.
and to make matters worse it is becoming more and more difficult to find a reasonably
priced canned cat food that can substituted as a Decent Liver Pate. We have a high net worth
Bridge Owners party next week and the stuff we tried last month pulled the bridges right out
of their mouths.
You proved his point. You would be very concerned if you knew the true Money Power Monopolist Game of
Thrones.
===============
"Modern slaves are not in chains, they are in debt."
~Anonymous
"Let the American people go into their debt-funding schemes and banking systems, and from
that hour their boasted independence will be a mere phantom."
~William Pitt, (referring to the inauguration of the first National Bank in the United States
under Alexander Hamilton).
"The new law will create inflation whenever the trusts want inflation. From now on
depressions will be scientifically created."
~Congressman Charles A. Lindbergh, after the passage of the Federal Reserve act 1913.
"The one aim of these financiers is world control by the creation of inextinguishable
debt."
~Henry Ford
"Retirement" is a fairly new fad- prior to the 1950s it was unheard of - expect that fad
to end some point soon. The whole concept resembles a Pyramid Scheme- as long as there are
enough people at the bottom supporting those at the top everything is OK- the problem occurs
when there are not enough at the bottom contributing to support those above them - which we
have now.
the answer is simple; the math of a distribution portfolio is vastly different than that
of a portfolio NOT making withdrawals.....depending on the amount being withdrawn the
recovery point will take longer if at all.
just keep dry powder ready for when FERAL Reserve jacks discount rate up in the teens, the
geezers will make it back fast. I do not doubt I will see rates in CDs at 10%. They have to
drain 4.4 trillion of gravy from the system to protect what they stole in 2008 or inflation
will get it fast.
NEW YORK, Jan 17 (Reuters) - U.S. fund investors charged into high-yield "junk" bonds during
the latest week, pouring in $3.3 billion, the most cash flowing into that market since late
2016, Lipper said on Thursday, boosted by soothing words by Federal Reserve Chairman Jerome
Powell.
Underscoring investors' appetite for some risk-taking, investors pulled $15 billion net cash
from U.S.-based money market funds, according to the Refinitiv research service. For their
part, U.S.-based equity mutual funds - which exclude exchange-traded funds - posted inflows of
$4.8 billion, Lipper data showed.
OPEC released its Oil Market Report in recent days, which showed that the cartel slashed
output by 750,000 bpd in December – sharp reductions that came before the deal even went
into effect. Saudi Arabia led the way with 468,000 bpd in reductions, but its efforts were
aided by the involuntary losses from Iran (-159,000 bpd), Libya (-172,000 bpd) and Venezuela
(-33,000) bpd.
In fact, those three countries have accounted for massive output reductions over the past
two months. The OPEC+ deal is using October as a baseline, calling for 1.2 million barrels per
day (mb/d) in reductions, and the group is well on their way thanks to turmoil in just a few
countries. Over the course of November and December, Iran has lost 561,000 bpd, Libya has lost
190,000 bpd, and Venezuela's output fell by 58,000 bpd. Taken together, the involuntary outages
exceed 800,000 bpd.
"... The whole affair is psyop, we know that already ..."
"... Stranger and stranger British press is saying that they did CPR on both victims at the scene of their collapse; being a trained nurse one of the first things they would have done is to have taken their pulse and other vitals and miraculously managed to do this and not become contaminated. Methinks something doth stink! ..."
"... Before any free-trade agreement can be reached with the United States, the Queen must issue a written apology to President Trump for attempting to overthrow his government. ..."
The case of poisoned double-agent Sergei Skripal just got weirder after it was revealed that
the first responder to the scene was the Chief Nursing Officer for the British Army after he
daughter spotted Skripal and his daughter collapsed on a bench at the Maltings shopping center
in Salisbury on March 5 of last year.
According to
Spire FM , 16-year-old Abigail McCourt spotted the poisoned Russians while "out celebrating
her brother's birthday," and then quickly alerted her mother - Alison McCourt. The two McCourts
gave first aid to the Skripals until paramedics arrived.
Colonel McCourt - who was decorated
for her efforts to fight Ebola in Sierra Leone, proposed her daughter as a candidate for the
Lifesaver Award at Spire FM's Local Hero Awards.
"As a qualified nurse it was a fairly routine situation for me but my daughter was amazing.
Her prompt actions, spotting them in difficulty, and the way she assisted me to put Yulia
Skripal in the recovery position had a significant impact on the outcome of the two victims , "
said Alison of her daughter.
The coincidence - kept under wraps for nearly a year , is sure to give skeptics plenty of
new ammunition to refute the official narrative that Russia attempted to kill Skripal 10 years
after the voluntarily gave him up in a spy exchange with the UK.
... ... ...
Christopher Steele connection walked back
In an embarrassing walkback of a story from March 2018, The Telegraph now says that the
Kremlin laid a "false trail" linking Sergei Skripal to Christopher Steele - the former MI6 spy
who crafted the infamous anti-Trump "Steele Dossier" paid for by Hillary Clinton's
campaign.
The Telegraph understands that Col Skripal moved to Salisbury in 2010 in a spy swap and
became close to a security consultant employed by Christopher Steele, who compiled the Trump
dossier.
The British security consultant, according to a LinkedIn social network account that was
removed from the internet in the past few days, is also based in Salisbury.
On the same LinkedIn account, the man listed consultancy work with Orbis Business
Intelligence, according to reports. -
Telegraph
On Sunday that entire connection - which implied that Skripal was somehow involved with the
Steele Dossier, was
blamed on Russia .
Russian intelligence created a false trail linking the double agent Sergei Skripal to the
former MI6 officer behind the Trump dossier before carrying out the Salisbury nerve agent
attack, the Telegraph has been told.
Well-placed sources now believe that the plot to kill Col Skripal may have included a
'black ops' attempt to sow doubt on the veracity of the explosive dossier that claims Donald
Trump received Kremlin backing.
The year before the attempted assassination of Col Skripal, a mysterious post on LinkedIn
suggested his MI6 handler, who is not being named, worked as a "senior analyst" at Orbis
Business Intelligence, the firm that produced the Trump dossier.
...
But a number of sources have told The Telegraph that the LinkedIn profile is false - if it
ever properly existed at all - and that Skripal's MI6 handler never worked for Orbis.
It is now suspected that the LinkedIn profile was created by the GRU, the Russian military
intelligence unit which tried to kill Col Skripal with novichok nerve agent. -
Telegraph
"By creating this link, they are suggesting that MI6 are involved with the dossier or
Skripal or both. It adds to the confusion and acts as a wedge between the White House and
Downing Street. It is exactly the kind of operation the Russians would order to sow confusion,"
said the Telegraph 's "well placed source."
"An internet hyperlink to the LinkedIn page appeared in an obscure blog posting in January
2017 - more than a year before the Salisbury attack - but the actual LinkedIn page itself has
never been visible ," the Telegraph writes.
In other words, The Telegraph wrote an entire story in March of last year based on nothing
more than "an internet hyperlink to the LinkedIn page" without actually having viewed the
profile now blamed on a Russian black op.
But there was another possibility - one that is utterly ludicrous and now disproved - that
was none the less championed by conspiracy theorists. Namely, that the death of Col Skripal
was not ordered by the Kremlin at all - but carried out by British agents to silence the
former Russian intelligence officer.
The reason was simple. Col Skripal - so the theory went - had helped provide information
to Christopher Steele, a former senior MI6 officer, who authored an extraordinary dossier on
Donald Trump, alleging that the soon-to-be president was effectively a puppet of Putin. The
dossier claimed that the Kremlin had been "cultivating, supporting and assisting Trump for at
least five years".
Oddly, however, a British spy named Pablo Miller was claimed by Russian media in 2007 as the MI6 agent
who recruited Skripal in 1995. Miller apparently works (or worked) for Orbis - though it is
unclear whether he is the same person noted in the original Telegraph report.
So - the British Army's head nurse was the first one to provide assistance to the dying
Russians, while Skripal's link to Christopher Steele is now thought to be part of a Russian
plot to discredit the Steele Dossier. Fascinating.
Fascinating??? Too much fantasy in this piece of fiction. The author seems uninterested in
going beyond trying to make it look like a fantasy James Bond. Surely someone can give the
'patient in difficulty' symptoms. Good grief, to categorize this fantasy story cooked up by
British Intel and hard-sell journalists, as NEWS. Is this the drivel we have to expect from
journalism schools?
M eye 6 is complicit in the Steele Dossier on Fake Russian collusion, Trying to cover a
big black eye from a so called British ally to USA that tried to run a coup on a sitting
president...
We always knew Pablo Miller worked for Orbis, Steele's consultancy, and was skripals
handler,
the article brings out the the nurses daughter sad Yulia Skripal was not breathing, was
dead, neither suffered any contact problems, unlike the policeman who was first on the scene
on the old story.
The 'actor based reality,' which has always been a tool for TPTB to use the fair and
balanced press to divide the public at large, utilizes much more than vast corps of
characters, writers, producers and directors as the psyops event coordinators executing
preplanned large scale operations to steer our perception with proven mind control tactics.
But, they're tactics have become so simple to spot by researchers as the templates are
basically similar and the plots of they're fake large scale events have become mind numbingly
ridiculous for any body paying attention to even the smallest amount of detail exposed in
these hoaxed
Wow, (((THEY))) sure LOVE gaslighting us. This mess of an attempt at an article shows how
******* stupid they really think we are. Even their warped version of one alternate theory
fits their ******** narrative. ******* absurd.
Porton Down is 8 miles...10 miles away? .. staff live in Salisbury...numbers of medical
staff deployed at PD and area will be large...Interesting is all.
Stranger and stranger British press is saying that they did CPR on both victims at the
scene of their collapse; being a trained nurse one of the first things they would have done
is to have taken their pulse and other vitals and miraculously managed to do this and not
become contaminated. Methinks something doth stink!
British authorities have refined to a whole new level offering bald faced lies and patent
absurdities with a dignified stiff upper lip. I have it from a highly placed source that
envious American and Israeli official and unofficial liars have been practicing posturing as
dignified and putting glue on their upper lips.
It's all a coincidence. In fact the word coincidence is an exaggeration. Because the
coincidences are happening more and more. Which makes them no longer a coincidence.
The previous alleged first responder was a policeman who became dangerously ill because
the novichok was so potent but strangely, this woman and her daughter suffered no ill
effects. I can only guess that due to her work with the British Army, she and her daughter
had fortunately and coincidentally been innoculated with a novichok antidote.
The house was on lockdown forever. Even if you are a trained nurse, doctor, emt, you are
out in a park with your family. What equipment are you carrying to defeat the effects of a
biological weapon??? And they weren't affected. Simply amazing.
Before any free-trade agreement can be reached with the United States, the Queen must
issue a written apology to President Trump for attempting to overthrow his government.
One week ago, when we discussed why the Fed now finds itself trapped by the slowing economy
on one hand, and the market's response to the Fed's reaction to the slowing economy (namely the
market's subsequent sharp rebound, only the third time since 1938 that we've seen a V-shape
recovery of this magnitude when the market dropped down more than ~10% and spiked +10% in the
subsequent period), we said that the "obvious problem" is that the Fed is cutting because the
economy is indeed entering a recession, even as market have already rebounded by over 10% from
the recent "bear market" low factoring in a the economic response to an easier Fed, effectively
cutting the drop in half expecting the Fed to react precisely to this drop, while ignoring the
potential underlying economic reality (the one confirmed by the bizarrely low neutral rate,
suggesting that the US economy is far weaker than most expect).
Ultimately, what this all boils down to as
Bank of America explained yesterday , is whether the economy is entering a recession, or -
somewhat reflexively - whether the suddenly dovish Fed, trapped by the market, has started a
chain of events that inevitably ends with a recession. The historical record is ambivalent: as
Bloomberg notes, similar to 1998 and 1987, the S&P fell into a bear market last month (from
which it immediately rebounded) following a Fed rate hike. The difference is that in the
previous two periods, the Fed cut rates in response to market crises - the collapse of
Long-Term Capital Management in 1998 and the Black Monday stock crash in 1987 - without the
economy slipping into a recession. In comparison, the meltdown in December occurred without a
similar market event.
And yet, a meltdown did occur, and it has a lot to do with confusing messaging by the Fed,
which did a 180-degree U-Turn when in the span of just two weeks, the Fed chair went from
unexpectedly hawkish during the December FOMC press conference (which unleashed fire and
brimstone in the market), to blissfully dovish when he conceded at the start of January that
the Fed will be "patient" and the balance sheet unwind is not on "autopilot."
But it wasn't just the Fed's messaging in a vacuum that prompted the sharp December drop: it
is also the fact that the Fed and the market continue to co-exist in a world of perilous
reflexivity, a point made - in his typical post-modernist, James Joyceian, Jacque Lacanian
fashion - by Deutsche Bank's credit strategist Aleksandar Kocic, who writes that
"the underlying ambiguities of the market's interpretation of economic conditions are an
example of financial parallax – the apparent disorientation due to displacement caused
by the change in point of view that provides a new line of sight" (or, said much more simply,
the Market reacts to the Fed, and the Fed reacts to the market in circular, co-dependant
fashion).
Yet while there is nothing new in the reflexive nature of the coexistence between the Fed
and market, this process appeared to short-circuit in Q4. So "where is the problem and what are
the sources of misunderstanding" asks Kocic, and answer by taking "the timeline from November
of last year as the onset of the subverted perspective and the beginning of the
self-referential circularity" (as we have said before, Kocic takes a certain delight in using
just a few extra words than is necessary for the attention spans of most traders, even if
liberal majors find a particular delight in his narrative). Anyway, continuing the Kocic
narrative of where the reflexivity between the Fed and market broke down, in the chart below
the Deutsche Bank strategist shows two snapshots of the swaps curve from November and
January.
As we noted repeatedly over the past 4 weeks, while the long end has largely experienced a
parallel shift lower, Kocic correctly points out that "the biggest drama has occurred in the
belly of the curve which has inverted through the five-year horizon", yet where Kocic's view
differs is that according to him, this is not indicative of a risk off trade but is instead "a
radical repricing of the Fed." Meanwhile, according to the DB strategist, the inversion of the
front end is the main source of the reinforcing loop "as it brings in the uncomfortable mode of
what we think is a misidentified alarm and incorrect interpretation of its economic
significance."
To make his point, Kocic looks at the previous episodes of curve flattening during the past
two tightening cycles.
As DB notes, unlike the past two episodes of Fed tightening, when rate hikes were
responsible for bear inversions, the last three months represent a bull inversion. In other
words, "the recent flattening and inversion of some sectors of the curve has been driven by a
decline in long rates that outpaced the decline in short rates."
As others have observed, this departure from history highlights a potential flaw in the
logic behind the connection between inversion and recession, Kocic writes, and explains:
If excessive Fed tightening is the likely trigger of the next recession, then the
underlying logic and causality must go as follows. The Fed continues to hike until it becomes
restrictive and the economy begins to contract which eventually forces the Fed to reverse its
direction. The former causes curve inversion and a tightening of financial conditions through
a decline in the stock market and wider credit spreads together with an economic slowdown.
The Fed then begins to cut rates in order to counter the effect of excessive tightening and
the curve re-steepens.
Simple enough, and also extremely problematic, because as we explained
last weekend , it's not the Fed tightening that is the recession catalyst: it is when the
Fed begins cutting rates that one should be worried as all three prior recessions followed
within 3 months of the first rate cut after a hiking cycle:
... while many analysts will caution that it is the Fed's rate hikes that ultimately
catalyze the next recession and the every Fed tightening ends with a financial "event", the
truth is that there is one step missing from this analysis, and it may come as a surprise to
many that the last three recessions all took place with 3 months of the first rate cut after
a hiking cycle !
If that wasn't bad enough, Kocic notes that if " this were how things work, the recent
market dynamics would be consistent with the US economy already being in a recession" and
explains that "with rates already rallying, the implication is that the Fed deliberately and
mistakenly continued to hike. This is the territory of a serious policy mistake."
In other words, bull inversion and rate hikes would indicate that the Fed was totally
detached from the realities of the market.
Yet after laying out this scenario, one which the market was obsessed with for much of
December, Kocic counters that a closer look at the recent repricing "suggests that this
narrative of a policy mistake may be misleading and market dynamics reveal something very
different from a recessionary market mode" and further claims that what happened fits with the
Fed sticking to the script of market normalization as a priority to wit:
this interpretation runs contrary to the recent response from the Fed, in which they have
shown an unmistakable attention to detail with a thorough understanding of the complexity of
the situation with all the risks associated with the stimulus unwind. The Fed has also gone
to great lengths throughout this normalization process to prepare the markets for its exit
and take care not to generate additional problems along the way. The well-telegraphed unwind
of the balance sheet, which has come under increasing scrutiny over the past month is just
one example of the Fed understanding the potential pitfalls of providing too little
guidance.
Kocic then goes on to further claim that the market reaction is "a clear demonstration that
the Fed is on track with the normalization of the rates market", and thatr "by sticking to its
script, the Fed has forced another leg of normalization. The two aspects of this are shown both
in the decline of the correlations back into negative territory as well as the migration of
volatility to the front end of the curve, both corresponding to the pre-2008 curve
functioning."
Why does Kocic take such a contrarian view, at least relative to the broader market?
Because, as he explains, "if bear steepeners and bull flatteners were to continue to be the
dominant curve modes, monetary policy shocks are at risk of being amplified, and the potential
for a disruptive unanchoring of the back end of the curve, with its hazardous ramifications for
risk assets and credit in particular, is heightened."
This is why normalization requires front-loading monetary policy shocks and focusing on
the front end with the fed funds rate remaining the primary policy tool, while –
despite some calls to the contrary – the balance sheet unwind should remain predictable
and controlled.
Whether Kocic is correct or not we will know shortly, perhaps as soon as March, when the Fed
- which as we discussed previously remains a hostage
to markets - will be pressed to halt its balance sheet reduction, and which would
immediately crush Kocic's theory that the Fed is purposefully normalizing instead of simply
being forced to react to the market's every whim.
In any case - accuracy of the DB strategist notwithstanding - the bigger problem, and this
goes back to our point from last week, is that no matter what the Fed does at this point, its
actions will almost certainly precipitate the very recession it hopes to avoid.
Why? The following chart from SocGen answers that question in grandiose simplicity: because
it is not the curve flattening that is the recession catalyst - it is sharp curve steepening,
whether bull or bear-driven, that precedes the immediate onset of the recession.
And once the steepener trade finally takes off, Kocic's variant perception that " recent
market dynamics would be consistent with the US economy already being in a recession" would be
spot on: at that point, the bond market would finally admit that everything that happened ever
since the Fed though it could normalize has been one massive mistake.... just as Ben Bernanke
predicted admitted in May 2014, when he said that there would be "
no rate normalization during my lifetime ." Tags Business Finance
it is not a problem to raise rate and shrink sheet. they pumped trillons of dollar into
market is the problem. they pumped the biggest bubble in human history. they are evils
Robert Snefjella says:
January 20, 2019 at 4:21 pm GMT 200 Words
@Erebus Going from memory, in Hellyer's book The Money Mafia, his impression was that
Bouey's decision was taken without real political understanding or guidance. Noteworthy was an
attempt in recent years to restore that Bank of Canada fund-emission function via the court
system. The attempt failed. The lawyer representing the group making the effort, Rocco Galati,
indicated that the media in Canada had received pressure not to cover the story. The government
of Canada at the time the court case was initiated was under Harper Conservative rule.
As to how astute Trudeau was, or how much practical influence he had when it came to
national financial matters, I don't know. There was a lot of economic flux at the time
involving the US dollar, oil, high inflation and gold. There was a big jump in Canadian
interest rates around 1974. In any case, the emission of funds directly for productive purpose,
without taxation and borrowing, is a beneficent unacknowledged elephant in the economic
policy-options room.
"... Number two, the capitalist system that we're all part of has a downturn on average every four to seven years. It's been more than seven years since the last crash -- 2008/9 -- so everybody knows it's coming. ..."
"... And here's another one that people don't talk about. The big tax cut last December, 2017, gave an awful lot of money to the richest Americans and to big corporations. They had no incentive to plow that into their businesses, because Americans can't buy any more than they already do. They're up to their necks in debt and all the rest. ..."
Every time I sit down with economist Richard Wolff, he demonstrates why the field of
economics is so necessary in the cultural critique of our American empire. In my recent interview with
him, we discussed why the thriving economy touted by President Donald Trump hasn't translated into real
gains for the majority of Americans. We also went over what is hidden by the economic indicators that
allow the financial industry to celebrate while so many Americans are still suffering.
Professor Wolff talked with me on my show "Redacted Tonight: VIP" on RT America. Enjoy this
excerpt from
the interview
.
LEE CAMP:
Professor Wolff -- thanks for joining me! Last month was,
apparently, the worst December for the stock market since the year 1980. What's going on here?
RICHARD WOLFF:
A lot of things are coming to a head. Each one of them by
itself might have gone by without this, but they're too many.
To list major ones: The tariff war with China, Europe and the rest creates enormous
uncertainty. It makes all the predictions and plans of corporations and entire countries uncertain.
People are holding back. Number one.
Number two, the capitalist system that we're all part of has a downturn on average every
four to seven years. It's been more than seven years since the last crash -- 2008/9 -- so everybody knows
it's coming.
It's not a question of whether, we've never been able to overcome these kinds of
instabilities in our system. So we're overdue for one.
And here's another one that people don't talk about. The big tax cut last December,
2017, gave an awful lot of money to the richest Americans and to big corporations. They had no incentive
to plow that into their businesses, because Americans can't buy any more than they already do. They're up
to their necks in debt and all the rest.
So what they did was to take the money they saved from taxes and speculate in the stock
market, driving up the shares and so forth. Naive people thought that was a sign of economic health. It
wasn't. It was money bidding up the price of stock until the underlying economy was so far out of whack
with the stock market that now everybody realizes that and there's a rush to get out and boom, the thing
goes down.
Very serious. The question now is how badly the underlying economy -- jobs, incomes, and
debts -- will be impacted negatively by all of this stock market downturn.
LC:
You brought up predictions of an impending crash because it's been
seven or eight years, even JPMorgan Chase has told investors that the next crash, the crisis, they think
will be in 2020. What does it mean when the largest financial firms in the world are saying, "Oh yeah!
We're just going to have another financial crisis around the corner"?
RW:
It's a wonderful sign. (Laughs) And by the way, JPMorgan Chase is not
the only one. Goldman Sachs has done that, the International Monetary Fund, lots of the major players
know it's coming. The only disagree on exactly when which you can never know anyway. But here's what it
means, it means that they have accepted, as if it were like rain falling from the sky, that this economic
system we have crashes every few years. As if it's kind of in the cards. Unchangeable. Unaffected by
anything we might do.
It's kind of like giving up on the human desire not to be plunged into a crazy unemployment
and cutback every few years that interrupts people's lives, their educations, their savings for the
future. I mean, we ought to have an economic situation, or at least a debate, about an economic system
that works this way rather than simply accepting it in the manner of these predictions. As if there's
nothing we can do.
LC:
Absolutely. Donald Trump keeps telling us that unemployment is very
low, so obviously he is a wonderful president. Is that true? Also I overheard on NPR that they had a
panel or something about why wages aren't going up considering how well the stock market has done over
the past years, and how low unemployment is. The host just seemed baffled as to why wages have not gone
up.
RW:
Well again, there are a number of reasons why wages aren't going up.
What we've seen is a quote-unquote "recovery" that is very peculiar.
Two particular peculiarities: People who lost jobs -- and those are in the millions in 2008,
2009, and 2010 -- have now gotten jobs, that's true, but the jobs they've gotten have lower wages, have
less security and fewer benefits than the ones they lost, which means they can't spend money like we
might have hoped they would if they had got the kinds of jobs they lost, but they didn't. And the second
thing is that large numbers, particularly of white men aged 30-60, have not gone back into the labor
force.
They lost their jobs, it's very hard for them to find new jobs. The jobs they find are so
poor that they're more likely to stay at home, or do something else. So as the economy comes back at
least with some jobs, and as they run out of savings, these people are slowly coming back.
So there's no need for employers to raise wages to attract workers, they can just pull them
slowly out of the desperate population of people who haven't worked for years and have run out of
savings. They can't turn to their friends and relatives anymore, so they come back and accept the jobs
that they were once too proud to accept. It's a real downturn of the quality of life of America, which is
why you don't see the wages going up and why you see the anger and the bitterness, because all of the
promises of Obama before, and of Trump now, are not changing that basic situation.
LC:
Yeah, the quality of life has definitely gone down. If these jobs are
not good -- as you say -- and also the gains have gone to the 1%, and something like 50% of Americans can't
afford a $1000 emergency, then why does it seem like everything just keeps trucking along? You know, you
don't really see things collapsing. There aren't strikes shutting down whole cities. What's the motor
that keeps things going?
RW:
Well at this point I think it really depends on what indexes you're
looking at. The biggest thing that's kept this economy going in the last few years should make everybody
tremble. It's called debt, let me give you just a couple of examples. Ten years ago, at the height of the
crash, the total debt carried by students in the United States was in the neighborhood of $700 billion,
an enormous sum. What is it today? Over twice that, one-and-a-half trillion dollars. The reason part of
our economy hasn't collapsed is that students have taken up an enormous amount of debt that they cannot
afford, in order to get degrees which will let them get jobs whose incomes will not allow them to pay
back the debts. And forget about getting married, forget about having a family.
We have paid an enormous price in hobbling the generation of people who would have otherwise
lifted this economy and made us more productive. It is a disastrous mistake historically, and if you face
that, and if you add to it the increased debt of our businesses, and the increased debt of our
government, you see an economy that is held up by a monstrous increase in debt, not in underlying
productivity, not in more jobs that really produce anything, but in debt.
That should frighten us because it was the debt bubble that burst in 2008 and brought us the
crash. It is as if we cannot learn in our system to do other than we've always done and that's taking us
into another crash coming now.
LC:
Yeah. This is the land of the free, but it seems like most of us are
chained down by debt peonage.
If there's one thing everyone in today's Washington can agree on, it's that whenever an
official or someone being paid by the government says something truly outrageous or dangerous,
there should be consequences, if only a fleeting moment of media fury.
With one notable exception: Arguing that the US should be quietly working to promote the
violent disintegration and carving up of the largest country on Earth.
Because so much of the discussion around US-Russian affairs is marked by hysteria and
hyperbole, you are forgiven for assuming this is an exaggeration. Unfortunately it isn't.
Published in the Hill under the dispassionate title "Managing
Russia's dissolution," author Janusz Bugajski makes the case that the West should not only
seek to contain "Moscow's imperial ambitions" but to actively seek the dismemberment of Russia
as a whole.
Engagement, criticism and limited sanctions have simply reinforced Kremlin perceptions
that the West is weak and predictable. To curtail Moscow's neo-imperialism a new strategy is
needed, one that nourishes Russia's decline and manages the international consequences of its
dissolution.
Like many contemporary cold warriors, Bugajski toggles back and forth between overhyping
Russia's might and its weaknesses, notably a lack of economic dynamism and a rise in ethnic and
regional fragmentation. But his primary argument is unambiguous: That the West should actively
stoke longstanding regional and ethnic tensions with the ultimate aim of a dissolution of the
Russian Federation, which Bugajski dismisses as an "imperial construct."
The rationale for dissolution should be logically framed: In order to survive, Russia
needs a federal democracy and a robust economy; with no democratization on the horizon and
economic conditions deteriorating, the federal structure will become increasingly
ungovernable...
To manage the process of dissolution and lessen the likelihood of conflict that spills
over state borders, the West needs to establish links with Russia's diverse regions and
promote their peaceful transition toward statehood.
Even more alarming is Bugajski's argument that the goal should not be self-determination for
breakaway Russian territories, but the annexing of these lands to other countries . "Some
regions could join countries such as Finland, Ukraine, China and Japan, from whom Moscow has
forcefully appropriated territories in the past."
It is, needless to say, impossible to imagine anything like this happening without sparking
a series of conflicts that could mirror the Yugoslav Wars. Except in this version the US would
directly culpable in the ignition of the hostilities, and in range of 6,800 Serbian nuclear
warheads.
So who is Janusz Bugajski, and who is he speaking for?
The author bio on the Hill's piece identifies him as a senior fellow at the Center for
European Policy Analysis, a Washington, D.C. think-tank. But CEPA is no ordinary talk shop:
Instead of the usual foundations and well-heeled individuals, its financial backers seem to be mostly arms of the US
government, including the Department of State, the Department of Defense, the US Mission to
NATO, the US-government-sponsored National Endowment for Democracy, as well as as veritable
who's who of defense contractors, including Raytheon, Bell Helicopter, BAE Systems, Lockheed
Martin and Textron. Meanwhile, Bugajski chairs the South-Central Europe area studies program at
the Foreign Service Institute of the US Department of State.
To put it in perspective, it is akin to a Russian with deep ties to the Kremlin and
arms-makers arguing that the Kremlin needed to find ways to break up the United States and, if
possible, have these breakaway regions absorbed by Mexico and Canada. (A scenario which alas is
not as far-fetched as it might have been a few years ago; many thousands in California now
openly talk of a "Calexit," and many more in Mexico of a reconquista .)
Meanwhile, it's hard to imagine a quasi-official voice like Bugajski's coming out in favor
of a similar policy vis-a-vis China, which has its own restive regions, and which in
geopolitical terms is no more or less of a threat to the US than Russia. One reason may be that
China would consider an American call for secession by the Tibetans or Uyghurs to be a serious
intrusion into their internal affairs, unlike Russia, which doesn't appear to have noticed or
been ruffled by Bugajski's immodest proposal.
Indeed, just as the real scandal in Washington is what's legal rather than illegal, the real
outrage in this case is that few or none in DC finds Bugajski's virtual declaration of war
notable.
But it is. It is the sort of provocation that international incidents are made of, and if
you are a US taxpayer, it is being made in your name, and it should be among your outrages of
the month.
Putin knows that if he ignores the West and provides strong path for Russia growth,
re-building economy, manufacturing and military; building international relationships - it
will strengthen the country in a horror of it's enemies.
While others panicked over drop in oil prices - Putin was making adjustments to weather
out the storm. While many nations were taking out massive development loans [advised by city,
chase, goldman, etc] - Russia balanced the budget. While US government is in mayhem over
protecting the border [seems like no brainer] - Putin continues with strong central policy.
And the US sanction that crushed so many countries - appears to have limited effect [slowing
down some growth].
This author, Bugajski, [MI5 agent] wrote countless self-promoting books. Russia will never
want to fight a war with NATO [their customers]. Britain and France already lost that war.
Russia is just waiting for EU and NATO to collapse over money disagreement. Because they were
all happy as long as US was paying for all of it. Not anymore. Standby for Collapse of EU and
NATO show coming soon.
The Russian Confederation of Labour (KTR) says that the average life expectancy for men is
actually less than 65-years-old in over 60 regions in Russia. "KTR does not support such
decisions and declares its intention to launch a broad public campaign against their
implementation," the organization said in a statement .
You start off with "Putin is a cuck" which may or may not be a fact but if you actually
read the article it clearly states "President Medvedev" and raising the retirement age
from...wait for it... 60 to 63?? Really??
Most west european countries have a retirment age of around 65 years. In scandinavic
countries they are going to increase to 67. They realized that importing rapefugees is not
going to solve the demographic crisis.
RW: Well at this point I think it really depends on what indexes you're looking at. The
biggest thing that's kept this economy going in the last few years should make everybody
tremble. It's called debt, let me give you just a couple of examples.
Ten years ago, at the
height of the crash, the total debt carried by students in the United States was in the
neighborhood of $700 billion, an enormous sum.
What is it today? Over twice that,
one-and-a-half trillion dollars.
The reason part of our economy hasn't collapsed is that
students have taken up an enormous amount of debt that they cannot afford, in order to get
degrees which will let them get jobs whose incomes will not allow them to pay back the debts.
And forget about getting married, forget about having a family.
We have paid an enormous price in hobbling the generation of people who would have otherwise
lifted this economy and made us more productive. It is a disastrous mistake historically, and
if you face that, and if you add to it the increased debt of our businesses, and the increased
debt of our government, you see an economy that is held up by a monstrous increase in debt, not
in underlying productivity, not in more jobs that really produce anything, but in debt.
That should frighten us because it was the debt bubble that burst in 2008 and brought us the
crash. It is as if we cannot learn in our system to do other than we've always done and that's
taking us into another crash coming now.
LC: Yeah. This is the land of the free, but it seems like most of us are chained down by
debt peonage.
The breakup of the USSR was due to confluence of factors such as rise of neoliberalism,
stagnation of oversentlised USSR economy, emergence of internat communications and personal
computers which weakened official propaganda power, creation of fifth column within the USSR due
to bad timing and execution of Gorbachev's reforms (Presetoyka was essentially the idea of
repeating NEP on a new level), and extremely weak abilities of Gorbachov as a politician, growth
of nationalism (well financed from theWest), degeneration of Bolshevik's elute and emergence of
multiple neoliberal turncoats (Yeltsin, Gaidar, Yakovlev, etc). but dissolution of the USSR
probably case as a surporse.
But after the dissolution CIA-Mossad-MI6 jumped into the dame with the explicit goal to
destruction of Russian economy, asset stripping (Browder probably is connected to MI6), Harvard
mafia probably also was somehow connected to CIA, and disintegration of the country (Chechnya
insurrection was supported by the USA, Britain and their vassals in Persian gulf).
This is an interesting lesson for future reformers: the presence of CIA-Mossad-MI6 on the
world scene changes the result of almost any forceful overthrow of the government, especially if
it was done with the goal of neoliberalization, imposing a huge cost on the population. Ukraine
is one recent example (the standard of living dropped probably 300 or so). Libya is another.
This particular neocon writing in his official capacity of a MIC lobbyist (that is what all
neocons are), so his views are interesting only as an example of a dangerous trend.
Like
many contemporary cold warriors, Bugajski toggles back and forth between overhyping Russia's
might and its weaknesses, notably a lack of economic dynamism and a rise in ethnic and regional
fragmentation. But his primary argument is unambiguous: That the West should actively stoke
longstanding regional and ethnic tensions with the ultimate aim of a dissolution of the Russian
Federation, which Bugajski dismisses as an "imperial construct."
Even more alarming is Bugajski's argument that the goal should not be
self-determination for breakaway Russian territories, but the annexing of these lands to other
countries . "Some regions could join countries such as Finland, Ukraine, China and Japan, from
whom Moscow has forcefully appropriated territories in the past."
It is, needless to say, impossible to imagine anything like this happening without sparking a
series of conflicts that could mirror the Yugoslav Wars. Except in this version the US would
directly culpable in the ignition of the hostilities, and in range of 6,800 Serbian nuclear
warheads.
So who is Janusz Bugajski, and who is he speaking for?
The author bio on the Hill's piece identifies him as a senior fellow at the Center for
European Policy Analysis, a Washington, D.C. think-tank. But CEPA is no ordinary talk shop:
Instead of the usual foundations and well-heeled individuals, its financial backers seem to be mostly arms of the US
government, including the Department of State, the Department of Defense, the US Mission to NATO,
the US-government-sponsored National Endowment for Democracy, as well as as veritable who's who
of defense contractors, including Raytheon, Bell Helicopter, BAE Systems, Lockheed Martin and
Textron. Meanwhile, Bugajski chairs the South-Central Europe area studies program at the Foreign
Service Institute of the US Department of State.
To put it in perspective, it is akin to a Russian with deep ties to the Kremlin and
arms-makers arguing that the Kremlin needed to find ways to break up the United States and, if
possible, have these breakaway regions absorbed by Mexico and Canada. (A scenario which alas is
not as far-fetched as it might have been a few years ago; many thousands in California now openly
talk of a "Calexit," and many more in Mexico of a reconquista .)
The breakup of the USSR was planned also. It was followed by the formation of oligarchs, IMF
loans, and asset stripping. The economic advice and help Russia received from the west almost
accomplished the goal of breaking up Russia.
Russia is well aware that war with NATO cannot be avoided in the long run. One only has to
talk to Russians to see that they understand they are in a Cold war that they have to survive.
From their view they did not seek this confrontation. They truly thought they would be embraced
by the West after the fall and a new relationship benefiting both sides could have emerged. So
now Russia has to turn to China and prepare for a future war within a decade with NATO!
Disgusting projection of US imperialism. The elite never forgave Putin for throwing US
Rothschild elites out of Russia so they could no longer plunder Russias extensive wealth under
Yeltsin..
Let's see what happens when neocunts start that hot war, how Americans then feel about
Russia
We truly have dumbfucks in this country who love the thought of other as enemy other than
THEMSELVES. They never ONCE consider that in demonizing another countries leader, they are
demonizing a whole nation of peoples too. I wonder how Americans would feel if constant
demonizing and threats coming their way, with also say regime change in Mexico to provoke
them?
US neocons are psychopaths that care nothing for Americans. What they do to others in regime
change they will do to us. Oh, wait. They already have #9/11
Published in the Hill under the dispassionate title "Managing
Russia's dissolution," author Janusz Bugajski makes the case that the West should not
only seek to contain "Moscow's imperial ambitions" but to actively seek the dismemberment of
Russia as a whole.
If that is the intended goal then wouldn't it be accurate to state that America, or at least
its government, has imperial ambitions?
The rationale for dissolution should be logically framed: In order to survive, Russia
needs a federal democracy and a robust economy; with no democratization on the horizon and
economic conditions deteriorating, the federal structure will become increasingly
ungovernable...
Russia already tried "democracy" and the end result spelled disaster for their country.
Minorities were put on a pedestal while their economy was in shambles, all the while the
oligarchs, who were mostly Jewish, made a fortune plundering their natural resources. Sound
familiar?
Some regions could join countries such as Finland, Ukraine, China and Japan, from whom
Moscow has forcefully appropriated territories in the past."
The hypocrisy in this statement is breathless. Is America going to return Alaska to Russia?
Allow Hawaii to once again be an autonomous entity? Cease the illegal occupation of countries
throughout the Middle East? Remove their Neo-Nazi stooges from Ukraine?
It is, needless to say, impossible to imagine anything like this happening without
sparking a series of conflicts that could mirror the Yugoslav Wars. Except in this version
the US would directly culpable in the ignition of the hostilities, and in range of 6,800
Serbian nuclear warheads.
The idea seems to be to stoke regional tensions in order to provoke Russia and start a
conflict where the surrounding countries are put on the front lines while being provided with
logistics from the outside, meaning the US. Washington could then play up the plausible
deniability angle, even while technology from Lockheed Martin, Raytheon and other Western
contractors is primarily being used against the Russians.
Russia is not a direct threat to Western nations, only to their (((governments))), because
during any attempted implementation of a JWO (as in the EU for example), Russia will serve as a
reminder to all Western peoples - especially white people - as to what their nations once were:
independent, sovereign and self-determined. Russia prevented ISISrael from taking over Syria,
thwarted their Oded Yinon plan and threw out their oligarchs, so World Judaism is using America
as their bludgeon against the Russian Federation while preventing us from forming an
alliance.
74 years after Nazi Germany miscalculated Russian resolve some idiot dreams of carving
Russia up like it's a Thanksgiving turkey and some people actually take him seriously. Yeah,
good luck with that.
6 hours ago Bug-aj-ski - neocon shrill writing for and paid by the MIC it looks like
from the sponsors of this think tank
"Cultivating new sources of competitive advantage for U.S. strategy."
no list of sponsors tho I can see from the website - real MIC platform it sounds like from the
article
6 hours ago Yep, it's a Zbigniew Brzezinski memorial. The money seems to come mostly from the
MIC and the usual Cold War think tanks, like the Harry and Lynde Bradley Foundation. 5 hours ago
These necons need to remember that chess is the national passtime of Russians, while making
mudpies is the what they do in the West. These "think-tanks" are very childish. 3 hours ago 9
hours ago here's where some of it started/got turbocharged:
https://www.lrb.co.uk/v41/n02/seymour-m-hersh/the-vice-presidents-men
LA_Goldbug 10 hours ago The only way I can understand this twat is to think that he is just
earning his shekels. He knows what the Party Line is in DC requires and is writing accordingly. I
just checked a bit of his BS and this one is definitely written for the uninformed or deeply
indoctrinated Western sheep.
"Taking Stock of Ukraine's Achievements Amidst Russia's Aggression
Five years ago, the Ukrainian people staged a peaceful "revolution of dignity" against a
corrupt regime sponsored by the Kremlin. They stood firm even under gunfire and it was the
discredited President Viktor Yanukovych who eventually retreated and took refuge in Russia. With
Moscow engaging in renewed attacks against Ukraine in the Sea of Azov it is important to take
stock of Ukraine's achievements since those fateful days in Kyiv's Independence Square."
You need to be brain dead to think it was peaceful !!!!
The legendary John Bogle passed away yesterday in Bryn Mawr, Pennsylvania. He was 89. Bogle
was the founder of Vanguard Group. In announcing his death, Vanguard said that Bogle
"introduced the first index mutual fund for investors and, in the face of skeptics, stood
behind the concept until it gained widespread acceptance; and he drove down costs across the
mutual fund industry by ceaselessly campaigning in the interests of investors."
We'll always remember Bogle for the courage he demonstrated on April 23, 2013 when he
appeared
on the PBS program Frontline . Bogle dropped the bombshell that Wall Street has
attempted to hide for half a century: If you work for 50 years and receive the typical
long-term return of 7 percent on your 401(k) plan and your fees are 2 percent, almost
two-thirds of your account will go to Wall Street.
Bogle explained the math to Frontline's Martin Smith:
Bogle: What happens in the fund business is the magic of compound returns is overwhelmed by
the tyranny of compounding costs. It's a mathematical fact. There's no getting around it. The
fact that we don't look at it -- too bad for us.
Smith : What I have a hard time understanding is that 2 percent fee that I might pay to an
actively managed mutual fund is going to really have a great impact on my future retirement
savings.
Bogle: Well, you have to rely on somebody to get out a compound interest table and look at
the impact over an investment lifetime. Do you really want to invest in a system where you put
up 100 percent of the capital, you the mutual fund shareholder, you take 100 percent of the
risk and you get 30 percent of the return?
You can check the math yourself. Access a compounding calculator on
line. Input an account with a $100,000 balance and compound it at 7 percent for 50 years. That
gives you a balance of $3,278,041.36. Now change the calculation to a 5 percent return (reduced
by the 2 percent annual fee) for the same $100,000 over the same 50 years. That delivers a
return of $1,211,938.32. That's a difference of $2,066,103.04 – the same 63 percent
reduction in value that Smith's example showed.
If you don't know the amount of fees that you're paying on the mutual funds in your 401(k)
plan, 403(b) plan, IRA or other retirement vehicle, you may be putting your ability to retire
with adequate income and dignity at risk.
"... Mispricing risk is the new normal, apparently. The assumption is that the stock market is now in hand and will be fine -- unless something startles it. ..."
We will be getting more individual company financial results now that we are in the
reporting period again. These may help to sway the markets in some direction, or not.
Mispricing risk is the new normal, apparently. The assumption is that the stock market
is now in hand and will be fine -- unless something startles it.
Stocks and Precious Metals Charts -
Who Could See It
Coming?
- Dead Reckoning the Minsky Moment
"
In particular, over a protracted period of good times, capitalist economies tend to
move from a financial structure dominated by hedge finance units to a structure in
which there is large weight to units engaged in speculative and Ponzi finance."
Hyman Minsky,
The Financial Instability Hypothesis
"Twenty-five years ago, when most economists were extolling the virtues of financial
deregulation and innovation, a maverick named Hyman P. Minsky maintained a more
negative view of Wall Street; in fact, he noted that bankers, traders, and other
financiers periodically played the role of arsonists, setting the entire economy
ablaze. Wall Street encouraged businesses and individuals to take on too much risk, he
believed, generating ruinous boom-and-bust cycles. The only way to break this pattern
was for the government to step in and regulate the moneymen.
Many of Minsky's colleagues regarded his 'financial-instability hypothesis,' which he
first developed in the nineteen-sixties, as radical, if not crackpot. Today, with the
subprime crisis seemingly on the verge of metamorphosing into a recession, references
to it have become commonplace on financial web sites and in the reports of Wall Street
analysts. Minsky's hypothesis is well worth revisiting."
John Cassidy,
The Minsky Moment
, The New Yorker, 4 February 2008.
"The period of financial distress is a gradual decline after the peak of a speculative
bubble that precedes the final and massive panic and crash, driven by the insiders
having exited but the sucker outsiders hanging on hoping for a revival, but finally
giving up in the final collapse."
Charles Kindelberger,
Manias, Panics, and Crashes: A History of Financial Crises
"The sense of responsibility in the financial community for the community as a whole is
not small. It is nearly nil. Perhaps this is inherent. In a community where the
primary concern is making money, one of the necessary rules is to live and let live.
To speak out against madness may be to ruin those who have succumbed to it. So the
wise in Wall Street [and in the professional and credentialed class] are nearly always
silent."
John Kenneth Galbraith,
The Great Crash of 1929
"People who lost jobs -- and those are in the millions in 2008, 2009, and 2010 -- have
now gotten jobs, that's true, but the jobs they've gotten have lower wages, have less
security and fewer benefits than the ones they lost, which means they can't spend money
like we might have hoped they would if they had got the kinds of jobs they lost, but
they didn't...
The big tax cut last December, 2017, gave an awful lot of money to the richest
Americans and to big corporations. They had no incentive to plow that into their
businesses, because Americans can't buy any more than they already do. They're up to
their necks in debt and all the rest.
So what they did was to take the money they saved from taxes and speculate in the stock
market, driving up the shares and so forth. Naive people thought that was a sign of
economic health. It wasn't. It was money bidding up the price of stock until the
underlying economy was so far out of whack with the stock market that now everybody
realizes that and there's a rush to get out and boom, the thing goes down."
Bubbles most often resolve their imbalances irresponsibly and jarringly, with a correction
that is sharp and destructive. It is often triggered by some seemingly trivial event,
especially if its predatory mispricing of risk has been allowed to fester for an extended
period of time.. How can this be?
Credit cycles explain bubbles in modern finance, but the elite protect themselves and
their banks from the effects. Hence, only the middle and working class loses. And this has
been the case for many years now. Hence the growing unrest abroad, and the decisions by
the electorate at home that seem to puzzle and provoke the very comfortable 'credentialed'
class.
The reason for this is quite easy to understand. Those who benefit the most from the
bubble both actively and passively help sustain it. They are reluctant to surrender any
potion of their enormous advantage and personal gains, even if it might be better for them
in the long term.
They do not consider the damage that may be done to the underlying social fabric that
supports and protects their wealth. Contrary to all of the familiar assumptions, they are
not acting rationally or prudently, even for themselves. Their focus is short term and
short-sighted. They are drunk on their own success.
The interpreters and creators of the prevailing narrative are themselves beneficiaries of
the bubble economy, and will go to great lengths to misdirect the public discussion from
any root causes, and often from its very existence. They will distract the public with
inflammatory issues, economic fear, stage-managed spectacles, and manufactured
complexity. And finally, in the extremes of their shamelessness, they will seek to blame
the victims for their lack of sophistication and the government for its efforts to
restrain their predatory frauds.
This enables the cycle of boom and bust to repeat and worsen beyond all reasonable
expectations.
The lesson from history is that a system based on the ascendant greed of powerful insiders
is rarely rational and self-correcting, and is often spectacularly self-destructive. And
those with the most power, in their wonderful self-delusion, simply do not care until it
is too late. They are blinded by the moment, in their competition with each other, and
the insatiable nature of greed itself. 'Enough' is not in their reckoning.
To this end governments are fashioned, and people organize themselves from the damage that
can be done to society as a whole by a few. Unfortunately people forget, and it seems
that at least once every generation or so the madness slips loose its restraints, and this
sad lesson from history repeats.
And so once again the world must face its rendezvous with destiny.
The box scores for today's market action are shown in the graphs below.
Apparently rough weather is heading towards the east coast. The local grocery store was a
nuthouse even in the early afternoon. I am making some chicken soup for myself and Dolly.
Even if I could coax her out of her fuzzy blanket and pillows, Dolly would offer limited
assistance. She is clearly just in it for the chicken.
Declassified documents show security assurances against NATO expansion to Soviet leaders
from Baker, Bush, Genscher, Kohl, Gates, Mitterrand, Thatcher, Hurd, Major, and Woerner
U.S. Secretary of State James Baker's famous "not one inch eastward" assurance about NATO
expansion in his meeting with Soviet leader Mikhail Gorbachev on February 9, 1990, was part of
a cascade of assurances about Soviet security given by Western leaders to Gorbachev and other
Soviet officials throughout the process of German unification in 1990 and on into 1991 ,
according to declassified U.S., Soviet, German, British and French documents posted today by
the National Security Archive at George Washington University ( http://nsarchive.gwu.edu ).
The documents show that multiple national leaders were considering and rejecting Central and
Eastern European membership in NATO as of early 1990 and through 1991 , that discussions of
NATO in the context of German unification negotiations in 1990 were not at all narrowly limited
to the status of East German territory, and that subsequent Soviet and Russian complaints
about being misled about NATO expansion were founded in written contemporaneous memcons and
telcons at the highest levels.
The documents reinforce former CIA Director Robert Gates's criticism of "pressing ahead with
expansion of NATO eastward [in the 1990s], when Gorbachev and others were led to believe that
wouldn't happen. "
[1] The key phrase, buttressed by the documents, is "led to believe."
President George H.W. Bush had assured Gorbachev during the Malta summit in December 1989
that the U.S. would not take advantage ("I have not jumped up and down on the Berlin Wall") of
the revolutions in Eastern Europe to harm Soviet interests; but neither Bush nor Gorbachev at
that point (or for that matter, West German Chancellor Helmut Kohl) expected so soon the
collapse of East Germany or the speed of German unification.
[2]
The first concrete assurances by Western leaders on NATO began on January 31, 1990 , when
West German Foreign Minister Hans-Dietrich Genscher opened the bidding with a major public
speech at Tutzing, in Bavaria, on German unification. The U.S. Embassy in Bonn (see Document 1)
informed Washington that Genscher made clear "that the changes in Eastern Europe and the German
unification process must not lead to an 'impairment of Soviet security interests.' Therefore,
NATO should rule out an 'expansion of its territory towards the east , i.e. moving it closer to
the Soviet borders.'" The Bonn cable also noted Genscher's proposal to leave the East German
territory out of NATO military structures even in a unified Germany in NATO.
[3]
https://nsarchive.gwu.edu/briefing-book/russia-programs/2017-12-12/nato-expansion-what-gorbachev-heard-western-leaders-early
falconflight 13 hours ago It was a horrible betrayal of a promise that should have been greatly
enhanced by promoting free enterprise concepts, and personal freedoms propaganda (Not lies),
and even economic assistance where reasonable. A historical opportunity lost. Those powerful
Kremlinologists couldn't pivot, it was easier to continue to treat Russia as an existential
adversary and in certain circumstances, purposely attempt to humiliate them, such as in
Serbia.
It takes two to tango. The defense contractors can jaw jaw and spread around loads of
cash but without someone in power having the same views war doesn't happen. You don't buy
politicians they willingly sell you their services at top dollar if the cause is right.
Too
many people with big ego's and tiny dicks proving their manhood by sending in the military to
kill and maiming or piling on sanctions to slowly starve any country that stands in the way of
the one indispensable nation on the planet.
Politicians and their sanctions are like the fabled
neutron bomb. Very little physical damage but huge death and suffering.
Iraq is a perfect
example. Sanctions killed far more than than bombs and bullets.
DEDA CVETKO 13 hours ago
Is The Violent Dismemberment Of Russia Official US Policy?
Taking Stock of Ukraine's Achievements Amidst Russia's Aggression
Five years ago, the Ukrainian people staged a peaceful "revolution of dignity" against a
corrupt regime sponsored by the Kremlin. They stood firm even under gunfire and it was the
discredited President Viktor Yanukovych who eventually retreated and took refuge in Russia.
With Moscow engaging in renewed attacks against Ukraine in the Sea of Azov it is important to
take stock of Ukraine's achievements since those fateful days in Kyiv's Independence
Square."
Talk about Orwellian double speak. Only Russiagaters would eat that **** up in their stupidity
.
pparalegal 10 hours ago (Edited)
Oligarchs, corporations and want to be psychopathic rulers
East and West run the political/ think tank know-it-all class. All profit by it. Governments
start wars, not people.
I am still waiting for an explanation of how the mythical beast New Russia will own the USA
and what they will do with it after that. If we don't bomb the s**t out of some third country
because we can. I am much more concerned about the in house mad cows we have elected to boss the
American public and take the gold out of my teeth for the greater good..
Helg Saracen 10 hours
ago (Edited)
I'm just curious. How many real estate over the past 15 years has been bought by the
Chinese in New York, Chicago and California? How many brands, businesses were bought by the
Chinese from the Americans? How many were "borrowed" technology? And how many Russians bought
(rich Jews from Russia cannot be taken into account, they came to their relatives, well, they
bought a little of everything)? :( 30 years ago, the USSR was communist, and the US was
capitalist, now Russia has become capitalist, and the USA (I don't even know how to say) has
become an elite club for financial bandits manipulating sheep under the name "American Nation".
Mantis964 6 hours ago
and the USA (I don't even know how to say) has become an elite club for
financial bandits manipulating sheep under the name "American Nation".
"... In addition, Trump is a pretend President. He doesn't control his own government. Hell, a single judge anywhere in the hinterlands evidently has the power to veto pretty much whatever the Trumpster does. It's clear that the real power resides in the hands of the Ruling Class, most of whom are unelected and unaccountable. Judges. Bureaucrats. Regulators. The Deep State. They now run the show. ..."
Great article and right on target. In fact, we don't have a real democracy anymore. We have a
Potemkin Village democracy. Our national legislature is paralyzed and impotent. And honestly,
that's the way its membership likes it. Pretend to govern. Hold tight to the seats of
privilege and status.
In addition, Trump is a pretend President. He doesn't control his own government. Hell, a
single judge anywhere in the hinterlands evidently has the power to veto pretty much whatever
the Trumpster does. It's clear that the real power resides in the hands of the Ruling Class,
most of whom are unelected and unaccountable. Judges. Bureaucrats. Regulators. The Deep
State. They now run the show.
Meanwhile, the mainstream media plays the role of Orwell's Squealer the Pig from Animal
Farm. Propagandists. Purveyors of fake news and fake truth. This is not going to end well.
The only question is how and when the ending comes.
"... An excellent piece. I would add only that the so-called elites mentioned by Mr Bacevich are largely the products of the uppermost stratum of colleges and universities, at least in the USA, and that for a generation or more now, those institutions have indoctrinated rather than educated. ..."
"... As their more recent alumni move into government, media and cultural production, the primitiveness of their views and their inability to think -- to say nothing of their fundamental ignorance about our civilization other than that it is bad and evil -- begin to have real effect. ..."
An excellent piece. I would add only that the so-called elites mentioned by Mr
Bacevich are largely the products of the uppermost stratum of colleges and universities, at
least in the USA, and that for a generation or more now, those institutions have
indoctrinated rather than educated.
As their more recent alumni move into government, media and cultural production, the
primitiveness of their views and their inability to think -- to say nothing of their
fundamental ignorance about our civilization other than that it is bad and evil -- begin to
have real effect. The new dark age is no longer imminent. It is here, and it is them. I
see no way to rectify the damage. When minds are ruined young, they remain ruined.
Washington Post Forgets to Mention, Scott Walker Misled Fifth Graders About Taxes
By Dean Baker
The Washington Post had an article * about how Republicans and right-wingers have become
obsessed with trying to attack Alexandria Ocasio-Cortez, the newly elected representative
from Brooklyn. At one point it refers to former Wisconsin governor Scott Walker's attack on
Ocasio-Cortez's position advocating a high marginal tax rate on high income individuals.
"Former Wisconsin governor Scott Walker, a Republican who was defeated in November, on
Tuesday mocked Ocasio-Cortez for her tax proposal and suggested it was an elementary-school
understanding of the issue. 'Even 5th graders get it,' he tweeted."
While the piece noted part of Ocasio-Cortez's response, that rich people are the one's
with the money, it left out the more important part, Walker misled the fifth graders he
refers to in his tweet. In his tweet, Walker confuses a marginal tax rate with an average tax
rate
"Explaining tax rates before Reagan to 5th graders: 'Imagine if you did chores for your
grandma and she gave you $10. When you got home, your parents took $7 from you.' The students
said: 'That's not fair!' Even 5th graders get it."
Ocasio-Cortez correctly pointed out in her reply that the $10 the students earned for
doing chores for their grandma would not be taxed because the 70 percent tax rate she
proposes would only apply to incomes above $10 million.
"Explaining marginal taxes to a far-right former Governor:
"Imagine if you did chores for abuela & she gave you $10. When you got home, you got
to keep it, because it's only $10.
"Then we taxed the billionaire in town because he's making tons of money underpaying the
townspeople."
Ocasio-Cortez is right on this point and Walker is wrong. He either does not understand
how our income tax system works or is deliberately lying to advance his agenda. Either way,
the Post should have pointed out that Walker was wrong.
Many people are confused about the concept of a marginal tax rate (the higher tax rate
only appears to the income above a cutoff). Opponents of high marginal taxes on the rich try
to take advantage of this confusion in the way Scott Walker did with his class of fifth
graders. It is the media's responsibility to try to inform people about how the tax system
works and to expose politicians who misrepresent the issue.
That's funny in a sad sort of way. Dean has his hands full. There is no explaining the
stupidity of politicians, media, and ordinary people in the US these days.
100% tax, no economy, so no revenue.
0% tax, no revenue.
So, maximum revenue is somewhere between those.. and the 70% top rate is clearly above
that.. so we have to lower the top rate.
Let's unwrap the lies.
1) At 100% top rate, there is no economy.
WRONG! Ignores brackets, marginal rates, deductions, effective rates... Even at 90% top rate,
the rich were averaging 40% effective.
2) The goal of taxation is maximum revenue. NO!!! The tax code should be viewed as a tool
to keep the right amount of money, actively circulating in the economy. As such, is not only
about getting back out the money the government adds, but also about limiting how much the
rich take out.
3) Even if we assumed there is some taxation rate that hurts the economy, there was no
evidence presented to say we were above that point.
OF course, it is point #2 (limiting how much money the rich take from the economy) that the
Laffer Curve was created to destroy. And destroy it did, which is why we've been going into
debt at 3x the sustainable rate.
I would add that there is plenty of historical evidence ("90% destroys all incentives!"
"70% destroys all incentives!"..."39.5% destroys...") to conclude that the plutocrats believe
that all taxation is theft.
People on the left need to realize that high top rates are NOT to take money from the rich.
They will spend or invest in ways that lets them avoid taxes.
High top rates are needed to get the rich to spend and capital invest, to reverse the
structural imbalances.
That spending and investing creates demand, jobs, wages, lifting the poor into the middle
class.
The extra revenue comes from that growth in the middle class as the poor go from 0%
effective rate to 10-15% effective rate.
Agree - but it also changes the incentives for corporations and CEOs. By taxing away huge
windfalls for CEOs it allows corporations to set a max wage around 15-20M. This means instead
of the 700M to 1B salaries of big corps going to one guy, they pay their mid managers more
and their line staff more. It means they invest more in R&D. I agree with you - just an
supporting argument.
Does William Cohan's New York Times Tirade Against Low Interest Rates Make Any Sense?
By Dean Baker
It doesn't as far as I can tell. Cohan has been on a rant * for years about how high risk
corporate bonds are going to default in large numbers and then ... something. It's not clear
why most of us should care if some greedy investors get burned as a result of not properly
evaluating the risk of corporate bonds. No, there is not a plausible story of a chain of
defaults leading to a collapse of the financial system.
But even the basic proposition is largely incoherent. Cohan is upset that the Federal
Reserve has maintained relatively low, by historical standards,interest rates through the
recovery. He seems to want the Fed to raise interest rates. But then he tells readers:
"After the fifth straight quarterly rate increase, Mr. Trump, worried that the hikes might
slow growth or even tip the economy into recession, complained that Mr. Powell would 'turn me
into Hoover.' On January 3, the president of the Federal Reserve Bank of Dallas said the Fed
should assess the economic outlook before raising short-term interest rates again, a signal
that the Fed has hit pause on the rate hikes. Even Mr. Powell has signaled he may be turning
more cautious."
It's not clear whether Cohan is disagreeing with the assessment of the impact of higher
interest rates, not only by Donald Trump, but also the president of the Dallas Fed, Jerome
Powell, and dozens of other economists.
Higher interest rates will slow growth and keep people from getting jobs. The people who
would be excluded from jobs are disproportionately African American, Hispanic, and other
disadvantaged groups in the labor market. Higher unemployment will also reduce the bargaining
power of tens of millions of workers who are currently in a situation to secure real wage
increases for the first time since the recession in 2001.
If Cohan had some story of how bad things would happen to the economy if the Fed doesn't
raise rates then perhaps it would be worth the harm done by raising rates, but investors
losing money on corporate bonds doesn't fit the bill.
Look at financial fraud and smoke and mirrors in the current USA "casino capitalism" as
another example of the same. People do believe the insane valuations of tech firms like Apple,
Facebook, Google and Amazon despite dot-com bubble. A lot of people put hard earned money in
stock of those companies in wane hope to get out before the bubble pops.
"war is a racket" as the saying goes. it's usually less about actual capability than it is
keeping all the usual suspects latched firmly on the "military industrial" teat. it's
basically the world's largest welfare program disguised as "national defense" and - coupled
with financial fraud/smoke and mirrors - what props up the sad remnants of the US. unless
people believe the insane overvaluation of tech firms like facebook and amazon for another
generation.
it is also - like you and others have mentioned - an offensive system allowing for
first-strike capability and not feasible for many reasons (not the least of which is the
sheer amount of "space junk" floating around in orbit.) all it takes is one
russian/chinese/belgian/? missile getting through anyway...unless these idiots still agree
with bush sr's idea of "acceptable losses of entire cities".
Today I participated in a nice web-based program started by the Central Bank of Russia (it
will be posted soon). An economist is being interviewed by another, and then the one who has
been interviewed becomes in his/her turn the interviewer of yet a third one. My friend Shlomo
Weber, the head of the New School of Economics interviewed me, and then I interviewed
Professor Natalya Zubarevich, from the Lomonosov Moscow State University and a noted scholar
of Russian regional economics.
Just a couple of days ago Natalia gave a very well-received talk at the Gaidar Forum in
Moscow on (what one might call) "unhealthy convergence" of Russian regions. In fact, Natalia
shows that most recently regional per capita GDPs have started a mild convergence, but that
this is due first to low growth rate of most of them and the economy as a whole, and to the
redistribution mechanism (mostly of the oil rent) between the regions. A healthy convergence,
Natalia says, would be the one where economic activity, and especially small and medium size
private businesses, were much more equally distributed across some ninety subjects of the
Russian Federation. She also had very interesting insights into the excessive
"verticalization" of economic power and decision-making in Russia, and the economic growth of
Moscow (much faster than of any other part of Russia) driven by centralization of that power,
and concentration of large state-owned or state-influenced enterprises as well as bureaucracy
in Moscow.
What most attracted my attention during Natalia's presentation at the Gaidar Forum was her
description of the current period of low growth rates in Russia as zastoi, or stagnation.
Now, zastoi has a very special political meaning in Russian because it was a disparaging term
used in the Gorbachev era, and by Gorbachev himself, to define the Brezhnevite period of
declining growth rates, lack of development perspectives, unchanging bureaucracy, and general
demoralization and malaise.
But I asked Natalia the following question. Looking over the past 150 years of Russian
history (and I think it is hard to go further back), were not really the best periods for
ordinary people exactly the periods of zastoi: incomes rose by little for sure, but the state
repression was weak, there were no wars, and probably if you look at violent deaths per
capita per year, the lowest number of people died precisely during the periods of zastoi. So
perhaps that zastoi is not so bad.
Natalia said, "I know I lived through the Brezhnevite period. Many people were
demoralized; but I used it to study. I never read so many books and learned so much as then
-- you could do whatever you wanted because your actual job really did not matter much."
(Even art, as I saw in the Tretyakovska Gallery, even if some of these paintings were never
exhibited in the official museums, seems to have done well during the Brezhnevite zastoi. And
as the recent film, which I have not seen, but read the reviews, Leto, appears to indirectly
argue as well.)
The best growth periods, as Natalia said, and as is generally accepted by economic
historians were the 1950s up to about 1963-65, and then the period of the two first Putin's
terms. In both cases, the growth spurs came as a ratchet effect to the previous set of
disasters: in the Khrushchev period, to the apocalypse of the Second World War, in the Putin
period, as a reaction to the Great Depression under Yeltsin during the early transition.
So this then made us think a bit back into the past (say, going back to 1905) and put
forward the following hypothesis: that Russian longer-term economic growth is cyclical. The
cycle has three components. First a period of utter turbulence, disorder, war, and huge loss
of income (and in many cases of life as well), followed by a decade or so of efflorescence,
recovery and growth, and finally by the period of "calcification" of whatever (or whoever)
that worked in that second period -- thus producing the zastoi or stagnation.
I do not know if this is something specific to the Russian economic history. It made me
think of Naipaul's observation on successful and unsuccessful countries. The history of the
former consists of a number of challenges and setbacks indeed, but certain things are solved
forever, and then new challenges appear. Take the United States: the Indian challenge and
then the independence from Britain were not easy to overcome/acquire, but eventually, they
were and they never came back; then the Civil War and the Emancipation; then the Great
Society etc. But unsuccessful countries, according to Naipaul (and he had, I think, Argentina
in mind) always stay within the circular history. The same or similar events keep on
repeating themselves forever without any upward trend -- and no single challenge is forever
overcome. In each following cycle everything simply repeats itself.
The challenges for Russia today is, I think, to break this cycle.
Russia's PL-19 Nudol, a system U.S. military
intelligence assesses will be focused primarily on anti-satellite missions, was successfully
tested twice in 2018. The weapon, which was fired from a mobile launcher, was last tested on
Dec. 23 and marked the seventh overall test of the system, according to one of the people who
spoke on the condition of anonymity.
The Russian anti-satellite weapon is expected to target communication and imagery satellites
in low Earth orbit, according to the other person, who also spoke on condition of anonymity.
For reference, the International Space Station and the Hubble Space Telescope travel in low
Earth orbit.
While anti-satellite missiles are by no means new, the latest revelation comes less than a
year after Putin touted his nation's growing military arsenal.
"I want to tell all those who have fueled the arms race over the last 15 years, sought to
win unilateral advantages over Russia, introduced unlawful sanctions aimed to contain our
country's development: You have failed to contain Russia," Putin said during a national address
in March.
A recently unclassified report from the National Air and Space Intelligence Center, or
NASIC, explained how the U.S. advantage above the Earth's atmosphere is eroding to "an emergent
China and a resurgent Russia."
The NASIC report said there number of foreign intelligence and imaging satellites "has
tripled" to 300 in orbit in the last two decades. The U.S. itself has 353 of its own space
assets in orbit for those purposes. In response, military superpowers have poured funding into
researching and developing anti-satellite weapons.
Missiles are the most high-profile, physical manifestation of anti-satellite weapons. Frank
Slazer, the vice president of space systems at the Aerospace Industries Association, told CNBC
about how those missiles may be physically effective, but are likely not the "first line of
approach on this."
"You'd much rather jam the satellite, blind it [with a laser], or take over its control
systems with a cyberattack," Slazer said. "Kinetic impacts could cause problems for other
nations, besides the one you are attacking, and possibly for your own system's for many years
afterwards."
Both Slazer and the NASIC report pointed to the example of China's anti-satellite test in
2007. China fired an anti-satellite missile at one of its own, discarded weather satellites.
The test was successful, but the satellite shattered into thousands of pieces, which continue
to zip around in an orbital cloud of deadly debris.
"A huge percentage of the debris in low earth orbit is still attributable to that one test,"
Slazer said.
As far as the U.S. military's ability to defend against anti-satellite weapons, the assets
and capabilities in orbit "are the same as they have been for awhile," Tommy Sanford, director
of the Commercial Spaceflight Federation, told CNBC.
Sanford contends that there has not been much in the way of progress when it comes to
defending U.S. space-based assets. Sanford gave the example of using networks of smaller and
cheaper satellites, like cubesats and nanosats, to offer "effective platforms to augment and
support missions carried out by the DoD's larger exquisite satellites."
"The idea behind a distributed architecture for space support is – instead of having
one exquisite target – you'd have a system which could presumably survive some loss of
its elements and still be able to provide function," Slazer said.
First, a quick précis of what is under discussion. The Obama stimulus package was
less than half as big as it needed to be, meaning unemployment was at 10 percent in November
2010, sending Democrats to a massive defeat in the midterms. Obama's foreclosure policy was a
monumental catastrophe which crushed the wealth of middle-class homeowners -- particularly
African-American ones -- to save the banks from their own fraudulent schemes. His corporate
crime policy amounted to a near-halt of prosecutions of top white-collar crime, again largely
to protect the banks.
Obama's health-care reform, while a step forward in some ways, was poorly designed and
failed to stop skyrocketing cost growth. His climate policy was timid and inexcusably slow --
while at the same time he enabled enormous growth of U.S. oil and gas drilling. He also made
excuses for torture and largely embraced the Bush security apparatus -- even extending it in
places, like dragnet surveillance and assassinating American citizens.
Obama apologists typically deal with these problems in one of three ways. One strategy is to
ignore them in favor of his positive record, which to be fair is pretty substantial. Jonathan
Chait points to the stimulus, some moderate corporate regulation (Dodd Frank), and modest tax
hikes on the rich as evidence he is basically just like FDR. Another strategy is slanted
arithmetic: Michael Grunwald says the stimulus was as big as the New Deal in inflation-adjusted
dollars, which is true but leaves out overall economic size, which is far more telling since
the point of that spending was to restore full employment at the time it was passed. The
Recovery Act spending was 5.7 percent of 2008 output, while the New Deal was 40 percent of 1929
output. A final strategy is just to point at Obama's popularity among Democrats (95 percent
approval) as speaking for itself, as former administration staffer Jon Favreau does here.
I would guess that of the three, this final strategy will be the one that actually prevents
any very searching debate over Obama's failures. Bringing that topic up online always creates
an instant snarling fight between critics and the vastly more numerous legions of die-hard
Obama partisans. For a candidate to do it would distract from their upcoming campaign and
likely polarize Democratic loyalists against whatever a critic was saying, regardless of
content. Even Bernie Sanders has become hesitant to obliquely criticize the Democratic Party as
such, because of the instant backlash from Obama fans.
However, that's not the end of the story. The very terrain of political and policy debate
among Democrats in 2019 is a tacit admission that the Obama presidency was a wrong turn to a
great degree. Instead of building on the clearly lousy ObamaCare exchange model, most
presidential candidates so far have endorsed Medicare-for-all, or at least the idea of
expanding Medicare and Medicaid. Elizabeth Warren wants to give workers 40 percent of corporate
board seats -- which is hugely more radical than anything Obama ever did or proposed. Kirsten
Gillibrand supports universal paid leave and postal banking, instead of Medicare and Social
Security cuts to reduce the deficit.
Cory Booker is talking about a quasi-social wealth fund for children, instead of tax cuts
for companies who hire domestically. Kamala Harris is proposing big income boosts for the
working and middle class. Even Joe Biden is considering free college.
The turn away from Obama-style policy can also be seen in what gets attention now. The new
hotness in tax policy is Alexandria Ocasio-Cortez's 70 percent top marginal tax rate -- over 30
percentage points above its highest rate during the Obama years. Instead of a disastrous "all
of the above" energy policy, Democrats are debating how to slash domestic oil and gas
production with a Green New Deal.
Politically, most Democrats have quietly abandoned Obama's asinine notion that America is
crying out for a return to bipartisanship -- in favor of the clearly correct view that
defeating Republicans is what matters. Even the Democratic rank and file have ditched their
traditional attachment to compromise, apparently radicalized by the ongoing disaster of the
Trump presidency.
So while nobody is likely to want to hash out Obama's indefensible handouts to bankers or
drill-baby-drill energy policy over the next two years, the political debate will still proceed
as if everyone agrees they were a bad idea. Because they were.
Three Bernie Sanders Bills to Arrest the Highway Robbery in the Prescription Drug
Market
Allowing foreign imports, authorizing Medicare bargaining, or setting prices at what other
nations pay -- all good options
By DEAN BAKER
The prescription drug market in the United States is an incredible mess. From an economic
standpoint, everything is wrong. Drugs that would sell for a few hundred dollars in a free
market often sell for tens or even hundreds of thousands of dollars because we give their
manufacturers patent monopolies. This leads to the sort of distortions and inefficiency that
would be expected from tariffs as high as many thousands percent.
From a heath perspective the situation is no better. The huge markups give drug companies
enormous incentive to misrepresent the safety and effectiveness of their drugs and to push
them for uses where they may not be appropriate. This is a big part of the story of the
opioid epidemic.
Cumulatively, it is a huge deal in both economics and health. We spent more than $430
billion (2.2 percent of GDP) on prescription drugs last year. These drugs likely would have
cost less than $80 billion in a free market. The difference of $350 billion is almost five
times the annual federal budget for food stamps. This is real money.
This is the backdrop for three bills proposed last week by Senator Bernie Sanders, along
with Representatives Elijah Cummings and Ro Khanna, to address the high and rapidly rising
cost of prescription drugs. The three measures provide alternative paths for reducing drug
prices.
The first one, "The Prescription Drug Price Relief Act," would end the patent monopoly for
any drug that sold for a price exceeding the median price in five other major countries:
Canada, the United Kingdom, France, Germany, and Japan. This would allow large savings since
drug prices in these countries are roughly half as much as in the United States. Drug
companies would have a choice of either lowering their prices or losing their patent
monopoly.
In the latter case, the competition is likely to push the price well below the levels in
the five countries. While these nations do regulate drug prices, patent monopolies still let
the companies charge a price that is far higher than the price that would exist in a
competitive market with generic competition.
The second bill is "The Medicare Drug Price Negotiation Act." This bill would allow
Medicare to negotiate collectively for the drugs purchased through Medicare prescription drug
insurance. Since this program spends roughly $100 billion annually on drugs, it should have
serious bargaining power.
Anyone designing a rational drug insurance program would have required negotiation when
the program was created, but rational design was not necessarily the top priority at the time
this program was enacted.
Anyone designing a rational drug insurance program would have required negotiation when
the program was created, but rational design was not necessarily the top priority at the time
this program was enacted. Representative Billy Tauzin, who headed the Energy and Commerce
Committee, which structured the Medicare prescription drug legislation, resigned immediately
after the bill was signed into law to become head of the pharmaceutical industry's trade
association.
The third bill, "The Affordable and Safe Prescription Drug Importation Act," is also an
effort to take advantage of the fact that drugs are so much cheaper in other countries than
in the United States. This bill would allow people to freely import drugs from other wealthy
countries that have safety standards that are comparable to those in the United States.
This bill both highlights the sharp differences in prices between the United States and
other countries and calls out one of the big lies used to justify these differences. Allies
of the drug industry often claim that we cannot count on getting safe drugs from other
countries, implying that countries like Canada and Germany do not protect their populations
from unsafe drugs.
This is, of course, absurd. The standards in these countries are every bit as high as in
the United States. And, if we think the quality of imported drugs is a problem, we all should
already be very worried because many of the drugs and ingredients in drugs sold in the United
States are already imported, largely from China. So the idea that we can't be assured of the
safety of imported drugs is simply an industry talking point, not a real concern.
Which of these paths for reducing drug costs is best? Importation is probably the most
far-reaching, since it should quickly bring our prices down to the level of other wealthy
countries. As a practical matter, however, progressives should back anything that moves the
debate forward.
We really need to turn the industry on its head, paying for research upfront and then
having drugs sold in a free market, like paper plates and shovels. It is absurd to pay for
research that has already been done, at the point when people are suffering from serious
conditions jeopardizing their health or their life.
No one thinks it makes sense to pay firefighters based on the value of their work when
they come to our burning house with our families inside, yet this is essentially how we pay
for drug research under the patent monopoly system. In fact, the story is even worse with
drugs, since typically we have a third party payer (either an insurance company or the
government) who we are trying to get pick up most of the tab.
These bills would not fully solve the problem, but each would be a big step in the right
direction. Sanders, Cummings, and Khanna have done a great service in pushing them
forward.
"No one thinks it makes sense to pay firefighters based on the value of their work ..."
We value fire fighters as worthless, by not paying most fire fighters in the US.
After all, requiring the people saving your life to be paid kills jobs, so we end up with
unpaid life savvers.
We should appply the same principle to people providing life saving food, the people
building the roads needed to deliver life savings, the people making the vehicles used by
those providing life saving services.
In fact, no one should be paid to work! Thats free lunch economics!
Sarcastic, yes.
Dean Baker meantioned nothing about costs, which are always labor costs.
Look, Keynes argued that when there were unemployed workers, and capital is scarce,
government should tax and spend to pay workers to build capital.
For drugs, paying unemployed researchers to build capital, eg, life saving drugs, then
taxing the drugs produced to repay the cost of developing the drugs, with so many new drugs
developed, the private capital in drug factories, etc will produce so many drugs that drug
prices fall to total labor costs per unit, plus the drug tax.
We know there are unemployed drugresearchers because NIH always runs out of money to pay
all thre recent collage grads seeking grants to fund their hoped for job as a researcher.
The stock market has staged a rebound in January, but Morgan Stanley sees a number of
bearish indicators. Indeed, they estimate that odds of the U.S. economy slipping into a
recession are now the highest since the financial crisis of 2008, and they project that the
S&P 500 Index (SPX) ultimately will settle back to a value of 2,400 in 2019, revisiting the
recent lows seen in December and more than 18% below the record high set in September 2018. "We
expect upcoming negative data will prove 2600-2650 [on the S&P 500] to be a good sale
before a proper retest of the December lows," Morgan Stanley says in the latest Weekly Warm-Up
report from their U.S. equity strategy team headed by Michael Wilson.
Robert Samuelson Ignores Role of Hedge Fund Magnate Eddie Lampert in Sears Decline
By Eileen Appelbaum
In today's column, * Robert Samuelson attributes Sears bankruptcy and possible
liquidation- the final chapter in a saga that has already cost 200,000 workers their jobs
– to the department store chain's inability to adapt to competition with big box stores
and the Internet. Apparently, he has never heard of Eddie Lampert and his ESL hedge fund,
which took over Sears and Kmart in 2006 and ran the company, now known as Sears Holdings as
an ATM for himself and his investors. Lampert may not have known anything about retailing,
but as Sears' CEO he had no qualms about monetizing it assets for his own and his wealthy
investors' benefit – including Treasury Secretary Steve Mnuchin who was an investor in
his hedge fund and served on the Sears board for 12 years as the retailer spiraled
downward.
In its most egregious act of financial engineering, Lampert's hedge fund setup a real
estate company, Seritage Growth Properties, with Lampert as Chairman of Seritage's board. In
2015, Lampert as CEO of Sears sold 266 Sears and Kmart stores located on prime real estate to
Seritage, where he was Chairman of the Board. Seritage shuttered stores and developed the
real estate into high-priced new developments - offices for the burgeoning high tech sector
in Santa Monica, a luxury shopping center in Aventura, Florida. Sears creditors are in court
over this self-dealing by Lampert, claiming he cheated them out of $2.6 billion.
If Samuelson took the time to read his own newspaper, he could have learned about the
business model of investment funds – private equity and hedge funds – that take
over Main Street companies from Peter Whoriskey's investigative reporting on the bankruptcy
of Marsh, a major mid-West grocery chain. Amazon, Walmart and the Internet certainly pose a
challenge, but the inability of companies to respond can be laid squarely at the feet of
investment funds that load the companies they own with unsustainable levels of debt and that
take resources out of the company by selling off its real estate.
As I show ** in a comparison of the largest supermarket chain in America, the very
successful publicly traded Kroger's, and the second largest, floundering private equity owned
Albertsons, large, iconic retail companies can respond to competitive challenges when they
control their own resources, own their own real estate, and keep their debt levels
manageable.
Samuelson attributes the demise of Sears to changes in capitalism and competition without,
apparently, having ever heard of hedge funds and private equity funds that take over the
management of companies and run them in the interests of investors in their funds, with
little regard for the companies' ability to compete or its workers.
Perhaps the Washington Post should set as a minimum requirement for its columnists that
they actually read the newspaper.
Montgomery-Ward, the original mail-
order 'dry goods' store (1872-2001)
Wikipedia: Montgomery Ward was founded by Aaron Montgomery Ward in 1872. Ward had
conceived of the idea of a dry goods mail-order business in Chicago, Illinois, after several
years of working as a traveling salesman among rural customers. He observed that rural
customers often wanted "city" goods, but their only access to them was through rural
retailers who had little competition and did not offer any guarantee of quality. Ward also
believed that by eliminating intermediaries, he could cut costs and make a wide variety of
goods available to rural customers, who could purchase goods by mail and pick them up at the
nearest train station. ...
Bankruptcy in 2000; Full liquidation in 2001
namesake retailer launched in 2004
after purchase of trademarks
Donald Trump may or not be on the Russian government's payroll.
He may or may not have been blackmailed by Vladimir Putin.
He may or may not have actively colluded with Russia during the 2016 campaign.
But there's one thing we know for sure: Donald Trump has been compromised by Russia.
Every day that he remains president will mean that he is putting Russia's interests ahead
of America's.
The latest revelations that emerged this weekend in the Trump/Russia investigation only
bolstered this notion. First, via The New York Times, we found out that the FBI opened a
counterintelligence investigation after he fired FBI Director Jim Comey to determine if he
was working on behalf of the Russian government. Then, the next day, The Washington Post
revealed that Trump has gone to "extraordinary lengths" to keep the substance of his talks
with Russia's president, Vladimir Putin, hidden from his own aides, "including on at least
one occasion taking possession of the notes of his own interpreter and instructing the
linguist not to discuss what had transpired with other administration officials." ...
(Note: This is from Globe opinion write Michael A. Cohen
not Donald Trump's former lawyer Michael D. Cohen.)
"... is a retired civil servant living in London and consequently old enough to remember what life was like before political correctness. He runs the Living In A Madhouse and England Calling blogs. ..."
So what is really happening -- in the U.K. and the U.S.?
The Deep State is often portrayed as a conspiracy. In fact, it is better thought of as a
blind sociological event. There is no group of conscious conspirators, simply people being
groomed to have the same opinions or at least saying they do.
Link Bookmark What has happened in the UK (and the rest for the West to varying degrees) is
the
success of the long
march through the institutions . That is what ultimately has given the UK an elite (
politicians ,
mediafolk , teachers etc) who are overwhelmingly Politically Correct internationalists. And
it's those people who are at the forefront of the attempts to sabotage Brexit.
How did it come about? A German student leader of the 1960s Rudi Dutschke,
echoing the Italian Marxist Antonio Gramsci , put forward
the idea whereby societies could be subverted
from within by those of an internationalist bent who would patiently work to gain
positions of power and influence. Eventually there would be enough of such people to change the
policies of Western societies from national to internationalist ones. That point was reached in
the UK at least 50 years ago and the Politically Correct stranglehold on our society is now
complete.
The capture of Western societies by internationalists has allowed them to permit and even
overtly encourage mass immigration of people from different cultures, denigrate their own
societies, traduce the West and its native populations generally and introduce gradually the
pernicious Totalitarian creed of Cultural Marxism which has "anti-racism" (in reality
anti-white racism) at its heart. The last brick in the Politically Correct building is the
increasingly draconian treatment of anyone who refuses to toe the line -- increasingly
including the use of the criminal law and imprisonment.
That is why Western politics until recently has been so ideologically monotone. Brexit was a
revolt against that mentality.
Most MPs overtly or tacitly supported the idea of the referendum and its result by promising
it in election manifestos, in Parliament and through their passage by large majorities of the
legislation needed to both set up the referendum and make provision for its implementation.
But by doing so, MPs forfeited their right to do anything other honour the result of the
referendum. That applies just as much to Remainer MPs as Leaver MPs.
Sadly, the behaviour of the most committed Remainers with power and influence (including
many MPs and peers in the House of Lords) has shattered utterly the idea that the UK is a fully
functioning democracy. Rather, it is an elective oligarchy whereby the electorate are offered
an opportunity every few years to choose between competing parts of the elite -- an elite in
the UK whose general political ideas are largely held in common and go against the interests
and wishes of most of the electorate.
None of this should be a surprise. The sad truth: the central political question in all
Western societies is -- how far will the masses be able to control the naturally-abusive
tendencies of the elite?
Robert Henderson [ Email him ]is a retired civil servant living in
London and consequently old enough to remember what life was like before political correctness.
He runs the Living In A
Madhouse and England Calling
blogs.
"Instead, the Chinese government has been piling on loans to businesses and state-owned
enterprises, pushing the SOEs to spend more, and so on. Basically it has kept investment
going despite low returns. Yet this process has to have some limits – and when it hits
the (great) wall, it's hard to see how consumption can rise fast enough to take up the
slack."
Proof Krugman has been corrupted by free lunch economics!
If interest on savings is very low, returns on capital investment should be very low.
The lower limit on returns to capital is the real interest rate on savings. In China,
inflation makes interest on savings negative. So, returns on investment can be negative, just
less negative than interest on savings.
The only way investment can be funded is by workers spending less on consumption than they
earn working or from other sourcees. If workers are investing a lot, they have individually
decided they should not consume more, because there is no shortage of goods andd services to
buy in China.
This is a very different situation than in the US where 90% of the population has too
little money to buy what they want or need, and thus they borrow money to pay for
consumption. Wages are too low in the US to fund investment so a great deal of scarcity
exists in the US of several consumption goods which result in rapid inflation in the prices
of those goods, and thus very high returns to capotal even as interest on savings are kept
artificially low in order to allow for high defaults on bad consumer debt, consumer debt
needed to pay the high inflated price of selected scarce consumption goods due to under
investment.
In China, workers earn so much more than they are accustomed to consume they have
investing in housing so housing costs are very low, and housing exists in excess.
In the US, workers earn less than they need to consume, so hiusing is extremely scarce and
consumption prices have inflated at high rates.
Now, while China uses Keynes and sees excess housing as a good thing, the US uses free
lunch economics and sees scarce housing as a good thing because housing inflation "creates
wealth".
China has embraced private capital in many ways much more than the US since the 80s, with
returns to private capital falling to very low levels, while in the US, building capital is
thwarted to generate capital scarcity and high rates of capital price inflation. To "create
wealth" from capital scarcity.
"[W]hile in the US, building capital is thwarted to generate capital scarcity and high rates
of capital price inflation. To 'create wealth' from capital scarcity."
Alternatively, in the U.S. there is a combination of excess of capital and insufficient
investment alternatives (due to growing income and wealth inequality and excessive market
power, anti-competitive business practices and insufficient anti-trust enforcement) that
causes investors to chase unproductive returns and unrealistically bid-up asset prices.
Name the excess capital from paying too much to workers to build capital assets.
The only thing that I can think of that might be true is too much paying of workers to
create TV shows, movies, and computer games.
Except, in this media sector, big companies buying competitors along with buying back
shares of their stocks with profits is spawning ever more competitors. As much as Comcast
tries to eliminate competition, investors keep paying workers to build new streaming services
with content only the new companies have by paying more workers to produce TV and movies.
But this is standard economic theory: technology cuts costs, which cuts prices which
increases demand so the workers eliminated by technology get retasked producing more, but the
more is so much more, more workers are needed. The equilibrium is reached when long term
revenue just barely pays for all the workers long term.
You might object to everyone consuming more media content because you are like Miltion
Friedman a classic Jew stereotype puritian who believes the mmasses must work more and suffer
by consuming less, so you can be an elite preaching values you will not embrace for
yourself.
Ie, you did not state: "I am paid too much which is a sign of too many workers being paid
too much due to too much investment driving up wages".
Please send me $1000 a month for the rest of my life as debt. Then collect your money,
debt, after I'm dead. After all, your debt does not need to be repaid by my working for
income and not consuming using all or more of my income!
Or you believe the Venezuela economic policy is fantastic and should be adopted in the US,
because Trump and the GOP were not creating structural long term borrowing and spending fast
enough 2017-2018?
Yes the management of the domestic market development might fail to take adequate
measures
Indeed the macro managers may lose their way
But the techniques that got them this far
Are still solid
And with augmentation
Can continue high speed expansion of the production system and urbanization
Price regulation could and should be
CO ordinated with a mark up market
Land lots market value zeroed out
thru a 100 % George tax
And corporate debt placed in special investment vehicles and managed uniformly
Thru a universal default insurance system.
Run by a state default insurance agency
Imagine conservatives electing representatives to Congress who hiked the "gas tax" and then
offered lots more money to States that had elected legislatures that hiked their gas tax to
generate the matching funds to get Federal gas tax funds that were spent on transportation.
"Gas taxes" are not limited to fuel, but include fees on tires, which cost based on wear
on roads, ie, a big rig uses big costly ties that last maybe 25,000 miles so the more use of
the road the more tax paid. But increasingly cars have high cost performance tires. Then
there are use taxes based on the size plus load of the vehicle. A very high tax rate on
fossil fuels will eliminate their use requiring moving to a fee based on miles driven and
capacity of the vehicle, maybe by open road tolling.
But as transportation is a living cost, living costs need to be increased in Trumpland to
create the coastal economies Trump lives in and builds his resorts in. Economies with high
living costs to pay the high wages of all the workers who moved from low living cost
conservative places to high living cost liberal places.
So, all capital assets must be consumed in an average of 3 years? A ten year old house would
need to be burned down. Steeet torn up after five years returned to farm or forest land?
Average useful life of assets is probably 30 years, but at that point they still have a
minimum of 10% of cost in residual value, and paying workers to invest in existing capital at
3-5% annually will maintaiin the asset value of over half of assets for centuries. Spending
another 2% will replace all of the other half. So, spending 10% of GDP will increase capital
assets by 3% easy every year, which 70/3 means doubling total assets every 25 years.
Your 40% would mean doubling assets every 70/35% or two years.
Assuming assets keep increasing GDP becyond the addition to GDP from building productive
assets.
Note, cars are productive assets, ie, a car gets you to work. A house with utilities frees
up probably 5 hours a day to be used working for others. Try being homeless or living in a
tar paper shack with nothing but a pot belly stove and water from a pond half a mile away.
The capital asset like a house includes roads, running water and sewage, and fuel to cook and
heat with zero labor, which are paid for for with $100 in labor for a family unit up to 4,
more or less. Paying $100 a week frees up at least 25 hours of unpaid household labor,
collecting/cutting wood for energy, walking to the pond to fetch water, walking along a trail
to work and shop.
Yes, the management of the domestic market development might fail to take adequate
measures
Indeed the macro managers may lose their way
But, the techniques that got them this far
Are still solid
And with augmentation
Can continue high-speed expansion of the production system and urbanization
Price regulation could and should be
Coordinated with a markup market ...
[ Important criticism and agreed. Prominent Western economists have usually been unwilling
to look to the structure of the Chinese economy and specific techniques that have been used
to spur development. ]
Brad DeLong has been wrong about China since 1980, Jeffrey Sachs and Stanley Fischer since
1990, Paul Krugman since 2011... The problem is that they simply never look at the Chinese
institutions that have driven 9.5% yearly growth in GDP and 8.5% yearly growth in per capita
GDP these 42 years. Suddenly, then, Krugman decides that what has driven Chinese growth is of
no consequence because China has (gasp) too few people.
Imagine a China of too few people, and I could care less about the age ratios, which I
have and which are of no concern relative to productivity growth which is just what China is
focusing on.
"On one side, China's problems are real. On the other, the Chinese government –
hindered neither by rigid ideology nor by anything resembling a democratic political process
– has repeatedly shown its ability and willingness to do whatever it takes to prop up
its economy. It's really anyone's guess whether this time will be different, or whether
Xi-who-must-be-obeyed can pull out another recovery."
By God, Jeeves, I think he's got it.
Tonight's music recommendation is the Jefferson Airplane.
"... The first, directed outward, finds its expression in the global War on Terror and in the Bush Doctrine that the United States
has the right to launch preemptive wars. This amounts to the United States seeing as illegitimate the attempt by any state to resist
its domination. ..."
"... The second dynamic, directed inward, involves the subjection of the mass of the populace to economic "rationalization", with
continual "downsizing" and "outsourcing" of jobs abroad and dismantling of what remains of the welfare state created by President Franklin
D. Roosevelt's New Deal and President Lyndon B. Johnson's Great Society. Neoliberalism is an integral component of inverted totalitarianism.
The state of insecurity in which this places the public serves the useful function of making people feel helpless, therefore making
it less likely they will become politically active and thus helping maintain the first dynamic. ..."
"... By using managerial methods and developing management of elections, the democracy of the United States has become sanitized
of political participation, therefore managed democracy is "a political form in which governments are legitimated by elections that
they have learned to control". ..."
"... Under managed democracy, the electorate is prevented from having a significant impact on policies adopted by the state because
of the opinion construction and manipulation carried out by means of technology, social science, contracts and corporate subsidies.
..."
According to Wolin, domestic and foreign affairs goals are each important and on parallel tracks,
as summarized at Wikipedia,the United
States has two main totalizing dynamics:
The first, directed outward, finds its expression in the global War on Terror and in the Bush Doctrine that the United
States has the right to launch preemptive wars. This amounts to the United States seeing as illegitimate the attempt by any
state to resist its domination.
The second dynamic, directed inward, involves the subjection of the mass of the populace to economic "rationalization",
with continual "downsizing" and "outsourcing" of jobs abroad and dismantling of what remains of the welfare state created by
President Franklin D. Roosevelt's New Deal and President Lyndon B. Johnson's Great Society. Neoliberalism is an integral component
of inverted totalitarianism. The state of insecurity in which this places the public serves the useful function of making people
feel helpless, therefore making it less likely they will become politically active and thus helping maintain the first dynamic.
<> <> <> <> <> <> <> <> <> <>
Wolin's Inverted Totalitarianism provides the ground work for my suspicions regarding faux populists Obama and Trump:
By using managerial methods and developing management of elections, the democracy of the United States has become sanitized
of political participation, therefore managed democracy is "a political form in which governments are legitimated by elections
that they have learned to control".
Under managed democracy, the electorate is prevented from having a significant impact on policies adopted by the state
because of the opinion construction and manipulation carried out by means of technology, social science, contracts and corporate
subsidies.
The Wall Street Journal
continues to counter the liberal
mainstream media's Trump Derangement Syndrome , dropping uncomfortable truth-bombs and
refusing to back off its intense pressure to get to the truth and hold those responsible,
accountable (in a forum that is hard for the establishment to shrug off as 'Alt-Right' or
'Nazi' or be 'punished' by search- and social-media-giants) .
And
once again Kimberley Strassel - who by now has become the focus of social media attacks for
her truth-seeking reporting - does it again. Confirming what
we detailed yesterday - that The Justice Department was fully aware that the notorious
Steele Dossier was connected to Hillary Clinton and might be biased, a crucial detail which was
omitted just weeks later from the Foreign Intelligence Surveillance Act (FISA) warrant used to
spy on the Trump campaign - Strassel makes the aggressive and correct statement that the
Justice Department official's testimony raises new doubts about the bureau's honesty.
Via The
Wall Street Journal,
Everybody knew.
Everybody of consequence at the Federal Bureau of Investigation and Justice Department
understood fully in the middle of 2016 - as the FBI embarked on its counterintelligence probe
of Donald Trump - that it was doing so based on disinformation provided by Hillary Clinton's
campaign.
That's the big revelation from the transcript of the testimony Justice Department official
Bruce Ohr gave Congress in August. The transcripts haven't been released, but parts were
confirmed for me by congressional sources. Mr. Ohr testified that he sat down with dossier
author Christopher Steele on July 30, 2016, and received salacious information the opposition
researcher had compiled on Mr. Trump. Mr. Ohr immediately took that to the FBI's then-Deputy
Director Andy McCabe and lawyer Lisa Page. In August he took it to Peter Strzok, the bureau's
lead investigator. In the same month, Mr. Ohr believes, he briefed senior personnel in the
Justice Department's criminal division: Deputy Assistant Attorney General Bruce Swartz, lawyer
Zainab Ahmad and fraud unit head Andrew Weissman. The last two now work for special counsel
Robert Mueller.
More important, Mr. Ohr told this team the information came from the Clinton camp and warned
that it was likely biased, certainly unproven.
"When I provided [the Steele information] to the FBI, I tried to be clear that this is
source information," he testified.
"I don't know how reliable it is. You're going to have to check it out and be aware. These
guys were hired by somebody relating to -- who's related to the Clinton campaign, and be
aware."
He said he told them that Mr. Steele was "desperate that Donald Trump not get elected," and
that his own wife, Nellie Ohr, worked for Fusion GPS, which compiled the dossier. He confirmed
sounding all these warnings before the FBI filed its October application for a surveillance
warrant against Carter Page. We broke some of this in August, though the transcript provides
new detail.
The FBI and Justice Department have gone to extraordinary lengths to muddy these details,
with cover from Democrats and friendly journalists.
A January 2017 memo from Adam Schiff, the House Intelligence Committee's top Democrat,
flatly (and incorrectly) insisted "the FBI's closely-held investigative team only received
Steele's reporting in mid-September."
A May 2018 New York Times report repeated that claim, s aying Mr. Steele's reports didn't
reach the "Crossfire Hurricane team," which ran the counterintelligence investigation, until
"mid-September."
This line was essential for upholding the claim that the dossier played no role in the
unprecedented July 31, 2016, decision to investigate a presidential campaign. Former officials
have insisted they rushed to take this dramatic step on the basis of a conversation involving a
low-level campaign aide, George Papadopoulos, which took place in May, before the dossier
officially came into the picture. And maybe that is the case. Yet now Mr. Ohr has testified
that top personnel had dossier details around the time they opened the probe.
The Ohr testimony is also further evidence that the FBI misled the Foreign Intelligence
Surveillance Court in its Page warrant application. We already knew the bureau failed to inform
the court it knew the dossier had come from a rival campaign. But the FISA application
additionally claimed the FBI was "unaware of any derogatory information pertaining" to Mr.
Steele, that he was "reliable," that his "reporting" in this case was "credible," and that the
FBI only "speculates" that Mr. Steele's bosses "likely" wanted to "discredit" Mr. Trump.
Speculates? Likely? Mr. Ohr makes clear FBI and Justice officials knew from the earliest
days that Mr. Steele was working for the Clinton campaign, which had an obvious desire to
discredit Mr. Trump. And Mr. Ohr specifically told investigators that they had every reason to
worry Mr. Steele's work product was tainted.
Strassel concludes succinctly - and ominously for anyone who still believes that 'we, the
people' have any freedom left, that the testimony has three other implications.
First, it further demonstrates the accuracy of the House Intelligence Committee
Republicans' memo of 2018 - which noted Mr. Ohr's role and pointed out that the FBI had not
been honest about its knowledge of the dossier and failed to inform the court of Mrs. Ohr's
employment at Fusion GPS.
Second, the testimony also destroys any remaining credibility of the Democratic response,
in which Mr. Schiff and his colleagues claimed Mr. Ohr hadn't met with the FBI or told them
anything about his wife or about Mr. Steele's bias until after the election.
And third, the testimony raises new concerns about Mr. Mueller's team . Critics have noted
Mr. Weissman's donations to Mrs. Clinton and his unseemly support of former acting Attorney
General Sally Yates's obstruction of Trump orders. It now turns out that senior Mueller
players were central to the dossier scandal. The conflicts of interest boggle the mind.
And Strassel concludes unequivocally, the Ohr testimony is evidence the FBI itself knows how
seriously it erred. The FBI has been hiding and twisting facts from the start.
Correct me if I'm wrong but let's see if I've got this right. The so-called "information"
looked like ****, smelled like **** and tasted like **** and the world's premier
investigative organization took that ****, knowing full well it was shitty, to the FISA Court
to begin their treasonous pursuit of an American president contrary to the Constitution they
vowed to protect. And they're still at it today because they can't admit their actions are
far more illegal than what they falsely allege Trump did. Did I miss anything?
So general Flynn gives a few questionable statements to the FBI and he's prosecuted.
Hillary gives a whole ******* false dossier to the FBI and the whole FBI and Justice
Department lick her *******?
The general statute of limitations for noncapital federal crimes is five years. (18 U.S.C.
§ 3282.) This statute of limitations applies to perjury, filing a false bankruptcy form,
embezzlement, bribery, and destroying records, and all other bankruptcy crimes.
And those conflicts of interest have pretty much been public knowledge for over a year.
Yet nothing is done and the Mewliar ****-show just keeps chugging along. When you look at it
objectively there is really one primary reason for that . . . because the MSM (other than the
WSJ) refuses to cover those conflict of interest issues (among many other issues that would
be detrimental to the 'Russian collusion' investigation). Enemy of the people indeed.
I am not sure if it can happen as these agency's control and power is greater than rule of
law but to really get back to the original principles of our constitution, we have to do away
with just about all of them. Those trator Clintonite, Bushites and Obamaite clans were
hellbent on destroying this country and they sure have done a good job of it. One more
globalist presidents and that is it; adios gringos.
The FBI did not err. The FBI did nothing wrong. People within the FBI broke laws. People
within the FBI committed fraud, abuse of power under color of authority. Lets not let these
rotten apples hide behind the facad of the FBI
********. Many rank and file FBI agents knew what was going and did and said nothing. They
are sworn to uphold the Constitution not to obey every **** sucker in their chain of command.
They all put their personal ease and comfort ahead of doing the right and leagal thing.
Shitcan the lot of them.
People who are kicked out of their IT jobs around 55 now has difficulties to find even
full-time McJobs... Only part time jobs are available. With the current round of layoff and job
freezes, neoliberalism in the USA is entering terminal phase, I think.
A survey by
Transamerica Center for Retirement Studies found on average Americans are retiring at age
63, with more than half indicating they retired sooner than they had planned. Among them, most
retired for health or employment-related reasons.
... ... ...
On April 3, 2018, Linda LaBarbera received the phone call that changed her life forever. "We
are outsourcing your work to India and your services are no longer needed, effective today,"
the voice on the other end of the phone line said.
... ... ...
"It's not like we are starving or don't have a home or anything like that," she says. "But
we did have other plans for before we retired and setting ourselves up a little better while we
both still had jobs."
... ... ...
Linda hasn't needed to dip into her 401(k) yet. She plans to start collecting Social
Security when she turns 70, which will give her the maximum benefit. To earn money and keep
busy, Linda has taken short-term contract editing jobs. She says she will only withdraw money
from her savings if something catastrophic happens. Her husband's salary is their main source
of income.
"I am used to going out and spending money on other people," she says. "We are very generous
with our family and friends who are not as well off as we are. So we take care of a lot of
people. We can't do that anymore. I can't go out and be frivolous anymore. I do have to look at
what we spend - what I spend."
Vogelbacher says cutting costs is essential when living in retirement, especially for those
on a fixed income. He suggests moving to a tax-friendly location if possible.
Kiplinger ranks Alaska, Wyoming, South Dakota, Mississippi, and Florida as the top five
tax-friendly states for retirees. If their health allows, Vogelbacher recommends getting a
part-time job. For those who own a home, he says paying off the mortgage is a smart financial
move.
... ... ...
Monica is one of the 44 percent of unmarried persons who rely on Social Security for 90
percent or more of their income. At the beginning of 2019, Monica and more than 62 million
Americans received a 2.8 percent cost
of living adjustment from Social Security. The increase is the largest since 2012.
With the Social Security hike, Monica's monthly check climbed $33. Unfortunately, the new
year also brought her a slight increase in what she pays for Medicare; along with a $500
property tax bill and the usual laundry list of monthly expenses.
"If you don't have much, the (Social Security) raise doesn't represent anything," she says
with a dry laugh. "But it's good to get it."
"... The inquiry follows a Consumer Financial Protection Bureau report said that Wells Fargo charged students the highest fees of 573 banks examined. ..."
"... "When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge struggling college students exorbitant fees," Warren said in a statement. "These high fees, which are an outlier within the industry, demonstrate conclusively that Wells Fargo does not belong on college campuses." ..."
Elizabeth Warren is demanding that Wells Fargo & Co. be kicked off college campuses, a market the bank has said is among its fastest-growing.
The Democratic senator from Massachusetts and likely presidential candidate said Thursday that she requested more information
from Wells Fargo Chief Executive Officer Tim Sloan and from 31 colleges where the bank does business. The inquiry follows a Consumer
Financial Protection Bureau report said that Wells Fargo charged students the highest fees of 573 banks examined.
"When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge
struggling college students exorbitant fees," Warren said in a statement. "These high fees, which are an outlier within the industry,
demonstrate conclusively that Wells Fargo does not belong on college campuses."
Warren has been a vocal critic of Wells Fargo -- including repeatedly calling for Sloan's ouster -- since a series of consumer
issues at the company erupted more than two years ago with a phony-accounts scandal.
Wells Fargo is "continually working to improve how we serve our customers," a bank spokesman said in an emailed statement Thursday.
"Before and since the CFPB's review on this topic, we have been pursuing customer-friendly actions that support students," including
waiving service fees on some checking accounts offered to them.
A reputation for overcharging students could further harm Wells Fargo's consumer-banking strategy. The San Francisco-based bank
has identified college-age consumers as a growth opportunity, and John Rasmussen, head of personal lending, said last year that Wells
Fargo
may expand into the refinancing of federal student loans.
"... On Tuesday, Dimon and JPMorgan CFO Marianne Lake said they think the current outlook for growth is positive considering the consumer is still strong and healthy. ..."
During an interview with FOX Business earlier this month, Dimon told FOX Business' Maria Bartiromo that while it didn't look like
a recession was imminent, there will eventually be a meaningful slowdown.
"There will be a recession one day. So when people say, 'Is there going to be a recession?' Yeah, I don't know when it's going
to be, but there will be one and something will trigger it and it will be a little bit different than the last one," he said.
On Tuesday, Dimon and JPMorgan CFO Marianne Lake said they think the current outlook for growth is positive considering the
consumer is still strong and healthy.
For the fourth quarter, the largest U.S. bank by assets reported lower-than-expected profit despite gains from higher interest
rates and a bump within its loan sector. Losses were driven by market volatility, global growth worries and an ongoing trade war
between the U.S. and China.
Ryan S 8 hours ago
Yes the pending recession will cause many debt bubbles to burst and not just isolated primarily to banking and housing sector.
Think of what happens to the college/university system when student can no longer get loans for subsidized rates. A house
or vehicle can serve as an asset to be used as collateral to control rate ceilings. However, there is no collateral in Billy
and Genie's BA History degree. Good luck to all these ivory tower universities when your funding dries up and nobody can afford
your way overpriced programs. Anubis 9 hours ago I have read Americans
hold over 50 trillion in debt yet over half the population has only $1,000 in savings.
Bob 9 hours ago
Why is the US increasing deficit spending doing a good economy???? Reply
s 8 hours ago
Why does no one ask....why does higher education cost so much compared to other costs? The rate of increases in higher education
is never challenged by anyone. It is automatically assumed good. People are so blind and accepting.
Bart 7 hours ago
"At some point in the future we will have a recession and it will be a little bit different from the last recession." He is
paid $28,500,000.00 a year and sounds like my car mechanic.
buddhist 8 hours ago
Same like it was in 2007. Everything in the world was fine until Lehmann declared bankruptcy and hell started to break. May
be this time around it's Deutsche bank's turn.
Sam 5 hours ago
Signs of the economy slowing are everywhere. Company earnings are down and layoffs are increasingly more common. Min wage jobs
might be plentiful right now, but that will change in less than a year. Better hold on and you better keep your job. Next recession
will eliminate a lot of jobs. Those over 40 - forget it.
Chinas Love 8 hours ago
The next recession will occur when the US government hit over $25 Trillion in debt thus surpassing out total GDP thus making
the US bankrupt or Trump enacts the remaining $600 billion of the $820 Billion in tariffs on China and the rest of the world
because China trade deficit has grown under his watch to historic levels each each!
The Zionist Plan for the Middle East, also known as the Yinon Plan, is an Israeli
strategic plan to ensure Israeli regional superiority. It insists and stipulates that Israel
must reconfigure its geo-political environment through the balkanization of the surrounding
Arab states into smaller and weaker states.
The reach of a "Greater Israel", as described in the Yinon plan.
When viewed in the current context, the war on Iraq, the 2006 war on Lebanon, the 2011 war
on Libya, the ongoing war on Syria, not to mention the process of regime change in Egypt,
must be understood in relation to the Zionist Plan for the Middle East. The latter consists
in weakening and eventually fracturing neighboring Arab states as part of an Israeli
expansionist project.
"Greater Israel" consists in an area extending from the Nile Valley to the Euphrates.
Israeli strategists viewed Iraq as their biggest strategic challenge. This is why Iraq was
outlined as the centerpiece to the balkanization of the Middle East and the Arab World. In
Iraq, on the basis of the concepts of the Yinon Plan, Israeli strategists have called for the
division of Iraq into a Kurdish state and two Arab states, one Shiite and the other
Sunni.
The Atlantic, in 2008, and the U.S. military's Armed Forces Journal, in 2006, both
published widely circulated maps that closely followed the outline of the Yinon Plan. Aside
from a divided Iraq, the Yinon Plan calls for a divided Lebanon, Egypt, and Syria. The Yinon
Plan also calls for color revolutions (Arab Spring) North Africa and forecasts it as starting
from Egypt and then spilling over into Sudan, Libya, and the rest of the region.
"Greater Israel" requires the breaking up of the existing Arab states into small states.
The plan operates on two essential premises. To survive, Israel must
become an imperial regional power, and
must effect the division of the whole area into small states by the dissolution of all
existing Arab states.
Small here will depend on the ethnic or sectarian composition of each state. Consequently,
the Zionist hope is that sectarian-based states become Israel's satellites and, ironically,
its source of moral legitimation This is not a new idea, nor does it surface for the first
time in Zionist strategic thinking. Indeed, fragmenting all Arab states into smaller units
has been a recurrent theme.
Viewed in this context, the war on Syria is part of the process of Israeli territorial
expansion. Israeli intelligence working hand in glove with the US, Turkey and NATO is
directly supportive of the Al Qaeda terrorist mercenaries inside Syria.
The Zionist Project also requires the destabilization of Egypt, the creation of factional
divisions within Egypt as instrumented by the "Arab Spring" leading to the formation of a
sectarian based State dominated by the Muslim Brotherhood.
What a bunch of fools. As Tucker Carlson aptly said
Most terrifying of all, the crew has become incompetent. They have no idea how to sail.
They're spinning the ship's wheel like they're playing roulette and cackling like mental
patients.
The boat is listing, taking on water, about to sink. They're totally unaware that any of
this is happening. As waves wash over the deck, they're awarding themselves majestic new
titles and raising their own salaries. You look on in horror, helpless and desperate. You
have nowhere to go. You're trapped on a ship of fools.
Plato imagined this scene in The Republic. He never mentions what happened to the ship. It
would be nice to know. What was written as an allegory is starting to feel like a
documentary, as generations of misrule threaten to send our country beneath the waves.
The people who did it don't seem aware of what they've done. They don't want to know, and
they don't want you to tell them. Facts threaten their fantasies. And so they continue as if
what they're doing is working, making mistakes and reaping consequences that were predictable
even to Greek philosophers thousands of years before the Internet.
They're fools. The rest of us are their passengers.
Some highlights from this thread (no names, no pack drill):
Populism is a kickback and correction to the forty years of political correctness where
the white masses of Europe and America were forbidden by the liberal establishment to be
their real selves
People are fed up with the elite consensus because of the failures of the elites.
Perhaps the reason that "populism" is thriving is that the liberal elites who ruled us
in the entire post war period became complacent out of touch with those they were meant to
represent.
there are millions of others whose voices have been ignored or silenced by the
mainstream news
We are disenfranchised by what the elites are saying because the elites control the
narrative in a way that makes sure the power will always reside with them.
The MSM has always been biased-
Why is democracy booming the article asks.
Well because the lies and bullshit of the liberal elite are there for all to see.
Take a look at what the MSM refuses to report, or what it deliberately distorts,
You can see the problem. It's like they are all reading from the same limited script which
has been handed to them. Given the freedom to express our opinions, we are regurgitating what
someone else has told us to say.
Maybe we should not be too pessimistic. The levels of opportunity for expression that the
internet and social media have given us might currently have exceeded our ability to think
critically about whatever bullshit we are being fed, but future generations may be better.
After all, it's only a small step from doubting whatever mainstream thought tells you, to
starting to wonder who is telling you to doubt those things and why and then to actually go
back and think for yourself about the issues.
So Corbyn and Trump are the same because they both have shirts. Well, color me
convinced!
Like so many of these articles -- including the long but uninformative 'long read' on the
same topic -- there is no mention of the failures of the elites.
Clinton sold us a false bill of goods. The Washington Consensus on economics would make
the country richer and, after some 'pain', would benefit the working class. Sure you wouldn't
be making cars but after some retraining you would work in tech.
This was a broken promise -- de industrialization has devastated the upper midwest. The
goods are made in China and the money goes to Bezos. People are rightly upset.
The Washington Consensus on war sold us a false bill of goods. Instead of peace through
strength we have seen a century of endless conflict. We have been caught in state of constant
killing since 2001 and we are no safer for it. Indeed the conflicts have created new enemies
and the only solution on offer is a hair of the dog solution.
People are fed up with the elite consensus because of the failures of the elites. Nowhere
are the repeated failures of the elites, the decades of broken promises mentioned in the
articles. Instead, those of us who prefer Sanders to Clinton, Corbyn to Blair are mesmerized
by emotional appeals and seduced by simplistic appeals to complex problems. And they wonder
why we don't accept their analyses . . .
TL;DR -- clickbait didn't get us here. The broken promises of the Washington consensus
did.
"... Blame it on the robots if you must -- it's an easy out for those struggling to understand what's happened already, and what's going to happen next. The trouble is, it's not very useful for everyone else. ..."
"The funny thing is, we've always been quite bad at knowing how to attribute market
volatility, which long predates algorithm trading.
The start of a much-shared satirical Wall Street Journal article from the 1990s sums it up:
'The market rallied early this morning for reasons nobody understands and nobody predicted.
CNBC analysts confidently asserted it had something to do with the Senegalese money supply, but
others pointed to revised monthly figures showing a poor tuna haul off the Peruvian coast.'
A
separate question, of course, is whether all this market volatility can or should be ascribed
to algorithm training as it has been.
Despite recent relative placidity, markets have always
been volatile.
The last three months' ups-and-downs may have been choppy, but they're by no
means historic. It may also be true that we're simply talking more about the most minute market
moves.
Blame it on the robots if you must -- it's an easy out for those struggling to
understand what's happened already, and what's going to happen next. The trouble is, it's not
very useful for everyone else."
But that probably does not not including possible "back channel" from the US government to
major banks which allow them to finance unprofitable oil extraction.
Notable quotes:
"... $70/b by the end of 2019 is very reasonable [estimate] and actually similar to many of the major banks. The $55/b average expectation of oil executives according to Dallas Fed is too low in my opinion. ..."
Agree, Rapier is very good. $70/b by the end of 2019 is very reasonable [estimate] and actually
similar to many of the major banks. The $55/b average expectation of oil executives according
to Dallas Fed is too low in my opinion. Rapier is spot on (within $5/b of being correct) imo.
Much depends on what ROI is acceptable for an oil company, if they require a 15% ROI, then
the average 2017 Permian Basin well (average cost full cycle assumed to be $9.5 million)
needs $66/b at refinery gate ($62/b at wellhead) to meet that hurdle, EUR is about 411
kb.
"... Last year, oil production in Norway fell to 1.49 million barrels per day (bpd), down by 6.3 percent compared to the 1.59 million bpd production in 2017, the oil industry regulator, the Norwegian Petroleum Directorate (NPD), said in its annual report this week. Oil production this year is forecast to drop by another 4.7 percent from last year to reach in 2019 its lowest level in thirty years -- 1.42 million bpd, the NPD estimates show. ..."
"... However, the Norwegian oil regulator warned that "resource growth at this level is not sufficient to maintain production of oil and gas at a high level after 2025. Therefore, it is essential that more profitable resources are proven in the next few years." ..."
"... The industry's problem is that after Johan Sverdrup and Johan Castberg there haven't been major discoveries. ..."
Despite cost controls, increased efficiency, and higher activity offshore Norway, oil
production at Western Europe's largest oil producer fell in 2018 compared to 2017 and is
further expected to drop this year to its lowest level since 1988.
Last year, oil production in Norway fell to 1.49 million barrels per day (bpd), down by 6.3
percent compared to the 1.59 million bpd production in 2017, the oil industry regulator, the
Norwegian Petroleum Directorate (NPD), said in its annual report this week. Oil
production this year is forecast to drop by another 4.7 percent from last year to reach in 2019
its lowest level in thirty years -- 1.42 million bpd, the NPD estimates show.
As bad as it sounds, this year's expected low production is not the worst news for the
Norwegian Continental Shelf (NCS) going forward.
Oil production is expected to jump in 2020 through 2023, thanks to the start up in late 2019
of Johan
Sverdrup -- the North Sea giant, as operator Equinor calls it. With expected resources of
2.1 billion -- 3.1 billion barrels of oil equivalent, Johan Sverdrup is one of the largest
discoveries on the NCS ever made. It will be one of the most important industrial projects in
Norway in the next 50 years, and at its peak, the project's production will account for 25
percent of Norway's total oil production, Equinor says.
The worst news for Norway's oil production, as things stand now, is that after Johan
Sverdrup and after Johan Castberg
in the Barents Sea scheduled for first oil in 2022, Norway doesn't have major oil discoveries
and projects to sustain its oil production after the middle of the 2020s.
The NPD
started warning last year that from the mid-2020s onward, production offshore Norway will
start to decline "so making new and large discoveries quickly is necessary for maintaining
production at the same level from the mid-2020s."
In the report this week, NPD Director General Bente Nyland said:
"The high level of exploration activity proves that the Norwegian Shelf is attractive.
That is good news! However, resource growth at this level is not sufficient to maintain a
high level of production after 2025. Therefore, more profitable resources must be proven, and
the clock is ticking".
Norwegian oil production in 2018 was expected to drop compared to the previous year, but the
decline "proved to be greater than expected," the NPD said, attributing part of the production
fall to the fact that some of the newer fields are more complex than previously assumed, and
certain other fields delivered below forecast, mainly because fewer wells were drilled than
expected.
In October 2018, Germany's Wintershall
warned that its Maria oil and gas field off Norway was not fully meeting expectations due
to issues with water injection. Those issues haven't been solved yet, NPD's Nyland told
Reuters this week.
Exploration activity in Norway considerably increased in 2018 compared to 2017, with 53
exploration wells spud, up by 17 wells compared to the previous year. Based on company plans,
this year's exploration activity is expected to remain high and around the 2018 number of wells
spud, the NPD says.
The key reasons for higher exploration activity have been reduced costs, higher oil prices
lifting exploration profitability, and new and improved seismic data on large parts of the
Shelf, the NPD noted.
However, the Norwegian oil regulator warned that "resource growth at this level is not
sufficient to maintain production of oil and gas at a high level after 2025. Therefore, it is
essential that more profitable resources are proven in the next few years."
Norway still holds a lot of oil under its Shelf, and those remaining resources could sustain
its oil and gas production for decades to come. The industry's problem is that after Johan
Sverdrup and Johan Castberg there haven't been major discoveries.
According to the NPD's resource estimate, nearly two-thirds of the undiscovered resources
lie in the Barents Sea.
"Therefore, this area will be important for maintaining production over the longer term,"
the regulator said.
Operators on the NCS have made great efforts to try to make even smaller discoveries
profitable by hooking them to existing platforms and production hubs. However, these smaller
finds alone can't offset maturing production -- Norway needs major oil discoveries, and it
needs them soon , considering that the lead time from discovery to production is several
years.
Chinese crude oil imports up +9.9% higher in full year 2018 compared to FY 2017.
The month of December up +29.9% higher than Dec 2017
2019-01-14 OilyticsData
Another big crude import number from China (2nd consecutive month of imports above 10 MMB/D).
Low oil prices and startup of mega refineries such as RongSheng and Hengli is helping to keep
these numbers near record levels.(Source; GAC China)
Chart https://pbs.twimg.com/media/Dw3fk2GXcAUZ_Vu.jpg
Oilytics https://twitter.com/OilyticsData
In support of RRC, I looked up their agency expenses, and found they are less than $50
million. That's to pay for keeping up with almost a half million oil and gas wells, thousands
of operators, and multiple other duties, including taking care of a significant amount of
State income. There is a grand total of about 725 employees. Hats off!
"... Good article. It accurately spells it out about the contempt and disrespect that America has of other countries, and the coercive tactics that America often applies to them. ..."
"... It really goes back to what Marine corps Major General Smedley Butler once reflected on, in 1933, about the U.S.,. He said: "I spent thirty-three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle-man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism". Apparently, that is how other countries see us operating as too. ..."
For another example I turn to U.S. Ambassador to Germany, Richard Grenell, who just sent a
letter to both Uniper and BASF to stop work on the Nordstream 2 pipeline or else face
further U.S. sanctions.
The Bild report raised the ire of some German politicians in Berlin. Fabio De Masi, a top
Left Party MP, demanded that the government reprimand Grenell, saying
: "The US Ambassador seems to make an impression that he is a viceroy of the Washington
emperor.
This is the real face of Trumpian diplomacy. Stop acting in your own best interest or we'll
bankrupt you.
The situation at this point is pretty clear. While our military strength is formidable it is
not, however, a blank check to enforce political edicts anymore.
In a world where U.S. prosperity is dependent on the prosperity of the entire world,
threatening financial ruin is just as much of a bluff as threatening physical ruin.
And we're seeing that bluff being called a lot. Country after country are now simply showing
U.S. strongmen like Pompeo, Bolton, Mattis and even Trump himself, the door and there is little
to no real response from them.
Trump tried to scare Erdogan into submission with sanctions and a collapse of the lira
last year. When it didn't work, Erdogan knew where his allies were. He acted accordingly,
siding with Putin's energy security for Turkey rather than a mercurial U.S.
India did the same thing over the purchase of Russian S-400 missile defense systems. They
said some nice things, invited us to talks and then sent us packing without a deal.
Germany refuses to yield on Nordstream 2.
Qatar was the first to pull out of the Syrian conflict and then turned around and
negotiated a major exploration and development deal with Iran in the North Pars gas
field.
Even Japan is in constant talks with Russia about working out their differences
officially (again, against U.S. wishes) and sign a peace treaty. Japan needs Russian energy
badly and Putin is patient enough to wait Prime Minister Shinzo Abe out while calling out his
hypocrisy.
Good article. It accurately spells it out about the contempt and disrespect that America
has of other countries, and the coercive tactics that America often applies to them.
It
really goes back to what Marine corps Major General Smedley Butler once reflected on, in
1933, about the U.S.,. He said: "I spent thirty-three years and four months in active
military service as a member of this country's most agile military force, the Marine Corps. I
served in all commissioned ranks from Second Lieutenant to Major-General. And during that
period, I spent most of my time being a high class muscle-man for Big Business, for Wall
Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism".
Apparently, that is how other countries see us operating as too.
Something has changed in U.S. politics. And it may finally signal something changing for the
better. Since the announcement (but no real follow through) to end our military involvement in
Syria what passes for our statesmen - John Bolton and Secretary of State Mike Pompeo - have
been ignored, mocked or both.
Bolton attempted to box Trump in on not leaving Syria while Israel chest-thumped about how
they will not yield an inch to Iran. Turkish President Erdogan publicly lambasted him with no
response from President Trump.
Or anyone else for that matter.
When was the last time you heard of a major U.S. political figure go overseas and be refused
a meeting with a foreign head of state, publicly upbraided and sent home like an irrelevant
flunkie?
I can't think of one.
Bolton came into the Middle East and made demands like he was the President which Bolton
knew were clearly red lines for Erdogan -- guaranteeing the safety of the Syrian Kurds.
And he did this from Jerusalem.
The insult couldn't be plainer. The lack of Bolton's self-awareness and understanding of the
situation was embarrassing. And it left Erdogan the perfect opportunity to call out the Trump
Administration's policies as beholden to a foreign power, Israel.
Well yes and I held a conference with resolutions in my backyard over some beers and it
resulted in calling out the occupation as the spoils of war. The Syrians will just have to
suck it up. Everyone else who pays attention to the bleating of ****** morons at the UN
should realize the backyard beer occupation resolution trumps all.
" The lack of Bolton's self-awareness and understanding of the situation was embarrassing.
And it left Erdogan the perfect opportunity to call out the Trump Administration's policies
as beholden to a foreign power, Israel. "
This fits into my theory regarding Trump as a good boss. He obviously could not avoid
hiring Bolton, as Trump's balancing act goes on. Bolton is an old PNAC petty
potentate,
and he obviously believes that triumphalist drivel from 2000. So, Bolton obviously
thought he could deke around Trump and defy him and walked right into this act
of political suicide.
He'l be fired when the time is right. He's too connected to get beat up like Sessions.
Trump will have to lever Bolton out using his own mustache and with the appropriate
backing. That's going to easier now that Bolton danced a jig in Jerusalm.
"Winners Take All" is one of
several recently published books raising difficult
questions about how the world's
biggest donors approach their giving. As someone who studies, teaches and believes in
philanthropy, I believe these writers have started an important debate that could potentially
lead future donors to make make a bigger difference with their giving.
Giridharadas to a degree echoes
Ford Foundation President Darren Walker , who has made a stir by denouncing a "
paradox of privilege " that "shields (wealthy people) from fully experiencing or
acknowledging inequality, even while giving us more power to do something about it."
Like Walker , Giridharadas finds it hard to shake the words of Martin Luther King Jr., who
spoke of "the circumstances of economic injustice which make philanthropy necessary."
To avoid changes that might endanger their privileges, mega-donors typically seek what they
call win-win solutions. But however impressive the quantifiable results of those efforts may
seem, according to this argument, those outcomes will always fall short. Fixes that don't
threaten the powers that be leave underlying issues intact.
As long as school systems are funded locally, based on property values, students in wealthy
communities will have advantages over those residing in poorer ones. However, creating a more
equal system to pay for schools would take tax dollars and advantages away from the rich. The
wealthy would lose, and the disadvantaged would win.
So it's possible to see the
nearly $500 million billionaires and other rich people have pumped into charter schools and
other education reform efforts over the past dozen years as a way to dodge this problem.
Charters have surely made a difference for some kids, such as those in rural
Oregon whose schools might otherwise have closed. But since the bid to expand charters
doesn't address
childhood poverty or challenge the status quo – aside from diluting the power of
teacher
unions and raising the stakes in
school board elections – this approach seems unlikely to help all schoolchildren.
Indeed, years into the quest to fix this problem without overhauling schoolPaying for Tuition
Bloomberg's big donation raises a similar question.
He aims to make a Johns Hopkins education more accessible for promising low-income students.
When so many Hopkins
alumni have enjoyed success in a wide range of careers, what can be wrong with that?
Well, paying tuition challenges millions of Americans, not just the thousands who might
attend Hopkins .
Tuition, fees, room and board at the top-ranked school cost about $65,000 a year.
Only 5 percent
of colleges and universities were affordable , according to the Institute for Higher
Education Policy, a nonpartisan global research and policy center, for students from families
earning $69,000 a year or less.
Like Giridharadas, the institute argues paying for college is "largely a problem of
inequity."
Bloomberg's gift will certainly help some people earn a Hopkins degree. But it does nothing
about the bigger challenge of making college more affordable for all in a country where student
debt has surpassed $1.5
trillion .
One alternative would be to finance advocacy for legislative remedies to address
affordability and inequity. For affluent donors, Giridharadas argues, this could prove to be a
nonstarter. Like most of what he calls " win-lose
solutions ," taking that route would lead to higher taxes for the wealthy.
Subsidies for Gifts from the Rich
Similarly, who could quibble with Bezos spending $2 billion to fund
preschools and homeless shelters? Although he has not yet made clear what results he's
after, I have no doubt they will make a difference for countless Americans.
No matter how he goes about it, the gesture still raises questions. As Stanford University
philanthropy scholar Rob Reich explains in his new book "
Just Giving ," the
tax break rich Americans get when they make charitable contributions subsidizes their favorite
causes.
Or, to phrase it another way, the federal government gives initiatives supported by Bezos
and other wealthy donors like him preferential treatment. Does that make sense in a democracy?
Reich says that it doesn't.
The elected representatives in democracies should decide how best to solve problems with tax
dollars, not billionaires who are taken with one cause or another, the Stanford professor
asserts.
That's why I think it's so important to ask the critical questions that Giridharadas and
Reich are raising, and why the students taking my philanthropy classes this semester will be
reading "Winners Take All" and "Just Giving."
Editor's note: Johns Hopkins University Press provides funding as a member of The
Conversation US, which also has a grant from the Walton Family Foundation. The Gates Foundation
is a funder of The Conversation Media Group.
None of the common tactics of the "reformers" have scientific backing. So (union-busting)
charter schools, merit pay (because teachers are motivated by money), and testing kids until
their eyeballs bleed are all bogus, and do not have an impact on educational outcomes.
The plutocrats have even funded a propaganda film called "Waiting for Superman" in which
Michelle Rhee applies "tough love" to reform failing Washington D.C. schools, firing lots of
teachers because their students' test scores didn't make the cut, etc.
Waiting for Superman touts the Finnish schools as the ones to emulate and they are very
good ones, too. Omitted from their account is the fact that Finnish teachers are tenured,
unionized, respected and quite well paid.
So what does correlate with educational outcomes? Childhood poverty. In Finland, only 2%
of their children are poor. In the U.S. it's 23%.
The problem is systemic, not the teachers, or the types of schools.
In some sense this is nothing new. Back when Pittsburgh was a network of steel mills and
mine tailings Carnegie funded meuseums, libraries, arboretums, and strike-breakers who shot
workers that complained. He was public about the need to "give back" and made a point of
demanding that the places were open on Sundays because he forced his workers to do 12 hour
days six days a week.
No doubt he may have felt he was helping, and no doubt the institutions have been and
still are a positive benefit, but they also did nothing to attack the root cause of the
suffering nor did they make any fundamental change in society. That would upset his apple
cart. By the same token the fact that private donors needed to fund public institutions was
based upon the simple fact that they had all the money.
It is also notable that some of the more recent endeavors such as Gates' tech-driven
charter schools, or Facebook's donation to the same, or for that matter Apple's donation of
iPads to LAUSD have a direct commercial component. The intial gift may be free but in the end
it is market-making as much of the cash routes back to the company. They may genuinely
believe in the solution but the financial connection is also clear.
More interesting though Pierre Omidyar who combined his business and "philanthropy" more
directly by putting money into a foundation that then invests in startups he runs which "do
social good" or which sell technology to those that do so.
Ultimately Bill Gates and Jeff Bezos may have more to play with than Carnegie ever dreamed
of but at the end of the day much of what they are doing is the same, starving necessary
institutions of funds, smoothing out the rough edges of their PR (especially when, like
Bezos, they are in the crosshairs), and then peddling "solutions" that look good but only
reinforce the conditions that make them rich.
" have a direct commercial component. The intial gift may be free but in the end it is
market-making as much of the cash routes back to the company."
How true, but you might not even be cynical enough. Back in 2012 (I believe) there was
reportage about large banks quitely lobbying Bloomberg to make big cuts to the New York
City's funding of local charities and non-profits. Several million dollars were cut as a
result of the austerity lobbying by the banks. The same week the food pantry where I
volunteered, which lost $40,000 of City funding if memory serves me correctly, received a
"generous" gift of a folding table from Citibank. My wife who at the time worked at a large
non-profit dedicated to community issues in the South Bronx, had to attend a presentation by
a Citibank employee with a name like "How the Nonprofit Community Has Failed the Community".
Her attendance was a courtesy demanded in exchange for a several thousand dollar donation
from Citibank to her nonprofit. Her non-profit lost much more in funding from the City due to
the banks' lobbying efforts, and surprise surprise, what was the main thrust of the Citibank
presentation? How micro-finance lending can help historically marginalized communities of
course! My wife's organization was engaged in several programs aimed at encouraging and
aiding entrepreneurship and financial literacy. Citibank saw local non-profits that were
helping the community keep their collective heads above the water as competition. Their
programatic work was harmful to the bank's business model of luring people into odious debt
by promulgating an environment of despair and desperation.
Beware of billionaires and bankers bearing gifts. Their vast fortunes should be trimmed
down to size with taxation/force and distributed democratically according to the needs of the
community, not the whims of the market or the misguided opinions of non-expert, know-it-all
billionaires who have never lived nor worked in the communities they claim to care about.
Charity makes people supplicants which is a form of servitude. "Thank you kindly, sir, for
you gracious gift." That is not a "free" society. We should have a society where no one needs
some good folks' trickle downs. A basic guaranteed income might work better than the system
we have now especially with an affordable heath care system. It would eliminate food banks
and homeless shelters and jobs involving making lists and forms and graphs for the Medical
Insurance Business. And it would eliminate a lot of other stupid and bullsh*t jobs. Yes, I've
been rereading David Graeber's "Bullsh*t Jobs."
Several years ago I collected signatures for Move to Amend, an organizations which
advocates for an anti-corporate personhood amendment to the US Constitution. I learned two
things:
1. ordinary citizens 'get it' about corporations running the show, and they are enthusiastic
about bringing them to heel, and
2. ordinary citizens who work in 501(c)3 non-profits are far less enthusiastic about the
possible withering away of their cozy corporate dole.
So, while the giant vampire squids of the world drift lazily along on a fine current of their
own making, keep in mind that there are huge schools of pilot fish that depend on their
leavings for survival. All of these small fish will surely resist any effort to tenderize
this calamari.
No one said it better than William Jewett Tucker, a contemporary critic of Carnegie:
"I can conceive of no greater mistake, more disastrous in the end to religion if not to
society, than of trying to make charity do the work of justice."
This was a terrific post on a very important issue.
Even in my insignificant little burg we have experienced this problem first-hand. A local
Charter School was doing a very good job of "keeping out the brown people" and publishing a
"walk of shame" of all who made "voluntary" contributions to their coffers, thus "outing"
those who didn't (the California constitution forbids schools that spend public money from
requiring fees). They even went so far as to hire a Head of School from one of the last
Mississippi Segregation Acadamies, just in case their "mission" wasn't clear. Admission was
by lottery ("because lotteries are fair!"), unless you happened to be on their
massively bloated and self-appointed Board (including influential local officials, quelle
surprise !). Those with learning differences or languages other than English were
"strongly discouraged" from even applying.
The Charter covered their operating budget with all those "voluntary" contributions, and
had sequestered all the cash squeezed out of the local public schools, in order to buy an
office building (because kids just love preparing for the world of work by going to
school in office buildings!). A local billionaire whose name rhymes with "Netflix" bailed
them out with a $10M donation for the building when it appeared that some in authority might
look askance at who would be the beneficiaries of this insider real estate deal using
skimmed-off public monies.
Scratch a Charter School and 9 times out of 10 there's a real estate deal underlying it
("Because, the children !"). Billionaires should have no more influence than any
other individual voter in making public policy.
Grrrrr, Charter Schools are making me angry. The real estate deal(s), you mention are
absolutely true. Here's another sweet scheme in Arizonia: "The Arizona Republic has reported
that Rep. Eddie Farnsworth stands to make about $30 million from selling three charter
schools he built with taxpayer money.
The toothless Arizona State Board for Charter Schools approved the transfer of his for-profit
charter school to a new, non-profit company. He might collect up to $30 million -- and maybe
even continue running the operation in addition to retaining a $3.8 million share in the new
for-profit company.
The Benjamin Franklin charter schools operate in wealthy neighborhoods. The 3,000 students
have good scores and the schools have a B rating. But that's not surprising, since most of
the parents have high incomes and college educations. If the schools are like most charters
in the state, they're more racially segregated than the campuses in the surrounding school
districts. The state pays the charter schools $2,000 per student more than it pays
traditional school districts like Payson -- which is supposedly to make up for the charter's
inability to issue bonds and such.
However, converting the charters to a non-profit company will enable the schools to avoid
property taxes and qualify for federal education funds. Taxpayers will essentially end up
paying for the same schools twice, since taxpayers have footed the bills for the lease
payments to the tune of about $5 million annually. Now, the new owners will use taxpayer
money to finance the purchase of buildings already paid for by taxpayers."
Stevenson school in Mountain View CA, a public school with PACT (parents and children
together), has a lottery. Its students are 70% white. Across the street, Theuerkauf, which
does not have PACT, is 30% white and no lottery. And a huge difference in the two schools
test scores. Smells illegal.
Also, Google took the former building of the former PACT program hosting school, which
resulted in this grotesque distortion of the supposed public service the school district
provides.
As a former NYC public school teacher who fought against the billionaire-funded hostile
takeover of public education for two decades, I'm gratified to see the beginnings of a
harsher critique of so-called philanthropy, in education and everywhere else.
But the next hurdle is to overcome the tic of always qualifying critique and pushback with
talk of the "good intentions" of these Overclass gorgons. Their intention are not "good" in
the way most human beings construe that word, and are the same as they've always been:
accumulation and establishing the political wherewithal to maintain/facilitiate the same.
This hustle does the added trick of getting the public to subsidize it's own impoverishment
and loss of political power (as in Overclass ed reformers funding efforts to eliminate local
school boards).
When there is near-total congruence between your financial/political interests and the
policies driven by your "philanthropy," the credibility of your "good intentions" transacts
at an extremely high discount, no matter how much you try to dress it up with vacuous and
insipid social justice cliches. For a case in point, just spend five minutes researching the
behavior and rhetoric of Teach For America.
Malanthropy (n): the systemic use of non-profit, tax-exempt entities to facilitate the
economic and political interests of their wealthy endowers, to the detriment of society at
large. See also, Villainthropy.
The critical thing, I have found, is to see "philanthropy" and charitable endeavor as a
cornerstone of capitalism, without which the system would–without any doubt–fail.
Engels and others documented, contemporary scholars have continued to document, the way that
the wives of the first factory owners established almshouses and lying in hospitals where the
deserving poor were separated from the undeserving, dunned with religion and political cant,
and channelled into various forms of work, including reproductive labor. A very big piece of
the neoliberal puzzle involves the rise of the NGO during the Clinton/Blair period, and its
integration with works of the like of the IMF and USAID, the increasing sophistication of
this enterprise which has at times also included union-busting (see Grenada in the aftermath
of the US invasion) and worse. As a State Department function, the Peace Corps integrates the
best of charity, grassroots capitalism, and good old Protestant cant.
I've read the Winners Take All book and it's terrific! Even if you understand the general
outlines, the author will make you see things differently because of his intimate knowledge
of how this ecosystem works. Highly recommended! Also recommend his twitter account,
@AnandWrites
He's really good on "pinkerizing" too, and "Thought Leaders" and how they comfort the
comfortable.
"... "The world's two largest economies slow, while the UK's financial sector readies for Brexit and the ECB retreats from QE. Structural challenges and limited space for any policy response add to fragility. Here's the best of this week's opinion and analysis." ..."
"The
world's two largest economies slow, while the UK's financial sector readies for Brexit and the ECB retreats from QE. Structural
challenges and limited space for any policy response add to fragility. Here's the best of this week's opinion and analysis."
"The corporate bond market has all kinds of problems. I think investors should use the
strength of junk bonds that's happened as a gift and get out of them. Corporate
credit, as a percentage of GDP, has never been higher.
The leverage in the corporate economy is very bad, There's been a lot of buybacks --
borrow money at low rates, buy back stocks -- which of course, it's just turning the
equity market into a CDO residual, an equity piece, that's getting thinner and thinner,
riskier and riskier.
I think investors need to go to strong balance sheets. Strong balance sheets are
going to be the way to survive during the zigzag of 2019."
Jeffrey Gundlach
"Goldman Sachs Group Inc. is leading a pack of bullish voices cheering for gold. The
bank's analysts led by Jeffrey Currie raised their price forecast for gold, predicting
that over 12 months the metal will climb to $1,425 an ounce -- a level not seen in more
than five years. Bullion has benefited as rising geopolitical tensions fuel central
bank purchases, while fears of a recession helped boost demand from investors seeking
'defensive assets,' they said."
At this point, deja vu mind-set returns to teach a powerful lesson. Having once witnessed a
major historical reversal, one knows that historical determinism isan illusion -- opium for
people on the edge of a nervous breakdown.
Machiavelli insisted that surrender is a bad idea because we never know what surprises
fortune may have in store for us. In Machiavelli's view, there are "good times" and "bad times"
in politics, and the good ruler is not one who can fend off the "bad times" so much, as one who
has accumulated enough goodwill among citizens to help him ride out those bad times.
The argument of this short book is that European Union is going through a really bad time
today, torn apart by numerous crises that damage confidence in the future of the project among
citizens across the continent. So the disintegration of the union is one of the most likely
outcomes.
For A. Roy, a writer has the responsibility to take sides overtly.
In these violent diatribes, she tears the masks of the `missionaries to redeem the wretched'
and of those preaching privatization and globalization as the one and only solution for the
whole world's economic problems.
The hypocrisy of globalization
For A. Roy, globalization has nothing to do with the eradication of poverty. It will not pull
the Third World out of the stagnant morass of illiteracy, religious bigotry or
underdevelopment. In India, 70 % of the population still has no electricity and 30 % is still
illiterate.
Globalization means crudely and cruelly `Life is Profit'. `Its realm is raw capital, its
conquest emerging markets, its prayers profits, its borders limitless, its weapons
nuclear.'
Privatization (of agriculture, seeds, water supply, electricity, power plants, commodities,
telecommunications, knowledge) consists only in the transfer of productive public assets from
the State to private interests (transnational corporations).
The globalization's economic agenda `munches through the economies of poor countries like a
cloud of locusts.' One example: by hugely subsidizing their farm industries, the rich
countries put impoverished subsistence farmers in the Third World out of business and chase
them into the cities.
The hypocrisy of the war against terrorism
For A. Roy, the rich countries are the real worshippers of the cult of violence. They
manufacture and sell almost all the world's weapons and possess the largest stockpile of
weapons of mass destruction (chemical, biological, nuclear).
At the head of ICAT (The Coalition Against Terror) stays a country which spends mind-boggling
military budgets to fight a few bunches of manipulated terrorists created by the hegemon
himself. It committed `the most of genocides, ethnic cleansing, and human rights violations.
It sponsored, armed and financed untold numbers of dictators and supports military and
economic terrorism.' Its aim is full spectrum dominance.
But, as Paul Krugman remarked, the replacement of the Cold War issue by the (manipulated)
terrorism one as a justification for massive military spending was (and is) a very big
failure.
Arundhati Roy's bitter and angry texts are a must read for all those who want to
understand the world we live in.
Arundhati Roy bristles at being called a "writer-activist" (too much like sofa-bed, she
says), but the rest of us should be grateful that the author of "The God of Small Things" is
taking on the establishment, here and in India.
Part of Mrs. Roy's greatness is that she is not colored by the partisan debates that
influence the dialogue on issues such as globalization in America. She is an
equal-opportunity critic, taking on Clinton and Bush. Although other authors pledge no
allegiance to either side of the aisle, Roy has a fresh perspective, and has a take on
globalization that I haven't found in works by American authors.
This book is set up as a collection (a rather random collection) of several essays. The first
essay gives a wonderful perspective of globalization (ie. the expansion of American business
interests) from a foreign perspective. She examines the impact of the global economic
movement on the actual people being affected by it at the lowest level. She reveals the
influence of the privatization of the electric industry through the eyes of India's poorest
citizens.
The second essay goes in-depth into politics in India, primarily addressing the enormous
number of dams being built in the country, and the impacts (economic, environmental, social)
that they will have. Mrs. Roy explicitly recounts how Enron scammed the Indian government
into building new power generators, and how this will cost India hundreds of millions per
year while lining the pockets of American business interests.
Critics will say that "Power Politics" is devoid of hard facts and analysis, but there can be
no doubt that this book is worth a read. She may lack the economic background of Stiglitz,
but her passion and style, in addition to her ability to articulate the important issues in
the globalization debate in a readable manner, will be appreciated by anyone with an interest
in global economic expansion.
"... I watched Greg Hunter's show on this. Very disturbing because of it's currency. This backdoor off-the-books financing of whatever they want is as she says, the introduction of free fascism in the US. ..."
"... Deep State is REAL: https://www.youtube.com/watch?v=LLTzpDFGWjI ..."
Investment advisor and former Assistant Secretary of Housing Catherine Austin Fitts says it
looks like a "global recession is coming."
Is that going to cause the debt reset we've been hearing about for years? Fitts says, " Make
no mistake about it, there is no reason for the federal government to default or monkey with
any debt because they can literally print the currency..."
" The question is how do they make sure whatever they are printing really holds any kind
of store of value. I think the reason you are seeing them reengineer the federal bureaucracy
and financial transactions infrastructure is because they want much greater and tighter
control to do whatever they do, and that includes to continue to debase the currency. They
could do this (reset) entirely by debasing the currency...
What we are watching . . . is essentially a coup. We had a financial coup, and now we are
watching a legal coup to consolidate that financial coup. I would keep my eye on the
fundamental governance structure of the U.S. The important thing is not what they do. The
important thing is who controls no matter what they do. Now, we have created a mechanism for
them to control entirely in secret and create policies entirely in secret, including around
the back of a U.S. President... It's pirating by the 'just do it' method. I said to someone
the other day, what is it about secret money for secret private armies that you don 't
understand? "
$21 trillion in "missing money" at the DOD and HUD that was discovered by Dr. Mark Skidmore
and Catherine Austin Fitts in 2017 has now become a national security issue.
The federal government is not talking or answering questions, even though the DOD recently
failed its first ever audit. Fitts says, "This is basically an open running bailout..."
"Under this structure, you can transfer assets out of the federal government into private
ownership, and nobody will know and nobody can stop it. There is no oversight whatsoever. You
can't even know who is doing it. I'm telling you they just took the United States government,
they just changed the governance model by accounting policy to a fascist government. If you
are an investor, you don't know who owns those assets, and there is no evidence that you
do...
If the law says you have to produce audited financial statements and you refuse to do so
for 20 years, and then when somebody calls you on it, you proceed to change the accounting
laws that say you can now run secret books for all the agencies and over 100 related entities
."
In closing, Fitts says, "We cannot sit around and passively depend on a guy we elected
President..."
"The President cannot fix this. We need to fix this...
This is Main Street versus Wall Street. This is honest books versus dirty books. If you
want the United States in 10 years to resemble anything what it looked like 20 years ago, you
are going to have to do it, and there is no one else who can do it. You have to first get the
intelligence to know what is happening."
Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of "The Solari Report."
"If the law says you have to produce audited financial statements and you refuse to do so
for 20 years, and then when somebody calls you on it, you proceed to change the accounting
laws that say you can now run secret books for all the agencies and over 100 related entities
."
She's referring to FASB standards, but those dont sound like a Constitutional Amendment to
me.
Article i, Section 9, paragraph 7: "No Money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law; and a regular Statement and Account of the
Receipts and Expenditures of all public Money shall be published from time to time."
Perhaps when $20+ trillion are involved, the Constitution be damned, I suppose. Or perhaps
the govt boys will claim the $20T didn't come from an appropriation but instead from their
own "industrious" activities...you know, like drug and gun running, and human trafficking
perhaps?
I watched Greg Hunter's show on this. Very disturbing because of it's currency. This
backdoor off-the-books financing of whatever they want is as she says, the introduction of
free fascism in the US.
One of the smartest women out there. Huge fan here. She almost got snuffed for blowing the
whistle at HUD (two sets of books and all). It's only recently that she's come out and said
that there's no such thing as the "money being lost". It's digital and 100% traceable.
Fitts is correct and her approach is sound. Money flows are traceable. The problem is more
complicated, though. As Enron proved and the Parmalat scandal cemented, the CRONY CUT is
fatal. The Auditors gave up fiduciary duties for FIDOCIARIES riches. They rolled over and played
dead.
They've already tried to off her. They broke her financially and she bounced back. She
made a lot of enemies but luckily she has some good friends in high places too. Watch a few
Vids about what they did to her after she blew the whistle at HUD. She's lucky to be above
ground.
Her extensive studies and reports that follow crack cocaine being dumped into various
areas the subsequent drug related violence and BS "WOD" response and then what happened to
the real estate, as in, WHO WINDS UP BUYING block after block after block of blighted
buildings is absolutely fascinating . She should have gotten more recognition for those
exhaustive studies.
There's a VERY LARGE HAND at work there...for profit.
Free market is possible only under strict government regulation. Without government regulation free market quickly
deteriorates into the law of jungles. Such a paradox ;-)
And if financial oligarchy gets to power as they got via coup d'état in the USA in late 7th, it is only a matter of time before
the society collapses. They are very destructive to the society at large. Probably more so then organized crime. But wait. They
actually can be viewed as special type of organized prime as is "The best way to rob the bank is to own it".
Notable quotes:
"... Idiots on here are always going on about how we don't got capitalism, if we only had capitalism, we don't got free markets, if only we had free markets, then everything would be hunky-dory. Without any proof, of course, because there never was and never will be a "free" "market." The US has plenty capitalism. And everything sucks. And they want more. Confused, stupid, disingenuous liars. ..."
"... Free markets are crookedness factories. As a PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no free market! It's all crooked!" ..."
Idiots on here are always going on about how we don't got capitalism, if we only had
capitalism, we don't got free markets, if only we had free markets, then everything would be
hunky-dory. Without any proof, of course, because there never was and never will be a "free"
"market." The US has plenty capitalism. And everything sucks. And they want more. Confused,
stupid, disingenuous liars.
Look, what you call "capitalism" and "free markets" just means scams to make rich people
richer. You read some simple-minded description of some pie-in-the-sky theory of some perfect
world where rational actors make the best possible decisions in their own interest without
any outside interference, and you actually think you are reading a description of something
real.
I'll tell you what's real. Crookedness. Free markets are crookedness factories. As a
PhD from Chicago Business School told me, "Free markets?! What free markets?! There is no
free market! It's all crooked!"
"Goldman cuts 10-year Treasury yield target for 2019 to 3%"
By Sunny Oh...Jan 8, 2019...10:45 a.m. ET
"Goldman Sachs has rolled back its call for much higher rates in U.S. government bonds in
the U.S., though it still expects a gradual climb from the current muted levels in the
Treasury market.
In a Tuesday note, Goldman Sachs said they expect the 10-year yield TMUBMUSD10Y, +0.06% to
hit 3% by year-end, a 50 basis point cut from their forecast of 3.5%. Since last week, the
benchmark bond yield has steadily risen to 2.710% Tuesday, after hitting an 11-month low of
2.553% last Thursday, according to Tradeweb data.
"... However, despite the signs, Goldman Sachs assumes the indicators are wrong and that "recession risk remains fairly low, in the neighborhood of 15% over the next year." The bank has predicted that the S&P 500 will finish 2019 at 3,000, up from the current value just below 2,600. ..."
Confidence in continued economic growth has been waning. A huge majority of chief financial officers
around the world say a recession will happen by the end of 2020. Most voters think one will hit by the end
of this year.
Now the Goldman
Sachs economic research team says that the
market shows a roughly 50% chance of a recession over the next year, according to
Axios.
Goldman Sachs looked at two different measures: the yield curve slope and credit spreads.
The former refers to a graph of government bond interest rates versus the years attaining
maturity requires. In a growing economy, interest rates are higher the longer the investment
because investors have confidence in the future. A frequent sign of a recession is the
inversion of the slope, when investors are uncertain about the future, so are less willing to
bet on it.
Credit spreads compare the interest paid by government bonds, which are considered the
safest. Corporate bonds, which are riskier, of the same maturity have to offer higher interest
rates. As a recession approaches, credit spreads tend to expand, as investors are more worried
about companies defaulting on their debt.
However, despite the signs, Goldman Sachs assumes the indicators are wrong and that
"recession risk remains fairly low, in the neighborhood of 15% over the next year." The bank
has predicted that the S&P 500 will finish 2019 at 3,000, up from the current value just
below 2,600.
The other three recessions were each caused by derangements in financial markets. After the
savings-and-loan crisis of 1991-1992 came the bursting of the dot-com bubble in 2000-2002,
followed by the collapse of the subprime mortgage market in 2007, which triggered the global
financial crisis the following year.
... ... ...
At the same time, the gap between short and long-term interest rates on safe assets,
represented by the so-called yield curve, is unusually small, and short-term nominal interest
rates are unusually low. As a general rule of thumb, an inverted yield curve – when the
yields on long-term bonds are lower than those on short-term bonds – is considered a
strong predictor of a recession. Moreover, after the recent stock-market turmoil, forecasts
based on John Campbell and Robert J. Shiller's
cyclically adjusted price-earnings (CAPE) ratio put long-run real (inflation-adjusted)
buy-and-hold stock returns at around 4% per year, which is still higher than the average over
the past four decades.
... ... ...
Needless to say, the particular nature and form of the next financial shock will be
unanticipated. Investors, speculators, and financial institutions are generally hedged against
the foreseeable shocks, but there will always be other contingencies that have been missed. For
example, the death blow to the global economy in 2008-2009 came not from the collapse of the
mid-2000s housing bubble, but from the concentration of ownership of mortgage-backed
securities.
Likewise, the stubbornly long downturn of the early 1990s was not directly due to the
deflation of the late-1980s commercial real-estate bubble. Rather, it was the result of failed
regulatory oversight, which allowed insolvent savings and loan associations to continue
speculating in financial markets. Similarly, it was not the deflation of the dot-com bubble,
but rather the magnitude of overstated earnings in the tech and communications sector that
triggered the recession in the early 2000s.
having just ruled out what could very well be the only solution, all in the cause of
independence.
"One can appreciate why central bankers don't want to get gamed into some of the nuttier
monetary policies that have been proposed, for example "helicopter money" (or more targeted
"drone money") whereby the central bank prints currency and hands it out to people. Such a
policy is, of course, fiscal policy in disguise, and the day any central bank starts doing it
heavily is the day it loses any semblance of independence. Others have argued for raising
inflation targets, but this raises a raft of problems, not least that it undermines decades
of efforts by central banks to establish the credibility of roughly 2% inflation."
I am reminded of Paul's advice to the day care coop, that they could not trade chits for
hours simply because they didn't have enough chits to allow for savings, so make more and
distribute them. At least, that's how I remember it.
The Fed failed to get growth going after the last recession...despite a long stream of rosy
forecasts. So what do elites propose for the next recession? More Fed action...and why not?
Low interest rates goose the markets, lining the pockets of the banksters who own the Fed.
Like Vietnam, Iraq, Afghanistan and the other pointless and futile military adventures,
when the going gets tough, you can count on elites to double down with failed economic
policies (that just happen to enrich them.)
At some point, policy simply becomes to "hold it together".
What do you think the goals of the policy in Iraq, Afghanistan are?
Oh sure, Bush Jr went in thinking we could set a pro-west democracy, ignoring the experts
that said it would be impossible since the people don't want pro-west. If they have
democracy, they are going to vote to disband the democracy and hand power to the
theocracy.
Since then, the policy has simply been to prevent giving Iran and Russia free rein to set
up anti-west theocracies as puppets of Russia and Iran.
As for the Fed not getting growth, same principal... at least they have prevented the
house of cards that is the massive household and business debt from cascade defaulting into
global depression.
Back in Bernanke's day, every Fed speech included comments on "structural imbalances that
need to be addressed with fiscal policy", and every time he was dismissed as "the rich that
fund the political campaigns will never allow it".
Going back to Point's OP. Once they have taken away the screw driver, the hammer becomes
the only way to put in a screw.
BTW nobody knows the terms of the deal Big Oil negotiated with Iraqi leaders to get a lock on
cheap oil in southern Iraq. It was so bad that the Iraqi parliament never approved it. I
assume that Big Oil pays $5/barrel or less to Iraqi leaders' bank account in tax havens.
IOW...total corruption embraced by Republicans and Democrats alike.
"Answer: 1) Avoid admitting defeat. 2) Enrich the military/security oligopolies."
Nope.
To prevent Iran, with Russian aid, from advancing their goal of unifying the Islamic
world.
The goal is to keep the middle east divided and fighting itself so that it can't unify
against the west.
We can argue whether or not that is "good policy" or "moral policy", but that is the
policy.
Our friends in the region, like Saudi Arabia and Turkey are the countries that are content
to keep the middle east divided.
Iraq too, under Saddam Hussein... right up until he saw the collapse of the USSR and a
weakened Iran as an opportunity to unite the middle east under his control. Once he decided
to try to "unite the middle east" instead of being a tool for keeping it divided, he became
just another part of the problem.
Ridiculous. Total lack of understanding: Islamic world will never unite behind Iran. Iran is
Shi'a.
Of course, the knuckleheads running American foreign policy didn't understand that in
2003...and probably still don't understand, so I'll cut Darrell in Phoenix a little slack,
because his ignorance is shared by many elites.
Just how will Iran, who was the safest Islamic country until US and Saudis got mad at them
and stirred up Baluch and MEK terrorism, unify the Salafists who are Sunni supported by GCC
emirs and royals?
Stop making up motives that make no sense at all:
"Since then, the policy has simply been to prevent giving Iran and Russia free rein to set
up anti-west theocracies as puppets of Russia and Iran."
Note Russia has its own issues with Chechen and other Islamist terror!
Your excuses are almost as wild as the things Feith and Cheney made up about Iraq in
2002!
2019-01-11 (Bloomberg) Saudi and Canadian cuts are leaving world hungry for heavy crude
Refiners along the Gulf Coast and in the Midwest invested billions of dollars in cokers and
other heavy-oil processing units over the past three decades anticipating supplies of light
oil would become scarce while heavy crude from Canada's oil sands, Venezuela and Mexico would
grow. Instead, the opposite occurred.
The shale revolution, as well as new offshore supplies form Brazil and West Africa, caused a
surge of light oil, while supplies from Venezuela to Mexico declined. Canada's growth has
been stymied by delays in getting new pipelines built.
https://www.bnnbloomberg.ca/saudi-and-canadian-cuts-are-leaving-world-hungry-for-heavy-crude-1.1197259
India – Consumption of Petroleum Products (Without LPG or PetCoke)(kt/day)
December 2018 up +7.01% higher than December 2017
Average full year 2018 up +6.80% higher than full year 2017
Chart https://pbs.twimg.com/media/DwoYp5xWsAA_vRh.jpg
India Light Distillates Consumption (shown in chart)
Average full year 2018 up +9.74% higher than full year 2017
Chart https://pbs.twimg.com/media/DwoY_yjX4AA-S9K.jpg
India Middle Distillates Consumption
Average full year 2018 up +3.92% higher than full year 2017
Same source of info which is the Dallas Fed. Only, this one discusses costs more. As, was
discussed here, previously, WTI needs to be closer to $70 barrel to induce interest.
The president says he will bring the troops home from Syria and Afghanistan. Now, because of
their pathological hatred of Trump, mainstream Democrats are hysterical in their
opposition.
If anyone else were president, the "liberals" would be celebrating. After all, pulling
American soldiers out of a couple of failing, endless wars seems like a "win" for progressives.
Heck, if Obama did it there might be a ticker-tape parade down Broadway. And there should be.
The intervention in Syria is increasingly aimless, dangerous and lacks an end state.
Afghanistan is an unwinnable war – America's longest – and about to end in outright
military
defeat . Getting out now and salvaging so much national blood and treasure ought to be a
progressive dream. There's only one problem: Donald Trump. Specifically, that it was Trump who
gave the order
to begin the troop withdrawals.
Lost in the haze of their pathological hatred of President Trump, the majority of mainstream
liberal pundits and politicians can't, for the life of them, see the good sense in extracting
the troops from a couple Mideast quagmires. That or they can see the positives, but, in their
obsessive compulsion to smear the president, choose politics over country. It's probably a bit
of both. That's how tribally partisan American political discourse has become. And, how
reflexively hawkish and interventionist today's mainstream Democrats now are. Whither the
left-wing antiwar movement? Well, except for a few diehards out there, the movement seems to
have been buried long ago with
George McGovern .
Make no mistake, the Democrats have been tacking to the right on foreign policy and
burgeoning their tough-guy-interventionist credentials for decades now. Terrified of being
painted as soft or dovish on martial matters, just about all the "serious" baby-boomer Dems
proudly co-opted the militarist line and gladly accepted campaign cash from the corporate arms
dealers. Think about it, any Democrat with serious future presidential aspirations back in 2002
voted for the Iraq War – Hillary, Joe Biden, even former peace activist John Kerry! And,
in spite of the party base now moving to the left, all these big name hawks – along with
current Senate Minority Leader Chuck Schumer – are still Democratic stalwarts. Heck, some
polls
list Biden as the party's 2020 presidential frontrunner.
More disturbing than the inconsistency of these political hacks is the vacuousness of the
supposedly liberal media. After Trump's announcement of troop withdrawals, just about every
MSNBC host slammed the president and suddenly sounded more hawkish than the clowns over at Fox
News. Take Rachel Maddow. Whatever you think of her politics, she is – undoubtedly
– a brilliant woman. Furthermore, unlike most pundits, she knows a little something about
foreign policy. Her 2012 book, Drift: The
Unmooring of American Military Power was a serious and well-researched critique of
executive power and the ongoing failure of the wars on terror. Drift was well reviewed by
regular readers and scholars alike.
Enter Donald Trump. Ever since the man won the 2016 election, Maddow's nightly show has been
dominated the hopeless dream of Russia-collusion and a desire for Trump's subsequent
impeachment. Admittedly, Maddow's anti-Trump rhetoric isn't completely unfounded – this
author, after all, has spent the better part of two years criticizing most of his policies
– but her zealousness has clouded her judgment, or worse. Indeed, that Maddow, and her
fellow "liberals" at MSNBC have now
criticized the troop withdrawals and even paraded a slew of
disgraced neoconservatives – like Bill Kristol – on their shows seems final proof
of their descent into opportunistic hawkishness.
One of the most disturbing aspects of this new "liberal" hawkishness is the pundits' regular
canonization of Jim Mattis and the other supposed "adults"
in the room . For mainstream, Trump-loathing, liberals the only saving grace for this
administration was its inclusion of a few trusted, "grown-up" generals in the cabinet. Yet it
is a dangerous day, indeed, when the supposedly progressive journalists deify only the military
men in the room. Besides, Mattis was no friend to the liberals. Their beloved President Obama
previously canned "mad-dog" for his excessive bellicosity towards Iran. Furthermore, Mattis
– so praised for both his judgment and ethics – chose an interesting issue for
which to finally fall-on-his-sword and resign. U.S. support for the Saudi-led starvation of
85,000 kids in Yemen: Mattis could deal with that. But a modest disengagement from even one
endless war in the Middle East: well, the former SECDEF just couldn't countenance that. Thus,
he seems a strange figure for a "progressive" network to deify.
Personally, I'd like to debate a few of the new "Cold Warriors" over at MSNBC or CNN and ask
a simple series of questions: what on the ground changed in Syria or Afghanistan that has
suddenly convinced you the US must stay put? And, what positivist steps should the military
take in those locales, in order to achieve what purpose exactly? Oh, by the way, I'd ask my
debate opponents to attempt their answers without uttering the word Trump. The safe money says
they couldn't do it – not by a long shot. Because, you see, these pundits live and die by
their hatred of all things Trump and the more times they utter his name the higher go the
ratings and the faster the cash piles up. It's a business model not any sort of display of
honest journalism.
There's a tragic irony here. By the looks of things, so long as Mr. Trump is president, it
seems that any real movement for less interventionism in the Greater Middle East may come from
a part of the political right – libertarians like Rand Paul along with the president's
die hard base, which is willing to follow him on any policy pronouncement. Paradoxically, these
folks may find some common cause with the far left likes of Bernie Sanders and the
Ocasio-Cortez crowd, but it seems unlikely that the mainstream left is prepared to lead a new
antiwar charge. What with Schumer/Pelosi still in charge, you can forget about it. Given the
once powerful left-led Vietnam-era protest movement, today's Dems seem deficient indeed on
foreign policy substance. Odds are they'll cede this territory, once again, to the GOP.
By taking a stronger interventionist, even militarist, stand than Trump on Syria and
Afghanistan, the Democrats are wading into dangerous waters. Maybe, as some say, this president
shoots from the hip and has no core policy process or beliefs. Perhaps. Then again, Trump did
crush fifteen Republican mainstays in 2015 and shock Hillary – and the world – in
2016. Indeed, he may know just what he's doing. While the Beltway,
congressional-military-industrial complex continues to support ever more fighting and dying
around the world, for the most part the American people do not . Trump, in fact, ran on a
generally anti -interventionist platform, calling the Iraq War "dumb" and not to be repeated.
The president's sometimes earthy – if coarse – commonsense resonated with a lot of
voters, and Hillary's hawkish establishment record (including her vote for that very same Iraq
War) didn't win her many new supporters.
Liberals have long believed, at least since McGovern's 1972 trouncing by Richard Nixon, that
they could out-hawk the Republican hawks and win over some conservatives. It rarely worked. In
fact, Dems have been playing right into bellicose Republican hands for decades. And, if they
run a baby-boomer-era hawk in 2020 – say Joe Biden – they'll be headed for another
shocking defeat. The combination of a (mostly, so far) strong economy and practical policy of
returning US troops from unpopular wars, could, once again, out weigh this president's other
liabilities.
Foreign policy won't, by itself, tip a national election. But make no mistake, if the clowns
at MSNBC and "liberal" hacks on Capitol Hill keep touting their newfound militarism, they're
likely to emerge from 2020 with not only smeared consciences, but four more years in the
opposition.
* * *
Danny Sjursen is a US Army officer and regular contributor to Antiwar.com He served combat tours with reconnaissance units in Iraq
and Afghanistan and later taught history at his alma mater, West Point. He is the author of a
memoir and critical analysis of the Iraq War, Ghostriders of
Baghdad: Soldiers, Civilians, and the Myth of the Surge . Follow him on Twitter at
@SkepticalVet .
[ Note: The views expressed in this article are those of the author, expressed in an
unofficial capacity, and do not reflect the official policy or position of the Department of
the Army, Department of Defense, or the U.S. government.]
A the politicians carry their recordsike a ball and chain. Trump had no legislative
baggage so in comparison he looked ok. There may be a chance that some plan to allow e
wrything to sink to near chaos is happening, with that risk of a slip up being total
collapse. It would appear total collapse is likely absent some very well thought out plan by
a lot of people who appear to be morons
In the US the neocons switch between parties like changing underwear. Now that the
republicans are soiled they'll wear democrats instead, lobby for more war until they're good
and soiled, and switch when republican populism is back on the rise (like during the Bush
years, and then Obama).
We all know it. If libtards didn't hate America, they wouldn't be trying so hard to change
it.
Remember the happy white culture middle class America of 1955? Libtards hate it with a
passion that can only be an obsession. The first thing libtards started whining about in the
1950's was the the poor 'oppressed' negroes weren't allowed to burp and fart at the same
lunch counter as the evil white man. We foolishly caved in to that first step of liberal
stupidity and look where we are today. Mall shootings in Chicongo and New Jersey.
Everytime the (((media))) shows you these violent examples, just remember how we got
here.
Compromising with liberals is nothing more than a highway to hell, paved with compromise
and liberal 'good intentions'.
Now we have Donald Trump who is willing to tell the liberal idiots to shove their fake
altruism and egalitarianism up their collective asses. This chance of a lifetime for our
children may never come again.
I voted for McGovern. I think that was the first time I voted. Now I can't stand either
political Parties. I saw the games the Republicans pulled with the Massachusetts Caucus and
Convention when I was an alternate delegate for Ron Paul. There is no trick dirty enough for
either Party to pull. They are without a moral compass.
Bring 'some' troops home is just a political maneuver not a policy change. How can you
tell?
Trump is an imperialist. That's why he fired Bannon.
And that's why Trump moved drones attacks operations from the military to the CIA.
There's no evidence that Trump is ending US intervention anywhere.
Now check this out when the President is Democrat.
52%
of Republicans disprove withdrawing troops: Americans widely support President Obama's
recent decision to withdraw nearly all U.S. troops from Iraq by the end of the year, with 75%
approving. That includes the vast majority of Democrats and independents. Republicans,
however, are slightly more likely to disapprove than approve.
The Republican position went from 50% supporting withdrawal with Obama to 70% under Trump.
A change for sure, but not nearly as dramatic as the Democrats which have completely changed
their positions i.e. their position has nothing to do with principles what-so-ever.
@Escrava Isaura: " Trump is an imperialist. That's why he fired Bannon. "
Not so sure of the connection there.
But America is an imperial nation (both major parties have supported this for years) and
the problem now is that its imperialism is on an irreversible trajectory which will bring it
to an end. As one might expect, they are trying to keep it alive but that will only delay the
inevitable. What we don't know is whether it will end with a whimper or a big bang.
"... This screaming comes not only from the US mainstream, but also from that European elite which has been housebroken for seventy years as obedient poodles, dachshunds or corgis in the American menagerie, via intense vetting by US trans-Atlantic "cooperation" associations. ..."
"... They are CIA assets who do what they're told. ..."
"... There is an unrecognized plague in our society called antidepressants. More than ten per cent of the people in the industrialized world take drugs which interfere with self doubt. They don't ask themselves whether an idea in their minds is true, fair or kind. They only ask if they believe it. And since the chemical they ingest prevents them from assessing the idea from all sides they always believe that if they think something it must be true. ..."
"... Other symptoms of antidepressant use include high levels of free floating anxiety (because useful anxiety is suppressed) and restlessness. ..."
"... I am still asking myself what motivated a veteran politician like Hillary Clinton to violate a cardinal rule of politics by attacking not her opponent but his supporters with the "basket of deplorable" comment in the closing days of the 2016 campaign except chemically induced madness. ..."
"... If history has recorded that the Roman Empire collapsed due to lead poisoning from the water pipes a future time may also conclude the US Empire was destroyed due to antidepressants. ..."
"... The psychology of the mass of Americans with it's self-righteousness and self-centerdness is really amazing. Just in the last seventeen years the US has invaded or otherwise attacked numerous countries and has caused millions of people to die, become miserable refugees, become orphans and all other manner of evil. ..."
"... Not least of all has been it's creation and patronage of ISIS, one of the most heinous groups in history. Yet Americans have this massive blind spot to the war criminality of all this that their country has committed against the peace of the world. Instead they're being stampeded into some irrational Russia-phobia. It's the US that's been on the march everywhere, labeling those countries that resist it's aggression as being aggressors for being willing to defend themselves. It's all upside-down. ..."
"... "I would rather take a political risk in pursuit of peace than to risk peace in pursuit of politics." ..."
"... I'd really like to know who wrote that line for the Prez. (Since I think it unlikely that he wrote that, or any of his "prepared remarks".) Stephen Miller? Whoever. But it was a genius comment. ..."
"... "Whom the gods would destroy, they first make mad" obviously the Gods want to destroy the so called western man ..."
Anyone with an average intelligence can, in two hours trawling of Internet, get how
false all that is. And, yet, here we are.
The same people who can spend hours on social media, shopping and entertainment online
can't, for SOME reason, figure all that out.
Easy to blame "them" and media/academia/whatever. Maybe it's time to start passing a bit
of blame to people in general. Not holding my breath.
I fully agree with this sentiment. The only reason the evil bastards who control our
society can get away with their treachery is because most of the American people are out to
lunch on the most important issues of our time. If the sheeple were to take responsibility to
inform themselves of what is happening today they would be able to see the lies they are
being constantly exposed to as just that -- lies. And then, they could put down the beer and
turn off the damn sports channel and get angry at what has happened to their country.
The only thing necessary for evil to triumph is for ignorant people to remain
ignorant.
This screaming comes not only from the US mainstream, but also from that European
elite which has been housebroken for seventy years as obedient poodles, dachshunds or
corgis in the American menagerie, via intense vetting by US trans-Atlantic "cooperation"
associations.
There is an unrecognized plague in our society called antidepressants. More than ten per
cent of the people in the industrialized world take drugs which interfere with self doubt.
They don't ask themselves whether an idea in their minds is true, fair or kind. They only ask
if they believe it. And since the chemical they ingest prevents them from assessing the idea
from all sides they always believe that if they think something it must be true.
This is the perfect environment for the virus of groupthink to spread.
And since our leaders, both on the left and the right, may be ahead of the curve on drug
usage the neocons and the politically correct may use antidepressants at greater levels than
10 per cent.
Other symptoms of antidepressant use include high levels of free floating anxiety
(because useful anxiety is suppressed) and restlessness.
I am still asking myself what motivated a veteran politician like Hillary Clinton to
violate a cardinal rule of politics by attacking not her opponent but his supporters with the
"basket of deplorable" comment in the closing days of the 2016 campaign except chemically
induced madness.
If history has recorded that the Roman Empire collapsed due to lead poisoning from the
water pipes a future time may also conclude the US Empire was destroyed due to
antidepressants.
@Gordon
Pratt I think you are mistaken trying to rationalize the behavior of the political class
and their puppet masters. I believe the real driver are not antidepressants, but an obscene
greed, which is so blinding that it made MIC profiteers forget that to enjoy the fruits of
their thievery they have to be alive.
The psychology of the mass of Americans with it's self-righteousness and self-centerdness
is really amazing. Just in the last seventeen years the US has invaded or otherwise attacked
numerous countries and has caused millions of people to die, become miserable refugees,
become orphans and all other manner of evil.
Not least of all has been it's creation and patronage of ISIS, one of the most heinous
groups in history. Yet Americans have this massive blind spot to the war criminality of all
this that their country has committed against the peace of the world. Instead they're being
stampeded into some irrational Russia-phobia. It's the US that's been on the march
everywhere, labeling those countries that resist it's aggression as being aggressors for
being willing to defend themselves. It's all upside-down.
"I would rather take a political risk in pursuit of peace than to risk peace in
pursuit of politics."
I'd really like to know who wrote that line for the Prez. (Since I think it unlikely
that he wrote that, or any of his "prepared remarks".) Stephen Miller? Whoever. But it was a
genius comment.
TDS is a convenient shorthand for this form of disconnect from reality. That said it is
absolutely fascinating to see and puzzle over this geopolitical tectonic event. The old
narrative is crumbling, with the result that people like Lauri are fighting desperately to
preserve their "sanity", dependent as it is on their tribal submission to the old order and
its old narrative (its timeworn lies).
"Science advances one funeral at a time."
Max Planck
By which he means that people persist in believing in those "truths" (their belief system)
they have held for a lifetime. Only when they die out will a new, revised belief system
replaced the old. The same in geopolitics as in science.
American dementia is not new. It is current but after the false flags of almost all of our
(US) wars going back as far as the Barbary Pirates, Americans have thrived on being the good
guys in an evil world. We are SO GOOD, and the world thinks we are perfect and want to be
part of US so much, that any other thought is treasonous.
The fact that getting along with Russia is necessary to NOT create armageddon, is
irrelevant to the typical citizen because no matter how wrong, we are blessed and perfect in
the eyes of the gawd we pretend to believe in.
"Russian Orthodox Church says smartphones a harbinger of the Antichrist"
"MOSCOW (AP) -- The head of the Russian Orthodox Church says the data-gathering capacity
of devices such as smartphones risks bringing humanity closer to the arrival of the
Antichrist.
In an interview shown Monday on state TV, Patriarch Kirill said the church does not oppose
technological progress but is concerned that "someone can know exactly where you are, know
exactly what you are interested in, know exactly what you are afraid of" and that such
information could be used for centralized control of the world.
"Control from one point is a foreshadowing of the coming of Antichrist, if we talk about
the Christian view. Antichrist is the person who will be at the head of the world wide web
that controls the entire human race," he said."
Voters around the world revolt against leaders who won't improve their lives.
Newly-elected Utah senator Mitt Romney kicked off 2019 with an op-ed in the Washington Post
that savaged Donald Trump's character and leadership. Romney's attack and Trump's response
Wednesday morning on Twitter are the latest salvos in a longstanding personal feud between the
two men. It's even possible that Romney is planning to challenge Trump for the Republican
nomination in 2020. We'll see.
But for now, Romney's piece is fascinating on its own terms. It's well-worth reading. It's a
window into how the people in charge, in both parties, see our country.
Romney's main complaint in the piece is that Donald Trump is a mercurial and divisive
leader. That's true, of course. But beneath the personal slights, Romney has a policy critique
of Trump. He seems genuinely angry that Trump might pull American troops out of the Syrian
civil war. Romney doesn't explain how staying in Syria would benefit America. He doesn't appear
to consider that a relevant question. More policing in the Middle East is always better. We
know that. Virtually everyone in Washington agrees.
Corporate tax cuts are also popular in Washington, and Romney is strongly on board with
those, too. His piece throws a rare compliment to Trump for cutting the corporate rate a year
ago.
That's not surprising. Romney spent the bulk of his business career at a firm called Bain
Capital. Bain Capital all but invented what is now a familiar business strategy: Take over an
existing company for a short period of time, cut costs by firing employees, run up the debt,
extract the wealth, and move on, sometimes leaving retirees without their earned pensions.
Romney became fantastically rich doing this.
Meanwhile, a remarkable number of the companies are now bankrupt or extinct. This is the
private equity model. Our ruling class sees nothing wrong with it. It's how they run the
country.
Mitt Romney refers to unwavering support for a finance-based economy and an internationalist
foreign policy as the "mainstream Republican" view. And he's right about that. For generations,
Republicans have considered it their duty to make the world safe for banking, while
simultaneously prosecuting ever more foreign wars. Modern Democrats generally support those
goals enthusiastically.
There are signs, however, that most people do not support this, and not just in America. In
countries around the world -- France, Brazil, Sweden, the Philippines, Germany, and many others
-- voters are suddenly backing candidates and ideas that would have been unimaginable just a
decade ago. These are not isolated events. What you're watching is entire populations revolting
against leaders who refuse to improve their lives.
Something like this has been in happening in our country for three years. Donald Trump rode
a surge of popular discontent all the way to the White House. Does he understand the political
revolution that he harnessed? Can he reverse the economic and cultural trends that are
destroying America? Those are open questions.
But they're less relevant than we think. At some point, Donald Trump will be gone. The rest
of us will be gone, too. The country will remain. What kind of country will be it be then? How
do we want our grandchildren to live? These are the only questions that matter.
The answer used to be obvious. The overriding goal for America is more prosperity, meaning
cheaper consumer goods. But is that still true? Does anyone still believe that cheaper iPhones,
or more Amazon deliveries of plastic garbage from China are going to make us happy? They
haven't so far. A lot of Americans are drowning in stuff. And yet drug addiction and suicide
are depopulating large parts of the country. Anyone who thinks the health of a nation can be
summed up in GDP is an idiot.
The goal for America is both simpler and more elusive than mere prosperity. It's happiness.
There are a lot of ingredients in being happy: Dignity. Purpose. Self-control. Independence.
Above all, deep relationships with other people. Those are the things that you want for your
children. They're what our leaders should want for us, and would want if they cared.
But our leaders don't care. We are ruled by mercenaries who feel no long-term obligation to
the people they rule. They're day traders. Substitute teachers. They're just passing through.
They have no skin in this game, and it shows. They can't solve our problems. They don't even
bother to understand our problems.
One of the biggest lies our leaders tell us that you can separate economics from everything
else that matters. Economics is a topic for public debate. Family and faith and culture,
meanwhile, those are personal matters. Both parties believe this.
Members of our educated upper-middle-classes are now the backbone of the Democratic Party
who usually describe themselves as fiscally responsible and socially moderate. In other words,
functionally libertarian. They don't care how you live, as long as the bills are paid and the
markets function. Somehow, they don't see a connection between people's personal lives and the
health of our economy, or for that matter, the country's ability to pay its bills. As far as
they're concerned, these are two totally separate categories.
Social conservatives, meanwhile, come to the debate from the opposite perspective, and yet
reach a strikingly similar conclusion. The real problem, you'll hear them say, is that the
American family is collapsing. Nothing can be fixed before we fix that. Yet, like the
libertarians they claim to oppose, many social conservatives also consider markets sacrosanct.
The idea that families are being crushed by market forces seems never to occur to them. They
refuse to consider it. Questioning markets feels like apostasy.
Both sides miss the obvious point: Culture and economics are inseparably intertwined.
Certain economic systems allow families to thrive. Thriving families make market economies
possible. You can't separate the two. It used to be possible to deny this. Not anymore. The
evidence is now overwhelming. How do we know? Consider the inner cities.
Thirty years ago, conservatives looked at Detroit or Newark and many other places and were
horrified by what they saw. Conventional families had all but disappeared in poor
neighborhoods. The majority of children were born out of wedlock. Single mothers were the rule.
Crime and drugs and disorder became universal.
What caused this nightmare? Liberals didn't even want to acknowledge the question. They were
benefiting from the disaster, in the form of reliable votes. Conservatives, though, had a ready
explanation for inner-city dysfunction and it made sense: big government. Decades of
badly-designed social programs had driven fathers from the home and created what conservatives
called a "culture of poverty" that trapped people in generational decline.
There was truth in this. But it wasn't the whole story. How do we know? Because virtually
the same thing has happened decades later to an entirely different population. In many ways,
rural America now looks a lot like Detroit.
This is striking because rural Americans wouldn't seem to have much in common with anyone
from the inner city. These groups have different cultures, different traditions and political
beliefs. Usually they have different skin colors. Rural people are white conservatives,
mostly.
Yet, the pathologies of modern rural America are familiar to anyone who visited downtown
Baltimore in the 1980s: Stunning out of wedlock birthrates. High male unemployment. A
terrifying drug epidemic. Two different worlds. Similar outcomes. How did this happen? You'd
think our ruling class would be interested in knowing the answer. But mostly they're not. They
don't have to be interested. It's easier to import foreign labor to take the place of
native-born Americans who are slipping behind.
But Republicans now represent rural voters. They ought to be interested. Here's a big part
of the answer: male wages declined. Manufacturing, a male-dominated industry, all but
disappeared over the course of a generation. All that remained in many places were the schools
and the hospitals, both traditional employers of women. In many places, women suddenly made
more than men.
Now, before you applaud this as a victory for feminism, consider the effects. Study after
study has shown that when men make less than women, women generally don't want to marry them.
Maybe they should want to marry them, but they don't. Over big populations, this causes a drop
in marriage, a spike in out-of-wedlock births, and all the familiar disasters that inevitably
follow -- more drug and alcohol abuse, higher incarceration rates, fewer families formed in the
next generation.
This isn't speculation. This is not propaganda from the evangelicals. It's social science.
We know it's true. Rich people know it best of all. That's why they get married before they
have kids. That model works. But increasingly, marriage is a luxury only the affluent in
America can afford.
And yet, and here's the bewildering and infuriating part, those very same affluent married
people, the ones making virtually all the decisions in our society, are doing pretty much
nothing to help the people below them get and stay married. Rich people are happy to fight
malaria in Congo. But working to raise men's wages in Dayton or Detroit? That's crazy.
This is negligence on a massive scale. Both parties ignore the crisis in marriage. Our
mindless cultural leaders act like it's still 1961, and the biggest problem American families
face is that sexism is preventing millions of housewives from becoming investment bankers or
Facebook executives.
For our ruling class, more investment banking is always the answer. They teach us it's more
virtuous to devote your life to some soulless corporation than it is to raise your own
kids.
Sheryl Sandberg of Facebook wrote an entire book about this. Sandberg explained that our
first duty is to shareholders, above our own children. No surprise there. Sandberg herself is
one of America's biggest shareholders. Propaganda like this has made her rich.
We are ruled by mercenaries who feel no long-term obligation to the people they rule.
They're day traders. Substitute teachers. They're just passing through. They have no skin in
this game, and it shows.
What's remarkable is how the rest of us responded to it. We didn't question why Sandberg was
saying this. We didn't laugh in her face at the pure absurdity of it. Our corporate media
celebrated Sandberg as the leader of a liberation movement. Her book became a bestseller: "Lean
In." As if putting a corporation first is empowerment. It is not. It is bondage. Republicans
should say so.
They should also speak out against the ugliest parts of our financial system. Not all
commerce is good. Why is it defensible to loan people money they can't possibly repay? Or
charge them interest that impoverishes them? Payday loan outlets in poor neighborhoods collect
400 percent annual interest.
We're OK with that? We shouldn't be. Libertarians tell us that's how markets work --
consenting adults making voluntary decisions about how to live their lives. OK. But it's also
disgusting. If you care about America, you ought to oppose the exploitation of Americans,
whether it's happening in the inner city or on Wall Street.
And by the way, if you really loved your fellow Americans, as our leaders should, if it
would break your heart to see them high all the time. Which they are. A huge number of our
kids, especially our boys, are smoking weed constantly. You may not realize that, because new
technology has made it odorless. But it's everywhere.
And that's not an accident. Once our leaders understood they could get rich from marijuana,
marijuana became ubiquitous. In many places, tax-hungry politicians have legalized or
decriminalized it. Former Speaker of the House John Boehner now lobbies for the marijuana
industry. His fellow Republicans seem fine with that. "Oh, but it's better for you than
alcohol," they tell us.
Maybe. Who cares? Talk about missing the point. Try having dinner with a 19-year-old who's
been smoking weed. The life is gone. Passive, flat, trapped in their own heads. Do you want
that for your kids? Of course not. Then why are our leaders pushing it on us? You know the
reason. Because they don't care about us.
When you care about people, you do your best to treat them fairly. Our leaders don't even
try. They hand out jobs and contracts and scholarships and slots at prestigious universities
based purely on how we look. There's nothing less fair than that, though our tax code comes
close.
Under our current system, an American who works for a salary pays about twice the tax rate
as someone who's living off inherited money and doesn't work at all. We tax capital at half of
what we tax labor. It's a sweet deal if you work in finance, as many of our rich people do.
In 2010, for example, Mitt Romney made about $22 million dollars in investment income. He
paid an effective federal tax rate of 14 percent. For normal upper-middle-class wage earners,
the federal tax rate is nearly 40 percent. No wonder Mitt Romney supports the status quo. But
for everyone else, it's infuriating.
Our leaders rarely mention any of this. They tell us our multi-tiered tax code is based on
the principles of the free market. Please. It's based on laws that the Congress passed, laws
that companies lobbied for in order to increase their economic advantage. It worked well for
those people. They did increase their economic advantage. But for everyone else, it came at a
big cost. Unfairness is profoundly divisive. When you favor one child over another, your kids
don't hate you. They hate each other.
That happens in countries, too. It's happening in ours, probably by design. Divided
countries are easier to rule. And nothing divides us like the perception that some people are
getting special treatment. In our country, some people definitely are getting special
treatment. Republicans should oppose that with everything they have.
What kind of country do you want to live in? A fair country. A decent country. A cohesive
country. A country whose leaders don't accelerate the forces of change purely for their own
profit and amusement. A country you might recognize when you're old.
A country that listens to young people who don't live in Brooklyn. A country where you can
make a solid living outside of the big cities. A country where Lewiston, Maine seems almost as
important as the west side of Los Angeles. A country where environmentalism means getting
outside and picking up the trash. A clean, orderly, stable country that respects itself. And
above all, a country where normal people with an average education who grew up in no place
special can get married, and have happy kids, and repeat unto the generations. A country that
actually cares about families, the building block of everything.
What will it take a get a country like that? Leaders who want it. For now, those leaders will
have to be Republicans. There's no option at this point.
But first, Republican leaders will have to acknowledge that market capitalism is not a
religion. Market capitalism is a tool, like a staple gun or a toaster. You'd have to be a fool
to worship it. Our system was created by human beings for the benefit of human beings. We do
not exist to serve markets. Just the opposite. Any economic system that weakens and destroys
families is not worth having. A system like that is the enemy of a healthy society.
Internalizing all this will not be easy for Republican leaders. They'll have to unlearn
decades of bumper sticker-talking points and corporate propaganda. They'll likely lose donors
in the process. They'll be criticized. Libertarians are sure to call any deviation from market
fundamentalism a form of socialism.
That's a lie. Socialism is a disaster. It doesn't work. It's what we should be working
desperately to avoid. But socialism is exactly what we're going to get, and very soon unless a
group of responsible people in our political system reforms the American economy in a way that
protects normal people.
If you want to put America first, you've got to put its families first.
Adapted from Tucker Carlson's monologue from "Tucker Carlson Tonight" on January 2,
2019.
"... America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society." ..."
"... He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate the forces of change purely for their own profit and amusement." ..."
"... The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher wrote of Carlson's monologue, "A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would be the first affirmative vote I've ever cast for president. ..."
"... The Two-Income Trap: Why Middle-Class Parents Are Growing Broke ..."
"... Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites -- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people." ..."
"... "What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put these policies into effect, what will you have in 10 years?" ..."
"... Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald Trump, whose populist-lite presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless you figure out how to put the flames out, it will consume it." ..."
"... Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative, thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment. ..."
"... Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax. ..."
"... "I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home an ever-expanding proportion of the money is not a recipe for a stable society. It's not." ..."
"... Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and figure out how to protect average people from these remarkably powerful forces that have been unleashed." ..."
"... But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left. ..."
"... Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense of unchosen obligations one might have towards one's kin. ..."
"... Hillbilly Elegy ..."
"... Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a function or raw nature." ..."
"All I'm saying is don't act like the way things are is somehow ordained by God."
Last Wednesday, the conservative talk show host Tucker Carlson started a fire on the right after airing a prolonged
monologue on his show that was, in essence, an indictment of American capitalism.
America's "ruling class," Carlson says, are the "mercenaries" behind the failures of the middle class -- including sinking
marriage rates -- and "the ugliest parts of our financial system." He went on: "Any economic system that weakens and destroys families
is not worth having. A system like that is the enemy of a healthy society."
He concluded with a demand for "a fair country. A decent country. A cohesive country. A country whose leaders don't accelerate
the forces of change purely for their own profit and amusement."
The monologue was stunning in itself, an incredible moment in which a Fox News host stated that for generations, "Republicans
have considered it their duty to make the world safe for banking, while simultaneously prosecuting ever more foreign wars." More
broadly, though, Carlson's position and the ensuing controversy reveals an ongoing and nearly unsolvable tension in conservative
politics about the meaning of populism, a political ideology that Trump campaigned on but Carlson argues he may not truly understand.
Moreover, in Carlson's words: "At some point, Donald Trump will be gone. The rest of us will be gone too. The country will remain.
What kind of country will be it be then?"
The monologue and its sweeping anti-elitism drove a wedge between conservative writers. The American Conservative's Rod Dreher
wrote of Carlson's monologue,
"A man or woman who can talk like that with conviction could become president. Voting for a conservative candidate like that would
be the first affirmative vote I've ever cast for president." Other conservative commentators scoffed. Ben Shapiro wrote in
National Review that Carlson's monologue sounded far more like Sens. Bernie Sanders or Elizabeth Warren than, say, Ronald Reagan.
I spoke with Carlson by phone this week to discuss his monologue and its economic -- and cultural -- meaning. He agreed that his
monologue was reminiscent of Warren, referencing her 2003
bookThe Two-Income Trap: Why Middle-Class Parents Are Growing Broke . "There were parts of the book that I disagree
with, of course," he told me. "But there are parts of it that are really important and true. And nobody wanted to have that conversation."
Carlson wanted to be clear: He's just asking questions. "I'm not an economic adviser or a politician. I'm not a think tank
fellow. I'm just a talk show host," he said, telling me that all he wants is to ask "the basic questions you would ask about any
policy." But he wants to ask those questions about what he calls the "religious faith" of market capitalism, one he believes elites
-- "mercenaries who feel no long-term obligation to the people they rule" -- have put ahead of "normal people."
But whether or not he likes it, Carlson is an important voice in conservative politics. His show is among the
most-watched television programs in America. And his raising questions about market capitalism and the free market matters.
"What does [free market capitalism] get us?" he said in our call. "What kind of country do you want to live in? If you put
these policies into effect, what will you have in 10 years?"
Populism on the right is gaining, again
Carlson is hardly the first right-leaning figure to make a pitch for populism, even tangentially, in the third year of Donald
Trump, whose populist-lite
presidential candidacy and presidency Carlson told me he views as "the smoke alarm ... telling you the building is on fire, and unless
you figure out how to put the flames out, it will consume it."
Populism is a rhetorical approach that separates "the people" from elites. In the
words of Cas
Mudde, a professor at the University of Georgia, it divides the country into "two homogenous and antagonistic groups: the pure people
on the one end and the corrupt elite on the other." Populist rhetoric has a long history in American politics, serving as the focal
point of numerous presidential campaigns and powering William Jennings Bryan to the Democratic nomination for president in 1896.
Trump borrowed some of that approach for his 2016 campaign but in office has governed as a fairly orthodox economic conservative,
thus demonstrating the demand for populism on the right without really providing the supply and creating conditions for further ferment.
When right-leaning pundit Ann Coulter
spoke with Breitbart Radio about Trump's Tuesday evening Oval Office address to the nation regarding border wall funding, she
said she wanted to hear him say something like, "You know, you say a lot of wild things on the campaign trail. I'm speaking to big
rallies. But I want to talk to America about a serious problem that is affecting the least among us, the working-class blue-collar
workers":
Coulter urged Trump to bring up overdose deaths from heroin in order to speak to the "working class" and to blame the fact
that working-class wages have stalled, if not fallen, in the last 20 years on immigration. She encouraged Trump to declare, "This
is a national emergency for the people who don't have lobbyists in Washington."
Ocasio-Cortez wants a 70-80% income tax on the rich. I agree! Start with the Koch Bros. -- and also make it WEALTH tax.
These sentiments have even pitted popular Fox News hosts against each other.
Sean Hannity warned his audience that New York Rep. Alexandria Ocasio-Cortez's economic policies would mean that "the rich people
won't be buying boats that they like recreationally, they're not going to be taking expensive vacations anymore." But Carlson agreed
when I said his monologue was somewhat reminiscent of Ocasio-Cortez's
past comments on the economy , and how even a strong economy was still leaving working-class Americans behind.
"I'm just saying as a matter of fact," he told me, "a country where a shrinking percentage of the population is taking home
an ever-expanding proportion of the money is not a recipe for a stable society. It's not."
Carlson told me he wanted to be clear: He is not a populist. But he believes some version of populism is necessary to prevent
a full-scale political revolt or the onset of socialism. Using Theodore Roosevelt as an example of a president who recognized that
labor needs economic power, he told me, "Unless you want something really extreme to happen, you need to take this seriously and
figure out how to protect average people from these remarkably powerful forces that have been unleashed."
"I think populism is potentially really disruptive. What I'm saying is that populism is a symptom of something being wrong," he
told me. "Again, populism is a smoke alarm; do not ignore it."
But Carlson's brand of populism, and the populist sentiments sweeping the American right, aren't just focused on the current
state of income inequality in America. Carlson tackled a bigger idea: that market capitalism and the "elites" whom he argues are
its major drivers aren't working. The free market isn't working for families, or individuals, or kids. In his monologue, Carlson
railed against libertarian economics and even payday loans, saying, "If you care about America, you ought to oppose the exploitation
of Americans, whether it's happening in the inner city or on Wall Street" -- sounding very much like Sanders or Warren on the left.
Carlson's argument that "market capitalism is not a religion" is of course old hat on the left, but it's also been bubbling on
the right for years now. When National Review writer Kevin Williamson
wrote
a 2016 op-ed about how rural whites "failed themselves," he faced a massive backlash in the Trumpier quarters of the right. And
these sentiments are becoming increasingly potent at a time when Americans can see both a booming stock market and perhaps their
own family members struggling to get by.
Capitalism/liberalism destroys the extended family by requiring people to move apart for work and destroying any sense
of unchosen obligations one might have towards one's kin.
At the Federalist, writer Kirk Jing
wrote of Carlson's
monologue, and a
response
to it by National Review columnist David French:
Our society is less French's America, the idea, and more Frantz Fanon's "Wretched of the Earth" (involving a very different
French). The lowest are stripped of even social dignity and deemed
unworthy of life . In Real America, wages are stagnant, life expectancy is crashing, people are fleeing the workforce, families
are crumbling, and trust in the institutions on top are at all-time lows. To French, holding any leaders of those institutions
responsible for their errors is "victimhood populism" ... The Right must do better if it seeks to govern a real America that exists
outside of its fantasies.
J.D. Vance, author of
Hillbilly Elegy
, wrote that the [neoliberal] economy's victories -- and praise for those wins from conservatives -- were largely meaningless
to white working-class Americans living in Ohio and Kentucky: "Yes, they live in a country with a higher GDP than a generation ago,
and they're undoubtedly able to buy cheaper consumer goods, but to paraphrase Reagan: Are they better off than they were 20 years
ago? Many would say, unequivocally, 'no.'"
Carlson's populism holds, in his view, bipartisan possibilities. In a follow-up email, I asked him why his monologue was aimed
at Republicans when many Democrats had long espoused the same criticisms of free market economics. "Fair question," he responded.
"I hope it's not just Republicans. But any response to the country's systemic problems will have to give priority to the concerns
of American citizens over the concerns of everyone else, just as you'd protect your own kids before the neighbor's kids."
Who is "they"?
And that's the point where Carlson and a host of others on the right who have begun to challenge the conservative movement's orthodoxy
on free markets -- people ranging from occasionally mendacious bomb-throwers like Coulter to writers like
Michael Brendan Dougherty -- separate
themselves from many of those making those exact same arguments on the left.
When Carlson talks about the "normal people" he wants to save from nefarious elites, he is talking, usually, about a specific
group of "normal people" -- white working-class Americans who are the "real" victims of capitalism, or marijuana legalization, or
immigration policies.
In this telling, white working-class Americans who once relied on a manufacturing economy that doesn't look the way it did in
1955 are the unwilling pawns of elites. It's not their fault that, in Carlson's view, marriage is inaccessible to them, or that marijuana
legalization means more teens are smoking weed (
this probably isn't true ). Someone,
or something, did this to them. In Carlson's view, it's the responsibility of politicians: Our economic situation, and the plight
of the white working class, is "the product of a series of conscious decisions that the Congress made."
The criticism of Carlson's monologue has largely focused on how he deviates from the free market capitalism that conservatives
believe is the solution to poverty, not the creator of poverty. To orthodox conservatives, poverty is the result of poor decision
making or a
lack of virtue that can't be solved by government programs or an anti-elite political platform -- and they say Carlson's argument
that elites are in some way responsible for dwindling marriage rates
doesn't make sense .
But in French's response to Carlson, he goes deeper, writing that to embrace Carlson's brand of populism is to support "victimhood
populism," one that makes white working-class Americans into the victims of an undefined "they:
Carlson is advancing a form of victim-politics populism that takes a series of tectonic cultural changes -- civil rights, women's
rights, a technological revolution as significant as the industrial revolution, the mass-scale loss of religious faith, the sexual
revolution, etc. -- and turns the negative or challenging aspects of those changes into an angry tale of what they are
doing to you .
And that was my biggest question about Carlson's monologue, and the flurry of responses to it, and support for it: When other
groups (say, black Americans) have pointed to systemic inequities within the economic system that have resulted in poverty and family
dysfunction, the response from many on the right has been, shall we say,
less than
enthusiastic .
Really, it comes down to when black people have problems, it's personal responsibility, but when white people have the same
problems, the system is messed up. Funny how that works!!
Yet white working-class poverty receives, from Carlson and others, far more sympathy. And conservatives are far more likely to
identify with a criticism of "elites" when they believe those elites are responsible for the
expansion of trans
rights or creeping secularism
than the wealthy and powerful people who are investing in
private prisons or an expansion
of the
militarization of police . Carlson's network, Fox News, and Carlson himself have frequently blasted leftist critics of market
capitalism and efforts to
fight
inequality .
I asked Carlson about this, as his show is frequently centered on the turmoils caused by "
demographic change
." He said that for decades, "conservatives just wrote [black economic struggles] off as a culture of poverty," a line he
includes in his monologue .
He added that regarding black poverty, "it's pretty easy when you've got 12 percent of the population going through something
to feel like, 'Well, there must be ... there's something wrong with that culture.' Which is actually a tricky thing to say because
it's in part true, but what you're missing, what I missed, what I think a lot of people missed, was that the economic system you're
living under affects your culture."
Carlson said that growing up in Washington, DC, and spending time in rural Maine, he didn't realize until recently that the same
poverty and decay he observed in the Washington of the 1980s was also taking place in rural (and majority-white) Maine. "I was thinking,
'Wait a second ... maybe when the jobs go away the culture changes,'" he told me, "And the reason I didn't think of it before was
because I was so blinded by this libertarian economic propaganda that I couldn't get past my own assumptions about economics." (For
the record, libertarians have
critiqued Carlson's
monologue as well.)
Carlson told me that beyond changing our tax code, he has no major policies in mind. "I'm not even making the case for an
economic system in particular," he told me. "All I'm saying is don't act like the way things are is somehow ordained by God or a
function or raw nature."
And clearly, our market economy isn't driven by God or nature, as the stock market soars and unemployment dips and yet even those
on the right are noticing lengthy periods of wage stagnation and dying little towns across the country. But what to do about those
dying little towns, and which dying towns we care about and which we don't, and, most importantly, whose fault it is that those towns
are dying in the first place -- those are all questions Carlson leaves to the viewer to answer.
What Should You Do About a Falling Stock Market?
Nothing https://nyti.ms/2RncIvF
NYT - Neil Irwin - Jan 3
Millions of investors will receive year-end statements from their brokerages and
retirement plan managers in the coming weeks, and the great majority of them will have
unpleasant news: losses.
The S&P 500 finished the year down 6.2 percent, with the steepest declines recorded in
the fourth quarter.
With Apple's announcement of disappointing sales in China on Wednesday, the bad times for
stocks continued in the first week of the new year. While most economic data has remained
strong, there are some rumblings that 2019 may be quite a bit rougher than 2018. Corporate
executives are becoming more pessimistic, according to surveys, and Americans are conducting
Google searches for the word "recession" at the highest rate since the last one just ended in
2009.
If it all makes you want to flee -- or at least shift your 401(k) into cash -- that's
understandable. It's also a bad idea.
The sensible response to this unnerving series of developments is to do pretty much
anything else. Read a book. Go for a walk. Take up knitting. Or just do nothing at all, like
take a nap.
If you are a long-term investor (and any money you have tied up in the stock market should
be intended for the long term to begin with), tumult like that of the last few months isn't
something that should cause panic. Rather, it's the price you pay for enjoying returns that,
over long time horizons, are likely to be substantially higher than those for cash or
bonds.
That's true if this episode turns out to be a false alarm for the overall economy, as is a
distinct possibility. But it's also true even if this does turn out to be the start of a
prolonged period of economic and market distress -- especially if you are still in the phase
of your life of contributing to a retirement plan or otherwise accumulating savings.
The recent pessimistic tone in markets is getting way ahead of the evidence. Nothing so
far in either the economic data or the market indicators that most reliably predict economic
swings suggests there will be anything worse than a modest slowdown in economic growth in
2019.
Businesses are still expanding and adding jobs. The yield on two-year Treasury bonds has
fallen in the last three months, but it would have fallen a lot more if the bond market --
which tends to be closely tied to the direction of the overall economy -- had been predicting
an imminent recession.
Moreover, an investor who moved money into cash now would be doing so just as the
valuation of stocks was becoming more favorable -- buying high and selling low, not the way
great fortunes are made. That's especially true when you factor in the drop in longer-term
interest rates, which makes shares particularly appealing relative to bonds.
In early November, investing $100 in stocks would buy you about $4.64 worth of corporate
earnings, versus the $3.21 in interest you would could receive by investing in 10-year
Treasury bonds. Now, stocks offer $5.25, while bonds offer only $2.61.
But most important, even if the economic road ahead really is as bumpy as some in markets
seem to fear, you're probably not going to be successful at timing those swings just
right.
Of course, if you had a perfect ability to predict how far the market would fall and when
it would bottom out, it would make sense to move money in and out. You do not.
There is a wide range of evidence that people are pitiful at timing the market. Even
supposed investment experts lack that prescience.
Even if you turned out to be right about a continuing tumble in 2019, the great risk would
be that whenever the rebound began, you would be caught out of position, unable to take
advantage.
Suppose you were clever enough to recognize at the start of December 2007 that a major
recession was about to take place, and you moved your money out of stocks.
Yes, you would have saved yourself from steep losses in 2008 and early 2009. But you have
to ask yourself: Would I have also had the courage to put money back in while the economy was
still in horrendous shape in 2009, with double-digit unemployment and a banking system in
tatters?
If not then, when would you have moved money back in? People who simply left their savings
fully invested in the stock market in December 2007 have now made a 134 percent return on
that money. Would you have done better than that, or would you have missed out on a big chunk
of those gains out of the same caution that led you to pull money out of stocks to begin
with?
People who did not panic in the fall of 2008 -- the most panic-worthy time in most of our
lifetimes -- and kept putting their retirement funds into stocks did indeed incur steep
losses over the ensuing months. But their newly invested funds were being put into stocks at
the most favorable valuations in a generation, and thus enjoyed the full benefit of the
rebound when it eventually came.
A truism of economic and financial cycles is that by the time it feels like the coast is
clear and putting money into riskier investments is completely safe, the real money has
already been made. People who looked at the economic chaos of early 2009 and stuck to their
guns have ended up far better off than those who, convinced that a double-dip downturn was
imminent, waited for years to get in.
This equation changes, of course, if we're talking about money needed imminently as
opposed to longer-term savings, such as for retirement. The economy looks stable now, but
that could change -- it's still possible that markets and C.E.O.s know something about the
future that isn't clear in the data yet.
But that's more of a fundamental argument about how your assets should be allocated. If an
18 percent drop in stocks is enough to cause you to change your entire investment strategy,
that money shouldn't have been in stocks to begin with.
The entire point of investing in stocks is that you get greater long-term expected returns
in exchange for tolerating bigger ups and downs. Episodes like those of the last few weeks
are, in effect, the price you pay for returns that are substantially higher than bonds or
cash over longer periods.
Just as there are no free lunches, there are no excess returns without some volatility and
risk.
As individual investors, we cannot control volatility. What we can control is our own
mind-set and reaction, and the more level your head, the better your long-term results are
likely to be.
---
Others would advise you to use the '120 - Yer Age' rule:
At age 70, keep 120-70 (50%) of yer assets in equities,
50% in bonds. The main point to this might be, if yer 30, keep 90% of them in equities.
(Not so long ago, apparently, this was the
'100 - Yer Age' rule, if that tells you anything.)
Such rules reflect the idea that stock markets
*always* recover over time, assuming you have
enough time available to wait.
Stocks were going up too quickly for too long, becoming overpriced.
The longer that happens, and the more overpriced they get, the bigger the drop when it
corrects.
So, you let stock prices fall back to a normal P/E ratio.
Anti-greenspan. Greenspan thought bubbles good, and the clean-up easy. Wrong. Bubbles are
bad. Volker was correct. Take away the punch bowl just as the party is getting
started.
This is more reassuring. DeLong's article "What Will Cause the Next US Recession?" leads with
"Three of the last four US recessions stemmed from unforeseen shocks in financial markets..."
As long as DeLong can get away with saying those crises were the results of unforeseen causes
then economists still really do not know what they are talking about and we would be better
off listening to readers of hand palms and tea leaves.
Like Generals fighting the last war, Dr. Summers ?
"The critical challenge for monetary and fiscal policy will be to maintain sufficient
demand amid immense geopolitical uncertainty, increasing protectionism, high accumulated debt
levels, and structural and demographic factors leading to increased private saving and
reduced private investment"
Perhaps the critical challenge, and the tone of the next recession, is less demand. After
all, recessions area always caused by a change in consumer taste more than demand.
I have no idea how well Alexandria Ocasio-Cortez will perform as a member of
Congress. But her election is already serving a valuable purpose. You see, the mere thought of having a young,
articulate, telegenic nonwhite woman serve is driving many on the right mad -- and in their madness they're
inadvertently revealing their true selves.
Some of the revelations are cultural: The hysteria over a video of AOC dancing
in college says volumes, not about her, but about the hysterics. But in some ways the more important
revelations are intellectual: The right's denunciation of AOC's "insane" policy ideas serves as a very good
reminder of who is actually insane.
The controversy of the moment involves AOC's advocacy of a tax rate of 70-80
percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only
ignorant people like um, Peter Diamond, Nobel laureate in economics and arguably the world's leading expert
on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with
claims that he was
unqualified
. Really.) And it's a policy nobody has ever implemented, aside from the United States, for 35
years after World War II -- including the most successful period of economic growth in our history.
To be more specific, Diamond, in work with Emmanuel Saez -- one of our leading
experts on inequality -- estimated the
optimal top tax rate
to be 73 percent. Some put it higher: Christina Romer, top macroeconomist and former
head of President Obama's Council of Economic Advisers, estimates it at
more than 80 percent
.
Where do these numbers come from? Underlying the Diamond-Saez analysis are two
propositions: Diminishing marginal utility and competitive markets.
Diminishing marginal utility is the common-sense notion that an extra dollar is
worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family
with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy
who makes $1 million an extra thousand and he'll barely notice it.
What this implies for economic policy is that we shouldn't care what a policy
does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of
people, and will barely affect their life satisfaction, since they will still be able to buy whatever they
want.
So why not tax them at 100 percent? The answer is that this would eliminate any
incentive to do whatever it is they do to earn that much money, which would hurt the economy. In other words,
tax policy toward the rich should have nothing to do with the interests of the rich, per se, but should only be
concerned with how incentive effects change the behavior of the rich, and how this affects the rest of the
population.
But here's where competitive markets come in. In a perfectly competitive
economy, with no monopoly power or other distortions -- which is the kind of economy conservatives want us to
believe we have -- everyone gets paid his or her marginal product. That is, if you get paid $1000 an hour, it's
because each extra hour you work adds $1000 worth to the economy's output.
In that case, however, why do we care how hard the rich work? If a rich man
works an extra hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income of
everyone else doesn't change, does it? Ah, but it does -- because he pays taxes on that extra $1000. So the
social benefit from getting high-income individuals to work a bit harder is the tax revenue generated by that
extra effort -- and conversely the cost of their working less is the reduction in the taxes they pay.
Or to put it a bit more succinctly, when taxing the rich, all we should care
about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that
raises the maximum possible revenue.
And that's something we can estimate, given evidence on how responsive the
pre-tax income of the wealthy actually is to tax rates. As I said, Diamond and Saez put the optimal rate at 73
percent, Romer at over 80 percent -- which is consistent with what AOC said.
An aside: What if we take into account the reality that markets aren't
perfectly competitive, that there's a lot of monopoly power out there? The answer is that this almost surely
makes the case for even higher tax rates, since high-income people presumably get a lot of those monopoly
rents.
So AOC, far from showing her craziness, is fully in line with serious economic
research. (I hear that she's been talking to some very good economists.) Her critics, on the other hand, do
indeed have crazy policy ideas -- and tax policy is at the heart of the crazy.
You see, Republicans almost universally advocate low taxes on the wealthy,
based on the claim that tax cuts at the top will have huge beneficial effects on the economy. This claim rests
on research by well, nobody. There isn't any body of serious work supporting G.O.P. tax ideas, because the
evidence is overwhelmingly against those ideas.
Look at the history of top marginal income tax rates (left) versus growth in
real GDP per capita (right, measured over 10 years, to smooth out short-run fluctuations.):
Top tax rates and growth
Credit
Tax
Policy Center, BEA
Image
Top
tax rates and growth
Credit
Tax
Policy Center, BEA
What we see is that America used to have very high tax rates on the rich --
higher even than those AOC is proposing -- and did just fine. Since then tax rates have come way down, and if
anything the economy has done less well.
Why do Republicans adhere to a tax theory that has no support from nonpartisan
economists and is refuted by all available data? Well, ask who benefits from low taxes on the rich, and it's
obvious.
And because the party's coffers demand adherence to nonsense economics, the
party prefers "economists" who are obvious frauds and can't even
fake their numbers
effectively.
Follow The New York Times Opinion section on
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.
Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City
University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his
work on international trade and economic geography.
@
PaulKrugman
Billy, if AOC's proposal is
insane, than Dwight Eisenhower, President during a long period of economic expansion and
prosperity, belonged not in the White House but in a mad house, given that the top income tax
rate during his administration, 91%, exceeded even that suggested by AOC. I have lifelong
friends in Denmark and have visited the country. All say they are happy with the high
personal income tax rate, which was 55.8 % in 2018 . See
https://tradingeconomics.com/denmark/personal-income-tax-rate
. Interestingly, the main
indicators of happiness find that Denmark is also the happiest country in the world (
https://www.frugalconfessions.com/miscellaneous/denmark-highest-tax-rate-and-happiest-people.php
).
Whatever one makes of AOC's tax
ideas (they're good) or PK's take on them, the frenzy that AOC has sparked is quite a sight
to behold.
This is how people shape the conversation, and it's how the Dems can reclaim a
share of the news media spotlight.
Conservatives have known this is how it works for a long
time: it pays to have a few extremists willing to utter ideas from the fringe. The media will
cover AOC because it's AOC saying things. Period. Over time, with persistence and if she and
others like her have substance and discipline (still not certain), she will help move the
window of opportunity to the left.
She will help normalize what until recently was regarded
as 'zany lefty'. This clearly freaks out conservative operators and it will be one of AOC's
biggest contributions. Her strength will be to make everyone talk about her and her ideas.
Her haters commenting here are proving the point. Finally, a Dem who knows to steer clear of
the 51-point policy plan that oh-so-cleverly tweaks the tax code here and balances the wishes
of everyone/no one and instead just make a bold ambitious claim. Good for her.
In Manchester's "The Power and
the Glory" he noted that in 1950, the CEO of Ford Motors lived in a relatively modest
five-bedroom home in Detroit: "when the doorbell rang, he answered himself." So did the Vice
President of the United States. Their children were drafted.
These men were no less smart,
savvy, and entrepreneurial than today. They were comfortable, had homes in the Hamptons (not
mansions) and still led the United States in the greatest economic expansion in history.
When
did we begin to believe that mega-millions to CEOs will magically transform into wealth for
all, or that it is a necessary inducement to work? A man who makes millions will reinvest in
his country; a man who makes hundreds of millions will hide it offshore, Restore the marginal
tax rate to the 1960 level. And restore the draft. It's America, dammit, and everybody pulls
an oar.
I'm baffled by the rationale here. The liberals certainly understand that it's 2019 and people and capital are more mobile than
they've ever been. I own a business - tax me at 73% and watch me take it to Canada, Ireland, or any other locale where I don't get
"soaked".
Why is the answer from the left that we always need more money from someone? As if the "rich" have done something wrong. Why not
take the existing bloated budget, apply some creativity and critical thinking (you know - the kind that happens in the private
sector) and solve problems with the current tax rates.
@Freda Pine When you're making
over $10 million, you're not getting out of bed and clocking into the warehouse to earn your
money. Your interest are diverse and generate money without your lifting a finger. There is
no faucet of income to turn off, and even if you could, why would you? It's still a lot of
extra income for the type of person who is interested in earning more money than they can
possibly spend.
Economists are not
physiologists. I will not get out of bed if I had to pay 70% tax on my income. Not even if my
income was $300,000 annually. I might as well work less hard and earn $100,000 paying $20%
tax. This tax worked in the past, but since a lot has changed in our society. We are far from
Scandinavia and any effort to impose a move in it's direction is unproductive.
Ask most older white Americans
what was the best time economically in this country and they will say the post WWII and the
Eisenhower years. Then remind them of the top tax rates and the lack of deductions.
I think this is still the wrong tack, as it gets too close to the wrong headed Modern Money
Theory where the ignorant think money can be dumped into the economy, in near infinite
amounts, without regard for taxation, with no side-effects.
I think the better tack is to attack it as a cash-flow issue. The rich are taking money
out of active circulation, and lending it back into the economy. This is why debt is
exploding at an unsustainable rate.
We need to use the tax code to force the rich to spend or capital invest their income back
into the economy.
Observations of the 1950-1960s tax code show that the rich didn't actually pay a higher
effective rate. They used loopholes.
RIGHT!!! Those loopholes were created as the carrot to get the rich to spend or
invest.
Don't phrase it as "We need to raise taxes to fund..." It smacks of "take from workers and
give to lazy".
We need to phrase it as "We need to tax to force the rich to spend or invest."
The spending and investing increases total economic activity. The poor become middle
class, going from paying little-to-no tax to paying 20-30% effective rates.
AND, it is that lifting of the poor into the middle class that creates the extra tax
revenue to fund needed social and infrastructure spending.
The solution is to put the Federal government on GAAP bookkeeping. An income and expense
ledger. And asset and liabilty ledger.
State and local government sorta do this, ie, they balance income and expense except for
capital expense funded with bonds.
What is not done is the listing of all assets offset by debt, etc, and shareholder
equity.
For NYC vs smallville KS, the liabilities of NYC would be tens of billions and svKS zero,
but the assets of NYC multiples of liabilities vs a few thousand in asset value for that debt
free small town.
Given Adam Smith, the assets of a government should include its people as they are the
biggest wealth "of nations". The better educated, skilled, more productive, substantially
derermined by investing in education, health, etc, the greater the asset value, the greater
the wealth.
But just limiting debt to bonds tied to new assets, bonds for roads, schools, etc. Taxing
the assets to pay off the bonds while taxing the people for current consumption is
prudent.
Track refers to trains or roads, meaning one of limited options.
Tack is a sailing term used to describe how you get a sailboat to go upwind by not going
directly in the direction you want, but rather at an angle.
I am concerned with the money supply.
Currently, 10% of GDP leaks out via structural imbalances, replaced by debt increasing at
3x the rate of population(1%ish) and inflation(2%ish).
The OP Krugman tacks the tack (or is it track, becasue of limited options?) that we should
just keep doing that. He is saying we should ignore the massive deficits, and wealth transfer
to the rich that the interest on that debt creates.
I believe this the wrong tack (or is it track?), instead thinking we should attack and
reverse the trade imbalances such that the debt is no longer necessary.
You are still misunderstand the problem, viewing the macroeconomy through a microeconomic
lens.
You want the federal government to start acting "responsible", ignoring the lessons of the
1800s that the rich would soon suck all the money out of the economy, creating a
depression.
You get blood out of a turnip by first putting blood into a turnip.
You get money out of an economy (as the trade does $500+B a year and the rich are doing
$1T+ a year) but first putting money in ($1.5T+ new debt a year).
You think we can stop putting blood into the turnip... I mean stop putting money into the
economy, without first stopping the giant drain of blood... dang it... I mean money out of
the economy.
In reality, there appear to be 2 options. 1) Keep putting money in and taking it out. 2)
Stop taking it out so that we can stop putting it in.
Your option of "just stop putting money in, without first addressing the drains" is sure
to lead to collapse.
"... This is an excellent analysis. Let's look at the issue from a non monetary stance. The prime mover here is not wealth, but power, political power. These ultra rich want to run the show. Think about that. ..."
"... If you have so much money that you can buy anything you want, what else is there to grasp beyond material possessions? Power. The low tax rates are intended to establish a wealth aristocracy, a type of moneyed royalty who control society. Coupled with that is the elimination of the estate tax. This allows the ultra rich to set up dynasties, like royal lines of succession, to have their legacies continue. It's like a stab at immortality. ..."
"... The only people who believe in Republican economic doctrine are people who are paid to believe and people who are paid don't care whether the doctrine is accurate. George H.W. called it from the start. Voodoo economics defies basic arithmetic. How 40 years worth of voters forgot common sense is beyond me. ..."
"... Paul, the United States has conducted a continual experiment in radical inequality ever since Reagan entered the White House. This experiment has largely continued regardless of whether a Democrat or Republican has sat in the Oval Office. IMHO, the results are in - and they demonstrate that America is not a happier country when CEOs make roughly 300 times amount of their lowest paid employees, and when the ultra rich can easily shift the money that they're not paying in taxes to federal and state governments into off-shore havens or emerging market economies. ..."
"... The graph is telling. I don't recall rich people in the late 50s and early 60s as being destitute because of tax rates; they seemed to do just fine. But now Jeff Bezos earns roughly $6,000,000 per hour, while Amazon warehouse workers start at $11 per hour. Is Bezos's personal marginal product really worth 545,455% more than his warehouse employees? ..."
"... The lies of Republican economics, or greed is good, has led us to the brink of plutocracy and oligarch ..."
"... "She definitely knows more economics than almost everyone in the G.O.P. caucus, not least because she doesn't "know" things that aren't true. This sums up the GOP. They've created their own alternate reality where facts and history do not exist. ..."
"... President Reagan was at least honest. He dropped the high income tax rates by about a factor of 2 and then made all income sources equal, e. g., no special low tax rates for capital gains. The rich accepted the new, low tax rates on income, and then worked feverishly to regain their perks, including preferential treatment of capital gains. ..."
I have long been humored by the absurd idea that the wealth accumulated by "entrepreneurs" and businessmen is hard earned. I made
a pretty decent living and, while experiencing some added stress with more responsibility, I worked less hard as I became more successful.
Sure, I had experience and judgment that helped, but mostly I won the game that is played in most businesses and organizations.
Being white helps a lot. Being male helps a whole bunch. Knowing certain social conventions and being reasonably well educated
was useful. The very wealthy folks I have known, and there have been many, have more leisure time, more freedom to manage their own
personal affairs and less stress from being at the mercy of others.
And the very wealthy I've known are not smarter, more creative or virtuous than the folks who work for them or for other wealthy
executives. It's all a complex social sorting based primarily on several kinds of privilege combined with aggression in many cases.
America's greatest myth is that people deserve what they get and get what they deserve. That is why progressive taxation and civic
generosity is the only way to craft a truly civil society.
When top rates were high, 70-80 percent, executive salaries were lower, much lower. Why? Companies saw that if they raised
executive salaries they would simply be shoveling most of that extra money to the government. They thought they had better uses
for it, such as capital investment and better pay for workers. This is yet another way, an indirect way, in which low top rates
encourage economic inequality, the bane of our society, today.
If high taxes on the rich really were a problem, how is it possible then that the economies of Scandinavia and Europe are doing
so well? I'd also like to add that the best way to add revenue to the government, is to fund the IRS: it busts cheaters, and it
enforces compliance of those who may be tempted to cheat. When, after the Panama and UBS leaks, a few big cases of tax fraud were
brought to justice in Europe (some well-known VIPs even went to prison), there suddenly was a wave of rich people voluntarily declaring
hidden assists and gladly paying penalties, for fear of being busted in another set of leaks, sent to prison and/or be publicly
shamed.
Although I agree with Mr. Krugman's argument and I'm a big fan of AOC and the other fresh young voices in the House, I think
the graph presented in the middle of this article is misleading. While it's true that we had tremendous growth during a period
of very high taxes, one should not draw the conclusion that the high taxes promoted vigorous growth. That period of high taxes
occurred when the US manufacturing sector was supercharged by the war effort, and Japan and Europe lay in ruins. It's entirely
possible that growth might have been even stronger with lower tax rates. That said, as a wealthy person I fundamentally agree
that paying higher taxes will not affect my personal economics in any materially meaningful way. Sure, some wealthy people might
leave the US for cheaper lands; people whose principal goal in life is to have the highest score in the video game of finance.
Most of the rest of us will continue to enjoy living in this country, and likely take advantage of an improved infrastructure,
a more educated workforce, clean air and water, and pristine wilderness areas.
To anyone who thinks that the Republican Party knows a thing about economics or business: you're delusional. Republicans know
a tremendous amount about greed, theft and selfishness. Arthur Laffer is the idiotic tax-cut patron saint economist of the Grand
Old Phonies who helped Ronnie Reagan raid the US Treasury for the uber-wealthy.
George W Bush re-implemented Laffer-economics
and drove the nation into a Depression.
Trump and the GOP are in the process of driving America over another bankrupting 0.1%
welfare tax-cut cliff -- remember it took Bush-Cheney a good seven years to do it.
And guess who recently helped drive Kansas
bankrupt with tax cuts for the rich ?
GOP tax-cut saint Arthur Laffer. He helped former Kansas Gov. Sam Brownback (R) pass tax
cuts through the Kansas legislature. In August 2012, Laffer promised a crowd at a small business forum in Kansas that the cuts
would produce "enormous prosperity," adding that they'll "make a big difference in a decade." They did make a big difference.
Kansas employment and the Kansas state economy both grew slower than the national rates, and the drastic decline in tax revenue
coming into the state's treasury blew a gigantic hole in its budget.
Kansas reversed the destructive tax cuts in order save Kansas.
The lesson is plain and simple and happens over and over again. Republicans are economic wrecking balls hellbent on destroying
society for corrupt billionaires. D to go forward. R for nationally-assisted suicide.
These top rates almost never apply to the rich anyway who almost always are paying the capital gains rate rather than that
on ordinary income. It is much like the rates on corporations -- they never pay anything near that amount. Only those working for
wages pay top dollar. A huge scandal.
@OCA is going to show these resentful old white patriarch and their female enablers what well-adjusted women are like and what
self-respect does not only for ones soul, but in righting the wrongs for a new generation of Americans. It's about time, too!
@OCA has vision, imagination, compassion, and self-love. We're being robbed by a bunch of entitled two-bit crooks.
It'll take
raising corporate taxes to Clinton levels or higher, not only to recover from Trump, the Bush recession and the then middle aged
workers who never got back on track, but also to prepare for the new automated economy in the next 20 years.
We need more Ocadio-Cortezes
in office and I look forward to electing a progressive majority in 2020. --- Things Trump Did While You Weren't Looking [2019]
https://wp.me/p2KJ3H-3h2
In Manchester's "The Power and the Glory" he noted that in 1950, the CEO of Ford Motors lived in a relatively modest five-bedroom
home in Detroit: "when the doorbell rang, he answered himself." So did the Vice President of the United States. Their children
were drafted. These men were no less smart, savvy, and entrepreneurial than today. They were comfortable, had homes in the Hamptons
(not mansions) and still led the United States in the greatest economic expansion in history. When did we begin to believe that
mega-millions to CEOs will magically transform into wealth for all, or that it is a necessary inducement to work?
A man who makes
millions will reinvest in his country; a man who makes hundreds of millions will hide it offshore, Restore the marginal tax rate
to the 1960 level. And restore the draft. It's America, dammit, and everybody pulls an oar.
Well, this is refreshing. The tax rate, once 90% of rich people's income, now sits at 150% from where it once as, during America's
halcyon days of growth and incentive. In other words, the rich were put to work for the rest of us. And why not? But it took a
healthy dive, from 70% to less than half that under Reagan (trickle-down, anyone?). The graph is most revealing in that growth
rate dropped like a stone (under Reagan) as did the corresponding top tax rate. Coincidence? Hardly. So Alexandria Ocasio-Cortez
comes along and has the idea that the wealthy will never (all things considered equal) lack for money. So, the Right's question
is this: "why should the rich work for the poor?" The answer is that they live in the same world that we do, and the labor and
the tax rate for the less-than-rich allow the rich to utilize the same benefits the rest of us do. It's been a Republican meme,
and will, I fear, always be one, but the cry of "Socialism" and "wealth re-distribution" are as potent on the right as anything
racist or nationalist or xenophobic that Trump or McConnell or Ryan or anyone of their ilk could dream up. Simply put, Republicans
do not consider those without wealth worth the trouble, the time, the patience, or the courtesy of invested citizenship. Instead,
they re-direct their anger towards voting rights and unfunded schools and unlimited political donations. They now own the Supreme
Court, the executive and half of Congress. I wish Ms. Ocasio-Cortez well.
My spouse and I have a very nice life, probably in the top four-tenths of the one percent in terms of assets (primarily illiquid)
and somewhat wealthy with a combined mid-six-figure annual salary income. I gave away 25 percent of my salary this year because
I was so disgusted by the impact of the Trump tax bill. I will probably do the same in 2019. Some of the money I gave did not
go to nonprofits, but directly to very hard-working people whose incomes do not cover housing, food, health care, transportation,
and utilities. Basics. For God's sake, Republicans, get with the program, And Democrats, you too. My spouse and I, even though
we live in a high-tax state, should be paying more taxes. Our systems rot from the inside out. I see it in both parties, and I
see it at the local, state, and federal level. And this greed is unique to one group. I see it in privileged whites and I also
see it in minorities.
This is an excellent analysis. Let's look at the issue from a non monetary stance. The prime mover here is not wealth, but
power, political power. These ultra rich want to run the show. Think about that.
If you have so much money that you can buy anything
you want, what else is there to grasp beyond material possessions? Power. The low tax rates are intended to establish a wealth
aristocracy, a type of moneyed royalty who control society. Coupled with that is the elimination of the estate tax. This allows
the ultra rich to set up dynasties, like royal lines of succession, to have their legacies continue. It's like a stab at immortality.
To top off the entire royalty thing, much of their wealth was most likely generated from tax breaks, tax giveaways, tax shelters
and the like. Odds are that a substantial portion of their wealth was never taxed to begin with and with the loss of the estate
tax, they get to will it to their heirs tax free. This wealth aristocracy is the prime mover of Republican politics. Everything
they do from judges to legislation is targeted to bolstering this wealth aristocracy. The real tragedy here is they convinced
the coal miners and factory workers that doing this is a great idea.
This needed to be said and you said it well. The nonexistent link between higher taxes and lower growth has to be exposed.
Tax policy based on that falsehood only serves to make the wealthy wealthier. It also serves to create a class of offsprings who
are also extremely wealth without having worked for a nickel of that wealth. This can't be good economic or social policy.
@WPLMMT That is not what she is proposing. The 70% is the marginal tax rate, applied only to the very highest portion of incomes,
like over 10 million. Do just a little research before criticizing.
I do not understand the donor class -- those in the top tenth of the top one percent who give millions to GOP congresspeople
in expectation of massive tax cuts. According to CBS reporting they pull in an average annual income of $35 million and belong
to a cohort of billionaires whose combined net worth approximates that of the rest of us put together. They have everything they
need, everything they could ever want. Yet very little of their income goes back into the economy to "trickle down."
Typically
the majority goes to investment, often offshored for tax advantage. And big tax-deductible blocks go to "charities" like the Heritage
Foundation which stocks the courts with partisan judges who mould the law in their favor or like conservative publications or
think tanks which help mould public opinion in their favor. They spend millions to get their tax cuts, to mould the courts and
public opinion, for the best accountants and tax lawyers money can buy. All to maximize incomes so large the marginal utility
of additional millions is, well, marginal.
And all to keep absolutely as little as possible from going to public health, public
education, public security, any public use whatsoever. It is not so much that more is never enough. The bigger question is why
they spend so much to avoid contributing money of so little marginal value to them to the commonweal. Whatever happened to noblesse
oblige? To "For to whom much is given, much is required"?
I didn't know Nobel prize winning economists needed to defend Ocasio-Cortez. I used to teach marginal utility and marginal
product to kids fresh out of high school. You don't need a doctorate to understand the fundamental mechanics of economic theory.
The only people who believe in Republican economic doctrine are people who are paid to believe and people who are paid don't care whether
the doctrine is accurate. George H.W. called it from the start. Voodoo economics defies basic arithmetic. How 40 years worth of
voters forgot common sense is beyond me.
Paul, the United States has conducted a continual experiment in radical inequality ever since Reagan entered the White House.
This experiment has largely continued regardless of whether a Democrat or Republican has sat in the Oval Office. IMHO, the results
are in - and they demonstrate that America is not a happier country when CEOs make roughly 300 times amount of their lowest paid
employees, and when the ultra rich can easily shift the money that they're not paying in taxes to federal and state governments
into off-shore havens or emerging market economies.
I submit that our exploding budget deficit is a testament to how this policy
has failed fiscally - and that our loss of national comity is a testament to how this policy has failed politically. It's time
for a new experiment, an experiment in bubble-up economics - an economics for the rest of us, a capitalism with a human face,
a mixed economy where individual effort is rewarded, but within which no one who truly tries to keep up is left behind.
Judging from many of the comments posted here what is needed to improve tax policy in the US is education. If so many of us
can't follow the simple analysis Professor Krugman offers how will we ever get past the bogus claims and do the right thing?
The graph is telling. I don't recall rich people in the late 50s and early 60s as being destitute because of tax rates; they
seemed to do just fine. But now Jeff Bezos earns roughly $6,000,000 per hour, while Amazon warehouse workers start at $11 per
hour. Is Bezos's personal marginal product really worth 545,455% more than his warehouse employees?
And what is his ACTUAL tax
rate, given all the many deduction open to the super wealthy that someone making $11 per hour doesn't have available? The great
irony of the graph is that MAGA hearkens back to post WWII America, a time when the richest among us had a 90% tax rate and far
fewer deductions, and unions helped lower to middle class workers get livable wages and a pension.
@Kenneth Johnson How many wealthy people left the US in the 50's and 60's, when the tax rate was so high? It's a reasonable
hypothesis: most wealthy people will leave the US if the tax rate goes too high. But what actual evidence is there to support
it? I'm a very wealthy person, have constantly voted to increase my tax rate, live in the one of the highest taxed states in the
union, and I have no plans to leave. Like the professor wrote, paying more taxes will not affect my material life in the least.
So why would I leave?
Whatever one makes of AOC's tax ideas (they're good) or PK's take on them, the frenzy that AOC has sparked is quite a sight
to behold. This is how people shape the conversation, and it's how the Dems can reclaim a share of the news media spotlight. Conservatives
have known this is how it works for a long time: it pays to have a few extremists willing to utter ideas from the fringe. The
media will cover AOC because it's AOC saying things. Period. Over time, with persistence and if she and others like her have substance
and discipline (still not certain), she will help move the window of opportunity to the left. She will help normalize what until
recently was regarded as 'zany lefty'. This clearly freaks out conservative operators and it will be one of AOC's biggest contributions.
Her strength will be to make everyone talk about her and her ideas. Her haters commenting here are proving the point. Finally,
a Dem who knows to steer clear of the 51-point policy plan that oh-so-cleverly tweaks the tax code here and balances the wishes
of everyone/no one and instead just make a bold ambitious claim. Good for her.
The most important thing is to make clear that this rate is for a new bracket. It only applies to people who make more than
$10 million dollars a year, and only applies to the income over the first $10 million. Once that is understood, most people would
support a top rate of 73 percent, or even Eisenhower's 90 percent. We need a transformation to common sense, ethics, and the public
good. The lies of Republican economics, or greed is good, has led us to the brink of plutocracy and oligarchy...
Ask most older white Americans what was the best time economically in this country and they will say the post WWII and the
Eisenhower years. Then remind them of the top tax rates and the lack of deductions.
@Gwe - I don't believe that people with the competency to run a company are so rare, and their skills so exceptional, that
you need to pay them millions of dollars to have any hope of attracting one of these management unicorns. I think they definitely
would LIKE people to believe that. But there are plenty of examples of incompetent CEOs doing a terrible job, and they still get
paid millions.
There is also an economic theory out there, I can't remember its name, but I call it the Ferrari theory. It goes like this:
these men/women..."Masters of the Universe" are so smart, so talented at generating $$, so in love with $$ that taxing them too
little is like driving a Ferrari at very low RPM; Ferraris are optimal and made for high RPMs. Well, this applies to some people
too. If you have some employees that are workhorses, you work them; you do NOT lessen the proportion of their work, you increase
it because they can do it. If these rich people are so smart, so talented and so in love with $$, the society needs to optimize
their tax output for the betterment of society. They'll only work harder to make more money. The Tax code today pampers them like
they are incompetent and is the central cause of inequality never seen before in history. N.B., Atlas is not going to Shrug
When George Romney was a CEO in Detroit, his $compensation was about 80X the median income. (Today's CEOs are at 300X) And
his tax rate, as shown when he ran for president, was about 40%. Wasn't Mitt's tax rate under 15% when he released his tax records.
Billy, if AOC's proposal is insane, than Dwight Eisenhower, President during a long period of economic expansion and prosperity,
belonged not in the White House but in a mad house, given that the top income tax rate during his administration, 91%, exceeded
even that suggested by AOC. I have lifelong friends in Denmark and have visited the country. All say they are happy with the high
personal income tax rate, which was 55.8 % in 2018 . See
https://tradingeconomics.com/denmark/personal-income-tax-rate
. Interestingly, the main indicators of happiness find that Denmark is also the happiest country in the world (
https://www.frugalconfessions.com/miscellaneous/denmark-highest-tax-rate-and-happiest-people.php
).
@Jason So take your lemonade stand to Canada, see if they're willing to pay $4 a cup. You're here because the market is here
and, in some cases, because the employees you need are here. So suck it up and contribute your fair share. Current tax rates are
a complete sham, fiscal stimulus at the top of the business cycle, benefiting only the rich. This is when we need to be reducing
debt and saving for the lean times.
"She definitely knows more economics than almost everyone in the G.O.P. caucus, not least because she doesn't "know" things
that aren't true. This sums up the GOP. They've created their own alternate reality where facts and history do not exist. I hope AOC does very well for her district and the country. We need fact based leadership and in that regard she already outshines dump
and co.
@Freda Pine When you're making over $10 million, you're not getting out of bed and clocking into the warehouse to earn your
money. Your interest are diverse and generate money without your lifting a finger. There is no faucet of income to turn off, and
even if you could, why would you? It's still a lot of extra income for the type of person who is interested in earning more money
than they can possibly spend.
I appreciate your comment and the reminder that correlation is not causation. I'm puzzled as to why it's not a "pick." Anyway,
I saw the graph differently. Not so much that high taxes on the wealthiest promote growth as that high taxes do not prevent growth,
which is the Republican cant. That is, high taxes on the wealthy and solid economic performance can coexist just fine, thankyouverymuch.
I also appreciated your first-hand validation of Dr. Krugman's point about marginal utility.
@Geoffrey I don't think people necessarily deserve what they get. Progressive taxation is an attempt to compensate for imbalances
in distribution of wealth, not an attempt to steal from the wealthy. Who is to say what is fair you ask? That is what democracy
is for. A civil society can't tolerate the gigantic pay imbalances we see today. It's gotten out of control, it's messing with
the cohesion that we need to survive, and something has to be done. If not taxation, what.
President Reagan was at least honest. He dropped the high income tax rates by about a factor of 2 and then made all income
sources equal, e. g., no special low tax rates for capital gains. The rich accepted the new, low tax rates on income, and then
worked feverishly to regain their perks, including preferential treatment of capital gains. They have had their cakes and have
been eating them too. Not exactly fair.
@Gwe Your opinion, in my opinion (!), has a few faults. The good CEO types don't grow on trees. That's one reason so many CEO's
are not good. But they get paid lavishly all the same. You are talking only about the achievement, academic and economic, of the
ones who are making a lot of money. How about the ones with equal achievement that doesn't result in a lot of money? Why do they
deserve less? I suggest that one reason is that they aren't the ones deciding on the flow of money. When someone joins that crowd,
they are likely to be well taken care of. A high marginal tax rate won't push anyone down severely. It will stop some of the self-indulgence
of people who believe they are entitled to self-indulgence at the expense of 95-99% of the people. They will have to readjust
their standards, and it won't be a disaster.
Dr. Krugman, you are being - dare I say it - a little Disingenuous - here. You make it sound like the criticisms of AOC are
based only on her dancing video and her views on the top marginal rates. That is not the case. Her dancing is of course personal
business and it is is silly on the right to go after this. And her views on the top rates could perhaps be justified as you have
done. But she has displayed appalling ignorance of economics and even worse evidence of innumeracy. First she said that the unemployment
rate was low because many people work a second and third job. Surely, you will be first person to acknowledge that this is blather?
This may forgivable if it came from an English or History major. Ms. Dowd informs us that AOC is an econ major. And then there
was the nonsense about the 21 trillion dollar mistake that the Pentagon made which will be enough to pay for healthcare for all
and a host of other programs. This is worse than ignorance of economics. It is evidence of poor reasoning and innumeracy (all
that she needed to do was to look at the size of US GDP to know that 21 trillion dollar income release from an accounting error
is a ridiculous idea). She displays the tendency to speak first and think later.
Would you accept this level of ignorance and
innumeracy in Mr. Ryan or President Bush or Mr. Gingrich? She has the right instincts for the most part. But it is not OK to play
the "our ignoramus is fine, but theirs is a wingnut" game.
I'd like to call out the video for a moment - in a country where a full half of college students don't graduate from college
on time - and in a country plagued by opioid abuse - and in a country where #metoo was started because of harassment and sexual
violence - and in a country with a president elected by people who deny gender and racial equality - watching a bunch of clean
cut, lighthearted, happy, talented young women and men dancing was a breath of cool, fresh air.
The Trump Tax Cut: Even Worse Than You've Heard
Skeptical reporting has still been too favorable.
By Paul Krugman
The 2017 tax cut has received pretty bad press, and rightly so. Its proponents made big
promises about soaring investment and wages, and also assured everyone that it would pay for
itself; none of that has happened.
Yet coverage actually hasn't been negative enough. The story you mostly read runs something
like this: The tax cut has caused corporations to bring some money home, but they've used it
for stock buybacks rather than to raise wages, and the boost to growth has been modest. That
doesn't sound great, but it's still better than the reality: No money has, in fact, been
brought home, and the tax cut has probably reduced national income. Indeed, at least 90 percent
of Americans will end up poorer thanks to that cut.
Let me explain each point in turn.
First, when people say that U.S. corporations have "brought money home" they're referring to
dividends overseas subsidiaries have paid to their parent corporations. These did indeed surge
briefly in 2018, as the tax law made it advantageous to transfer some assets from the books of
those subsidiaries to the home companies; these transactions also showed up as a reduction in
the measured stake of the parents in the subsidiaries, i.e., as negative direct investment
(Figure 1).
Figure 1 *
But these transactions are simply rearrangements of companies' books for tax purposes; they
don't necessarily correspond to anything real. Suppose that Multinational Megacorp USA decides
to have its subsidiary, Multinational Mega Ireland, transfer some assets to the home company.
This will produce the kind of simultaneous and opposite movement in dividends and direct
investment you see in Figure 1. But the company's overall balance sheet – which always
included the assets of MM Ireland – hasn't changed at all. No real resources have been
transferred; MM USA has neither gained nor lost the ability to invest here.
If you want to know whether investable funds are really being transferred to the U.S., you
need to look at the overall balance on financial account – or, what should be the same
(and is more accurately measured), the inverse of the balance on current account. Figure 2
shows that balance as a share of GDP – and as you can see, basically nothing has
happened.
Figure 2
So the tax cut induced some accounting maneuvers, but did nothing to promote capital flows
to America.
The tax cut did, however, have one important international effect: We're now paying more
money to foreigners.
Bear in mind that the one clear, overwhelming result of the tax cut is a big break for
corporations: Federal tax receipts on corporate income have plunged (Figure 3).
Figure 3
The key point to realize is that in today's globalized corporate system, a lot of any
country's corporate sector, our own very much included, is actually owned by foreigners, either
directly because corporations here are foreign subsidiaries, or indirectly because foreigners
own American stocks. Indeed, roughly a third of U.S. corporate profits basically flow to
foreign nationals – which means that a third of the tax cut flowed abroad, rather than
staying at home. This probably outweighs any positive effect on GDP growth. So the tax cut
probably made America poorer, not richer.
And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent ** of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit.
Meanwhile, since the tax cut isn't paying for itself, it will eventually have to be paid for
some other way – either by raising other taxes, or by cutting spending on programs people
value. The cost of these hikes or cuts will be much less concentrated on the top 10 percent
than the benefit of the original tax cut. So it's a near-certainty that the vast majority of
Americans will be worse off thanks to Trump's only major legislative success.
As I said, even the mainly negative reporting doesn't convey how bad a deal this whole thing
is turning out to be.
Roughly a third of Baby Boomers have saved less than $25,000 while just over a fifth of all
American have no savings at all, according to a study by Northwestern Mutual.
(Bloomberg) -- Jeffrey Gundlach said yet again that the U.S. economy is gorging on debt.
Echoing many of the themes from his annual "Just Markets" webcast on Tuesday, Gundlach took
part in a round-table of 10 of Wall Street's smartest investors for Barron's. He highlighted
the dangers especially posed by the U.S. corporate bond market.
Prolific sales of junk bonds and significant growth in investment grade corporate debt,
coupled with the Federal Reserve weaning the market off quantitative easing, have resulted in
what the DoubleLine Capital LP boss called "an ocean of debt."
The investment manager countered President Donald Trump's claim that he's presiding over the
strongest economy ever. The growth is debt-based, he said.
Gundlach's forecast for real GDP expansion this year is just 0.5 percent. Citing numbers
spinning out of the USDebtClock.org website, he pointed out that the U.S.'s unfunded
liabilities are $122 trillion -- or six times GDP.
"I'm not looking for a terrible economy, but an artificially strong one, due to stimulus
spending," Gundlach told the panel. "We have floated incremental debt when we should be doing
the opposite if the economy is so strong."
Stock Bear
Gundlach is coming off another year in which his Total Return Bond Fund outperformed its
fixed-income peers. It returned 1.8 percent in 2018, the best performance among the 10 largest
actively managed U.S. bond funds, according to data compiled by Bloomberg.
Gundlach expects further declines in the U.S. stock market, which recently have steadied
after reeling for most of December since the Great Depression. Equities will be weak early in
the year and strengthen later in 2019, effectively a reversal of what happened last year, he
said.
"So now we are in a bear market, which isn't defined by me as stocks being down 20 percent.
A bear market is determined by the way stocks are acting," he said.
Rupal Bhansali, chief investment officer of International & Global Equities at Ariel
Investments, picked up on Gundlach's debt theme in the Barron's cover story. Citing General
Electric's woes, she urged investors to focus more on balance-sheet risk rather than whether a
company could beat or miss earnings. Companies with net cash are worth looking at, she
said.
To anyone who thinks that the Republican Party knows a thing about economics or business:
you're delusional. Republicans know a tremendous amount about greed, theft and selfishness.
Arthur Laffer is the idiotic tax-cut patron saint economist of the Grand Old Phonies who
helped Ronnie Reagan raid the US Treasury for the uber-wealthy.
George W Bush re-implemented Laffer-economics and drove the nation into a Depression.
Trump and the GOP are in the process of driving America over another bankrupting 0.1%
welfare tax-cut cliff -- remember it took Bush-Cheney a good seven years to do it.
And guess who recently helped drive Kansas bankrupt with tax cuts for the rich ?
GOP tax-cut saint Arthur Laffer. He helped former Kansas Gov. Sam Brownback (R) pass tax
cuts through the Kansas legislature. In August 2012, Laffer promised a crowd at a small
business forum in Kansas that the cuts would produce "enormous prosperity," adding that
they'll "make a big difference in a decade." They did make a big difference.
Kansas employment and the Kansas state economy both grew slower than the national rates,
and the drastic decline in tax revenue coming into the state's treasury blew a gigantic hole
in its budget.
Kansas reversed the destructive tax cuts in order save Kansas. The lesson is plain and
simple and happens over and over again. Republicans are economic wrecking balls hellbent on
destroying society for corrupt billionaires. D to go forward. R for nationally-assisted
suicide.
Did Krugman just issue a veiled warning to Pelosi, Schumer, and Clinton Democrats? Did he see
this as a teaching moment for them? Has he turned from unabashed megaphone for establishment
Democrats to an honest broker, willing to explain economics to Demcoratic Big Money
parasites? Could be... If so, this might be a turning point for Krugman from partisan hack to
honest broker!
As always, Robert Reich pulls fewer punches: "Do not ever underestimate the influence of
Wall Street Democrats, corporate Democrats, and the Democrats' biggest funders. I know. I've
been there.
In the 2018 midterms, according to the nonpartisan Center for Responsive Politics, big
business made more contributions to Democrats than to Republicans. The shift was particularly
noticeable on Wall Street. Not since 2008 have donors in the securities and investment
industry given a higher percentage to Democratic candidates and committees than to
Republicans.
The moneyed interests in the Democratic party are in favor of helping America's poor and
of reversing climate change – two positions that sharply distinguish them from the
moneyed interests in the Republican party.
And maybe, just maybe, Krugman, in a veiled warning to Democrats enamored with Trump's tax
cuts, has decided to trump partisan loyalty with economic reality...as any decent economist
should do.
EMichael and kurt will be disappointed, very disappointed that Krugman sided with AOC over
corrupt, sclerotic, corporate Democrats...
There is no reason to think that mainstream liberals would not just go along with whatever
direction the liberal establishment takes. OTOH, there is a major difference in the context
between the rank and file of mainstream liberals and the actual liberal establishment itself.
Mainstream liberals just want to fit in and win elections. They are concerned with
electability and the constraints of legislative process. There is nothing wrong with that. It
is the role of the rank and file.
However, AOC is correct. It is radicals that bring about all significant change.
Mainstream radical is an oxymoron. After radicals cause change then it is no longer radical,
but it becomes mainstream instead.
In contrast, the liberal establishment is also concerned with electability because that is
what they do for a living, either get elected or ride along on the coattails of the elected,
but they are elites and elitists not to be separated from the status quo economic
establishment without considerable consternation. However, the elitists' trepidation over
being separated from their wealthy elite supporters would be greatly reduced by severe limits
on private campaign financing. Still, it would be a rare elected official that would rather
eat in a soup kitchen than a five-star restaurant both for the good food and for the good
company. In both regards though that depends upon what your definition of "good" is.
"Mainstream liberals just want to fit in and win elections..." And they are precisely they
kind of "go-along to get along types" who let bad things happen...and then pretend to not
understand what went wrong...Vietnam, Iraq, GWOT, Glass-Steagall repeal, trade
liberalization/offshoring profits, banksters who go Scot free after bringing the economy
down. The list goes on.
There are leaders, followers, and radicals. One can choose to be any one or two or those they
want, but no more than two. It is not very rewarding to be a radical from the back of the
line unless there is also a radical to follow at the front of the line. Leaders that are also
followers inherit the status quo and guard it like it was their own because it is. Radical
leaders rarely succeed, but often die young.
Trump is a bad example of a leader, but he follows his nose at least rather than just the
status quo. Trump has a nose for trouble and he cannot resist its stench any more than a
jackal or hyena can resist rotting carrion. Fortunate for Trump the US has a long history of
stockpiling trouble for future consumption that reaches all the way back to colonial times.
Trump likes to think that orange is the new black, but the old black, brown, and red are
still around and neither yellow nor orange can take their place.
The majority of people are just plain old followers. If people think that there is chaos
in the world already, just imagine what it would be like if most people were not just plain
old followers. The status quo always has the advantage of the natural force of inertia.
"...banksters who go Scot free after bringing the economy down. The list goes on."
Because you believe in government as done by Putin, Maduro, Saddam, Saudi Arabia, etc:
jail, torture, kill enemies by the people in power being the law.
You reject the US Constitution where voters are allowed to elect Republicans who legalize
fraud and theft by deception based on voters wanting the free lunch of easy credit requiring
bankers have no liability for the bad loans from easy credit. You reject the US Constitution
prohibition on retroactive laws criminalizzing legal actions.
Only if you were leading protests in the 90s in opposition to laws making credit easy for
below $80,000 workers whether buying houses or trucks/SUV.
Only if you were picketing real estate agents and car dealers from 2001 to 2005 to keep
out customers, you were not doing enough to stop easy credit.
The GOP was only dellivering what voters wanted, stuff they could not afford paid for by
workers saving for their retirement.
Elections have consequences.
The elections from 1994 to 2004 were votes for free lunch economics. The GOP promised and
delivered free lunch economic policies.
In 2005, voters on the margins realized tanstaafl, and in 2006 elected Pelosi to power,
and Pelosi, representing California knows economies are zero sum, so she increased costs to
increase general welfare. One of the costs was reccognizing the costs, and benefits, of the
US Constitution.
In 2008, she did not try to criminalize past action, and when she could not get the votes
to punish the bankers who bankrupted the institutions they ran by prohibiting bonuses in the
future,, she insread delivered the best deal possible for the US Constitutional general
welfare.
I think Bernie wanted all voters who voted GOP to lose their jobs, or maybe he simply
believes in free lunch economist claims that welfare payments in Ohio and Michigan are higher
than union worker incomes.
Maybe he thinks bankruptcy court nationalize businesses, not liquidate them.
Or maybe he figured the solution was a 21st Century Great Depression which would elect a
socialist instead of a capitalist FDR, and he would get to run all the automakers, all the
food industry, and employ all the workers deciding what they can buy?
I can never figure out how the economy would work if Bernie were running it. He talks
about Europe, but never advocates the cost of EU economy that is part of EU law: the VAT. All
EU members must have a VAT that is a significant cost to every person in the EU.
Free lunch economics is when you promise increased benefits with no costs, or lower
costs.
Free lunch Trump and free lunch Bernie differ only in their winners, but their losers are
always the same.
When progressives argue for unlimited increases in debt just like Reagan, they are
rejecting the pokicies of FDR, Keynes, the US when the general welfare increased most by
increasing assets faster than debt.
"'elitists' trepidation over being separated from their wealthy elite supporters would be
greatly reduced by severe limits on private campaign financing." Which is why so many liberal
establishment politicians...per Reich...pay only lip service to real campaign finance reform.
Being parasites, they feed off of their hosts and dare not disrupt the gravy train.
"elitists' trepidation over being separated from their wealthy elite supporters would be
greatly reduced by severe limits on private campaign financing."
So, the wealthy liberal elites who pay no taxes by cleverly paying all revenue to workers
need to be punished because they pay too much to too many workers?
Warrren Buffett has never paid much in taxes even when tax rates on corporations were over
50% and individuals reached over 70%. Money paid to workers, directly or indirectly, was and
still is the number one tax dodge.
Unless you go to a sales tax aka VAT which taxes all revenue, expecially business income
paid to workers.
VAT is an income tax with zero tax dodges aka loopholes aka deductions.
""'elitists' trepidation over being separated from their wealthy elite supporters would be
greatly reduced by severe limits on private campaign financing." Which is why so many liberal
establishment politicians...per Reich...pay only lip service to real campaign finance reform.
Being parasites, they feed off of their hosts and dare not disrupt the gravy train."
In your view, its the poor who create high paying jobs?
It's wrong to listen to people who convince rich people to give their money to people
paying US workers to build factories, wind farms, solar farms battery factories,
transportation systems, vehicles, computer systems in the US?
Instead Democrats should listen to people who have never created long term paying jobs,
but only pay elites who run campaigns using mostly unpaid workers, or workers paid only a few
months every few years? Like Bernie does?
When it comes to how to run a "Green New Deal", I want the policy crafted by someone who
listens to Elon Musk, Bill Gates, Jeff Bezos, and the CEOs of California energy corporations,
tech companies, who are commited to consuming more and more energy that requires no fossil
fuels. Listening to Home Depot and Walmart building managers and retail sales managers should
be a priority. All these guys both focus on paying more workers, and selling more to workers
paid more.
AOC and Bernie seem to listen to the Lamperts who are destroying the value of companies
like Sears by "taxing" both the customers, workers, and owners, by giving money to people who
don't work to produce anything.
I make going to RealClearPolicy, Politics, etc a daily practice to see how bad
progressives are at selling their policies, making it easy for find all sorts of costs,
without any benefits to anyone.
The New Deal was not about taking money from the rich and giving it to the poor. The New
Deal was about paying workers more.
In 1930, half the population still lived on farms. (They might work off the farm, but they
were farmworkers first.) The problem for farmers is Europe had recovered from the war and was
no longer sending gold to the US to secure loans to buy food, but instead repaying the loans
by shipping high value food to the US, wine, cheese, etc, and that meant too much food drove
prices down, which meant farmworkers earned less and less.
One of the first laws set minimum prices for food, enforced by destroying crops, or
government overpaying for food like milk, cheese, bread, which the government gave away to
the poor who could never buy this food. It was not about giving food away, but about paying
workers, the farmers, ranchers, etc. Giving the food to the poor who could not afford to buy
food was simply to avoid the attacks on FDR for destroying good food to drive up farmer pay.
Which was the truth.
FDR talked about creating a healthy workforce to make America great, then about building a
healthy soldier. Ike in the 50s and JFK in the 60s campaigned on creating healthy soldiers.
And smart, educated soldiers and workers.
The policies of liberals was about better workers, richer workers.
Conservatives since Reagan has been about cutting the costs of workers. Sold based on
consumers benefiting from lower cost workers, because consumees are never workers, workers
never consumers, because if workers equal consumers, economics must be zero sum.
By attracting the intense ire of the GOP, AOC activates the negative polarization of lib
pundits and makes them look for ways to defend left policy items they'd attack in any other
scenario. It's very effective at pushing the discourse forward.
"But the Democrats' moneyed interests don't want more powerful labor unions. They are not in
favor of stronger antitrust enforcement against large corporations."
So, you think beef at $10 plus per pound, salad greens at $5 plus per pound, a fast food
meal at $10 plus, is a winning issue for Democrats?
Or by powerful labor unions, you mean for only white male blue collar factory workers,
long haul white truckers, white construction workers?
Making all work pay enough to reach middle class status at the low end will not happen by
unions because many parts of the US, and workers, and jobs, will oppose unions. Instead,
labor laws and enforcement to lift wages and working conditions rapidly in conservative
regions are required.
Better to get the minimum wage in Indiana and Kansas to $10 than in California to $15.
More important to get farm workers fully covered by Federal law like factory workers, with
exemptions only for farmer family members.
Raising incomes in low living cost regions will not raise prices much nationally, but
increase living standards among the most disadvantaged who feel "left behind".
Automatic increases annually of 10% for 7 years, then indexed by cpi.
Constantly emphasizing this minimum is way below what the low wage is in SF, NYC, LA, but
the goods produced will be bought and thus wages paid mostly by high income liberal elites.
Conservatives sticking it to liberals!
Wow... you need to do a lot better at shopping sales. I wait for sales and then buy burger
at $2.50, crud cuts at $3-4, and can frequently get t-bone and ribeye for under $5.
BUT, on the larger scale, what is the difference if I pay $1 a pound for burger and earn
$20K a year, or I pay $3 for burger and earn $60K a year?
Inflation punishes savers? Really? What is the difference if I earn 3% at 2% inflation or
1% at 0% inflation? The answer is, none.
"In that case, however, why do we care how hard the rich work? If a rich man works an extra
hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income
of everyone else doesn't change, does it? Ah, but it does – because he pays taxes on
that extra $1000. So the social benefit from getting high-income individuals to work a bit
harder is the tax revenue generated by that extra effort – and conversely the cost of
their working less is the reduction in the taxes they pay."
This is not right. Heck, it's not even wrong.
Say the $1000 is for a surgery. The social benefit is the tax they pay on it? The surgery
itself is irrelevant?
Krugman confuses the flow of money, which supports and correlates with production, with
the actual production, the real "social benefit".
If you invent a widget that everyone on earth is willing to pay $1 over cost to get,
congratulations, you just earned $7 billion.
Now, does that mean you get to consume $7 billion worth of stuff other people produce? I
think so.
Or, does it mean you get to trap the world in $7 billion of debt servitude from which it
is impossible for them to escape, because you are hoarding, and then charging interest on,
the $7 billion they need to pay back their debts.
The key is to understand that money is created via debt. Money has value because people
with debt need to get it to repay their debts.
If we all decide BitCoin is worthless, then BitCoin is worthless. It has no fundamental
usefulness.
If we all decide money is worthless, then a bunch of people with debt will gladly take it
off our hands so that they can repay their debt. Heck, they may even trade us stuff to get
the debt... which is why money is NOT worthless.
If $1 per day make everyone live better with no added climate change, PLUS paid an extra $7
billion per day to production workers, service workers, that would be good, or bad?
Say, the $7 billion in wages was to sing and dance so no matter where in the world he was,
he was entertained by song and dance?
Economies are zero sum. Every cost has an equal benefit aka income or consumption. Work
can't exist without consumption, consumption without work.
"If $1 per day make everyone live better with no added climate change, PLUS paid an extra $7
billion per day to production workers, service workers, that would be good, or bad?"
Obviously, good. Which is what I say in my post.
"Money is merely work in the past or future."
Money is other peoples' debt. They have borrowed money into existence and then spent it
into the economy, AND they have pledged to do work in the future, to get the money back so
they can repay the debt.
That "doing work in the future to get the money back" is only possible if the people with
the money actually spend it back into the economy.
The problem is that the people in debt also agreed to pay interest, and the people with
the money want to keep collecting the interest... so keep holding the money... making it
absolutely impossible for those with debt to pay it back.
I'm saying is that there is obligation on both sides. There is obligation on the part of
people with debt to produce goods and services and sell them for money to repay their debts,
AND for that to be possible, there is obligation on those with money to actually spend the
money...
Contrary to CONservative opinion, money is not created by work, it is earned by selling,
and that means for the economy to function, there has to be spending.
We need a tax code with very high top rates, but deductions for spending and capital
investing... not to take from the rich, but rather to force them to spend and invest to get
deductions.
Elizabeth Warren and Her Party of Ideas She's what a serious policy intellectual looks like in 2019. By Paul Krugman
Almost 40 years have passed since Daniel Patrick Moynihan -- a serious intellectual turned influential politician -- made
waves by declaring, "Of a sudden, Republicans have become a party of ideas." He didn't say that they were good ideas; but the
G.O.P. seemed to him to be open to new thinking in a way Democrats weren't.
But that was a long time ago. Today's G.O.P. is a party of closed minds, hostile to expertise, aggressively uninterested in
evidence, whose idea of a policy argument involves loudly repeating the same old debunked doctrines. Paul Ryan's "innovative"
proposals of 2011 (cut taxes and privatize Medicare) were almost indistinguishable from those of Newt Gingrich in 1995.
Meanwhile, Democrats have experienced an intellectual renaissance. They have emerged from their 1990s cringe; they're no longer
afraid to challenge conservative pieties; and there's a lot of serious, well-informed intraparty debate about issues from health
care to climate change.
You don't have to agree with any of the various Medicare for All plans, or proposals for a Green New Deal, to recognize that
these are important ideas receiving serious discussion.
The question is whether our media environment can handle a real party of ideas. Can news organizations tell the difference
between genuine policy wonks and poseurs like Ryan? Are they even willing to discuss policy rather than snark about candidates'
supposed personality flaws?
Which brings me to the case of Elizabeth Warren, who is probably today's closest equivalent to Moynihan in his prime.
Like Moynihan, she's a serious intellectual turned influential politician. Her scholarly work on bankruptcy and its relationship
to rising inequality made her a major player in policy debate long before she entered politics herself. Like many others, I found
one of her key insights -- that rising bankruptcy rates weren't caused by profligate consumerism, that they largely reflected
the desperate attempts of middle-class families to buy homes in good school districts -- revelatory.
She has also proved herself able to translate scholarly insights into practical policy. Full disclosure: I was skeptical about
her brainchild, the Consumer Financial Protection Bureau. I didn't think it was a bad idea, but I had doubts about how much difference
a federal agency tasked with policing financial fraud would make. But I was wrong: Deceptive financial practices aimed at poorly
informed consumers do a lot of harm, and until President Trump sabotaged it, the bureau was by all accounts having a hugely salutary
effect on families' finances.
And Warren's continuing to throw out unorthodox policy ideas, like her proposal that the federal government be allowed to get
into the business of producing some generic drugs. This is the sort of thing that brings howls of derision from the right, but
that actual policy experts consider a valuable contribution to the discussion.
Is there anyone like Warren on the other side of the aisle? No. Not only aren't there any G.O.P. politicians with comparable
intellectual heft, there aren't even halfway competent intellectuals with any influence in the party. The G.O.P. doesn't want
people who think hard and look at evidence; it wants people like, say, the "economist" Stephen Moore, who slavishly reaffirm the
party's dogma, even if they can't get basic facts straight.
Does all of this mean that Warren should be president? Certainly not -- a lot of things determine whether someone will succeed
in that job, and intellectual gravitas is neither necessary nor sufficient. But Warren's achievements as a scholar/policymaker
are central to her political identity, and clearly should be front and center in any reporting about her presidential bid.
But, of course, they aren't. What I'm seeing are stories about whether she handled questions about her Native American heritage
well, or whether she's "likable."
This kind of journalism is destructively lazy, and also has a terrible track record. I'm old enough to remember the near-universal
portrayal of George W. Bush as a bluff, honest guy, despite the obvious lies underlying his policy proposals; then he took us
to war on false pretenses.
Moreover, trivia-based reporting is, in practice, deeply biased -- not in a conventional partisan sense, but in its implicit
assumption that a politician can't be serious unless he (and I mean he) is a conservative, or at most centrist, white male. That
kind of bias, if it persists, will be a big problem for a Democratic Party that has never been more serious about policy, but
has also never been more progressive and more diverse.
This bias needs to be called out -- and I'm not just talking about Warren. Consider the contrast between the unearned adulation
Ryan received and how long it took conventional wisdom to recognize that Nancy Pelosi was the most effective House speaker of
modern times.
Again, I'm not arguing that Warren should necessarily become president. But she is what a serious policy intellectual looks
and sounds like in 2019. And if our media can't recognize that, we're in big trouble.
Warren's point is: "the generals, 'adults' to the neocons and media, have to express in clear terms what is 'winning', how we
the unwashed know it is winning and what cost and time to 'win'.
No more deferring to neocon pundits and appeal to generals' authority for insanities like Syria and Libya!
Sort of like what the TDS'ers are saying about the border wall only for the immense pentagon waste machine.
Skeptical about the war mongers, Warren may not be an adult any more........
... Afghanistan has long been called the "graveyard of empires" -- for so long that it is unclear who coined that disputable
term.
In truth, no great empires perished solely because of Afghanistan. Perhaps a better way to put it is that Afghanistan is the
battleground of empires. Even without easily accessible resources, the country has still been blessed -- or cursed, more likely
-- with a geopolitical position that has repeatedly put it in someone or other's way. ...
Were they really "going broke"? They could print unlimited amounts of money.
Or was it that no one was bothering to work?
Or was it that the oligarchs realized they could get richer if they could fire people rather than under a system where they
had to employ everyone?
I had a co-worker that grew up in the Soviet Union. From his point of view, one day you had a guaranteed job and the pay was
going to be low no matter how hard you worked, so no one actually worked much. The next day you could be fired if you didn't work.
So people actually started to work. Output increased, their pay didn't go up, but the oligarchs were able to get a lot richer.
"Were they really "going broke"? They could print unlimited amounts of money."
Sounds like you're being argumentative.
The U.S.S.R. couldn't afford the invasion of Afghanistan. It cost a lot so it reduced their ability to spend on other priorities,
like aid to allied states. The Warsaw PACT countries began to fall away and then it snowballed.
If by "argument" we mean using logical statements to support a conclusion, then YES, I'm being argumentative. Not if you mean,
disagreeing just to be a jerk.
On an economics site, even if no where else, we have to view the economy from two sides... supply and demand.
Work produces supply and money supplies demand.
Was the USSR's problem on the supply side or the money side? Saying "went bankrupt" implies the problem was on the money side.
My view of state socialism, or any system where you can't be fired, is that it creates supply side problems. If you can't be
fired, there is no motivation to work hard.
I think it a HIGHLY important distinction, and one that we must use to keep progressive liberalism on the right track. (or
is it tack?)
Margaret Thatcher's quote "The problem with socialism is that you run out of other peoples' money to spend." is ignorant on
its face. As soon as government spends the money, it is someone else's again, ready to be taxed away again.
This "The USSR went bankrupt" reinforces the false view of socialism's flaws.
This feeds into the "We can't afford it" bulldung when we try to talk about things like Medicare for All.
Did the USSR collapse because they ran out of other peoples' money (went bankrupt)? OR, was production really low because people
couldn't be fired, so didn't bother to work hard? Did the oligarchs decided to end socialism and move to capitalism, so that they
could fire people, to motivate them to work harder, to increase production?
It is HUGELY important distinction for creating a successful progressive economy.
Pro-union? I'm all for it if it is about getting a bigger share of revenue for the workers via collective bargaining. BUT,
does that include making it hard to impossible to fire terrible workers? If so, does that hurt total production? If so, then it
has the same fatal flaw of state socialism.
Guaranteed Job: An idea that if you don't have a private sector job, you show up at a government employment office, do whatever
work is assigned, and get a check. However, since you can't be fired from the guaranteed job, there is absolutely no motivation
to actually do the assigned work. Then, there becomes no motivation to get a private sector job where you actually do have to
work.
Universal Basic Income: Until we reach the level of automation seen in Wall-E, stuff is still going to need to be done, by
someone. UBI makes people not want to do it.
+++++
On the flip side...
For Medicare for All, it is work that is already being done. All we're talking about is if we hand the money to the government
to manage the risk-pooling, or we hand the money over to for-profit insurance companies.
The "how can we afford it?" argument is based on the idea that the USSR went bankrupt from spending too much of "other peoples'
money".
However, if properly viewed as a labor issue, then "How can we afford it?" becomes obvious. We just use some of the money people
are already spending on healthcare.
Any apparent agreement between Liz Warren and Trump can be chalked up to coincidence. Liz Warren's opposition to the US always-war
is a feature, not a bug.
The MIC is an unregulated pox on American history.
War would not end if the USA slashed defense spending. All that would change is that other countries would colonize the USA
instead of the USA colonizing other countries.
You can chose to be the predator, or you can chose to be the prey, but you can't chose to not participate.
For many readers especially on this comes as no surprise, as you are well aware of the
octopus that wraps its tentacles around the globe. But it may surprise you how active In-Q-Tel
is and how chummy they are with the rest of the VC community. It's as if they are just another
VC, but with another purpose. Let's look at some of the stats, from Crunchbase:
Here's a list of recent investments
If you dig back you won't see Google or Facebook on there – which is company policy
for retail consumer investments that can impact the public (it's kept secret behind an NDA).
Here's how it works – In-Q-Tel may invest in your startup but there's a big catch. First,
you have to sign an NDA which is enforced strongly – that you are not to disclose your
partner. Second, you must agree to 'cooperation' when it comes to information sharing now or
down the road, such as location data on people using Facebook, Google, or other systems –
perhaps only to feed it into a big data brain at Palantir. Or perhaps for more street level
surveillance. The surveillance is known by fact, not conspiracy theory – but by fact
– due to the disclosure of classified documents by Edward Snowden. If it were not for
Snowden, we could only guess about this. The name of the main program is
PRISM but there are many others.
But for others, it may come as a surprise that not only the CIA has its own VC fund, but
that it sits on many corporate boards alongside many Wall St. firms and other VCs.
And of course, they always do well.
Let's consider the doors they opened for Google, or in the case of Google it was more like
the doors that were closed. Google was not the best search engine, it was not superior
technology – it wasn't even really very good. It just became a monopoly and crushed the
competition. Many wonder how they were able to do it, and that this is part of the Entrepreneur
"Magic" that few have. Well we can say in the case of Google there was no Magic they had a
helping hand from a friend in the deep shadows. Google wanted to become huge – the CIA
wants information (they always do, so we don't use the past tense 'wanted'). So it was a cozy
and rational partnership – in exchange for making the right handshakes at the right time,
allowing Google to become a global behemoth, all they needed to do was share a little
information about users. Actually, a lot of information. No harm in that, right?
But in doing so Google violated itself as well as prostituted its model and its users.
Google still does this and is not nearly as flagrant as its brother Facebook, however Google
shares more detailed 'meta data' which is actually more useful to Echelon systems like Palantir
that rely on big data, not necessarily photos of what you ate for breakfast (but that can be
helpful too, they say).
The metaphor is making a deal with the devil; you get what you want but it comes at a price.
And that's the price users pay to Google – they get service 'free' but at a huge cost,
their privacy. Of course – this is all based on the concept of Freedom which really does
exist in USA. You don't have to use Google – there are many alternatives like the rising
star Duck Duck Go :
But who cares about privacy; only criminals, hackers, programmers, super wealthy (UHNWI) and
a few philosophers.
Google remains the dominant search platform and much more. Google exploits niche by niche
even competing with Amazon's Alexa service.
Two decades ago, the US intelligence community worked closely with Silicon Valley in an
effort to track citizens in cyberspace. And Google is at the heart of that origin story. Some
of the research that led to Google's ambitious creation was funded and coordinated by a
research group established by the intelligence community to find ways to track individuals
and groups online. The intelligence community hoped that the nation's leading computer
scientists could take non-classified information and user data, combine it with what would
become known as the internet, and begin to create for-profit, commercial enterprises to suit
the needs of both the intelligence community and the public. They hoped to direct the
supercomputing revolution from the start in order to make sense of what millions of human
beings did inside this digital information network. That collaboration has made a
comprehensive public-private mass surveillance state possible today.
There you have it – Google is the child of the digital revolution of the surveillance
state. Why spy, when you can collect data electronically and analyze with machine learning?
The new spy is the web bot.
And the investors in Google did well – so that's the investing story that matters
here. It pays well to have friends in high places, and in dark places. Of all the investments
In-Q-Tel made, almost all of them have done very well. That doesn't mean that Palantir is going
to grow to the size of Google, but it does provide natural support should a company backed by
In-Q-Tel run into problems.
By the time Facebook came out, digital surveillance was already in the n-th generation of
evolution, and they really stepped up their game. In the creepiest examples, Facebook doesn't
necessarily (and primarily) collect data on Facebook users – it does this too. But that's
just a given – you don't need to perform surveillance on someone who gives all their data
to the system willingly – you always know where they are and what they are doing at any
given moment. The trick is to get information about those who may try to hide their activities,
whether they are real terrorists or just paranoid geniuses.
How does Facebook do this? There are literally hundreds of programs running – but in
one creepy example, Facebook collects photos that users take to analyze the environment
surrounding. Incidentally, the location data is MUCH MORE accurate than you see on the retail
front end. So you get the newspaper and see a gift in your mailbox for your birthday –
you take a photo because the ribbons are hanging out. What shows up in the background? All
kinds of information. What the neighbor is doing. License plate of the car driving by. Trash
waiting to be picked up by the street. A child's toy left by the sidewalk. You get the picture.
Facebook users have been turned into sneaky little digital spies! While they are walking around
with their 'smartphones' (should be called 'dumbphones') scrolling their walls and snapping
photos away – they are taking photos of you too. That means, Facebook collects data for
the CIA about users who don't have Facebook accounts. This is the huge secret that the
mainstream media doesn't want to tell you. Deleting your Facebook account will do nothing
– every time you go out in public you are being photographed, video recorded, and more
– all going into big data artificial intelligence for analysis.
But here's the best part. You own it! The CIA may have a bad reputation but it is part of
the US Government, and thus – profits go back to the Treasury (those which are declared)
or at least they are supposed to. Considering this, why is there a stigma about even talking
about In-Q-Tel when in fact we should be more involved in any US Government operation when it
is technically owned by the people and funded by taxpayers? Meaning, do taxpayers have rights
to know what goes in in taxpayer funded entities, like In-Q-Tel? The big difference between
In-Q-Tel and the CIA is that In-Q-Tel functions just like any other VC – they disclose
most of their investments, they attend conferences, they accept business plans. You can
literally submit your idea to In-Q-Tel and get funding. Of course, like any VC there's a very
small chance of being funded.
So what's an investor's take on this story? In-Q-Tel is not Freddie Mac there is nor a
quasi-government entity; it's not an NGO and there is no implicit guarantee that In-Q-Tel's
deals will do any better than Andreessen
Horowitz .
However, their deals do very well. Companies they fund not only have the backing of the CIA
explicitly, it's not only about business – it's about national security! Under that
guise, it's no wonder that companies like Google and Facebook rocket to the top.
We are not suggesting that investors double down on In-Q-Tel bets. We are only suggesting
that at a minimum, we follow what they do. It's a data point – a good source of
information. And the best part is that it's public.
Their most recent investment is in a virtual reality company in Boca Raton, FL called
Immersive Wisdom:
Immersive Wisdom® is an enterprise software platform that allows users to
collaborate in real-time upon diverse data sets and applications within a temporal and
geospatially-aware Virtual, Mixed, and Augmented Reality space. Immersive Wisdom is
hardware-agnostic and runs on VR, AR, as well as 2D displays. Regardless of geographic
location , multiple users can be together in a shared virtual workspace, standing on maps,
with instant access to relevant information from any available source. Users can
simultaneously, and in real time, visualize, fuse, and act upon sensor inputs, cyber/network
data, IoT feeds, enterprise applications, telemetry, tagged assets, 3D Models, LiDAR, imagery
and UAV footage/streaming video, providing an omniscient, collaborative view of complex
environments. Immersive Wisdom also acts as a natural human interface to multi-dimensional
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Any unbiased observer would suspect that considerable part of US Congress consists of senile
gerantocrats...
Notable quotes:
"... You can accuse only the elites of dementia: they forgot that to enjoy the fruits of your thievery you have to be alive. ..."
"... They tricked us the last time, I hope that the people have learned their lesson – not to trust them anymore. ..."
"... Thank you, this is an excellent summary of the situation right now. It's worth noting too just how disconnected the establishment is from the wider public. They have enormous financial resources and access to the entire legacy media ..."
"... Let's stop using the word "elites". That sounds too positive, as though they have some admirable traits acquired by hard work, as in "elite athletes". Instead, let's call them "oligarchs" so that we get the right nuances of wealth and power, and get the correct emotional connotations of our disgust with them. We should label them with labels that they will dislike: oligarchs, mob bosses, etc. ..."
"... This is not irrational. The screaming, the hysteria, this is the utterly rational, breathtakingly brutal reaction of a ruling elite that has the moral sense of a reptile. And it's working. All of Trump's campaign promises to stop wasting trillions on pointless winless foreign wars of choice, and instead spend that on our own country? Gone. And so much else besides. ..."
"... It's dangerous to underestimate an enemy. The useful idiot foot soldiers, screaming in mindless herd instinct, are one thing. The people behind them – the Koch brothers, Jeff Bezos, Mark Zuckerberg, others – there is nothing at all mindless or demented about them. ..."
Where to begin to analyze the madness of mainstream media in reaction to the Trump-Putin
meeting in Helsinki? By focusing on the individual, psychology has neglected the problem of
mass insanity, which has now overwhelmed the United States establishment, its mass media and
most of its copycat European subsidiaries. The individuals may be sane, but as a herd they are
ready to leap off the cliff.
For the past two years, a particular power group has sought to explain away its loss of
power – or rather, its loss of the Presidency, as it still holds a predominance of
institutional power – by creation of a myth. Mainstream media is known for its herd
behavior, and in this case the editors, commentators, journalists have talked themselves into a
story that initially they themselves could hardly take seriously.
Donald Trump was elected by Russia ?
On the face of it, this is preposterous. Okay, the United States can manage to rig elections
in Honduras, or Serbia, or even Ukraine, but the United States is a bit too big and complex to
leave the choice of the Presidency to a barrage of electronic messages totally unread by most
voters. If this were so, Russia wouldn't need to try to "undermine our democracy". It would
mean that our democracy was already undermined, in tatters, dead. A standing corpse ready to be
knocked over by a tweet.
Even if, as is alleged without evidence, an army of Russian bots (even bigger than the
notorious Israeli army of bots) was besieging social media with its nefarious slanders against
poor innocent Hillary Clinton, this could determine an election only in a vacuum, with no other
influences in the field. But there was a lot of other stuff going on in the 2016 election, some
for Trump and some for Hillary, and Hillary herself scored a crucial own goal by denigrating
millions of Americans as "deplorables" because they didn't fit into her identity politics
constituencies.
The Russians could do nothing to build support for Trump, and there is not a hint of
evidence that they tried. They might have done something to harm Hillary, because there was so
much there: the private server emails, the Clinton foundation, the murder of Moammer Gaddafi,
the call for a no-fly zone in Syria they didn't have to invent it. It was there. So was the
hanky panky at the Democratic National Committee, on which the Clintonite accusations focus,
perhaps to cause everyone to forget much worse things.
When you come to think of it, the DNC scandal focused on Debbie Wasserman Schultz, not on
Hillary herself. Screaming about "Russian hacking the DNC" has been a distraction from much
more serious accusations against Hillary Clinton. Bernie Sanders supporters didn't need those
"revelations" to make them stop loving Hillary or even to discover that the DNC was working
against Bernie. It was always perfectly obvious.
So at worst, "the Russians" are accused of revealing some relatively minor facts concerning
the Hillary Clinton campaign. Big deal.
But that is enough, after two years of fakery, to send the establishment into a frenzy of
accusations of "treason" when Trump does what he said he would do while campaigning, try to
normalize relations with Russia.
This screaming comes not only from the US mainstream, but also from that European elite
which has been housebroken for seventy years as obedient poodles, dachshunds or corgis in the
American menagerie, via intense vetting by US trans-Atlantic "cooperation" associations. They
have based their careers on the illusion of sharing the world empire by following U.S. whims in
the Middle East and transforming the mission of their armed forces from defense into foreign
intervention units of NATO under U.S. command. Having not thought seriously about the
implications of this for over half a century, they panic at the suggestion of being left to
themselves.
The Western elite is now suffering from self-inflicted dementia.
Donald Trump is not particularly articulate, navigating through the language with a small
repetitive vocabulary, but what he said at his Helsinki press conference was honest and even
brave. As the hounds bay for his blood, he quite correctly refused to endorse the "findings" of
US intelligence agencies, fourteen years after the same agencies "found" that Iraq was bursting
with weapons of mass destruction. How in the world could anyone expect anything else?
But for the mainstream media, "the story" at the Helsinki summit, even the only
story, was Trump's reaction to the, er, trumped up charges of Russian interference in our
democracy. Were you or were you not elected thanks to Russian hackers? All they wanted was a
yes or no answer. Which could not possibly be yes. So they could write their reports in
advance.
Anyone who has frequented mainstream journalists, especially those who cover the "big
stories" on international affairs, is aware of their obligatory conformism, with few
exceptions. To get the job, one must have important "sources", meaning government spokesmen who
are willing to tell you what "the story" is, often without being identified. Once they know
what "the story" is, competition sets in: competition as to how to tell it. That leads to an
escalation of rhetoric, variations on the theme: "The President has betrayed our great country
to the Russian enemy. Treason!"
This demented chorus on "Russian hacking" prevented mainstream media from even doing their
job. Not even mentioning, much less analyzing, any of the real issues at the summit. To find
analysis, one must go on line, away from the official fake news to independent reporting. For
example, "the Moon of Alabama" site offers
an intelligent interpretation of the Trump strategy , which sounds infinitely more
plausible than "the story". In short, Trump is trying to woo Russia away from China, in a
reverse version of Kissinger's strategy forty years ago to woo China away from Russia, thus
avoiding a continental alliance against the United States. This may not work because the United
States has proven so untrustworthy that the cautious Russians are highly unlikely to abandon
their alliance with China for shadows. But it makes perfect sense as an explanation of Trump's
policy, unlike the caterwauling we've been hearing from Senators and talking heads on CNN.
Those people seem to have no idea of what diplomacy is about. They cannot conceive of
agreements that would be beneficial to both sides. No, it's got to be a zero sum game, winner
take all. If they win, we lose, and vice versa.
They also have no idea of the harm to both sides if they do not agree. They have no project,
no strategy. Just hate Trump.
He seems totally isolated, and every morning I look at the news to see if he has been
assassinated yet.
It is unimaginable for our Manichean moralists that Putin might also be under fire at home
for failing to chide the American president for U.S. violations of human rights in Guantanamo,
murderous drone strikes against defenseless citizens throughout the Middle East, the
destruction of Libya in violation of the UN mandate, interference in the elections of countless
countries by government-financed "non-governmental organizations" (the National Endowment of
Democracy), worldwide electronic spying, invasions of Iraq and Afghanistan, not to mention the
world's greatest prison population and regular massacres of school children. But the diplomatic
Russians know how to be polite.
Still, if Trump actually makes a "deal", there may be losers – neither the U.S. nor
Russia but third parties. When two great powers reach agreement, it is often at somebody else's
expense. The West Europeans are afraid it will be them, but such fears are groundless. All
Putin wants is normal relations with the West, which is not much to ask.
Rather, candidate number one for paying the price are the Palestinians, or even Iran, in
marginal ways. At the press conference, asked about possible areas of cooperation between the
two nuclear powers, Trump suggested that the two could agree on helping Israel:
"We both spoke with Bibi Netanyahu. They would like to do certain things with respect to
Syria, having to do with the safety of Israel. In that respect, we absolutely would like to
work in order to help Israel. Israel will be working with us. So both countries would work
jointly."
In political terms, Trump knows where political power lies, and is counting on the influence
of the pro-Israel lobby, which recognizes the defeat in Syria and the rising influence of
Russia, to save him from the liberal imperialists – a daring bet, but he does not have
much choice.
On another subject, Trump said that "our militaries" get along with the Russians "better
than our politicians". This is another daring bet, on military realism that could somehow
neutralize military industrial congressional complex lobbying for more and more weapons.
In short, the only chance to end the nuclear war threat may depend on support for Trump from
Israel and the Pentagon!
The hysterical neoliberal globalists seem to have ruled out any other possibility –
and perhaps this one too.
"Constructive dialogue between the United States and Russia forwards the opportunity to open
new pathways toward peace and stability in our world" Trump declared "I would rather take a
political risk in pursuit of peace than to risk peace in pursuit of politics."
That is more than his political enemies can claim.
This is a frightening, accurate commentary on what we face as a result of an unaccountable
power structure resorting to any and all means to retain power which, if this structure
continues to exercise it, will lead to our extinction.
In the establishment, it's not dementia as such, it's just serving the highest bidder. You
can accuse only the elites of dementia: they forgot that to enjoy the fruits of your thievery
you have to be alive. If only they die, it would be a great service to the humanity.
Unfortunately, the way things go, they might take us all with them.
This mass hysteria over a country hostile to both democracy and gay rights (it's hard to tell
which one is worse) has been seen in the west before.
It's very reminiscent of the lead-up to Iraq war in 2003. I mean what's next? Are they
gonna accuse Russia of having WMD's too?
They are pretty good at providing false evidence of WMD's, I wouldn't be surprised if they
stage another presentation of evidence of Russian WMD's at UN, complete with satellite images
of mobile trucks equipped with Uranium enrichment technology and all that.
That Nikki Halley can be quite persuasive, you know. I just hope that the world doesn't
buy that BS again. Russia having WMD's? That's preposterous. They tricked us the last time, I
hope that the people have learned their lesson – not to trust them anymore.
Thank you, this is an excellent summary of the situation right now. It's worth noting too
just how disconnected the establishment is from the wider public. They have enormous
financial resources and access to the entire legacy media but seem to have almost no real
base of support. Remember how the Never Trumpers had no one more prominent and well-known
than Evan McMullan (!!) to run as their candidate? Note too the tiny number of views the
YouTube videos of the Aspen Institute get: https://www.youtube.com/user/AspenInstitute/videos
.
On its own, these things aren't conclusive proof but together they add up. The Aspen
Institute crowd is an almost entirely self-contained subculture. They seem to have no base of
support, beyond their stacks of money, job titles and the power that come with the various
offices they hold. That's probably why they can never stop calling their opponents
"populists" or why Bill Kristol keeps tweeting about encountering scrappy shoeshine boys who
shout "give Trump hell, Mr Kristol!" as he goes about his urban peregrinations.
Diana Johnstone is not alone. Others on the alt-Left are starting to wake up, too. This is
Joaquín Flores:
People are seeing through dishonesty, and the old language traps are used up and done
for. If reconquista is the goal, then we need to have an honest conversation about that. If
there's a Latino nation with self determination in the south-west US, or rights 'back' to
the south-west US, then let's speak of it in such terms. Because then we'd be looking at a
Euro-American nation also. Now of course there's issues of interpenetrated peoples, and
identities we carry in our minds in diverse urban centers. But the point here is that we
have to have an honest discourse, and stop hiding reconquista sentiments under the rubric
of 'human rights'. Because European-Americans don't have right of return to Europe, so the
left is promoting what will ultimately be a race war, full scale, if they don't chill the
fuck out and back off this disingenuous approach to policy-wonkism on immigration.
The paradigmatic question today is, how is wealth made, and where does wealth come from?
What is the balance of trade and debts, and how is that is no longer manageable? The US
empire and NATO is no longer manageable. Trump is unwinding NATO. That can't be a bad
thing.
@AnonFromTNLet's stop using the word "elites". That sounds too positive, as though they have some
admirable traits acquired by hard work, as in "elite athletes". Instead, let's call them
"oligarchs" so that we get the right nuances of wealth and power, and get the correct
emotional connotations of our disgust with them. We should label them with labels that they
will dislike: oligarchs, mob bosses, etc.
@Tulips
You are right, of course, the word "elites" has too many positive connotations. In fact, they
are oligarchs, mega-thieves, or something on those lines. Functionally, in our society they
are puppet masters of all the venal puppets (politicians, journos, etc.).
I hear you, and I sympathize, but this is not mass dementia.
The oligarchy that runs the United States was worried that Donald Trump might actually
(!!) take some consideration for the national interest of the people of the United States of
America. That will never do.
This is not irrational. The screaming, the hysteria, this is the utterly rational,
breathtakingly brutal reaction of a ruling elite that has the moral sense of a reptile. And
it's working. All of Trump's campaign promises to stop wasting trillions on pointless winless
foreign wars of choice, and instead spend that on our own country? Gone. And so much else
besides.
It's dangerous to underestimate an enemy. The useful idiot foot soldiers, screaming in
mindless herd instinct, are one thing. The people behind them – the Koch brothers, Jeff
Bezos, Mark Zuckerberg, others – there is nothing at all mindless or demented about
them.
Having a title "Mass Dementia in the Western Establishment" and approaching this effort as
"mass insanity", "demented chorus" etc. is simply delusional.
They know exactly what they are doing and, it appears, they are doing it well.
The are able to create their own reality. What puzzles me a bit isn't "them" or their servants (media etc.).
It's people in general. They appear to be buying that manufactured reality with ease. In this
era of instant communications it's .sobering. This constant shitting on "them" and their servants is fine and dandy but feels as just a
feel good exercise.
Perhaps some effort could be spared in trying to analyze and explain common people approach
to all this. The buying, hook and sinker, that manufacture.
Anyone with an average intelligence can, in two hours trawling of Internet, get how false
all that is. And, yet, here we are.
The same people who can spend hours on social media, shopping and entertainment online can't,
for SOME reason, figure all that out.
Easy to blame "them" and media/academia/whatever.
Maybe it's time to start passing a bit of blame to people in general.
@Daniel
Rich The Russians are by nature cautious. They are a conglomerate of individuals, many of
whom remember times when they would be sent by communist tyrants to a gulag for Wrongthink.
Of course they're cautious.
How Hillary Clinton could even run for presidency after the murder of Moammer Gaddafi and
Libya destruction, in any decent civilisation and society.
That's planetary shame and the most important question, not DNC hack or anything else, which
just trace in wrong direction.
So, Trump should grow some balls and arrest not just her but Barack Obama as well on the
same charges, as war criminals as they are, and prove that he really deserves to be
trusted.
And sacrifice himself in the process if needed as that would do any honest true US president,
and he knew what to expect from such position from the start.
It's not TV reality show, as still it is.
All he cares about is his ego and popularity, and he is loosing both.
Israel lobby finally see that they put their money in the wrong bank.
I intend to believe more that West, namely USA and UK the most, keeps them more hostage in
uncertainty for decades than in some Jewish conspiracy. Also, I also believe that only Russia can guaranty Israel security and peace in the
region.
In political terms, Trump knows where political power lies, and is counting on the
influence of the pro-Israel lobby, which recognizes the defeat in Syria and the rising
influence of Russia, to save him from the liberal imperialists – a daring bet, but he
does not have much choice.
Saudi Arabia spent 40 billion dollars helping Saddam's Iraq in its war against Iran, the
cost of US efforts in the Syria civil war have largely been met by the Saudis. The coming
attack on Iran will be as much to please the Saudis as to lock Israel into West Bank Arab
expulsion mode. The Israel Lobby will is not pushing Donald Trump, they are playing catch up
with him. Trump has already shown with the Jerusalem recognition that he is encouraging
Israel in unilateral courses of action.
@TG
No, I agree with the assessment in this article and its title: the establishment is
dangerously detached from reality right now. Our stagnant and locked-down political culture
in the West allowed the "elite" to develop a false sense of security and and certainty. They
thought they had things pretty much figured out a few years ago but now they're genuinely
panicked.
Looking to this circus from Russia, to those insane speaches, insulting caricatures in MSM, I
understand the huge amount of rotteness of Western society, mainly its high top part, but not
only. Even here in comments (not in this particularly article) the percentage of trolls and
brainwashed idiots exceeds all I could've imagined. So I stopped writing here – no
sense, I beleive that something can change only after the dramatic changes in US/West society
and that is possible only after a big war/revolution.
So, I'm afraid our future is vague
"According to two former administration officials."
NYT.
Fake News
57 minutes ago
The "exit interview" said nothing about "Not Up To Role Of President." That was a quote at the
start of the article attributed to "people."
People say.
Yes, they do.
1 hour ago
Ummm. That would be Senator Dianne DEEP STATE Feinstein, former chair of the Senate
Intelligence Committee and, therefore, Democrat doppelganger for DEEP STATE kingpin John O.
Brennan.
"It's a loss, there's no question," said Sen. Dianne Feinstein (D-CA).
1 hour ago
Kidbuck has served under enough Marine officers to know that most of them lie to cover their
own *** as if it's second nature.
1 hour ago
That's probably true in all US military branches.
This is probably one major reason why US have lost all wars, since WWII.
1 hour ago
I think you get the US and Deep State confused, The US military goes in and wipes out
countries military and Deep state comes in with al queda and isis after their military is gone,
For ex...Iraq had the 4th largest army in world at time and didnt last 3 weeks. A lot of people
know now these wars were based on lies...
48 minutes ago
In the Army, few rise above the rank of Captain unless they proven themselves to be ***
kissers. To reach full bird Colonel, they have proven themselves to be totally loyal to the
military machine. To wear the stars and breath the rarified air of the Generals, you have become
among the best boot lickers on earth, and looking forward to retirement and some lucrative
figurehead job with one of the defense contractors you have been sucking up to. Always remember,
gaining rank in peacetime is slow & difficult, but war offers lots of opportunities to climb
the ladder much faster.
1 hour ago
"everyone has been picked by Trump. "
Technically, but not exactly true.
It's more closer to the truth that everyone was recommended by the Dark State's Gatekeeper,
Kelly.
Once, Chump hired Kelly as his Chief of Staff, a long time MIC, pentagon swamp creature, Chump
got boxed in.
34 minutes ago (Edited)
Priebus was hardly better. And what kind of leader is Trump if he lets himself be manipulated
like this?
It's just excuse after excuse with that guy.
2 hours ago
"Military people," said Kelly "don't walk away."
Which is why such people agitate for war.... Self-justificating war monger like Matthis. Just
another Deep-State tool.
Thank you for your service and don't let the door hit your desk-jockey arse on the way
out.
The real "adults" actively pursue peace, they don't look to keep the monthly drone body-count
ticking over.
1 hour ago
Generals by definition are "war mongers".
1 hour ago
"Which is why such people agitate for war.... Self-justificating war monger like Matthis.
Just another Deep-State tool."
That's right. They are willing Dark State war tools. In fact, they are the DARK STATE.
If China Is Suffering So Much Because of Trump's Trade War, Why Is Its Surplus Up So
Much?
By Dean Baker
Donald Trump has made his tariffs against China and other countries a big part of his
agenda as president. He even went so far as to dub himself "Tariff Man" on Twitter.
The media have been quick to assume that Tariff Man is accomplishing his goals, especially
with regard to China. It is standard for news articles, like this one, to assert that China's
economy is suffering in large part because of Trump's tariffs.
In fact, through the first ten months of 2018 China's trade surplus * with the United
States on trade in goods has been $344.5 billion. This is up 11.5 percent from its surplus in
the same months last year.
The tariffs surely are having some effect, and China's surplus would almost certainly be
larger if they were not in place. But it is difficult to believe that China's $13.5 trillion
dollar economy (measured at exchange rate values) could be hurt all that much by somewhat
slower growth in its trade surplus with the United States. (For arithmetic fans, the surplus
is equal to 2.5 percent of China's GDP. We are talking about slower growth in this
surplus.)
It is worth noting that we will not be getting new trade data until the government
shutdown is over since the Census Bureau is one of the government agencies without funding
for fiscal year 2019.
I posted an NYT piece the other day
that described an automobile-headlight
manufacturer in Michigan who was struggling
to get LED bulbs from China, where they were
usually in plentiful supply, So, he was just
*trying* to stockpile some inventory.
Trump Has Promised to Bring Jobs Back. His Tariffs Threaten to Send Them Away.
By Peter S. Goodman
For EBW Electronics, the biggest hit has come through increased costs for components,
including transistors, resistors and capacitors. Across the breadth of the factory, workers
in blue lab coats slot these nibs of metal into circuit boards and then attach LED lights,
most of these items imported from China.
These components are produced at enormous scale in China. Even with tariffs on Chinese
imports, American factories have no incentive to make them, because profit margins are tiny,
and the costs are vast.
"Nobody in this country wants to make these things," said Mr. Steeby, the EBW president,
echoing a contention heard widely here.
The company has filed for exemptions from the tariffs, but has yet to hear back from the
federal government. And EBW has encountered stiff resistance in passing on the extra costs to
its customers, though it is obliged to continue delivering lights to major auto manufacturers
at agreed-upon prices, or pay fines for interfering with production.
"We're the monkey in the middle," said Mr. LeBlanc, the EBW chairman.
If Mr. Trump follows through on threats to raise tariffs to 25 percent, EBW and its 230
employees could face dire circumstances.
"At 25 percent, we are not making money," Mr. Steeby said. "There's a threat that you
cease to exist, or there's a threat that jobs move to Mexico."
In an era of anxiety over global competition, EBW has engaged Chinese suppliers to produce
a crucial commodity -- American paychecks. Now, Mr. Trump's tariffs have put jobs at
risk.
"There's no intelligence to the way this is being done," Mr. Steeby said. "The tariffs are
designed to hurt China, but they are being paid by American companies."
Of course, the Mr. Steeby, President of EBW Electronics, is without question, honest and
trustworthy. Like a boy scout, he would never lie. What he said should be taken as the gospel
truth, not a grain of salt.
I posted an NYT piece the other day
that described an automobile-headlight
manufacturer in Michigan who was struggling
to get LED bulbs from China, where they were
usually in plentiful supply, So, he was just
*trying* to stockpile some inventory.
[ There is no indication the company is stockpiling LED bulbs, and there is no indication
there is stockpiling as yet through the economy. ]
[ No, the matter is important, and I am correct and do not care to be baited.
This is no data showing that American companies are stockpiling. American companies have
long operated with minimal inventory and a change would be dramatic. ]
Protectionist Measure to Help U.S. Corporations at the Expense of U.S. Workers Tops Trump
China Trade Agenda
By Dean Baker
Readers of this New York Times piece * on Robert Lighthizer, United States trade
representative, and his negotiations with China may have missed this point. The piece said
that one of Lighthizer's main goals was to stop China's practice of requiring that companies
like Boeing and GE, who set up operations in China, take Chinese companies as business
partners.
This is an effective way of requiring technology transfers, since the partners will become
familiar with the production techniques of the U.S. companies. This will enable them in
future years to be competitors with these companies.
If the U.S. government prohibits contracts that require this sort of technology transfer
it will make it more desirable to outsource some of their production to China. This will be
good for the profits of Boeing, GE, and other large companies but bad for U.S. workers. It
will also mean that we will be paying more for products in the future than would otherwise be
the case, since if Chinese companies would have been able to out-compete U.S. companies, it
presumably means that would be charging lower prices or selling a better product.
It is also worth noting that the basic concern expressed by Lighthizer and others assumes
that major U.S. corporations are unable to look out for themselves. They are not being forced
to enter in contracts with China. This problem arises because they decide to invest in China,
even with conditions requiring technology transfer.
We have a great story here where the government, and many analysts, think our largest
corporations lack the ability to look out for their best interest. By contrast, when it comes
to individual workers who are forced to sign away their right to have class action suits, or
individual investors who can be fleeced by the financial industry, the current position of
the government is that they can look out for themselves.
The NYT piece also does some inappropriate mind reading when it tells readers:
"Mr. Trump is increasingly eager to reach a deal that will help calm the markets, which he
views as a political electrocardiogram of his presidency."
The reporter/editor does not know that Trump is "increasingly eager" or that he "views"
the markets as "a political electrocardiogram of his presidency."
Good reporting says what politicians do and say. It does not report as fact their alleged
opinions.
As a people, we should look to the masters of mercantilism, Germany, and learn the lessons.
How are they dealing with the tendency of corporations to hire the gulag communists to
produce goods for sale in the advanced Western economies, like Germany and America.
Obviously, the communist government of China, which owns all production, has decided to not
buy from the capitalists, but prefers to sell to them, only. Whoops.
"... "yield curve inversions" have not historically tended to produce false recession predictions. The overall judgment of financial markets is that a recession is significantly more likely than not in the next two years. ..."
"... the very low real yield on government bonds is a signal that more debt can be absorbed. It is not too soon to begin plans to launch large-scale infrastructure projects if a downturn comes. ..."
"... It is the irony of our moment that prudence requires the rejection of austerity. ..."
"... I have no intention of reading any opinion piece by Summers or Greenspan who both ignored (for whatever reasons) Wall Street malfeasance in their policy making roles. Give me more of Steve Pearlstein's academic minded pieces on this subject and I will happily read on. ..."
"... Essentially, Summers agrees with Trump that the Fed raising interest rates threatens the economy. The difference is that Summers can articulate why this is a problem. ..."
"... Now Trump's Fed appointee has decided that there is a "normal" interest rate of 3% that the Fed must force despite the low level of inflation and the resulting real interest rate. The logic of this is that interest rates must be increased to 3% so that when the Fed forcing interest to 3% causes a recession, the Fed can lower interest rates to fight it. ..."
"... More likely the economy slows to 2% by Q4 2019 and bounces around 1.5% to 2% throughout 2020. ..."
Paul Samuelson's
famous quip
that the stock market has predicted nine of the past five recessions cautions against overreacting to recent market moves. But
credit spreads have widened considerably,
commodity prices have softened, and investors have started demanding higher yields for short-term U.S. bonds than for those with
longer terms. Unlike equity markets, such "yield curve inversions" have not historically tended to produce false recession predictions.
The overall judgment of financial markets is that a recession is significantly more likely than not in the next two years.
Real economic indicators for the world's largest economies -- China and the United States -- also suggest cause for concern. Almost
every Chinese indicator in the past few months has come in below expectations. Beijing now sees the need for stimulus measures if
it is to credibly report the attainment of growth targets. Revisions of economic forecasts tend to run in the same direction for
protracted periods as forecasters adjust to emerging realities. This tendency is especially pronounced in China, given the extreme
political sensitivity of economic statistics.
In the United States, inflation is again running
below the Federal Reserve's 2 percent target, and comparisons of the yields on ordinary and inflation-adjusted bonds suggest
investors expect this to continue for the next decade. While
jobs growth remains strong, employment is usually a lagging statistic. Forward-looking indicators of business and consumer sentiment
suggest that growth is likely to slow.
... ... ...
It is almost inconceivable that the global economy will remain healthy in the face of serious economic problems in both
China and the United States , even leaving aside their conflicts over trade and technology. Europe lacks economic energy, and
the uncertainties associated with Brexit, French protests, German political transition and Italian populism mean the continent is
more likely to be a source of problems than a solution.
Like generals fighting the last war, too many policymakers are focused on yesterday's problems. The global economy is much more
likely to suffer from a downturn than from overheating in the next two years. There is more likely to be too little credit flow than
too much, asset price deflation is more probable than a bubble, and excess austerity is a bigger risk than profligacy.
The critical challenge for monetary and fiscal policy will be to maintain sufficient demand amid immense geopolitical uncertainty,
increasing protectionism, high accumulated debt levels, and structural and demographic factors leading to increased private saving
and reduced private investment.
The Fed should signal that it is determined to avoid a downturn, which would assure another decade of below-target inflation.
The
People's Bank of China and other central banks should also make clear that they recognize that avoiding another recession is
the most important thing they can contribute to financial stability.
Fiscal policymakers should also realize the very low real yield on government bonds is a signal that more debt can be absorbed.
It is not too soon to begin plans to launch large-scale infrastructure projects if a downturn comes. The largest economies should
try to limit trade frictions and signal that they are committed to cooperating to support global growth by assuring adequate capital
flows to emerging markets and avoiding a cycle of protectionism.
Even if my recession fears are excessive, a shift toward emphasizing growth will contribute to bringing inflation up to target
levels and can be reversed. If I am proved right, the costs of delay in the policy response could be catastrophic. It is the
irony of our moment that prudence requires the rejection of austerity.
PacificWren 2 days ago
In the meantime, banks are creating the latest risk with financial instruments similar to those toxic mortgage bundles, except
with loans to risky businesses. "The Biggest Emerging Market Debt Problem is in America" by Carmen Reinhardt: "These CLOs share
many similarities with the mortgage-backed securities that set the stage for the subprime crisis a decade ago."
But the Trump administration and Republican leaders are determined to get rid of regulations that were meant to reduce risk.
I realize that the use of hyperbole, exaggeration for effect, has a long history in journalism; but it is now seems to
be the norm in when reporting about many issues and events. This constant drumbeat of impending doom is helping to make Americans
numb to the events and problems facing our country. Writers, scale back the hysteria.
PBDenn1 3 days ago
I have no intention of reading any opinion piece by Summers or Greenspan who both ignored (for whatever reasons) Wall
Street malfeasance in their policy making roles. Give me more of Steve Pearlstein's academic minded pieces on this subject and
I will happily read on.
tidelanderndva 3 days ago
Essentially, Summers agrees with Trump that the Fed raising interest rates threatens the economy. The difference is that Summers can articulate why this is a problem.
Since Volcker strangled inflation as instructed by President Carter, inflation has been dead. Despite this, Greenspan repeatedly
increased interest rates out of fear of nonexistent inflation in 1991, 1994, 1999-2000, and 2006.
Now Trump's Fed appointee has decided that there is a "normal" interest rate of 3% that the Fed must force despite the low
level of inflation and the resulting real interest rate. The logic of this is that interest rates must be increased to 3% so that
when the Fed forcing interest to 3% causes a recession, the Fed can lower interest rates to fight it.
elkill_2008 4 days ago
More likely the economy slows to 2% by Q4 2019 and bounces around 1.5% to 2% throughout 2020.
Unemployment ticks up to 5% or so, thus stopping wage increases in their tracks, and the beginnings of stagnation are obvious
by election day. The reason for this is what we're not seeing and that is substantial increases in capital expenditures that could
boost productivity.
Manufacturing employment is a small part of the overall employment picture and the most likely place where capital expenditures
will occur.
But there doesn't appear to be any particular segment one can point to that can pick up the slack, and wages, as those expenditures
reduce employment in that sector.
Even if wages do increase due to the improved productivity, the absolute numbers employed no longer have the impact they once
did. Again, due to manufacturing employment compared to the rest of the economy.
It's like a 10 trillion X increase in income for the Golden Globe winners, there simply aren't enough of them to buy enough
to drive the economy.
"... In what is still a low-interest-rate environment globally, the perpetual search for yield has found a comparatively new and attractive source in the guise of collateralized loan obligations (CLOs) within the USEM world. According to the Securities Industry and Financial Markets Association, new issues of "conventional" high-yield corporate bonds peaked in 2017 ..."
"... These CLOs share many similarities with the mortgage-backed securities that set the stage for the subprime crisis a decade ago. During that boom, banks bundled together loans and shed risk from their balance sheets. Over time, this fueled a surge in low-quality lending, as banks did not have to live with the consequences. ..."
"... A world economy geared toward increasing the supply of financial assets has hooked us into a global game of waiting for the next bubble to emerge somewhere. ..."
A decade after the subprime bubble burst, a new one seems to be taking its
place in the market for corporate collateralized loan obligations. A world economy geared toward increasing the supply of financial
assets has hooked market participants and policymakers alike into a global game of Whac-A-Mole.
A recurrent topic in the financial press for much of 2018 has been the rising
risks in the emerging market (EM) asset class. Emerging economies are, of course, a very diverse group. But the yields on their
sovereign bonds have climbed markedly, as capital inflows to these markets have dwindled amid a general perception of
deteriorating conditions
.
1
Historically, there has been a tight positive relationship between
high-yield US corporate debt instruments and high-yield EM sovereigns. In effect, high-yield US corporate debt is the
emerging market that exists within the US economy (let's call it USEM debt). In the course of this year, however, their
paths have diverged (see Figure 1). Notably, US corporate yields have failed to rise in tandem with their EM counterparts.
What's driving this divergence? Are financial markets overestimating the
risks in EM fixed income (EM yields are "too high")? Or are they underestimating risks in lower-grade US corporates (USEM
yields are too low)?
Taking together the current trends and cycles in global factors (US
interest rates, the US dollar's strength, and world commodity prices) plus a variety of adverse country-specific economic
and political developments that have recently plagued some of the larger EMs, I am inclined to the second interpretation.
In what is still a low-interest-rate environment globally, the perpetual search for yield has found a comparatively new
and attractive source in the guise of collateralized loan obligations (CLOs) within the USEM world. According to the
Securities Industry and Financial Markets Association, new issues of "conventional" high-yield corporate bonds peaked in
2017
and are off significantly this year (about 35% through November). New issuance activity has shifted to the CLO
market, where the amounts outstanding have soared, hitting new peaks almost daily. The
S&P/LSTA US
Leveraged Loan 100 Index
shows an increase of about 70% in early December from its 2012 lows (see Figure 2), with
issuance hitting record highs in 2018. In the language of emerging markets, the USEM is attracting large capital inflows.
These CLOs share many similarities with the mortgage-backed
securities that set the stage for the subprime crisis a decade ago. During that boom, banks bundled together loans and shed
risk from their balance sheets. Over time, this fueled a surge in low-quality lending, as banks did not have to live with
the consequences.
Likewise, for those procuring corporate borrowers and bundling corporate
CLOs, volume is its own reward, even if this means lowering standards for borrowers' creditworthiness. The share of
"Weakest Links"
– corporates rated B-
or lower (with a negative outlook) – in overall activity has risen markedly since 2013-2015. Furthermore, not only are the
newer issues coming from a lower-quality borrower, the covenants on these instruments – provisions designed to ensure
compliance with their terms and thus minimize default risk – have also become lax.
Covenant-lite
issues are on the rise and
now account for about 80% of the outstanding volume.
As was the case during the heyday of mortgage-backed securities, there
is great investor demand for this debt, reminiscent of the "capital inflow problem" or the "
bonanza
"
phase of the capital flow cycle. A recurring pattern across time and place is that the seeds of financial crises are sown
during good times (when bad loans are made). These are good times, as the US economy is at or near full employment.
The record shows that capital-inflow surges often end badly. Any number
of factors can shift the cycle from boom to bust. In the case of corporates, the odds of default rise with mounting debt
levels, erosion in the value of collateral (for example, oil prices in the case of the US shale industry), and falling
equity prices. All three sources of default risk are now salient, and, lacking credible guarantees, the CLO market (like
many others) is vulnerable to runs, because the main players are lightly regulated shadow banking institutions.
And then there are the old and well-known concerns about shadow banking
in general, which stress both its growing importance and the opaqueness of its links with other parts of the financial
sector. Of course, we also hear that a virtue of financing debt through capital markets rather than banks is that the shock
of an abrupt re-pricing or write-off will not impair the credit channel to the real economy to the degree that it did in
2008-2009. Moreover, compared to mortgage-backed securities (and the housing market in general), the scale of household
balance sheets' exposure to the corporate-debt market is a different order of magnitude.
A decade after the subprime bubble burst, a new one seems to be taking
its place – a phenomenon aptly characterized by Ricardo Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas as "
Financial
'Whac-a-Mole
.'"
A world economy geared toward increasing the supply of financial assets has hooked us into a global
game of waiting for the next bubble to emerge somewhere.
Like the synchronous boom in residential housing prior to 2007 across
several advanced markets, CLOs have also gained in popularity in Europe. Higher investor appetite for European CLOs has
predictably led to a
surge in issuance
(up almost 40% in 2018). Japanese banks, desperately seeking higher yields, have swelled the ranks of
buyers. The networks for financial contagion, should things turn ugly, are already in place.
1
Carmen M. Reinhart is Professor of the International Financial System at Harvard University's Kennedy School of
Government.
Douglas
Leyendecker
Dec 23, 2018
The most important questions isn't when or why this bubble will burst but how we got here in the first place. It all
starts with BAD economic and social policies. Now we require more and more "money" to keep the wheels on. Bubble to
bubble...this is where we are in the developed world today. When the reboot finally hits there won't be any
cryptocurrency because there won't be any internet. This is what happens in a fiat currency system.
Read More
MARCO
TEAMNEURS
Dec 23, 2018
Certain deterministic outcome such as the one presented by Professor Carmen M. Reinhart fits with the Idols refereed by
Francis Bacon in Novum Organum. We will be using financialization until it will be not relevant because something else
had emerged or most of us de-merged. This time might be that we are on those moments where something relevant is moving
under our feet.
What seems to be making the difference is strength of soft/hard power the CCP (Communist Chinese Party) has to leverage
decisions over the world. What happened when in the Subprime Crises Russia called China to together attack capital
markets of USA and China refused (according to Mr. Henry Paulson) might have not the same reply this time.
Read less
Paul Daley
Dec 23, 2018
Good article. But -- do I dare say it -- this time may be different. As Reinhart points out, CLOs do not have heavily
engaged public institutions, as was the case with mortgage backed securities and sovereign debt. A collapse in CLO prices
would fall largely on private shoulders. And, after their first experiments with QE, central banks should have a better
grip on the risks and consequences of asset price support programs in encouraging and sustaining asset price bubbles, and
be prepared this time to employ income support measures to sustain real economic activity, if necessary.
nigel southway
Dec 22, 2018
The best course of action is stop the easy movement of capital across borders that way it stops the phoney wealth
transactions caused by a foolish focus on the global economy start more national centered wealth funds
Jacob Alhadeff
Dec 20, 2018
I had no idea any of this was going on. This was very informative, but I don't know yet exactly what to do with this
information. I'm cynical about our ability to avoid such bubbles, but we can prepare for them. In terms of how low/middle
income Americans can prepare what would anyone suggest? Also, I'm not looking for advice on investing decisions
Read less
nigel
southway
Dec 24, 2018
We need to come to terms with who owns capital. It's mostly the nation that created it. The capitalists should only rent
it and the traders and globalists have zero rights to it hence the justification for stricter controls
That is another surefire sign of degeneracy: when a regime can only produce incompetent,
often old, leaders who are completely out of touch with reality and who blame their own
failures on [everyone but themselves].
Another sign of degeneracy is that masses of people put their faith in such human garbage
and fantasize that the essentially effortless task of casting ballots every few years will
somehow, perhaps magically, improve their situations. Even more telling is the infantilism
demonstrated by the attitude that they're special and "da gweatist" and that the world should
cater to their every whim just like mommy and daddy did.
Unlike the Titanic, most collapsed regimes don't fully sink. They remain about half
under water, and half above, possibly with an orchestra still playing joyful music. And in
the most expensive top deck cabins, a pretty luxurious lifestyle can be maintained by the
elites.
A clever metaphor.
incompetent, often old, leaders who are completely out of touch with reality and who
blame their own failures on internal ("deplorables") and external ("the Russians")
factors.
Just so.
Dmitry Orlov's assessment rings dead true to me. The most terrifying factor is that a
doomed and demented US administration may resort to the use of its vast air and missile power
to save itself.
If the U.S. health care system was a country, it would have the fifth largest GDP on the entire planet.
At this point
only the United States, China, Japan and Germany have a GDP that is larger than the 3.5 trillion dollar U.S. health care
market.
If
that sounds obscene to you, that is because it is obscene.
We should want people to be attracted to the health care
industry because they truly want to help people that are suffering, but instead the primary reason why people are drawn to the
health care industry these days is because of the giant mountains of money that are being made.
Like
so many other things in our society, the health care industry is all about the pursuit of the almighty dollar, and that is just
wrong.
In order to keep this giant money machine rolling, the health care industry has to do an enormous amount of marketing. If you
can believe it, a study that was just published found that
at
least 30 billion dollars a year
is spent on such marketing.
Hoping to earn its share of the
$3.5
trillion
health care market, the medical industry is pouring more money than ever into advertising its products -- from
high-priced prescriptions to do-it-yourself genetic tests and unapproved stem cell treatments.
Spending on health care marketing nearly doubled from 1997 to 2016, soaring
to
at least $30 billion a year
, according to a study published Tuesday in JAMA.
This marketing takes many different forms, but perhaps the most obnoxious are the television ads that are endlessly hawking
various pharmaceutical drugs. If you watch much television, you certainly can't miss them. They always show vibrant, smiling,
healthy people participating in various outdoor activities on bright, sunny days, and the inference is that if you want to be
like those people you should take their drugs. And the phrase
"ask
your doctor"
is usually near the end of every ad
The biggest increase in medical marketing over the past 20 years was in "direct-to-consumer" advertising, including the TV
commercials that exhort viewers to "ask your doctor" about a particular drug.
Spending
on such ads jumped from $2.1 billion in 1997 to nearly $10 billion in 2016
, according to the study.
As a result of all those ads, millions of Americans rush out to their doctors to ask about drugs that they do not need for
diseases that they do not have.
But everyone will just keep taking those drugs, because that is what the doctors are telling them to do. But what most people
never find out is that the pharmaceutical industry goes to great lengths to get those doctors to do what they want. According
to
NBC News
, the big drug companies are constantly "showering them with free food, drinks and speaking fees, as well as paying
for them to travel to conferences".
It is a legal form of bribery, and it works.
When you go to most doctors, they will only have two solutions to whatever problem you have – drugs or surgery.
And since nobody really likes to get cut open, and since drugs are usually the far less expensive choice, they are usually the
preferred option.
Of course if doctors get off the path and start trying to get cute by proposing alternative solutions, they can get in big
trouble
really
fast
Today's medical doctors are not allowed to give nutritional advice, or the
American
Medical Association
will
come shut them down
, and even if they were, they don't know the right things to say, because they weren't educated
that way in medical college. So instead, M.D.s just sling experimental, addictive drugs at symptoms of deeper rooted
sicknesses, along with immune-system-destroying antibiotics and carcinogenic vaccines.
That's why any medicine that wrecks your health is easy to come by, just like junk food in vending machines. The money isn't
made off the "vending" products, the money is made off the sick fools who are repeat offenders and keep going back to the well
for more poison – it's called chronic sick care or symptom management. Fact: Prescription drugs are the
fourth
leading cause of death
in America, even when "taken as directed."
Switching gears, let's talk about hospitals for a moment.
When you go to the hospital, it is often during a great time of need. If you are gravely ill or if an accident has happened and
you think you might die, you aren't thinking about how much your medical care is going to cost. At that moment you just want
help, and that is a perfect opportunity for predators to take advantage of you.
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Just consider the example of 24-year-old Nina Dang. She broke her arm while riding her bicycle in San Francisco, and so she went
to the emergency room.
The hospital that Facebook CEO Mark Zuckerberg donated so much money to definitely fixed her arm,
but
later they broke her bank account when they hit her
with
a $24,000 bill
A bystander saw her fall and called an ambulance. She was semi-lucid for that ride, awake but unable to answer basic questions
about where she lived. Paramedics took her to the emergency room at Zuckerberg San Francisco General Hospital, where doctors
X-rayed her arm and took a CT scan of her brain and spine. She left with her arm in a splint, on pain medication, and with a
recommendation to follow up with an orthopedist.
A few months later,
Dang
got a bill for $24,074.50
. Premera Blue Cross, her health insurer,
would
only cover $3,830.79 of that
-- an amount that it thought was fair for the services provided. That left Dang
with
$20,243.71 to pay
, which the hospital threatened to send to collections in mid-December.
Most Americans assume that if they have "good health insurance" that they are covered if something major happens.
But as Dang found out, you can still be hit with crippling hospital bills even if you have insurance.
Today, medical debt is the number one reason why Americans declare bankruptcy. Because of the way our system is set up, most
families are just one major illness away from financial ruin.
And this kind of thing is not just happening in California. The median charge for a visit to the emergency room nationally is
well
over a thousand dollars
, and you can be billed
up
to 30 dollars
for a single pill of aspirin during a hospital stay.
Our health care system is deeply broken,
and it has been designed to squeeze as much money out of all of us as it
possibly can.
Unfortunately, we are stuck with this system for now.
The health care industry is certainly not going to reform itself,
and the gridlock in Washington is going to make a political solution impossible for the foreseeable future.
Most big
hospital ERs negotiate prices for care with major health insurance providers and are considered "in-network."
Zuckerberg San Francisco General has not done that bargaining with private plans, making them "out-of-network."
That leaves many insured patients footing big bills.
That's a tough
question considering we don't really know how much is flowing to the
military
industrial complex.
My guess healthcare spending is in second place.
U.S. shale industry could struggle if WTI remains below $60-$70 per barrel (differ by the
area and the spots). Investing in $50th range is just "hope" investmnet which is reling og
positive price dynamics, and below them is clear losses for produces, which means additional
junk bond issues.
... ... ...
But even as production held up, drilling activity indicated a sharper slowdown was underway.
The index for utilization of equipment by oilfield services firms dropped sharply in the fourth
quarter, down from 43 points in the third quarter to just 1.6 in the fourth – falling to
the point where there was almost no growth at all quarter-on-quarter.
Meanwhile, employment has also taken a hit. The employment index fell from 31.7 to 17.5,
suggesting a "moderating in both employment and work hours growth in the fourth quarter," the
Dallas Fed wrote. Labor conditions in oilfield services were particularly hit hard.
The data lends weight to comments made by top oilfield service firms from several months
ago. Schlumberger and Halliburton warned in the third
quarter of last year that shale companies were slowing drilling activity. Pipeline constraints,
well productivity problems and "budget exhaustion" was leading to weaker drilling conditions.
The comments were notable at the time, and received press coverage, but oil prices were still
high and still rising, and so was shale output. The crash in oil prices and the worsening
slowdown in the shale patch puts those comments in new light.
What does all of this mean? If oil producers are not hiring service firms and deploying
equipment, that suggests they are rather price sensitive. The fall in oil prices forced
cutbacks in drilling activity. Oilfield service firms in particular are bearing the brunt of
the slowdown. Executives from oilfield service firms told the Dallas Fed that their operating
margins declined in the quarter.
Baker huges reports a current US rig count decrease of 1% in the past two weeks. Several
companies I support in the Permian have stacked rigs and layed off workers. $50 bbl is the
magic number, the longer below that number the worse it will get.
Or it shows how much better the industry has gotten in response to production and prices.
It's like a capital intensive industry that doesn't waste capital drilling for something that
won't make them money. That's preservation of capital.
It doesn't take years or months to respond. It takes weeks.
Yes sure, the easiest datasets to follow in one place are at SRSrocco. Steve StAngelo,
kudos to him, has been onto this for years and has analyzed a lot of data from different
sources.
There are lots of other sources if you duck it (Google is, of course, much more of the
official narrative) but Steve has done a pretty good job of pulling a lot of information
together over many years and for free. Even the paid access business facilities don't have
much information (Surprise?).
The shale industry has been a kind of Ponzi scheme with OPM, entirely dependent on
constant new loans to keep production levels up with new wells, and has never made a profit.
I have often wondered, actually, to what extent the ESF (That is, USG) has supported the
industry as a means of attempting to put more pressure on RRRRUUUUUSSSSSIIIAAAAA!!!!!!! and
its energy income. Ultimately, unsuccessfully so, so perhaps this support might not last too
much longer?
Without subsidies from "someone", it's difficult to understand how an unprofitable
industry could have survived for so long. The Banks are not stupid. Wait, let me re-consider
that last remark!! But not in the way I meant
"... Sven Henrich is founder and the lead market strategist of NorthmanTrader.com . He has been a frequent contributor to CNBC and MarketWatch, and is well-known for his technical, directional and macro analysis of global equity markets. His Twitter handle is @NorthmanTrader . ..."
For years critics of U.S. central-bank policy have been dismissed as Negative Nellies, but the ugly truth is staring us in the
face: Stock-market advances remain a game of artificial liquidity and central-bank jawboning, not organic growth. And now the jig
is up.
As I've been saying for a long time: There is zero evidence that markets can make or sustain new highs without some sort of
intervention on the side of central banks. None. Zero. Zilch.
And don't think this is hyperbole on my part. I will, of course, present evidence.
In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one), which was introduced following the
initial announcement in November 2008. Every major correction since then has been met with major central-bank interventions: QE2,
Twist, QE3 and so on.
When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history. The
sum: More than $5 trillion between 2016 and 2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal
Reserve, the European Central Bank and the Bank of Japan:
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When did global central-bank balance sheets peak? Early 2018. When did global markets peak? January 2018.
And don't think the Fed was not still active in the jawboning business despite QE3 ending. After all, their official language
remained "accommodative" and their interest-rate increase schedule was the slowest in history, cautious and tinkering so as not
to upset the markets.
With tax cuts coming into the U.S. economy in early 2018, along with record buybacks, the markets at first ignored the beginning
of QT (quantitative tightening), but then it all changed.
And guess what changed? Two things.
In September 2018, for the first time in 10 years, the U.S. central bank's Federal Open Market Committee (FOMC) removed
one
little word
from its policy stance: "accommodative." And the Fed increased its QT program. When did U.S. markets peak?
September 2018.
And with the sugar high of the tax cuts fading, it was too much. Add trade wars and global growth slowing, and it was more than
markets could handle.
And so, yes, the timing was perfect and you can see it in the chart:
Who ya gonna believe, me or our lying eyes?
Global central banks did the dirty work for the Fed between 2016 and 2017, adding ever more artificial liquidity. But then the
ECB slowed its QE program and finally ended it in late 2018.
How did the DAX (German stock index) handle all that removal in artificial liquidity? Not well.
The DAX peaked in January 2018, as the ECB started reducing its QE program.
The Fed likes to claim it is managing policy based on the economy, not on markets. But here's the ugly truth on that: The economy
these days is very much tied to market performance. Big drops in markets have an adverse impact on the economy, full stop. Hence,
it is a fallacy to argue that one looks at one but not the other.
After all, tell me when the Fed ever raises rates during a massive market correction? The answer: Never. It's always the other
way around.
As soon as markets drop, all plans for rate hikes and/or balance-sheet reductions come to a sudden halt:
The Fed never sees it coming.
Crude was $74+ &
$
SPX
at 2900+ when this
chatter came out.
3 months later: let's stop everything.
It's almost as if market price trajectory drives Fed policy.
Recognizing the market's newfound sensitivity to QT, the Fed was sure to react. After all, markets were sensitive to slowing
growth in China, Apple's
AAPL,
-0.71%
warning
this week and the renewed sell-off in markets as a result.
"We don't believe that our issuance is an important part of the story of the market turbulence that began in the fourth
quarter of last year. But, I'll say again, if we reached a different conclusion, we wouldn't hesitate to make a change," Powell
said. "If we came to the view that the balance sheet normalization plan -- or any other aspect of normalization -- was part of the
problem, we wouldn't hesitate to make a change."
Nonsense. And he knows that, and he dangled the carrot and that's all that mattered.
Who ya gonna believe, me or our lying eyes?
This move came on the heels of China's
overnight
intervention
announcing a coming cut in its bank reverse ratios by 1%.
So don't mistake this rally for anything but for what it really is: Central banks again coming to the rescue of stressed markets.
Their action and words matter in heavily oversold markets.
But the reality remains, artificial liquidity is coming out of these markets:
Although the Fed, as indicated by Powell, may slow or even halt their projected path. On a dime. And that's what markets are
reacting to today.
Central banks keep claiming all this is done to support growth. What growth? What has actually been accomplished?
All this intervention has not produced sustained accelerating growth, certainly not compared to previous cycles.
Tax-cut sugar high aside, all growth projections for 2019 are pointing to a marked slowing, with recession risks rising.
The only thing that has really grown as a result of all this cheap money and intervention is debt:
Corporate debt has doubled since 2007. Government debt is expanding with no end in sight, having risen by another $2 trillion in
the first two years of the Trump administration.
And so here we go again:
And central banks have already begun to react.
What's the larger message here? Free-market price discovery would require a full accounting of market bubbles and the realities
of structural problems, which remain unresolved. Central banks exist to prevent the consequences of excess to come to fruition
and give license to politicians to avoid addressing structural problems. And by preventing these market forces from playing out
at each sign of trouble, the can gets kicked further and further down the road. Each successive recovery keeps the illusion
alive, but "accommodation" requires ever-lower rates before the monsters return. In the meantime, debt keeps expanding, while
each recovery produces less and less organically driven growth, and ever-higher wealth inequality. This is what this system
produces.
And that's the ugly truth. But you won't hear it from the Fed.
Sven Henrich is founder and the lead market strategist of
NorthmanTrader.com
.
He has been a frequent contributor to CNBC and MarketWatch, and is well-known for his technical, directional and macro analysis
of global equity markets. His Twitter handle is
@NorthmanTrader
.
In a week when the
Vix
is at a seven-year high and the markets
are back to the trading range of the summer of 2017, now seems like a good time to revisit the theme of
market efficiency. Here is a
link
to the
pre-publication version of an academic paper I published this year in the
Review of
Economic Dynamics
.
The paper is a formal model of an argument I've been making for a
while. Although it's not possible for the average punter to make a buck in the financial markets we should
definitely NOT trust the financial markets to do a good job allocating capital intertemporally. As Richard
Thaler explained in his
review
of
Justin Fox's book
The Myth of the Rational Market
,
the efficient markets hypothesis (
EMH
)
has two components.
The first, 'no free lunch' asserts that
unless you have inside information, it is impossible to outperform the market except through dumb luck. That
is almost certainly correct, although even that part of the EMH is disputed by some.
The second, 'the price is right', asserts that the financial markets
allocate capital efficiently over time. Efficiently, here, means that there is no intervention by government
that could make us all better off. That, despite the protestations of radical free-marketeers, is almost
certainly wrong. My
paper
explains
why.
The financial markets facilitate trade with people not yet born. If you buy
a stock and sell it twenty years later, there is a good chance the buyer wasn't alive when you made the
purchase. When you buy the stock for the long-run, you are betting that the buyer, twenty years from now,
will pay more than you did. And the buyer is making the same forecast about the whims of some other buyer in
the yet more distant future. This never-ending chain of market trades leads to the possibility that
self-fulfilling prophecies lead to inefficient cycles of booms and crashes.
For the cognoscenti, here is the abstract from my paper
"This paper constructs a general equilibrium model where asset price fluctuations are caused by random
shocks to beliefs about the future price level that reallocate consumption across generations. In this
model, asset prices are volatile, and price-earnings ratios are persistent, even though there is no
fundamental uncertainty and financial markets are sequentially complete.
I show that the model can
explain a substantial risk premium while generating smooth time series for consumption. In my model,
asset price fluctuations are Pareto inefficient and there is a role for treasury or central bank
intervention to stabilize asset price volatility. "
Have fun trading everyone and I wish you all a very happy 2019.
"... The following is a transcript of CounterPunch Radio – Episode 19 (originally aired September 21, 2015). Eric Draitser interviews Michael Hudson. ..."
"... The Troika and IMF doctrine of austerity and privatization ..."
ED: Thanks so much for coming on. As I mentioned already, the title of your book –
Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy –
is an apt metaphor. So parasitic finance capital is really what you're writing about. You
explain that it essentially survives by feeding off what we might call the real economy. Could
you draw out that analogy a little bit? What does that mean? How does finance behave like a
parasite toward the rest of the economy?
MH: Economists for the last 50 years have used the term "host economy" for a country that
lets in foreign investment. This term appears in most mainstream textbooks. A host implies a
parasite. The term parasitism has been applied to finance by Martin Luther and others, but
usually in the sense that you just talked about: simply taking something from the host.
But that's not how biological parasites work in nature. Biological parasitism is more
complex, and precisely for that reason it's a better and more sophisticated metaphor for
economics. The key is how a parasite takes over a host. It has enzymes that numb the host's
nervous system and brain. So if it stings or gets its claws into it, there's a soporific
anesthetic to block the host from realizing that it's being taken over. Then the parasite sends
enzymes into the brain. A parasite cannot take anything from the host unless it takes over the
brain.
The brain in modern economies is the government, the educational system, and the way that
governments and societies make their economic policy models of how to behave. In nature, the
parasite makes the host think that the free rider, the parasite, is its baby, part of its body,
to convince the host actually to protect the parasite over itself.
That's how the financial sector has taken over the economy. Its lobbyists and academic
advocates have persuaded governments and voters that they need to protect banks, and even need
to bail them out when they become overly predatory and face collapse. Governments and
politicians are persuaded to save banks instead of saving the economy, as if the economy can't
function without banks being left in private hands to do whatever they want, free of serious
regulation and even from prosecution when they commit fraud. This means saving creditors
– the One Percent – not the indebted 99 Percent.
It was not always this way. A century ago, two centuries ago, three centuries ago and all
the way back to the Bronze Age, almost every society has realized that the great destabilizing
force is finance – that is, debt. Debt grows exponentially, enabling creditors ultimately
to foreclose on the assets of debtors. Creditors end up reducing societies to debt bondage, as
when the Roman Empire ended in serfdom.
About a hundred years ago in America, John Bates Clark and other pro-financial ideologues
argued that finance is not external to the economy. It's not extraneous, it's part of the
economy, just like landlords are part of the economy. This means that if the financial sector
takes more revenue out of the economy as interest, fees or monopoly charges, it's because
finance is an inherent and vital part of the economy, adding to GDP, not merely siphoning it
off from producers to pay Wall Street and the One Percent. So our economic policy protects
finance as if it helps us grow, not siphons off our growth.
A year or two ago, Lloyd Blankfein of Goldman Sachs said that the reason Goldman Sachs'
managers are paid more than anybody else is because they're so productive. The question is,
productive of what? The National Income and Product Accounts (NIPA) say that everybody is
productive in proportion to the amount of money they make/take. It doesn't matter whether it's
extractive income or productive income. It doesn't matter whether it's by manufacturing
products or simply taking money from people, or simply by the fraud that Goldman Sachs,
Citigroup, Bank of America and others paid tens of millions of dollars in fines for committing.
Any way of earning income is considered to be as productive as any other way. This is a
parasite-friendly mentality, because it denies that there's any such thing as unearned income.
It denies that there's a free lunch. Milton Friedman got famous for promoting the idea that
there's no such thing as a free lunch, when Wall Street knows quite well that this is what the
economy is all about. It's all about how to get a free lunch, with risks picked up by the
government. No wonder they back economists who deny that there's any such thing!
ED: To get to the root of the issue, what's interesting to me about this analogy that we're
talking about is that we hear the term neoliberalism all the time. It is an ideology I that's
used to promote the environment within which this parasitic sort of finance capital can
operate. So could you talk a bit about the relationship between finance capital and
neoliberalism as its ideology.
MH: Today's vocabulary is what Orwell would call DoubleThink. If you're going to call
something anti-liberal and against what Adam Smith and John Stuart Mill and other classical
economists described as free markets, you pretend to be neoliberal. The focus of Smith, Mill,
Quesnay and the whole of 19th-century classical economics was to draw a distinction between
productive and unproductive labor – that is, between people who earn wages and profits,
and rentiers who, as Mill said, "get rich in their sleep." That is how he described landowners
receiving groundrent. It also describes the financial sector receiving interest and "capital"
gains.
The first thing the neoliberal Chicago School did when they took over Chile was to close
down every economics department in the country except the one they controlled at the Catholic
University. They started an assassination program of left wing professors, labor leaders and
politicians, and imposed neoliberalism by gunpoint. Their idea is you cannot have anti-labor,
deregulated "free markets" stripping away social protections and benefits unless you have
totalitarian control. You have to censor any idea that there's ever been an alternative, by
rewriting economic history to deny the progressive tax and regulatory reforms that Smith, Mill,
and other classical economists urged to free industrial capitalism from the surviving feudal
privileges of landlords and predatory finance.
This rewriting of the history of economic thought involves inverting the common vocabulary
that people use. So, the idea of the parasitism is to replace the meaning of everyday words and
vocabulary with their opposite. It's DoubleThink.
Democratic vs. oligarchic government and their respective economic doctrines
ED: I don't want to go too far off on a tangent, but you mentioned the example of Chile's 1973
coup and the assassination of Allende to impose the Pinochet dictatorship. That was a
Kissinger/Nixon operation as we know, but what's interesting about that is Chile was
transformed into a sort of experimental laboratory to impose the Chicago school economic model
of what we now would call neoliberalism. Later in our conversation I want to talk a bit about
some recent laboratories we have seen in Eastern Europe, and now in Southern Europe as well.
The important point about neoliberalism is the relationship between totalitarian government and
this form of economics.
MH: That's right. Neoliberals say they're against government, but what they're really
against is democratic government. The kind of governments they support are pre-referendum
Greece or post-coup Ukraine. As Germany's Wolfgang Schäuble said, "democracy doesn't
count." Neoliberals want the kind of government that will create gains for the banks, not
necessarily for se the economy at large. Such governments basically are oligarchic. Once high
finance takes over governments as a means of exploiting the 99 Percent, it's all for active
government policy – for itself.
Aristotle talked about this more than 2,000 years ago. He said that democracy is the stage
immediately proceeding oligarchy. All economies go through three stages repeating a cycle: from
democracy into oligarchy, and then the oligarchs make themselves hereditary. Today, Jeb Bush
wants to abolish the estate tax to help the emerging power elite make itself into a hereditary
aristocracy. Then, some of the aristocratic families will fight among themselves, and take the
public into their camp and promote democracy, so you have the cycle going all over again.
That's the kind of cycle we're having now, just as in ancient Athens. It's a transition from
democracy to oligarchy on its way to becoming an aristocracy of the power elite.
ED: I want to return to the book in a second but I have to interject that one particular
economist hasn't been mentioned yet: Karl Marx. It's an inversion of Marx as well, because
Marx's labor theory of value was that that value ultimately is derived from labor. Parasitic
finance capital is the opposite of that. It may increase prices without value.
MH: Correct, but I should point out that there's often a misinterpretation of the context in
which the labor theory of value was formulated and refined. The reason why Marx and the other
classical economists – William Petty, Smith, Mill and the others – talked about the
labor theory of value was to isolate that part of price that wasn't value. Their purpose was to
define economic rent as something that was not value. It was extraneous to production, and was
a free lunch – the element of price that is charged to consumers and others that has no
basis in labor, no basis in real cost, but is purely a monopoly price or return to privilege.
This was mainly a survival of the feudal epoch, above all of the landed aristocracy who were
the heirs of the military conquers, and also the financial sector of banking families and their
heirs.
The aim of the labor theory of value was to divide the economy between excessive price
gouging and labor. The objective of the classical economists was to bring prices in line with
value to prevent a free ride, to prevent monopolies, to prevent an absentee landlord class so
as to free society from the legacy of feudalism and the military conquests that carved up
Europe's land a thousand years ago and that still underlies our property relations.
The concept and theory of economic rent
ED: That's a great point, and it leads me into the next issue that I want to touch on. You've
mentioned the term already a number of times: the concept of economic rent. We all know rent in
terms of what we have to pay every month to the landlord, but we might not think about what it
means conceptually. It's one of the fabrics with which you've woven this book together. One of
the running themes, rent extraction, and its role in the development of what we've now termed
this parasitic relationship. So, explain for laymen what this means – rent extraction
– and how this concept evolved.
MH: To put the concept of economic rent in perspective, I should point out when I went to
get my PhD over a half a century ago, every university offering a graduate economics degree
taught the history of economic thought. That has now been erased from the curriculum. People
get mathematics instead, so they're unexposed to the concept of economic rent as unearned
income. It's a concept that has been turned on its head by "free market" ideologues who use
"rent seeking" mainly to characterize government bureaucrats taxing the private sector to
enhance their authority – not free lunchers seeking to untax their unearned income. Or,
neoclassical economists define rent as "imperfect competition" (as if their myth of "perfect
competition" really existed) stemming from "insufficient knowledge of the market," patents and
so forth.
Most rent theory was developed in England, and also in France. English practice is more
complex than America. The military conquers imposed a pure groundrent fee on the land, as
distinct from the building and improvements. So if you buy a house from a seller in England,
somebody else may own the land underneath it. You have to pay a separate rent for the land. The
landlord doesn't do anything at all to collect land rent, that's why they call them rentiers or
coupon clippers. In New York City, for example, Columbia University long owned the land
underneath Rockefeller Center. Finally they sold it to the Japanese, who lost their shirt. This
practice is a carry-over from the Norman Conquest and its absentee landlord class.
The word "rent" originally was French, for a government bond (rente). Owners received a
regular income every quarter or every year. A lot of bonds used to have coupons, and you would
clip off the coupon and collect your interest. It's passively earned income, that is, income
not actually earned by your own labor or enterprise. It's just a claim that society has to pay,
whether you're a government bond holder or whether you own land.
This concept of income without labor – but simply from privileges that had been made
hereditary – was extended to the ideas of monopolies like the East India Company and
other trade monopolies. They could produce or buy goods for, let's say, a dollar a unit, and
sell them for whatever the market will bear – say, $4.00. The markup is "empty pricing."
It's pure price gouging by a natural monopoly, like today's drug companies.
To prevent such price gouging and to keep economies competitive with low costs of living and
doing business, European kept the most important natural monopolies in the public domain: the
post office, the BBC and other state broadcasting companies, roads and basic transportation, as
well as early national airlines. European governments prevented monopoly rent by providing
basic infrastructure services at cost, or even at subsidized prices or freely in the case of
roads. The guiding idea is for public infrastructure – which you should think of as a
factor of production along with labor and capital – was to lower the cost of living and
doing business.
But since Margaret Thatcher led Britain down the road to debt peonage and rent serfdom by
privatizing this infrastructure, she and her emulators other countries turned them into
tollbooth economies. The resulting economic rent takes the form of a rise in prices to cover
interest, stock options, soaring executive salaries and underwriting fees. The economy ends up
being turned into a collection of tollbooths instead of factories. So, you can think of rent as
the "right" or special legal privilege to erect a tollbooth and say, "You can't get television
over your cable channel unless you pay us, and what we charge you is anything we can get from
you."
This price doesn't have any relation to what it costs to produce what they sell. Such
extortionate pricing is now sponsored by U.S. diplomacy, the World Bank, and what's called the
Washington Consensus forcing governments to privatize the public domain and create such
rent-extracting opportunities.
In Mexico, when they told it to be more "efficient" and privatize its telephone monopoly,
the government sold it to Carlos Slim, who became one of the richest people in the world by
making Mexico's phones among the highest priced in the world. The government provided an
opportunity for price gouging. Similar high-priced privatized phone systems plague the
neoliberalized post-Soviet economies. Classical economists viewed this as a kind of theft. The
French novelist Balzac wrote about this more clearly than most economists when he said that
every family fortune originates in a great theft. He added that this not only was undiscovered,
but has come taken for granted so naturally that it just doesn't matter.
If you look at the Forbes 100 or 500 lists of each nation's richest people, most made their
fortunes through insider dealing to obtain land, mineral rights or monopolies. If you look at
American history, early real estate fortunes were made by insiders bribing the British Colonial
governors. The railroad barrens bribed Congressmen and other public officials to let them
privatize the railroads and rip off the country. Frank Norris's The Octopus is a great novel
about this, and many Hollywood movies describe the kind of real estate and banking rip-offs
that made America what it is. The nation's power elite basically begun as robber barons, as
they did in England, France and other countries.
The difference, of course, is that in past centuries this was viewed as corrupt and a crime.
Today, neoliberal economists recommend it as the way to raise "productivity" and make countries
wealthier, as if it were not the road to neofeudal serfdom.
The Austrian School vs. government regulation and pro-labor policies
ED: I don't want to go too far off on a tangent because we have a lot to cover specific to your
book. But I heard an interesting story when I was doing a bit of my own research throughout the
years about the evolution of economic thought, and specifically the origins of the so-called
Austrian School of Economics – people like von Mises and von Hayek. In the early 20th
century they were essentially, as far as I could tell, creating an ideological framework in
which they could make theoretical arguments to justify exorbitant rent and make it seem almost
like a product of natural law – something akin to a phenomenon of nature.
MH: The key to the Austrian School is their hatred of labor and socialism. It saw the danger
of democratic government spreading to the Habsburg Empire, and it said, "The one thing we have
to stop is democracy. Their idea of a free market was one free of democracy and of democratic
government regulating and taxing wealthy rentiers. It was a short step to fighting in the
streets, using murder as a "persuader" for the particular kind of "free markets" they wanted
– a privatized Thatcherite deregulated kind. To the rentiers they said: "It's either our
freedom or that of labor."
Kari Polanyi-Levitt has recently written about how her father, Karl Polanyi, was confronted
with these right-wing Viennese. His doctrine was designed to rescue economics from this school,
which makes up a fake history of how economics and civilization originated.
One of the first Austrian's was Carl Menger in the 1870s. His "individualistic" theory about
the origins of money – without any role played by temples, palaces or other public
institutions – still governs Austrian economics. Just as Margaret Thatcher said, "There's
no such thing as society," the Austrians developed a picture of the economy without any
positive role for government. It was as if money were created by producers and merchants
bartering their output. This is a travesty of history. All ancient money was issued by temples
or public mints so as to guarantee standards of purity and weight. You can read Biblical and
Babylonian denunciation of merchants using false weights and measures so see why money had to
be public. The major trading areas were agora spaces in front of temples, which kept the
official weights and measures. And much exchange was between the community's families and the
public institutions.
Most important, money was brought into being not for trade (which was conducted mainly on
credit), but for paying debts. And most debts were owed to the temples and palaces for pubic
services or tribute. But to the Austrians, the idea was that anything the government does to
protect labor, consumers and society from rentiers and grabbers is deadweight overhead.
Above all, they opposed governments creating their own money, e.g. as the United States did
with its greenbacks in the Civil War. They wanted to privatize money creation in the hands of
commercial banks, so that they could receive interest on their privilege of credit creation and
also to determine the allocation of resources.
Today's neoliberals follow this Austrian tradition of viewing government as a burden,
instead of producing infrastructure free of rent extraction. As we just said in the previous
discussion, the greatest fortunes of our time have come from privatizing the public domain.
Obviously the government isn't just deadweight. But it is becoming prey to the financial
interests and the smashers and grabbers they have chosen to back.
ED: You're right, I agree 100%. You encounter this ideology even in the political
sociological realm like Joseph Schumpeter, or through the quasi-economic realm like von Hayek
in The Road to Serfdom.
MH: Its policy conclusion actually advocates neo-serfdom. Real serfdom was when families had
to pay all their income to the landlords as rent. Centuries of classical economists backed
democratic political reform of parliaments to roll back the landlords' power (and that of
bankers). But Hayek claimed that this rollback was the road to serfdom, not away from it. He
said democratic regulation and taxation of rentiers is serfdom. In reality, of course, it's the
antidote.
ED: It's the inversion you were talking about earlier. We're going to go into a break here
in a minute but before we do I want to touch on one other point that is important in the book,
again the book, Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global
Economy, available from CounterPunch – very important that people pick up this book.
MH: And from Amazon! You can get a hard copy for those who don't want to read on
computers.
Finance as the new mode of warfare
ED: Yes, and on amazon as well, thank you. This issue that I want to touch on before we go to
the break is debt. On this program a couple of months ago I had the journalist John Pilger. He
and I touched on debt specifically as a weapon, and how it is used as a weapon. You can see
this in the form of debt enslavement, if you want to call it that, in postcolonial Africa. You
see the same thing in Latin America where, Michael, I know you have a lot of experience in
Latin America in the last couple of decades. So let's talk a little bit, if we could, before we
go to the break, about debt as a weapon, because I think this is an important concept for
understanding what's happening now in Greece, and is really the framework through which we have
to understand what we would call 21st-century austerity.
MH: If you treat debt as a weapon, the basic idea is that finance is the new mode of
warfare. That's one of my chapters in the book. In the past, in order to take over a country's
land and its public domain, its basic infrastructure and its mineral resources, you had to have
a military invasion. But that's very expensive. And politically, almost no modern democracy can
afford a military invasion anymore.
So the objectives of the financial sector – of Wall Street, the City of London or
Frankfurt in Germany – is to obtain the land. You can look at what's happening in Greece.
What its creditors, the IMF and European Central Bank (ECB) want are the Greek islands, and
they want the gas rights in the Aegean Sea. They want whatever buildings and property there is,
including the museums.
Matters are not so much different in the private sector. If you can get a company or
individual into debt, you can strip away the assets they have when they can't pay. A
Hayek-style government would block society from protecting itself against such asset stripping.
Defending "property rights" of creditors, such "free market" ideology deprives the rest of the
economy – businesses, individuals and public agencies. It treats debt writedowns as the
road to serfdom, not the road away from debt dependency.
In antiquity, private individuals obtained labor services by making loans to families in
need, and obliging their servant girls, children or even wives to work off the loan in the form
of labor service. My Harvard-based archaeological group has published a series of five books
that I co-edited, most recently Labor in the
Ancient World . Creditors (often palace infrastructure managers or collectors) would get
people into bondage. When new Bronze Age rulers started their first full year on the throne, it
was customary to declare an amnesty to free bond servants and return them to their families,
and annul personal debts as well as to return whatever lands were forfeited. So in the Bronze
Age, debt serfdom and debt bondage was only temporary. The biblical Jubilee law was a literal
translation of Babylonian practice that went back two thousand years.
In America, in colonial times, sharpies (especially from Britain) would lend farmers money
that they knew the farmer couldn't pay, then they would foreclose just before the crops came
in. Right now you have corporate raiders, who are raiding whole companies by forcing them into
debt, and then smashing and grabbing. You now have the IMF, European Central Bank and
Washington Consensus taking over whole countries like Ukraine. The tactic is to purposely lend
them the money that clearly cannot be repaid, and say, "Oh you cannot pay? Well, we're not
going to take a loss. We have a solution." The solution is to sell off public enterprises, land
and natural resources. In Greece's case, 50 billion euros of its property, everything that it
has in the public sector. The country is to be sold off to foreigners (including domestic
oligarchs working out of their offshore accounts). Debt leverage is thus the way to achieve
what it took armies to win in times past.
ED: Exactly. One last point on that as well. I want to get your comment on and we see this
in post-colonial Africa, especially when the French and the British had to nominally give up
control of their colonies. You saw debt become an important tool to maintain hegemony within
their spheres of influence. Of course, asset stripping and seizing control, smashing and
grabbing was part of that. But also it is the debt servicing payments, it is the cycle of debt
repayment and taking new loans on top of original loans to service the original loans –
this process this cycle is also really an example of this debt servitude or debt bondage.
MH: That's correct, and mainstream economics denies any of this. It began with Ricardo,
who's brothers were major bankers at the time, and he himself was the major bank lobbyist in
England. Right after Greece won its independence from Turkey, the Ricardo brothers made a
rack-renting loan to Greece at far below par (that is, below the face value that Greece
committed itself to pay). Greece tried to pay over the next century, but the terms of the loan
ended up stripping and keeping it on the edge of bankruptcy well into the 20th century.
But Ricardo testified before Parliament that there could be no debt-servicing problem. Any
country, he said, could repay the debts automatically, because there is an automatic
stabilization mechanism that enables every country to be able to pay. This is the theory that
underlines Milton Friedman and the Chicago School of monetarism: the misleading idea that debt
cannot be a problem.
That's what's taught now in international trade and financial textbooks. It's false
pleading. It draws a fictitious "What If" picture of the world. When criticized, the authors of
these textbooks, like Paul Samuelson, say that it doesn't matter whether economic theory is
realistic or not. The judgment of whether an economic theory is scientific is simply whether it
is internally consistent. So you have these fictitious economists given Nobel Prizes for
promoting an inside out, upside down version of how the global economy actually works.
ED: One other thing that they no longer teach is what used to be called political economy.
The influence of the Chicago School, neoliberalism and monetarism has removed classical
political economy from academia, from the Canon if you will. Instead, as you said, it's all
about mathematics and formulas that treat economics like a natural science, when in fact it
really should be more of a historically grounded social science.
MH: The formulas that they teach don't have government in them,. If you have a theory that
everything is just an exchange, a trade, and that there isn't any government, then you have a
theory that has nothing to do with the real world. And if you assume that the environment
remains constant instead of using economics to guide public and national policy, you're using
economics for the opposite of what the classical economists did. Adam Smith, Mill, Marx, Veblen
– they all developed their economic theory to reform the world. The classical economists
were reformers. They wanted to free society from the legacy of feudalism – to get rid of
land rent, to take money creation and credit creation into the public domain. Whatever their
views, whether they were right wingers or left wingers, whether they were Christian socialists,
Ricardian socialists or Marxian socialists, all the capitalist theorists of the 19th century
called themselves socialists, because they saw capitalism as evolving into socialism.
But what you now have, since World War I, is a reaction against this, stripping away of the
idea that governments have a productive role to play. If government is not the director and
planner of the economy, then who is? It's the financial sector. It's Wall Street. So the
essence of neoliberalism that you were mentioning before, is indeed a doctrine of central
planning. It states that the central planning should be done by Wall Street, by the financial
sector.
The problem is, what is the objective of central planning by Wall Street? It's not to raise
living standards, and it's not to increase employment. It is to smash and grab. That is the
society we're in now.
A number of chapters of my book (I think five), describe how the Obama administration has
implemented this smash and grab, doing the exact opposite of what he promised voters. Obama has
implemented the Rubin-omics [Robert Rubin] doctrine of Wall Street to force America into what
looks like a chronic debt depression.
ED: Exactly right. I couldn't agree more. Let's take a short break and we'll continue the
discussion. Again, I'm chatting with Michael Hudson about his new book, Killing the Host: How
Financial Parasites and Debt Bondage Destroy the Global Economy.
The case of Latvia: Is it a success story, or a neoliberal disaster?
ED: I want to go back to some of the important issues that we introduced or alluded to in the
first part of our discussion. As I was mentioning to you off-air, a couple years ago I twice
interviewed your colleague Jeffrey Sommers, with whom you've worked and co-published a number
of papers. We talked a lot about many of the same issues that you and I are touching on.
Specifically Sommers – and I know you as well – did a lot of work in Latvia, a
country in the former Soviet space in Eastern Europe on the Baltic Sea. Your book has a whole
chapter on it, as well as references throughout the book.
So let's talk about how Latvia serves as a template for understanding the austerity model.
It is touted by technocrats of the financial elite as a major success story – how
austerity can work. I find it absurd on so many different levels. So tell us what happened in
Latvia, what the real costs were, and why neoliberals claim it as a success story.
MH: Latvia is the disaster story of the last two decades. That's why I took it as an object
lesson. You're right, it was Jeff Sommers who first brought me over to Latvia. I then became
Director of Economic Research and Professor of Economics at the Riga Graduate School of
Law.
When Latvia was given its independence when the Soviet Union broke up in 1991, a number of
former Latvians had studied at George Washington University, and they brought neoliberalism
over there – the most extreme grabitization and de-industrialization of any country I
know. Latvians, Russians and other post-Soviet countries were under the impression that U.S.
advisors would help them become modernized like the U.S. economy – with high living and
consumption standards. But what they got was advice to emulate American experience. It got
something just the opposite – how to enable foreign investors and bankers to carve it up,
dismantle its industry and become a bizarre neoliberal experiment.
You may remember the Republican presidential candidate Steve Forbes, who in 2008 proposed a
flat tax to replace progressive taxation. The idea never could have won in the United States,
but Latvia was another story. The Americans set the flat tax at an amazingly low 12 percent of
income – and no significant property tax on real estate or capital gains. It was a
financial and real estate dream, and created a classic housing and financial bubble.
Jeff and I visited the head of the tax authority, who told us that she was appointed because
she had done her PhD dissertation on Latvia's last land value assessment – which was in
1917. They hadn't increased the assessments since then, because the Soviet economy didn't have
private land ownership and didn't even have a concept of rent-of-location for planning
purposes. (Neither did Russia.)
Latvia emerged from the Soviet Union without any debt, and also with a lot of real estate
and a highly educated population. But its political insiders turned over most of the government
enterprises to themselves. Latvia had been a computer center and also the money-laundering
center of the Soviet leadership already in the late 1980s (largely as a byproduct of Russian
oil exports through Ventspils), and Riga remains the money-laundering city for today's
Russia.
Privatizing housing and other property led to soaring real estate prices. But this bubble
wasn't financed by domestic banks. The Soviet Union didn't have private banks, because the
government had simply created the credit to fund the economy as needed. The main banks in a
position to lend to Latvia were Swedish and other Scandinavian banks. They pounce on the
lending opportunities to opened up by an entire nation whose real estate had almost no tax on
it. The result was the biggest real estate bubble in the world, along with Russia's. Latvians
found that in order to buy housing of their own, they had to go deeply into debt. Assets were
only given to insiders, not to the people.
A few years ago there was a reform movement in Latvia to stop the economic bleeding. Jeff
and I brought over American property appraisers and economists. We visited the leading bank,
regulatory agencies. Latvia was going broke because its population had to pay so much for real
estate. And it was under foreign-exchange pressure because debt service on its mortgage loans
was being paid to the Swedish and foreign banks. The bank regulator told us that her problem
was that her agency's clients are the banks, not the population. So the regulators thought of
themselves as working for the banks, even though they were foreign-owned. She acknowledged that
the banks were lending much more money than property actually was worth. But her regulatory
agency had a solution: It was to have not only the buyer be obligated to pay the mortgage, but
also the parents, uncles or aunts. Get the whole family involved, so that if the first signer
couldn't pay the cosigners would be obligated.
That is how Latvia stabilized its banking system. But it did so by destabilizing the
economy. The result is that Latvia has lost 20 percent of its population over the past decade
or so. For much the same reasons that Greece has lost 20 percent of its population, with
Ireland in a similar condition. The Latvians have a joke "Will the last person who leaves in
2020 please turn off the lights at the airport."
The population is shrinking because the economy is being run by looters, domestic and
foreign. I was shown an island in the middle of the Daugava river that runs to the middle of
Latvia, and was sold for half a million dollars. Our appraisers said that it's worth half a
billion dollars, potentially. There are no plans to raise the property tax to recapture these
gains for the country – so that it can lower its heaviest labor taxes in the world,
nearly half each paycheck for income tax and "social security" spending so that finance and
real estate won't be taxed.
A few years ago, I was at the only meeting of INET (George Soros's group) that I was invited
to, and in the morning one of the lead talks was on how Latvia was a model that all countries
could follow to balance the budget. Latvia has balanced the budget by cutting back public
spending, reducing employment and lowering wage levels while indebting its population and
forcing to immigrate. The neoliberal strategy is to balance by selling off whatever remains in
the public domain. Soros funded a foundation there (like similar ones he started in other
post-Soviet countries) to get a part of the loot.
These giveaways at insider prices have created a kleptocracy obviously loyal to neoliberal
economics. I go into the details in my chapter. It's hard to talk about it without losing my
temper, so I'm trying to be reasonable but it's a country that was destroyed and smashed. That
was the U.S. neoliberal model alternative to post-Stalinism. It wasn't a new American economy.
It was a travesty.
Why then does the population continue to vote for these neoliberals? The answer is, the
neoliberals say, the alternative is Stalinism. To Latvians, this means exile, deportations and
memories of the old pro-Russian policy. The Russian-speaking parties are the main people
backers of a social democracy party. But neoliberals have merged with Latvian nationalists.
They are not only making the election over resentment against the Russian-speaking population,
but the fact that many are Jewish.
I find it amazing to see someone who is Jewish, like George Soros, allying with anti-Semitic
and even neo-Nazi movements in Latvia, Estonia, and most recently, of course, Ukraine. It's an
irony that you could not have anticipated deductively. If you had written this plot in a
futuristic novel twenty years ago, no one would have believed that politics could turn more on
national and linguistic identity politics than economic self-interest. The issue is whether you
are Latvian or are Russian-Jewish, not whether you want to untax yourself and make? Voting is
along ethnic lines, not whether Latvians really want to be forced to emigrate to find work
instead of making Latvia what it could have been: an successful economy free of debt. Everybody
could have gotten their homes free instead of giving real estate only to the kleptocrats.
The government could have taxed the land's rental value rather than letting real estate
valuation be pledged to pay banks – and foreign banks at that. It could have been a
low-cost economy with high living standards, but neoliberals turned in into a smash and grab
exercise. They now call it an idea for other nations to follow. Hence, the U.S.-Soros strategy
re Ukraine.
ED: That's an excellent point. It's a more extreme case for a number of reasons in Ukraine
– the same tendency. They talk about, "Putin and his gaggle of Jews." That's the idea,
that Putin and the Jews will come in and steal everything – while neoliberals plan to
appropriate Ukraine's land and other resources themselves. In this intersection between
economics and politics, Latvia, Lithuania, Estonia – the Baltic States of the former
Soviet Union – are really the front lines of NATO expansion. They were some of the first
and most pivotal countries brought into the NATO orbit. It is the threat of "Russian
aggression" via the enclave at Kaliningrad, or just Russia in general. That is the threat they
use to justify the NATO umbrella, and simultaneously to justify continuing these economic
policies. So in many ways Russia serves as this convenient villain on a political, military and
economic level.
MH: It's amazing how the popular press doesn't report what's going on. Primakov, who died a
few months ago, said during the last crisis a few years ago that Russia has no need to invade
Latvia, because it owns the oil export terminals and other key points. Russia has learned to
play the Western game of taking countries over financially and acquiring ownership. Russia
doesn't need to invade to control Latvia any more than America needs to invade to control Saudi
Arabia or the Near East. If it controls exports or access to markets, what motive would it have
to invade? As things stand, Russia uses Latvia it as a money laundering center.
The same logic applies to Ukraine today. The idea is that Russia is expansionary in a world
where no one can afford to be militarily expansionary. After Russia's disaster in Afghanistan,
no country in the world that's subject to democratic checks, whether it's America after the
Vietnam War or Russia or Europe, no democratic country can invade another country. All they can
do is drop bombs. This can't capture a country. For that you need major troop commitments.
In the trips that I've taken to Russia and China, they're in a purely defensive mode.
They're wondering why America is forcing all this. Why is it destroying the Near East, creating
a refugee problem and then telling Europe to clean up the mess it's created? The question is
why Europe is willing to keep doing this. Why is Europe part of NATO fighting in the Near East?
When America tells Europe, "Let's you and Russia fight over Ukraine," that puts Europe in the
first line of fire. Why would it have an interest in taking this risk, instead of trying to
build a mutual economic relationship with Russia as seemed to be developing in the 19th
century?
ED: That's the ultimate strategy that the United States has used – driving a wedge
between Russia and Europe. This is the argument that Putin and the Russians have made for a
long time. You can see tangible examples of that sort of a relationship even right now if you
look at the Nord Stream pipeline connecting Russian energy to German industrial output –
that is a tangible example of the economic relationship, that is only just beginning between
Russia and Europe. That's really what I think the United States wanted to put the brakes on, in
order to be able to maintain hegemony. The number one way it does that is through NATO.
MH: It's not only put the brakes on, it has created a new iron curtain. Two years ago,
Greece was supposed to privatize 5 billion euros of its public domain. Half of this, 2.5
billion, was to be the sale of its gas pipeline. But the largest bidder was Gazprom, and
America said, "No, you can't accept the highest bidder if its Russian." Same thing in Ukraine.
It has just been smashed economically, and the U.S. says, "No Ukrainian or Russian can buy into
the Ukrainian assets to be sold off. Only George Soros and his fellow Americans can buy into
this." This shows that the neoliberalism of free markets, of "let's everybody pay the highest
price," is only patter talk. If the winner in the rigged market is not the United States, it
sends in ISIS or Al Qaeda and the assassination teams, or backs the neo-Nazis as in
Ukraine.
So, we're in a New Cold War. Its first victims, apart from Southern Europe, will be the rest
of Europe. You can imagine how this is just beginning to tear European politics apart, with
Germany's Die Linke and similar parties making a resurgence.
The Troika and IMF doctrine of austerity and privatization
ED: I want to return us back to the book and some other key issues that you bring up that I
think are most important. One that we hear in the news all the time, and you write extensively
about it in the book, is the Troika. That's the IMF, the European Central Bank (ECB) and the
European Commission. It could be characterized as the political arm of finance capital in
Europe, one that imposes and manages austerity in the interest of the ruling class of finance
capital, as I guess we could call them. These are technocrats, not academically trained
economists primarily (maybe with a few exceptions), but I want you to talk a bit about how the
Troika functions and why it's so important in what we could call this crisis stage of
neoliberal finance capitalism.
MH: Basically, the Troika is run by Frankfurt bankers as foreclosure and collection agents.
If you read recently what former Greek finance minister Yanis Varoufakis has written, and his
advisor James Galbraith, they said that when Syriza was elected in January, they tried to
reason with the IMF. But it said that it could only do what the European Central Bank said, and
that it would approve whatever they decided to do. The European Central Bank said that its role
wasn't to negotiate democracy. Its negotiators were not economists. They were lawyers. "All we
can say is, here's what you have to pay, here's how to do it. We're not here to talk about
whether this is going to bankrupt Greece. We're just interested in in how you're going to pay
the banks what they're owe. Your electric companies and other industry will have to go to
German companies, the other infrastructure to other investors – but not from Russia."
It's much like England and France divided up the Near East after World War I. There's a kind
of a gentlemen's agreement as to how the creditor economies will divide up Greece, carving it
up much like neighboring Yugoslavia to the north.
In 2001 the IMF made a big loan to Argentina (I have a chapter on Argentina too), and it
went bad after a year. So the IMF passed a rule, called the No More Argentinas rule, stating
that the Fund was not going to participate in a loan where the government obviously can not
pay.
A decade later came the Greek crisis of 2011. The staff found that Greece could not possibly
pay a loan large enough to bail out the French, German and other creditors. So there has to be
a debt write-down of the principal. The staff said that, and the IMF's board members agreed.
But its Managing Director, Strauss-Kahn wanted to run for the presidency of France, and most of
the Greek bonds were held by French banks. French President Sarkozy said "Well you can't win
political office in France if you stiff the French banks." And German Chancellor Merkel said
that Greece had to pay the German banks. Then, to top matters, President Obama came over to the
G-20 meetings and they said that the American banks had made such big default insurance
contracts and casino gambles betting that Greece would pay, that if it didn't, if the Europeans
and IMF did not bail out Greece, then the American banks might go under. The implicit threat
was that the U.S. would make sure that Europe's financial system would be torn to pieces.
ED: And Michael, I just want to clarify, I guess it's sort of a question: about what you're
talking about here in terms of Geithner and Obama coming in: These would be credit default
swaps and collateralized debt obligations?
MH: Yes. U.S. officials said that Wall Street had made so many gambles that if the French
and German banks were not paid, they would turn to their Wall Street insurers. The Wall Street
casino would go under, bringing Europe's banking system down with it. This prompted the
European Central Bank to say that it didn't want the IMF to be a part of the Troika unless it
agreed to take a subordinate role and to support the ECB bailout. It didn't matter whether
Greece later could pay or not. In that case, creditors would smash and grab. This lead the some
of the IMF European staff to resign, most notably Susan Schadler, and later to act as whistle
blowers to write up what happened.
The same thing happened again earlier this year in Greece. Lagarde said that the IMF doesn't
do debt reduction, but would give them a little longer to pay. Not a penny, not a euro will be
written down, but the debt will be stretched out and perhaps the interest rate will be lowered
– as long as Greece permits foreigners to grab its infrastructure, land and natural
resources.
The staff once again leaked a report to the Financial Times (and maybe also the Wall Street
Journal) that said that Greece couldn't pay, there's no way it can later sell off the IMF loan
to private bondholders, so any bailout would be against the IMF's own rules. Lagarde was
embarrassed, and tried to save face by saying that Germany has to agree to stretch out the
payments on the debt – as if that somehow would enable it to pay, while its assets pass
into foreign hands, which will remit their profits back home and subject Greece to even steeper
deflation.
Then, a few weeks ago, you have the Ukraine crisis and the IMF is not allowed to make loans
to countries that cannot pay. But now the whole purpose is to make loans to countries who can't
pay, so that creditors can turn around and demand that they pay by selling off their public
domain – and implicitly, force their population to emigrate.
ED: Also, technically they're not supposed to be making loans to countries that are at war,
and they're ignoring that rule as well.
MH: That's the second violation of IMF rules. At least in the earlier Greek bailout, Strauss
Kahn got around the "No More Argentinas" rule by having a new IMF policy that if a country is
systemically important, the IMF can lend it the money even if it can't pay, even though it's
not credit-worthy, if its default would cause a problem in the global financial system (meaning
a loss by Wall Street or other bankers). But Ukraine is not systemically important. It's part
of the Russian system, not the western system. Most of its trade is with Russia.
As you just pointed out, when Lagarde made the IMF's last Ukrainian loan, she said that she
hoped its economy would stabilize instead of fighting more war in its eastern export region.
The next day, President Poroshenko said that now that it had got the loan, it could go to war
against the Donbass, the Russian speaking region. Some $1.5 billion of the IMF loan was given
to banks run by Kolomoisky, one of the kleptocrats who fields his own army. His banks send the
IMF's gift abroad to his own foreign banks, using his domestic Ukrainian money to pay his own
army, allied with Ukrainian nationalists flying the old Nazi SS insignia fighting against the
Russian speakers. So in effect, the IMF is serving as an am of the U.S. military and State
Department, just as the World Bank has long been.
ED: I want to interject two points here for listeners who haven't followed it as closely.
Number one is the private army that you're talking about – the Right Sector which is
essentially a mercenary force of Nazis in the employ of Kolomoisky. They're also part of what's
now called the Ukrainian National Guard. This paramilitary organization that is being paid
directly by Kolomoisky. Number two – and this relates back to something that you were
saying earlier, Michael – that IMF loan went to pay for a lot of the military equipment
that Kiev has now used to obliterate the economic and industrial infrastructure of Donbass,
which was Ukraine's industrial heartland. So from the western perspective it's killing two
birds with one stone. If they can't strip the assets and capitalize on them, at least they can
destroy them, because the number one customer was Russia.
MH: Russia had made much of its military hardware in Ukraine, including its liftoff engines
for satellites. The West doesn't want that to continue. What it wants for its own investors is
Ukraine's land, the gas rights in the Black Sea, electric and other public utilities, because
these are the major tollbooths to extract economic rent from the economy. Basically, US/NATO
strategists want to make sure, by destroying Ukraine's eastern export industry, that Ukraine
will be chronically bankrupt and will have to settle its balance-of-payments deficit by selling
off its private domain to American, German and other foreign buyers.
ED: Yes, that's Monsanto, and that's Hunter Biden on the Burisma board (the gas company).
It's like you said earlier, you wouldn't even believe it if someone would have made it up. It's
so transparent, what they're doing in Ukraine.
Financialization of pension plans and retirement savings
I want to switch gears a bit in the short time we have remaining, because I have two more
things I want to talk about. Referring back to this parasitical relationship on the real
economy, one aspect that's rarely mentioned is the way in which many regular working people get
swindled. One example that comes to my mind is the mutual funds and other money managers that
control what pension funds and lots of retirees invest in. Much of their savings are tied up in
heavily leveraged junk bonds and in places like Greece, but also recently in Puerto Rico which
is going through a very similar scenario right now. So in many ways, US taxpayers and
pensioners are funding the looting and exploitation of these countries and they're then
financially invested in continuing the destruction of these countries. It's almost like these
pensioners are human shields for Wall Street.
MH: This actually is the main theme of my book – financialization. Mutual funds are
not pension funds. They're different. But half a century ago a new term was coined: pension
fund capitalism, sometimes called pension fund socialism. Then we got back to Orwellian
doublethink when Pinochet came to power behind the natural alliance of the Chicago School with
Kissinger at the State Department. They immediately organized what they called labor
capitalism. n labor capitalism labor is the victim, not the beneficiary. The first thing they
did was compulsory setting aside of wages in the form of ostensible pension funds controlled by
the employers. The employers could do whatever they wanted with it. Ultimately they invested
their corporate pension funds in their own stocks or turned them over to the banks, around
which their grupo conglomerates were organized. They then simply drove the businesses with
employee pension funds under, wiping out the pension fund liabilities – after moving the
assets into their captive banks. Businesses were left as empty corporate shells.
Something similar happened in America a few years ago with the Chicago Tribune. Real estate
developer Sam Zell borrowed money, bought the Tribune, using the Employee Stock Ownership Plan
(ESOP) essentially to pay off the bondholders. He then drove/looted the Tribune into bankruptcy
and wiped out the stockholders. Employees brought a fraudulent conveyance suit.
Already fifty years ago, critics noted that about half of the ESOPs are wiped out, because
they're invested by the employers, often in their own stock. Managers give themselves stock
options, which are given value by employee purchases. Something similar occurs with pension
funds in general. Employee wages are paid into pension funds, which bid up the stock prices in
general. On an economy-wide basis, employees are buying the stock that managers give
themselves. That's pension fund capitalism.
The underlying problem with this kind of financialization of pensions and retirement savings
is that modern American industry is being run basically for financial purposes, not for
industrial purposes. The major industrial firms have been financialized. For many years General
Motors made most of its profits from its financial arm, General Motors Acceptance Corporation.
Likewise General Electric. When I was going to school 50 years ago, Macy's made most of its
money not by selling products, but by getting customers to use its credit cards. In effect, it
used its store to get people to use its credit cards.
Last year, 92% of the earnings of the Fortune 100 companies were used for stock buy-backs --
corporations buying back their stock to support its price – or for dividend payouts, also
to increase the stock's price (and thus management bonuses and stock options). The purpose of
running a company in today's financialized world is to increase the price of the stock, not to
expand the business. And who do they sell the stock to? Essentially, pension funds.
There's a lot of money coming in. I don't know if you remember, but George W. Bush wanted to
privatize Social Security. The idea was to spend all of its contributions – the 15+% that
FICA withholds from workers paychecks every month – into the stock market. This would
fuel a giant stock market boom. Money management companies, the big banks, would get an
enormous flow of commissions, and speculators would get rich off the inflow. It would make
billionaires into hundred-billionaires. All this would soar like the South Sea Bubble, until
the American population began to age – or, more likely, begin to be unemployed. At that
point the funds would begin to sell the stocks to pay retirees. This would withdraw money from
the stock market. Prices would crash as speculators and insiders sold out, wiping out the
savings that workers had put into the scheme.
The basic idea is that when Wall Street plays finance, the casino wins. When employees and
pension funds play the financial game, they lose and the casino wins.
ED: Right, and just as an example for listeners – to make what Michael was just
talking about it even more real – if we think back to 2009 and the collapse of General
Motors, it was not General Motors automotive manufacturing that was collapsing. It was GMAC,
their finance arm, which was leveraged on credit default swaps, collateralized debt obligations
and similar financial derivatives – what they call exotic instruments. So when Obama
comes in and claimed that he "saved General Motors," it wasn't really that. He came in for the
Wall Street arm of General Motors.
Obama's demagogic role as Wall Street shill for the Rubinomics gang
MH: That's correct. He was the Wall Street candidate, promoted by Robert Rubin, who was
Clinton's Treasury Secretary. Basically, American economic policies can run by a combination of
Goldman Sachs and Citigroup, often interchangeably.
ED: This was demonstrated very clearly in the first days of Obama taking office. Who does he
meet with to talk about the financial crisis? He invites the CEOs of Goldman Sachs and JP
Morgan, Bank of America, Citi and all of the rest of them. They're the ones who come to the
White House. It's been written about in books, in the New Yorker and elsewhere. Obama basically
says, "Don't worry guys, I got this."
MH: Ron Suskind wrote this. He said that Obama said, "I'm the only guy standing between you
and the pitchforks. Listen to me: I can basically fool them." (I give the actual quote in my
book.) The interesting thing is that the signs of this meeting were all erased from the White
House website, but Suskind has it in his book. Obama emerges as one of the great demagogues of
the century. He may be even worse than Andrew Jackson.
ED: So much of it is based on obvious policies and his actions. The moment he came to power
was a critical moment when action was needed. Not only did he not take the right action, he did
exactly what Wall Street wanted. In many ways we can look back to 2008 when he was championing
the TARP, the bailout, and all the rest of that. None of that would have been possible without
Obama. That's something that Democrats like to avoid in their conversations.
MH: That's exactly the point. It was Orwellian rhetoric. He ran as the candidate of Hope and
Change, but his real role was to smash hope and prevent change. By keeping the debts in place
instead of writing them down as he had promised, he oversaw the wrecking of the American
economy.
He had done something similar in Chicago, when he worked as a community organizer for the
big real estate interests to tear up the poorer neighborhoods where the lower income Blacks
lived. His role was to gentrify them and jack up property prices to move in higher-income
Blacks. This made billions for the Pritzker family. So Penny Pritzker introduced him to Robert
Rubin. Obama evidently promised to let Rubin appoint his cabinet, so they appointed the vicious
anti-labor Rahm Emanuel, now Chicago's mayor, as his Chief of Staff to drive any Democrat to
the left of Herbert Hoover out of the party. Obama essentially pushed the Democrats to the
right, as the Republicans gave him plenty of room to move rightward and still be the "lesser
evil."
So now you have people like Donald Trump saying that he's for what Dennis Kucinich was for:
a single payer healthcare program. Obama fought against this, and backed the lobbyists of the
pharmaceutical and health insurance sectors. His genius is being able to make most voters
believe that he's on their side when he's actually defending the Wall Street special interests
that were his major campaign contributors.
ED: That's true. You can see that in literally every arena in which Obama has taken action.
From championing so-called Obamacare, which is really a boon for the insurance industry, to the
charter schools to privatize public education and also become a major boon for Wall Street, for
Pearson and all these major education corporations. In terms of real estate, in the
gentrification, all the rest. Literally every perspective, every angle from which you look at
Obama, he is a servant of finance capital of investors, not of the people. And that's what the
Democratic Party has become, delivering its constituency to Wall Street.
A left-wing economic alternative
MH: So here's the problem: How do we get the left to realize this? How do we get it to talk
about economics instead of ethnic identity and sexual identity and culture alone? How do we get
the left to do what they were talking about a century ago – economic reform and how to
take the side of labor, consumers and debtors? How do we tell the Blacks that it's more
important to get a well paying job? That's the way to gain power. I think Deng said: "Black
cat, white cat, it doesn't matter as long as it catches mice." How do we say "Black president,
white president, it doesn't matter, as long as they give jobs for us and help our community
economically?"
ED: I think that's important and I want to close with this issue: solutions. One of the
things I appreciate in reading your book is that it is broken up into sections. The final
section, I think, is really important. You titled it: "There Is An Alternative." That is of
course a reference to Margaret Thatcher's TINA (There Is No Alternative). That ideology and
mindset took over the left, or at least the nominally left-wing parties. So you're saying that
there is an alternative. In that section you propose a number of important reforms. You argue
that they would restore industrial prosperity. Now, I'm not asking you to name all of them, to
run down the list, but maybe touch on a little bit of what you included, and why that's
important for beginning to build this alternative.
MH: There are two main aims that classical economists had 200 years ago. One was to free
society from debt. You didn't want people to have to spend their lives working off the debt,
whether for a home, for living or to get an education. Second, you wanted to fund industry, not
by debt but by equity. That is what the Saint-Simonians and France did. It's what German
banking was famous for before World War I. There was a debate in the English speaking
countries, especially in England saying that maybe England and the Allies might lose World War
I because the banks are running everything, and finance should be subordinated to fund
industry. It can be used to help the economy grow, not be parasitic.
But instead, our tax laws make debt service tax deductible. If a company pays $2 billion a
year in dividends, a corporate raider can buy it on credit and, if there's a 50% stock rate, he
can pay $4 billion to bondholders instead of $2 billion to stockholders. Over the past twenty
years the American stock market has become a vehicle for corporate raiding, replacing equity
with debt. That makes break-even costs much higher.
The other point I'm making concerns economic rent. The guiding idea of an economic and tax
system should be to lower the cost of living and doing business. I show what the average
American wage earner has to pay. Under the most recent federal housing authority laws, the
government guarantees mortgage loans that absorb up to 43% of family income. Suppose you pay
this 43% of income for your home mortgage, after the 15% of your wages set aside for Social
Security under FICA.
Instead of funding Social Security out of the general budget and hence out of what is still
progressive taxation, Congress has said that the rich shouldn't pay for Social Security; only
blue-collar workers should pay. So if you make over $115,000, you don't have to pay anything.
In addition to that 15% wage tax, about 20% ends up being paid for other taxes – sales
taxes, income taxes, and various other taxes that fall on consumers. And perhaps another 10%
goes for bank loans besides mortgages – credit card loans, student loans and other
debts.
That leaves only about 25% of what American families earn to be spent on goods and services
– unless they borrow to maintain their living standards. This means that if you would
give wage earners all of their food, all their transportation, all their clothing for nothing,
they still could not compete with foreign economies, because so much of the budget has to go
for finance, insurance and real estate (FIRE). That's why our employment is not going to
recover. That's why our living standards are not going to recover.
Even if wages do go up for some workers, they're going to have to pay it to the bank for
education loans, mortgage loans (or rent), bank debt and credit card debt, and now also for our
amazingly expensive and rent-extracting medical insurance and health care and medications. The
result is that if they try to join the middle class by getting higher education and buying a
home, they will spend the rest of their lives paying the banks. They don't end up keeping their
higher wages. They pay them to the banks.
ED: You don't have to tell me. I'm living that reality. Interestingly, in that final section
of your book you talk about alternatives, like a public banking option that many people have
discussed. You talk about the Social Security cap that you were just mentioning, and focus on
taxing economic rent. Some critics would suggest that these sorts of reforms are not going to
be able to salvage the capitalist model that is so ensconced in the United States. So I want to
give you a chance to sort of present that argument or maybe rebut it.
MH: I won't rebut that criticism, because it's right. Marx thought that it was the task of
industrial capitalism to free economies from the economic legacies of feudalism. He saw that
the bourgeois parties wanted to get rid of the "excrescences" of the industrial capitalist
marketplace. They wanted to get rid of the parasites, the landowners and usurious creditors.
Marx said that even if you get rid of the parasites, even if you socialize finance and land
that he dealt with in volume II and III of Capital, you're still going to have the Volume I
problem. You're still going to have the exploitation problem between employers and employees
– the labor/capital problem.
My point is that most academic Marxists and the left in general have focused so much on the
fight of workers and labor unions against employers that they tend to overlook that there's
this huge FIRE sector – Finance, Insurance, and Real Estate – tsunami is swamping
the economy. Finance is wrecking industry and government, along with labor. The reforms that
Marx expected the bourgeois parties to enact against rentiers haven't occurred. Marx was overly
optimistic about the role of industrial capitalism and industrialized banking to prepare the
ground for socialism.
This means that until you complete the task of freeing of society from feudalism –
corrosive banking and economic rent as unearned income – you can't solve the industrial
problems that Marx dealt with in Volume I. And of course even when you do solve them, these
problems of labor exploitation and markets will still exist.
ED: Yes, absolutely. Well we're out of time. I want to thank you for coming onto the
program. Listeners, you heard it. There's so much information to digest here. The book is
really brilliant, I think essential reading, required reading – Killing the Host: How
Financial Parasites and Debt Bondage Destroy the Global Economy, available through
CounterPunch, as well as on Amazon. Michael Hudson professor of economics at University of
Missouri Kansas City, his work is all over the place. Find it regularly on CounterPunch, as
well as on his website michael-hudson.com. Michael Hudson thanks so much for coming on
CounterPunch Radio.
MH: It's great to be here. It's been a wonderful discussion.
The key point is that financial industry needs to be strictly regulated and suppressed, because after a cirtain point it stage
coup d'état, banksters come to power and turn the industry into cancer for the society with it uncontrolled parasitic growth.
Notable quotes:
"... In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector. In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and most corrupt. ..."
"... The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors. ..."
"... Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ. ..."
"... Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians. Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most, happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?) See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell their funds. In 2010, mutual fund companies paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups. ..."
"... One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets. ..."
"... As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public asset strip mining is one of the chief causes of the increasing profitability of the financial sector. ..."
Before I begin this article want to make the point that what I'm about to say doesn't apply to everyone in the industry. While
the average mutual fund, broker, wealth manager, and hedge fund charges high fees and delivers poor results it doesn't apply to everyone.
I know lots of good, honest hedge fund managers that charge reasonable fees. I know lots of wealth managers that act in their client's
best interest and don't gouge them on fees. Unfortunately these are the exceptions rather than the rule.
Over the past year or so, the issue of rising income inequality in the United States (and even worldwide) has come front and center.
Most of what I've read has focused on wages, union membership, unemployment, taxation, government subsidy, and executive pay issues.
There is one issue whose role I think is overlooked in the mainstream media: the role the financial sector plays in exacerbating
income inequality. In fact, I believe the financial sector is one of the prime causes, and at its current point is perhaps the greatest
parasite in human history. It is sucking wealth from the productive sectors of the economy at an unprecedented rate.
Before we go any further, I want to define the term "income inequality." When I use that term, I am referring to the fact that,
on average, the incomes and standard of living of American workers is not keeping pace with productivity. I'm also using the term,
in part, to explain why workers and executives in some parts of the economy are overpaid in relation to the benefits they provide.
What I am not doing is making a blanket statement that money should be taken away from successful, hardworking people and
given or "redistributed" to the lazy.
The Role of the Financial Sector
In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion
of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector.
In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and
most corrupt.
The problem is that the financial, insurance, and real estate (FIRE) sectors do not actually produce any goods or services. If
you go on Google Finance you'll see it divides the economy into ten sectors: energy, basic materials, industrials, cyclical consumer
goods, non-cyclical consumer goods, financials, healthcare, technology, telecommunications, and utilities.
The nine nonfinancial sectors all produce goods or services. For example, the energy sector companies drill for our oil and refine
it into gasoline (e.g., ExxonMobil); the basic materials sector mines our iron (BHP Billiton) and refines it into steel (Nucor);
the industrial sector produces the mining equipment (Caterpillar) used by the previously mentioned sectors; the cyclical consumer
goods sector produces our cars (Ford) or sells our everyday items (Wal-Mart); the non-cyclical consumer goods sector sells the things
we need no matter what, such as groceries (Safeway); the healthcare sector provides the medicines that heal us (Johnson & Johnson);
the technology sector gives us the computers and software we use (Apple); the telecommunications sector gives us the ability to communicate
(Verizon); and the utility sector gives us the power to run our homes and businesses (Duke Energy).
The financial sector? Well, according to Harvard professor Greg Mankiw, chief academic apologist for the financial sector, this
is what it's supposed to do:
Those who work in banking, venture capital, and other financial firms are in charge of allocating the economy's investment resources.
They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow.
The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller
the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the
more money it siphons off from the productive sectors.
The graph below shows how the financial sector has grown since 1960. The figures are shown as a percentage of investment (using
both gross and net investment).
Graphic source: Jacobin Magazine
As you can see, the financial sector has almost doubled or tripled in size since 1960. That means it is extracting double or triple
the amount of money from the real economy!
Just how much?
I want to go through several areas of the economy to show you how the financial sector is extracting money and offering no benefit.
The Grift in Your Retirement Plan
I want to start with the industry I work in, wealth management. When I started my business, I was cognizant of how investors were
ill served by the traditional model of wealth management and vowed to run my business differently. Unfortunately, a vast majority
of the financial industry has built an unrivaled apparatus for extracting huge sums of money from retirees and mom-and-pop investors.
Say, you're sitting on your couch, watching TV and thinking about retirement. You just got part of your inheritance and think
investing it for the future would be a sensible idea. Imagine you haven't the slightest idea how to get started. Then a commercial
comes on with Tommy Lee Jones telling you how trustworthy Ameriprise is. Maybe you hear the reassuring voice of John Houseman pitching
Smith Barney, or you might see the iconic bull charging across the desert for Merrill Lynch.
Say you decide to go down to your local brokerage and meet with a financial advisor. His (or her) pitch sounds good, so you decide
to become a client.
The first problem is the guy you met. Remember how he told you he has his finger on the pulse of the market, he has access to
the best investment research, he is always taking continuing education classes, and he is always monitoring your portfolio? He isn't.
He could be a complete moron. He got hired (and survived and thrived) because he is a good salesman. Nothing less and nothing more.
He takes his orders on what to sell from the top -- the gaggle of people with their fingers in your retirement pie, helping themselves
to regular bites.
The first person behind the scenes telling our hapless salesman what to do is some sort of office, district, or regional manager.
This is manager is just like the salesman but with more ambition. Almost all of these guys were promoted from sales, and their job
is do an impersonation of Alec Baldwin from Glengarry Glen Ross, yelling at the underperformers ("Coffee is for closers!") to get
out there and sell the turd of the month. ("XYZ Mutual Fund Company just paid our firm $200M," this manager says, "so get out there
and sell their funds! And, Jones, if you don't gross $20,000 by the end of this month you're fired! Meeting adjourned.")
Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the
lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ.
Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians.
Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most,
happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical
methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?)
See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell
their funds. In 2010, mutual fund companies
paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups.
You, the investor, are usually charged somewhere around 1% to 1.5% of assets annually for this "service." I've seen clients charged
as much as 1.65% and I've come across firms advertising fees as high as 2% per year for clients with small account balances. For
large portfolios (typically $1M or more) the fees start going down and I've seen rates as low as .5% or less. These fees are split
up between your advisor, the district manager, and the firm itself. Keep in mind that these are fees before any investments have
been made!
So who actually makes the investments in stocks and bonds? It's the portfolio managers at the mutual fund companies. According
to the Investment Company Institute 2011 Fact Book (the ICI is a pro-mutual fund organization), the average mutual fund in
2010 charged 1.47% of assets annually. That's in addition to an average up-front sales charge of 1%.
Why so expensive? Well, the funds are towing a lot of dead weight. According to the ICI 2013 Fact Book, only 42% of mutual
fund employees were employed in fund management positions or fund administrative positions. The rest, 58%, were employed in either
investor servicing (34%) or sales and distribution (24%) job functions.
Like any good infomercial says, "But wait! There's more!" When you buy a stock or bond, you can't just go grab it off the shelf
like you are shopping at Wal-Mart. You need to go through a brokerage. A 1999 study by Chalmers, Edelen, and Kadlec found that the
average mutual fund incurs trading expenses of .78% per annum. A newer study in 2004 by Karceski, Livingston, and O'Neal found brokerage
commissions cost funds around .38% per annum, or .58% if you account for the effect trading large blocks of stock has on the bid-ask
spread.
But wait! There's more! Mutual funds and your average retail investor are relatively unsophisticated, so a new industry has popped
up to take advantage of them. It's called "high frequency trading" or HFT for short. These are powerful computers programmed to take
advantage of "dumb" traders in the market. These HFT firms place their computers physically next to the stock exchange computers
in the datacenters and buy access to market quotes milliseconds before they are made public. They use these and other advantages
to skim
profits from other legitimate investors (that is, people buying stocks because they want to own part of the underlying company).
All told, it's not uncommon to see investors incurring annual expenses of 2%, all the way up to 4% per year.
Institutions and the Rich Have the Same Problem
The problem isn't just limited to Joe Six-pack Retiree. Large institutional investors, such as pension funds, and "sophisticated"
rich investors get taken to the cleaners too.
Once upon a time someone came up with a great idea: Since an all-stock portfolio is volatile, why not "hedge" the portfolio and
sell some stocks short? If you bet that good stocks will go up (buying stocks in the good companies or going long) and bad stocks
will go down (selling the stock short) then you could limit volatility and maybe make some extra money. (You'd make money both when
the good stocks went up and the bad stocks went down). It was and is a pretty good idea when done correctly. Unfortunately, the term
"hedge fund," like the term "mutual fund," has lost its original meaning. The term hedge fund is now used to refer to any type of
pooled investment vehicle that is limited to select clients (usually rich, sophisticated investors and institutions, although the
rules vary worldwide).
The rule of thumb is that hedge funds charge a 2% per year management fee and keep 20% of all profits, the proverbial "2 and 20"
compensation. According to a
WSJ article , this
old adage isn't too far off; the average hedge fund charges 1.6% per year and keeps 18% of profits.
In 2012, hedge funds removed $50.5B from their investors' pockets. In fact, according to an article in Jacobin Magazine, the top
25 hedge fund managers make more money than the CEOs of all S&P 500 companies combined. Combined!
Have they earned it? Well, the answer seems to be no. I pulled the last four years of return data for two hedge fund indices:
the Barclays Hedge Fund Index and the Credit Suisse AllHedge Index. These two indices track thousands of hedge funds across the globe.
I compared them with the returns of the Vanguard Total World Stock Index Fund and the Vanguard Total World Bond Market Index Fund
as well as a 50/50 portfolio of the two Vanguard Funds. All returns shown are net of fees.
The Vanguard stock fund trounced both hedge fund indices, and the Credit Suisse index managed only to beat the returns of bonds
by .01%.
Right about now you will hear the howls of the "hedgies" complaining. I wasn't quite fair to the hedge funds. A lot, but not all,
of them are hedged so returns in down markets will be better and four years isn't a terribly long time to look at.
The two graphs below show the returns for the Credit Suisse index since 2004 and the maximum drawdowns (losses) since 2004.
First, over 10 years the returns for hedge funds are atrocious, only about 25% in total. They do have a point that the draw downs
are lower. The maximum losses experienced during the downturn only averaged about 25%. Fine, but the Vanguard Total Bond Market Index
had barely any draw downs during the crisis and returned over 50% during a similar time period.
Unfortunately, Vanguard does not have return data for any of its World Stock funds for a complete 2008 calendar year so I was
unable to get exact data for my 50/50 portfolio. But I'd be willing to bet it beats the hedge fund indices on a risk adjusted basis.
When you hear about underfunded pension plans, part of the blame lies with pension investment committees and their investments
in hedge funds. These funds, in aggregate, have not earned the fees they charge and have instead funneled the money of retirees into
the hands of a wealthy few.
I'm not alone in reaching this conclusion. Pension funds are slowly starting to see the light and
reducing their allocations to "alternative" investments, such as hedge funds, and
reallocating the capital to indexed products or negotiating with the funds for lower fees.
It's not just the traditional investment arena where the financial sector has run wild. Its unending quest for siphoning money
from the economy has spilled out into other areas.
Speculation in Commodities Costs Main Street Billions
Speculation by the financial sector in the commodities market is impacting the entire world. The passage of the Commodities Futures
Modernization Act (CFMA) has allowed big banks to engage in almost limitless speculation in the commodities market. Wall Street has
convinced everyone from individual investors to pension funds and endowments that they need to include commodities in their portfolios
for deworsification, I mean, diversification purposes. Between investors plowing more than $350B into the commodities market and
what appears to be outright manipulation of commodities prices, the financial sector has increased the costs of everything from wheat
to heating oil and aluminum to gasoline.
An executive for MillerCoors testified that manipulation of the aluminum market cost manufacturers over $3B. The World Bank estimated
that in 2010, 44 million people worldwide were pushed into poverty because of high food prices. The chief cause?
More than 100 studies
agree the cause is speculation in the commodities market. (Goldman Sachs made
$440M in 2012
from food market speculation.) For Americans who love their cars (and SUVs), the biggest impact might be felt at the gas pump where
experts estimate
that financial speculation has added anywhere from $1 to $1.50 to gas prices.
For more information on speculation in the commodities, I recommend Matt Taibbi's
excellent pieces, in-depth information at Better Markets , or some
of myarticles on commodities.
If you think it's bad enough that Wall Street is raising the price of your food, heating oil, gasoline, and Pepsi, then wait until
you get a load of one of the Street's other ingenious ideas for helping themselves to more of your money.
Corruption of Public Infrastructure
One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should
be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover
servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets.
The first and most obvious examples of this type of fraud (I choose to use the term "fraud" because I believe that is exactly
what these deals are) are government entities selling public, taxpayer-owned infrastructure, such as road, bridges, parking facilities,
and ports, to the private sector so that they can extract rent from the users. The deals are usually touted as saving taxpayers money
and letting the "more efficient" private sector better manage the asset. This is false. Many studies show private ownership of public
goods does not lead to any cost savings. A comprehensive econometric
study done in 2010 of all available public vs. private studies by Germa Bel, Xavier Fageda, Mildred E. Warner at the University
of Barcelona found no cost saving in privatizing public water or solid waste management services and infrastructure.
The case is no different when it comes to public roads. A
2007 paper by US PIRG found that
privatizing roads never benefits citizens. Financial firms were typically able to buy the assets on the cheap and then raise toll
rates while usually sneaking language into the agreements that prevented governments from building competing infrastructure. The
paper presented evidence that the Indiana Toll Road lease will cost taxpayers at least $7.5B.
One of the most egregious examples of the financial sector extracting rent is the
2009 sale of Chicago's parking meters
to a consortium led by Morgan Stanley. Shortly after the lease was finalized, rates at many parking meters increased (in some case
by quadruple the amount). The Chicago Inspector General found that the city was underpaid by almost $1B for the lease. Meanwhile,
in 2010 Morgan Stanley banked $58 million in profits from the parking meters. With
no way
out of the deal , the citizens of Chicago are now paying Morgan Stanley for the right to use assets they used to own!
The second way in which taxpayers are exploited by the financial sector is so-called public-private partnerships (also referred
to as PPP or P 3 ). There is no set definition for what constitutes a PPP arrangement, and it is possible some might be
beneficial in limited circumstances. I want to focus on one specific type of PPP that enriches the financial sector: when public
projects are privately financed. There is absolutely no reason for any government project to ever require paying "rent" to the financial
sector in the form of financing.
The United States federal government is the monopoly supplier of US dollars. It can add them to the economy at will through deficit
spending or remove them via taxation. There is no earthly reason for a public entity to be forced to depend on the private sector
to provide any type of financing. The only constraint on whether or not money should be spent is whether the economy is at full capacity
(full employment and full industrial capacity utilization) where the additional deficit spending may cause inflation.
State and local governments are unable to issue currency and therefore must depend on revenue raised via taxation, distributions
from the federal government, or money raised through bond issuance. Even then, studies have shown that PPPs are more expensive compared
to the state or local entity securing financing through the municipal bond market.
As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are
nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public
asset strip mining is one of the chief causes of the increasing profitability of the financial sector.
So far we've dealt with examples that are pretty easy to see. Everyone who owns a car knows that gas prices have been rising too
fast and food is more expensive. The citizens of Chicago know they are getting shafted on the parking meter deal since parking rates
have quadrupled. But there are hidden areas of the economy where the financial sector is ripping off the public too.
Interest Rate Manipulation
Do you know what LIBOR is? And what it's used for? A lot of financial types read my newsletters, so I'm sure some of you do. But
the average man or woman on the street likely does not.
LIBOR stands for London Interbank Offered Rate and is the average interest rate banks in London estimate that they would be charged
if they borrowed from other banks. This rate is used worldwide by mortgage lenders, credit card agencies, banks, and other financial
institutions to set interest rates. By some estimates, more than $350T in financial products, derivatives, and contracts are tied
to LIBOR.
In 2012, it was discovered that, since 1991, banks were falsely inflating or deflating the interest rates they reported. (Remember
banks essentially make up their own interest rates and report them with the results being essentially averaged and reported as LIBOR.)
The banks did this in order to profit from trades or to make themselves look more creditworthy than they were.
The Macquarie Group estimated that the
manipulation of LIBOR cost investors $176B. (Keep in mind this is an estimate coming from a financial firm, so it would be prudent
to assume it's on the low end.)
Andrew Lo, a finance professor at MIT, said the fraud "dwarfs by orders of magnitude any financial scam in the history of the
markets."
Food Stamps (SNAP) and Welfare (TANF)
I highly doubt any of my clients or readers are beneficiaries of the SNAP or "food stamps" program and are probably not very familiar
with it. While it is nominally a government program it has been corrupted by the big banks. Benefits are provided electronically
via debit cards (EBT cards). JP Morgan
has made over $500M
from 2004 to 2012 providing EBT benefits to 18 states. The banks then are free to reap fees from users for such things as cash
withdraws for TANF benefits, out of network ATM fees, lost card replacement fees, and even customer service calls.
I believe you can judge how profitable a service is to a company how much it spends on lobbying. In the case of JPMorgan, its
bribes, I mean campaign contributions to Agriculture Committee (SNAP is part of the Department of Agriculture) members increased
sharply after it entered the EBT market in 2004.
(Graphic source: GAI via data from CRP) Summary
A bloated and out-of-control financial sector does not add any value to society. Society benefits when the financial sector is
kept as small as possible.
The financial sector is a parasite that depends on its host organism, the productive sector of the economy, to fuel its profits.
The larger the financial sector grows, the more wealth it extracts from the productive sectors of the economy. With all due respect
to Matt Taibbi, Goldman Sachs isn't a vampire squid; the entire financial sector is the vampire squid with its tentacles reaching
into the pockets of citizens everywhere and sucking out money.
Quite a damning critique, and if I may step away from the main point I have to ask: why is it that some guys involved with
finance, Strubel as well as Auerback, Mosler and Ritholtz, talk like this while so many in the field do not? Does everyone involved
"know" all this but most simply choose to put on blinders?
Great Article about the .01% "Taker Class". This can all end by the 99% demanding a change to the TAX CODE! Yet another clear
indication of the manipulation of the "Giver Class" by government!
Its truly frightening to see how the public has been blindsided/mislead about the root causes of rapid income inequality. As
a social worker I am somwhat familiar with the SNAP benefit program Depressing to think JP Morgan Chase skimmed at least 500m
over an eight year period for SNAP and welfare benefits. I suppose this is the new age enclosure movement where Wall Street is
picking up public assets for pennies on the dollar and charging enormous rents..
The questions is.. what happens when it is used up?? A scorched wasteland of dysfunctional infrastruture/gated communites housing
a tiny elite protected from beggars, street criminals, and gang bandits??
Excellent article. Easy for a layperson to understand and covers a good portion of the pervasive, ongoing, worldwide financial
system theft. I worked for a stock brokerage firm years ago while studying for the series 7. Once I figured out they were all
just well-dressed telemarketers, I quit and found a more productive job. Remember 'dogs of the Dow' ?
A very well-written and eye-opening post – thanks, Ben. I think the formulation of this central point may be a little skewed,
though: " the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial
sector becomes the more money it siphons off from the productive sectors."
I think this formulation may be somewhat muddling the real-vs.-financial dichotomy that MMT revolves around. Sort of by definition,
the financial sector is 100 percent nominal – even when it posits ownership of real assets, it is really just money-valuing them,
applying the unit-of-account property of money. The ownership is an abstraction. The owner of a share of stock or a gold ETF has
no concrete interaction with the company or commodity in question. So, contrasting the total size of the financial sector to the
totality of real wealth available – for those members of society who do *not* receive income from the financial sector – leaves
me scratching my head. I'm not clear what is being measured. I know that profits flowing to the financial sector have exploded
from around two percent of total corporate profits in the 1950s to around forty percent now. This means it is over-charging for
its so-called services, but I think the real-economy effects are non-linear, and more complex than this.
Regarding the financial sector's growing tendency to siphon off money from the productive sectors – yes, they do this. But
it is up to the state, with its currency-issuing and taxing powers, to regulate how far this process goes and what happens next.
In a recent post, J.D. Alt took note of the ephemeral nature of the financial sector's nominal money-wealth. It is "fictitious
capital". Electronic poker chips. Just zeros and ones, really. As long as the plutocrats simply hoard them – use them to keep
score – the state can just replace them by increasing spending. I also tend to think that the consumption spending of the .01
percent is rather inelastic. They already have everything they want. Keynes' attitude was to let them live it up, up to a point,
and then tax the excess back when they die.
For me, the most important part of your post is the section on commodity speculation and infrastructure privatization. This
truly is a huge deal, a clear interaction with the real economy and a terrible crime, actually. Again, though, it is up to the
state to permit these outrages or ban them – we used to ban them but we stopped. So. One more big thank-you to the Big Dog, I
guess. To think – before Clinton, America actually based aid to poor children on their ages and their poverty rather than the
supposed moral imperfections of their parents. We even had no-fee food stamps.
Obviously, the other reason we can't just let the one percent play their casino games is that they eventually blow up the real
economy, as a totality, through financial crises and destabilization. And, due to all the fabulist monetary propaganda out there,
there is now a big reservoir of public opinion and political will *in favor* of financial collapse. The libertarians and other
Paul-Partiers think it would do us all good. And bring back the gold standard. And "End the Fed", and all the rest of that good
19th Century stuff. I'm not a ready-for-Hillary kind of guy in general, but is it possible to imagine a scarier idea than President
Rand?
While most of your specific criticisms are quite valid, I think your brush is a bit too broad. "The problem is that the financial,
insurance, and real estate (FIRE) sectors do not actually produce any goods or services. "
This is obviously false. I have many times used services provided by banks, credit unions, insurance companies, and real estate
brokers and agents. It would be practically impossible to find the right house to buy, to sell it for a fair price, to get the
loan necessary to buy it, or to protect myself and my family from a catastrophic loss without their services.
It is undoubtedly true that most of the volatility of the FIRE sector since 1990 is due to speculation and parasitical activities,
but there is undoubtedly also some growth of useful services that has facilitated growth of the other sectors, not detracted from
it. Thus it is not always true that "the smaller the financial sector is the more real wealth there is for the rest of society
to enjoy".
Bottom line, you have a good point. Excessively broad statements might be more dramatic, but if they are not true they don't
help your cause.
I have gotten real value from real estate brokers. Did you ever try to sell a house without one? Qualify the serious buyers
and deal with the lookie-loos? And the government paperwork!! I've always gotten my money's worth.
No, the fire doesn't care if you have insurance, but the insurance company will advise you on how to prevent fires and minimize
the damage. Paying an insurance company has protected me from paying the unaffordable high cost of the insured risks. The service
provided by insurance is not incident prevention, it is management of financial risk, and it does that very well. My claims have
been handled quickly and fairly. I had one unusual case where I thought the insurance company should have paid me more than their
original offer (the nation-wide blue book value of the car didn't reflect the unique situation in my State), and after discussion
they agreed with me and paid. I've been with them for over 40 years and I'm very happy with their services.
If you want your bank to create wealth for you, you're looking in the wrong place. Banks are good for storing and protecting
your money, and many will do that for you without fees, and even pay you interest. They'll let you use their computers to pay
your creditors, also without charge. They'll even give you short-term interest-free loans, and pay you cash rebates, if you use
their credit cards. I like my banks' services, too. And, of course, if you want to borrow money they will lend it to you and if
your payment is late they don't break your legs. They will make a profit, though. That's why they do it. You don't have to participate
if you don't want to.
Not every bank is Goldman Sachs, and not every insurance company is AIG. Those are good examples of companies that often serve
no useful purpose, but there are many others who do provide useful services at a reasonable cost.
Although I can be sympathetic of the no-value creation thesis in the financial industry, comparing the performance of hedge
funds with the recent performance of bonds is a no big no-no, because it assumes a negative correlation between equities and bonds.
If one look at the world markets in the last 100 years, that has been the exception rather than the rule.
And you forgot to mention the important roles of capital markets in deploying capital and financing companies through IPOs,
bond offers, etc.
You missed another big point, negative real interest rates. The Fed Funds Rate is currently 0%-0.25%, while real inflation
is much higher. (The CPI is not an accurate measure of inflation.) Big banks can profit by borrowing at 0% and buying stuff (bonds,
stocks, commodities, real estate, politicians, whatever).
On LIBOR, here's another interesting bit. Cities and states lost a TON of money on interest rate swaps with banks. What was
sold as a "hedge" wound up blowing up and costing a fortune.
This was a fascinating piece, very readable for those of us with minimal financial education. However, since this is such a
good explainer for the layman, I think it would be very beneficial to explain how big a difference 1% in fees makes for an investor
over a lifetime. I know personally when I used to compare funds the difference between 1 and 2% in fees seemed negligible. But
then I saw that fantastic PBS Frontline
on this topic and saw how much that 1% could cost me over a lifetime! I now have everything that I personally manage in index
funds!
You can't really argue with what has been said, and all (of us) involved in the sector know it is massive rip off.
While a free market advocate, I think a first step would be to introduce meaningful fee caps on all state promoted or mandated
saving arrangements (eg ISAS, and Pensions), on the grounds that the market is skewed by the government intervention that creates
the glut of forced buyers, and so to correct that imbalance the market (i.e. consumers) need protection through fee caps. I'd
say no more than 20 – 25bps should be permitted for all ISAS and pension savings (DC or DB). Individual wealthy investors (investments
of more than say Ł5m?) can pay what they like.
>>The job of the finance sector is simply to manage existing resources. It creates nothing.
This is a dubious assertion, but you clearly believe it. How then, can you in good conscience, charge 1.25% (plus indirect
costs for the funds you hold in client portfolios) to manage people's money when you yourself admit you are adding no value?
I know this was for Ben, but there's a pretty simple answer to that question: They don't charge 1.25% because they create value,
they're charging a fee to access the profit created by companies they invest in. Say I told you that I knew a guy named Jimmy
who was going to make three bucks for every buck he gets, and I asked if you'd lend me a dollar to give to Jimmy with the promise
that he'd give me 1.50 cents of it. I'd want to keep 25 cents but you can have 1.25, and so you agree. I didn't create the 2 extra
dollars of value -- Jimmy did -- but I feel justified in asking for a cut because I gave you the tip about Jimmy's value creation
ability.
At least, that is my understanding of Ben's statement.
There are 6000 publicly traded companies. Some of them will have rising stock prices, some falling. If a money manager can
steer you to the rising ones, he is doing something of value. It doesn't mean he created anything physical that didn't exist before.
He's doing a service for you that would otherwise have taken you some time and effort to do, and that's what you pay for.
Yes, it's a different definition of value. The growth of financial services has been outpacing the growth of other sectors
to a monstrous scale, and that makes this distinction important. It signals a kind of corruption that can only mean high inflation
and decoupling money from economic output.
I don't follow. How is financial services different from any other kind of services, in the impact on inflation? Why not also
actors, barbers, or any other service profession? The growth of the financial sector might be explained by the fact that it is
the industry most able to exploit computers, and the first to do so on a large scale.
The corruption is, I think, a separate issue that is present whenever other people's money is involved. Financial services
and government are simply more involved that way than most other industries, and have been all along, dating to long before the
recent growth. Corruption is not impossible in any industry, just more attractive when the numbers are larger.
Corruption is never a separate in ANY corporate activity. The TAX CODE treats the wealth of the .01% radically different than
Income from Labor, because all Taxes on Capital Gains are deferred until taken and are not TAXED as ordinary income. The TAX CODE
is responsible for the corruption of our government because it has put real POWER, the Power of Wealth in the hands of the .01%,
to buy whatever it wants, while labor and the poor spend everything they earn or are given , every single year to survive in a
economic culture designed for the benefit of the .01%, something no one will write about!
Change the TAX CODE and the Corruption of Society will end!
Barbers and actors being paid for their labor do not have the same impact on inflation as a bank giving out loans and consumer
credit at interest. It's not equivalent at all.
Corruption in financial industries is what this article is discussing. If it's a separate issue, I'm confused as to the point
of talking about this at all!
I don't think your explanation is correct. Why wouldn't I go directly to Jimmy in that case and cut out the middle man since
he is offering no value add? The fact is, the middle man, Ben, in this case, believes that he can identify superior companies
to invest his clients money in and earn a greater return. This is Ben's value add and why he charges 1.25%.
Golfer John is correct and that point, essentially, blows a hole in Ben's thesis here that the financial sector adds no value
because they only manage "existing resources". Steering capital to the good ideas that improve consumer wealth and generate a
return is a value add and the fact that millions of transactions like this happen voluntarily between consenting adults further
supports this.
Physics tells us that matter cannot be created or destroyed, so the same resources that are on this earth today are the same
ones that were here 10,000 years ago. So, in that sense, Apple is simply managing "existing resources" when they build the iphone,
Toyota simply managing "existing resources" when they build a car, and UPS and US Mail are merely moving "existing resources"
from one location to another when they make deliveries, must be no value add there right?
Asserting that the financial sector only manages existing resources, and then citing that as proof of no value add is simply
a non sequiter.
No, I wasn't, though I have heard that. My theory of markets, and human group behavior in general, is a statistical approach.
There are averages, distributions, and temporary equilibriums, but the interesting parts are the outliers. I guess that is more
of a quantum flavor than Newtonian. Over time, economies behave cyclically. Much of nature and human group behavior is cyclical.
Paul -- That's true, and a good analogy, except you're getting a bit reductive with the term "existing resources". I agree
that "no value" is a bit extreme, which is why I became more interested in the -type- of value.
John – My physics is flawed to the extent that the law of conservation of matter is flawed, this I admit. I am much more economist
than physicist though so better that I get my physics wrong and econ right! I see a lot of similarities between the two, as well
as crucial differences, but I don't want to get too off topic.
Briana – "No Value is a bit extreme"
I agree, and as the absurdly hyperbolic title* of this article states, the author takes it to an even greater extreme – namely
that the financial sector is actually a systematic destroyer of value (parasite) that is created by all of the other industries.
The crux of his assertion rests on that they only "manage existing resources" and also calling Greg Mankiw an apologist, neither
strikes me as an intellectually rigorous argument.
And interestingly, on his own firm's website, the author apparently contradicts the thesis of this article when advertising
his financial services and the fees he charges for his own value add. I can think of several explanations for this, none of which
are particularly flattering, others can draw their own conclusions.
*a worse parasite than all of the murderous dictatorial regimes in human history that have institutionalized the slaughter
and torture of millions? Really? I note this because it is so obviously false that it makes the rest of the content seem unserious
and shallow even if valid points exist. Acidic comments tend to preach to the already converted, but perhaps that is the goal
here.
Yeah, ok. I should know better, Paul. My brain tried to rationalize the argument by making it less extreme. The goal probably
was to mobilize the choir to go Occupy Wall Street for a few more months, haha.
Those valid points shouldn't be ignored because of the poorly handled hyperbole, though. The financial sector does have a great
capacity to act as a parasite by overvaluing their services and squandering wealth generated by other industries instead of reinvesting
it in worthwhile, valuable enterprises; or using that wealth to essentially 'gamble' or invent money that is not attached to any
real value (i.e. shorting or credit default swaps). As the fruits of these behaviors are becoming obvious, it gets harder to justify
policies that allow them to happen.
In many ways that is my point. You found those "valid points" obviously correct before reading the article, so it rang true
despite the extreme hyperbole. I did not find those points self-evidently true so this poorly constructed argument relying on
clearly false assumptions struck me as uncompelling.
For example, how does one "overvalue their services"? If one charges too much, no one is forced to buy. I may find Ben's management
fee of 1.25% to be overvaluing himself, but I have the option of not paying and instead going to less expensive alternatives.
Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After
all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?
I do not see anything inherently wrong with short selling. Indeed, the ability to short a stock is simply expressing a view
about its value, and leads to greater and more accurate price discovery. What is wrong with shorting a stock if one believes it
is overpriced relative to its instrinsic value? Is it not preferable that prices reflect underlying economic fundamentals rather
than being disconnected from such? Shorting puts downward pressure on prices, and helps prevent overvaluation.
Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance.
I'm not suggesting that you, here in the comments, need to write a paper elaborating on those, just that this article did a
poor job of pursuading, though again, I am coming to the realization that I am likely not the intended audience.
This discussion in the comments has actually been more fruitful than the article itself.
(Sorry for the late response, I've been away for a few days.)
"For example, how does one "overvalue their services"?"
This argument hinges on everyone that purchases these services knowing their true value. It's very simplistic to say that if
someone purchases it, that is the real value. It gets complicated when you take into account the psychological pressures of purchasing
behavior, such as "middle-price" preferences, "money you don't see is money you don't miss" and other tricks that are employed
to get people to pay higher prices.
"Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After
all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?"
Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently
not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is
worthwhile.
"I do not see anything inherently wrong with short selling."
Shorting is basically a bucket shop in disguise.
"Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance."
"This argument hinges on everyone that purchases these services knowing their true value."
In a literal sense, you are correct, it is an imperfect measure of value. However, I think it is far and away the most reliable
one we have as value is extremely subjective. I don't think it is right or prudent for third, non cost bearing parties to preempt
decisions made by consenting adults, rather, I would accord them the dignity of free choice. There are many things that consumers
purchase that I do not understand, why anyone would pay a premium for a fast car seems like a waste of money to me, for example.
Why anyone would pay money to golf, not to mention the huge cost in terms of time it takes to get through 18 holes, seems like
a waste of money to me. These are things that make no sense to me because I do not see the value there. But, I recognize that
people have various tastes and preferences, and I respect that and presume that individuals know themselves and their own tastes
and preferences better than I (or someone else) does. Therefore, when someone values something that I do not understand, I tend
to believe it is a result of a difference in preference, rather than they are too dumb to figure out what they like, or that they
are "tricked" into buying something and hence need protection delivered by those who fancy themselves as enlightened enough to
see the real truth. Nothing about this is unique to the financial industry, by the way.
"Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently
not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is
worthwhile."
Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile
and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's
money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources.
I agree with you on purchasing decisions. People should be free to determine value. I'm not saying people are always dumb,
but I do think they are manipulated. If you want to believe they are not, that is up to you, but apparently you've never seen
advertising. The financial industry advertises itself heavily, especially in consumer credit markets and insurance. But if we're
going to gauge something as nebulous as "true value", it requires a level of conscientiousness from everyone, and accepting whatever
people purchase as reflecting it's actual value is a quick way to guarantee abuse, especially when you have something like consumer
credit. If people are free to determine value, they should also be held to the consequences of their choices, which is currently
not the case in the financial industry and increasingly in the general population.
"Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile
and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's
money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources."
You mean like electricity, phone services, railroads, airlines, fortified wheat, water treatment, the internet, satellites,
healthcare.. the list could go on and on. It is less efficient (a word that really needs to be defined clearly, but I'll assume
I know what you mean!), and it happens because otherwise it wouldn't be possible, and yet it becomes widely adopted and lauded
none-the-less; progress, they say. Like I said, worthwhile and profitable are not 1-to-1 correlation, just as willingness to purchase
doesn't necessarily indicate true value.
I thought you might have some interesting opinion on the CDS as money creation I'm still trying to figure that one out!
"... Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're sucking the rest of us dry @rcbregman ..."
"... 'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body' ..."
"... This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection – cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world. ..."
"... To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth. ..."
"... But there is also a second way to make money. That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his power to claim economic benefit. ..."
"... For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large class of useless rentiers, well-described by the French economist Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking. From Wall Street to Silicon Valley , from big pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere. ..."
"... It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements – not exactly leftist thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they gobble it up whole. ..."
"... In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however, is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares, then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you), and if the shit hits the fan, let Uncle Sam mop it up. ..."
"... Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields a similar revenue model. Take tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent. ..."
"... Even paragons of modern progress like Apple, Amazon, Google , Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose. ..."
"... Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger. ..."
"... Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US. ..."
"... Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised within an inch of her life if she checks the wrong box. ..."
"... The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts. ..."
"... One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire. Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier drains a country of its vitality. ..."
Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're
sucking the rest of us dry @rcbregman
'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body'.
This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet – on reflection
– cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job
creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance
the whole world.
Now, we may disagree about the extent to which success deserves to be rewarded – the philosophy of the left is that the strongest
shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise – but across the spectrum virtually
all agree that wealth is created primarily at the top.
So entrenched is this assumption that it's even embedded in our language. When economists talk about "productivity", what they
really mean is the size of your paycheck. And when we use terms like "
welfare
state ", "redistribution" and "solidarity", we're implicitly subscribing to the view that there are two strata: the makers and
the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.
In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders
are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we
hail as "successful" and "innovative" are earning their wealth at the expense of others. The people getting the biggest handouts
are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about
it. Even for politicians on the left, it's a non-issue.
To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means
tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout
app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.
But there is also a second way to make money.
That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase
your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his
power to claim economic benefit.
'From Wall Street to Silicon Valley, zoom in and you'll see rentiers everywhere.'
For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large
class of useless rentiers, well-described by the
French economist
Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend
the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking.
From Wall Street to Silicon Valley , from big
pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere.
There is no longer a sharp dividing line between working and rentiering. In fact, the modern-day rentier often works damn hard.
Countless people in the financial sector, for example, apply great ingenuity and effort to amass "rent" on their wealth. Even the
big innovations of our age – businesses like Facebook
and Uber – are interested mainly in expanding the rentier economy. The problem with most rich people therefore is not that they are
coach potatoes. Many a CEO toils 80 hours a week to multiply his allowance. It's hardly surprising, then, that they feel wholly entitled
to their wealth.
It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll
start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the
International Monetary Fund and the
Bank for International Settlements – not exactly leftist
thinktanks – have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they
gobble it up whole.
In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating
anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however,
is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares,
then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you),
and if the shit hits the fan, let Uncle Sam mop it up.
The financial innovation concocted by all the math whizzes working in modern banking (instead of at universities or companies
that contribute to real prosperity) basically boils down to maximizing the total amount of debt. And debt, of course, is a means
of earning rent. So for those who believe that pay ought to be proportionate to the value of work, the conclusion we have to draw
is that many bankers should be earning a negative salary; a fine, if you will, for destroying more wealth than they create.
Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields
a similar revenue model.
Take
tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of
other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers.
One of the richest people in the world,
Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The
same goes for the Russian oligarchs who rose after the
Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent.
But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the
face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely
that makes us overlook their massive rent-seeking.
Take the pharmaceutical industry. Companies like
GlaxoSmithKline and
Pfizer regularly
unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture
medications that resemble what we've already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers,
and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the
result of a tiny pinch of innovation and fistfuls of rent.
Even paragons of modern progress like Apple, Amazon, Google
, Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries
and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice
recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid
paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose.
Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing
growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult
to compete with, because as they grow bigger, they only get stronger.
Aptly characterising this "platform capitalism" in an article,
Tom Goodwin writes : "Uber, the world's largest taxi company, owns no vehicles. Facebook, the world's most popular media owner,
creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world's largest accommodation provider,
owns no real estate."
Facebook
Twitter
Pinterest 'Every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice
recognition, was invented by researchers on the government payroll.' Photograph: Regis Duvignau/Reuters
So what do these companies own? A platform. A platform that lots and lots of people want to use. Why? First and foremost, because
they're cool and they're fun – and in that respect, they do offer something of value. However, the main reason why we're all happy
to hand over free content to Facebook is because all of our friends are on Facebook too, because their friends are on Facebook because
their friends are on Facebook.
Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for
free. And sure, we have fun doing it. But we also have no alternative – after all, everybody is on Facebook these days. Zuckerberg
has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with
free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an
astounding
64% of all online ad revenue in the US.
But don't Google and Facebook make anything useful at all? Sure they do. The irony, however, is that their best innovations only
make the rentier economy even bigger. They employ scores of programmers to create new algorithms so that we'll all click on more
and more ads.
Uber has
usurped the whole taxi sector just as
Airbnb has upended the hotel industry and Amazon has overrun the book trade. The bigger such platforms grow the more powerful
they become, enabling the lords of these digital feudalities to demand more and more rent.
Think back a minute to the definition of a rentier: someone who uses their control over something that already exists in order
to increase their own wealth. The feudal lord of medieval times did that by building a tollgate along a road and making everybody
who passed by pay. Today's tech giants are doing basically the same thing, but transposed to the digital highway. Using technology
funded by taxpayers, they build tollgates between you and other people's free content and all the while pay almost no tax on their
earnings.
This is the so-called innovation that has Silicon Valley gurus in raptures: ever bigger platforms that claim ever bigger handouts.
So why do we accept this? Why does most of the population work itself to the bone to support these rentiers?
I think there are two answers. Firstly, the modern rentier knows to keep a low profile. There was a time when everybody knew who
was freeloading. The king, the church, and the aristocrats controlled almost all the land and made peasants pay dearly to farm it.
But in the modern economy, making rentierism work is a great deal more complicated. How many people can explain a
credit default swap
, or a collateralised debt obligation ? Or the revenue
model behind those cute Google Doodles? And don't the folks on Wall Street and in Silicon Valley work themselves to the bone, too?
Well then, they must be doing something useful, right?
Maybe not. The typical workday of Goldman Sachs' CEO may be worlds away from that of King Louis XIV, but their revenue models
both essentially revolve around obtaining the biggest possible handouts. "The world's most powerful investment bank," wrote the journalist
Matt Taibbi about
Goldman Sachs , "is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything
that smells like money."
But far from squids and vampires, the average rich freeloader manages to masquerade quite successfully as a decent hard worker.
He goes to great lengths to present himself as a "job creator" and an "investor" who "earns" his income by virtue of his high "productivity".
Most economists, journalists, and politicians from left to right are quite happy to swallow this story. Time and again language is
twisted around to cloak funneling and exploitation as creation and generation.
However, it would be wrong to think that all this is part of some ingenious conspiracy. Many modern rentiers have convinced even
themselves that they are bona fide value creators. When current Goldman Sachs CEO
Lloyd Blankfein
was asked about the purpose of his job, his straight-faced answer was that he is "
doing God's
work ". The Sun King would have approved.
The second thing that keeps rentiers safe is even more insidious. We're all wannabe rentiers. They have made millions of people
complicit in their revenue model. Consider this: What are our financial sector's two biggest cash cows? Answer: the housing market
and pensions. Both are markets in which many of us are deeply invested.
Recent decades have seen more and more people contract debts to buy a home, and naturally it's in their interest if
house
prices continue to scale new heights (read: burst bubble upon bubble). The same goes for pensions. Over the past few decades
we've all scrimped and saved up a mountainous pension piggy bank. Now pension funds are under immense pressure to ally with the biggest
exploiters in order to ensure they pay out enough to please their investors.
The fact of the matter is that feudalism has been democratised. To a lesser or greater extent, we are all depending on handouts.
En masse, we have been made complicit in this exploitation by the rentier elite, resulting in a political covenant between the rich
rent-seekers and the homeowners and retirees.
Don't get me wrong, most homeowners and retirees are not benefiting from this situation. On the contrary, the banks are bleeding
them far beyond the extent to which they themselves profit from their houses and pensions. Still, it's hard to point fingers at a
kleptomaniac when you have sticky fingers too.
So why is this happening? The answer can be summed up in three little words: Because it can.
Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he
had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely
in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised
within an inch of her life if she checks the wrong box.
The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon
a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks,
law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions
in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts.
One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire.
Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier
drains a country of its vitality.
What innovation remains in a rentier economy is mostly just concerned with further bolstering that very same economy. This may
explain why the big dreams of the 1970s, like flying cars, curing cancer, and colonising Mars, have yet to be realised, while bankers
and ad-makers have at their fingertips technologies a thousand times more powerful.
Yet it doesn't have to be this way. Tollgates can be torn down, financial products can be banned, tax havens dismantled, lobbies
tamed, and patents rejected. Higher taxes on the ultra-rich can make rentierism less attractive, precisely because society's biggest
freeloaders are at the very top of the pyramid. And we can more fairly distribute our earnings on land, oil, and innovation through
a system of, say, employee shares, or a
universal basic
income .
But such a revolution will require a wholly different narrative about the origins of our wealth. It will require ditching the
old-fashioned faith in "solidarity" with a miserable underclass that deserves to be borne aloft on the market-level salaried shoulders
of society's strongest. All we need to do is to give real hard-working people what they deserve.
And, yes, by that I mean the waste collectors, the nurses, the cleaners – theirs are the shoulders that carry us all.
"... At least in nature, "smart" parasites may perform helpful functions, such as helping their host find food. But as the host weakens, the parasite lays eggs, which hatch and devour the host, killing it. That is what predatory finance is doing to today's economies. It's stripping assets, not permitting growth or even letting the economy replenish itself. ..."
"... MH: The financial sector is a rentier sector – external to the "real" economy of production and consumption, and therefore a form of overhead. As overhead, it should be a subtracted from GDP. ..."
"... In the name of saving "the market," the Fed and ECB therefore overruled the market. Today, over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks won't make loans without the government picking up the risk of non-payment. So bankers just pretend to be free market. That's for their victims. ..."
"... The "flight to security" is a move out of the stock and bond markets into government debt. Stocks and bonds may go down in price, some companies may go bankrupt, but national governments can always print the money to pay their bondholders. Investors are mainly concerned about keeping whatthey have – security of principal. They are willing to be paid less income in exchange for preserving what they have taken. ..."
"... But the way Wall Street administrators at the Treasury and Fed plan the crisis is for small savers to lose out to the large institutional investors. So the bottom line that I see is a slow crash. ..."
"... U.S. diplomats radically changed IMF lending rules as part of their economic sanctions imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the military coup shows how the IMF is simply a tool of President Obama's New Cold War policy. ..."
"... The main financial innovation by Apple has been to set up a branch office in Ireland and pretend that the money it makes in the Untied States and elsewhere is made in Ireland – which has only a 15 percent income-tax rate ..."
"... It would seem to be an anomaly to borrow from banks and pay dividends. But that is the "cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole, some 92 percent of earnings recently were used to pay dividends or for stock buybacks. ..."
Michael Hudson: The financial sector today is decoupled from industrialization. Its main
interface with industry is to provide credit to corporate raiders. Their objective isasset
stripping, They use earnings to repay financial backers (usually junk-bond holders), not to
increase production. The effect is to suck income from the company and from the economy to pay
financial elites.
These elites play the role today that landlords played under feudalism. They levy interest
and financial fees that are like a tax, to support what the classical economists called
"unproductive activity." That is what I mean by "parasitic."
If loans are not used to finance production and increase the economic surplus, then interest
has to be paid out of other income. It is what economists call a zero-sum activity. Such
interest is a "transfer payment," because it that does not play a directly productive function.
Credit may be a precondition for production to take place, but it is not a factor of
production as such.
The situation is most notorious in the international sphere, especially in loans to
governments that already are running trade and balance-of-payments deficits. Power tends to
pass into the hands of lenders, so they lose control – and become less democratic.
To return to my use of the word parasite, any exploitation or "free lunch" implies a host.
In this respect finance is a form of war, domestically as well as internationally.
At least in nature, "smart" parasites may perform helpful functions, such as helping their
host find food. But as the host weakens, the parasite lays eggs, which hatch and devour
the host, killing it. That is what predatory finance is doing to today's economies. It's
stripping assets, not permitting growth or even letting the economy replenish itself.
The most important aspect of parasitism that I emphasize is the need of parasites to control
the host's brain. In nature, a parasite first dulls the host's awareness that it is being
attacked. Then, the free luncher produces enzymes that control the host's brain and make it
think that it should protect the parasite – that the outsider is part of its own body,
even like a baby to be specially protected.
The financial sector does something similar by pretending to be part of the industrial
production-and-consumption economy. The National Income and Product Accounts treat the
interest, profits and other revenue that Wall Street extracts – along with that of the
rentier sectors it backs (real estate landlordship, natural resource extraction and
monopolies) – as if these activities add to Gross Domestic Product. The reality is that
they are a subtrahend, a transfer payment from the "real" economy to the Finance, Insurance and
Real Estate Sector. I therefore focus on this FIRE sector as the main form of economic overhead
that financialized economies have to carry.
What this means in the most general economic terms is that finance and property ownership
claims are not "factors of production." They are external to the production process. But they
extract income from the "real" economy.
They also extract property ownership. In the sphere of public infrastructure – roads,
bridges and so forth – finance is moving into the foreclosure phase. Creditors are trying
to privatize what remains in the public domains of debtor economies. Buyers of these assets
– usually on credit – build interest and high monopoly rents into the prices they
charge.
JR: What is your vision for the next few decades of the global economy?
MH: The financial overhead has grown so large that paying interest, amortization and fees
shrinks the economy. So we are in for years of debt deflation. That means that people have to
pay so much debt service for mortgages, credit cards, student loans, bank loans and other
obligations that they have less to spend on
goods and services. So markets shrink. New investment and employment fall off, and the economy
is falls into a downward spiral.
My book therefore
devotes a chapter to describing how debt deflation works. The result is a slow crash. The
economy just gets poorer and poorer. More debtors default, and their property is transferred to
creditors. This happens not only with homeowners who fall into arrears, but also corporations
and even governments. Ireland and Greece are examples of the kind of future in store for
us.
Financialized economies tend to polarize between creditors and debtors. This is the dynamic
that Thomas Piketty leaves out of his book, but his statistics show that all growth in income
and nearly all growth in wealth or net worth has accrued to the One Percent, almost nothing for
the 99 Percent.
Basically, you can think of the economy as the One Percent getting the 99 Percent
increasingly into debt, and siphoning off as interest payments and other financial charges
whatever labor or business earns. The more a family earns, for instance, the more it can borrow
to buy a nicer home in a better neighborhood – on mortgage. The rising price of housing
ends up being paid to the bank – and over the course of a 30-year mortgage, the banker
receives more in interest than the seller gets.
Economic polarization is also occurring between creditor and debtor nations. This
issplitting the eurozone between Germany, France and the Netherlands in the creditor camp,
against Greece, Spain, Portugal, Ireland and Italy (the PIIGS) falling deeper into debt,
unemployment and austerity – followed by emigration and capital flight.
This domestic and international polarization will continue until there is a political fight
to resist the creditors. Debtors will seek to cancel their debts. Creditors will try to
collect, and the more they succeed, the more they will impoverish the economy.
Background
JR: Let's talk about your history, why did you become an economist?
MH: I started out wanting to be a musician – a composer and conductor. I wasn't very
good at either, but I was a very good interpreter, thanks to working with Oswald Jonas in
Chicago studying the musical theories of Heinrich Schenker. I got my sense of aesthetics from
music theory, and also the idea of modulation from one key to another. It is dissonance that
drives music forward, to resolve in a higher key or overtone.
When I was introduced to economics by the father of a schoolmate, I found it as aesthetic as
music, in the sense of a self-transforming dynamic through history by challenge and response or
resolution. I went to work for banks on Wall Street, and was fortunate enough to learn about
how central mortgage lending and real estate were for the economy. Then, I became Chase
Manhattan's balance-of-payments economist in 1964, and got entranced with tracing how the
surplus was buried in the statistics – who got it, and what they used it for. Mainly the
banks got it, and used it to make new loans.
I viewed the economy as modulating from one phase to the next. A good interpretation would
explain history. But the way the economy worked was nothing like what I was taught in school
getting my PhD in economics at New York University. So I must say, I enjoyed contrasting
reality with what I now call Junk Economics.
In mainstream textbooks there is no exploitation. Even fraudulent banks, landlords and
monopolists are reported as "earning" whatever they take – as if they are contributing to
GDP. So I found the economics discipline ripe for a revolution.
JR: What is the difference between how economics is taught vs. what you learned in your
job?
MH: For starters, when I studied economics in the 1960s there was still an emphasis on the
history of economic thought, and also on economic history. That's gone now.
One can easily see why. Adam Smith, John Stuart Mill and other classical economists sought
to free their societies from the legacy of feudalism: landlordism and predatory finance, as
well as from the monopolies that bondholders had demanded that governments create as a means of
paying their war debts.
Back in the 1960s, just like today, university courses did not give any training in actual
statistics. My work on Wall Street involved National Income and Product Accounts and the
balance-of-payments statisticspublished by the Commerce Department every three months, as well
as IMF andFederal Reserve statistics. Academic courses didn't even make reference to accounting
– so there was no conceptualization of "money," for instance, in terms of the liabilities
side of the balance sheet.
New York University's money and banking course was a travesty. It was about helicopters
dropping money down – to be spent on goods and services, increasing prices. There was no
understanding that the Federal Reserve's helicopter only flies over Wall Street, or that banks
create money on its own computers. It was not even recognized that banks lend to customers
mainly to buy real estate, or speculate in stocks and bonds, or raid companies.
Economics is taught like English literature. Teachers explain the principle of "suspension
of disbelief." Readers of novels are supposed to accept the author's characters and setting. In
economics, students are told to accept just-pretend parallel universe assumptions, and then
treat economic theory as a purely logical exercise, without any reference to the world.
The switch from fiction to reality occurs by taking the policy conclusions of these
unrealistic assumptions as if they do apply to the real world: austerity, trickle-down
economics shifting taxes off the wealthy, and treating government spending as "deadweight" even
when it is on infrastructure.
The most fictitious assumption is that Wall Street and the FIRE sector add to
output, rather than extracting revenue from the rest of the economy.
JR: What did you learn in your work on the US oil industry?
MH: For starters, I learned how the oil industry became tax-exempt. Not only by the
notorious depletion allowance, but by offshoring profits in "flags of convenience" countries, in
Liberia and Panama. These are not real countries. They do not have their own currency, but use
U.S. dollars. And they don't have an income tax.
The international oil companies sold crude oil at low prices from the Near East or Venezuela
to Panamanian or Liberian companies – telling the producing countries that oil was not
that profitable. These shipping affiliates owned tankers, and charged very high prices to
refineries and distributors in Europe or the Americas. The prices were so high that these
refineries and other "downstream" operations marketing gas to consumers did not show a profit
either. So they didn't have to pay European or U.S. taxes. Panama and Liberia had no income tax.
So the global revenue of the oil companies was tax-free.
I also learned the difference between a branch and an affiliate. Oil wells and oil fields
are treated as "branches," meaning that their statistics are consolidated with the head office
in the United States. This enabled the companies to take a depletion allowance for emptying out
oil fields abroad as well as in the United States.
My statistics showed that the average dollar invested by the U.S. oil industry was returned
to the United States via balance-of-payments flows in just 18 months. (This was not a profit
rate, but a balance-of-payments flow.) That finding helped the oil industry get exempted from
President Lyndon Johnson's "voluntary" balance-of-payments controls imposed in 1965 when the
Vietnam War accounted for the entire U.S. payments deficit. Gold was flowering out to France,
Germany and other countries running payments surpluses.
The balance-of-payments accounting format I designed for this study led me to go to work for
an accounting firm, Arthur Andersen, to look at the overall U.S. balance of payments. I found
that the entire deficit was military spending abroad, not foreign aid or trade.
Junk Economics
JR: Why do you think there is a disconnect between academic economic theory and the way
that international trade and finance really works?
MH: The aim of academic trade theory is to tell students, "Look at the model, not at how
nations actually develop." So of all the branches of economic theory, trade theory is the most
wrongheaded.
For lead nations, the objective of free trade theory is to persuade other countries not to
protect their own markets. That means not developing in the way that Britain did under its
mercantilist policies thatmade it the first home of the Industrial Revolution. It means not
protecting domestic industry, as the United States and Germany did in order to catch up with
British industry in the 19 th century and overtake it in theearly 20 th
century.
Trade theorists start with a conclusion: either free trade or (in times past) protectionism.
Free trade theory as expounded by Paul Samuelson and others starts by telling students to
assume a parallel universe – one that doesn't really exist. The conclusion they start
with is that free trade makes everyone's income distribution between capital and labor similar.
And because the world has a common price for raw materials and dollar credit, as well as for
machinery, the similar proportions turn out to mean equality. All the subsequent assumptions
are designed to lead to this unrealistic conclusion.
But if you start with the real world instead of academic assumptions, you see that the world
economy is polarizing. Academic trade theory can't explain this. In fact, it denies that
today's reality can be happening at all!
A major reason why the world is polarizing is because of financial dynamics between creditor
and debtor economies. But trade theory starts by assuming a world of barter. Finally, when the
transition from trade theory to international finance is made, the assumption is that countries
running trade deficits can "stabilize" by imposing austerity, by lowering wages, wiping out
pension funds and joining the class war against labor.
All these assumptions were repudiated already in the 18 th century, when Britain
sought to build up its empire by pursuing mercantilist policies. The protectionist American
School of Economics in the 19 th century put forth the Economy of High Wages
doctrine to counter free-trade theory. None of this historical background appears in today's
mainstream textbooks. (I provide a historical survey in Trade, Development and
Foreign Debt , new ed., 2002. That book summarizes my course in international trade
and finance that I taught at the New School from 1969 to 1972.)
In the 1920s, free-trade theory was used to insist that Germany could pay reparations far
beyond its ability to earn foreign exchange. Keynes, Harold Moulton and other economists
controverted that theory. In fact, already in 1844, John Stuart Mill described how paying
foreign debts lowered the exchange rate. When that happens, what is lowered is basically wages.
So what passes for today's mainstream trade theory is basically an argument for reducing wages
and fighting a class war against labor.
You can see this quite clearly in the eurozone, above all in the austerity imposed on
Greece. The austerity programs that the IMF imposed on Third World debtors from the 1960s
onward. It looks like a dress rehearsal to provide a cover story for the same kind of
"equilibrium economics" we may see in the United States.
JR: Can the US pay its debts permanently? Does the amount of federal debt, $18 or $19
trillion even matter? Should we pay down the national debt?
MH: It is mainly anti-labor austerity advocates who urge balancing the budget, and even to
run surpluses to pay down the national debt. The effect must be austerity.
A false parallel is drawn with private saving. Of course individuals should get out of debt
by saving what they can. But governments are different. Governments create money and spend it
into the economy by running budget deficits. The paper currency in your pocket is technically a
government debt. It appears on the liabilities side of the public balance sheet.
When President Clinton ran a budget surplus in the late 1990s, that sucked revenue
out of the U.S. economy. When governments do not run deficits, the economy is
obliged to rely on banks – which charge interest for providing credit. Governments can
create money on their own computers just as well. They can do this without having to pay
bondholders or banks.
That is the essence of Modern Monetary Theory (MMT). It is elaborated mainly at the
University of Missouri at Kansas City (UMKC), especially by Randy Wray – who has just
published a number of books on money – and Stephanie Kelton, whom Bernie Sanders
appointed as head of the Senate Democratic Budget Committee.
If the government were to pay off its debts permanently, there would be no money –
except for what banks create. That has never been the case in history, going all the way back
to ancient Mesopotamia. All money is a government debt, accepted in payment of taxes
This government money creation does not mean that governments can pay foreign
debts. The danger comes when debts are owed in a foreign currency. Governments are unable to
tax foreigners. Paying foreign debts puts downward pressure on exchange rates. This leads to
crises, which often end by relinquishing political control to the IMF and foreign banks. They
demand "conditionalities" in the form of anti-labor legislation and privatization.
In cases where national economies cannot pay foreign debts out of current
balance-of-payments revenue, debts should be written down, not paid off. If they are not
written down, you have the kind of austerity that is tearing Greece apart today.
JR: You say that mainstream economic theory and academic study is pro-creditor? Why is
this the case?
MH: Thorstein Veblen pointed out that vested interests are the main endowers and backers of
the higher learning in America. Hardly by surprise, they promote a bankers'-eye view of the
world. Imperialists promote a similar self-serving worldview.
Economic theory, like history, is written by the winners. In today's world that means the
financial sector. They depict banks as playing a productive role, as if loans are made to help
borrowers earn the money to pay interest and still keep something for themselves. The pretense
is that banks finance industrial capital formation, not asset stripping.
What else would you expect banks to promote? The classical distinction between productive
and unproductive (that is, extractive) loans is not taught. The result has been to turn
mainstream economics as a public-relations advertisement for the status quo, which meanwhile
becomes more and more inequitable and polarizes the economy.
JR: What can be learned by studying the history of economic thought? What did Adam Smith
and the people in his era and those which followed him understand that would be useful to us
now?
MH: If you read Adam Smith and subsequent classical economists, you see that their main
concern was to distinguish between productive and unproductive economic activity. They wanted
to isolate unproductive rentier income, and unproductive spending and credit.
To do this, they developed the labor theory of value to distinguish value from price –
with "economic rent" being the excess of price over socially necessary costs of production.
They wanted tofree industrial capitalism from the legacy of feudalism: tax-like groundrent paid
to a hereditary landed aristocracy. They also opposed the monopolies that bondholders had
insisted that governments create to sell off to pay the public debt. That was why the East
India Company and the South Sea Company were created with their special privileges.
Smith and his followers are applauded as the founding fathers of "free market" economics.
But they defined free markets in a diametrically opposite way from today's self-proclaimed
neoliberals. Smith and other classical economists urged markets free from economic
rent.
These classical reformers realized that progressive taxation to stop favoring
rentiers required a government strong enough to take on society's most powerful and
entrenched vested interests. The 19 th -century drive for Parliamentary reform in
Britain aimed at enabling the House of Commons to override the House of Lords and tax the
landlords. (This rule finally passed in 1910 after a constitutional crisis.) Now there has been
a fight by creditors to nullify democratic politics, most notoriously in Greece.
Today's neoliberals define free markets as those free for rent-seekers and
predatory bankers from government regulation and taxes.
No wonder the history of economic thought has been stripped away from the curriculum.
Reading the great classical economists would show how the Enlightenment's reform program has
been inverted. The world is now racing down a road to the Counter-Enlightenment, a neo-
rentier economy that is bringing economic growth to a halt.
JR: Why does economic thought minimize the role of debt? I.e. I read Paul Krugman and he
says the total amount of debtisn't a problem, for example you can't find the internet bust in
GDP or the 1987 crash?
MH: When economists speak of money, they neglect that all money and credit is debt. That is
the essence of bookkeeping and accounting. There are always two sides to the balance sheet. And
one party's money or savings is another party's debt.
Mainstream economic models describe a world that operates on barter, not on credit. The
basic characteristic of credit and debt is that it bears interest. Any rate of interest can be
thought of as a doubling time. Already in Babylonia c. 1900 BC, scribes were taught to c
alculate compound interest, and how long it took a sum to double (5 years) quadruple (10 years)
or multiply 64 times (30 years). Martin Luther called usury Cacus, the monster that absorbs
everything. And in Volume III of Capital and also his Theories of Surplus
Value , Marx collected the classical writings about how debts mount up at interest by
purely mathematical laws, without regard for the economy's ability to pay.
The problem with debt is not only interest. Shylock's loan against a pound of flesh was a
zero-interest loan. When crops fail, farmers cannot even pay the principal. They then may lose
their land, which is their livelihood. Forfeiture is a key part of the credit/debt dynamic. But
the motto of mainstream neoliberal economics is, "If the eye offends thee, pluck it out."
Discussing the unpayability of debt is offensive to creditors.
Anyone who sets out to calculate the ability pay quickly recognizes that the overall volume
of debts cannot be paid. Keynes that made point in the 1920s regarding Germany's inability to
pay reparations.
Needless to say, banks and bondholders do not want to promote any arguments explaining the
limits to how much can be paid without pushing economies into depression. That is what my
Killing the
Host is about. It is the direction in which the eurozone is now going, and the United
States also issuffering debt deflation.
Turning to the second part of your question, Krugman and others say that debt doesn't matter
because "we owe it to ourselves." But the "we" who owe it are the 99 Percent; the people who
are "ourselves" are the One Percent. So the 99 Percent Owe the One Percent. And they owe more
and more,thanks to the "magic of compound interest."
Krugman has a blind spot when it comes to understanding money. In his famous debate with
Steve Keen, he denied that banks create money or credit. He insists that commercial banks only
lend out deposits. But Keen and the Modern Monetary Theory (MMT) school show that loans
create deposits , not the other way around. When a banker writes a loan on his computer
keyboard, he creates a deposit as the counterpart.
Endogenous money is easily created electronically. That privilege enables banks to charge
interest. Governments could just as easily create money on their own computers. Neoliberal
privatizers want to block governments from doing this, so that economies will have to rely on
commercial banks for the money and credit they need to grow.
The mathematics of compound interest means that economies can only pay their debts by
creating a financial bubble – more and more credit to bid up asset prices for real
estate, stocks and bonds, enabling banks to make larger loans. Today's economies are obliged to
develop into Ponzi schemes to keep going – until they collapses\ in a crash.
JR: The models of the macroeconomy to forecast the future and to develop policy at
institutions like the IMF, often consider finance and banking as just another sector of
industry, like construction or manufacturing. How do these institutions consider their model of
the financial sector?
MH: The IMF acts as the collection agent for global bondholders. Its projections begin by
assuming that all debts can be paid, if economies will cut wages and wiping out pension funds
so as to pay banks and bondholders.
As long as creditors remain in control, they are quite willing to sacrifice the 99 Percent
to pay the One Percent. When IMF "stabilization" programs end up destabilizing their hapless
victims, mainstream media blame the collapse on the debtor country for not shedding enough
blood to impose even more austerity.
Economists often define their discipline as "the allocation of scarce resources among
competing ends." But when resources or money really become scarce, economists call it
a crisis and say that it's a question for politicians, not their own department. Economic
models are only marginal – meaning, small changes, not structural.
The only trend that does grow inexorably is that of debt. The more it grows, the
more it slows the "real" economy of production and consumption. So something must give: either
the economy, or creditor claims. And that does indeed change the structure of the economy. It
is a political as well as an economic change.
Regarding the second part of your question – how creditor institutions model the
financial sector – when they look at prices they only consider wages and consumer prices,
not asset prices. Yet most bank credit is tied to asset prices, because loans are made to buy
homes or commercial real estate, stocks or bonds, not bread and butter.
Not looking at what is obviously important requires a great effort of tunnel vision. But as
Upton Sinclair noted, there are some jobs – like being a central banker, or a New
York Times editorial writer – that require the applicant not to understand
the topic they are assigned to study. Hence, you have Paul Krugman on money and banking, the
IMF on economic stabilization, and Rubinomics politicians on bailing out the banks instead of
saving the economy.
If I can add a technical answer: The IMF does not recognize that the "budget problem"
– squeezing domestic currency out of the economy by taxing wages and industry – is
quite different from the "transfer problem" of converting this money into foreign exchange.
That distinction was the essence of the German reparations debate in the 1920s. It is a focus
of my history of theories of Trade, Development and
Foreign Debt .
Drawing this distinction shows why austerity programs do not help countries pay their
foreign debt, but tears them apart and induces emigration and capital flight.
JR: Does the financial sector add to GDP?
MH: The financial sector is a rentier sector – external to the "real" economy
of production and consumption, and therefore a form of overhead. As overhead, it should be a
subtracted from GDP.
JR: In the way that oil industry funded junk science on global warming denial, Wall
Street funds and endows junk economics and equilibrium thinking?
Falling on your face is a state of equilibrium. So is death – and each moment of
dying. Equilibrium is simply a cross section in time. Water levels 20 or 30 feet higher would
be another form of equilibrium. But to the oil industry, "equilibrium" means their earnings
continuing to grow at the present rate, year after year. This involves selling more and more
oil, even if this raises sea levels and floods continents. That is simply ignored as not
relevant to earnings. By the time that flooding occurs, today's executives will have taken
their bonuses and capital gains and retired.
That kind of short-termism is the essence of junk economics. It is tunnel-visioned.
What also makes economics junky is assuming that any "disturbance" sets in motion
countervailing forces that return the economy to its "original" state – as if this were
stable, not moving down the road to debt peonage and similar economic polarization.
The reality is what systems analysts call positive feedback: When an economy gets out of
balance, especially as a result of financial predators, the feedback and self-reinforcing
tendencies push it further and further out of balance.
My trade theory book traced the history of economists who recognize this. Once a class or
economy falls into debt, the debt overhead tends to grow steadily until it stifles market
demand and subjects the economy to debt deflation. Income is sucked upward to the creditors,
who then foreclose on the assets of debtors. This shrinks tax revenue, forcing public budgets
into deficit. And when governments are indebted, they becomemore subject to pressure to
privatization of public enterprise. Assets are turned over to monopolists, who further shrink
the economy by predatory rent seeking.
An economy going bankrupt such as Greece and having to sell off its land, gas rights, ports
and public utilities is "in equilibrium" at any given moment that its working-age population is
emigrating, people are losing their pensions and suffering.
When economists treat depressions merely as self-curing "business downturns," they are
really saying that no government action is required from "outside" "the market" to rectify
matters and put the economy back on track to prosperity. So equilibrium thinking isbasically
anti-government libertarian theory.
But when banks are subjected to "equilibrium" by writing down debts in keeping with the
ability of borrowers to pay, WallStreet's pet politicians and economic journalists call this a
crisis and insist that the banks and bondholders must be saved or there will be a crisis. This
is not a solution. It makes the problem worse and worse.
There is an alternative, of course. That is to understand the dynamics at work transforming
economic and socialstructures. That's what classical economics was about.
The post-classical revolution was marginalist. That means that economists only look at small
changes, not structural changes. That isanother way of saying that reforms are not necessary
– because reforms change structures, not merely redistribute a little bit of income as a
bandage.
What used to be "political economy" gave way to just plain "economics" by World War I. As it
became increasingly abstract and mathematical, students who studied the subject because they
wanted to make the world better were driven out, into other disciplines. That was my experience
teaching at the New School already nearly half a century ago. The discipline has become much
more tunnel-visioned since then.
Present state of financial world
JR: We see around the world something like 25% of all national debt is now has a yield
priced in negative interest rates? What does this mean? Do you see this continuing?
MH: On the one hand, negative interest rates reflect a flight to security by investors. They
worry that the debts can't be paid and that there are going to be defaults.
They also see that the United States and Europe are in a state of debt deflation, where
people and businesses have to pay banks instead of spending their income on goods and services.
So markets shrink, sales and profits fall, and the stock market turns down.
This decline was offset by the Federal Reserve and the European Central Bank trying to
re-inflate the Bubble Economy by Quantitative Easing – providing reserves to the banks in
exchange for their portfolio of mortgages and other loans. Otherwise, the banks would have had
to sell these loans in "the market" at falling prices.
In the name of saving "the market," the Fed and ECB therefore overruled the market. Today,
over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks
won't make loans without the government picking up the risk of non-payment. So bankers just
pretend to be free market. That's for their victims.
The "flight to security" is a move out of the stock and bond markets into government debt.
Stocks and bonds may go down in price, some companies may go bankrupt, but national governments
can always print the money to pay their bondholders. Investors are mainly concerned about
keeping whatthey have – security of principal. They are willing to be paid less income in
exchange for preserving what they have taken.
Here's the corner that the economy has backed itself into. The solution to most problems
creates new problems – blowback or backlash, which often turn out to be even bigger
problems. Negative interest rates mean that pension funds cannot invest in securities that
yield enough for them to pay what they have promised their contributors. Insurance companies
can't earn the money to pay their policyholders. So something has to give.
There will be breaks in the chain of payments. But the way Wall Street administrators at the
Treasury and Fed plan the crisis is for small savers to lose out to the large institutional
investors. So the bottom line that I see is a slow crash.
JR: Could there be a more symbiotic relationship with global financial institutions? For
money to have value, doesn't it need a functioning economy, rather than an
entirelyfinancialized one?
MH: Money is debt. It is a claim on some debtor. Government money is a claim by its
holder on the government, settled by the government accepting it as payment for tax debts.
Being a claim on a debtor, money does not necessarily need a functioning economy. It can be
part of a foreclosure process, transferring property to creditors. A financialized economy
tends to strip the economy of money, by sucking up to the creditor One Percent on top. That
is what happened in Rome, and the result was the Dark Age.
JR: In 2007/2008 we had a subprime crash and since 2014 we've had a commodities crash
where oil prices are low, is this because of what's going on in emerging market economies? Are
emerging market economies and China the next subprime?
MH: The current U.S. and Eurozone depression isn't because of China. It's because of
domestic debt deflation. Commodity prices and consumer spending are falling, mainly because
consumers have to pay most of their wages to the FIRE sector for rent or mortgage payments,
student loans, bank and credit card debt, plus over 15 percent FICA wage withholding for Social
Security and Medicare (actually, to enable the government to cut taxes on the higher income
brackets), as well income and sales taxes. After all this is paid, consumers don't have that
much left to spend on commodities. So of course commodity prices are crashing.
Oil is a special case. Saudi Arabia is trying to drive U.S. fracking rivals out of business,
while also hurting Russia. This lowers gas prices for U.S. and Eurozone consumers, but not by
enough to spur economic recovery.
JR: You've written that we're entering a financial cold war – the IMF and the US
have been very strict on debt repayment for loans from debtor nations, but in Ukraine they've
made an exception regarding Russia, could you discuss your recent writing on that?
MH: U.S. diplomats radically changed IMF lending rules as part of their economic sanctions
imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their
neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the
military coup shows how the IMF is simply a tool of President Obama's New Cold War policy.
The
aim was to enable the IMF to keep lending to the military junta even though Ukraine is in
default of its $3 billion debt to Russia, even though it refuses to negotiate payment, and even
though IMF money has been used to fund kleptocrats such as Kolomoisky to field his own army
against Russian speakers in Donbas. Ukraine has no foreseeablemeans of paying off the IMF and
other creditors, given its destruction of its export industry in the East. My articles on this
are on my website, michael-hudson.com
.
JR: Today's economy has some truly amazing technology from companies like Apple, but
Apple is also example of financial engineering, you outline this in your book, what financial
innovations havebeen associated with the story of Apple's stock?
MH: The main financial innovation by Apple has been to set up a branch office in Ireland and
pretend that the money it makes in the Untied States and elsewhere is made in Ireland –
which has only a 15 percent income-tax rate
The problem is that if Apple remits this income back to the United States, it will have to
pay U.S. income tax. It wants to avoid this – unless Wall Street can convince politicians
to declare a "tax holiday" would let tax avoiders bring all their foreign money back to the
United States "tax free." That would be a tax amnesty only for the very wealthy, not for the 99
Percent.
JR: This tax angle explains why Apple, almost the wealthiest company in the world, has
been urged by activist shareholders to borrow. Why should the richest company have to go into
debt?
MH: The answer is that Apple can borrow from U.S. banks at a low interest rate to pay
dividends on its stock, instead of paying these dividends by bringing its income back home and
paying the taxes that are due.
It would seem to be an anomaly to borrow from banks and pay dividends. But that is the
"cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole,
some 92 percent of earnings recently were used to pay dividends or for stock buybacks.
JR: What is the eventual outcome of all theses corporate buybacks to pump up share
prices?
MH: The problem with a company using its revenue simply to buy its own shares to support
their price (and hence, enable CEOs to increase their salaries and bonuses, and make more
capital gains on their stock options) is that the price fillip is temporary. Last year saw the
largest volume of U.S. stock buybacks on record. But since January 1, the market has fallen by
about 20 percent. The debts that companies took on to buy stocks remain in place; and the
earnings that companies used to buy these stocks are now gone.
Corporations did not use their income to invest in long-term expansion. The financial time
frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs
and financial managers simply want to take their money and run. That is the financial
mentality.
JR: What is the outcome of all theses corporate buybacks to pump up share
prices?
MH: When the dust settles, companies financialized in this way are left as debt-leveraged
shells. CEOs then go to their labor unions and threaten to declare bankruptcy if the unions
don't scale back their pension demands. So there is a deliberate tactic to force companies into
debt for short-term earnings and stock-price gains in the short term, and a more intensive
class war against present and past employees and pensioners as a longer-term policy.
JR: Why do business schools endorse of financialization? Reversing
short-termism?
MH: The financial sector is the major endower of business schools. They have become training
grounds for Chief Financial Officers. AtHarvard, Prof. Jensen reasoned that managers should aim
at serving stockholders, not the company as such. The result was an "incentive" system tying
management bonuses to the stock price. So naturally, CFOs used corporate earnings for stock
buybacks and dividend payouts that provided a short-term jump in the stock price.
The ideological foundation of today's business schools is that economic control should be
shifted out of government hands into those of financial managers – that is, Wall Street.
That is their idea of freeenterprise. Its inevitable tendency is to end in more centralized
planning by Wall Street than in Washington.
The aim of this financial planning is quite different from that of governments. As I wrote
in Killing the
Host : "The euro and the ECB were designed in a way that blocks government money
creation for any purpose other than to support the banks and bondholders. The financial sector
takes over the role of economic planner, putting its technicians in charge of monetary and
fiscal policy without democratic voice or referendums over debt and tax policies."
Financial planning always has been short-term. That is why planning should not be consigned
to banks and bondholders. Their mentality is extractive, and that ends up hit-and-run. What
passes for mainstream financial analysis is simply to add up how much is owed and demand
payment, not help the economy grow. To financial managers, economic prosperity and unemployment
is an "externality" – that is, not part of the equation that they are concerned with.
Future
JR: The story of Greece in recent years is relevant to our discussion because the
political party Syriza took over with ideas that were traditionally representing the left? Does
the body of traditional left ideas have the ability to solve some of the challenges regarding
financial warfare?
MH: The left and former Social Democratic or Labour parties have dome to focus on political
and cultural issues, not the economic policy that led to their original creation. What is
lacking is a focus on rent theory and financial analysis. Part of the explanation probably is
covert U.S. funding and sponsorship of Blair-type neoliberals.
The eurozone threatened Greece with domestic destabilization if it did not surrender to the
Troika's demands. Syriza's leaders worried that the ensuing turmoil would bring a right-wing
neo-Nazi group such as Golden Dawn into power, or a military dictatorship as a client oligarchy
for U.S. and German neoliberals.
So the political choice today is much like the 1930s, when the global economy also broke
down. The choice is between nationalism and populism on the right, or socialism reviving what
used to be left-wing politics.
JR: Could there be a debt write down? Isn't someone's debts another person's savings, i.e.
pension funds, 401k, retirement funds?
MH: The problem is indeed that one party's debt finds its counterpart in some other party's
savings. Not paying debts therefore involves annulling some other party's financial claims on
the debtor. What happens to the savings on the other side of the savings/debt balance
sheet?
JR: The political question is, who will lose first?
MH: The answer is, the least politically protected. The end game is "Big fish eat little
fish." Pension funds are in the front line of sacrifice, while government bondholders are the
most secure. Greek pensionsalready have been written down, and the savings of U.S. pension
funds, Social Security and other social programs are the first to be annulled.
The only way to achieve a fair debt cancellation is to write down the debts of the
wealthiest, not the most needy. That is the opposite of how matters are being resolved today.
That is why southern Europe is being radicalized over the debt issue.
JR: Will financialized economies implode? Leaving the non-financialized ones?
MH: The One Percent who hold most of the economy's savings are quite willing to plunge
society into depression to collect on their savings claims. Their greed is why we are in an
economic war much like Rome's Conflict of the Orders that shaped the Republic, and its century
of civil war between creditors and debtors, 133-29 BC.
Argentina has been imploding, just as Third World debtors were obliged to do when they
accepted IMF austerity programs and "conditionalities" for loans to keep their currencies from
depreciating. To avoid being forced to adopt such self-defeating and anti-democratic policies,
it looks like countries will have to move out of the U.S. and Eurozone orbit into that of the
BRICS. That is why today's financial crisis is leading to a New Cold War. It is as much
financial as it is military.
JR: How would you advise a politician to restore prosperity in the future?
MH: The problem is who to give advice to. Most politicians today – at least in the
United States – are proxies for their campaign contributors. President Obama is basically
a lobbyist for his Wall Street in the Democratic Party's Robert Rubin gang. That kind of
demagogue wouldn't pay any attention to policies that I or other economists would make. Their
job is not to make the economy better, but to defend their campaign contributors among the One
Percent at the economy's expense.
But when I go to China or Russia, here's what I advise (without much success so far, I
admit):
First, tax land rent and other economic rent. Make it the tax base. Otherwise, this rental
value will end up being pledged to banks as interest on credit borrowed to buy rent-yielding
assets.
Second, make banks into public utilities. Credit creation is like land or air: a monopoly
created by society. As organs of public policy they would not play the derivatives casino, or
make corporatetakeover loans to raiders, or falsify mortgage documents.
Third, do not privatize basic utilities. Public ownership enables basic services to be
provided at cost, on a subsidized basis, or freely. That will make the economy more
competitive. The cost of upgrading public infrastructure can be defrayed by basing the tax
system on economic rent, not wages.
Does it have to be this way ?
The Eurozone die is cast. Countries must withdraw from the euro so that governments can
create their own money once again, and resist creditor demands to carve up and privatize their
public domain.
For the United States, I don't see a concerted alternative to neoliberalism squeezing more
and more interest and rent out of the economy, making the present slump even deeper in
debt.
How won't debts be paid?
There are two ways not to pay debts: either by annulling or repudiating them, or by
foreclosure when creditors take or demand property in lieu of monetary payment.
The first way not to pay is to default or proclaim a Clean Slate. The most successful
example in modern times is the German Economic Miracle – the Allied Monetary Reform of
1948. That cancelled Germany's internal debts except for wages owed by employers, and minimum
working balances.
The United States Government has fought against creation of an international court to
adjudicate the ability of national economies to pay debts. If such a court is not
created, the global economy will fracture. That is occurring in what looks like a New Cold War
pitting the United States and its NATO satellites against the BRICS (China, Russia, South
Africa, Brazil and India) along with Iran and other debtors.
The US preferred policy is for countries to sell off whatever is in their public domain when
they lack the money to pay their debts. This is the "foreclosure" stage.
Short of these two ways of not paying debts, economies are submitting to debt deflation.
That strips income from producers and consumers, businesses and governments to pay creditors.
As the debtor economy weakens, the debt arrears mount up – often at rising interest rates
to reflect the risk of non-payment as creditors realize that there is no "business as usual'
way in which the debts can be paid.
Debtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to
buy out bondholders. This saves the latter from taking a loss – leaving the debtor
country with debts that are even harder to annul, because they are to foreign governments and
international institutions. That is why it is a very bad policy for countries to move from
owing money to private bondholders to owing the IMF or European Central Bank, whose demands are
unforgiving.
In the long term, debts won't be paid in the way that Rome's debts were not paid. The money
economy itself was stripped, and the empire fell into a prolonged Dark Age. That is the fate
that will befall the West if it continues to support the "rights" of creditors over the right
of nations and economies to survive.
This is a transcript from an interview on the
XE Podcast conducted by Justin Ritchie.
This article published 10 years ago looks like it was written yesterday. The more things change in the USA casino
capitalism the more they stay the same
Now Trump tariffs will cause drop in consumption. What will follow it not very clear.
Hypertrophied growth of financial system is cancer. It is a parasitic institution much like cancer cells in human body.
Notable quotes:
"... The Federal Reserve made tragic policy errors most certainly with regard to interest rates. They were hampered by a lack of coordinated effort because of the official US policy focus on liquidation and non-interference, along with mass bank failures which rendered their attempts to reflate the money supply as largely futile. ..."
"... But good policies applied with vigor during a period of economic illness may be like forcing patients seriously ill with pneumonia to swim laps and run in marathons because you think such physical activity is inherently good and beneficial in itself at all times. ..."
"... Today it seems to us that the Fed and Treasury are trying to cure our current problems by filling the banks full of liquidity with the idea that it will eventually trickle down to the real economy through their toll gates. ..."
"... We believe this will not work. The financial system is rotten, and not only in its toxic and fraudulent assets. It is a weakened, rotten timber that will provide scant leverage for the rescue attempts. ..."
The 1920's were marked by a credit expansion, a significant growth in consumer debt, the
creation of asset bubbles, and the proliferation of financial instruments and leveraged
investments. The Federal Reserve expanded the money supply and the Republican government
pursued a laissez-faire approach to business.
This helped to create a greater wealth disparity, and saddled a good part of the public with
debts on consumables that were vulnerable to an economic contraction.
The bursting of the credit bubble triggered the stock market Crash of 1929. The Hoover
administration's response was guided by Secretary of the Treasury Andrew Mellon. As noted by
Herbert Hoover in his memoirs, "Mellon had only one formula: 'Liquidate labor, liquidate
stocks, liquidate the farmers, liquidate real estate.'"
Indeed, the collapse of consumption and credit, and the ensuing 'do nothing' policy of
liquidation by the government crippled the economy and drove unemployment up to the incredible
24% level at the climax of the liquidation and deleveraging.
Although some assets fared better than others, virtually everything was caught up in the
cycle of liquidation and everything was sold: stocks, bonds, farms, even long dated US
Treasuries, all of them collapsing into the bottom in late 1932.
The Federal Reserve made tragic policy errors most certainly with regard to interest rates.
They were hampered by a lack of coordinated effort because of the official US policy focus on
liquidation and non-interference, along with mass bank failures which rendered their attempts
to reflate the money supply as largely futile.
Thrifty management of the credit and monetary levels when the economy is balanced in the
manufacturing, service, export-import, and consumption distribution levels is a good policy to
follow.
But good policies applied with vigor during a period of economic illness may be like forcing
patients seriously ill with pneumonia to swim laps and run in marathons because you think such
physical activity is inherently good and beneficial in itself at all times.
Additionally, monetary expansion alone also does not work, as can be seen in the early
attempts by the Fed to expand the monetary base without policy initiatives to support expansion
and consumption. Hoover's administration raised the income tax and cut spending for a balanced
budget.
A combined monetary and government bias to stimulating consumption while restoring balance
and correcting the errors that fostered the credit bubble is the more effective course of
action.
Today it seems to us that the Fed and Treasury are trying to cure our current problems by
filling the banks full of liquidity with the idea that it will eventually trickle down to the
real economy through their toll gates.
We believe this will not work. The financial system is rotten, and not only in its toxic and
fraudulent assets. It is a weakened, rotten timber that will provide scant leverage for the
rescue attempts.
Better to cauterize the bleeds in the financial system and assume a 'trickle up' approach by
reaching the econmy through the individual rather than the individual through the banks.
Provide secure FDIC insurance to everyone to a generous degree , and let those banks who
must fail, fail. You will encourage reform and savings, we guarantee it. Stimulate work and
wages, and then consumption, and the financial system will follow.
While the financial system as it is constituted today remains the centerpiece of our
economy, we cannot sustainably recover since it is a source of recurring infection.
Globalists like to cite the introduction of the Smoot-Hawley tariffs as a major factor in
the development of the Great Depression. This appears to be largely unsubstantiated, and
attributable to a dogmatic bias to international trade as a panacea for failing domestic
demand.
In fact, before Smoot-Hawley both exports and imports were in a steep decline as consumption
collapsed around the world. If the US had declared itself open for free trade, to whom would
they sell, and who in the US would buy? Consumption was in a general collapse around the world.
Smoot Hawley did not help, but it also did not hurt because it was largely irrelevant.
It is a lesser discussed topic, but the US held the majority of the gold in the world in
1930 as the aftermath of their position as an industrial power in World War I and the expansion
that followed. Since the majority of the countries were on some version of the gold standard,
one could make a case that the US had an undue influence on the 'reserve currency of the world'
at that time, and its mistaken policies were transmitted via the gold standard to the rest of
the world.
The nations that exited the Great Depression the soonest, those who recovered more quickly
and experienced a shallower economic downturn, were those who stimulated domestic consumption
via public works and industrial policies: Japan, Germany, Italy, Sweden.
As a final point, we like to show this chart to draw a very strong line under the fact that
the liquidationist policy of the Hoover Administration caused most assets to suffer precipitous
declines. Certainly some fared better than others, such as gold which was pegged, and silver
which declined but not nearly as much as industrial metals and certainly financial instruments
like stocks which declined 89% from peak to trough.
FDR devalued the dollar by 40%, but he never followed Britain off the gold standard,
maintaining fictitious support by outlawing domestic ownership. As the government stepped away
from its liquidationist approach the economy gradually recovered and the money supply
reinflated, despite the carnage delivered to the US economy and the world, provoking the rise
of militarism and statist regimes in many of the developed nations.
There is a fiction that the economy never really recovered, and FDR's policies failed and
only a World War caused the recovery. In fact, if one cares to look at the situation more
closely, the recession of 1937 was a result of the aggressive military buildup for war in the
world, the diversion of capital and resources to non-productive goods and services, and of
course the general reversal of the New Deal by the US Supreme Court and the Republican minority
in Congress.
As an aside, it is interesting to read about the efforts of some US industrialists to foster
a fascist solution here in the US, as their counterparts and some of them had done in
Europe.
What finally put the world on the permanent road to recovery was the savings forced by the
lack of consumer goods during World War II and the rebuilding of Europe and Asia, devastated by
war, significantly aided by the policies of the Allied powers.
A Depression following a Crash caused by an asset bubble collapse is a terrible thing
indeed. But it does not have to be a prolonged ordeal.
Governments can and do make policy errors that prolong the period of adjustment, most
notably instituting an industrial policy that discourages domestic consumption and money supply
growth in a desire to obtain foreign reserves through exports.
From what we have seen thus far, we believe that the Russian experience in the 1990's is
going to be closer to what lies ahead for the US. Unless the US adopts an export driven, low
domestic consumption, high savings policy bias, non-productive military buildup and public
works, and discourages population growth we don't believe the Japanese experience will be
repeated.
Preventing the banking system from collapsing is a worthy objective. Perpetuating the
symptom of fraud and abuse and 'overreach' that was becoming pervasive in the system before the
collapse is not sustainable, instead leading to more frequent and larger collapses.
Balance will be restored, and a reversion to the means will occur, one way or the other. It
would be most practical to accomplish this in a peaceful, sustainable manner, with justice and
toleration.
"... "The entire US economy today is about the quick buck." ..."
"... " When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history giving us a grand total of over $15 trillion." ..."
Central banks are founded for one reason only: to save
[private] banks from bankruptcy, invariably at the cost of society at large. They'll bring down markets
and societies just to make sure banks don't go under. They'll also, and even, do that when
these banks have taken insane risks. It's a battle societies can't possibly win as long as
central banks can raise unlimited amounts of 'money' and shove it into private banks. Ergo:
societies can't survive the existence of a central bank that serves the interests of its
private banks.
For years critics of U.S. central-bank policy have been dismissed as Negative Nellies,
but the ugly truth is staring us in the face: Stock-market advances remain a game of
artificial liquidity and central-bank jawboning, not organic growth. And now the jig is up.
As I've been saying for a long time: There is zero evidence that markets can make or sustain
new highs without some sort of intervention on the side of central banks. None. Zero. Zilch.
And don't think this is hyperbole on my part. I will, of course, present evidence.
In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one),
which was introduced following the initial announcement in November 2008. Every major
correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and
so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest
combined intervention effort in history. The sum: More than $5 trillion between 2016 and
2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the
European Central Bank and the Bank of Japan:
When did global central-bank balance sheets peak? Early 2018. When did global markets
peak? January 2018. And don't think the Fed was not still active in the jawboning business
despite QE3 ending. After all, their official language remained "accommodative" and their
interest-rate increase schedule was the slowest in history, cautious and tinkering so as not
to upset the markets.
With tax cuts coming into the U.S. economy in early 2018, along with record buybacks,
the markets at first ignored the beginning of QT (quantitative tightening), but then it all
changed. And guess what changed? Two things. In September 2018, for the first time in 10
years, the U.S. central bank's Federal Open Market Committee (FOMC) removed one little word
from its policy stance: "accommodative." And the Fed increased its QT program. When did U.S.
markets peak? September 2018.
[..] don't mistake this rally for anything but for what it really is: Central banks
again coming to the rescue of stressed markets. Their action and words matter in heavily
oversold markets. But the reality remains, artificial liquidity is coming out of these
markets. [..] What's the larger message here? Free-market price discovery would require a
full accounting of market bubbles and the realities of structural problems, which remain
unresolved. Central banks exist to prevent the consequences of excess to come to fruition and
give license to politicians to avoid addressing structural problems.
is it $15 trillion, or is it 20, or 30? How much did China add to the total? And for what?
How much of it has been invested in productivity? I bet you it's not even 10%. The rest has
just been wasted on a facade of a functioning economy. Those facades tend to get terribly
expensive.
Western economies would have shrunk into negative GDP growth if not for the $15-20 trillion
their central banks injected over the past decade. And that is seen, or rather presented, as
something so terrible you got to do anything to prevent it from happening. As if it's
completely natural, and desirable, for an economy to grow forever.
It isn't and it won't happen, but keeping the illusion alive serves to allow the rich to put
their riches in a safe place, to increase inequality and to prepare those who need it least to
save most to ride out the storm they themselves are creating and deepening. And everyone else
can go stuff themselves.
And sure, perhaps a central bank could have some function that benefits society. It's just
that none of them ever do, do they? Central banks benefit private banks, and since the latter
have for some braindead reason been gifted with the power to issue our money, while we could
have just as well done that ourselves, the circle is round and we ain't in it.
No, the Fed doesn't hide the ugly truth. The Fed is that ugly truth. And if we don't get rid
of it, it will get a lot uglier still before the entire edifice falls to pieces. This is not
complicated stuff, that's just what you're made to believe. Nobody needs the Fed who doesn't
want to pervert markets and society, it is that simple.
The word your looking for "abyss"
definition --
a catastrophic situation seen as likely to occur to the people with wealth that is built
upon "leverage."
Leverage results from using borrowed capital as a funding source when investing to expand
the firm's asset base and generate returns on risk capital. Leverage is an investment
strategy of using borrowed money -- specifically, the use of various financial instruments
or borrowed capital -- to increase the potential return of an investment. Leverage can also
refer to the amount of debt a firm uses to finance assets. When one refers to a company,
property or investment as "highly leveraged," it means that item has more debt than
equity.
"The entire US economy today is about the quick buck."
Even the stock market these days seems to be about the quick buck. In the US, the
average holding period for stocks has dropped from 8 years (1960), to 5 years (1970), to 2
years (1990), to 4 months (in the past few years).
The policies of the Fed (as well as the Board of Directors of the companies) are
evidently geared towards the short-term benefits of the owners who will be leaving in a few
months. The long-term health of the companies, the economy, and the overall society (mostly
non-owners) is evidently not so important to the Fed and the CEOs.
" When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort
in history giving us a grand total of over $15 trillion."
Those $15 trillion in assets being held by the central banks propped the global stock market capitalization up to around
$75 trillion. Short term thinking that gives short-term benefits. Take away the props and of course that sucker is going to
fall.
What were they thinking, the overweight patient with all of those systemic problems is going to be able to walk just
fine when the crutches are taken away?
"I don't care about Europe," declared US President Donald Trump this week during his White
House cabinet's first meeting of the new year.
The American president probably revealed more about the true nature of US-European relations
than he intended.
Trump was speaking
in the context of American military involvement with Europe, as well as trade and other issues.
He was reiterating the tedious mantra that the US is allegedly being "taken advantage of" by
European allies by not spending more on their military budgets.
It was the usual rambling, barely articulate fallacy from Trump who portrays the inherent
military profligacy of American corporate capitalism not as a destructive vice, but as a
supposed virtuous cause of "protection" for allies and the rest of the world. In short,
delusional American exceptionalism.
But it was Trump's bluntly stated contempt for European allies that was notable. In a quip
to a question about his reported unpopularity in Europe, the president said he didn't care what
Europeans think. A few seconds later, in a betrayal of his arrant egotistical state of mind,
Trump turned around and claimed that he would be popular if he stood in an election in
Europe!
Ironically, though, perhaps we should be grateful to Trump for his brash outspokenness. By
dissing Europe with such contemptuous disregard, he lays bare the true face of Washington's
relations with the old continent.
Past American presidents have been adept at presenting the transatlantic connection as a
putative "strategic partnership" – as most clearly manifested by the US-led NATO military
alliance. Trump's former Defense Secretary James Mattis, who resigned in protest over policies,
was of this conventional transatlantic mould. Mattis repeatedly talked up the importance of
maintaining strong bonds with allies.
However, decades of transatlantic rhetoric has often served to conceal the real relationship
between Washington and Europe. The reality is the Europeans are not partners. They are
vassals.
Successive European governments and the European Union have continually permitted their
countries to serve as bases for American military forces, including in the past, nuclear
weapons pointed at Russia. Those missiles may return to European soil, if the US walks away
from the Intermediate-range Nuclear Forces Treaty as it threatens to do under Trump.
The subordinate European governments have also dutifully facilitated American militarism by
affording a multilateral pseudo legal cover for Washington's imperialist wars. For example,
European nations sent troops to augment US wars in Afghanistan and Iraq thereby giving criminal
genocidal ventures a veneer of legitimacy.
Ironically, in his remarks to his cabinet this week Trump scoffed at European nations for
sending "only 100 troops" to Afghanistan and Iraq. He also mentioned Syria, illustrating how
rampantly arrogant US criminality is.
So, Trump is berating Europeans for not devoting more of their economic resources to match
the American pathological addiction to militarism; for not paying more for US military
occupation of European countries; and for not sending more troops to join in American overseas
criminal aggressions.
Previous American presidents would be a little more circumspect in disguising Washington's
tyrannical relationship with Europe. But Trump is too self-centered and boorishly transactional
in his view. The whole self-indulgent pretense of American chivalry and protection is shredded,
albeit unwittingly.
Trump told Europe this week he does not care a jot about the continent and supposed US
allies. With such contempt, European nations need to wake up to the reality of charting their
own independence from Washington, and in particular pursuing a genuine continental partnership
with Russia.
Washington's arrogance is perhaps most starkly expressed by the Trump administration
threatening European states with sanctions if they continue building the Nord Stream 2 gas
pipeline from Russia. Russia is a natural strategic partner for Europe, especially in terms of
economical supply of gas and oil fuel.
The issue of energy supply and demand epitomizes so much else about the relation between
Europe and Russia, and the US. The latter is something of an imposter and is foisting its
selfish interests on others, whether in energy trade or in military affairs. We have also seen
this with regard to Trump tearing up the Iran nuclear deal and punishing Europe for upholding
that international treaty.
Trump could not have stated the reality of American disregard for European interests any
more brazenly. He doesn't give a fig.
At the end of last year, the European Union voted to renew economic sanctions on Russia for
another six months. Those sanctions are based largely on anti-Russian ideological claims made
by Washington and its NATO partners over a host of spurious issues, including conflict in
Ukraine and the preposterous fantasy of Russia interfering in elections. Again, the vassal
position of Europe is revealed by the fact that it is European economies, not the American
economy, that have incurred self-defeating damage from the sanctions on Russia.
European governments need to adopt something of Trump's "America First" policy and begin
putting the interests of their people first. Europe must repudiate Washington's antagonism and
militarism towards Russia. Many of the incumbent European governments seem incapable of finding
the necessary political will to be independent from Washington. That is partly why there is
such a phenomenal rise in popular discontent with the European Union and establishment
politicians. The powers-that-be are unresponsive and unrepresentative of popular interests and
needs, creating further backlash to the establishment institutions.
Europe needs to stop being a lackey of Washington. After Trump's blatant contempt this week,
Europe has no excuse or justification to continue debasing itself as an American vassal.
From the piece you linked above which seems to indicate capex spending will be flat to
slightly down there was also this:
Asked to provide a specific price for WTI used for capital planning this year,
executives said they expect prices to average $54/bbl, with responses ranging from $50 to
$64.99. Only 9% thought prices would be below $50.
If their oil price expectation (the average) proves correct, there will not be a lot of
money made in 2019 in the tight oil plays of Texas.
"... The EIA weekly reports are a joke with zero movements for crude inventory for last 2 weeks. And an adjustment factor that nobody understands. Maybe the government shutdown has some influence after all. ..."
It is all a big illusion that oil is cheap like water in my opinion. To manipulate the market
down will only make for more volatility in the future, and it is a good a bet as when the oil
price fell to 30 dollars/b in 2016 that prices will eventually rise again from this level.
It has do with that the tanking of oil prices is out of the usual cycle in the industry
(low investments makes for less oil after 3+ years).
I have started to bet on oil prices going up again even more for the fun of it (a few bets
made too early I have to admit) and now I put some meaningful amount of money in it; to make
it even more fun hopefully.
The EIA weekly reports are a joke with zero movements for crude inventory for last 2
weeks. And an adjustment factor that nobody understands. Maybe the government shutdown has
some influence after all.
To build a wall against the tide water is an illustration of how successful it will be to
keep the oil prices down with illusional data alone. And I stand by that a recession based on
"fear" news alone is fake, but can of course in the end become a self fulfilling
prophecy.
And [there is] the real fear is inflation based on too high oil prices. Extensive tariffs
to hinder trade will also never help prosperity, but it remains to be seen if threats are
made real or if the policy at some point will be revoked.
Gold continued to plow higher, acting as a safe haven from the risks of phony paper assets
and undisclosed counterparty risks.
How unusual.
Big Pharma gave us a present, and
raised the prices of over 1,000 prescription drugs
for the New Year. It was somewhat
ironic that as I was reading this article, the spokesmodels on financial tv were
commenting on the Bristol-Myers acquisition of Celgene and said that pharmaceutical
companies 'are scrambling to lower prices' and that there are no antitrust concerns in the
sector.
This is going to be an interesting year as the credibility trap compels our best and
brightest to speak and act in a manner that is increasingly divergent from reality.
Apple's announcement of a big revenue miss was a bit odd, because they seemed to point the
finger at an economic slowdown in China. Apple is not a major player in the cellphone
market there as far as I know. Perhaps they are the victims of rosy forecasts of growth
fueled by market penetration that did not materialize because they were just not
competitive?
On a happy note,
Wall Street On Parade
is back online, after a long hiatus due to a family
illness. It is so good to see them publishing again. Reform minded bloggers are in
short enough supply.
"It could be argued that we are now in the midst of a coup d'état in slow motion.
Democracy is weakening; few people would disagree. Corporatism is strengthening; you
only have to look around you. Yet none of us has chosen this route for our society, in
spite of which our elites quite happily continue down it. Certainly corporatism is
creating a conformist society. It is a modern form of feudalism."
John Ralston Saul
"Donald Trump is not an anomaly. He is the grotesque visage of a collapsed democracy.
The creeping corporate coup d'état that began forty five years ago is complete. It has
destroyed the lives of tens of millions of Americans no longer able to find work that
provides a living wage, cursed to live in chronic poverty."
Chris Hedges
"A narcissist paints a picture of themselves as being the victim or innocent in all
aspects. They will be offended by the truth. But what is done in the dark will come to
light. Time has a way of showing people's true colors."
Karla Grimes
"Although journalism was always a loose extension of establishment power, something has
changed in recent years. Dissent tolerated when I joined a national newspaper in
Britain in the 1960s has regressed to a metaphoric underground as liberal capitalism
moves towards a form of corporate dictatorship.
This is a seismic shift, with journalists policing the new groupthink, dispensing its
myths and distractions, pursuing its enemies.
The source of 'fake news' is not only trollism, or the likes of Fox News, or Donald
Trump, but a journalism self-anointed with a false respectability: a liberal journalism
that claims to challenge corrupt state power but, in reality, courts and protects it,
and colludes with it.
Complex stories are reported to a cult-like formula of bias, hearsay and omission. So
much of the mainstream has descended to this level. Subjectivism is all; slogans and
outrage are proof enough. What matters is the 'perception.'"
John Pilger,
Hold the Front Page: The Reporters are Missing
"Narcissism falls along the axis of what psychologists call personality disorders, one
of a group that includes antisocial, dependent, histrionic, avoidant and borderline
personalities. But by most measures, narcissism is one of the worst, if only because
the narcissists themselves are so clueless.
There's a reason narcissists don't learn from mistakes and that's because they never
get past the first step which is admitting that they made one. It's always an
assistant's fault, an adviser's fault, a lawyer's fault. Ask them to account for a
mistake any other way and they'll say, 'what mistake?"
Jeffrey Kluger
"Hate obscures all distinctions."
C.S. Lewis
All the ruling elite have to offer to us is hate and fear -- both of which obscure reason,
that instrument of scrutiny which their self-serving actions and policies cannot bear.
Stocks opened significantly lower, but with the support of some determined, price
insentive buying programs in the futures markets, were able to finish virtually unchanged.
Gold was trying to break out, but was pushed back down into the close.
Today was the first trading day of this new year of 2019. And it is almost certainly
going to be interesting.
Non-Farm Payrolls report on Friday.
It is not that our age is lacking in self-aggrandizing 'heroes'. We have an excess of
them. They cast themselves as our saviours against phantoms of fear and the troubles that
they themselves have created. Our two political parties and the corporate monopolies act
like competing crime families rather than the organizers and protectors of society.
Rather, there is an alarming shortage of the basic principles of morality being exercised
by mature adults. And this shortage is particularly acute in NY and DC, the halls of big
business and the government which big money has bought.
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Le Café Américain
Mes Amis du Café
Be a Light to the World, a Testimony to Nations
Matičres ŕ Réflexion
For the first time in years, investors can plump up their cash cushions without feeling
shortchanged. Vanguard Prime Money Market Fund ( VMMXX )
yields 2.21%, compared with a current 1.9% yield on the S&P 500. The highest-yielding
online banks and CDs will deliver 2.25% to 2.7%. Fidelity Conservative Income Bond ( FCONX )
yields 2.2% and can be considered a cash alternative, say Morningstar analysts. (For more
strategies and picks, see
Cash Is No Longer Trash .)
Author John Kay sets forth the theme of his book, and its title, at the beginning:
=====
The directors of (banks and corporations), being the managers rather of other people's money
than of their own, it cannot well be expected, that they should watch over it with anxious
vigilance. . . NEGLIGENCE AND PROFUSION, THEREFORE MUST ALWAYS PREVAIL, more or less, in the
management of the affairs of such a company.
Adam Smith, The Wealth of Nations, 1776
=====
Kay then echoes the warnings of Karl Marx who predicted that capitalists would use finance
as a means to subvert the economy:
======
The central paradox of this chapter is the intensification of the dichotomy that Marx
described, between the physical assets themselves and the securities that represent them.
=====
Kay is neither a Marxist nor a rabid free-market acolyte. He's a practical minded monetary
systems economist, esteemed enough to have become the first director of Oxford's Business
School. He advises governments on financial policy. He has written an enjoyably readable book
that holds even a financial layperson's interest. It pulls you along by explaining financial
issues with everyday real-life examples that all readers can understand. He backs up his
explanations with delightful anecdotes from the past and present. Being neither an
anti-banking populist or an apologist for bankers' unethical behaviors, Kay gives a
level-headed critique of the "financial economy" that has developed in the last 30 years in
the developed countries, especially the USA and UK.
=====
Parts of the finance sector today .demonstrate the lowest ethical standards of any legal
industry. If London casinos were even accused of the malpractices to which London banks have
admitted -- false reporting, misleading customers and unauthorised trading -- the individuals
responsible would be barred from the industry and the licences of the institutions concerned
revoked within hours. The finance sector has experienced actual criminality on a wide scale,
from liar loans to LIBOR rate-fixing.
Financial innovation was critical to the creation of an industrial society; it does not
follow that every modern financial innovation contributes to economic growth. Many good ideas
become bad ideas when pursued to excess.
=====
That jives with what I saw as a real estate investor at the epicenter of the 2008
Financial Crisis. The economy imploded because the banks became insolvent due to their
dereliction of due diligence on the rotten loans they bought from local mortgage originators,
who issued mortgages to millions of non-creditworthy customers who had no incomes to pay back
the mortgages, then pawned off the bogus mortgages to the big banks, who did not care that
they were bogus because they rolled them up into collateralized debt obligations (CDO)s that
they sold to their unsophisticated customers who didn't understand the risk of what they were
buying.
How did it come to be that:
A) So many bankers became so corrupt?
B) They came to control so much of the world's commerce, that the entire global economy was
brought down by the bankers' malfeasance?
Those are the deeper issues that McKay seeks to explain. He describes how
"financialization" is characterized by:
• The liquidation of the physical economy. Large companies no longer invest in
physical structures such as office buildings and factories. They lease their offices and
contract the manufacture of their products to cheap-labor subcontractors in the Third
World.
• "Financial engineering" where debt replaces wealth. Banks and publicly traded
corporations load themselves with junk bonds and complex derivatives that hide debt and make
the institutions look like they have strong balance sheets when they're actually
insolvent.
• The criminalization of finance. Kay talks about how criminals like Enron's Jeff
Skilling was "aggressively courted by all major investment banks" while he was in the process
of defrauding Enron's shareholders, customers, and employees.
• The government becomes captive to bankers. Bankers fund candidates' campaigns and
hire them on as partners with lavish compensation when they retire from public office.
Government policy is therefore bent toward favoring bankers.
• The inversion of risk from business owners to employees and taxpayers. When banks
and businesses fail, their management rarely suffers. The rank-and-file employees lose their
jobs, and the vendors and creditors are stiffed by bankruptcy, which voids debt.
Financialization transfers wealth away from the majority of people who earn their livelihood
as wage earners and to the tiny fraction that makes it money managing financial instruments.
It is Robin Hood in reverse, and explains why the standard of living of the middle glass
appears to be in free fall.
• Wealth is "pulled forward" from future generations when bankers pull the strings of
their political puppets to induce them to bail out insolvent banks with public money that
will be added to the national debts our children and grandchildren are obligated to repay
• A steadily eroding standard of living as banks and publicly traded companies
fritter away their physical assets and load them with debt that has to be paid back by later
generations.
After such a stinging indictment, I'd expect Kay to favor more intensive regulation of the
financial sector to transform it from a parasitic element of the economy to a productive one.
But that is not the case. He believes that written regulations are easily subverted and that
bankers will in any case ignore them whenever they perceive profitable ways to scam the
public. They have already proven willing to pay undreds of billions of fines each year as a
"cost of doing business" for violating laws already on the books.
Kay believes the fundamental solution is "to get the money out of politics" by disallowing
banking and corporate executives from funding politicians' campaigns. I'm dubious on that
idea, because banks and corporations will still be able to maintain their influence over
cooperative politicians by promising to make them millionaires when they leave office.
Kay's other idea is to strike at the root of financial malfeasance by inculcating a sense
of professional ethics in business and banking. I'm dubious on that point too. I've seen
banking and accounting criminals get flushed out of prestigious firms, only to immediately go
out and infiltrate other prestigious firms and corrupt them. There seems to be no sense of
shame in large publicly traded business and banks, and therefore it will be difficult to get
started with a tradition of integrity where none exists.
Kay finally does get around to the idea of separating the most conflicted aspects of
banking by "ring fencing" the separate departments in a bank. Banks that accept deposits from
the public should not be able to use them to speculate in risky investments with the
expectation of being bailed out by public money when markets fail; banks that play the market
should not be allowed to advise their customers to take the losing end of the bank's trades;
and so on. But how can this be accomplished without regulation?
I thus feel that Kay's prescriptions for reform are weak. For that reason I took one star
off the five I would have otherwise given it. Even so, the book remains a most valuable read.
It will educate lay readers to the way the financial systems of the USA, Britain, and Europe
operate --- why they failed in 2008 and why they remain far less sound than they should be.
This knowledge is indispensable to anyone who invests in the markets or who depends upon
financial institutions to manage their savings
"'The best indicator of whether someone will be amenable to being defrauded has to do with
financial insecurity,' [said] David Vladeck, the former director of the Federal Trade
Commission's Bureau of Consumer Protection."
So I wonder what the trend is on being scammed. Perhaps fairly level at the moment.
DeLong proves himself to be incoherent on
economic theory,, clearly bought into free lunch economics, perhaps not willing to outright
oppose current Fed policy because he would agree with Trump, but totally unwilling to admit
that tge only thing the Fed did do is prevent the massive foreclosures from asset prices
falling far below their debt.
Asset prices are high because too little labor is paid to build assets. Too much public
policy is devoted to anti-keynesian policy of preventing investments that increase investments,
investments always requiring paying workers to build long term assets which to a keynesian
generate merely enough returns over their useful life to pay the workers and little else.
High asset prices mean high inflation. Yet free lunch economists say paying twice labor
costs for something is not inflation, but paying labor costs for the same priced object is
extremely high inflation.
That is free lunch economics. Money for nothing, from nothing.
Paying workers kills jobs because it costs too much. Ie, building more factories in the US
and producing more would drive down prices and kill jobs. So, only not paying workers to create
scarcity and higher prices can't jobs be created.
Its a failed economic theory, yet DeLong can't simply say so.
What I like about Baker is that he is objective. Some people - like
EMichael and Kurt - will spin everything in favor of Dems and against Trump - sort of inverse
of Fox News and Republican pundits.
It's hard to trust them. They feel the ends justify the means, but when you start spreading
Fake News it's hard to keep track of the lies and propaganda. I don't think it works for
Republicans.
Steven Rattner's Charts in the NYT Don't Show What He Says They Show
Written by Dean Baker
Published: 31 December 2018
Steven Rattner used his NYT column to present a number of charts to show Donald Trump's
failures as president. While some, like the drop in enrollments in the health care exchanges,
do in fact show failure, others do not really make his case.
For example, he has a chart with a headline "paltry raise for the middle class." What his
chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the
recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their
pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This
is not a great story, but the picture under Trump is certainly better than under Obama. (This
wasn't entirely Obama's fault, since he inherited an economy in the toilet.)
The chart shows more rapid growth at the bottom of the pay latter and a modest downturn
under Trump for those at the top. By recent standards, this is not a bad picture, even if Trump
does not especially deserve credit for it. (He came in with an unemployment rate that was low
and falling.)
Rattner also presents as a bad sign projections for fewer Fed rate hikes. While one basis
for projecting fewer rate hikes is that the economy now looks weaker for 2019 than had been
thought earlier in the year (but still stronger than had been projected in 2016), another
reason is that inflation is lower than expected. Economists have consistently over-estimated
the impact that low unemployment would have on the inflation rate. With inflation coming in
lower than projected, there is less reason for the Fed to raise rates.
Contrary to what Rattner is implying, this is a good development. It means that the
unemployment rate can continue to fall and workers at the middle and the bottom of the pay
ladder can continue to see real wage gains.
Rattner also shows us how growth projections for the U.S. and the world have been lowered
since June of 2018. It's not clear how much Trump can be held responsible for growth in the EU
(trying blaming the European Commission's austerity drive) and the rest of the world, but his
argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018 is
actually up 0.1 percentage point from the June projection. More importantly, it is up from a
projection of 1.7 percent from January of 2017, the month Trump took office.
Then we have the chart showing the rise in the debt relative to GDP. While Rattner is right
that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio is
basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current
interest rate on its long-term bonds is 0.00 percent.)
If anyone is seriously concerned about the debt that the government is passing on to future
generations then it is also necessary to include the rents associated with patent and copyright
monopolies. These monopolies are alternative mechanisms to direct funding that the government
uses to pay for services (i.e. research and creative work).
To take the most important case, suppose the government were the replace the $70 billion
(0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry
conducts each year with direct funding of $70 billion. All research findings could then be
placed in the public domain and new drugs would sell at generic prices.
Rattner and his crew would count the $70 billion in addition spending as an addition to the
debt and deficit. However, when the industry is able to charge the public an extra $360 billion
(1.8 percent of GDP) a year in higher drug prices due to patent monopolies and related
protections, Rattner and company choose to ignore the burden. This sort of groundless debt fear
mongering deserves only ridicule; it is not serious economic analysis.
Trump has done many awful things as president and threatens to do many more. But this is not
a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his
performance without playing games with it.
Let's see, if the duration of equity is, what, 15 years? so it behaves like a 30 year bond
or so in terms of rate sensitivity, then roughly speaking a percent change in discount should
be about fifteen percent change in value. That would be four more rate hikes. Thus the value
of everything would be down about 15%.
Meanwhile, Roubini is talking about changes in output on the order of maybe 1% over a few
year time period (maybe with interim volatility)? He is talking about a change in yield,
which feeds back into value 1:1, for a 1% decline in the value of everything.
How is it that economists cannot do bond math comparisons to see what size matters and
what does not? Thus the ills of the market are the Fed, not the crazy potus.
Top 5 professional journals (T5) serve as gatekeepers for professional advancement of
academic economists: "strong evidence for the influence of the T5. Without doubt, publication
in the T5 is a powerful determinant of tenure and promotion in academic economics." https://www.ineteconomics.org/perspectives/blog/the-tyranny-of-the-top-five-journals
When this happens, acceptable research and discourse tend to get established and limited
… Chinese economists probably need not apply...as well as unorthodox views in the
US.
Michael Hudson describes the Orwellian approach of today's mainstream economics: "Viewing
the economic vocabulary as propaganda, I saw that we can understand how the words you hear as
largely propaganda words. They’ve changed the meaning to the opposite of what the
classical economists meant. But if you untangle the reversal of meaning and juxtapose a more
functional vocabulary you can better understand what ís actually happening." https://michael-hudson.com/2018/12/guns-butter-the-vocabulary-of-economic-deception/
"... Hard core neoliberals say Social Security is a ponzi scheme because too few workers can't pay too many retirees, it should have bought stocks and bonds. Ok, if all the boomers had bought stocks and bonds instead of paying FICA, would too many boomers selling stocks relative to the younger workers saving for retirement buying stocks magically keep share prices rising? Was the crash the day before Chriistmas caused by too many buyers of stocks and bonds, or too many sellers? ..."
"... Hard core neoliberals have been pushing free lunch economics for several decades by erasing the connection between labor and money and real value. ..."
Why oh why can't Krugman explain economics, and especially how "voodoo" conservative free
lunch economics is.
First, why has Krugman self lobotomized and remove the economic basic axiom that
everything is about labor, especially money.
Money is labor, labor in the past or labor in the future. Eliminate work, ie, robots
completely replace all workers, then someone will tell their robot to build more robots and
tell those robots to do the same until everyone can be given as many robots as they want for
free to produce as much as the new own want, whether to consume or not, so no one will be
willing to pay anything for any thing.
So, until someone can explain how money has value without human labor, and "property" is
not the reason because I will order my robots to build an army to kill you if you refuse to
vacate the land I want as my own. And I'll build the biggest robot army to fight off any
"government" that tries to take the liberty I have gained with my robots eliminating any
requirement for me to work for what I consume or desire.
So, again, money is past or future labor, just as goods and capital are past labor, the
Fed merely ensures liquidity of labor IOUs, but if no one will pay workers to work with these
IOUs, no one will get a job no matter how many labor IOUs the Fed prints.
And it i give you labor IOUs, but no one will produce anything by work in exchange for
those labor IOUs, they are worthless. Like in Venezuela where you buy stuff paying in eggs or
fuel or other things produced by workers with capital, ie, labor.
And Trump never sees any value in money because he never works. He'll promise you money,
but if you believe he'll do any work to make his promise honest, you are a fool. And thats
true for pretty muchh all Hard core neoliberals these days.
Hard core neoliberals tell you to work more than the money paid in exchange for other working to
produce stuff for you in the future. First it was by pensions. But now they refuse. Then is
was by government IOUs, but now they are saying "nope" to redeeming the bonds.
Anyone think the businesses with skyhigh share prices are going to pay dividends, or buy
back shares at sky high prices when sellers exceed buyers?
Hard core neoliberals say Social Security is a ponzi scheme because too few workers can't pay too
many retirees, it should have bought stocks and bonds. Ok, if all the boomers had bought
stocks and bonds instead of paying FICA, would too many boomers selling stocks relative to
the younger workers saving for retirement buying stocks magically keep share prices rising?
Was the crash the day before Chriistmas caused by too many buyers of stocks and bonds, or too
many sellers?
Hard core neoliberals have been pushing free lunch economics for several decades by erasing the
connection between labor and money and real value.
Hard core neoliberals see work as too costly, and paying workers to crushingly costly, but they
want others to give them both stuff and money. A free lunch.
And they cleverly created clever lines like, "cutting taxes puts money in yoour pockets"
and "costly givernment regulations kills jobs" and "we must cut costs to create jobs".
So, voters who just got told GM is cutting costs by eliminating 10,000 jobs and closing 5
factories listen to Trump promise to cut costs to bring back factories and jobs end up voting
for Trump???
So genious Krugman can't point out the lie Trump and the GOP are telling by simply
pointing outt to those workers they lost their job because of cost cutting.
Why can't workers understand that anytime a politician says "cut" he means "fire" or
"impoverish"???
Bad Faith, Pathos and G.O.P. Economics: On professionals who sold their integrity, and got
nothing in return.
By Paul Krugman
As 2018 draws to an end, we're seeing many articles about the state of the economy. What
I'd like to do, however, is talk about something different -- the state of economics, at
least as it relates to the political situation. And that state is not good: The bad faith
that dominates conservative politics at every level is infecting right-leaning economists,
too.
This is sad, but it's also pathetic. For even as once-respected economists abase
themselves in the face of Trumpism, the G.O.P. is making it ever clearer that their services
aren't wanted, that only hacks need apply.
What you need to know when talking about economics and politics is that there are three
kinds of economist in modern America: liberal professional economists, conservative
professional economists and professional conservative economists.
By "liberal professional economists" I mean researchers who try to understand the economy
as best they can, but who, being human, also have political preferences, which in their case
puts them on the left side of the U.S. political spectrum, although usually only modestly
left of center. Conservative professional economists are their counterparts on the center
right.
Professional conservative economists are something quite different. They're people who
even center-right professionals consider charlatans and cranks; they make a living by
pretending to do actual economics -- often incompetently -- but are actually just
propagandists. And no, there isn't really a corresponding category on the other side, in part
because the billionaires who finance such propaganda are much more likely to be on the right
than on the left.
But let me leave the pure hacks on one side for a moment, and talk about the people who at
least used to seem to be trying to do real economics.
Do economists' political preferences shape their research? They surely affect the choice
of subject: Liberals are more likely to be interested in rising inequality or the economics
of climate change than conservatives. And human nature being what it is, some of them --
O.K., of us -- occasionally engage in motivated reasoning, reaching conclusions that cater to
their politics.
I used to believe, however, that such lapses were the exception, not the rule, and the
liberal economists I know try hard to avoid falling into that trap, and apologize when they
do.
But do conservative economists do the same? Increasingly, the answer seems to be no, at
least for those who play a prominent role in public discourse.
Even during the Obama years, it was striking how many well-known Republican-leaning
economists followed the party line on economic policy, even when that party line was in
conflict with the nonpolitical professional consensus.
Thus, when a Democrat was in the White House, G.O.P. politicians opposed anything that
might mitigate the costs of the 2008 financial crisis and its aftermath; so did many
economists. Most famously, in 2010 a who's who of Republican economists denounced the efforts
of the Federal Reserve to fight unemployment, warning that they risked "currency debasement
and inflation."
Were these economists arguing in good faith? Even at the time, there were good reasons to
suspect otherwise. For one thing, those terrible, irresponsible Fed actions were pretty much
exactly what Milton Friedman prescribed for depressed economies. For another, some of those
Fed critics engaged in Donald Trump-like conspiracy theorizing, accusing the Fed of printing
money, not to help the economy, but to "bail out fiscal policy," i.e., to help Barack
Obama.
It was also telling that none of the economists who warned, wrongly, about looming
inflation were willing to admit their error after the fact.
But the real test came after 2016. A complete cynic might have expected economists who
denounced budget deficits and easy money under a Democrat to suddenly reverse position under
a Republican president.
And that total cynic would have been exactly right. After years of hysteria about the
evils of debt, establishment Republican economists enthusiastically endorsed a budget-busting
tax cut. After denouncing easy-money policies when unemployment was sky-high, some echoed
Trump's demands for low interest rates with unemployment under 4 percent -- and the rest
remained conspicuously silent.
What explains this epidemic of bad faith? Some of it is clearly ambition on the part of
conservative economists still hoping for high-profile appointments. Some of it, I suspect,
may be just the desire to stay on the inside with powerful people.
But there's something pathetic about this professional self-abasement, because the rewards
center-right economists long for haven't come, and never will.
It's not just that Trump has assembled an administration of the worst and the dimmest. The
truth is that the modern G.O.P. doesn't want to hear from serious economists, whatever their
politics. It prefers charlatans and cranks, who are its kind of people.
So what we've learned about economics these past two years is that many conservative
economists were, in fact, willing to compromise their professional ethics for political ends
-- and that they sold their integrity for nothing.
We All Have a Stake in the Stock Market, Right? Guess Again
By PATRICIA COHEN
Take a deep breath and relax.
The riotous market swings that have whipped up frothy peaks of anxiety over the last week
-- bringing the major indexes down more than 10 percent from their high -- have virtually no
impact on the income or wealth of most families. The reason: They own little or no stock.
A whopping 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent
of households. And that includes everyone's stakes in pension plans, 401(k)'s and individual
retirement accounts, as well as trust funds, mutual funds and college savings programs like
529 plans.
"For the vast majority of Americans, fluctuations in the stock market have relatively
little effect on their wealth, or well-being, for that matter," said Edward N. Wolff, an
economist at New York University who recently published new research * on the topic....
What I could find says 401(k)s have $5.6T, IRAs have $2.5T, and when you add in pensions, the
total is $29 trillion. Not sure when those numbers are from.
Hard to know what part of that is stocks vs. bonds.
As of last April, US stock markets had $34 trillion and the rest of the world $44 trillion
equiv.
So, if IRA, 401(k) and retirement plans have almost as much wealth as the total of us
stocks, and that is 16% of all stocks... does that mean we
1) Americans own a lot more foreign stocks than foreigners own american stocks
or
2) 84% of retirement assets are bonds?
There is, what? $50 trillion is US debt, much of it backed by bonds.
So, $30 trillion retirement assets, $24.5T bonds and $5.5 trillion stocks... such that
$5.5T is 16% of $34T?
"And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit."
Wildly unsubstantiated first sentence, though the rest seems likely true. Whether the bulk
went to tax cuts for domestic or foreign national or into the furnace, there was indeed some
sliver that actually went to the rest of us.
Efficiency of what, I might ask? Efficiency of shipping goods halfway around the world from
where people work for less in less safe environments is really the efficiency of theft by
capitalists, not the efficiency of production. Taking from the land and sea and dumping waste
into the land, sea, and air is the efficiency of theft by capitalists too, not the efficiency
of resource use. We are very efficient at making billionaires from externalized costs. We
continue to cheaply sell ourselves out because the price is right. Ask Paine what lies hidden
in the price?
I would prefer unhiding externalized costs and allocating domestic labor to pay those costs,
not with taxes, but with production of domestic goods and the elimination of pollutants and
managed use of limited resources. That's just me and entirely off the subject when it comes
to macroeconomics.
In any case, I am also for Paine's KLV full employment macroeconomics. If anything KLV
macro is more accessible both politically and intellectually than the kinds of price
movements that would be required to place environmentally sustainable caps on carbon
emissions or the commercial menhaden catch. A nominal interest rate for interbank lending
that was maintained by the Fed to persist at just the rate of inflation except for lower when
necessary to recover from a recession is not a terrible thing. The consequence of braking the
economy just to avoid hitting some inflation target is reckless driving. As we know the crash
victims are always labor.
You need to separate Paine's economics from his politics. He believes a peoples' party can
deliver that. It cannot. It will not. As efficiency goes out the door when a small,
unregulated group controls everything. Not to say our version of capitalism has anywhere near
the government regulation I think it needs to reach your(and my) goals. But it is light years
ahead of Paine's dreams.
Paine's economics are insightful and useful. Paine's politics are bifurcated. Paine is as
much for a progressive liberal democrat as he is for an enlightened communist dictator. Which
do you think has a greater chance of actually ever existing in this century?
I'm all in on Paine's economics, but I believe his politics make him an opponent to ever
coming up with progressive liberal democrats running the country.
All or nothing with him, and that makes it beyond hard to move towards that goal. Many in
here like that. I admire them for going through their life without once ever settling for
anything but perfect. I never had that opportunity.
A bunch of small steps are necessary, as the Founders insured that. Raging against those
facts are immense negatives. And it is why Reps win elections.
I am largely in concurrence with you, but I do have some specific caveats.
At least in my part of the country Paine's far left politics are not representative of
anything that we come into contact with in public life. Your politics are bit left of us
here. I am the far left in these parts. Paine's more populous left side is barely represented
by any group in my reality. So, for me, Paine is a unique curiosity reminiscent of my
socialist friends from the 60's and early 70's for which I have seen no analog since the
introduction of Disco and double-knit leisure suits.
The EV crowd in general is a microcosm of nerdiness rather than a microcosm of well
informed constituencies of the US unrepresentative "democracy." There is nothing unsettling
about it. This crowd is as normal as the characters of "Big Bang Theory."
Republicans win elections because they get the most votes. The VA voter turnout for 2018
was almost 60%, well above 2014 and 2010 midterms which were just above 40%. Most people
think that Trump is the most politically divisive POTUS in history, but I think nothing in my
life has done more to unify the Democratic Party given they can curb their enthusiasm about
beating Trump in 2020 enough to not rip the party apart over who gets the spoils.
Turnout for POTUS election in VA has been above and sometimes well above 70% for every
POTUS election since 1975 except for 2000. Turnout for VA gubernatorial elections has been
between 40% and 50% for each election from 1997 up through 2017, but ran much higher before
motor voter stopped the purging of voter registration rolls. VA elects state legislators in
off years for statewide elections with just over 30% of voters showing up.
"...My point is that when you reduce the cost of doing business, or reduce the credit
worthiness of a borrower, you will see greater inefficiency.
Digging holes and filling them in is one way to spend money. Building a road or a building
is another.
Which would you prefer?"
[While I would prefer bridges to digging holes and filling them, my hesitation in
answering this question was with the assumption that lower interest rates generate more
wasteful investment, despite that I know it to be true in some contexts. Speculation is the
problem more than real projects by far. Diversity among investments can be a very good thing.
Failure in this context is just a consequence of innovation by trial and error, one of the
more efficient means. Besides, for private investment the risk spread limits useless
excursions, while the state needs conscious limits on pork perhaps, but pork is also a useful
medium of political exchange. Uncle's discretionary spending is a very small pot of
gold.]
" Many in here like that. I admire them for going through their life without once ever
settling for anything but perfect. I never had that opportunity.
A bunch of small steps are necessary, as the Founders insured that. Raging against those
facts are immense negatives. And it is why Reps win elections."
The New Deal.
The Great Society.
Social Security. Medicare. Medicaid.
EMichael would have argued against all of them as overreaching.
His excuse for the Democrats was that past Presidents had large majorities in
Congress.
He would say the country is too conservative and racist. But they like those programs
now.
"Lower interest make business plans much easier. In doing so, risks are taken that should not
be taken, thus increasing inefficiency.
This is especially true when the planners carry absolutely no financial risk themselves on
a project."
[I understood what you were going for and do not doubt that you have specific instances for
which you are sure that is true. For a few years prior to 2008 then I am sure that was true,
but those "animal spirits" were drunk on more than just low interest rates. There was a
specific sequence of events that played out over a long period of time bringing the US
economy to the precipice of financial system euphoria over the infallibility of markets.
Lenders and borrowers and especially middlemen stared down into the abyss and then kept on
truckin'. Then we all heard a big splat!
Now is not then. Some future now may be then again if we forget about then, but it takes a
lot of stupid to get there, not just low interest rates. Taking a bit more risk, but without
the stupid is how we learn from failure to achieve greater success.
If either the dot.com splat or the mortgage splat were not clearly visible at least three or
four years before the splat then either you need a new prescription for your eye glasses or
you need to step out of that fog that you were living in.
"success through failure" has become a norm of American business, with the PotUS as the
perfect example.
He never got into the casino, steak, wine, water, university, etc. businesses with intent
on making money in those businesses. Heck, he barely breaks even on the condo and golf
businesses.
He creates the towers and golf resorts to promote the name, and promotes the name to be
able to lease it to doomed businesses which he starts with the intent of losing money on the
leasing of his name. I suspect the most profitable thing he's ever done was "realty tv" host
and having a book ghost-written in his name.
And yes, low interest rates DO create easy money, and much of it does find its way into
"success through failure" investments. Why would you loan money to a business that you know
was a scam just created to accumulate debt then go bust? Because you can securitize the debt
and sell it off to Main Street suckers to eat the loss.
Why else "success through failure". Well, I've worked for a company that dumped a lot of
money into a venture it knew was doomed long-term. Why? Because it intended to go IPO, and it
needed the (unprofitable) revenue from the doomed venture to pump its price in the IPO.
I think we'd all agree that "success through failure" is terrible and wish it would go
away. Problem is, it works.
Regarding "Success through failure" I was thinking in terms of the dot.com boom from which
sprang the broadband Internet and Amazon. Out there in Phoenix AZ where you and EMichael live
things must be really crazy. Back in 70's Phoenix was the yuppy Mecca. What happened?
True, not all of the dot.com was bad investment. Just most.
We got a lot of housing built during the housing boom too. Too bad most of it was
2000-3000 sqft McMansions on golf courses, 50 miles from any jobs.
"Out there in Phoenix AZ where you and EMichael live things must be really crazy."
1970 Phoenix metro had 1 million people. Today we're at 4.75 million.
Politics are a mess. Big money is pushing to constantly lower taxes, but now people are
pushing back wanting more funding for schools. Surprisingly, we've passed phased in $12
minimum wage and medical marijuana (recreational failed by less than 1%), and now have split
representation at the federal level indicating a move toward liberal.
And yet, we'll still very Republican in the state house and go highly conservative on many
other issues such as animal rights. A recent "green energy initiative" failed ugly.
So, to sum it up... Pretty Liberal, but Very CONservative, with a HUGE swing vote that
goes this-way-and-that in random directions and on different issues...
...but in general want low taxes, are hate big government...
...except on the things like Social Security, Medicare, Medicaid, Defense, education,
transportation, police, fire, courts, justice system, boarder security, anti-terrorism, and
the rest of stuff government actually spends almost all of its money on...
... but are all for getting rid of all the wasteful government that practically doesn't
really exist...
... and we definitely want religious freedom, as long as that religion is Christianity and
the freedom is to force their views onto others, and not allow other religions to have a
place in society.
No one notices that the biggest factor in the housing bubble was bush ordering the OCC to
take regulation of national banks out of the hands of the states.
The population increase? People would have to be somewhere, and unlike coastal California
with those stupid oceans, bays and mountains... Phoenix has plenty of open space.
2000-3000 sqft mcmansions 50 miles from jobs? Probably true. Without the housing bubble we
would have hit the wall on housing and caused massive rent spike a decade ago instead of a
few years ago. With that massive rent increase then instead of now, meaning that a decade ago
we would have seen the in-building of small apartments and condos that we are now
getting.
Net, we probably would have been better off with more in-building of smaller, multi-family
units instead of massive sprawl of McMansions.
Don't complain too much. The "massive sprawl of McMansions" is a sure sign of widespread
prosperity. Here in eastern Henrico County VA we have the massive sprawl of McCracker boxes
instead although not just crackers live in them. McMansions are usually on at least 1/2 acre
lots, while McCracker boxes are built so close together that most of the time there was not
room left for a driveway and people park on the street except that some of those streets are
actually the highways to the neighboring cracker box town. On street parking is just one sign
of poverty. There are also drug related shootings just like in the big city.
In eastern Henrico there are only a few small McMansion developments in prime real estate
overlooking the flood plain of the James River where there is any such high ground in eastern
Henrico near the river. Chesterfield County across the James River has the advantage of very
high ground near the James River at River's Bend, a.k.a, Meadowville, where there is plenty
room for a golf course and marina as well as loads of McMansions and high-end apartment
buildings. High and dry western Henrico County is where they build the McMansions along with
all the exclusive high end shopping. The "Sad-eyed Lady of the Lowlands" was probably sad
because her basement flooded whenever it rained:<)
I was adding a tad to the "inefficiencies" discussion caused by disconnecting loan
origination from loss risk.
I got my piece of the giant federal government giveaway needed to clean up the mess. In
2011 I bought a 1000 sqft condo for $48K that I now have leased out for a nice cash-flow
positive $600+ a month and true after-tax profit of about the same $600 a month (add $100 of
the payment that is principal reduction, then subtract 22% income tax on $500 a month ($700
profit - $200 depreciation)).
If you notice the purchase price doesn't match the depreciation, yeah, I've done over $20K
in additional capital improvements that increase the base including new roof, new HVAC,
replaced all aluminum windows and doors with high-E, gutted and replaced the kitchen and both
baths. Summer cooling bill was cut by more than half from ~$300 to ~$125 by the new windows
and doors and more efficient HVAC, increasing the monthly rent accordingly.
I've only been spending abut $400 of that $600 profit, letting the rest accumulate for
maintenance, repairs, upgrades.
Oh, I also save about $250 a month on the mortgage of my primary by locking in 3% interest
rate.
Not big deals in the grand scheme, but the boom->crash->rent squeeze worked out okay
for me personally.... for now.
To be perfectly honest, it is exactly those kinds of houses that the Phoenix market needs
a lot more of.
Switching from those to McMansions, then hardly any construction at all for 6 or 7 years,
is why there is such a crunch on housing, and skyrocketing rents and house prices now.
Even now they aren't building many of those small single family homes.
They are building redevelopment/in-fill condos in downtown/near ASU in Tempe and
apartments in the middle-burbs.
The Tax Cut and the Balance of Payments (Wonkish)
Lots of financial maneuvering, signifying nothing
By Paul Krugman
What tax cuts were supposed to do
A tax cut for corporations looks, on its face, like a big giveaway to stockholders, mainly
bypassing ordinary families: of stocks held by Americans, 84 percent are held by the
wealthiest 10 percent; * 35 percent of U.S. stocks are held by foreigners. **
The claim by tax cut advocates was, however, that the tax cut would be passed through to
workers, because we live in an integrated global capital market. There were multiple reasons
not to believe this argument in practice, but it's still worth working through its
implications....
The key point to realize is that in today's globalized corporate system, a lot of any
country's corporate sector, our own very much included, is actually owned by foreigners,
either directly because corporations here are foreign subsidiaries, or indirectly because
foreigners own American stocks. Indeed, roughly a third of U.S. corporate profits basically
flow to foreign nationals – which means that a third of the tax cut flowed abroad,
rather than staying at home. This probably outweighs any positive effect on GDP growth. So
the tax cut probably made America poorer, not richer.
And it certainly made most Americans poorer. While 2/3 of the corporate tax cut may have
gone to U.S. residents, 84 percent of stocks are held by the wealthiest 10 percent of the
population. Everyone else will see hardly any benefit....
Steven Rattner's Charts in the New York Times Don't Show He Says They Show
By Dean Baker
Steven Rattner used his New York Times column * to present a number of charts to show
Donald Trump's failures as president. While some, like the drop in enrollments in the health
care exchanges, do in fact show failure, others do not really make his case.
For example, he has a chart with a headline "paltry raise for the middle class." What his
chart actually shows is that middle class wages, adjusted for inflation, fell sharply in the
recession, but have been rising roughly 1.0 percent a year since 2014. They recovered their
pre-recession levels in 2017 and now are almost a percentage point above the 2008 level. This
is not a great story, but the picture under Trump is certainly better than under Obama. (This
wasn't entirely Obama's fault, since he inherited an economy that was failing.)
The chart shows more rapid growth at the bottom of the pay ladder and a modest downturn
under Trump for those at the top. By recent standards, this is not a bad picture, even if
Trump does not especially deserve credit for it. (He came in with an unemployment rate that
was low and falling.)
Rattner also presents as a bad sign projections for fewer Federal Reserve rate hikes.
While one basis for projecting fewer rate hikes is that the economy now looks weaker for 2019
than had been thought earlier in the year (but still stronger than had been projected in
2016), another reason is that inflation is lower than expected. Economists have consistently
over-estimated the impact that low unemployment would have on the inflation rate. With
inflation coming in lower than projected, there is less reason for the Fed to raise
rates.
Contrary to what Rattner is implying, this is a good development. It means that the
unemployment rate can continue to fall and workers at the middle and the bottom of the pay
ladder can continue to see real wage gains.
Rattner also shows us how growth projections for the U.S. and the world have been lowered
since June of 2018. It's not clear how much Trump can be held responsible for growth in the
EU (try blaming the European Commission's austerity drive) and the rest of the world, but his
argument about the U.S. is pretty weak. The 2.4 percent growth projection from December 2018
is actually up 0.1 percentage point from the June projection. More importantly, it is up from
a projection of 1.7 percent from January of 2017, the month Trump took office.
Then we have the chart showing the rise in the debt relative to GDP. While Rattner is
right that the tax cuts to the rich were a waste of resources, the higher debt to GDP ratio
is basically meaningless. (Japan's debt to GDP ratio is almost 250 percent and the current
interest rate on its long-term bonds is 0.00 percent.)
If anyone is seriously concerned about the debt that the government is passing on to
future generations then it is also necessary to include the rents associated with patent and
copyright monopolies. These monopolies are alternative mechanisms to direct funding that the
government uses to pay for services (i.e. research and creative work).
To take the most important case, suppose the government were the replace the $70 billion
(0.35 percent of GDP) in patent monopoly supported research that the pharmaceutical industry
conducts each year with direct funding of $70 billion. All research findings could then be
placed in the public domain and new drugs would sell at generic prices.
Rattner and his crew would count the $70 billion in addition spending as an addition to
the debt and deficit. However, when the industry is able to charge the public an extra $360
billion ** (1.8 percent of GDP) a year in higher drug prices due to patent monopolies and
related protections, Rattner and company choose to ignore the burden. This sort of groundless
debt fear mongering deserves only ridicule; it is not serious economic analysis.
Trump has done many awful things as president and threatens to do many more. But this is
not a reason to adopt Trumpian tactics, the data provide plenty of grounds to attack his
performance without playing games with it.
E.J. Dionne Provides Classic Example of Liberals Missing the Boat
By Dean Baker
I often rail against liberals who wring their hands over the unfortunate folks who have
been left behind by globalization and technology. E.J. Dionne gave us a classic example * of
such hand-wringing in his piece today on the need to help the left behinds to keep them from
becoming flaming reactionaries.
For some reason, it is difficult for many liberals to grasp the idea that the bad plight
of tens of millions of middle class workers did not just happen, but rather was deliberately
engineered. Longer and stronger patent and copyright protection did not just happen, it was
deliberate policy. Subjecting manufacturing workers to global competition, while largely
protecting doctors, dentists, and other highly paid professionals was also a policy
decisions. Saving the Wall Street banks from the consequences of their own greed and
incompetence was also conscious policy.
I know it's difficult for intellectuals to grasp new ideas, but if we want to talk
seriously about rising inequality, then it will be necessary for them to try. (Yeah, I'm
advertising my - free - book "Rigged: How Globalization and the Rules of the Modern Economy
Were Structured to Make the Rich Richer" ** again.) Anyhow, let's hope that in 2019 we can
actually talk about the policies that were put in place to redistribute income upward and not
just pretend that Bill Gates and his ilk getting all the money was a natural process.
You guys insist on continuing to think money isn't created from thin air by the Fed and
actually means something in the context of a substance that feeds you food. If you have to
have it, and you do have to have it, things will be done for you to get it. Borrowed money
that was created from thin air . . . who cares if you can't pay it back? You have to eat.
Consumption of oil is up. OPEC and Russia have reduced output. The price falls, because
there is no meaning to anything created from thin air when applied to something that depends
on physics.
You won't know anything until you find yourself sitting in a line waiting for gasoline.
You won't see it coming. You won't predict it. It will just happen someday.
Some truth to that Watcher. Simplistic thinking in investors. If we aren't making much money,
the US won't be making much money, so the price of oil must go lower. Not just simplistic,
flat out stupid.
And the number of people who think oil supply is limited is fairly scarce in relation to
the population as a whole. Probably less than the number of people who think chocolate milk
comes from brown cows.
On Friday, Bloomberg said
that many of the world's largest banks are forecasting a rebound in oil prices next year as
fears of a recession prove misplaced.
According to a Bloomberg survey of oil analysts, Brent will average $70 a barrel in 2019,
almost a third higher than its price on Thursday. Michael Cohen, head of energy and commodities
research at Barclays Plc in New York, said "we could even see something similar to a V-shaped
recovery next year, on two very important conditions. One, that the reduction in OPEC exports
leads to a reduction in inventories. And two, that we don't see a further deterioration in
macroeconomic conditions."
The Bloomberg report added that despite a recent darkening outlook for the global economy
amid prolonged trade disputes between the U.S. and China, and as the U.S. Federal Reserve
embarks on tightening monetary policy, most commentators aren't seeing an actual recession
biting the oil market next year. The median forecast of 24 oil analysts in the Bloomberg survey
projects that Brent crude futures will average exactly $70 a barrel in 2019. The price on
Thursday was about $53.50 while the average so far in 2018 has been about $72. Meanwhile, the
median forecast for WTI is $61.13. WTI futures traded at about $45.27 on Monday.
While Apple's profit warning was truly a shocker -- the first time in 16.5 years the company
had issued such a guidance release, according to Bespoke Research -- the forces pressuring
global equity markets today are more macro than micro. To put it simply: the yield curve looks
horrible. The table at the bottom of this report contains the details, but with a
near-inversion of the 12-month/10-year Treasury yield spread the market's demand for stocks is
understandably pressured.
In fact, over the course of 2018, Inhofe has made 57 individual stock trades, according to
Senate disclosure forms .
The value of these trades totaled somewhere between $1.72 million and $4.11 million. In 2017,
according to Inhofe's annual
report , he made another 52 trades.
Congress attempted to prevent legislators from insider trading with the 2012 STOCK
Act , which prohibits members and their staffs from exploiting insider information
discovered in the course of policy deliberations. But unlike corporate "insiders," members of
Congress are not required to establish arms-length trading plans --
nor has the House fully cooperated with efforts by the Securities and Exchange Commission
to investigate potential wrongdoing.
When compared to corporate insiders, members of Congress are exposed to a much broader array
of insider information which implicates a wide range of companies. Given that members of
Congress hold a unique position of public trust, Sens. Jeff Merkley, D-Ore., and Sherrod Brown,
D-Ohio, both potential Democratic presidential candidates, want to put a stop to all the
trading. Last week, they introduced
legislation that would permanently ban members of Congress and senior staff from trading
individual stocks.
"We should not be in the position of thinking about legislation in the context of personal
investment," Merkley told The Intercept in an interview. "As long as you own stocks, it's hard
to rule out of your mind. And the public sees it as a conflict of interest."
There's only one thing necessary to maintain the respect and affection of DC's ruling political and media class: affirm standard
precepts of US imperialism & militarism. You can work for Trump, or cheer menacing authoritarians, and you'll still be revered
as long as you do that:
Nikki Haley @NikkiHaley
Congratulations to Brazil's new President Bolsonaro. It's great to have another U.S.-friendly leader in South America, who
will join the fight against dictatorships in Venezuela and Cuba, and who clearly understands the danger of China's expanding influence
in the region.
(Previous comments from me that Pentagon officers
are not *necessarily* militarists not withstanding...)
Military Deletes New Year's Eve Tweet Saying It's
'Ready to Drop Something' https://nyti.ms/2RvcZwi
NYT - Matt Stevens and Thomas Gibbons-Neff - Dec. 31, 2018
The unified command responsible for the United States' nuclear strike capabilities drew
attention on Monday when it tweeted a message and video that threatened the possibility of
dropping a bomb.
In the tweet, which was posted as Americans prepared to celebrate New Year's Eve and was
deleted about three hours later, the United States Strategic Command said the nation was
"ready to drop something." A video that was part of the tweet showed a B-2 stealth bomber
soaring across the sky before releasing two GPS-guided bombs that exploded into a giant ball
of fire after hitting the ground below.
In the video, which was viewed more than 120,000 times, pulsing music beats in the
background as the words "STEALTH," "READY" and "LETHAL" flash across the screen in white
block letters.
"#TimesSquare tradition rings in the #NewYear by dropping the big ball...if ever needed,
we are #ready to drop something much, much bigger," the tweet said, adding the hashtags:
"#Deterrence #Assurance #CombatReadyForce #PeaceIsOurProfession." ...
A spokeswoman for the Strategic Command said the post "was part of our Year in Review
series meant to feature our command priorities: strategic deterrence, decisive response and
combat-ready force."
"It was a repost from earlier in the year, dropping a pair of conventional Massive
Ordnance Penetrators at a test range in the United States," she said in a statement that did
not elaborate.
About 30 minutes after the statement was issued, Stratcom apologized on Twitter, saying
that its "previous NYE tweet was in poor taste & does not reflect our values."
"We are dedicated to the security of America & allies," the new tweet added. ...
Obama was concocted in the darkest recesses of the elite. He was a deep-state test tube
presidential candidate.
BIC, Kissinger Associates, an occulted provenance, two comprehensively CIA connected
maternal grandparents, a June 8, 2008 meeting with HRC at a Bilderberg conference at the
Westfields Marriott in Chantilly, VA, while his press plane was ordered flown out of town
with all aboard except Barack Obama.
A ring on his wedding finger inscribed in Arabic. Tarmac reading material: "The Post
American World."
He was molded to do his level best to demolish the U.S., to deindustrialize it, strip mine
it, extinguish the middle class, serve it garnished to the People's Republic of China.
Tom_Collins 11 hours ago
Don't forget the fact that he refused to even investigate, much less prosecute both war
criminals and financial criminals. That effectively made those people and policies de-facto
above-the-law. As Glenn has written before, including in his book, we are now a nation of
men, not a nation of laws, and Obama is as much to blame for that as Bush, Cheney, their
lawyers and the Congress.
dkwilson 8 hours ago
I've always wondered why everyone forgets(?), or maybe no one knows... or maybe it's
convenient to omit the fact that Obama's first meaningful move as president was to attempt to
extract soldiers from the morass that is Syria. He sent Biden to the Pentagon to talk with
the corporate warlords there to take the overall temperature and find out how he could
achieve the pullout. But suddenly, that bell cow CIA media member, Bob Woodward, leaped off
the toilet on his yacht and "exposed" Obama's wants with a withering how could he, pro-war
attack (and some slick, "is Obama really a Muslim and, therefore, "anti Semite"
rhetoric).
It was as if someone took Obama into the WH's cinema room and showed him the untouched
version of the JFK assassination from every angle from which it was filmed. From that moment
forward, Barack Obama was never the same... in fact, he quickly became the Pentagon's "main
boy" water carrier. (It also seemed, Joe, I might be a Jesuit but I'm Jewish as hell, Biden
may have played a YUGE part in the play.)
But hey, why allow that little incident to get in the way of a tread worn, wholly
uniformed but somehow still effective anti-Obama narrative?
"On Thursday, Politico published a delightful story tracing how Donald Trump, American
president, got control of his own Tweet Machine. You see, up until 2013, he had a social
media manager named Justin McConney who would actually type and send each bit of, say, dating
advice to Robert Pattinson. The workflow for this was legitimately bonkers.
'Even as the mogul embraced digital media, he did so in the most analog way possible. He
had McConney print out his Twitter mentions, and he would use Sharpie pens to scribble
responses, which McConney would then type up and tweet out. After appearing at events, Trump,
who remained distrustful of anything he saw only on a screen, had McConney print out 8x10
glossy photos of him for his signoff before they were posted online.'
But one day, Trump got hold of the controls himself. In vintage fashion, he first used
them to praise someone for praising him on the teevee:
This prompted perhaps the greatest ever quote about Trumpian social media use. Certainly
it's the best from this news cycle.
"The moment I found out Trump could tweet himself was comparable to the moment in
'Jurassic Park' when Dr. Grant realized that velociraptors could open doors," recalled
McConney, who was the Trump Organization's director of social media from 2011 to 2017. "I was
like, 'Oh no.'"
If anyone still thinks that Donald Trump has some master plan to kill off his Deep State
adversaries they should check themselves into therapy. I know withdrawal is hard, but admitting
you have a problem is the first step to curing it.
He doesn't have a plan. He may fight them but it won't be with any kind of master plan to
trap them in some beautiful bit of political judo.
Frankly, Vladimir Putin he is not.
No, Trump is winging things at this point. While he still has the office he's trying to do
some of the things he promised. Doing that may keep him in power for a few more months.
But with his walking back the timetable for pulling troops out of Syria after a visit from
Lindsay Graham (R-MIC/AIPAC) should tell you all you need to know about Trump's willingness to
stand up to the pressure he's under.
Add to that the opening salvo from Mitt Romney (R-Wall St.) and it becomes pretty clear that
Trump was told what the score really is. When, not if, the Democrats push for impeachment or a
25th Amendment proceeding against him Graham and Romney will lead a GOP revolt against him,
siding with Senate Democrats to get rid of him.
That's been the point of this from the beginning. Pat Buchanan and I both talked about this
from the moment he was elected. Pat reminding us of what happened to Nixon who was hounded out
of office because he did the unthinkable -- ending the Vietnam War.
I've been simply looking at this from the standard libertarian perspective that "War is the
health of the state" and Trump's opposition to our Middle East follies would net him nothing
but contempt.
The Makinder "Heartland" view of Geopolitics holds complete sway in Washington, Downing St.
and the Pentagon. And as such, the Middle East is the access point to the Heartland and that
means destroying both Russia and Iran to ensure that Germany never joins them.
This is why The Swamp will not let Trump make nice with Putin. It's why the British deep
state and intelligence community was so eager to help Hillary Clinton fabricate the Russiagate
controversy through the creation of the Steele Dossier.
It's why outgoing Chairman of the Joint Chiefs of Staff, General Joseph Dunford, would only
entertain a peace deal with the Taliban in Afghanistan as long as the U.S. maintained all of
its military presence there.
In other words, accept our colonial presence here to ensure you stay in the 19th century and
we no longer have to fight openly.
If for nothing else, Trump's firing Dunford was a brief bit of joy that may outlive his
presidency. Not much else will.
Look, the Deep State is vast and cruel. Nancy Pelosi's first act as Speaker of the House was
to declare open season on Trump. She'll wait until the Mueller report to start the process but
she seems pretty confident she'll get what she needs.
Michael Cohen likely provided the road map to Trump's shady business dealings (far beyond
his pecadillos) which will be used against him. Impeachment isn't a legal proceeding, it's a
purely political one.
There is no standard of proof. If you're hated by enough of the right people, you're done.
That's it. In a time of unlimited corruption counting on people to act honorably is a fool's
game.
And Trump at this point is the head fool.
You don't announce something like the withdrawal from Syria and all that that entails only
to walk it back 10 days later because someone threatened you.
In fact, Trump's best, and frankly, only course of action now is to go on the offensive. And
Elizabeth Warren memes, no matter how entertaining, are not getting this done.
As I lay out in this video, the threat of exposing all of the corruption is his best play.
It may cost him everything but if he's going down the best thing he can do to MAGA is take as
many of them down as possible.
Spot on Tom. Ending a Predator Class war for global hegemony (the Makinder World Island
quest) is a capital offense for any President. That's why JFK was offed... (the Nixon tale is
not credible... Nixon sabotaged LBJ's negotiations with the N. Vietnamese and with Kissinger
dragged on the war until the US was kicked out in '75).
Trump could appeal to the American people over Syria and Afghanistan claiming that as the
Peace President he is being threatened... Maybe DoJ gets cleaned out; Mueller has
nothing.
Order the acting AG to appoint Special Prosecutors for Clinton, Feinstein and Pelosi and
others for their treason and their Chinese Business Dealings
Declassify all of the JFK and other documents that you promised to release, the Mexican
stand off ends the day Trump leaves office and they bankrupt and imprison him and his
family.
Name the CFR, and all other Globalist Organizations and NeoCons, as Foreign Agents and
force register all of their members as Foreign Agents.
Pull the Security clearances from all people not currently employed by the Govt,
especially the CFR members and similar organization.
Name the ADL and SPLC as Hate Groups and appoint a special prosecutor to go after
them.
PS Stop appointing people who want you dead in the key positions in your government
PPS Pardon Assange and give him diplomatic passage to some country that won't extradite
him like Iceland or perhaps Switzerland.
We will stay because our Israeli bought government wants it. They will never allow Trump
to exit Syria.
Here is a list of politicians who carry Israeli Citizenship ... Good to know and explains
a lot
112 CONGRESS
THE US SENATE [13]
Richard Blumenthal (D-CT) Barbara Boxer (D-CA) Benjamin Cardin (D-MD) Dianne Feinstein
(D-CA) Al Franken (D-MN) Herb Kohl (D-WI) Frank Lautenberg (D-NJ) Joseph Lieberman
(Independent-CT) Carl Levin (D-MI) Charles Schumer (D-NY) Ron Wyden (D-OR) Michael Bennet
(D-CO)
HOUSE OF REPRESENTATIVES [27]
Gary Ackerman (D-NY) Shelley Berkley (D-NV) Howard Berman (D-CA) Eric Cantor (R-VA) David
Cicilline (D-RI) Stephen Cohen (D-TN) Susan Davis (D-CA) Ted Deutch (D-FL) Eliot Engel (D-NY)
Bob Filner (D-CA) Barney Frank (D-MA) Gabrielle Giffords (D-AZ) Jane Harman (D-CA) Steve
Israel (D-NY) Sander Levin (D-MI) Nita Lowey (D-NY) Jerrold Nadler (D-NY) Jared Polis (D-CO)
Steve Rothman (D-NJ) Jan Schakowsky (D-IL) Allyson Schwartz (D-PA) Adam Schiff (D-CA) Brad
Sherman (D-CA) Debbie Wasserman Schultz (D-FL) Henry Waxman (D-CA) Anthony Weiner (D-NY) John
Yarmuth (D-KY)
Here is a list of Israel's 'contributions' to US senators
Yesterday I had a conversation about my work, about how and why I started studying
inequality more than 30 years ago, what was my motivation, how it was to work on income
inequality in an officially classless (and non-democratic) society, did the World Bank care
about inequality etc. The interviewer and I thus came to some methodological issues and to
the inescapable influence of Marx on my work. I want to present it more systematically in
this post.
The most important of Marx's influences on people working in social sciences is, I think,
his economic interpretation of history. This has become so much part of the mainstream that
we do no longer associate it with Marx very much. And surely, he was not the only one or even
the first to have defined it. But he applied it most consistently and most creatively.
Even when we believe that such an interpretation of history is common-place today, this
still is not entirely so. Take the current dispute about the reasons that brought Trump to
power. Some (mostly those who believe that everything that went on previously was fine) blame
a sudden outburst of xenophobia, hatred, and misogyny. Others (like myself) see that outburst
as having been caused by long economic stagnation of middle class incomes, and rising
insecurity (of jobs, health care expenses, inability to pay for children's education). So the
latter group tends to place economic factors first and to explain how they led to racism and
the rest. There is a big difference between the two approaches -- not only in their diagnosis
of the causes but more importantly in their view of what needs to be done.
The second Marx's insight which I think is absolutely indispensable in the work on income
and wealth inequality is to see that economic forces that influence historical developments
do so through "large groups of people who differ in their position in the process of
production", namely through social classes. The classes can be defined by the difference in
the access to the means of production as Marx insisted but not only by that. Going back to my
work in socialist economies, there was a very influential left-wing critique of socialist
systems which held that social classes in that system were formed on the basis of
differential access to state power. Bureaucracy can indeed be seen as a social class. And not
only under socialism, but also in pre-capitalist formations where the role of the state as an
"extractor of the surplus value" was important, from the ancient Egypt to the medieval
Russia. Many African countries today can be usefully analyzed using that particular lens. In
my forthcoming "Capitalism, Alone" I use the same approach with respect to the countries of
political capitalism, notably China.
But to underline: class analysis is absolutely crucial for all students of inequality
precisely because inequality before it becomes an individual phenomenon ("my income is low")
is a social phenomenon that affects large swathes of people ("my income is low because women
are discriminated", or because African Americans are discriminated, or poor people cannot
access good education etc.). To give a couple of examples of what I have in mind here:
Piketty's work especially in "Top incomes in France" and Rodriguez Weber's book on Chilean
income distribution over the long-term ("Desarrollo y desigualdad en Chile (1850–2009):
historia de su economía política"). On the other hand, I think that Tony
Atkinson's work on British and various other income and wealth distributions failed to
sufficiently integrate political and class analysis.
This is also where the work on inequality parts ways with one of the scourges of modern
micro- and macro-economics, the representative agent. The role of the representative agent
was to obliterate all meaningful distinctions between large groups of people whose social
positions differ, by focusing on the observation that everybody is an "agent" who tries to
maximize income under a set of constraints. This is indeed trivially true. And by being
trivially true it disregards the multitude of features that make these "agents" truly
different: their wealth, background, power, ability to save, gender, race, ownership of
capital or the need to sell labor, access to the state etc. I would thus say that any serious
work on inequality must reject the use of representative agent as a way to approach reality.
I am very optimistic that this will happen because the representative agent itself was the
product of two developments, both currently on the wane: an ideological desire, especially
strong in the United States because of the McCarthy-like pressures to deny the existence of
social classes, and the lack of heterogeneous data. For example, median income or income by
decile was hard to calculate but GDP per capita was easy to get hold of.
The third extremely important Marx's methodological contribution is the realization that
economic categories are dependent on social formations. What are mere means of production
(tools) in an economy composed of small-commodity producers becomes capital in a capitalist
economy. But it goes further. The equilibrium (normal) price in a feudal economy, or in a
guild system where capital is not allowed to move between the branches will be different from
equilibrium prices in a capitalist economy with the free movement of capital. To many
economists this is still not obvious. They use today's capitalist categories for the Roman
Empire where wage labor was (to quote Moses Finley) "spasmodic, casual and marginal".
But even if they do not realize it fully, they de facto acknowledge the importance of
institutional set up of a society in determining prices not only of goods but also of the
factors of production. Again, we see it daily. Suppose that the world produces exactly the
same set of commodities and the demand for them is exactly the same, but it does so within
national economies that do not permit movement of capital and labor, and then does it in an
entirely globalized economy where borders do not exist. Clearly, the prices of capital and
labor (profit and wage) will be different in the latter, the distribution between capital
owners and workers will be different, prices will change as profits and wages change, incomes
will change too and so will consumption patterns, and ultimately even the structure of
production will be altered. Indeed this is what today's globalization is doing.
The fact that property relations determine prices and structure of production and
consumption is an extremely important insight. The historical character of any institutional
arrangement is thereby highlighted.
The last among Marx's contribution that I would like to single out -- perhaps the most
important and grandiose -- is that the succession of socio-economic formations (or more
restrictively, of the modes of production) is itself "regulated" by economic forces,
including the struggle for the distribution of the economic surplus. The task of economics is
nothing less than global historical: to explain the rise and fall not solely of countries but
of different ways of organizing production: why were nomads superseded by the sedentary
populations, why did Western Roman Empire break into a few large feudal-like demesnes and
serfs, while the Eastern Roman Empire remained populated by small landholders, and the like.
Whoever studies Marx can never forget the grandiosity of the questions that are being asked.
For such a student then using supply and demand curves to determine the cost of pizza in his
town will indeed be acceptable, but surely will never be seen as the prime or the most
important role of economics as a social science.
Rather than investing capital in new manufacturing capacity, new housing, public
utilities, :
'Investment capital' is used to buy an existing business showing a 6% ROI at a price of
twice its book value. New owner, wanting to make at least 6% return on their investment
(ROTI), brings in 'Al' to optimize operations and maximize sales. After 1 year of not getting
to anywhere near 6% ROI, 'Al' is let go and 'Jack' is brought in. Under 'Jack', the business
loses market share and ROI falls to 2... Nation loses ever more manufacturing capacity
Investment banker who thinks any viable business should return at least 12%, buys apple
orchard, can't get the return up, so sells the orchard to a real estate developer. Apple
imports soar.
Really big Investment Bank (RBIB) thinks a Certain Large Utility should pay its
shareholders 12%, buys controlling interest. In order to pay the 12%, management cuts back on
maintenance and safety, and contracts out significant operations. Over the next few years,
the utility; found responsible for multiple accidents leading to injury and death, and
destruction of property; is forced to file for bankruptcy.
RBIB thinks that all utilities should be privatized -- that markets are always best --
buys public water systems in undeveloped nations and charges the poor citizens 'market'
prices.
RBIBs and Wall Street, deciding that student loans are a good market opportunity, because
they can, buy themselves a few easily bent congresscritters (senators from ignorant, backward
states have inordinate power and can often be bought on the cheap), write the lender
favorable legislation for these bought and paid for; then get said passed.
Any debt is an investment opportunity, consumer debt is boundless, and if you own congress
credit card debt can be made tougher to escape than mortgages, bonds,
For the sophisticated wealthy investor there are hedge funds. Hedge funds can invest in
anything.
Venture capitalists invest in the high risk, potential high return start-ups and
emergents.
Rentiers, already having their capital invested, seek to increase their return. At times
rent increases are limited by competition. Not now in places like San Francisco, New York
City, Seattle, ... While prattling that the market always know best, greedy landlords in
California keep raising rents to 'market level' creating an ever raising rents positive
feedback loop (a rent bubble) that leads to ever more homelessness. The higher the rents, the
higher the property value, the higher the rents, ...
Can rent control be made to work efficiently indefinitely, and if so how? I have no proper
idea. Hong Kong used a seemingly efficient form of rent control for decades, though Milton
Friedman who advised the governor of the then British colony preferred not to notice. China
is working on rent control currently.
In SF it is impossible for rent control to work. There simply are not enough units to satisfy
demand. You cannot create millions of jobs while restricting the building of any new housing.
There is enough of a boom that the cost of materials is become a problem now that just a few
new units are in the pipeline. I don't see how you can have price controls on one side and a
artificial constraint on supply and not have all of the not rent controlled properties get
insanely expensive.
"In SF it is impossible for rent control to work. There simply are not enough units to
satisfy demand. You cannot create millions of jobs while restricting the building of any new
housing. There is enough of a boom that the cost of materials is become a problem now that
just a few new units are in the pipeline. I don't see how you can have price controls on one
side and a artificial constraint on supply and not have all of the not rent controlled
properties get insanely expensive."
Cant build affordable housing when Prop 13 prevents tax funded roads, water, sewer,
transit, schools to enanle building on the abundant vacant land.
I know you have likely bought the right-wing claim that rezoning single family to high
rise housing will increase the supply of modest cost single family houses, because the more
you restrict supply, the more supply you get.
California has had plenty of waves of rapid housing development which was quickly followed
by crisis requiring tax hikes and massive construction of infrastructure to provide roads,
water, schools, etc.
It was these tax hikes that led to popular support for Prop 13.
Around the same time, NH got stronger zoning plus the Union Leader "the pledge" campaign,
the pledge to starve NH of tax revenue to fund public investment. For the same reason: rapid
population growth from uncontrolled development causing crisis in public services like
schools, transportation, and pollution.
Tanstaafl
Only tax and spend allows affordable population growth.
I have written here a number of times about the perverse incentives of prop 13. SF needs to
build more mid and high rise. They need to replace the vacant warehouses with
midrise/highrise. This is the only way housing becomes affordable (that and inclusionary
housing that is reasonable and can get built). I certainly am no fan of single family zoning
nor am I for restricting supply.
"I certainly am no fan of single family zoning nor am I for restricting supply."
So, you hate most people living in SF because they make housing too expensive?
The past few decades have eliminated most single family homes in the city.
Now you want to eliminate all businesses that employ working class people?
Nature seems to be your enemy. You need a vocano, which can't exist in the bay area, to
add land so supply can increase, like in Hawaii.
For the Bay area, there is plenty of land, but no taxes to pay for building speedy
transportation, no taxes to pay for schools, water, sewer, etc. But its the speedy
transportation part that is the biggest barrier. For decades, new housing means slower
transportation, thanks to Prop 13, and its free lunch economics behind it.
"The true conservative seeks to protect the system of private property and free enterprise by
correcting such injustices and inequalities as arise from it. The most serious threat to our
institutions comes from those who refuse to face the need for change. Liberalism becomes the
protection for the far-sighted conservative. In the words of the great essayist [Lord
Macaulay, not named by FDR], "Reform if you would preserve." I am that kind of conservative
because I am that kind of liberal." FDR
Elizabeth Warren Announces She Is Running for
President in 2020 https://nyti.ms/2RoXMNo
NYT - Astead W. Herndon and Alexander Burns - Dec. 31, 2018
Senator Elizabeth Warren, the Massachusetts Democrat and a sharp critic of big banks and
unregulated capitalism, entered the 2020 race for president on Monday, becoming the first
major candidate in what is likely to be a long and crowded primary marked by ideological and
generational divisions in a Democratic Party desperate to beat President Trump.
In an 8:30 a.m. email to supporters on New Year's Eve -- 13 months before the first votes
will be cast in the Iowa caucuses -- Ms. Warren said she was forming an exploratory
committee, which allows her to raise money and fill key staff positions before a formal
kickoff of her presidential bid. Ms. Warren also released a video that leaned on the
populist, anti-Wall Street themes that are sure to be central to her campaign message.
"I've spent my career getting to the bottom of why America's promise works for some
families, but others, who work just as hard, slip through the cracks into disaster," she said
in the video. "And what I've found is terrifying: these aren't cracks families are falling
into, they're traps. America's middle class is under attack."
"But this dark path doesn't have to be our future," she continued. "We can make our
democracy work for all of us. We can make our economy work for all of us."
The race for the 2020 Democratic nomination is poised to be the most wide open since
perhaps 1992, with the party leaderless and lacking obvious front-runners. After a midterm
election that saw many women, liberals, minorities and young Democrats win, the primaries and
caucuses next year are likely to be fought over not only who is the most progressive
candidate but also which mix of identities should be reflected in the next nominee.
Ms. Warren, 69, is among the best-known Democrats seeking to take on Mr. Trump, who has
already announced his re-election campaign, but she also faces challenges: recent controversy
over her claims to Native American heritage, skepticism from the party establishment and a
lack of experience in a presidential race
She is running. I am glad EMichael likes her. About one of the only good things about him. I
suspect it's just that he likes her more than Bernie. He's anybody but Bernie.
Warren's 2020 agenda: break up monopolies, give workers control over corporations, fight
drug companies
A policy guide to the Massachusetts senator running for the White House
By Jeff Stein
December 31 at 3:17 PM
Sen. Elizabeth Warren (D-Mass.) is running for president on proposals to transfer
corporate power to workers, have the government produce prescription drugs and create
millions of new homes through federal intervention.
Warren has touted her policies as a way to use government to shift the benefits of
economic growth from big businesses and the rich to America's middle and working classes.
"America's middle class is under attack," Warren said in a video to supporters as she
announced her presidential exploratory committee on Monday. "How did we get here?
Billionaires and big corporations decided they wanted more of the pie. And they enlisted
politicians to cut them a bigger slice."
Warren does not see herself as a socialist, and has in interviews rejected the label by
saying she is a "capitalist to my bones." The senator does support some plans to have the
federal government take over certain industries, as she has signed on as a co-sponsor to a
bill from Sen. Bernie Sanders' (I-Vt.) to federalize national health insurance.
But of the key policies Warren is championing, most aim to use the federal government's
power to restructure markets -- rather than have the federal government take them over
directly. These policies reflect her perspective that a handful of concentrated economic
interests have come to unfairly dominate certain sectors, and that federal intervention can
reform markets to make them fairer by opening them up to greater competition.
Her housing bill, for instance, includes trying to repeal restrictive local zoning codes
rather than building new federally-owned housing, as some on the left have proposed.
Warren has focused on breaking up what she sees as monopolies in the technology sector and
other industries through new antitrust enforcement, and she has criticized anti-competitive
behavior by large tech companies.
And one of her most recently passed pieces of legislation in fact decreases the
government's footprint, deregulating the hearing aid industry by allowing Americans to
purchase them over the counter.
"If I could characterize Warren's ideology, it's that we should select the tool
appropriate to each economic problem we face, and not decide ahead of time that the same
solution is appropriate," said Marshall Steinbaum, fellow at the Roosevelt Institute, a
left-leaning think-tank.
Whether that approach can power Warren to the top of the primary pack or the White House
is another matter. To critics on her right, Warren's suite of policy proposals -- many of
which require tens of billions in new federal spending -- still look a lot like big
government socialism.
"Her impulse to mend but not end capitalism is the right one," said Jim Kessler, executive
vice president at Third Way, a center-left think-tank. "But I think some of her ideas, like
single-payer, may work for a base Democratic audience but not anybody else."
Here's a look at some of key pieces of legislation Warren has authored or supported.
Worker power over corporations. Warren's Accountable Capitalism Act, introduced this
summer, is perhaps her most distinctive contribution to the field of progressive U.S.
policy-making.
Most significantly, the plan would require large U.S. corporations to have 40 percent of
their board of directors selected by company employees. This proposal aims to redirect
trillions of dollars to American workers, as labor's share of the national income has
continued to fall despite rising corporate profits over the last several decades.
"It used to be that as firm profits grew, they grew for both workers and shareholders --
everybody gained when the economy as a whole gained," said Robert C. Hockett, a law professor
at Cornell University who helped Warren write the proposal. "The point is to give
wage-earners a much stronger voice in the determination of their own compensation."
This "codetermination" proposal would only apply to firms bigger than $1 billion, and is
modeled primarily after Germany, where workers have been given a seat on corporate boards
since the 1970's.
The bill would also require corporate expenditures on political candidates to be approved
by shareholders, and would eliminate incentives Warren says encourages corporate executives
to pay out dividends rather than plow profits back into their businesses.
Allen Sinai, chief economist at Decision Economics, said in theory he did not oppose
having more worker input on corporate boards, but said Warren's plan goes too far and would
be difficult to carry out.
"It would be a revolution in corporate America and extremely disruptive, and
counter-productive because it's so extreme," Sinai said. "It's far-fetched and totally
impractical."
Going after the monopoly power. In 2016, Warren delivered a speech calling for the federal
government to crackdown on tech giants and other corporate monopolies, arguing the country
needs a more robust antitrust policy.
A year later, the Democratic Party leadership incorporated antitrust reform in its "Better
Deal" blueprint, which allies of Warren credit in part to the senator's advocacy.
"People don't remember, but monopoly wasn't really an issue on people's radars at the
time," said Matt Stoller, policy director at the Open Markets Institute, where Warren
delivered the 2016 speech. "It was the first time a politician had criticized big tech for
being monopolistic in a big way."
Warren's demand that Apple, Google, and Amazon face antitrust scrutiny fits her broader
push on the dangers of monopoly power to the American economy. Earlier this month, Warren
unveiled a bill that would create a public option for pharmaceutical drugs, giving the
government the power to produce an affordable generic version of certain drugs that see big
price increases.
"Promoting competition used to be a central goal of economic policymaking," Warren wrote
in The Washington Post. "Today, in market after market, competition is dying as a handful of
giant companies gain more and more market share."
Similarly, earlier this year, Warren also unveiled a housing bill that would aim to reward
local governments for relaxing strict zoning laws that have prevented developers from
expanding the supply of housing. The plan also calls for investing billions more in
government spending in affordable housing projects, as well as helping black families
historically hurt by federal housing practices.
"Warren believes markets can be the mechanism for overthrowing the aristocrats who have
all the money," Stoller said.
Nationalize health insurance, $15 an hour minimum wage. But while many of her policies
stop short of having the government federalize parts of the private sector, Warren has also
embraced many of the ideas that align with the left.
The best example of this is Warren's support of Sanders' "Medicare for All" plan to
nationalize the health insurance industry. That plan rejects the Affordable Care Act's
market-based approach to reforming health insurance by allowing consumers to buy plans on
open exchanges, instead requiring the government to provide insurance to every American.
Similarly, Warren's plan to confront the opioid epidemic would require the federal
government to help treat millions of additional Americans who face addiction. Modeled after
the national response to the AIDS epidemic, that plan would pour $100 billion in federal
funding over 10 years to fighting the opioid epidemic.
Warren has also cosponsored a bill requiring a national $15 an hour minimum wage, as well
as a plan that would make it easier for workers to form and join unions.
Liz is starting a 2nd 6-year term,
with the next presidential election
just two years away. Now is as good
t5me for anyone with such job security
to go for the brass ring, as they say.
Not going to be a lot of useful work
done by Dems in the Senate anytime soon.
... With his political self-branding as "Middle-Class Joe," he is seen by Democratic
strategists as well equipped to make inroads into President Trump's base of blue-collar white
voters. ...
Outsider independent....LMAO - only according to the very narrowly limited range of
allowed speech that Chomsky references in his famous quote. Trump may not be a D.C. insider
in the recent traditional sense, but he's no outsider and he's no independent. His
three-letter agency actions and judicial nominations clearly point to longstanding
Republican/corporate/Wall Street/Israeli wish lists.
I'm happy about the Syria decision, but I have a suspicion that it's not as positive a
development as many of his supporters are touting.
Just remembered something about Arkin. This book: Code Names: Deciphering U.S. Military
Plans, Programs and Operations in the 9/11 World January 25, 2005 by William M. Arkin
https://books.google.com/books/about/Code_Names.html?id=KXLfAAAAMAAJ
In particular there was this one exercise called Vigilant Guardian, run by NORAD, simulating
terrorist attacks by hijackers which, curiously enough, happened to be in operation on the
very day the Saudi hijackers were actually conducting such attacks:
NORAD's next Vigilant Guardian exercise, in 2001, will actually be several days underway on
9/11 (see (6:30 a.m.) September 11, 2001). It will include a number of scenarios based
around plane hijackings, with the fictitious hijackers targeting New York in at least one
of those scenarios (see September 6, 2001, September 9, 2001, September 10, 2001, and (9:40
a.m.) September 11, 2001). [9/11 COMMISSION, 2004; VANITY FAIR, 8/1/2006]
It's just one of many stories that makes one wonder exactly how much pre-warning the Bush
Administration had about the 9/11 attacks, and whether there was a deliberate decision to
allow the hijackers to seize control of the planes without any interference. It did save the
Bush presidency, it did open the door to the Iraq invasion, and the Saudi intelligence
services were involved with helping the hijackers. All very suspicious, really. Point being,
Arkin's book is one of the few sources that lay out all those covert/overt program names, and
is a real treasure for anyone interested in the history of that era.
The Case for a Mixed Economy
Maybe not everything should be privatized
By Paul Krugman
A mind is a terrible thing to lose, especially if the mind in question is president of the
United States. But I feel like taking a break from that subject. So let's talk about
something completely different, and probably irrelevant.
I've had several interviews lately in which I was asked whether capitalism had reached a
dead end, and needed to be replaced with something else. I'm never sure what the interviewers
have in mind; neither, I suspect, do they. I don't think they're talking about central
planning, which everyone considers discredited. And I haven't seen even an implausible
proposal for a decentralized system that doesn't rely on price incentives and self-interest
– i.e., a market economy with private property, which most people would consider
capitalism.
So maybe I'm being dense or lacking in imagination, but it seems to be that the choice is
still between markets and some kind of public ownership, maybe with some decentralization of
control, but still more or less what we used to mean by socialism. And everyone either thinks
of socialism as discredited, or pins the label on stuff – like social insurance
programs – that isn't what we used to mean by the word.
But I've been wondering, exactly how discredited is socialism, really? True, nobody now
imagines that what the world needs is the second coming of Gosplan. But have we really
established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so. In fact, there are some areas, like education, where the
public sector clearly does better in most cases, and others, like health care, in which the
case for private enterprise is very weak. Add such sectors up, and they're quite big.
In other words, while Communism failed, there's still a pretty good case for a mixed
economy – and public ownership/control could be a significant, although not majority,
component of that mix. My back of the envelope says that given what we know about economic
performance, you could imagine running a fairly efficient economy that is only 2/3
capitalist, 1/3 publicly owned – i.e., sort-of-kind-of socialist.
I arrive at that number by looking at employment data. What we see right away is that even
now, with all the privatization etc. that has taken place, government at various levels
employs about 15 percent of the work force – roughly half in education, another big
chunk in health care, and then a combination of public services and administration.
Looking at private sector employment, we find that another 15 percent of the work force is
employed in education, health, and social assistance. Now, a large part of that employment is
paid for by public money – think Medicare dollars spent at private hospitals. Much of
the rest is paid for by private insurers, which exist in their current role only thanks to
large tax subsidies and regulation.
And there's no reason to think the private sector does these things better than the
public. Private insurers don't obviously provide a service that couldn't be provided,
probably more cheaply, by national health insurance. Private hospitals aren't obviously
either better or more efficient than public. For-profit education is actually a disaster
area.
So you could imagine an economy in which the bulk of education, health, and social
assistance currently in the private sector became public, with most people at least as well
off as they are now.
Then there are other private activities that could plausibly be public. Utilities are
heavily regulated, and in some cases are publicly owned already. Private health insurance
directly employs hundreds of thousands of people, with doubtful social purpose. And I'm sure
I'm missing a few others.
By and large, other areas like retail trade or manufacturing don't seem suitable for
public ownership – but even there you could see some cases. Elizabeth Warren is
suggesting public manufacture of generic drugs, which isn't at all a stupid idea.
Put all of this together, and as I said, you could see an economy working well with
something like 1/3 public ownership.
Now, this wouldn't satisfy people who hate capitalism. In fact, it wouldn't even live up
to the old slogan about government controlling the economy's "commanding heights." This would
be more like government running the boiler in the basement. Also, I see zero chance of any of
this happening in my working lifetime.
But I do think it's worth trying to think a bit beyond our current paradigm, which says
that anything you could call socialist has been an utter failure. Maybe not so much?
"Then there are other private activities that could plausibly be public. Utilities are
heavily regulated, and in some cases are publicly owned already."
I look at public utilities and see extremely weak regulation.
The free lunch economic criticism of public utility regulation until Jimmy Carter was it
increased consumer costs too much by paying too much to workers to provide too much service
and build too much capital.
And Germany and UK owned utilities more than the US, which meant that populists or
progressives, the Bernies and AOCs, demanded more mining of fossil fuels even when cheaper,
cleaner alternatives, were available.
How will Bernie and AOC create jobs when all their policies kill jobs, but prevent
creating new jobs in the US? Why won't they end up protecting coal mining jobs ten times more
than Trump? Or will they become Clinton: "your jobs that that made you middle class are never
coming back, and creating new jobs cost too much in higher taxes, so no new jobs".
Was and is the older liberal paradigm
Reinvigorated
Recall this De facto abandonment
Of organized labor
allowed full collaboration
Between progressive professional class
Elements
and major corporate bottom lines
ane and I want to take this opportunity to wish you and yours a very healthy and happy new
year.
It goes without saying that 2019 will be a pivotal and momentous time for our country and
the entire planet. As you know, there is a monumental clash now taking place between two very
different political visions. Not to get you too nervous, but the future of our country and
the world is dependent upon which side wins that struggle.
The bad news is that in the United States and other parts of the world, the foundations of
democracy are under severe attack as demagogues, supported by billionaire oligarchs, work to
establish authoritarian type regimes. That is true in Russia. That is true in Saudi Arabia.
That is true in the United States. While the very rich get much richer these demagogues seek
to move us toward tribalism and set one group against another, deflecting attention from the
real crises we face.
The good news is that, all across this country, people are getting politically involved
and are fighting back. They are standing up for economic, political, social and racial
justice.
In the last year we saw courageous teachers, in some of the most conservative states in
the country, win strikes as they fought for adequate funding for education.
We saw low paid workers at Amazon, Disney and elsewhere undertake successful struggles to
raise their wages to a living wage – at least $15 an hour.
We saw incredibly courageous young people, who experienced a mass shooting in their
school, lead successful efforts for commonsense gun safety legislation.
We saw diverse communities stand together in the fight against mass incarceration and for
real criminal justice reform.
We saw tens of thousands of Americans, from every walk of life, take to the streets and
demand that politicians respond to the global crisis of climate change.
As we enter 2019, it seems to me that we must mount a two-pronged offensive. First, we
must vigorously take on the lies, bigotry and kleptocratic behavior of the most irresponsible
president in the modern history of our country. In every way possible, we must stand up to
the racism, sexism, homophobia, xenophobia and religious intolerance of the Trump
administration.
But fighting Trump is not enough.
The truth is that despite relatively low unemployment, tens of millions of Americans
struggle daily to keep their heads above water economically as the middle class continues to
shrink.
While the rich get richer, 40 million live in poverty, millions of workers are forced to
work two or three jobs to pay the bills, 30 million have no health insurance, one in five
cannot afford their prescription drugs, almost half of older workers have nothing saved for
retirement, young people cannot afford college or leave school deeply in debt, affordable
housing is increasingly scarce, and many seniors cut back on basic needs as they live on
inadequate Social Security checks.
Our job, therefore, is not only to oppose Trump but to bring forth a progressive and
popular agenda that speaks to the real needs of working people. We must tell Wall Street, the
insurance companies, the drug companies, the fossil fuel industry, the military-industrial
complex, the National Rifle Association and the other powerful special interests that we will
not continue to allow their greed to destroy this country and our planet.
Politics in a democracy should not be complicated. Government must work for all of the
people, not just the wealthy and the powerful. As a new House and Senate convene next week,
it is imperative that the American people stand up and demand real solutions to the major
economic, social, racial and environmental crises that we face. In the richest country in the
history of the world, here are some (far from all) of the issues that I will be focusing on
this year. What do you think? How can we best work together?
Protect American democracy: Repeal Citizens United, move to public funding of elections
and end voter suppression and gerrymandering. Our goal must be to establish a political
system that has the highest voter turnout in the world and is governed by the democratic
principle of one person - one vote.
Take on the billionaire class: End oligarchy and the growth of massive income and wealth
inequality by demanding that the wealthy start paying their fair share of taxes. We must
rescind Trump's tax breaks for billionaires and close corporate tax loopholes.
Increase Wages: Raise the minimum wage to $15 an hour, establish pay equity for women and
revitalize the trade union movement. In the United States, if you work 40 hours a week, you
should not live in poverty.
Make health care a right: Guarantee health care for everyone through a Medicare-for-all
program. We cannot continue a dysfunctional healthcare system which costs us about twice as
much per capita as any other major country and leaves 30 million uninsured.
Transform our energy system: Combat the global crisis of climate change which is already
causing massive damage to our planet. In the process, we can create millions of good paying
jobs as we transform our energy system away from fossil fuel and into energy efficiency and
sustainable energy.
Rebuild America: Pass a $1 trillion infrastructure plan. In the United States we must not
continue to have roads, bridges, water systems, rail transport, and airports in
disrepair.
Jobs for All: There is an enormous amount of work to be done throughout our country
– from building affordable housing and schools to caring for our children and the
elderly. 75 years ago, FDR talked about the need to guarantee every able-bodied person in
this country a good job as a fundamental right. That was true in 1944. It is true today.
Quality Education: Make public colleges and universities tuition free, lower student debt,
adequately fund public education and move to universal childcare. Not so many years ago, the
United States had the best education system in the world. We much regain that status
again.
Retirement Security: Expand Social Security so that every American can retire with dignity
and everyone with a disability can live with security. Too many of our elderly, disabled and
veterans are living on inadequate incomes. We must do better for those who built this
country.
Women's rights: It is a woman, not the government, who should control her own body. We
must oppose all efforts to overturn Roe v. Wade, protect Planned Parenthood and oppose
restrictive state laws on abortion.
Justice for All: End mass incarceration and pass serious criminal justice reform. We must
no longer spend $80 billion a year locking up more people than any other country. We must
invest in education and jobs, not jails and incarceration.
Comprehensive immigration reform: It is absurd and inhumane that millions of hardworking
people, many of whom have lived in this country for decades, are fearful of deportation. We
must provide legal status to those who are in the DACA program, and a path to citizenship for
the undocumented.
Social Justice: End discrimination based on race, gender, religion, place of birth or
sexual orientation. Trump cannot be allowed to succeed by dividing us up. We must stand
together as one people.
A new foreign policy: Let us create a foreign policy based on peace, democracy and human
rights. At a time when we spend more on the military than the next ten countries combined, we
need to take a serious look at reforming the bloated and wasteful $716 billion annual
Pentagon budget.
In the New Year, let us resolve to fight like we have never fought before for a
government, a society and an economy that works for all of us, not just those on top.
The Ghost of Trump Chaos Future
Sorry, investors, but there is no sanity clause.
By Paul Krugman
Two years ago, after the shock of Donald Trump's election, financial markets briefly
freaked out, then quickly recovered. In effect, they decided that while Trump was manifestly
unqualified for the job, temperamentally and intellectually, it wouldn't matter. He might
talk the populist talk, but he'd walk the plutocratic walk. He might be erratic and
uninformed, but wiser heads would keep him from doing anything too stupid.
In other words, investors convinced themselves that they had a deal: Trump might sound
off, but he wouldn't really get to make policy. And, hey, taxes on corporations and the
wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal --
or at any rate, that there wasn't a sanity clause. (Sorry, couldn't help myself.) Put an
unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy
things.
To be clear, voters have been aware for some time that government by a bad man is bad
government. That's why Democrats won a historically spectacular majority of the popular vote
in the midterms. Even the wealthy, who have been the prime beneficiaries of Trump policies,
are unhappy: A CNBC survey finds that millionaires, even Republican millionaires, have turned
sharply against the tweeter in chief.
But market behavior has, until recently, been a different story.
The reality that presidential unfitness matters for investors seems to have started
setting in only about three weeks (and around 4,000 points on the Dow) ago. First came the
realization that Trump's much-hyped deal with China existed only in his imagination. Then
came his televised meltdown in a meeting with Nancy Pelosi and Chuck Schumer, his abrupt
pullout from Syria, his firing of Jim Mattis and his shutdown of the government because
Congress won't cater to his edifice complex and build a pointless wall. And now there's buzz
that he wants to fire Jerome Powell, the chairman of the Federal Reserve.
Oh, and along the way we learned that Trump has been engaging in raw obstruction of
justice, pressuring his acting attorney general (who is himself a piece of work) over the
Mueller investigation as the tally of convictions, confessions and forced resignations
mounts.
But let's play devil's advocate here: Does all this Trump chaos matter for the economy, or
for the stock market (which isn't at all the same thing)? At first sight, it's not all that
obvious.
After all, aside from the prospect of trade war, none of Individual-1's tantrums,
unpresidential as they are, have much direct economic impact. Even the government shutdown
will impose only a modest drag on overall spending.
And even trade war might not do that much harm, as long as it's focused mainly on China,
which is only one piece of U.S. trade. The really big economic risk was that Trump might
break up Nafta, the North American trade agreement: U.S. manufacturing is so deeply
integrated with production in Canada and Mexico that this would have been highly disruptive.
But he settled for changing the agreement's name while leaving its structure basically
intact, and the remaining risks don't seem that large.
So why do investors seem to be losing their what-me-worry attitude? It's not so much what
Trump is doing, as what he might do in the future -- or, perhaps even more important, what he
might not do.
The truth is that most of the time, presidential actions don't matter much for the
economy; short-term economic management is mainly up to the Fed. But when bad things happen,
we do need the White House to step up. In 2008 and 2009, it mattered a lot that officials of
both the outgoing Bush administration and the incoming Obama administration responded
competently and intelligently to the financial crisis.
Unfortunately, there's no reason to expect a comparable degree of competence if something
goes wrong again.
Consider how the Trumpistas have responded to falling stocks. So far these are just a
minor economic bobble. Yet Trump himself, having claimed credit when stocks were rising, has
flown into a rage and lashed out; hence the attacks on Powell. Meanwhile, top officials are
still claiming that last year's tax cut was a triumph in the teeth of the evidence, and
issuing bizarre statements -- via Twitter -- about the health of the banks, which nobody was
questioning.
Now imagine how this administration team might cope with a real economic setback, whatever
its source. Would Trump look for solutions or refuse to accept responsibility and focus
mainly on blaming other people? Would his Treasury secretary and chief economic advisers
coolly analyze the problem and formulate a course of action, or would they respond with a
combination of sycophancy to the boss and denials that anything was wrong? What do you
think?
Let's be clear: There isn't an obvious crisis-level threat looming at the moment. But
growth is slowing, and as the bumper stickers don't quite say, stuff happens. And if and when
it does, the people who would be supposed to deal with it are the gang that can't think
straight. Merry Christmas.
"He might talk the populist talk, but he'd walk the plutocratic walk."
What does PK mean here by populist? Good or bad?
"In other words, investors convinced themselves that they had a deal: Trump might sound
off, but he wouldn't really get to make policy. And, hey, taxes on corporations and the
wealthy would go down.
But now, just in time for Christmas, people are realizing that there was no such deal --
or at any rate, that there wasn't a sanity clause. (Sorry, couldn't help myself.) Put an
unstable, ignorant, belligerent man in the Oval Office, and he will eventually do crazy
things."
Is this true. Are wealthy investor worried about Trump in particular? He just cut their
taxes.
"To be clear, voters have been aware for some time that government by a bad man is bad
government. That's why Democrats won a historically spectacular majority of the popular vote
in the midterms."
Not clear at all. Yes it had a large part to do with it. What was the Dems message? Did
they all talk about Trump?
Unfortunately PK is pulling this out of his behind to fill column space.
"Even the wealthy, who have been the prime beneficiaries of Trump policies, are unhappy: A
CNBC survey finds that millionaires, even Republican millionaires, have turned sharply
against the tweeter in chief.""
Again not clear that the wealthy are unhappy. They got massive tax cuts. There is no
populist movement challenging them.
"Again not clear that the wealthy are unhappy. They got massive tax cuts. There is no
populist movement challenging them."
So the rich guys behind Sears are really really happy?
Why hasn't Trump created millions of Sears customers flush with cash shopping at Sears? My
guess is the prime Sears customer before 1990 voted for and supports Trump. Sears was the
store for rural America, especially when you add in Kmart.
On the other hand, my guess is neither Bezos nor Warren Buffett nor Elon Musk is paying
significantly less in taxes as a result of the Trump tax cuts.
The corporations Bezos owns have no profits so paid no taxes on profits before. Ditto with
Elon Musk.
Buffett structured his coorporation based on the 50% plus tax on profits of the 60s, 70s,
80s which promoted owning assets for the very long term, and the tax law vhanges promoting
asset churn, pump and dump, did not change his theory of "wealth", so hes done nothing to
benefit from the tax cuts, but he sees harm to his businesses flowing from the Trump taxes
and cost cutting taking money out of consumer pockets, hurting his extensive consumer
business holdings long run.
(Insurers as holding companies pay taxes on profits differently than a shareholder
business does, so by owning the entire corporattion with profits flowing to the holding
company and then used to pay claims, no taxes are due. But increasing assets is capital gains
that are not taxed until sold, but Buffett almost never sells assets, except at a loss, which
means no taxes owed.)
Buffett companies pay lots of taxes, but on labor costs and on property, but has never
paid taxes on wealth, and seldom on profits, which was by Keynesian tax policy design.
Profits paid to workers to build more assets is the Keynesian ideal. More capital assets
destroys wealth abd increases labor costs to exceed capital asset prices.
The problem today is too little capitalism, too much rent seeking, too much restriction by
rent seekers on capitalists.
Trump and his administration are rent seekers who want to make capital much scarcer. They
hate China and Germany which built too much capital. And Bezos who pays too much to workers
to build ever more capital, increases the number of workers paid too much.
Wonder what McConnell thinks of Bezos. Is building a big distribution center in Kentucky a
good thing? Or is driving up wages in Kentucky a bad thing? Is higher worker incomes a good
thing, or is the higher living costs that result from higher wages a bad thing? Is stealing
jobs from liberal coastal elite cities a good thing, or does driving up living costs in
Kentucky to catch up with coastal elite suburban living costs a bad thing?
"So the rich guys behind Sears are really really happy?"
The rich get most of the capital income, from rent, dividends, interest, etc. they win no
matter what. They're invested in EVERYTHING and pay minions to try to earn them more than
average.
Heads they win, tails we lose.
The main thing is worker power. Krugman's take is - forgive me - a little naive. Or maybe
it is just meant for the naive bien pensant plebes like you and me.
It's hard to tell with Krugman. At least he and DeLong admit what Piketty has reported
even if they don't dwell on it.
We are ruled by an oligarchy. Most of the income goes to this oligarchy no matter the rent
seeking and living costs and profits and asset values etc. They win no matter what and they
pay people to obfuscate and spread propaganda about how we're a meritocracy where people earn
what they deserve.
"The truth is that most of the time, presidential actions don't matter much for the economy;
short-term economic management is mainly up to the Fed."
Free lunch economics!
The Fed has zero authority to manage the economy.
The economy is workers paying workers, through intermediaries.
The Fed can buy labor IOUs so past and future labor prices do not fluctuate wildly and
thus cause too little or too much paying for labor based market speculation on labor
prices.
Ie, if market speculation is that future labor prices will be significantly lower, workers
will not be paid the higher current price in expectation profit will be made paying the lower
price in the future. The Fed can buy labor futures to keep future prices as high as they are
today. However, labor can only be traded as assets. The Fed can never set labor prices by
paying workers.
Again. The Fed can never set labor prices by paying workers.
So, if businesses and government decides to kill jobs, the Fed is totally powerless.
While Bush and Obama were president, the policy priority was cutting paying workers,
driven by conservatives in control of the GOP.
And since Trump, the conservatives have been even more vigously trying to kill payments to
workers,, but wanting much more consumption spending.
However, no one has found a way to consume without paying workers to at least deliver the
goods made by not paying US workers. And the boomers are cashing in labor IOUs earned before
1990 and 2000 when they paid higher taxes and higher consumer prices.
I accumulated all my labor IOUs before 2000, and I count on the Fed to keep them from
becoming worth less or, worse, worthless.
But all the Fed is doing is creating labor IOUs that Millennials will need to buy with
labor without consumption.
If they don't, the economy will crash like it has in Greece, Venezuela, Germany before the
rise of Hitler, ...
Being about the same age as Trump, I expect to not be around when that happens. Which
means Trump knows he's eagerly pillaging and plundering the future.
Tanstaafl.
Remember, Venezuela was the richest nation in Latin America, and then wealth was taxed for
redistribution, and the wealth has vanished into nothingness, nowhere. Ie, if the rich simply
took the wealth and left, where are the Venezuela multibillionaires living today with all the
stolen trillions in Venezuela wealth?
It's Cold, Dark and Lacks Parking. But Is This Finnish Town the World's Happiest?
By Patrick Kingsley
Dec. 24, 2018
141
Leer en español
KAUNIAINEN, Finland -- Jan Mattlin was having what counts as a bad day in Kauniainen.
He had driven to the town's train station and found nowhere to park. Mildly piqued, he
called the local newspaper to suggest a small article about the lack of parking spots.
To Mr. Mattlin's surprise, the editor put the story on the front page.
"We have very few problems here," recalled Mr. Mattlin, a partner at a private equity
firm. "Maybe they didn't have any other news available."
Such is the charmed life in Kauniainen (pronounced: COW-nee-AY-nen), a small and wealthy
Finnish town that can lay claim to being the happiest place on the planet.
Public Ownership Is Suitable for All Sectors
Matt Bruenig December 24, 2018
Paul Krugman has a piece in the New York Times where he argues in favor of a mixed
economy. The piece is meant to be a limited defense of public ownership and production
against those who categorically argue against government enterprises. But Krugman's argument
ends up being far too limited in my view. Due to the wonders of our financial system, public
ownership could be extended to the vast majority of the economy without presenting any
problems.
Here's Krugman:
But I've been wondering, exactly how discredited is socialism, really? True, nobody now
imagines that what the world needs is the second coming of Gosplan. But have we really
established that markets are the best way to do everything? Should everything be done by the
private sector? I don't think so. In fact, there are some areas, like education, where the
public sector clearly does better in most cases, and others, like health care, in which the
case for private enterprise is very weak. Add such sectors up, and they're quite big.
He goes on to argue that the education, health care, and social assistance sectors, which
employ around one-third of US workers, are often better run by the government. He also
briefly dabbles in the idea that certain natural monopolies like utilities are also better
run publicly. But that's the limit of Krugman's imagination on these things. He concludes
that "by and large, other areas like retail trade or manufacturing don't seem suitable for
public ownership."
Why Not Own It All?
When Krugman says the retail and manufacturing sectors are not suitable for public
ownership, I think he is suffering from a lack of imagination about how such public ownership
could be structured.
Public ownership generally comes in three forms:
1. General government (GG) services like education, health care, and social
assistance.
2. State-owned enterprises (SOEs) like utilities, transit systems, and the post
office.
3. Social wealth funds (SWFs) like the Alaska Permanent Fund that are able to own
basically anything.
Krugman only considers GG and SOEs in his piece. Thus, since he thinks retail and
manufacturing are not suitable as GG or SOEs, he concludes that they should not be done
publicly. But retail, manufacturing, and basically anything else not suitable for GG and SOEs
are suitable for SWFs.
The state can very competently own retail and manufacturing companies by simply buying up
their stock and acting like an institutional investor. For instance, a social wealth fund
created by the federal government could gradually buy up stock in Amazon and Walmart to get
into retail and buy up stock in US Steel and General Motors to get into manufacturing. The
latter is not even a hypothetical because the government did recently buy up almost all of
the GM stock during the financial crisis, though it subsequently sold off its stake.
The genius of modern finance has been to create corporate ownership arrangements that
allow basically anyone, including the government, to own shares of any company in any sector
while being as involved (or uninvolved) as they want to be in steering the company. A federal
social wealth fund, like the one we advocate, should be able to take advantage of modern
shareholding institutions to expand public ownership into every aspect of the US economy.
Why can't Krugman, an economist, clearly explain the destruction of the nation by neoliberals
destruction of economic theory, turning benefits into liabilities, and liabilities into
benefit, but only asymetricaly???
Hard core neoliberals cleverly attacked Adam Smith and Keynes so stealthily that even
Krugman rejects Adamm Smith and Keynes, and embraces free lunch economics.
No progressive today would support FDR or his advisors, including Eccles, who was much
smarter than anyone running the Fed since about 1970.
Hard core neoliberals want no money paid to workers, but they demand government ensure
consumers have lots of money to spend, far mote money than they earn. But, Hard core
neoliberals do not want government giving consumers money to spend to generate high profits
for Hard core neoliberals, but want the government to enable cHard core neoliberals get the
free money to rent to consumers, and then government punish consumers for not being able to
pay debt because they are not paid to work, because paying workers costs Hard core
neoliberals too much.
Just read a editorial from the anti government control of economy Heritage demanding a
branch of government, the Fed, control the economy, ie print more money, so businesses don't
have to pay consumers to buy stuff, ie, pay higher wages.
Free lunch economics is a total failure, yet hard core neoliberals argue its working
great, except [real] liberals keep pointing out its clear and obvious failures.
But hard core neoliberals should be thankful Krugman is not a liberal, but a free lunch
progressive in near total agreement with free lunch Hard core neoliberals.
In 1906 the great statistician Francis Galton observed a competition to guess the weight of
an ox at a country fair. Eight hundred people entered. Galton, being the kind of man he was,
ran statistical tests on the numbers. He discovered that the average guess was extremely close
to the weight of the ox. This story was told by James Surowiecki, in his entertaining book The
Wisdom of Crowds. 2
Not many people know the events that followed. A few years later, the scales seemed to
become less and less reliable. Repairs would be expensive, but the fair organiser had a
brilliant idea. Since attendees were so good at guessing the weight of an ox, it was
unnecessary' to repair the scales. The organiser would simply ask everyone to guess the weight,
and take the average of their estimates.
A new problem emerged, however. Once weight-guessing competitions became the rage, some
participants tried to cheat. They even tried to get privileged information from the farmer who
had bred the ox. But there was fear that, if some people had an edge, others would be reluctant
to enter the weight-guessing competition. With few entrants, you could not rely on the wisdom
of crowds. The process of weight discovery would be damaged.
So strict regulatory rules were introduced. The farmer was asked to prepare three monthly
bulletins on the development of his ox. These bulletins were posted on the door of the market
for everyone to read. If the farmer gave his friends any other information about the beast,
that information was also to be posted on the market door. And anyone who entered the
competition who had knowledge about the ox that was not available to the world at large would
be expelled from the market. In this way the integrity of the weight-guessing process would be
maintained.
Professional analysts scrutinised the contents of these regulatory' announcements and
advised their clients on their implications. They' wined and dined farmers; but once the
farmers were required to be careful about the information they' disclosed, these lunches became
less useful. Some smarter analysts realised that understanding the nutrition and health of the
ox wasn't that useful anyway. Since the ox was no longer being weighed -- what mattered was the
guesses of the bystanders -- the key' to success lav not in correctly assessing the weight of
the ox but in correctly' assessing what others would guess. Or what other people would guess
others would guess. And so on.
Some people -- such as old Farmer Buffett -- claimed that the results of this process were
more and more divorced from the realities of ox rearing. But he was ignored. True, Farmer
Buffett's beasts did appear healthy and well fed, and his finances ever more prosperous; but he
was a countryman who didn't really understand how markets work.
International bodies were established to define the rules for assessing the weight of the
ox. There were two competing standards -- generally accepted ox-weighing principles, and
international ox-weighing standards. But both agreed on one fundamental principle, which
followed from the need to eliminate the role of subjective assessment by any individual. The
weight of the ox was officially defined as the average of everyone's guesses.
One difficulty was that sometimes there were few, or even no, guesses of the weight of the
ox. But that problem was soon overcome. Mathematicians from the University of Chicago developed
models from which it was possible to estimate what, if there had actually been many guesses as
to the weight of the ox, the average of these guesses would have been. No knowledge of animal
husbandry was required, only a powerful computer.
By' this time, there was a large industry of professional weight-guessers, organisers of
weight-guessing competitions and advisers helping people to refine their guesses. Some people
suggested that it might be cheaper to repair the scales, but they' were derided: why go back to
relying on the judgement of a single auctioneer when you could benefit from the aggregated
wisdom of so many clever people?
And then the ox died. Amid all this activity', no one had remembered to feed it.
"... The 30-year U.S. yield fell to 2.91 percent on Thursday, the lowest since January 2018 ..."
"... The other interpretation is that the company chose to refinance with long-term fixed-rate debt because it sees the big drop in 30-year yields as unsustainable ..."
Berkshire, with the third-highest credit rating from both Moody's Investors Service and
S&P Global Ratings, is expected to price the debt on Thursday with a spread of 150 to 155
basis points above benchmark Treasuries. The 30-year U.S. yield fell to 2.91 percent on
Thursday, the lowest since January 2018.
The other interpretation is that the company chose to refinance with long-term fixed-rate
debt because it sees the big drop in 30-year yields as unsustainable. After all, if a borrower
expects interest rates to rise in the future, it would prefer to lock in a fixed rate now
rather than face higher payments down the road.
"... By James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government and Business Relations, University of Texas at Austin. Originally published at the Institute of New Economic Thinking website ..."
Yves here. It's surprising to see Piketty and even more so, one of this co-authors, Gabriel
Zucman, make such strong claims for tax data as a way to measure income inequality. The rich
and super rich engage in tax avoidance and evasion, to the degree that Zucman has estimated
that 6% of the world's wealth is hidden. First, that wealth was hidden to avoid paying taxes on
it and/or to hide its criminal origins (such as looting governments). Second, the income on
hidden wealth is also by nature hidden.
By James K. Galbraith, Lloyd M. Bentsen Jr. Chair in Government and Business Relations,
University of Texas at Austin. Originally published at
the Institute of New Economic Thinking website
Thomas Piketty and his colleagues
[1] have produced a new exposition of their empirical work, entitled the World
Inequality Report 2018 (hereafter: WIR). Their purpose is to showcase the
exploration of income and wealth inequalities begun with the World Top Incomes
Database (Atkinson and Piketty 2010) and theorized in Piketty's epic Capital in the
XXI Century (2014) . In particular the WIR concentrates on the presentation of
measures and evidence; the stated goal is to inform a "deliberative process" with "more
rigorous and transparent information on income and wealth" than has been available to date. In
a review
article published on-line and open access in Development and Change on December
24, 2018, I initiate this "deliberative process" by examining the WIR data and the claims made
for it.
The ground-breaking, systematic and transparent methodology on which the WIR rests is
largely the use of tax records–specifically income tax records–mined to show the
income shares of tranches of the income-earning population: top one percent, top ten percent,
next forty percent, and bottom fifty percent are the usual divisions. These Piketty and his
colleagues argue are more complete, comprehensive, and comparable across countries and through
time than the generally-used alternative, which is household or person-based surveys.
The WIR authors write disparagingly of the "Gini index" -- the inequality measure most
prevalent in such surveys -- which they find too "technical" and not sufficiently intuitive.
But they also object to survey methods: "The main problem with household surveys, however, is
that they usually rely entirely on self-reported information about income and wealth. As a
consequence, they misrepresent top income and wealth levels, and therefore overall inequality."
(p. 29) This sweeping critique carries on for several pages, brushing aside a body of research
comprising thousands of papers and millions of survey observations, including the work of the
Luxembourg Income Studies, the World Bank, Eurostat, the Economic Commission for Latin America,
and the United States Census Bureau among scores of national data-collection agencies. It is a
repudiation of what almost every previous researcher has done in this field over fifty
years.
But are tax data really better? Where survey and tax measures both exist, and report
different results, should one systematically prefer a measure based on taxes? The answer
depends in part on the quality of the survey measures. But it also must depend in part
on the quality, consistency, length and continuity of the national tax record, and in
particular of the income tax. The WIR authors acknowledge that tax data have limits, in
particular they cannot cover income and wealth hidden from tax authorities in tax havens. But
the question of the quality of tax records goes much further than this.
My new essay examines the question from three points of view: the coverage provided by tax
data in the world economy, the consistency of tax data with other sources of information on
income inequality, and the peculiarities of tax-based measurement of inequality in the United
States. It goes on to make a comparison with measures drawn from other forms of administrative
data -- specifically payroll records, used by the University of Texas Inequality Project -- which are generally
more consistent with
records of inequality measured in household surveys than are the WIR's tax records.
In brief summary, the review shows that by comparison with payroll and survey data,
available records from tax files are relatively sparse, and biased toward wealthier countries
and those that were once British colonies, which imposed income tax. It shows that tax data are
far less consistent with survey and payroll records than are the latter two with each other.
And it shows that even within the United States, a country with good tax records by world
standards, changes in tax law distort the WIR's measures of changes in the top income shares,
while a misunderstanding of the nature of low-income tax filers in the US leads to a dramatic
but nonsensical claim that the earnings of the bottom 50 percent of Americans have "collapsed"
in recent decades.
Overall, the review casts doubt on claims by the authors of the World Inequality
Report to have produced major advances in the study of world economic inequality, and
documents that many of the findings touted in the Report as new and unprecedented have in fact
been reported in the literature for years, even decades in some cases.
[1] The credited co-authors are Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel
Saez and Gabriel Zucman.
Figure 1 Top One Percent Shares from the World Inequality Database, showing an
unacknowledged data break due to the US Tax Reform Act of 1986. Adjusting the data for the
change in the tax definition of income would show that the US top share tracks the UK and
Canada very closely. Low numbers for France and Italy are likely due to inferior tax recording
of high income persons, not an underlying condition of less inequality.
I do not see your and the essay's point about tax evasion impacting actual reported income
more harshly than surveys. Even in cases where answers to surveys are required by law, the
penalties and effort undertaken by enforcement agencies are going to be several orders of
magnitude greater in cases of tax evasion compared to incorrect survey answers. Furthermore
income taxes are frequently automated which makes correct or at least some reporting the
default case while the default state of surveys is no data at all. Only by taking action is
any data generated. While it is theoreticaly possible that surveys are more accurate because
the incentive of lower taxes is also stronger, the logic argument given here is not
self-evident and actual empirical data is needed for prove.
The critic regarding change in tax reporting over time is quite correct altough I am far
from certain that neither survey methods nor questions haven't changed over the last century.
A feature not talked about at all is samplesize which always favours actual tax data over
surveys given that everyone with an income over a small threshold must pay taxes.
The only empirical evidence provided in the essay is self-referential. If one proxy
(survey data) is faulty correlation between it and another proxy (payroll records) does not
prove that the first proxy is correct because it remains possible that both proxies have the
same deficiencies and are therefore correlated – instead of both being a good
approximation of reality.
This is not to say that the essay must be wrong or Piketty et al's assertions must be
right, but with only the information provided here a lack of evidence still exists in my
opinion.
this line towards the end: " nonsensical claim that the earnings of the bottom 50 percent
of Americans have "collapsed" in recent decades." is nonsensical itself. Anyone who doesn't
believe that low and middle income earners' incomes have collapsed is living in a very opaque
bubble, head firmly planted up *ss.
I earned $12.00 per hour in retail with only a high school education in the early 1980s.
I'm Canadian but I don't think the two countries are so different in this regard. In 2018
dollars, according to the Bank of Canada inflation calculator that is $26.00 per hour!! Do
you know anyone in retail with only a high school education earning $26.00 per hour today? My
husband, again, no high school, was making twice that amount in a steel mill in the eighties.
Know anyone earning almost $60 per hour in any kind of factory work today? I sure don't. That
includes the people who work in that factory now, it is mostly precarious contract work, at
much lower wages, the union having been busted long ago
Further, I went back to school in the late 80s and ended with my Masters in Library
Science, my first full-time job in the early 90s had me earning the 1990ish equivalent of
that $12.00 per hour, things were already going south. It took me quite a few more years to
outpace that 1980 retail wage. My husband and I are living proof that wages have collapsed. I
don't care how anecdotal that is, I know the truth, just by looking around and talking to
people.
It is beyond frustrating to have to argue against this stuff.
One question for the author. How do you account for the fact that payroll records, at
least as I understand them, generally omit capital gains which is where the upper income
generally get most of their real wealth. Stock buybacks and share disbursements are not
generally considered "payroll" as I understand it.
The advantage of tax is that it should, at least in theory, show money received by
individuals rather than just money sent out in one category.
Things have been quite active in the Eastern Mediterranean lately, with Israel, Cyprus and
Greece pushing forward for the realization of the EastMed pipeline, a new gas conduit destined
to diversify Europe's natural gas sources and find a long-term reliable market outlet for all
the recent Mediterranean gas discoveries. The three sides have reached an agreement in late
November (roughly a year after signing the MoU) to lay the pipeline, the estimated cost of
which hovers around $7 billion (roughly the same as rival TurkStream's construction cost). Yet
behind the brave facade, it is still very early to talk about EastMed as a viable and
profitable project as it faces an uphill battle with traditionally difficult Levantine
geopolitics, as well as field geology.
The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of
Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek
mainland. Since most of its subsea section is projected to be laid at depths of 3-3.5
kilometer, in case it is built it would become the deepest subsea gas pipeline, most probably
the longest, too, with an estimated length of 1900km. The countries involved proceed from the
premise that the pipeline's throughput capacity would be 20 BCM per year (706 BCf), although
previous estimates were within the 12-16 BCm per year interval. According to Yuval Steinitz,
the Israeli Energy Minister, the stakeholders would need a year to iron out all the remaining
administrative issues and 4-5 years to build the pipeline, meaning it could come onstream not
before 2025.
The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast
of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the
Greek mainland.
Cyprus,Crete,Greece, Italy....
Yes, very stable EU supply line going through the most stable countries in the EU.
Yeah, I'm having trouble with the sub sea depth numbers too, despite the route cuts the
conflicts to a half a dozen from an infinite number.
Intuitively, shipping LNG offers comparable delivery price albeit at lower volumes,and can
be done off shore.
Even here in bucolic Pensyltucky, delivery of natty to market is limited by a lack of
piping infrastructure, limiting the gas boom. It gives the tree huggers time to throttle the
business. Figuring that the political climate and costs are going to get better with time
passing is foolish.
Also considered is price, still cheap, cheap, cheap.
Our local natty supplier just applied for, and received a price reduction, effective next
fall.
Since most of its subsea section is projected to be laid at depths of 3-3.5 kilometer,
in case it is built it would become the deepest subsea gas pipeline, most probably the
longest, too...
oh yeah bitchez. nothing could possibly go wrong with that plan. /s
none has even discovered the goods yet ... and we are told we have to go to war about
building some (((PIPELINES))) on something to be discovered in the future ... if ever
....
as Abba Waterloo song said the history books on the shelf just keeps repeating itself ...
that is why is not that difficult to see through the BS ...
World War I we are told was over some archiduke being killed by some extremist ...as a
result 1/3 of the Serb nation was killed ...
"... Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers ..."
"... Collectively, the [shale] companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions. ..."
MSM seems to be catching on to the hype in shale, excerpts from an excellent article on
shale on WSJ today:
Two-thirds of projections made by the fracking companies between 2014 and 2017 in
America's four hottest drilling regions appear to have been overly optimistic, according to
the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in
Texas and North Dakota.
Collectively, the [shale] companies that made projections are on track to pump nearly 10% less oil
and gas than they forecast for those areas, according to the analysis of data from Rystad
Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of
oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are
off track by more than 50% in certain regions.
-- --
In September 2015, Pioneer Natural Resources, based in Irving, Texas, told investors that
it expected wells in the Eagle Ford shale of South Texas to produce 1.3 million barrels of
oil and gas apiece. Those wells now appear to be on a pace to produce about 482,000 barrels,
63% less than forecast, according to the Journal's analysis.
An average of Pioneer's 2015 forecasts for wells it had recently fracked in the Midland
portion of the Permian basin suggested they would produce about 960,000 barrels of oil and
gas each. Those wells are now on track to produce about 720,000 barrels, according to the
Journal's review, 25% below Pioneer's projections.
In 2014, Parsley Energy, an Austin, Texas-based producer, told investors its average well
in the Midland section of the Permian basin would produce 690,000 barrels, according to a
review of Parsley's quarterly earnings presentations. By 2015, its estimates averaged
1,050,000 barrels.
Parsley is on track to miss its Midland well forecasts for every year from 2014 to 2017 by
an average of 25%, according to the Journal's analysis.
-- --
One reason thousands of early shale wells aren't meeting expectations is that many
companies extrapolated how much they would produce from small clusters of prolific initial
wells, according to reserves specialists. Some also excluded their worst-performing wells
from the calculations, which is akin to eliminating strikeouts when projecting a baseball
player's batting average.
"... Based on first year production numbers supplied by Shallow Sand, production can't increase without borrowing, except in some isolated areas. ..."
"... Consumption of oil is up. OPEC and Russia have reduced output. The price falls, because there is no meaning to anything created from thin air when applied to something that depends on physics. ..."
As I have posted before, the wells we apply a 60 month payout to have a much lower
decline rate than the shale wells, and are being drilled out of cash flow, not borrowed
money.
For example, a well we drilled in 2006 just passed 10,000 BO and produced 370 BO in
2018. It cost about 1/100 the cost of a shale well ($70K +/-).
Maybe not a valid comparison, but. 100:1 ratio would be cumulative of 1 million BO
and annual of 37,000 BO, which I think a rate you will not find often for any US shale well
after 12.5 years on production.
Our LOE is higher per BO, so not entirely valid, but still maybe somewhat useful for
comparison.
I note in the WSJ article PXD argued that the comparisons weren't valid because they
use a 50 year well life in calculating EUR v 30 year well life in the study.
I would think the PV of years 30-50 would be tiny on a 20,000' hz well producing
under 20 BOEPD! That PXD uses that argument seems to make them look a little foolish? Or am I
being too tough on them?
Shallow, you know they can't run a stripper well like you. Damn thing will be
plugged at seven years. Dennis can calculate his damn curves to twenty to thirty years if
he wants to. I can't disprove it, because we are only in about year eight, and some have
probably been plugged already, although I have no statistics on it. Although, I found one
of EOGs that didn't make it 7 years without trying too hard.
Mike was talking about borrowing on conventional production that has a much
smaller decline rate. You drill one this year, and borrow the next year to drill another,
you are increasing production. Not running on a treadmill.
Don't have the paywall, but you've given the gist. Investors were not happy with
returns. Now, they are being fact checked, and that can look real messy. Borrowing is set
to become restricted for many reasons. I really see some headwinds for future production
increases.
Based on first year production numbers supplied by Shallow Sand, production
can't increase without borrowing, except in some isolated areas.
To get even close to
covering declines from last years wells, they have to, at least, recover most of that
capex cost in the first year of production. That is far from reality, right now. To
increase, or later to even keep up, with production, they will have to borrow money. They
can possibly make a profit in three years, but that is meaningless to providing for
growth. Think it going to start looking nastier.
And to add to Ron's answer, God would have to add, and make each well profitable the
first year.
The miracle of US shale is about to have Toto pull back the curtain and reveal the
real wizard.
Shale was, is, and will be just a supplemental source of oil supply. An investor
could, if it was managed right, put x amount into the business, and in several years get
a marginal return. In two to three years, a second well could be drilled to increase that
income. That would be shale production growth. Not the imaginary growth numbers that are
being thrown out.
The putrid 10Qs and 10ks for 2019 will add to the fire.
You guys insist on continuing to think money isn't created from thin air by the Fed and
actually means something in the context of a substance that feeds you food. If you have to
have it, and you do have to have it, things will be done for you to get it. Borrowed money
that was created from thin air . . . who cares if you can't pay it back? You have to
eat.
Consumption of oil is up. OPEC and Russia have reduced output. The price falls, because
there is no meaning to anything created from thin air when applied to something that
depends on physics.
You won't know anything until you find yourself sitting in a line waiting for gasoline.
You won't see it coming. You won't predict it. It will just happen someday.
Some truth to that Watcher. Simplistic thinking in investors. If we aren't making much
money, the US won't be making much money, so the price of oil must go lower. Not just
simplistic, flat out stupid.
And the number of people who think oil supply is limited is fairly scarce in relation to
the population as a whole. Probably less than the number of people who think chocolate milk
comes from brown cows.
And if you think I am being unreasonably hard on the average IQ, google who is now
running the country, and consider almost 50% voted for him. Ok, I'll give them somewhat of
a break, as I didn't like the alternative, either. They should allow write ins, so we can
all vote.
And any moron can borrow 20 billion and service the debt for awhile. Maybe all of it, if
they are lucky. Who cares, it's only paper. Not a bad idea. I have an oil company, I can
borrow 20 billion, stick half into BNO, and have a ball with the rest. If I lose, I can
declare bankruptcy, and they can get my prepaid funeral expenses, but none of my gold bars
in the Caymans. And, I am 99.9% certain that is less of a risk than any E&P I can think
of.
If [neoliberal] left is understood as Clinton DemoRats, then it's just a second war party. Just look at Hillary. Such an
anti-war hero.
Notable quotes:
"... For decades, a common myth pervading the American political arena has been that the left is anti-war. ..."
"... But they are as much opposed to war as Sen. Lindsey Graham (R-SC) – at least he is honest about his appetite for blood and desire for perpetual regime change, no matter who occupies the Oval Office. So, from where did this mendacity come? ..."
"... In 2008, the United States was entrenched in an election battle and two major wars – Afghanistan and Iraq. The Democrats portrayed themselves as the anti-war party, promising to correct the foreign disasters of the incumbent administration. Since then, it's as if former President George W. Bush never departed. The Democrats have championed military interventions, twiddled their thumbs under President Barack Obama, and nominated a hawk to lead the party in 2016. ..."
"... Today, the [neoliberla] left has united with the neoconservatives in opposition to President Donald Trump's decision to bring 2,000 troops home from Syria and potential plans to withdraw from Afghanistan. Because they loathe Trump so much and don't want him to be portrayed as a more peaceful president than his predecessor, leftists demand that U.S. forces permanently stay in the region, facing death or serious injury. ..."
"... Attempting to locate a handful of consistent anti-war Democrats is like trying to spot Vice President Mike Pence with a woman other than his wife at a restaurant: It's never going to happen. ..."
"... For the last century, virtually every war, invasion, and occupation have been given the stamp of approval by Democrats. President Woodrow Wilson dragged the U.S. into one of those wars-to-end-all- wars fiascos. President Harry Truman sent thousands of young men to their deaths in Korea, setting the stage for perpetual global interventionism. President Lyndon Baines Johnson escalated American involvement in Vietnam. The Democratic leadership approved of the Iraq War, and Obama destabilized an entire region, killed American citizens, and intensified the drone bombing campaign. ..."
"... Outside of Capitol Hill, the predominantly left-leaning mainstream media have never seen a war it didn't like. In the last two years alone, the vacuous TV commentators have employed the same two strategies: Demand action against Russia (eh, Paul Begala ?) and oppose President Trump for using diplomacy and other tactics to institute peace ..."
Otto von Bismarck once said, "People never lie so much as after a hunt, during a war or
before an election." For decades, a common myth pervading the American political arena has been that the left
is anti-war.
But they are as much opposed to war as Sen. Lindsey Graham (R-SC) – at least he is
honest about his appetite for blood and desire for perpetual regime change, no matter who
occupies the Oval Office. So, from where did this mendacity come?
In 2008, the United States was entrenched in an election battle and two major wars –
Afghanistan and Iraq. The Democrats portrayed themselves as the anti-war party, promising to
correct the foreign disasters of the incumbent administration. Since then, it's as if former
President George W. Bush never departed. The Democrats have championed military interventions,
twiddled their thumbs under President Barack Obama, and nominated a hawk to lead the party in
2016.
Progressives, the same ones who, under Republican administrations, routinely held massive
anti-war rallies on days that ended in "y," have been eerily silent for the last ten years.
Today, the [neoliberla] left has united with the
neoconservatives in opposition to President Donald Trump's decision to
bring 2,000 troops home from Syria and potential plans to
withdraw from Afghanistan. Because they loathe Trump so much and don't want him to be
portrayed as a more peaceful president than his predecessor, leftists demand that U.S. forces
permanently stay in the region, facing death or serious injury.
Is this a case of Freaky Friday politics, or has the left always been
pro-war?
Anti-War Democrats, Please Stand Up
Attempting to locate a handful of consistent anti-war Democrats is like trying to spot Vice
President Mike Pence with a woman other than his wife at a restaurant: It's never going to
happen.
Even Sen. Bernie Sanders (I-VT), the man who switches from Independent to Democrat when it
suits the occasion, has come out of the closet on occasion as a hawk. In addition to
supporting the so-called Little War in Kosovo in the 1990s, Sanders
revealed to ABC News in September 2015 that the U.S. could use its military forces when not
attacked and apply sanctions on adversaries.
For the last century, virtually every war, invasion, and occupation have been given the
stamp of approval by Democrats. President Woodrow Wilson dragged the U.S. into one of those
wars-to-end-all- wars fiascos. President Harry Truman sent thousands of young men to their
deaths in Korea, setting the stage for perpetual global interventionism. President Lyndon
Baines Johnson escalated American involvement in Vietnam. The Democratic leadership approved of
the Iraq War, and Obama destabilized an entire region, killed American citizens, and
intensified the drone bombing campaign.
Outside of Capitol Hill, the predominantly left-leaning mainstream media have never seen a
war it didn't like. In the last two years alone, the vacuous TV commentators have employed the
same two strategies: Demand action against Russia (eh, Paul
Begala ?) and oppose President Trump for using diplomacy and other tactics to institute
peace.
So, how exactly is the left anti-war?
The Born-Again Right
When it comes to foreign policy, there are now three wings of the GOP: hawks, doves, and
those who realize the doctrine of the last 20 years has failed.
One of the biggest surprises since Trump's election is that the right has become
increasingly more cautious about seeking dragons to slay and erecting Old Glory on every plot
of land in the world. House Republicans have
slashed foreign aid in the billions, Senate Republicans have voted to end America's
role in Yemen's humanitarian crisis, and prominent figures in the White House have asked one
simple question: Why should the United States be the policeman of the world?
Stephen Miller, a senior adviser to the president, recently
dismantled the hawkish Counterfeit News Network when he told Wolf Blitzer:
"What I'm talking about, Wolf, is the big picture of a country that through several
administrations had an absolutely catastrophic foreign policy that cost trillions and
trillions of dollars and thousands and thousands of lives and made the Middle East more
unstable and more dangerous. And let's talk about Syria. Let's talk about the fact -- ISIS is
the enemy of Russia. ISIS is the enemy of Assad. ISIS is the enemy of Turkey. Are we supposed
to stay in Syria generation after generation, spilling American blood to fight the enemies of
all those countries?"
Comments that should draw praise from the left have been met with mockery and
scorn.
US Foreign Policy
H.L. Mencken was right when he said that "every decent man is ashamed of the government he
lives under." There is no other area in government that should instill more shame in the
population than foreign policy.
The political theater of sending young men and women overseas to fight in wars is a
tragicomedy: a comedy for those who don't have to wield a weapon and a tragedy for those who
do. It is easy and comfortable for politicians and pundits, a paltry few of whom have ever done
any of the fighting, to shout platitudes as if they were reincarnated John Waynes.
It's clear that politicians of all stripes have blood on their hands. The only difference is
that some policymakers showcase this human flesh with pride, while others pretend to be
benevolent. Trump's foreign policy has not been perfect, but it has been far superior to what
has transpired over the years. To rebuke the president's withdrawal of soldiers in an NPC-like
manner makes you complicit to atrocity.
"... only 1 in 3 US citizen STEM graduates can actually find jobs these days. ..."
"... US citizen are left submitting their resumes into black holes because the tech firms have placed their HR function into bunkers with near zero accessibility to the professional community who wants to offer their services. ..."
"... many bright minds, in the prime of their lives, instead of contributing, are sitting around trying to figure out where they're going to get their next meal. ..."
You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter don't you call me 'cause I can't go,
I owe my soul to the company store.
Travis Merle wrote the song Sixteen Tons about working your life away in the coal mines and spending your whole paycheck–and then
some–at the company store. You had no other options in the corporate mining villages of the early twentieth century.
The most famous version of the song came from Tennessee Ernie Ford. Sixteen Tons was covered by many others, including Johnny
Cash, and even Elvis at some concerts though he never recorded it.
And South Park recently featured their own version in an episode called "Unfulfilled," about working for Amazon. Of course, South Park is a comedy cartoon series that parodies real-life events. They depicted Amazon fulfilment centers as the only available jobs in the small Colorado town. People worked in dangerous collaboration
with machines, and went home to spend their entire paycheck on Amazon.
Jeff Bezos was depicted as a telepathic villain . He would tune in to various
Alexa streams to gauge the mood of the town. And anyone who didn't do his bidding would have their Prime status revoked. Comparing Amazon to coal mines is funny because it exaggerates a fear in society. Everyone buys from Amazon, so the small businesses
go under. And everyone working for the small businesses goes to work for Amazon.
South Park did the same thing with a Walmart episode about a decade back. Walmart possessed some unknown power which compelled
people to shop there, they were powerless to resist. Even better if they could work there and get an employee discount despite the
low pay.
Just when American workers were getting comfortable and were delivering productivity improvements, "corporate America" dropped
the ball and started doing massive outsourcing and importation of H-1B workers. To such a severe extent that only 1 in 3 US citizen
STEM graduates can actually find jobs these days.
Even top grads from top schools are ignored while the red carpet is rolled out
to foreign national OPT and H-1B visa recipients. US citizen are left submitting their resumes into black holes because the tech
firms have placed their HR function into bunkers with near zero accessibility to the professional community who wants to offer their
services.
The loss to the economy due to such is enormous. So many bright minds, in the prime of their lives, instead of contributing, are
sitting around trying to figure out where they're going to get their next meal.
XXX
10 hours ago remove link
Being your own boss sounds great, but in fact most people are not 'wired' for that. Which is a good thing, because any hierarchal
organization requires that a few be leaders, with the majority being led. That's why tribes have one chief, nations have one King
or President. It's why there is one judge who presides over a trial, why there is one teacher to a classroom, and why we have many
times more soldiers than generals.
That is simply the reality. The folks who go on about how we should all become entrepreneurs and work for ourselves as a solution
to the noxious employment situation we find ourselves in are ignoring that reality. A world of 'all chiefs and no Indians' just doesn't
work, because most people are unable to function that way. That doesn't make them inferior, it doesn't make them suckers for working
for 'the man'...that this is not currently working out too well is a function of the incompetent way we've been handling the whole
employment-thing, not because too many are employed by others.
The ratio of leaders vs. followers is the way it is because that's what is needed for these systems to WORK. Furthermore, you
find this in ALL of nature as well...the pack has ONE leader, the hive has ONE Queen, even among single-celled organisms, the mitochondria
have assumed the leadership role and now control and direct all other cellular functions. We see this in the evolution of out own
bodies, which consist of many different systems all operating under the leadership of organized neural cells in the brain. You will
of course notice that these biological systems have something in common...they all work for the good of the WHOLE organism, not just
a few parts. This is a missing piece in most human-run systems, and is likely a reason most people tend to mistrust them and want
out.
There is nothing wrong with being a 'worker bee'! Not everyone in the church choir can sell a million albums...does that mean
everyone else should just say the hell with it and disband their choirs? When company A makes one guy the CEO, should all the other
employees quit in protest and go form their own companies? Then what is the CEO going to run? And who will work for all those new
companies?
Anyone who thinks Americans have some kind of problem with 'work' needs to examine the MESSAGING our society is sending about
work. I think the problem really lies there. Because competition without cooperation is just warfare. And boy, is THIS a society
at war with itself or what?
XXX 12 hours ago
All large systems are hierarchical. Feudalism was hierarchical. So in that sense they are similar, although in corporations there
are usually a lot more levels and a lot more people are 'not serfs', but something slightly higher up.
Hierarchies (as far as we know) are the only way to 'scale'. Look at any large system and you will see a hierarchy (roads, Internet,
vascular system, government, military, and yes, corporations).
Hierarchical systems may have undesirable elements for some e.g. inequality, but until someone comes up with a different way to
organize and run a large system, it is the only way. And, it was not 'designed', it is simply the natural outcome. As natural as
the blood flowing in your veins. To 'blame' natural systems for perceived drawbacks is like blaming 'math'.
XXX
14 hours ago (Edited) remove link
This article indicates that we live within a system built and controlled by others and that our only choice is how we respond
to that environment. Someone else writes the rules that favor them and the rest of us just have to live with it.
It's a political economy. Changing the rules changes the economy.
Metalredneck , 14 hours ago
I'm sure the resemblance to feudalism is a coincidence. /s
"... Some years ago, I noticed the American media and politicians were sort of going soft (actually mushy) in the brain department, but I was told not to be so judgemental. As the months went by, I saw more and more people saying "they have gone nuts". So, it turns out I am not alone after all. ..."
"... That madness comes from having no behavioural limits, no references outside of your own opinion but groupthink, and manipulating the language to suit your ambitions (the Orwellism of the US media has been repeatedly pointed at). Simply put, you don't know anymore what's what outside of the narrative your group pushes, you go nuts. The manipulators ends up caught in their lies. All the more when they makes money out of it, which would be the case of all those think tanks and media. ..."
"... War or the threat of war is needed to distract attention from rapidly devolving societal bonds and immense economic inequality. ..."
Some years ago, I noticed the American media and politicians were sort of going soft
(actually mushy) in the brain department, but I was told not to be so judgemental. As the
months went by, I saw more and more people saying "they have gone nuts". So, it turns out I
am not alone after all.
That madness comes from having no behavioural limits, no references outside of your
own opinion but groupthink, and manipulating the language to suit your ambitions (the
Orwellism of the US media has been repeatedly pointed at). Simply put, you don't know anymore
what's what outside of the narrative your group pushes, you go nuts. The manipulators ends up
caught in their lies. All the more when they makes money out of it, which would be the case
of all those think tanks and media.
One could argue that they are not going mad, that they know full well they are lying, but
I beg to differ: they don't see anymore how ridiculous or how dumb or smart their arguments
are. That would be congruent with a real loss of touch with reality.
One wonders what
they see when they look at themselves in a mirror, a garden variety propagandist or a
fearless anti-Putin crusader?
It is partially tied direct to the economy of the warmongers as trillions of dollars of
new cold war slop is laying on the ground awaiting the MICC hogs. American hegemony is
primarily about stealing the natural resources of helpless countries. Now in control of all
the weak ones, it is time to move to the really big prize: The massive resources of Russia.
They (US and their European Lackeys) thought this was a slam dunk when Yeltsin, in his
drunken stupors, was literally giving Russia to invading capitalist. Enter Putin, stopped the
looting .........connect the dots.
Watching the USA these days is like watching a loved one with progressive dementia. I've reached the stage where I think the
sooner it's over the better for everyone.
CHICAGO -- Saying it was ultimately a small price to pay in exchange for the splendid spectacle that has followed, millions of
Americans admitted Thursday that they didn't really mind having their Facebook data stolen if it meant getting to watch that
little fucker squirm.
SEATTLE -- Deciding at the last minute to hold off due to ethical concerns, Amazon founder
and CEO Jeff Bezos reportedly set aside his latest cost-cutting initiative Wednesday after
realizing it was actually human slavery. "On the surface, it seemed plausible -- owning our
employees' bodies, implementing a mandatory 18-hour workday, restricting their movements, and
not compensating them with anything besides minimal food and shelter -- but then it started to
sound really familiar in a bad way," said Bezos, who acknowledged his fears were confirmed when
Amazon's general counsel kept reporting back that such labor arrangements had been illegal
throughout the United States since 1865. "It's too bad; the increased efficiency and cost
savings would have been tremendous. And now I have to go explain to our shareholders why I
spent $1.8 million outfitting all of our managers with bullwhips, shackles, and branding
irons." Bezos went on to describe the setback as temporary, saying it wouldn't matter in five
to 10 years when his entire workforce was robots.
"... But systemic risk is an inherent feature of finance, and a disturbance in one area can quickly spread to others through global networks. ..."
"... John Kay has written about the inability to recognize and minimize systemic risk in financial systems in Other People's Money: The Real Business of Finance ..."
"... The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About It. ..."
"... "The global financial network remains most susceptible to shocks coming from large central countries and countries with large financial systems (namely, the USA and the UK) " ..."
The ten-year anniversary of the global financial crisis has brought a range of analyses of
the current stability of the financial system (see, for example,
here ). Most agree that the banking sector is more robust now due to increased capital,
less leverage, more prudent balance sheets and better regulation. But systemic risk is an
inherent feature of finance, and a disturbance in one area can quickly spread to others through
global networks.
The growth of financial markets and institutions during the 1990s and 2000s benefitted many,
including those in emerging market economies that became integrated with world markets during
this period. But the large-scale extension of credit to the housing sector led to property
bubbles in the U.S., as well as in Ireland and Spain. The development of financial instruments
such as mortgage backed securities (MBS), collateralized debt obligations (CDOs), and credit
default swaps (CDS) were supposed to spread the risk of lenders in order to mitigate the impact
of a negative price shock. However, these instruments and the extension of credit to subprime
borrowers increased the vulnerability of financial institutions to reversals in the housing
markets. Risk increased in a non-linear fashion as balance sheets became highly leveraged, and
national regulators simply did not understand the nature and scale of these risks.
The holdings of assets across borders amplified the impact of the disruption of the U.S.
financial markets once housing prices fell. European banks that had borrowed dollars in order
to participate in the U.S. MBS markets found themselves exposed when dollar funding was no
longer available. The gross flows of money between the U.S. and Europe increased the ties
between their institutions and increased the fragility of their financial markets. It took the
the establishment of swap networks between the Federal Reserve and European central banks to
provide the necessary dollar funding.
John Kay has written about the
inability to recognize and minimize systemic risk in financial systems in Other
People's Money: The Real Business of Finance . He draws from engineers the lesson that
" stability and resilience requires conscious and systematic simplification, modularity, which
enables failures to be contained, and redundancy, which allows failed elements to be by-passed.
None of these features -- simplification, modularity, redundancy -- characterized the financial
system as is had developed in 2008."
Similarly, Ian Goldin of Oxford University
and Chris Kutarna examined the impact of rising financial complexity on the stability of
financial systems in the period leading up to the crisis: "Cumulative connective and
developmental forces produced a global financial system that was suddenly far bigger and more
complex than just a decade before. This made the new hazards harder to see and simultaneously
spread the dangers more widely -- to workers, pensioners, and companies worldwide."
Goldin and Mike Marithasan of KU Leuven also looked at the impact of increasing complexity
on financial systems in The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do About
It. They use Iceland as an example of how complex financial relationships were
constructed with virtually no understanding of the consequences if they unraveled. They draw
several lessons for dealing with a more complex financial networks. These include global
oversight by regulators using systemic analysis, and the use of simple rules such as leverage
ratios rather than complex regulations.
The Basel III regulatory
regime follows this advice in a number of areas. But the basic vulnerability of financial
networks remains. Yevgeniya Korniyenko, Manasa Patnam, Rita Maria del Rio-Chanon and Mason A.
Porter have analyzed the interconnectedness of the global financial system in an IMF working
paper, "
Evolution of the Global Financial Network and Contagion: A New Approach ." They use a
multilayer network framework with data on foreign direct investment, portfolio equity and debt
and bank loans over the period 2008-15 to analyze the global financial network.
The authors compare the networks for the years 2009 and 2015, and report which countries are
systematically important in the networks. They find that the U.S. and the U.K. appear at the
top of these rankings in both of the selected years, although the cross-border holdings of U.S.
financial institutions has increased over time while those of the U.K.'s institutions fell.
China has moved up in the rankings, as have other Asian countries such as Singapore and South
Korea. The authors conclude that "The global financial network remains most susceptible to
shocks coming from large central countries and countries with large financial systems (namely,
the USA and the UK) "
A decade after the global crisis, the possibility of the rapid propagation of a financial
shock remains. There is more resiliency in those parts of the financial system that failed in
2008, but the current most vulnerable areas may not be identified until there is a new crisis.
Policymakers who ignore this reality will be tripped up when the next shock occurs, and they
will learn that "
The past is not dead. It's not even past ."
Bert Schlitz , January 2, 2019 3:12 pm
That is the paradox of low interest rates. They lower leverage and raise it at the same
time.
This cycles low interest rates have given business the ability to not spend "real" money
and instead borrow while keeping their actually savings, growing. This has created
artificially high real earnings reports, when the business simply hasn't been growing that
fast. At least corporate earnings of the mid-00's were "real" insofar as accounting. This
cycle is all debt based fantasies. As interest rises, Corporations won't be able to keep
their books cooked anymore and borrowing will decline. Exposing that will crush real earnings
and profits will vanish. The "exposure" will cause a run on high yield corporate bonds after
the owners figure out the tide has pulled out, destroying market liquidity. Causing a
panic.
This is why, if you want to get rid of financial problems in the modern financialized
systems, you need higher interest rates 1-2% above the rate of inflation ex-energy to keep
"good" leverage high and "bad" leverage low.
A market indicator watched by the Fed as one of the most accurate gauges of economic health
is pricing in lower rates for the first time in more than a decade.
The little-known near-term forward spread, which reflects the difference between the
forward rate implied by Treasury bills six quarters from now and the current three-month
yield, fell to -0.0653 basis point on Wednesday.
It was the first time since March 2008 the gauge -- seen as a proxy for traders' outlook
on Federal Reserve policy -- fell below zero.
Crossing the threshold indicates the market sees easier policy and recession in "the next
several quarters," economists at the U.S. central bank wrote in a research paper dated July
2018.
"When negative, it indicates market participants expect monetary policy to ease,
presumably because they expect monetary policymakers to respond to the threat or onset of a
recession," Eric C. Engstrom and Steven A. Sharpe wrote. "When market participants expected
-- and priced in -- a monetary policy easing over the next 18 months, their fears were
validated more often than not."
Poland and Ukraine cannot stop provoking laughter from international observers. After the
lunatic idea circulating in Ukraine of resurrecting the country's nuclear arsenal, it is
now Poland's turn to send shockwaves around Europe. Polish foreign minister Czaputowicz
proposed that France share its nuclear arsenal and hand over its seat on the United Nations
Security Council (UNSC) to the European Union. It is is worth noting that this suggestion did
not even receive an official comment from Paris, showing that there was little prospect of the
Polish idea being taken seriously . Warsaw continues its opposition to the EU's domestic
policies on migration and austerity, while in foreign policy, agrees with countries like
Ukraine and the United States, particularly the neocon faction opposed to Russia. If there is a
distinctive feature in the political proposals that come from Poland, it is an acute
Russophobia. The idea of hosting a US base on Polish territory, and assuming its
costs, is another Polish proposal. The Americans are serious considering taking them up on
the offer .
The Poles and the Ukrainians would be willing to sacrifice themselves on behalf of their
allies for the privilege of being able to poke the Bear. Fortunately for them, Paris, London
and Berlin have neither the military capabilities nor the suicidal intention to challenge
Moscow with permanent military bases on its border. Neither do they wish to share their nuclear
weapons with other EU countries, nor engage in any such hare-brained ideas that threaten
humanity as the American Aegis Ashore system or the planned US withdrawal from the INF
Treaty.
So read the headline in The Washington Post , Aug. 18, 2011.
The story quoted President Barack Obama directly:
"The future of Syria must be determined by its people, but President Bashar al-Assad is
standing in their way... the time has come for President Assad to step aside."
France's Nicolas Sarkozy and Britain's David Cameron signed on to the Obama ultimatum: Assad
must go!
Seven years and 500,000 dead Syrians later, it is Obama, Sarkozy, and Cameron who are gone.
Assad still rules in Damascus, and the 2,000 Americans in Syria are coming home. Soon, says
President Donald Trump.
But we cannot "leave now," insists Sen. Lindsey Graham, or "the Kurds are going to get
slaughtered."
Question: Who plunged us into a Syrian civil war, and so managed the intervention that were
we to go home after seven years our enemies will be victorious and our allies will "get
slaughtered"?
Seventeen years ago, the U.S. invaded Afghanistan to oust the Taliban for granting sanctuary
to al-Qaida and Osama bin Laden.
U.S. diplomat Zalmay Khalilzad is today negotiating for peace talks with that same Taliban.
Yet, according to former CIA director Mike Morell, writing in The Washington Post today, the
"remnants of al-Qaeda work closely" with today's Taliban.
It would appear that 17 years of fighting in Afghanistan has left us with these alternatives
:
Stay there, and fight a forever war to keep the Taliban out of Kabul,
or withdraw and let the Taliban overrun the place.
Who got us into this debacle?
After Trump flew into Iraq over Christmas but failed to meet with its president, the Iraqi
Parliament, calling this a "U.S. disregard for other nations' sovereignty" and a national
insult, began debating whether to expel the 5,000 U.S. troops still in their country.
George W. Bush launched Operation Iraq Freedom to strip Saddam Hussein of WMD he did not
have and to convert Iraq into a democracy and Western bastion in the Arab and Islamic
world.
Fifteen years later, Iraqis are debating our expulsion.
Muqtada al-Sadr, the cleric with American blood on his hands from the fighting of a decade
ago, is leading the charge to have us booted out. He heads the party with the largest number of
members in the parliament.
Consider Yemen. For three years, the U.S. has supported with planes, precision-guided
munitions, air-to-air refueling and targeting information, a Saudi war on Houthi rebels that
degenerated into one of the worst humanitarian disasters of the 21st century.
Belatedly, Congress is moving to cut off U.S. support for this war. Crown Prince Mohammed
bin Salman, its architect, has been condemned by Congress for complicity in the murder of
journalist Jamal Khashoggi in the consulate in Istanbul. And the U.S. is seeking a truce in the
fighting.
Who got us into this war? And what have years of killing Yemenis, in which we have been
collaborators, done to make Americans safer?
Consider Libya. In 2011, the U.S. attacked the forces of dictator Moammar Gadhafi and helped
to effect his ouster, which led to his murder.
Told of news reports of Gadhafi's death, Secretary of State Hillary Clinton joked, "We came,
we saw, he died."
The Libyan conflict has since produced tens of thousands of dead. The output of Libya's
crucial oil industry has collapsed to a fraction of what it was. In 2016, Obama said that not
preparing for a post-Gadhafi Libya was probably the "worst mistake" of his presidency.
The price of all these interventions for the United States?
Some 7,000 dead, 40,000 wounded and trillions of dollars.
For the Arab and Muslim world, the cost has been far greater. Hundreds of thousands of dead
in Afghanistan, Iraq, Syria, Yemen, and Libya, civilian and soldier alike, pogroms against
Christians, massacres, and millions uprooted and driven from their homes.
How has all this invading, bombing and killing made the Middle East a better place or
Americans more secure? One May 2018 poll of young people in the Middle East and North Africa
found that more of them felt that Russia was a closer partner than was the United States of
America.
The fruits of American intervention?
We are told ISIS is not dead but alive in the hearts of tens of thousands of Muslims, that
if we leave Syria and Afghanistan, our enemies will take over and our friends will be
massacred, and that if we stop helping Saudis and Emiratis kill Houthis in Yemen, Iran will
notch a victory.
In his decision to leave Syria and withdraw half of the 14,000 troops in Afghanistan, Trump
enraged our foreign policy elites , though millions of Americans cannot get out of there soon
enough.
In Monday's editorial celebrating major figures of foreign policy in the past half-century,
The New York Times wrote,
"As these leaders pass from the scene, it will be left to a new generation to find a way
forward from the wreckage Mr. Trump has already created."
"The Only Meddling "Russian Bots" Were Actually Demorats Experts
masquerading as progressive Republicans and Democrats"............FIFY
It's all they have left after being rendered politically irrelevant and statistically
insignificant in November 2016 by the deplorables. ROFLMAO.........this civil war needs to
die in federal government so we do not waste money in mass deportations to an established
island nation surrounded by 1000 nautical miles of water.
"Election tampering via false identity" sounds like the right kind of language for
a federal law -- but I'm betting there is something already out there (at state/fed level),
and am not wild about yet more laws (which [[[they]]] get to ignore anyway).
a text book case of "projection" by demorats -their own crimes of sedition and treason
projected onto trump via the russians.
one can only hope that Mueller has found the proof that DemoRats were responsible for
attempts to rig the presidential elections - aided and abetted by criminal journalists also
guilty of sedition and treason.
As if it ******* matters at this point. Get real. We are watching a display of raw power
right now. Well connected individuals are calling the shots right now, well outside of the
legal system. If you haven't realized that over the past 2 years, you haven't been paying
attention. Furthermore, no amount of factual proof is going to result in the actual criminals
being held to account. The thing that is most difficult for Americans to grasp is that they
do not control their own government and have not for many decades. They do not have an equal
system of justice. Instead, the US is ruled by a secret oligarchy which exists above the US
legal code. This is the harsh reality we are watching be revealed right now.
We're watching an attempted display of raw power...that hasn't been going as
planned. If it had, Trump would either be gone or automagically transformed into the next
iteration of BushBama. We are fly in the ointment...buzz buzz
No prosecution... our DOJ does not prosecute anything political... no matter how serious
the felony. Just ask the ***-maggots Hillary, Brennan, Comey, Clapper and Lynch.
Wow! What does Sherlock Holmes Mueller think of this? This story makes Mueller out to be
the biggest fraud of all time and his attorneys tantamount to the Keystone Cops. Where are
they on all this?
"... Some years ago, I noticed the American media and politicians were sort of going soft (actually mushy) in the brain department, but I was told not to be so judgemental. As the months went by, I saw more and more people saying "they have gone nuts". So, it turns out I am not alone after all. ..."
"... That madness comes from having no behavioural limits, no references outside of your own opinion but groupthink, and manipulating the language to suit your ambitions (the Orwellism of the US media has been repeatedly pointed at). Simply put, you don't know anymore what's what outside of the narrative your group pushes, you go nuts. The manipulators ends up caught in their lies. All the more when they makes money out of it, which would be the case of all those think tanks and media. ..."
"... War or the threat of war is needed to distract attention from rapidly devolving societal bonds and immense economic inequality. ..."
Some years ago, I noticed the American media and politicians were sort of going soft
(actually mushy) in the brain department, but I was told not to be so judgemental. As the
months went by, I saw more and more people saying "they have gone nuts". So, it turns out I
am not alone after all.
That madness comes from having no behavioural limits, no references outside of your
own opinion but groupthink, and manipulating the language to suit your ambitions (the
Orwellism of the US media has been repeatedly pointed at). Simply put, you don't know anymore
what's what outside of the narrative your group pushes, you go nuts. The manipulators ends up
caught in their lies. All the more when they makes money out of it, which would be the case
of all those think tanks and media.
One could argue that they are not going mad, that they know full well they are lying, but
I beg to differ: they don't see anymore how ridiculous or how dumb or smart their arguments
are. That would be congruent with a real loss of touch with reality.
One wonders what
they see when they look at themselves in a mirror, a garden variety propagandist or a
fearless anti-Putin crusader?
It is partially tied direct to the economy of the warmongers as trillions of dollars of
new cold war slop is laying on the ground awaiting the MICC hogs. American hegemony is
primarily about stealing the natural resources of helpless countries. Now in control of all
the weak ones, it is time to move to the really big prize: The massive resources of Russia.
They (US and their European Lackeys) thought this was a slam dunk when Yeltsin, in his
drunken stupors, was literally giving Russia to invading capitalist. Enter Putin, stopped the
looting .........connect the dots.
Watching the USA these days is like watching a loved one with progressive dementia. I've reached the stage where I think the
sooner it's over the better for everyone.
Disinfo. Interesting how 911 is getting a lot of attention lately. Uniformly we see
stories that 'expose' the people ... not actually behind it :)
Looks like the high profile (((scum))) are getting nervous. As well they should. Everybody
smells a rat, they doubt the official story, but they can't figure out where the (((stink)))
is coming from - yet.
This is really the ONLY way to get the truth these days; it's from hackers who appropriate
"secret" files that either the corrupt gubmint or private companies will not release.
i wonder if they also have files that show what happened to Malaysia Airlines 370?
Enough with the 9/11 ****. I am so sick and tired of still hearing about this 17.5 years
later as with the way people go on about it, you'd think millions of people died. Even if
evidence ever came out that proved it was an inside job (which I believe it was...sorry,
don't buy that a few groups of 3 or 4 guys with utility knives could successfully hijack 3 or
4 planes at the same time and then have 2 steel towers collapse in their own footprint
because of 2 holes and some fire burning for 30-50 minutes), it isn't going to matter to the
people who don't already believe it was an inside job. They won't care.
Well, along with the obvious reason for 911 to get us into continuous war in the ME for
Israhell, I have read Twin Towers were loaded with asbestos and litigation was about to go
forward on that; Bush Crime Family had long term securities maturing the origin of which
would reveal their Nazi roots; Gold in the vaults beneath TT; Building 7 was old CIA storage
loaded with historical documents of many crimes. Too bad these hackers just want to blackmail
OR that could be a ruse to release information.
The airplanes were neutralized because there was a Training Exercise scheduled, I believe
on the Left Coast. Just like the Kennedy assassination, Cheney, Bush, Rumsfeld had all the
bases covered due to their positions of power.
Architects and Engineers just announced a Grand Jury hearing in Manhattan is upcoming on
911. How do they expect to get a fair hearing in NYC which is more corrupt and complicit in
911 than the criminals running Commiefornika?
Families of the 9/11 victims sought redress immediately after the attacks.
Enter Kenneth Feinberg, highly celebrated and dedicated Zionist extremist, devoted to
Israel. Feinberg was appointed master of a huge $7 billion taxpayer funded Victims
Compensation Fund. Estimates put the total settlement amount at less than $3.5 billion
total for all the victims. Due to the lack of oversight, it's anyone's guess where the rest
of the tax dollars have gone. Ellen Mariani, a brave and fiery widow and 9/11 plaintiff,
included Feinberg in her lawsuit which was eventually forcibly settled.
Feinberg's inclusion in the suit was partially related to his success in bribing
Mariani's attorney to try to coerce his client to accept the fund's payout and attempt to
convince her that she was clinically insane. Feinberg was also appointed as the key clean
up man for the BP oil spill and he aggressively tried to strip plaintiffs of legal
representation by shrewdly leveraging the power of his dollar coffers. In fact, Kenneth
Feinberg has been the money-waving head cover-up artist of many government and corporate
crimes like Agent Orange, the 9/11 Attacks, the Virginia Tech Shooter scandal, the TARP
bailout, and the BP Oil spill.
For the 96 families who initially chose to forgo the fund in favor of a transparent
trial, Sheila Birnbaum was appointed special mediator between Hellerstein and the victims'
families. Birnbaum, another dedicated Zionist lawyer at the Israeli Skadden Arps,
effectively railroaded these brave families and forced them all to settle. Skadden Arps
introduces itself with the following on its website:
Many of our attorneys are thoroughly familiar with the legal structure, business
environment and political system of Israel, and several (including at the partner level)
are Israeli-born, native Hebrew speakers who have been admitted to the bars of both Israel
and New York. A number of our lawyers volunteer a significant amount of their time to
Jewish and Israeli causes, including the America-Israel Friendship League, the
Anti-Defamation League, the College of Management, the Conference of Presidents of Major
American Jewish Organizations, Elem, the Hebrew University of Jerusalem, The Jerusalem
Foundation and Miklat.
Alvin K Hellerstein and Michael Mukasey have been the Israeli connected, Talmudic
tag-team of NY federal judges that have dominated 9/11 related litigation. They've
effectively prevented all cases from the victims' families from being heard in court and
ensuring the maximum payout for the Zionist duo of Silverstein and Lowy from the insurance
companies.
Alvin Hellerstein is tied to 9/11 directly in his role as head gatekeeper on all 9/11
claims, preventing legal discovery, wrongful death and personal injury lawsuits from trial.
Judge Hellerstein is also intimately connected to other key Israeli players of the 9/11
massacre on multiple layers through his son, Joseph. Joseph Hellerstein worked for an
Israeli law firm, Amit, Pollack and Matalon, which represented ICTS, the Israeli firm
implicated in the attacks via passenger screening and airline security at Newark, Boston
Logan, and Dulles, the departure sites of the hijacked aircraft.
ICTS is owned by two Israelis, Ezra Harel and Menachem Atzmon, who was convicted in
Israel of fraud with partner and mayor of Jerusalem, Ehud Olmert. Olmert later became prime
minister of Israel. Olmert incidentally also made a secret trip to meet with then mayor of
NYC, Rudy Guiliani on the eve of 9/11, ostensibly to oversee their plot. He and other
Israeli officials were allowed to leave the US aboard an El Al plane when all other planes
were grounded on 9/11. ICTS was implicated in the 7/7 bombings in London as well.
Hellerstein and Mukasey just so happen to attend the exact same Orthodox, Zionist,
Kehilath Jeshrun synagogue in Manhattan. The synagogue openly states that it is "deeply
committed to the State of Israel and its citizens." How would Americans feel if Pakistani
Jihadists at the behest of Pakistan were implicated in 9/11 and two Pakistani Jihadist
Judges, who attended the same "radical" mosque, were blocking trials for the victims'
families to pursue legal discovery and preventing any presentation of evidence in a
wrongful death suit against an airline security intimately connected to one of the
aforementioned judges?
Hellerstein recently effectively blocked the last victim's family, the Bavises, from
ever having a day of trial against the government and airport security, forcing them to
settle out of court after a decade of his dedicated gatekeeping. His callous quote to the
96 families of victims of 9/11 will live in infamy: "We have to get past 9/11. Let it go.
Life is beautiful. Life is short. Live out your years. Take the award." Both father and son
Hellerstein also worked for Stroock, Stroock, and Lavan, a Rothschild funded law firm
which, incidentally, represented Larry Silverstein in his bid to lease the towers. How many
conflicts of interests can you count?
Families of the 9/11 victims sought redress immediately after the attacks.
Enter Kenneth Feinberg, highly celebrated and dedicated Zionist extremist, devoted to
Israel. Feinberg was appointed master of a huge $7 billion taxpayer funded Victims
Compensation Fund. Estimates put the total settlement amount at less than $3.5 billion
total for all the victims. Due to the lack of oversight, it's anyone's guess where the rest
of the tax dollars have gone. Ellen Mariani, a brave and fiery widow and 9/11 plaintiff,
included Feinberg in her lawsuit which was eventually forcibly settled.
Feinberg's inclusion in the suit was partially related to his success in bribing
Mariani's attorney to try to coerce his client to accept the fund's payout and attempt to
convince her that she was clinically insane. Feinberg was also appointed as the key clean
up man for the BP oil spill and he aggressively tried to strip plaintiffs of legal
representation by shrewdly leveraging the power of his dollar coffers. In fact, Kenneth
Feinberg has been the money-waving head cover-up artist of many government and corporate
crimes like Agent Orange, the 9/11 Attacks, the Virginia Tech Shooter scandal, the TARP
bailout, and the BP Oil spill.
For the 96 families who initially chose to forgo the fund in favor of a transparent
trial, Sheila Birnbaum was appointed special mediator between Hellerstein and the victims'
families. Birnbaum, another dedicated Zionist lawyer at the Israeli Skadden Arps,
effectively railroaded these brave families and forced them all to settle. Skadden Arps
introduces itself with the following on its website:
Many of our attorneys are thoroughly familiar with the legal structure, business
environment and political system of Israel, and several (including at the partner level)
are Israeli-born, native Hebrew speakers who have been admitted to the bars of both Israel
and New York. A number of our lawyers volunteer a significant amount of their time to
Jewish and Israeli causes, including the America-Israel Friendship League, the
Anti-Defamation League, the College of Management, the Conference of Presidents of Major
American Jewish Organizations, Elem, the Hebrew University of Jerusalem, The Jerusalem
Foundation and Miklat.
Alvin K Hellerstein and Michael Mukasey have been the Israeli connected, Talmudic
tag-team of NY federal judges that have dominated 9/11 related litigation. They've
effectively prevented all cases from the victims' families from being heard in court and
ensuring the maximum payout for the Zionist duo of Silverstein and Lowy from the insurance
companies.
Alvin Hellerstein is tied to 9/11 directly in his role as head gatekeeper on all 9/11
claims, preventing legal discovery, wrongful death and personal injury lawsuits from trial.
Judge Hellerstein is also intimately connected to other key Israeli players of the 9/11
massacre on multiple layers through his son, Joseph. Joseph Hellerstein worked for an
Israeli law firm, Amit, Pollack and Matalon, which represented ICTS, the Israeli firm
implicated in the attacks via passenger screening and airline security at Newark, Boston
Logan, and Dulles, the departure sites of the hijacked aircraft.
ICTS is owned by two Israelis, Ezra Harel and Menachem Atzmon, who was convicted in
Israel of fraud with partner and mayor of Jerusalem, Ehud Olmert. Olmert later became prime
minister of Israel. Olmert incidentally also made a secret trip to meet with then mayor of
NYC, Rudy Guiliani on the eve of 9/11, ostensibly to oversee their plot. He and other
Israeli officials were allowed to leave the US aboard an El Al plane when all other planes
were grounded on 9/11. ICTS was implicated in the 7/7 bombings in London as well.
Hellerstein and Mukasey just so happen to attend the exact same Orthodox, Zionist,
Kehilath Jeshrun synagogue in Manhattan. The synagogue openly states that it is "deeply
committed to the State of Israel and its citizens." How would Americans feel if Pakistani
Jihadists at the behest of Pakistan were implicated in 9/11 and two Pakistani Jihadist
Judges, who attended the same "radical" mosque, were blocking trials for the victims'
families to pursue legal discovery and preventing any presentation of evidence in a
wrongful death suit against an airline security intimately connected to one of the
aforementioned judges?
Hellerstein recently effectively blocked the last victim's family, the Bavises, from
ever having a day of trial against the government and airport security, forcing them to
settle out of court after a decade of his dedicated gatekeeping. His callous quote to the
96 families of victims of 9/11 will live in infamy: "We have to get past 9/11. Let it go.
Life is beautiful. Life is short. Live out your years. Take the award." Both father and son
Hellerstein also worked for Stroock, Stroock, and Lavan, a Rothschild funded law firm
which, incidentally, represented Larry Silverstein in his bid to lease the towers. How many
conflicts of interests can you count?
I went to go watch VICE – the story about how Dick Cheney took over the government
with the aid of his wife – Lynne Cheney. Vice is a film that seeks to bring complicated
information about the inner corruption in Washington and transform it into a digestible and
entertaining format. There is no question that Christian Bale delivered a very impressive
performance of how Dick Cheney really is – a secretive and distant man whose eyes were
always filled with naked contempt. Amy Adams gave a fantastic performance as well and captured
the real character of the former Second Lady Lynne Cheney who was very much like her husband
– ambitious, and equally just as ruthless.
While the film captures th e reality of what took place, it completely misses the real story
behind the scenes as to even how Cheney came to be Vice President. The film shows that he was
out of politics and had effectively retired for some time. It pretends that George Bush called
him to be his Vice President and they negotiate that Cheney will have most of the power and
Bush was too stupid to understand what he was agreeing to.
As always, for whatever reason, I seem to be always in the middle of just about every major
event for the past 30+ years. I have stated before that I was asked to fly around the country
and meet with Republicans who wanted to run for President. Prior to 1999, they were told I was
there to advise them on the world economy and how it functioned. I have been to White House
dinners and testified before Congress. I have taken calls from Washington in times of crisis.
So meeting with people who wanted to run for President was nothing unusual for me. The real
issue was not that I was giving them advice, but I was to assess whether they were capable of
comprehending how the world functioned economically as well as politically. I was regarded as
the unbiased adviser around the world. Europeans loved me because I was not one of them. They
knew I would advise according to the cycles and markets. I cannot even bring staff with me to
meetings in Brussels today for the problem because they are European and will have skin in the
game. The same was true when I was asked to fly to Beijing during the 1997 Asian Currency
Crisis .
The real story how Cheney got that power is significantly different from how the movie
portrayed that aspect. It did a fantastic job in covering what he did once in power, with the
exception of the meeting when 911 took place. The film portrays everyone in that room and its
sources were correct in saying they were all confused but Cheney was more concerned about
talking to his lawyer in that meeting. What I do know is that the first World Trade Center
bombers were in MCC prison in Manhattan and they were given markers by the recreation officer
Mr. Kumb. They drew on the walls of their cell the twin towers with planes flying into them one
year BEFORE the incident. In creating Home Land Security, Congress merely stated that various
agencies had information but did not share it with one another. Cheney had personal offices in
all the agencies and I believe he knew well what took place on 911.
The movie correctly portrays Donald Rumsfeld as his co-conspirator. Just the day before 911
on September 10th, the Inspector General reported that $2.3 trillion was missing from the
Defense Department accounting. Rumsfeld stated before Congress an investigation was necessary.
The next day, the plane that struck the Pentagon hit the precise room where all those records
were stored.
The World Trade Center 7 collapsed like a pancake when no plane ever touched it. That
building has all the evidence of many things we will never know about. I have 20 years worth of
recordings that would have been enough to put all the major New York trading banks in prison.
Tapes that admitted paying bribes to Russian officials and all sorts of market manipulations.
All of those tapes from my case vanished that same day. I personally believe that Cheney knew
what was in the works. The mere fact that the terrorists drew the WTC on the wall of their cell
1 year before and the MCC took pictures and made a big deal out of it tells me that information
had been passed on.
Now to the issue of Cheney becoming Vice President. I was asked to go to Texas to meet with
George Bush, Jr during the early summer of 1999. I was told that "this is different. He's
really stupid." Up to that point, the entire process I was involved in was to assess the
qualification of those who wanted to run for President. Suddenly I was told this was different.
When I asked why would you make someone stupid President, the response was "he has the
name."
I was then asked if I would accept the position of Chief Economic Adviser in the White
House. I was told BECAUSE Bush was stupid, which they pay well in the movie, that they needed
to surround him with smart people. I declined because to take such a position meant I would
have to shut down my operation. I said thanks, but no thanks.
The kingmakers who I would go visit potential candidates for selected the people to put
around Bush. Cheney had been Chief of Staff so he knew the game. He was inserted into the White
House DELIBERATELY to be the default, President. The movie makes it sound that Bush Junior had
to convince him to be his VP. That is absolutely NOT the way this selection process worked.
They would NEVER have allowed the very person they said was "stupid" to select the people to
run the country. They were selected to be the babysitters. I know this because I was one of the
people asked and declined.
StheNine , 4 minutes ago
"I have 20 years worth of recordings that would have been enough to put all the major New
York trading banks in prison."
so armstrong still has them?-9/11 was for nothing-no wonder cheneys so grumpy/lol
zob2020 , 8 minutes ago
" The mere fact that the terrorists drew the WTC on the wall of their cell 1 year before
and the MCC took pictures and made a big deal out of it tells me that information had been
passed on. "
Worst evidence ever. Only shows why those particular patsies were later chosen as the
alleged perpetrators. All proven via the 2000 degrees Celsius proof passports. As fake
evidence as evidence can be.
blind_understanding , 9 minutes ago
Coincidence/5489228
COINCIDENCE? 9/11 Truth: NORAD Running 9/11 "Drills" ON and DURING 9/11 ... https://www.youtube.com/watch?v=xshSt0Phf_s
NORAD just happened to be running the exact same scenario witnessed on the morning of 9/11 as
a "drill", ON THE MORNING OF SEPTEMBER 11, 2001.
blind_understanding , 11 minutes ago
The movie is part of the 9/11 coverup. Just the old damage control line: Arab Muslim
terrorists did it but the government was incompetent in not catching them beforehand.
---
The only way it was possible for a PASSENGER JET to crash into the pentagon - the most
heavily-defended building on earth, was for someone to STAND DOWN THE FIGHTER-JET
INTERCEPTORS! And Cheney did it!
At least, "passenger jet" was the official story. More likely it was a MISSILE
---
On September 11 2001 **** Cheney stood down North American Aerospace Defense Command (NORAD)
fighter-jet interceptors. - On June 1, 2001 NORAD and Pentagon standing orders to shoot down
errant or hijacked aircraft were revoked and replaced by a new order to stand down until they
were given orders by the President, Vice President or Secretary of Defense. --- copy of the
order: http://www.jonesreport.com/images/260607_docu_1.jpg
----
Don't forget 911 was an inside job.. Cheney did 911 for private central-bank owners and
blamed the Arabs, in order to make their enemies look like our enemies, so we would fight
their wars of colnial financial expansion. And Bush was his side-kick.
Ah, 9/11 the drawing on the cell is new-would like another source but no matter-
1. the ongoing and 9/11 specific drills-door hop galley,amalgam virgo,fema drills-the
number could be up to 50.
2. also,re: drills a norad drill with most of planes on the west coast near canada on
9/11
3. calls to airforce 1-the final call was Angel is next. Angel was code for potus on
af1.
4. ALL the planes crossed a single point on radar in eastern Penn.-swap outs?
5 israeli art students in wtc summer 01. the israeli van guys who stated on israeli tv
they "were there to document the event"
6.the french guys that filmed the first plane strike. did you know they also filmed the
2nd strike from the other side of the buildings and it shows the nose of the plane,with nose
intact exiting the north end going through the whole building!.
7. cleveland airport,nasa building/ oh and reports at lax on 9/11.
hugin-o-munin , 34 minutes ago
Is Armstrong in trouble? Why would he write a piece like this if he wasn't?
Many of us who have joined the architects and engineers for 911 truth know full well of
the impossibility of the official story when it comes to simple physics and some of us even
understand the impossibility of the main hoax narrative about the planes themselves. Whether
this article is meant to shield W or someone else from what's coming is a bit unclear but
when weaved in nonsense like 'the terrorists drew planes on the wall' it starts to smell.
It's not a huge stretch of the imagination to believe W never really personally decided a
thing in his whole life but was a puppet son guided into decisions that he did not fully
comprehend. Cheney, Rumsfeld, Wolfowitz, Bolton and the rest of the initial neocon clan
obviously helped orchestrate this reenactment scene of the Reichtag building fire which we
are living through the aftermath of today. Aside from being completely insane and diabolical
this mindset has robbed the United States of its most valuable asset - its almost obsessively
optimistic people set on overcoming any obstacle on its march through history. It almost
killed the spirit of liberty and individual freedom, I say almost because the patient is not
dead yet and there is still a sliver of hope. Whether or not hanging these traitors is part
of the cure is unclear but uncovering the whole truth certainly is.
Please support the Federal Grand Jury to Hear Evidence of WTC Demolition if you can:
"What I do know is that the first World Trade Center bombers were in MCC prison in
Manhattan and they were given markers by the recreation officer Mr. Kumb. They drew on the
walls of their cell the twin towers with planes flying into them one year BEFORE the
incident."
1- the "first' WTC bombing took lace in 1993
2- the FBI gave the perps explosives which the detonated in the basement of the WTC... no
planes were involved
3- Dept of Homeland Security opened 8 years after the first WTC bombing in 2001... not
sure what Armstrong is driving at... the whole essay is discombobulated... Try again... when
you're not drunk.
4- The idea that 9/11 was executed to prevent a Pentagon audit is petty weak... the
principals had long stated far more global ambitions to use a "New Pearl Harbor" event to
stampede the country into Perpetual War for the Wolfowitz Doctrine of Uni-Polar hegemony and
full spectrum dominance (and creating an Orwellian police state internally)
Normal , 1 hour ago
Dude says all of the recordings vanished that same day without specifically saying that
the collapse of building #7 destroyed all of the recordings. This does two things through
ambivalence. It releases the author of the suspicion that he still holds the recordings and
it suggests that he may still have a copy hidden. The result being a slightly diminished
chance that he still has a copy. The rest of the article was sparse but factually related.
It's rhetoric is somewhat tied to his acknowledgment that Bale made a very impressive
performance and extrapolating his experiences from there. He limits his 911 to what he knows
and what everyone suspects. The stupidity of Bush Jr. is accurate and the fact that the
United States of America is an oligopoly rather than a republic is well shown. I liked the
article very much. Now what?
uhland62 , 54 minutes ago
It is a complex topic with many layers. Weren't there also documents in there re Yamashita
Gold? You wouldn't want that out in the open, would you. Manafort 'happened' to be in the
Philippines 'working' for Marcos when the gold diggers were active there. He'd know but would
probably not say. Manafort returned (from his CIA work?) to every Rep. presidential campaign,
just like a good secret service operative would do.
And then there was Khashoggi. He would have known something about the Saudi 911 guys and
with whom they worked.
hugin-o-munin , 28 minutes ago
Excellent point. The White Dragon gold is secured and out of reach from the Rothschilds.
Once you start really looking into the 911 coup there are so many subplots and crimes that it
almost makes your mind spin. The entire Enron investigation, the fake bond story, the looted
gold vaults, the option trades and on and on.
JethroBodien , 1 hour ago
Spread the word folks. The most important issue of our generation
Let me fill you in. Classified "Matter of National Security"
Jungle Jim , 1 hour ago
What about gold?
Ms No , 1 hour ago
This sums up beautifully why anybody who buys the official story is an idiot.
"...on September 10th, the Inspector General reported that $2.3 trillion was missing from
the Defense Department accounting. Rumsfeld stated before Congress an investigation was
necessary. The next day, the plane that struck the Pentagon hit the precise room where all
those records were stored.
The World Trade Center 7 collapsed like a pancake when no plane ever touched it. That
building has all the evidence of many things we will never know about. I have 20 years worth
of recordings that would have been enough to put all the major New York trading banks in
prison. Tapes that admitted paying bribes to Russian officials and all sorts of market
manipulations. All of those tapes from my case vanished that same day. I personally believe
that Cheney knew what was in the works."
JethroBodien , 59 minutes ago
No passenger liner jumbo yet hit the pentagon on 9/11. Lets get that straight for
starters.
As if a jumbo jet's soft aluminum nose could have crashed through the inner and outer
rings of the penatgaon and punched a perfect round whole out the back. Look at all the photo
and video evidence of the Pentagon site that day and tell me you can find any recognizable
piece of a jumbo jet liner. Not to mention the multi-tone titanium engines.
Have you seen what birds do to the nose of a jet on impact?
hedgeless_horseman , 49 minutes ago
...on September 10th, the Inspector General reported that $2.3 trillion was missing from
the Defense Department accounting...
And it's gone.
It's all gone.
So, what are you going to do about it?
*****.
You. Me. Us.
We are all a bunch of pussies. Vaginas. Wimps.
**** you.
**** me.
**** us.
Happy New Year?
Horse ****.
07564111 , 35 minutes ago
it's gone for sure, more interesting though is what it was used for.
Omega_Man , 1 hour ago
Martin has deluded visions of grandiosity... and has developed a super computer to forsee
events
Rock On Roger , 1 hour ago
A Greg Hunter interview with Dave Janda. Lots of good stuff.
Martin you are full of ****. Anyone who has any kind of a physical engineering background
knows that those boxcutter boys had a lot of help. These are the ONLY steel frame high rises
to collapse because of fire, they collapsed into their basement and jet fuel does not burn
hot enough to cause steel to fail.
Building 7 collapsed because some desks and chairs were burning? If you believe that then
you should NEVER enter another high rise building as long as you live. They are far too
fragile and dangerous.
But of course they are not fragile, nor are they dangerous. 911 was a terrorist event. The
box cutter boys were just pawns however.
LeadPipeDreams , 2 hours ago
+1.
The first WTC bombers were CIA assets, so they weren't serving time in any Manhattan
clink. This article is just more propaganda promoting the "Islamic terrorists did it"
narrative. Sprinkled with half-truths, but ultimately misleading the reader in the wrong
direction.
philipat , 34 minutes ago
If there is a trial anywhere in any US court system, the billions these perps will spend
in bribes, threats and killings will guarantee it to be another complete sham
Not so fast. A Grand Jury has now been empanelled to look at 911. This is a very
encouraging development as the proceeding do not involve a defense but involves only several
highly reputable organizations (including AE911) presenting the facts to the jury. There is
so much accumulated evidence that the official narrative is nonsensical so a jury of ordinary
citizens, even without deep technical understanding, should be able to reach sensible
conclusions using common sense alone. What happens NEXT is the question!!
philipat , 2 hours ago
The next day, the plane that struck the Pentagon
Which plane would that be? Every crash involving a heavy commercial jetliner leaves
wreckage, especially the engines yet there was none. Etc. Same applies to the Shanksville
"crash". Even someone who knows nothing about aviation but watched a couple episodes of "Air
crash investigation" can see there is something wrong here.
But the above statement by Armstrong (Does anyone trust this Guy?) kind of calls into
question what he actually knows or, perhaps being charitable, is prepared to divulge?
The Last but not LeastTechnology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
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Here, the data are showing us something that we find to be very interesting. Namely, that those who spend more money on a low-ROI bachelor's degree often find their careers to be more 'meaningful' than your average engineer. Does this mean there's an inverse relationship between spiritual fulfillment and monetary compensation when it comes to ones' career path? Possibly. But would like to suggest another possible explanation.
During this period, we have witnessed a huge national decline in well-paid middle class jobs in the manufacturing sector and other sources of employment for those lacking college degrees, with median American wages having been stagnant or declining for the last forty years. Meanwhile, there has been an astonishing concentration of wealth at the top, with America's richest 1 percent now possessing nearly as much net wealth as the bottom 95 percent. [2]
Surprise medical bills are in the news almost daily. Last Thursday, the White House called for legislation to protect patients from getting surprise doctor bills when they are rushed to the emergency room and receive care from doctors not covered by insurance at an in-network hospital.
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Soaring by $38,000 per second: US national debt now exceeds
$21.5 trillion
but your last sentence may hold some
validity. For that matter, I don't think shale has given up completely after the first go
round, if the price is right. Would that delay peak to another date? Quien sabe. Money talks.
What price? I know I would keep an ICE around for long trips at $200 a barrel for the
convenience. Food may be higher, though.
19 minutes ago
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